COVERT ACTION: THE CIA AND DRUGS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00845R000100170001-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 68
• Document Creation Date: December 22, 2016
• Document Release Date: June 3, 2010
• Sequence Number: 1
• Content Type: OPEN SOURCE

Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8
Number 28
The CIA and Drugs
$5.00
Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8
 Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8
Editorial
It is clearly appropriate, once again, to underscore the
enormity of the CIA's sordid role in the world of drug traffick-
ing. As we show in this issue, the CIA has been, from its in-
ception, a major source of opium, heroin, and now crack.
Revelations that the planes which fly weapons to the anti-
Sandinista contras in Honduras and Costa Rica return filled
with drugs, may-if they are allowed to be fully explored-yet
shock the conscience of an American people numbed by a dec-
ade of equally incredible revelations.
CRIB has also learned that the CIA is receiving assistance
in its Central American drug operations from an old ally, the
mafia, which, after all, has been in the business since before
the CIA existed. We hope to have this report in our next issue.
Getting the information to the public may not be easy, as a
recent Village Voice report details. Efforts by the office of the
U.S. Attorney in Miami and by the staff of Senator John Kerry
(Dem.-Mass.) to probe contra drug running have been con-
tinually stymied by an administration, and its congressional
backers, desperate to avoid the tarnish such investigations
will give to the image of their "freedom fighters."
Indeed, the efforts to discredit Sen. Kerry are monumental,
ranging from a back-stabbing committee staff member to un-
lawful interference with grand juries to disinformation cam-
paigns in the media. Pressure on the TV networks has led to
orders to correspondents not to cover the work of Kerry's
subcommittee, and one, which ran the first of a three-part
series on contra drug smuggling, abruptly canceled the other
parts and fired its researcher. The cover-up is extensive.
Drug Testing, CBW, and AIDS
The CIA does not just run drugs; it tests them on people as
well. In this issue we review some of the more notorious
aspects of such programs, including an update on the history
of U.S. involvement in chemical-biological warfare research
and development.
It is that work which leads to the special section of this
issue (to be continued in the next), on AIDS. A number of re-
searchers have raised the possibility that this dread epidemic
is the result, either intended or accidental, of such CBW work.
Because we believe that the AIDS crisis is of profound im-
portance, we are publishing this material which reviews all of
the theories under consideration. There is no smoking gun
here; indeed the "experts" cannot agree on what causes AIDS,
much less on how it works. But the evidence is very strong
that nature alone is not responsible.
Last Issue
It was pure coincidence that our last issue, on the Religious
Right, hit the stands as the Jim and Tammy Bakker scandal
broke. What is deliberate, however, is the way the media's
coverage of the exposes concentrated on sexual and financial
shenanigans alone, virtually ignoring the deep ties of the
religious ideologues to the contras and the Oliver North supply
network, to prominent U.S. government officials, and to ex-
treme rightwing groups around the world. ?
Table of Contents
Editorial
2
Drugs, Politics, and Disinformation
Running Drugs and Secret Wars
By Richard Hatch
By David Truong D.H.
3
Lest We Forget
The Australian Heroin Connection
By Louis Wolf
By Jerry Meldon
6
Mind Control in Canada
Nugan Hand Drug Clients
By Ken Lawrence
By Henrik Kruger
9
Chemical-Biological Warfare
Afghan Rebels and Drugs
By Robert Lederer
By William Vornberger
11
The Origin and Spread of AIDS
The Cocaine Connection
By Robert Lederer
By Vince Bielski and Dennis Bernstein
13
Is AIDS Non-Infectious?
Who Deals Drugs?
By Nathaniel S. Lehrman
By Roman Berger
17
Deltagate
Doc-u-drama
19
By Ellen Ray and William Schaap
Cover: Veteran and gay activist Leonard Matlovich, who has AIDS, being arrested at Washington rally by rubber-gloved police officer, June I, 1987. Credit:
Jose R. Lopez, New York Times.
CovertAction Information Bulletin, Number 28, Summer 1987; published by Covert Action Publications, Inc., a District of Columbia Nonprofit Corporation;
Post Office Box 50272, Washington, DC 20004, [phone], and c/o Institute for Media Analysis, Inc., 145 West 4th Street, New York, NY 10012 (212)
254-1061. Typeset by CAIB, printed by Faculty Press, Brooklyn, NY. Staff: Ellen Ray, William Schaap, Louis Wolf, and William Vornberger. Indexed in the
Alternative Press Index. ISSN 0275-309X.
