THE NEW OPIUM WAR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000300080001-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 16, 2016
• Document Release Date: May 11, 2005
• Sequence Number: 1
• Publication Date: May 1, 1971
• Content Type: MAGAZINE

Approved For Release 200 }S120MCIA-RDP75BOO38OR000300080001-4
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by Frank. Browning and Banning Garrett
IT R. PRESIDENT, THE SPECTER OF heroin addic-
4 t ticn is haunting nearly every community in
ator Vance Hartke spoke up _n March 2 in
support of a resolution on drug control being considered in
the U.S. Senate. Estimating that there are 500,000 heroin
addicts in the U.S., he pointed out that nearly 20 percent
of them are teenagers. The concern of Hartke and others
is not misplaced. Heroin has become the major killer of
young people between 18 rind 35, outpacing death from
accidents, suicides or cancer. It has also become a major
cause of crime: to sustain their habits, addicts in the U.S.
spend more than $15 million a day, half of.it coming from
the 55 percent of crime in the cities which they commit and
the annual $2.5 billion worth of goods they steal.
Once safely isolated as part of the destructive. funkiness
of the black ghetto, heroin has suddenly spread out into
Middle America, becoming as much a part of suburbia as
the Saturday barbecue. This has gained it the attention it
otherwise never would have had. President Nixon himself
says it is spreading with "pandemic virulence." People are
becoming aware that teenagers are shooting up at lunch-
time in schools and returning to classrooms to nod the day
away. But what they don't know-and what no one is tell-
ing them-is that neither the volcanic eruption of addiction
in this country nor the crimes it causes would b risible
without the age-old international trade in opium (from
which eroln Is ertve ,yyat heroin a Iction-like in-
flation, unemployment, and most of the other chaotic forces
in An Tr~ica society today- ;s d; acIl; relaxed. to the U.$.
w
The connection between war and opium in Asia is as old
as empire itself. But the relationship has never been so sym-
biotic, so intricate in its networks and so vast in its implica-
tions. Never before has the trail of tragedy been so clearly
marked as in the present phase of U.S. involvement in South-
east Asia. For the international traffic in opium has ex-
panded in lockstep with the expanding U.S. military pres-
ence there, just as heroin has stalked the same young people
in U.S. high schools who will also be called on to fight that
among its young people, the young soldiers it is sending to
Vietnaia are getting hooked and dying of overdoses at the
rate of one a day. Whilo the President is declaring war on
narcotics and on cri :ae in the streets, he is widening the war
in Laos, whose principal product is opium and which has
now become the funnel for nearly half the world's supply
of the narcotic, for which the U.S. is the chief consumer.
There would have been a bloodthirsty logic behind the
expansion of the war into Laos if the thrust had been to
seize supply centers of opium the communists were hoard-
ing up to spread like a deadly virus into the free world. But
the communists did not control the opium there: proces-
sing and distri'bution_ were already in the hands of t nee free
world. Who are the principals of this new opium war? The
ubiquitous CIA, whose role in getting the U.S. into Viet-
nam is well known but whose pivotal position in the opium
trade is not; and a rogue's gallery of organizations and
people-from an opium army subsidized by the Nationalist
Chinese to such familiar names as Madame Nhu and Vice
President Nguyen Cao Ky-who are the creations of U.S.
policy in that part of the world.
The story of opium in Southeast Asia is a strange one at
every turn. But the conclusion is known in advance: this
war has come home again-in a silky grey powder that goes
from a syringe into America's mainline.
OST OF THE OPIUM IN Southeast Asia is grown
in a region known as the "Fertile Triangle," an
area covering northwestern Burma, northern
Thailand, and Laos. It is a mountainous jungle
inhabited by tigers, elephants, and some of the most poison-
ous snakes in the world. The source. of the opium that
shares the area with these exotic animals is the poppy, and
the main growers are the Meo hill tribespeople who inhabit
the region. The Meo men chop back the forests in the wet
season so that the crop can be planted in August and Sep-
tember. Poppies produce red, white or purple blossoms be-
tween January and March, and when the blossom withers,
an egg-sized pod is left. The women harvest the crop and
make a small incision in the pod with a three-bladed knife.
The pod exudes a white latex-like substance which is left to
accumulate and thicken for a day or two. Then it is care-
fully gathered, ooiled to remove gross impurities, and the
sticky substance is rolled into balls weighing several pounds.
A fraction of the opium remains to be smoked by the vil-
lagers, but most is sold in nearby rendezvous with the local
smugglers. It is the Meos' only cash crop. The hill tribe
growers can collect as much as $50 per kilo, paid in gold,
silver, various commodities, or local currency. The same
kilo will bring $200 in Saigon and $2000 in San Francisco.
