HEROIN TRAFFIC: SOME AMAZING COINCIDENCES LINKING THE CIA, THE MAFIA, AIR AMERICA, SEVERAL MEMBERS OF THE BROOK CLUB, CHIANG KAI-SHEK, THE KUOMINTANG, PRINCE PUCHARTRA OF THAILAND, MANY BANKS AND INSURANCE COMPANIES - PRACTICALLY EVERY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP74B00415R000400170053-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 16, 2016
• Document Release Date: June 29, 2005
• Sequence Number: 53
• Publication Date: March 1, 1972
• Content Type: MAGAZINE

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rofessor Samuel Eliot Morison has written how in
1903 Theodore Roosevelt, "in the face of inter-
? i. national law and morality" secretly ordered. the
US Navy to support the "revolutionary" secession of
Panama from Colombia. The secession, which led swiftly
to the Canal Zone treaty, is described by him as a plan by
"Panama businessmen, agents of the French company
[which stood to gain $40 million in compensation under
the treaty] and United States army officers."' He neglects
to add that the "agents" of the French Panama Canal
Company were New York investment bankers j. & W.
Seligman and their Washington lobbyist Buneau-Varilla,
who organized and financed the "revolution" out of a
suite in the Waldorf-Astoria.
In some ways, the 'Panama exercise in "big stick"
partition is an instructive precedent for the post-war US
involvement in Indochina.2 Legally, the picture appears to
be different today; for many of the bankers' activities in
preparing for revolution and war would today be out-
lawed, under sections 956-60 of the US Criminal Code.
Ynsl y,_at leasl,.x.esponsi ~Alfry..~`Q~ t~. _ in. _of dQ c+~ e
QLArierican,_";utergsts is nowa-ramctnopoly of the _CLA.
But in fact, the CIA still maintains- close-contact with
J W, Seligman and similar Wall.Street inst.tutions.
These contacts have been powerful, it,was ,oreslyre
from Wall Street which uccQeded inpushina_the in 'aut
)CIA -into its first covert operations. President_ Tru~na ,
w.1is1 ~C.eateci_.thg_CIft .it~_I9 8,, has since declarad-1pis
u.niiappiness at the deflection of the CIA from its ante;lii-
encefunction: "I Hexer lead any thought . when i set
up the-CIA that it would beinjected int$.peacetime cloak-
d digger operations..".;,His intentions, however, count-
ed for less than those of Allen Dulles, then a New York
corporation lawyer and President of the Council on
Foreign Relations. The Administration became con-
cerned that the Communists might shortly win the Italian.
elections:
Forrestal felt that a secret counteraction was vital, but
his initial assessment was that the Italian operation
would have to be private. The wealthy industrialists
in Milan were hesitant to provide the money, fearing
reprisals if the Communists won, and so that hat was
passed at the Brook Club in New York. But Allen
Dulles felt the problem could not be handled effec-
tively in private hands. He urged strongly that the
government establish a covert organization with un-
vouchered funds, the decision was made to Create i.
under the National Security Council'
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sev
" ,i:Si+4Wl1l:L:lL'~4r..1 LJ
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oj,vrail- :
Secretary Icit we
soouid be private, but ?a private corporation lawyer de-
termined it should be public. By this arrangement,
presumably, the men in the Brook Club even got their
money back out of the hat; since then the funds-un-
vouchered-have come from us, the public taxpayers.
:Crwal< tl s la I f sympathy for the way the-CIA waa,
diy'erted", into covert operations did not result
in any measures to curb the control oTthe CIA y Wall
Ssreet.Rcpublicans. On the contrary, as the CIAe an to
}Wrgeop under Bedell Smith, all seven2ersons who are
kaown_to h.ave.,ser'ved. as-]lleputy Directors of tEe CtA
T:a: sy S. ^.: r z:sa:n
China) h.aaded_a.Bangkok_"trading company" called Sga
dpi pty, IOC? which. plLedarms and other supplies-to
tha.&Pjziititan ; troops of General Li Mi in Eurna t,? and
later trained the Thai border police under Thai Inter pr
Ministex Pnao Sriya.n.o .e
.$.ut_-by far the largest CIA proprietary in Asia was
f it-Air Transport_-CAT inc.--chartered in 1950 and
gown since 1959 as Air America. In 1961, General
,rjlw.ard Lansdale wrote a memorandum" to, Maxwell
I yiQr,.on unconventional warfare; published as pact of
she Pentagon Papers, confirming Air America's,
xtrithwthe CIA: .
