FYI - - ALLEGATIONS AND ANSWERS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP74B00415R000400170057-4
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: December 20, 2016
• Sequence Number: 57
• Content Type: SUMMARY

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FYI -- ALLEGATIONS AND ANSWERS
18 February 1972
On 27 January 1972 Allen Ginsberg appeared as a guest on the
Dick Cavett Show. He alleged, in sum, that the Central Intelligence
Agency is tied in with the drug traffic in Southeast Asia.
The March 1972 issue of Earth magazine contains the above
allegation in considerable detail. Advertising the article in Earth,
The New Republic of 19 February 1972 states, "The CIA put your
brother in Vietnam. CIA heroin traffic turned him on to smack. "
Nicholas von Hoffman appeared on CBS on 17 February, referred to
the article, and stated that Congress should investigate the matter.
The Director has dealt with this allegation previously. In an
address to the American Society of Newspaper Editors in Washington,
D. C., on 14 April 1971, he said:
"There is the arrant nonsense, for example, that the
Central Intelligence Agency is somehow involved in the world
drug traffic. We are not. As fathers, we are as concerned
about the lives of our children and grandchildren as are all of
you. As an Agency, in fact, we are heavily engaged in tracing
the foreign roots of the drug traffic for the Bureau of Narcotics
and Dangerous Drugs. We hope we are helping with a solution;
we know we are not contributing. to the problem. "
Attached is that portion of the 2 June 1971 Congressional Record
containing a letter to Congressman Charles Gubser from John E.
Ingersoll, Director of the Bureau of Narcotics and Dangerous Drugs.
The letter explains our non-involvement in drug traffic and our intelli-
gence support to programs that are dedicated to the termination of
illicit narcotics traffic.
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June' 2, 16 971 CONGRESSIONAL RECORD - Extensions of Remarks E 5305
The objective of the new policy is to induce
foreign concerns to take the Antidumping
Act into account before they engage in
sales to the United States.
The 25 Percent Rule
The Antidumping Act provides that in
normal situations fair value shall be deter-
mined by comparing the ex factory home
market price of the merchandise under in-
vestigation with the ex factory price at which
the merchandise is sold in the United States,
If the price in the United States is less than
the home market price, then there are "sales
at less than fair value" within the meaning
of the statute.
The Act also states that in situations where
the quantity of merchandise sold in the
home market is so small in relation to the
quantity sold for exportation to countries
i other than the United States as to form an
inadequate basis for comparison, then third
country price should be used as the basis for
comparison.
The Antidumping Regulations provide that
generally for purposes of determining what
constitutes an "inadequate basis of com-
parison" for fair value purposes, home mar-
ket sales will be considered to be inadequate
if less than 25 percent of the non-U.S, sales
of the merchandise are sold in the home mar-
ket.
The selection of home market or third
country price for fair value comparison can
easily be crucial to the results of antidump-
ing investigations, for frequently home mar-
ket price tends to be higher than third coun-
try price. This is particularly true where
merchandise is sold in a protected home mar-
ket and, when sold in third countries, is ex-
posed to the vagaries of world competition.
It has been Treasury's experience that
cases arise where sales in the home market
are adequate as a basis for fair value com-
parison, even though less than 25 percent of
the non-U.S. sales are sold in the home mar-
ket. From a technical standpoint, the exist-
ing regulations provide for this situation,
since the 25 percent rule is introduced by
the adverb "Generally." Examination of the
precedents, however, revealed that the Treas-
ury has not, in recent years at least, made
an exception in applying the 25 percent rule.
This left the Treasury with two alterna-
tives. It could have ignored the previous In-
terpretations of the Antidumping Regula-
tions which had, in effect, applied the regula-
tions as if the word "Generally" were not
there, or it coud propose a change in the
Antidumping Regulations to eliminate the
25 percent rule. We chose the latter course.
The proposal was published in the Federal
Register of April 27, and is currently open
for comment by interested persons. Any com-
ments received will be carefully considered
before we take final action on this proposal.
A LOOK INTO THE FUTURE
In my judgment, we have only come to
the end of the beginning of the rejuvenation
process. But, I believe we have made a solid
start.
Let me take a final brief moment to touch
upon what I see happening in the future. We
have taken steps to initiate a fresh examina-
tion of the Treasury's antidumping proce-
dures and regulations to see what more can
be done. The regulations were substantially
revised in mid-1968 after a broad review,
with the dual objectives of conforming the
Treasury's procedures to the requirements
of the International Anti-Dumping Code,
and also of having the regulations imple-
ment in clear and precise language the ob-
jectives of the Antidumping Act. With al-
most three additional years of experience
under the regulations, as then revised, it is
now appropriate to stop and take a new look
to see whether additional changes may be ap-
propriate. A Notice of Proposed Rule Making
to this effect was published in the Federal
Register of April 13, 1971.
Sixty days are being allowed for the sub-
mission of comments. I would assume that
many persons present here today-if you are
not already aware of the Treasury's invita-
tion to submit comments-may wish to do
so.
Let me emphasize that the Treasury De-
partment continues, as always, to adhere to
its policy of equitable administration of the
Antidumping Act. With the increased per-
sonnel assigned to this field and modernized
procedures and policies, we shall speed tip
antidumping investigations, thereby making
administration of the law more effective-all
this without sacrificing equity.