There are hundreds of routes, and certainly as many
methods of transport by which the smugglers ship opium-
war. The ironies that have accompanied the war in Vietnam
since its onset are more poignant than before. At the very
moment that public officials are wringing their hands over
the heroin problem, Washington's own Cold War crusade, re-
plete with clandestine activities that would seem far-fetched
even in a spy novel, continues to play a major role in a
process that has already rerouted the opium traffic from the
Middle East to Southeast Asia and is every day opening new
channels for its shipment to the U.S. At the same time the
government starts crash programs to rehabilitate drug users
Approved For Release 2005/05/20 : CIA-RDP75B0038OR000300080001-4
 Approved For Release 2005/05/20 : CIA-RDP75B0038OR000300080001-4
some of it already refined into heroin-through and out of yeas, where they now hold at leasteight village bases. Just
Southeast Asia. But there are three major networks. Some last year a reporter who was at Chieng Mai, Thailand, saw
of the opium from Burma and northern Thailand moves Thai troops and American advisors as well as military sup-
into Bangkok, then to Singapore and Hong Kong, then via plies provided by the Taiwan government. The Taiwan gov-
military aircraft, either directly or through Taiwan, to the crnment, he noted, maintains an information of Ice there
United States. The second, and probably major, route is and regularly accompanies the KMT troops on their forays
from Burma or Laos to Saigon or to ocean drops in the Gulf into China. to proselytize among the peasants of Yunnan
of Siam; then it goes either through the Middle East and province. These sorties are coordinated by the CIA (which
Marseille to the U.S. or through Hong Kong and Singapore is feverishly active if not wholly successful in this area),
to the West Coast. A final route runs directly from outposts and the United States even provides its own backwater R&R
held by Nationalist Chinese troops in Thailand to Taiwan for the weary KMT, flying its helicopters from hilltop to
and then to the U.S. by a variety of means. hilltop to pick up the Chinese (and the Establishment re-
One of the most successful of the opium entrepreneurs porter who supplied this information) for organized basket-
who travel these routes, a Time reporter wrote in 1967, is ball tournaments.
Chan Chi-foo, a half-Chinese, half-Shan (Burmese) mod- Although the KMT troops are often referred to as "rem-
ern-day warlord who might have stepped out of a Joseph nants," they are not just debris left behind by history. They
Conrad adventure yarn. Chan is a soft-spoken, mild-man- are in fact an important link in American and Taiwan policy
nered man in his late thirties who, it is said, is totally ruth- toward Communist China. Not only does Chiang Kai-shek
less. He has tremendous knowledge of the geography and maintain direct contact with his old 93rd, but fresh recruits
people of northwestern Burma and is said to move easily are frequently sent to maintain a troop level of from 5000
among them, conversing in several dialects. Yet he is also to 7000 men, according to a top-ranking foreign aid official
able to deal comfortably with the bankers and other busi- in the U.S. government. And, as the New York Times has
nessmen who finance his operations from such centers as noted, Chiang Kai-shek's son, Chiang Ching-Kuo, is widely
Bangkok and Vientiane. Under Chan Chi-foo's command believed to be in charge of the KMT operations from his
are from 1000-2000 well-armed men, with the feudal hier- position as chief of the Taiwan secret police.
archy spreading down to encompass another 3000 hill tribes- The KMT are tolerated by the Thais for several reasons:
men, porters, hunters and opium growers who pay him feal- they have helped in the counterinsurgency efforts of the
ty and whom he regards about the same as the more than Thai and U.S. governments against the hill tribespeople in
500 small mules he uses for transport. Thailand; they have aided the training and recruiting of
Moving the opium from Burma to Thailand or Laos is a Burmese guerrilla armies for the CIA; and they offer a pay-
big and dangerous operation. One of Chan's caravans, says off to the Border Patrol Police (BPP), and through them to
one awe-struck observer, may stretch in single file for well the second most powerful man in Thailand, Minister of the
over a mile, and may include 200 mules, 200 porters, 200 Interior Gen. Prapasx Charusathira. The BPP were trained
cooks and camp attendants, and about. 400 armed guards. in the '50s by the CIA and now are financed and advised by
Such a caravan can easily carry 15 to 20 tons of opium, AID and are flown from border village to border village by
worth nearly a million dollars when delivered to syndicate Air America. The BPP act as middlemen in the opium trade
men in Laos or Thailand. between the KMT in the remote regions of Thailand and the
To get his caravans to market, however, Chan must pay Chinese merchants of Bangkok. These relationships, of
a price, for the crucial part of his route is heavily patrolled course, are flexible and changing, with each group wanting
not by Thais or Laotians but by nomadic Nationalist Chi- to maximize profits and minimize antagonisms and dangers.
nese or Kuomingtang (KMT) troops. Still supported by the But the established routes vary, and sometimes double-
ruling KMT on Taiwan, Generalissimo Chiang Kai-shek's crosses are intentional.