CAT. Civil Air Transport (Chinese Nationalist)
CAT is a commercial airline engaged in scheduled
and non-scheduled air operations throughout the Far
.East, with headquarters and large maintenance facili-
ties located in Taiwan. CAT, a CIA proprietary,
provides air logistical support under commercial
cover to most CIA and other US Government agencies'
requirements.... During the past ten years, it has had
some notable achievements, including support of the
Chinese Nationalist withdrawal from the mainland,
air drop support to the French at Dien Bien Phu,
complete logistical and tactical air support for the
[1958] Indonesian operation, airlifts of refugees from
North Vietnam, more than 200 overflights of Main-
land China and Tibet, and extensive support in Laos
during the current (1961] crisis.,
General Lansdale erred, however, in failing to distinguish
itwcen the Taiwan commercial airline CAT Co., Ltcl.
iias Gi yil Air Transport,,_or CATCLand the Amer-
iean operating firm CAT, Inc., the CIA proprietary which
supplied CATCL with pilots and other personnel,. Sixty
percent of.the capital and control of CATCL was Chinese
Nationalist, represented by officers of the former Kin-
cheng Bank in Shanghai, who allegedly fronted for T. V.
Soong, the brother of Madame Chiang Kai-shek.10 Soong
is one of the most important figures in this history.
CATCL had been set up by General Chennault in
1946. Chennault's partner in CAT was Whiting Will-
auer, a US "economic intelligence" officer who during
World War II supplied the Flying Tigers as an officer of
China Defense Supplies under T. V. Soong. CAT's
treasurer in the 1940's was James J. Brennan, who after
the war served as T. V. Soong's personal secretary in
China. And the lawyer for CAT, as for the Flying Tigers,
was Tommy Corcoran, who after the war was rumored
to be handling T. V. Soong's multi-million dollar invest-
ments in the United States."
In the late 1940's, CAT flew military support missions
for the Kuomintang against the Communists, while
Chennault lobbied openly from a Washington office
against the more cautious China policy of the Truman-
Acheson State Department. In November, 1949, Chen-
nault, after a similar visit by Chiang, flew to Syngman
Rhee in Korea, "to give him a plan for the Korean mili-
tary air force"; even though at this time it was still US
official policy to deny Rhee planes, to discourage him
from invading North Korea." In December, 1949, Time
y,gdc,F mith anc'man came from New York legal and
fu=cialsicr_4, " iese~_.used,ctaeir corporate, expsri_.
?s;ce gnu connections to setup a number of dummy
}tate_entcrprises,,as "proprietaries" or wholly-owns
jig particularly for Far Eastern operations.,
'I~ie jt,~ll c e .om ovecnment sources, but profitts,
it`,,an +, are said to have. been retained by the "companies"
ihete'.'}gs. '
I-q 1/.ijZjuaa.Ii y .Peer , (an Office of Secret Services
hand from Burma and China, later the Army Chic',' of
Staf('s Special Assistant for Special Warfare Activities)
},n~st.o ,,nS,7,,ct~nrer~prgeC,_? 1^ Taiwat a cover
the ]nnnchip
uomintang-Nationalist Chinese-
o
e
g
f
,_ - mancn aids f oni the_is'.;?r:.' 'ef n+ic:mn ~ and Matsu eats that "What we must do now is shake loose from the
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later claimed, Dean Acheson told one of its correspond-
opr,t:i rued
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Chinese Nationalists ; while in January, 1949, George Perhaps the most obvious stake has been that of Pan
Kennan predicted that "by next year at this time we will Am (on whose board sit Robert Lehman of Lehman
have recognized the Chinese Communists. Brothers and James Sterling Rockefeller of the National
All such thoughts were frustrated by the sudden out-' City Bank). Like the National City Bank itself, and the
break of the Korean War in June, 1950-an event still larger Bank of America which in the early post-war
imperfectly understood, but which may have been an- period was still allied with it,10 so also Pan Am was par-
ticipated by certain Kuomintang speculators; who, be- ticularly oriented towards development of a "Pacific rim
cause of the war, cleared an estimated profit of about community," as opposed to an "Atlantic community." It
has been shown that Pan Am's staggering profits in the
$30,000,000" in soybeans.14 .
Nord afte eak.o the-16o-yeah War, the CIA 1960's were built on its early monopoly of conncnerc ai
?Kietazy, CAT.1nc.,was chartered inDelawarj., it air service to Thailand and Indo-China. Pan Am's ndo-
rlmercanCAT-promptly supplied planes, pilots and US china service was opened, with the assistance of the US
airlift contract . o tne~T~i~yan's CATCL, which in this Government "in the national interest," on MX ay 22nd,
period _~t'as the sole. flag air carrier of-C iiang's_new t
a
;ubljc.'~ While Tommy Corcoran continued to repro-
f i
'"
1 ; 1
sent Soon`, Cherault, and CATCL, the aviation law t
firm of Pogue and Neal ?handled the incorporation of
CAT Inc. During this period of formation, a vice-
president of the National City Bank-Of New York, Walter
Reid Wolf, was recruited briefly as a CIA Deputy Director
from 1951 to 1953; soon afterwards,' two of Wolf's
fellow-directors in the small Empire City Savings Bank,
Samuel Sloan Walker and Arthur B. Richardson, were.
named to the board of CAT, Inc. At rho. si ne time,
.Im.ond_Ftzgerald entered the CIA. Hwas a consiti
-of Walker's. and,a close business associate of Wolf's; nd,
}j4 e them, a member of New.fork's" '00-member Brook
-Club, "perhaps clubdom's richest from "the point of view
of inherited wealth."10 Other Brook Club members in-
eluded three directors of CAT, Inc., two directors of Pan
Atn, and Chiang Kai-shek's promoters Walter S. Robert-
son, who for six years was Eisenhower's Assistant Secre-
tary of State for Far Eastern Affairs, and journalist Joe
Alsop.