Let me also emphasize that the Treasury
Department and the Administration are
strongly opposed to having the Antidumping
Act transformed into an instrument of pro-
tectionism. On the other hand, we are
equally strongly opposed to allowing foreign
firms to injure U.S. Industry by unfair price
discrimination. It is with the latter objec-
tive in mind that the Treasury Department
Introduced the changes in the administra-
tion of the Antidumping law, which I have
discussed with you today. To the extent that
we succeed in our objective, the Treasury's
rejuvenation of the Antidumping Act will
become an Increasingly important influence
in favor of a freer International trade policy.
In conclusion, I would like to repeat a
statement made by Secretary Connally on
May 17 before the Subcommittee on Inter-
national Trade of the Senate Committee on
Finance:
"The efforts to foster increased competi-
tiveness in our economy must be actively
pursued in the context of fair and liberal
trading arrangements."
RAMPARTS MAGAZINE MISREPRE-
SENTS ROLE OF CENTRAL INTEL-
LIGENCE AGENCY IN FIGHTING
AGAINST IMPORTATION OF DAN-
GEROUS DRUGS
HON. CHARLES S. GUBSER
OF CALIFORNIA
IN THE HOUSE OF REPRESENTATIVES
Wednesday, June 2, 1971
Mr. GUBSER. Mr. Speaker, recently
Ramparts magazine published an article
which, like so many other articles which
appear in new left publications, attempt-
ed to discredit established agencies of the
Government, including the Central In-
telligence Agency. Unfortunately, the
Stanford Daily, the newspaper pub-
lished by students at Stanford Univer-
sity, saw fit to lend credibility to this
article by reprinting it.
A tearsheet from the Stanford Daily
was sent to me by a constituent" and I
submitted it to the Bureau of Narcotics
and Dangerous Drugs with a request for
comment. Under date of May 27 I re-
ceived a reply from Mr. John E. Ingersoll,
director of the Bureau of Narcotics and
Dangerous Drugs. His letter should he
brought to the attention of all responsible
Members of Congress and the press since
it certainly c"ntradicts the implications
contained in the Ramparts magazine
article. Mr. Ingersoll's response follows:
H011. CHARLES S. GUBSER
U.S. House of Representatives
Washington, D.C.
DEAR CONGRESSMAN Gl'essR: This Is in
response to your letter of May 21, 1971, which
enclosed a tearsheet from the "Standard
Daily" (a publication of Stanford Univer-
sity) of the article entitled, "The New Opium
War," as reprinted from "Ramparts Mag-
azine."
Charges made in the article appear to be
a part of a continuing effort to discredit
agencies of the U.S. Government, such as the
U.S. Military, the FBI, the CIA, and the De-
partment of State, all of which are, in point
of fact, working actively with the Bureau of
Narcotics and Dangerous Drugs (BNDD) in
our worldwide effort to curtail International
drug traffic.
Actually, CIA has for sometime been this
Bureau's strongest partner in identifying
foreign sources and routes of Illegal trade in
narcotics. Their help has Included both direct
support in intelligence collection, as well as
in intelligence analysis and production. Liai-
son between our two agencies is close and
constant in matters of mutual interest. Much
of the progress we are now making in iden-
tifying overseas narcotics traffic can, in fact,
be attributed to CIA cooperation.
In Burma, Laos, and Thailand, opium Is
produced by tribal peoples, some of whom
lead a marginal existence beyond the polit-
ical reach of their national governments.
Since the 1950's, this Southeast Asian area
has become a massive producer of Illicit
opium and Is the source of 500 to 700 metric
tons annually, which Is about half of the
world's illegal supply. Up to now, however,
less than ten percent of the heroin entering
the United States comes from For Eastern
production.
The dimensions of the drug problem and
the absence of any strong political base for
control purposes has been a dilemma for
United Nations opium control bodies op-
erating In Southeast Asia for many years.
Drug traffic. use, and addiction appears to
have become accepted as a fact of life in this
area and. on the whole, public attitudes
are not conducive to change.
The U.S. Government has been concerned
that Southeast Asia could become the major
source of illicit narcotics for U.S. addicts
after the Turkish production is brought
Under control. The Bureau of Narcotics and
Dangerous Drugs, with the help of CIA,
DOD. and the Department of State, has been
working to define and characterize the prob-
lem so that suitable programs to suppress
the illicit traffic and eliminate illegal opium
production, such as the proposed United
Nations pilot project in Thailand, can be
implemented.
It Is probable that opium production in
Southeast Asia will be brought under effec-
tive control only with further political de-
velopment In these countries. Nevertheless,
in consideration of U.S. Military personnel
in the area. as well as the possibility that
opium from this area may become a source
for domestic consumption. concerned U.S.
Agencies, including CIA, Bureau of Customs.
DoD, and State, are cooperating with BNDD
to work out programs to meet the immedi-
ate problem as well as provide longer term
solutions.
Since the subject matter of your letter
concerns CIA. I have taken the liberty of
furnis:ling a copy along with my reply to
Director Richard Helms.
Sincerely.
JOHN E. INGF.RSOI.I..
Director,
As an enclosure to his letter. Mr. In-
gersoll included a paper entitled "Recent
Trends in the Illicit Narcotics Market
in Southeast Asia." This should also be
of interest to every person who is con-
cerned about this problem and I there-
fore include the text herewith:
RECENT TRENDS IN THE ILLICIT NARCnnTlo S
MARKET IN SOV;TIIE.ASr A`IA
1. The reported increasing incidence f
heroin addiction among U.S. servicemen in
Vietnam and recent intelligence indicot nq
that heroin traffic between Sou+he.lst A:.ia
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