93rd Division controls a major part of the opium flowing In the summer of 1967 Chan Chi-foo set out from Burma
out of Burma and Thailand. Roving bands of mercenary through the KMT's territory with 300 men and 200 pack-
bandits, they fled to northern Burma in 1949 as Chiang's horses carrying nine tons of opium, with no intention of pay-
armies were being routed on the Chinese mainland, and have ing the usual fee of $80,000 protection money. But-troops cut
maintained. themselves since by buying opium from the off the group near the Laotian village of Ban Houei Sai in an
nearby Meo tribesmen which they then resell, or by exacting ambush that turned into a pitched battle. Neither group,
tribute payments from entrepreneurs like Chan Chi-foo. As however, had counted on the involvement of the kingpin of
travellers to the area attest, these troops also supplement the area's opium trade: the CIA-backed Royal Lao Govern-
their income by running Intelligence operations into China ment Army and Air Force, under the command of General
and Burma for the U.S. Ouane Rathikouns. Hearing of the skirmish, the general
pulled his armed forces out of the Plain of Jars in north-
HE BURMESE GOVERNMENT regularly complained eastern Laos where they were supposed to be fighting the
1 about all this activity to the United Nations, the Pathet Lao guerrillas, and engaged two companies and his
Taiwan government and the United States, charms entire air force in a battle of extermination against both sides.
the Americans and Taiwanese with actively The result was nearly 30 KMT and Burmese dead and a
supplying and supporting the KMT, which in turn has half-ton windfall of opium for the Royal Lao Government.
organized anti-government guerrillas. In 1959 Burmese
ground troops seized three opium processing plants set up
by the KMT guerrillas at Wanton; the troops also took an -N A MOMENT OF revealing frankness shortly after the
airstrip the Chinese had used to fly in reinforcements. B battle, General Rathikoune, far from denying the role
February 1961 the BuARPr%y KFs41EP0e 122 ` 5/20 !CI 1pzAQ goQ9iaQ4)Qam~o4ters that the
southeast into the Thai-Burmese and Thai-Laotian border opium trade was "not bad for Laos." The trade pro-
vides cash income for the Meo hill tribes, he argued, who
 Approved For Release 2005/05/20 : CIA-RDP75B0038OR000300080001 ;4
would otherwise be penniless and therefore a threat to Laos's The secrecy surrounding Long Cheng has hidden the
political stability. He also argued that the trade gives the Lao trade from reporters. But security has not been co,nplete:
elite (which includes government officials) a chance to ac- Carl Strock reported in the January 30 Far Eastern Eco-
cumulate capital to ultimately invest in legitimate enter- nomic Review, "Over the years eight journalists, including
-loses, thus building up 'Laos's economy. But if these ration- myself, have slipped into Long Cheng and have seen Ameri-
lizations seemed weak, far less convincing was the general's can crews loading T-28 bombers while armed CIA agents
assertion that, since he is in total control of the trade now, chatted with uniformed Thai soldiers and piles of raw opi-
when the time comes to put an end to it he will simply put um stood for sale in the market (a kilo for $52). It's old hat
an end to it. by now, but Long Cheng is still so secret that in the past
It is unlikely that Rathikoune, one of the chief warlords year both the U.S. embassy press attache and the director
of the opium dynasty, will decide to end the trade soon. of USAID's training center were denied clearance to visit
Right outside the village of Ban Houei Sai, hidden in the the mountain redoubt." The CIA not only protects the opi-
jungle,' are several of his refineries-called "cookers"- um in Long Cheng and various other pick-up points, but
which manufacture crude morphine (which is refined into also gives clearance and protection to opium-laden aircraft
heroin at a later transport point) under the supervision of flying out.