In this pyramid, the CIA's official control over CATCL
was remote and unreliable. While it owned 100 percent
of CAT, I'nc., and of CAT's Asian subsidiary, the CIA only
owned 40 percent of CATCL, and thus could hardly be
called to account 'when (as frequently occurred) CAT
planes slew in support of operations conforming to
Taiwan and Kuomintang foreign policy, but at odds with
the official foreign policy of the United States. Even the
C. A' _controi_,ov er the Aird_al,e/Pacific. Corp., which is
#ai"d to clear profits in the order of.$.1.0_m llion a year, is
open to:duestion:it is possible that the proprietary rela-
-tionshlp is as useful in supplying an "official" cover for
"
. cover: for
-private profit as it is in supplying a"private
Air America Itself has a private stake in Southeast
Asia's burgeoning oil economy, for it
YV aU.`1~o1 tv'r~ce rYO .(3 i~~1.u~wi
1953, 17 days after CAT, using'planes and'pilots "loaned'
by the USAF, began its military airlift to Dien Bien Phu.'
Flies prospectors looking for copper and geologists The inauguration of C"A`I's airlift to Laos in September
searching for oil in Indonesia, and provides pilots for 1959, which has continued with little interruption ever
commercial airlines such as Air Vietnam and Thai since, was likewise a godsend to Pan Am and the other
Airways and for China Airlines [Taiwan's new Chi- big US airlines, at a time when they were suffering badly.
nese-owned flag airline which since 1968 has taken Laos generated a need for additional military airlift
over CAT's passenger services.]" which, after considerable lobbying and threats of quitting
Much larger has been the economic stake of the financial international service, was awarded by contract to the
intrrrxts represented on the boards of Pacific Corp. and commercial carriers.x0 Thanks to its Pacific operations,
CA'1' Inc. over the year's (such as Dillon Read, repre. Pan Am saw its charter revenues soar almost 300 percent
seated by -William A. Read, Jr.," and the Rockefellers, in four years, and showed a profit in 1961 for the first
red resented'by Laurance R ckk-efe1~cr's cm to ec Har er time since 1956, even though its Atlantic service con-,
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c;irit"'i riUed
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ft~c sL~ c..:ied China Lobby in Congress in the early 1950's
was to be found the heart of the Pan Am lobby. Senator
Pat McCarran of Nevada, who chaired the Congressional
inquiry into Owen Lattimore and the Institute of Pacific
Relations, had first achieved fame as author of the 1938
Civil Aeronautics Act, and later as an oil lobbyist. In his
heyday as a China Lobbyist, McCarran was also known
as "the gamblers' senator"; and is said to have held court
at the Riverside Hotel in Reno, making deals with Syn-
dicate men to obtain casino licenses despite the law 22
Nevertheless, one cannot call lobbying a conspiracy, any
more than one can discern anything illegal in the fact
that Air America's top operating personnel were also
recruited from Pan Am.23 But when one looks beyond the
Washington offices of Air America to the Asian field
operations of CAT, with its 60 percent Chinese Nation.
ist control, the possibility of Kuomintang-criminal con-
.neciioas and activity demands to be explored.
A he most questionable of CAT's activities was its
sustained supply of arms and other supplies to Kuo-
rrintang (KMT) General Li Mi and his successors in
Burma and North Thailand, between 1949 and 1961.
Li Mi is probably the only major opium-dealer in the
world to have been honored with the US Legion of Merit
and 1, edal of freedom; his 93rd Division began collect.
ing opium from the Meos of northern Laos as early as
1946.-Faced with a public scandal after Burma com-
plained about these foreign intruders on its soil, the US
hired CAT Inc. to fly them out in 1954. Nevertheless, the
bull: of the troops refused to move, and CATCL con-
tinued to supply them, possibly using some of the very
Cep c ~~. L'a ;c ~~~cCw r '
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cording to an informed source, "the CIA saw
the
troops as a thorn in Mao's side and continued to ssurmly
them with arms.. an~1_ ~rtorzey,~' ._exe._. _tiley_ had
"decided-to_settle down and become rich by raving
the decision, to?finance and supply the remnan,,of
troops had grave consequences for the world
opium and heroin trafi5e, and alsq for that part of it
lup?dicd,by the so-called, National Crime Syndicate in the
Li ited ,states. The new right-wing Thai Government of
Phibum Songgram, having seized power in a 1948 coup
(over the issue.of controlling the local Chin ese),20legal.