professional pharmacists imported from Bangkok. Rathi- For some time, the primary middle-men in the opium
koune also has "cookers" in the nearby villages of Ban traffic had been elements of the Corsican Mafia, identified
Khwan, Phan Phung and Ban Kheung (the latter for opium in a 1966 United Nations report as a pivotal organization in
grown by the Yao tribe). Most of the opium he procures the flow of narcotics. In a part of the world where transpor-
rest from Burma in caravans such as Chan Chi-foo's; the tation is a major problem and where air transport is a solu-
and comes from Thailand or from the hill tribespeople (11e? lion, the Corsicans were able to parlay their vintage World
and Yao) in the area near Ban Houei Sai. Rathikoune flies
the dope from the Ban Houei Sal area to Luang War II airplanes (called "the butterfly fleet" or, according
"Air Prabang, the to "Pop" Buell, U.S. citizen-at-large in the area, "s,Opz-
Royalry aid capital, in helicopters given by the United States um") into a position of control. But as the Laotian civil
mOter aid program. war intensified in the period following 1963, it became in-
Othhers in the Lao elite and government. own refineries. creasingly difficult for the Corsicans to operate, and the
There are cookers for heroin in Vientiane, two blocks from Meos
started to have trouble getting their crop out of the
the King's residence; near Luang Prabang; on Khong Island hills in safety.
in the Mekong River on the Lao-Cambodian border; and The vacuum that was created was quickly filled by the
one recently built by Kouptasith Abhay (head of the mill- Royal Lao Air Force, which began to use helicopters and
tary region around Vientiane, but also from the powerful
Abhay family of Khong Island) at Phou Khao Khouai, just planes donated by the U.S. not only for fighting the Pathet
Lao but also for flying opium out from airstrips pockmark-
ince
P
d
r
e are
north of Vientiane, Other Lords of the Tra
ing the Laotian hills. This arrangement was politically more
Boun Oum of Southern Laos, and the Sananikone family, advantageous than prior ones, for it consolidated the in-
called the "Rockefellers of Laos." Phoui Sananikone, the terests of all the anti-communist parties. The enfranchise-
elan patriarch, headed a U.S.-backed coup in 1959 and is mcnt of the Lao elite gave it more of an incentive to carry
presently President of the National Assembly. Two other on the war Dulles had committed the U.S. to back; the safe
Sananikones are deputies in the Assembly, two are generals transport of the Meos' opium by an ideologically sanctioned
(one is Chief of Staff for Rathikoune), one is Minister of network increased the incentive of these CIA-equipped and
Public Works, and a host of others are to be found at lower tribesmen to fight the Pathet Lao. The U.S. got,
levels of the political, military and civil service structure. -trained
parties that would cooperate with its foreign policy not only
And the Sananikones' airline, Veha Akhat, leases planes and for political reasons, but on more solid economic grounds.
pilots from Taiwan for paramilitary operations which lend
themselves easily to commerce with opium-growing tribes- Opium was the economic cement binding all the parties to-
people. people. But the opium trade is popular with the rest of the gether much more closely than anti-communism could.
I As this relationship has matured, Long Cheng has become
li
i
i
h
nes
r
t a
g
elite, who rent RLG aircraft or create fly-by-n
(such as Laos Air Charter or Lao United Airlines) to do
their own direct dealing.
a major collection point for opium grown in Laos. CIA
protege General Vang Pao, former officer for th. French
colonial army and now head of the Meo counterinsurgents,
been t uses his U.S.-supplied helicopters and STOL (short-take-off-
l
ways
ONTROL of THE OPIUM TRADE has not a
in the hands of the Lao elite, although the U.S. and-landing) aircraft to collect the opium from the sur-
h been at least peripherally involved in who rounding area. It is unloaded and stored in hutches in Long
ster Dulles's Cheng. Some of it is sold there and flown out in Royal
F
J
h
i
o
n
o
nce
the beneficiaries were s
-?o?~ Laotian Government C-47s to Saigon or the Gulf of Siam
famous 1954 commitment to maintain an anti-communist o
r the South China Sea where it is dropped to waiting fish-
,
Laos. The major source of the opium in Laos has always in boats. Some of the opium is flown to Vientiane, where
{ been the Meo growers, who were selected by the CIA as its g
it is sold to Chinese merchants who then fly it to Saigon or
counterinsurgency bulwark against the Pathet Lao guerrillas. to the ocean drops. One of Vang Pao's main sources of trans-
The Meos' mountain bastion is Long Cheng, a secret base port, since the RLG Air Force is not under his control, is
80 miles northeast of Vientiane, built by the CIA during the ' the CIA-created Xieng Khouang Airline, which is still super-
1962 Geneva Accords period. By 1964 Long Chen0 s pop- tvised by an American, though it is scheduled soon to be
ulation was nearly 50,000, comprised largely of refugees turned over completely to Yang Pao's men. The airline's two
who had come to escape the war and who were kept busy C 47s (which can carry a maximum of 4000 pounds) are
growing poppies in they e ~ I~ to 2005/05/ 4e9A}fW7 QQ ( Q1 3Q0080001-4
V
 , ,,.,. iv ..,.iv11 ulru r I leg in Laos, the opium trade was
booming. Production had grown rapidly since the early '5N
to a level of 175-200 tons a year, with 400 of the 600 tons
produced in Burma, and 50-100 tons of that grown in Thai-
land, passing through Laotian territory. But if the opium
has been an El Dorado for the Corsicans, the Lao elite, the
CIA and others, it has been a nemesis for the Meo tribes-
men. For in becoming a pawn in the larger strategy of the
U.S., the Meos have seen the army virtually wiped out, with
the average age of recruits now 15 years, and their-popula-
tion reduced from 400,000 to 200,000. The Meos' reward
for CIA service, in other words, has been their destruction
as a people. (See Hard Times section, page 14)
OTH TIIE COMPLEXITY AND THE FINALITY of the
- bizarre is the opium network and so pervasive the
traffic that were it to appear in an Ian Fleming plot we
would pass it off as torturing the credibility of thriller fic-
tion. But the trade is real and the net has entangled govern-
ments beyond the steaming jungle of Indochina. In 1962,
for instance, an opium-smuggling scandal stunned the entire
Canadian Parliament. It was in March of that year that
Prime Minister Diefenbaker confirmed rumors that nine
Canadian members of the immaculate United Nations In-
ternational Control Commission had been caught carrying
opium from Vientiane to the International markets in Sai-
gon on UN planes.
The route from Laos to Saigon has long been one of the
well-established trails of the heroin-opium trade. In August
1967, a C-47 transport plane carrying two-and-a-half tons
of-opium and some gold was forced down near Da Lat, South
Vietnam, by American gunners when the pilot failed to-
identify himself. The- plane and its precious cargo, report-
edly owned by General Rathikoune's wife, were destined
for a Chinese opium merchant and piloted by a former
KMT pilot, L. G. Chao. Whatever their ownership, the
dope-running planes usually land at Tan Son Nhutairbase,
where they are met in a remote part of the airport with the
protection of the airport police.
A considerable part of the opium and heroin remains in
Saigon, where it is sold directly to U.S. troops or distributed
to U.S. bases throughout the Vietnamese countryside. One
G.I. who returned to the states an addict was August
Schultz. He's off the needle now, but how he got on is most
revealing. Explaining that he was "completely straight, even
a right-winger" before he went into the Army, August told
RAMPARTS how he fell into the heroin trap: "It was a regu-
lar day last April [ 1970] and I just walked into this bunker
and there were these two guys shooting up. I said to them,
`What you guys doing?' Believe it or not I really didn't
know. They explained it to me and asked me if I wanted to
try it. I said sure."
Probably a fifth of the men in his unit have at least tried
junk, August says. But the big thing, as his buddy Ronnie
McSheffrey adds, was that most of the officers in his com-
pany-including the MPs-knew about it. McSheffrey saw
MPs in his own divisiori (6th-- Battalion,. 3 Ist Infantry, 9th
Division) at Tan An shoot up, just as he says they saw him.
He and his buddies evenwatched the unit's sergeant-major
receive payoffs at a nearby whorehouse where every kind of
An article by Kansas City newspaperwoman Gloria Em-
erson inserted into the Congressional Record by Senator
Stuart Symington on March 10 said: "In a brigade head-
quarters at Long Binh, there were reports that heroin use in
the unit had risen to 20 percent ... 'You can salute an offi-
cer with your right hand and take a "hit" (of heroin) in
your left,' an enlisted man from New York told me... .
Along the 15-mile Bien Hoa highway running north to Sai-
gon from Long Binh, heroin can be purchased at any of a
dozen conspicuous places within a few minutes, and was by
this reporter, for three dollars a vial."
Adding glamour to the labyrinthine intrigue of Viet-
nam's opium trade throughout the late 1950s and early '60s
was the famous Madame Nhu, the Dragon Lady of Saigon.
Madame Nhu was in a position to be very likely coordinator
for the entire domestic opium traffic in Vietnam; yet so
great is the power she still wields from her palatial exile in
Paris that she has intimidated one American publisher and
kept him from publishing the story. In his book Mr. Pop,
Don Schanche, former editor of Horizon and former man-
agingeditor of the Saturday Evening Post, recounts the fol-
lowing interchange on the Plain of Jars during August 1960
between Edgar "Pop" Buell-the Indiana farmer who left
his home to work with the Meo tribespeople-and- a local
restaurateur: - -
... Buell drove with Albert [Foure] to Phong Savan
and watched from the side of the airstrip as a modem
twin-engined plane took on a huge load of opium. -Be-
neath the wing, talking heatedly with the plane's Cor-
sican pilot, was a slender woman dressed in long white
silk pants and ao d'ai, the side-slit, high-necked gown
of Vietnam. Her body was exquisitely formed, and her
darkly beautiful face wore a clear expression of author-
ity. Even Buell could see that she was Vietnamese, not
Lao. -
"Zat," said Foure, "'is ze grande madame of opium
from Saigon." Edgar never learned her name, but he
recognized the unforgettable face and figure when the
picture of an important South Vietnamese politician
appeared months later in an American news magazine.