ized the sale of opium and established an official Thai hai Gov-
ernment Opium Monopoly, on September 17, 1949.'1'his
happened just as the Chinese Communists were expelling
the last of the KMT-linked warlords who had -supplied
the Far East and America with opium before World War
II. Shortly thereafter, prepared opium in the containers
of the Thai Government Monopoly was seized in a raid
in Boston, Massachusetts, an event not noted in the US
press but duly reported by the US Government to the
United Nations Commission on Narcotic Drugs.27
Throughout the 1950's, US Government representatives
continued to notice quietly that Thailand was a source for
the opium and heroin imported into the United States,
though this relative candor waned in.the 1960's with the
escalation of the war in Vietnam.311 They also reported
the rapid increase in both opium-trading and opium-
growing in northern Thailand, where the KMT troops
were established; and noted that most of this opium was
exported out of Thailand for illicit traffic abroad.2J
Up until about 1964, however, the United States also
complained officially and ostentatiously. to the UN
Narcotics Commission about "Yunnan opium," brand
"999" morphine, and heroin from ""the Chinese main.
land," as part of Peking's "twenty-year plan to finance
political activities and spread addiction."" In 1958, for
example, the US *reported the smuggling into the United
States of 154 pounds of heroin "from mainland China";
and in 1960 that "the principal sources of the diacetyl.
morphine (heroin] seized in the United States were Hong
Kong, Mexico, and communist China."" But other dele-
gates and the Commission itself would complete this
misleading picture: "Yunnan opium" was opium which
came from anywhere in the "fertile triangle" (the Burma-
Thai-Laos-Yunnan border area). The I-Iong Kong
authorities "were not aware of a traffic in narcotics from
the mainland of China through Hong Kong"; but
"quantities of narcotics reached Hong Kong via Thai-
land."" The bulk of "Yunnan opium," and the "999"
morphine in particular, were in fact trafficked under the
protection of the KMT troops in Burma and north Thai.
land supplied by CAT. In 1960, the UN Commission
discreetly noted the presence in the Burmese sector of
the "fertile triangle" of "remnants of KMT troops who
were maintaining themselves largely on the profits of the
opium trade. It was reported that they received their
supplies periodically by air."33
. Why did CAT planes continue until 1961 to support
the suppliers of heroin which was flooding, via Thailand
and Hong Kong, into the United States? One reason was
indeed military, to use the KMT troops and raids "as a
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~~.1 NIM NII,iYC tW i~YMrY~ LVWY-~~'i1YYVrH
thorn in Mao's side," Qp cially during the_CIA/CAZ'-
!L~ipported operation in Tibet from 1956-6.0, for_w_hjch
tZw rI ant Tony Poe later stationed in the Laotian
enium center of Ban _1-Iouei, Sai) trained Tibetan guer-
ri.li,as, in the mountains of Colorado.34
But a second reason was political: to maintain contact
with the elaborate fabric of Chinese secret societies or
"Triads" throughout Southeast Asia. The profits and
relationships of the opium trade, in other words, would
help to preserve the pre-war Nationalist influence among
the Chinese middle class of these countries, and thus
challenge their allegiance to the new Chinese People's
Republic. This question of Chinese allegiance was par-
ticularly acute in the early 1950's in Malaya, where the
farming of the opium franchise among Chinese "Triads"
had been resorted to by the British authorities since at
least the I870's.3' Organized opium traffic, in ocher words,
had become a well-established accommodation and
control mechanism; and after World War II the opium
was supplied by the "fertile triangle.""
Although the British by and large fesisted Triad.
KMT offers to mobilize against the Chinese insurgency
in Nfalaya, they also found it difficult to crack down on
tht' opium anti gambling activities of the Wa ICci secret
sok iciv, "without disrupting the fabric" of the W:a Kei
and 10,1N in" it vacuum for the Communists to 1i11.37Mean-
while the wealthv Chinese owners of tin-mines in the
more exposed countryside found it expedient to sub-
~rlize a Wa Kei-Triad private army "with strong KMT
-
,7S44.A 14th~oQ,tj?
credit for restoring security to the Malayan tin industry
by 1954.38'
In Thailand, also, the farming of the opium franchise
has been used by the government for over a'century as a
means of controlling the local Chinese population; and
the enormous profits from the opium traffic have been a
traditional source of corruption inside the Siamese Gov
erninent.30 In the 1950's, the Thai police Interior Minister
General, after an initial phase of anti-Chinese adminis-
tration, "showed every willingness to co-operate with
Kuomintang Chinese'in the campaign against Commu-
nism."AOAt the same time, his police, and in particular his
border police, collaborated with Li Mi's KMT troops in
Burma by officially "confiscating" their contraband
opium in return for a reward to KMT "informers." (As
early as 1950, a US Government representative noted
cynical reports that it was profitable for the opium-trader
to be seized and to share the reward with police)."'