Though Schanche's publisher, David -McKay Co., refused
to publish her name for fear of reprisals, the unforgettable
face was that of Madame Nhu. -
UT SAIGON'S OPIUM TRADE is not new. Its history
stretches back to 1949, when the French appointed
former Vietnamese Emperor Bao Dai as chief of
state. Bao Dai brought with him as chief of po-
lice Bay Vien, the undisputed leader of Saigon's criminal
underground, which controlled not only the gambling and
narcotics trade in Saigon but also the important Chinese
suburb of Cholon. Bao Dai and Bay Vien held power until
they were displaced after the 1954 Geneva Accords by Ngo
Dinh Nhu, Diem's brother. Nhu-had gained prominence in
Vietnam as an organizer of a Catholic trade union move-
ment modeled after the French Force Ouvriere, which the
CIA had helped supply in the 1940s to break France's com-
munist dockworkers' union, the CGT.
At first Nh? f
i
d
e
gne
pprbved For Release 200.5/05/2U 101 Ib'P5M3]@Ofwm3e0w00obf the Saigon
secret police and-thereby-the city's opium and heroin
 trade as well. Just as ApkZil'1RiyrFe46r sl1@Ard20 CIA fRDin5c 003810kR000300d08000 4e factories in
power, a little-known figure entered the Diem military ap-
tifarseille. The Mediterranean trade was controlled by the
paratus-a man who through the years would carefully ex- Corsican Mafia (which itself has long been related to such
tend his control over the air force and end up eventually American crime lords as Lucky Luciano, who funneled a
heir not only to the South Vietnamese goyernment but to certain amount of dope into the black ghettoes). But high
'the opium and heroin trade as well. That man was Nguyen officials in the narcotics control division of the Canadian
Cao Ky, who had just returned, from Algeria to take charge government, and in Interpol, the International Police Agen-
of the South Vietnamese air transport's C-47 cargo planes. cy, confirm that since World War II-and paralleling the
At what particular point in time Ky became involved U.S. expansion in the Pacific-there has been a major re-
with the Nhus in the opium trade is not known, but by the
end of the '50s he was cutting quite a figure in Saigon's elite direction in the sources and routing of the worldwide opium
circles. In an interview with RAMPARTS, retired Marine traffic.
Corps Colonel (and author of the book The Betrayal) Wil- According to the United Nations Commission on Drugs
liam Corson described Ky's life in the late 1950s in the fol- nd Narcotics, since at least-1966 80 percent of the world's
1
ifto
vow
lowing fashion: "Ky of course was a colonel in the Air
Force back then and he used to have these glittering cock-
tail parties at the top of the Caravelle [Hotel] in Saigon.
He laid out a fantastic spread-which was all very inter-
esting because the amount of money he made as a soldier
was maybe $25 to $30 a month and he didn't have any
other outside income."
The first real light shed on the possible sources of Ky's
extracurricular income came only in the spring of 1968,
when Senator Ernest Grucning revealed that four years
earlier Ky had been in the employ of the CIA's "Operation
Haylift," a program which flew South Vietnamese agents
"into North Vietnam for the purpose of sabotage, such as
blowing up railroads, bridges, etc." More important, Ky
was fired, Gruening's sources claimed, for having been
caught smuggling opium from Laos back into Saigon. Sig-
nificantly, Ky and his flight crews were replaced by Nation-
alist Chinese Air Force pilots.
Neither the CIA, the Pentagon, nor the State Department
ever denied Ky worked on Operation Haylift. Nor did they
deny that he had smuggled opium back into Saigon. How-
ever, a U.S. embassy spokesman categorically denied Ky
was ever fired from "any position by any element of the
U.S. Government for opium smuggling or for any other
reason:" When Ky came to power in February 1965, most
observers supposed he had relinquished participation in the
opium traffic (although it was "common knowledge" that
Madame Ky had replaced Madame Nhu as Saigon's Dragon
Lady and dealt in opium directly with Prince Boun Oum in
Southern Laos). However, a high Saigon military official to
whom Ky at one time offered a place in the opium traffic
says Ky continued to carry loads ranging from 2000 to 3000
kilos of opium from Pleiku to Saigon in the spring of 1965
after he had assumed power and after Operation Haylift
had been discontinued. Those runs included regular pickups
near Dak To, Kon Turn and Pleiku. Since then there has
been no indication that Ky has in any way altered the trans-
port. Corson, who returned to Vietnam in 1965, observed
that Ky's involvement in the trade had become so routine
that it had lost almost all its adventure and intrigue.