It seems indisputable that some elements in the KNIT'
used opium as a means to organize and finance KMT
links with and control over the important Chinese com-
munities of Southeast Asia. This is not surprising: the
ICMT had relied on the Triads and gangs involved in the
opium traffic as early as 1927, when Chiang Kai-shek,
encouraged by foreign bankers, used the "Green Gang"
of Tu Yueh-sheng to break the Communist insurrection
in Shanghai .41
After the remnants of the Shanghai "Green" and "Red
Gangs" had relocated in Hong Kong, one finds increas-
ing references in UN Reports to the narcotics trafficking
of Triad societies in Hon, Kong and indeed throughout
the world. In 1963, for example, the US representative
to the UN Narcotics Commission "observed that the
problem of the Triad organizations (Chinese groups in-
volved in the illicit traffic in the Far East and Europe)
appeared to be significant in recent trafficking develop-
ments." Other delegates, confirming that "many heroin
traffickers ... had Triad backgrounds," noted the activi-
ties of Hong Kong Triad representatives in Germany,
Spain, and Switzerland."
This world-wide network -of Chinese secret societies
in the opium traffic extended both before and after World
War II to the Hip Sings, one of the Chinese tongs in the
United States, and also to the Bing Kong and other
American tongs. In the 1930's, the national president of
the Hip Sings, Yee On Li, was convicted for a Mafia-
linked narcotics operation involving the wife of Lucky
Luciano's partner, Thomas Pennachio; Yee was also
involved with "Hip Sing dope dealers in Chicago, San
Francisco, Pittsburgh, New York, Cleveland, Dallas, and
other important cities."" In January, 1959, a new genera-.
tion of Hip Sing officials, including San Francisco
president George W. Yee, were again indicted for nar-
cotics smuggling. A US Government report on the
indictments noted, that the tong's activities possibly
paralleled "die operations of the Triad societies in Hong
Kong."41
It has been claimed that profits from narcotics smug-
gling in the United States have been channeled into
Chiang Kai-shek's lobby in the US Congress, thus helping
to keep open the opium supply lines through Laos and
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c:,miIhued
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.l.F1CS, wrote [flat i~ .u UU aliu tile I1o11-
There is ... considerable evidence that a number of existent "invasion" of Laos, reported by Brook Club
[Nationalist) Chinese officials engaged in the illegal member Joe Alsop, than with opium? The US Govern-
smugglinry of narcotics into the United States w th ment itself, commenting on the nearby rebellion of the
o 5
the fuii knowledge and connivance of the Nationalist same year in the Shan states of Burma, called it "an
Chinese Government. The evidence indicates taut instance of a rebellion precipitated by the opium tra,Yic."52
several prominent Americans have participated in and The KMT-sponsored Shan rebellion followed a crack-
profited from these transactions. It indicates further down in the .summer of 1959 by the Burmese Govern-
that the narcotics busitless has been an important menr, after Pai Cne-jen and some 2,000 KMT troops had
factor in the activities and permutations of the China been driven from Sanskyin Mountain in Yunnan into
Lobby.41 Burma in 1958.53
By March, 1959, according to Bernard Fall, "Some of
Professor Xoen expressed the hope that his charges the Nationalist guerrillas operating in the Shan states of
would lead to a fuller legal investigation; they led, in- neighboring Burma had crossed into Laotian territory
stead, after a denial from Narcotics Commissioner and were being supplied by an airlift of 'unknown
Anslinger, to his book's being suppressed by the publish- . planes'."" Their old opium routes were being threatened
er. But Anslinger's denial, recently published, does not to the south as well. In July, 1959, the Thai Government,
touch upon.-Mr. Koen's charge about the China Lobby: in response to years of US Government pressure, ended
I can give you an unqualified ~ atement that this is its opium monopoly and announced it would clamp
manufactured out of the whole cloth: that there is no down on the narcotics traffic." Shortly after this prohibi-
scinti:la of evidence that any Chinese officials have tion, heroin, in the place of the bulkier opium, "carne to
engaged in illegal smuggling of narcotics into the be regarded as the major problem" in Thailand." By
United States with the Jull knowledge and connivance September, 1959, CAT had commenced charter airlift
of the Chinese Nationalist Government." in Laos at the expense of the American taxpayer.
Meanwhile, in May and June of 1959, Fang Chili of
And, without the italicized qualification, Mr. Anslinger's the Asian Peoples' Anti-Communist League (APACE)
refutation is hard to believe. For Chiang's Consul General visited KMT camps in Laos, Burma, and Thailand, as he
to San Francisco at the time of the Hip Sing arrests in the did again in 1960. On August 18, 1959, five days before
late 1930's, Huang Chao-chin, himself "narrowly es- the arrival of the two CAT planes in Vientiane, and 12
caped conviction ... on charges of smuggling narcotics days before the alleged "invasion," Ku Cheng-kang, who
in the US."45 Since 1952, Huang has been a member of was President of the FCRA as well as of the Taiwan
the KMT Central Committee, and today he is Chairman APACL, received in Taiwan the mysterious but influential
of the First Commercial Bank of Taiwan. Colonel Oudone Sananikone, a member of what was then
The KMT's stake in the CAT airlift to its troops in the the ruling Laotian family and nephew of, the Laotian
"fertile triangle" became obvious in 1961, when Fang Premier Phoui Sananikone.st On August 26th, 1959, in
CI-1h, a member of the KMT Central Supervisory Corn- Washington, Oudo ie's father, Ngon Sananikone, signed
?mittee and Secretary-General of the Free China Relief the US-Laos emergency aid agreement which would pay
Agency (K RA), admitted responsibility for an unlisted to charter the CAT planes, eight days after their arrival.
CAT plane that had just been shot down over Thailand This was only a few hours after. Eisenhower had left for
ov the Burmese Air Force.49 The Asian Peoples' Anti- Europe on the same day, not having had time to study
Communist League (APACL), of which the FCRA at the the aid request, for Ngon had only submitted it on August
same address was a member agency, was itself an organi- 25. On August 27, Col. Oudone Sananikone attended the
zation through which the KMT maintained overt contact founding in Taiwan of a Sino-Laotian friendship society,
with right-wing political and financial interests in Europe whose trustees included Ku Cheng-kang and Fang Chins"
and America, as well as with overseas Chinese com- Oudone Sananikone headed a "Laotian" paramilitary
munities. airline, Veha Akhat, which in those days serviced the
The Chairman of the APACL's secret liaison group in opium-growing areas north of the Plaine des Jarres with
America (in effect the heart of the American China Chinese Nationalist planes and personnel (CAT had not
Lobby) was in :959 Charles Edison, yet another right- yet begun its operations to the Meos in this region, which
wino member of the Brook Club.50 The APACL also offered such profitable opportunities for smuggling as a
wrote of its collaboration with psychological-warfare sideline for enterprising pilots.)" Colonel Oudone
experts in the Department of Defense, and with the John Sananikone also figured prominently in the secret three-
Birch Society. The.unpublicized visit to Laos of Fan- way talks between officers of Laos, South Vietnam, and
Chin, in the weeks immediately preceeding the phony Taiwan, which preceded the Laotian coup and resulting
Laos "invasion" of 1959, suggests that the narcotics crisis of April 19th, 1964, a coup which was reported
tra f1c, as well as Pathet Lao activity, may have been a two days in advance by Taiwan Radio.GO
reason why CAT's planes inaugurated their flights in Another major figure in the 1959 and 1964 Lao dal;
that year into the opium-growing Meo areas of Sam ? plots was General Duane Rathikoulne, who (few wish Joe
Ncua province. X.W41a, turn, would explain the, c?xtraQ - Alsop to Sin Ncua and showed him the staged cvicle-nc.r:
dinrX,ru~m-old, re Qrted ill th_.Chri1? ,~.~t..._._...t~#F~.,
p. w_,. .~' s, tee o r of the 1959 "invasion." General Uuunc is said to have
1 tng I?pt~_t~jQrCe's "opium runs are made with admitted in a recent interview that he was "the real boss"
CIA'protection "'St of opium operations in Laos.?1
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? 11i,~,~jlt? i lilt nC'"
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What is extraordinary, and quite possibly' criminal these planes, like Air America's in the same area, were
under US law, is not the involvement in narcotics of the not infrequently used for smuggling."
KMT, nor that of the Taiwan airline CATCL which it Willis Bird,. William Bird's brother or cousin in
controls, but of Americans exercising the authority of Bangkok, headed the Bangkok office of a "trading com-
the CIA. pany" called Sea Supply, Inc. As 1 noted earlier, Sea
.The CIA._as an_agency, it is true, cannot be identified Supply first supplied arms to the KM T troops of General
With the narcotics trade any more than car t1-`e whole Li Mi, and later trained Phao Sriyanon's Thai border
Hof the Kuomintang. In 1955, for example, while the Cllr police who were also implicated in KMT opium-snhug-
)s,as running its airlift to the opium trade in Thailand, filing activities. Like William, Willis Bird also branched
-General a;lsdale in Vietnam used CIA funds to smash a into the construction business on his own. In 1959, as
4Zro-French organization, which controlled the dope and and. Vice-President of tlhe "Universal Construction Com-
;ambling activities of Saigon and its Chinese suburb, pany," Bird was said by a Congressional committee in-
much as. t;le Triads operated in Malaya.62 tin 197"ir vestigating corruption in Laos to have bribed an iCA aid
t5th?era_ca pl;tnes are reported to have taken part in the official in Vientiane.ee-is>J962, when Presidex>tKcnne iy
growing US crackdown on the narcotics traf c. was struggling to bring the CIA hawks in Thailaxi.d.undsr
But while General Lansdale was cracking down on contr9i, his brother the- Attorrey General belatedly_.,rc-
narcotics in Vietnam, William i-I. Bird, the CAT repro- darned an indictment against Willis Birdav
,ho has.neyer
sentative in Bangkok, is said to have co-ordinated CAT returned to this country to stand trial."