Z''1TH GROSS RETURNS FROM the Indochinese trat-
\\\`\Tyr- lion per year, opium is one of the kingpins of
Southeast Asian commerce. Indochina has not
always had such an enviable position. Historically most of
the world's supply of opium and heroin came through Well-
established routes from Turkey, Iran and China. Then it
Approved
1200 tons of illicit opium has come from Southeast Asia-
irectly contradicting most official U.S. claims that the pri-
ary sources are Middle Eastern. In 1966 Interpol's former
13ecretary General Jean Nepote told investigators from Ar-
hur D. Little Research Institute (then under contract to
he U.S. Government Crime Commission) that the Fertile
riangle was a principal production center of opium. And
as, year an Iranian government official told a United Na-
ions seminar on narcotics control that 83 percent of the
wild's illegal supply originated in the Fertile Triangle-the
rea where opium is controlled by the U.S.-supplied troops
i Laos and Nationalist China.
It is odd that the U.S. government, with the most massive
Intelligence apparatus in history, could miss this innovation.
But though it may seem to be an amazing oversight, what
has happened is that Richard Nixon and the makers of
America's Asian policy have completely blanked Indochina
out of the world narcotics trade. Not even Joe Stalin's re-
moval of Trotsky from the Russian history books parallels
this historical reconstruction. In his recent State of the
World address, Richard Nixon dealt directly with the inter-
national narcotics traffic. "Narcotics addiction has been
spreading with pandemic virulence," he said, adding that
"this affliction is spreading rapidly and without the slightest
respect for national boundaries." What is needed is "an in-
tegrated attack on the demand for [narcotics], the supply
of them, and their movement across international borders.
... We have," he says, "worked closely with a large num-
ber of governments, particularly Turkey, France, and Mexi-
co, to try to stop the illicit production and smuggling of
narcotics." (authors' emphasis)
It is no accident that Nixon has ignored the real sources
of narcotics trade abroad and by so doing has effectively
precluded any possibility of being able to deal with heroin
at home, It is he more than anyone else who has underwrit-
ten that trade through the policies he has formulated, the
alliances he has forged, and most recently the political ap-
pointments he has made. For Richard Nixon's rise to
power has beer intricately interwoven with the rise of pro-
ponents of America's aggressive strategy in Asia, a group
of people loosely called the "China Lobby" who have been
in or near political power off and on since 1950.
Among the most notable members of the "China Lobby"
are Madame Anna Chennault, whose husband, General
Claire Chennault, founded Air America; columnist Joe
Alsop; FBI Director J. Edgar Hoover; former California
Senator William Knowland; and Ray Cline, currently
Chief of Intelligence for the State Department. They and
such compatriots as the late Time magazine publisher
For Release 2005/05/20kl4UW7SE Mti8IROQ93,t008000$-glaire Boothe
Luce, have been some of they country's strongest proponents' -
of the Nationalist Chinese ca.use.
 In 1954 Chiang Ka10opir eEiothReteAtSei2i*6'i05/
Anti-Communist League (APACL), which was to be-
come one of the vital links between the China Lobby and
the Taiwan government. (It was also in that year Nixon
urged that U.S. troops be sent into Indochina following
the French defeat in Dien Bien Phu-a proposal which
failed because of the lack of public support for such policy
following the Korean war.) As soon as the APACL was
formed, Chiang announced that it had established "close
contact" with three American politicians-the most im-
portant of whom was Vice President Richard Nixon.
VER THE YEARS THE CHINA LOBBY has continued to
spring to Nixon's support. It was Madame Chen-
vault, co-chairman in 1968 of Women for Nixon-
Agnew Advisory Committee, who helped raise a
quarter of a million dollars for the campaign; it was she
who just before the election entered into an elaborate set
of arrangements to sabotage a White House peace plan.
Within 30 hours of the announced plan, South Vietnam
President Thieu rejected the new negotiations it proposed
-a rejection Madame Chennault had helped arrange as a
last-minute blow at Hubert Humphrey and the Democrats.