air-drops to Li Mi's troops in the "fertile triangle." In Wlaat particularly canccrns~us is Of.~Qyxy?e~,,At tie
1960, after CAT began flying in Laos through "tine great personal venality. o: a US cot stzucti, n Q ic&aLorxo 7ilots
Laos fraud," his private engineering firm began the .dab.bling in opium on the side, so much as the sustzi.t .d
construction of short airstrips in Meo territory which support by CIA proprietaries of narcotics sinuggliAc-
were soon used for the collection of Laos opium, son, e tty.ties which affected the c
I e
o, it destined to be manufactured into heroin in Mar- not at all clear that this polental Unit tsar It_5
c policy fad o icial sanctio::
scilies, and forwarded to the National Crime Syndicate Eisenhower seems to have, been unaware of the airlift
in the United States." Soon Bird and Son had its own operations of Air America and Bird and Son in Laos,
airline of 50 planes flying US contract airlift to the which were apparently only authorized by an elaborate
opium-growing tribesmen, and rumors soon arose that conspiracy of deceit. By all accounts, the Kennedy Ad-
ministration was exerting pressure to remove the "est.,
r) -
~Y a2I o r? ~r L~YY
mated 4,000 Chinese Nationalists" who "were reportedly
operating in western Laos in 1961," having been "fio-,vii
from Taiwan into bases in northern Thailand."67 Even
the Johnson Administration announced in February 1964
that it would withdraw Air America from Laos: this
announcement came to naught after the organizer of
CAT's American replacement, John Davidson of Sea.
board World Services, was "accidentally" killed in a
dubious and controversial explosion of a CAT plane.08
ow could the objectives of a U$_preside nt beat odds
rl those o a, A ~proprietaryl The obvious stake or
KMT interests in CATCL is a partial explanation, to
which one can perhaps add the stake of private American
interests as well. For it is a striking fact that the law firm
of Tommy Corcoran, the Washington lawer for CATCL
and T. V. Soong, has had its own links to the interlocking
'..: ,~ _ . !.. ,.. worlds of the China Lobby and of organized crime. His
,partner, W. S. Youngman, joined the board of US Life
and other domestic insurance companies, controlled by
C. V. Starr (OSS, China) with the help of Philippine and
other Asian capital. Youngman's fellow-directors of
Starr's companies have included John S. Woodbridge of
Pan Am, Francis F. Randolph of J. & W. Seligman,
W. Palmer Dixon of Loeb Rhoades, Charles Edison of the
post-war China Lobby, and Alfred B. Jones of the Nat
alist Chinese Government's registered lobby, the Uni
versal Trading Corporation. The McClellan Committee
heard that in 1950 US Life (with Edison a director) and
a much smaller company (Union Casualty of New York)
were allotted a major Teamsters insurance contract, after
a lower bid from a larger and safer company had been
re j iloffa was accused h a fellow-trustee, testifying
agents-were
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1(:55 its5':Clittes 1-.tiff it ii t.. ..'1 ,I _ ..n}' 5 .. n'.. i iu a lalillllereli
.-sail,'" - through the interlocking Exchange and Investment Bank
The National City Bank itself had once leased its ? in Geneva." Lou Poller, King's fellow-director of the
racetrack in Havana (and also, through a subsidiary, the. Miami National Bank and a director also of the Swiss
Hotel Nationale de Cuba's casino) to Meyer Lansky of Exchange and Investment Bank, was investigated by the
the Organized Crime Syndicate.70 In 1950, Citibank's McClellan committee about his use of Teamster capital
largest shareholder, Transamerica Corporation, was rep- to acquire the Miami National Bank, and subsequently
resented through James F. Cavagnaro, in the shadowy indicted for perjury.80
"World Commerce Corporation" organized by several. It is said that rich Thai and other Asian capitalists,
OSS veterans. In 1950, the World Commerce Corpora- as well as wealthy Syndicate gangsters such as "Trigger
tion was involved in dubious soybean operations71 while Mike" Coppola, have invested heavily in Florida's post-
its subsidiary, Commerce International (China), spon- war land boons, through companies such as the General
sored the unauthorized Pawley-Cooke military assistance Development Corporation of Meyer Lansky's business
mission to Taiwan,72 and the illegal smuggling of air- associate Lou Chesler.81 Such business associations might
planes from California to the government of Chiang Kai- help explain why, for example, Prince Puchartra of
shek.1? Satiris "Sonny" Fassoulis, accused of passing Thailand became the only royal representative at the
bribes as the vice-president of Commerce International 1966 opening of Caesar's Palace in Las Vegas, a hotel-
(China), was under indictment ten years later when he casino said to be controlled by Jimmy Hoffa.8= The same
surfaced in the Syndicate-linked Guterma scandals.74 associations, if they were exposed, might cast light on the