It is not only his debts, associations and sympathies to
the China Lobby which have linked Nixon with Kuoming-
tang machinations in Indochina and helped plunge the U.S.
deeper into the morass there. One of his most important
foreign policy appointments since taking office has been the
reassignment of Ray Cline as State Department Director of
Intelligence and Research. Cline, the controversial CIA sta-
tion chief in. Taiwan who helpedorganize KMT forays into
Communist China, in 1962 promoted Nixon's old project
of a Bay of Pigs invasion of China. Within a month of
Cline's recent appointment, the resumption of pilotless In-
telligence flights over mainland China was approved.
The entire cast of the China Lobby has relied on one
magic corporation, the same corporation established just
after World War li by General Claire Chennault as Civil
Air Transport and renamed in the 1950s Air America. Car-
rier not only of men and personnel for all of Southeast
Asia, but also of the policies that have turned Indochina
into the third bloodiest battlefield in American history, Air
America's chief contract is with the American Central In-
telligence Agency.
Air America brings Brahmin Bostonians and wealthy
Wall Strecters who are the China Lobby together with
some of the most powerful men in Nationalist China's
financial history. One of its principal services has been
to fly in support for the "remnant" 93rd Division of the
KMT, the "opium army" in Burma; another has been as a,
ium itself Air America flies through all
I major carrier of o
p
. of the Laotian and Vietnamese opium pick-up points, for
aside from the private "butterfly fleet" and various military
transports, Air America is the "official" Indochina airline.
A 25-year-old black man recently returned from Indochina
told RAMPARTS of going to Vietnam in late 1963 as an ad-
venturer, hoping to get in on the dope business. But he
found that the business was all controlled by a "group like
the Mafia. It was tight and there wasn't room for me." The
only way he could make it in the dope trade, he says, was
to go to work for Air America as a mechanic. He found
-75B90ra0JR0 4.QWQQQ41Q94Aa is more
than' a flurry of corruption among select
dramatis personae in America's great Asian
Drama. The fact that Meo tribesmen have
been nearly wiped out, that the Corsican Mafia's Air
Opium has been supplanted by the CIA's Air America,
that Nationalist Chinese soldiers operate as narcotics
bandits, that such architects of U.S. democracy for the
East as the Nhus and Vice President Ky have been dope
runners-these are only the bizzare cameo roles in a
larger tragedy that involves nothing less than the uproot-
ing of what had been the opium trade for decades-
through the traditional lotus-land of the Middle East into
Western Europe-and the substitution of another network,
whose shape is. parallel to that of the U.S. presence in
Southeast Asia. The ecology of narcotics has been dis-
rupted and remade to coincide with the structure of
America's Asia strategy-the stealthy conquest of a con-
tinent to serve the interests of the likes of the China Lobby.
The shift in the international opium traffic is also a
metaphor for what has happened in Southeast Asia itself.
As the U.S. has settled in there, its presence radiating a
nimbus of genocide and corruption, armadas of air-
planes have. come to smash the land and lives of a help-
less people; mercenary armies have been trained by the
U.S.; and boundaries reflecting the U.S. desires have been
established, along with houses of commerce and petty
criminality created in the American image. One of the
upshots has been that the opium trade has been systema-
tized, given U.S. technological expertise and a slipping and
transportation network as pervasive as the U.S. presence
itself. The piratical Corsican transporters have been re-
placed by pragmatic technocrats carrying out their jobs
with deadly accuracy. Unimpeded by boundaries, scruples
or customs agents, and nurtured by the free flow of mil-
itary personnel through the capitals of the Orient, the
United States has-as a reflex of its warfare in Indochina-
built up a support system for the trade in narcotics that
is unparalleled in modern history.
The U.S. went on a holy war to stamp out communism
and to protect its Asian markets, and it brought home
heroin. It is a fitting trade-off, one that characterizes the
moral quality of the U.S. involvement. This ugly war
keeps coming home, each manifestation more terrifying
than the last; home to the streets of the teeming urban
ghettos and the lonely suburban isthmus where in the
last year the number' of teenage heroin addicts has taken
a quantum leap forward. Heroin has now become the
newest affliction of affluent America-of mothers in West-
port, Connecticut, who only wanted to die when they
traced track-marks on their daughters' elegant arms; or of
fathers in Cicero, Illinois, speechless in outrage when
their conscripted sons came back from the war bringing
home a blood-stained needle as their only lasting souvenir.
Researchers for RAMPARTS' report on opium traffic
and the war were Michael Aldrich, Adam Bennion
and Joan Medlin. Special thanks go to author Peter
Scott for permission to draw on unpublished ma-
terial regarding Laos and the China Lobby.
there "was plenty of doAp nlavediFtepf et l20?CQ5/20 : CIA-RDP75B0038OR000300080001-4
all over the place." Air America was the only way to get
in on it.
 Approved For Release 2005/05/20 : CIA-RDP75B0038OR000300080001-4
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