A director of Air America through the years has been unexplained 1968 business trip to Hong Kong and South-
Robert Guestier Goelet of the City Investing Co., where east Asia of Santo Trafficante, an old Lansky associate
his fellow-directors through the years have included named in narcotics investigations." Trafficante had been
Joseph Binns of the aforementioned US Life (Binns was preceded in 1965 by John Pullman, Meyer Lansky's
involved in Bahamas and other land speculations with courier to' the Miami National Bank. In April, 1965,
Meyer Lansky's business associate Lou Chesler),16.and Pullman visited "the Peninsula Hotel in Hong Kong,
John W. Rouser (an intelligence veteran from the Pacific where the syndicate had casinos and obtained much of
who negotiated the lease of the Havana Hilton hotel its narcotics.' 184
casino to Cuban associates of the Syndicate)." The apparent._itty.ol.vem.e.t?i_of_GJ.A. proprietaries wJth
g CIA proprietaries ~, foreign narcotics pp.e.rations is_ paralleled by tl>eir_ lp-
Sa ilza _,,;-nd organized crime, when we turn our -rcnt interlock with the domestic institutions involved
v'1'he d tou d
crstand susl~-tat,
rite. tt n iron CAT to the other ldentlfted supporter of )&h organized critne1,hee
ajzt ; 6 Cs?c Sea, Su ~l Inc. Sea Supply Inc. was organized volvements more fully may well become more urgent in
in ;,slams, Flori'-i, where its counsel, Paul L. E. Helliwell, a eJuturc, as the Indochina war is " Victnamtzed" and
doubled after 1951 as the counsel for C. V. Starr insur- Janded over increasingly to CIA proprietaries suclias
ance interests, and also as His Thai Majesty's Consul in ,Air,.America. For the thrust of this admittedly sketchy
It would be hard to say whether Helliwell (the ig?quiry his been to suggest that, with the maturation of
former OSS Chief of Special Intelligence in China) was bQth._capitaIism and third-world nationalism, and with,
more active in representing US or Thai government th .. putlawing of private war operations like those
interests: in 1955 and 1956, for example, the Thai Con- financed by the Seligmans in 1903, wealthy US interests
sulate in Miami (operating out of Helliwell's' office as ,...(using the secret authorities delegated to the CIA) have
secretary for the American Bankers' Insurance Company resorted systematically to organized outlaws to pursue
of Florida) pissed over $30,000 to its registered foreign their.,operatioils.
lobbyist in Washington, Tommy Corcoran's law partner it is true that the embarrassing links between Air
James Rowe.,4_asmu a5_CQtc. rAn.anRo~ye_ryere two America and.CATCL have been diminished in the last
of the closest personal advisers to Lyndon Baines John- five years. I3}at the opium-based economy of Laos_ is s.t Jl
11z t en the rapidly rising Senate Mijority I.eau~er, being protected by a coalition of opium=growing CIA
ar' "I'hc
lie il.is l's ohbyi.ng activities for the opium-dealing Gov- lercenaries, Air America planes, and Thai troops.
? nJ?lent of PnibuJ} . and Phao Sriyanon may well have recent crackdown on Turkish opium production handled
.4a 1_a.mor.e powerful impact on US policy than his-Tegal by Corsicans in France can, of course, only increase the
ty4.iiis `Ox' C4e, A,, importance of heroin deriving from (and refined in) the
Miami, of course, has been frequently identified as "a "fertile triangle;" which is already estimated to supply-
point where many of the more important United States possibly 25 percent of American heroin consumption."
and Canadian and even the French [narcotics] traffickers Official US doubletalk about the domestic heroin
congregate."" American Bankers' Insurance, the com- problem, and the reluctance since about 1963 to rccpg-
pany from whose office Helliwell doubled as Thai Consul nize the "fertile triangle" as a source for it, is only one
General and counsel for Sea Supply, Inc., appears to have further symptom that the public sanctions of law and the
maintained its own marginal -links with the institutions constitution have yielded ground to private ;w-rests aud
servicing the world of organized cringe and narcotics." the secret sat+caiotrs J,rovi+lt:+l Jiy t111r (;f A. fvlr,r+ nl~+.,1,.
The most striking interlock is that of its director, Jack 1,.. ically, the use of illegal nit rots, s tart w+,rl:r, to lil;lrt r?rr+-
Kin;, who in 1964 was also a director of the Miami munism, resorted to by Capitalists in Situp ;I+a; ill 19/'/
National Bank. The Miami National Bank was identified and in Southeast Asia in the 1950's, seems without our
in 1969 as Navin a '' owled a to have been sanctioned inside the United
tp Adk !!W TN3 C P ~0415R000400170053-8
conduit through -v is of rn tcate money was ex- , ...
c;tr,t: f nu ~ci'
 a iii);att~tcs ;foal , 9arpvM 1w I l aS 2005/0.7/13 zCIt~+J~f~a7cF~16QQ4i FQQ~{1Q1Qa17QQr53t$an
Amazing Apclt 1970, 1), 31).
Poole (New York: O.U.P,, 1965), pp. 825-26. Pointing to the 12. US Congress, House, Committee on Un-American Activi.
suu,e