2 CovertAction Number 28 (Summer 1987)
Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8
 Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8
Running Drugs and Secret Wars
By David Truong D.H.*
World War II had barely ended when major western powers
scrambled to reassert control over their former colonies. Asia
was one region where France, England, and the U.S. reached
understanding about their respective spheres of influence. In
September 1945, France sought to reestablish her rule over
Indochina and other former colonies where she had been un-
ceremoniously humiliated by the Axis powers. With British
assistance, and strengthened by Truman's policy against
independence movements in Indochina, the French returned to
Indochina to begin their disastrous nine-year war against the
Viet Minh, Vietnam's burgeoning independence movement.
In exchange for French support of America's Marshall Plan
and anticommunist operations throughout Europe, the United
States contributed to France's reconquest of Indochina. By the
time of the French defeat at Dien Bien Phu in 1954, the U.S.
had spent $3.5 billion, or seventy-five percent of French war
costs in Indochina. Nevertheless, throughout the war, the
French found themselves short of funds to finance their covert
operations against the Viet Minh. Thus in 1951, the French
intelligence service, SDECE (Service de Documentation Exte-
rieure et du Contre-Espionage), and its covert operations
branch, Service d'Action, took over the enormous opium trade
in French Indochina.'
Known as the "Opium Monopoly," the opium trade was
first established by the French in the 1880s to finance their
colonial rule over Indochina. Service d'Action had dubbed its
opium-financed secret war "Operation X."3 The operation in-
volved French-trained commandos made up of Hmong and
other tribesmen to be sent into action against Viet Minh
strongholds and a distribution network of French-sponsored
local pirates who ran hundreds of opium dens throughout
Vietnam and Laos. Operation X included a supporting cast of
Corsican underworld characters and their small airline, "Air
Opium," shuttling drug cargos between Laos and Vietnam.
The Corsicans had links with their equally enterprising col-
leagues in France. In post-war metropolitan France the CIA
had made its own alliance with the Corsican underworld in its
program to neutralize the influence of French Communist trade
unions.'
During the same period, in neighboring Thailand, the U.S.
had established a major presence. U.S. intelligence activities
in Thailand were part of a broad covert program, sanctioned by
the Joint Chiefs of Staff and the Truman White House, against
the newly established Chinese Communist government. Since
1948, the Office for Policy Coordination under the late Frank
Wisner, driven by Cold War fever, had initiated a number of
covert operations in Europe and laid the ground for more anti-
communist operations in Asia.
* David Truong D.H. is a researcher and policy analyst and a long-time
watcher of U.S. intelligence activities in the Third World.
1. Alfred McCoy, The Politics of Heroin in Southeast Asia (New York:
Harper & Row, 1972), pp. 92-109.
2. Ibid., pp. 73-75.
3. Ibid., pp. 99-100.
4. Ibid., pp. 37-47.
Civil Air Transport (CAT), American intelligence's first
proprietary airline in the Far East, flew clandestine missions
and drops for the OPC and later for the CIA throughout In-
dochina, Thailand, Burma and southern and eastern China. In
early February 1951, the CIA initiated Operation PAPER, the
first major paramilitary operation in that part of Southeast
Asia. It involved the invasion of Yunnan province, southern
China, by some 4,000 Kuomintang troops based in Mong
Hsat, Burma.5 KMT General Li Mi's troops met defeat and
were driven back to Burma; with continued CIA assistance,
the KMT again tried twice to invade Yunnan province before
retrenching itself in the territory of the Shan States in Burma.'
In the decades that followed, Thailand became the launching
pad for the multitude of U.S. covert operations against China.
Throughout the 1960s and early 1970s, as the U.S. increased
its role in Laos and South Vietnam, the Agency developed its
Thai-based covert, paramilitary programs against Indochina
and the rest of Southeast Asia.
This theater of clandestine operations was also a major
opium growing region, stretching from southern Yunnan to
neighboring Burma's Shan states, northern Thailand, and
northern Laos. It was commonly known as the "Golden
Triangle" to opium and heroin traffickers, and was the source
of 70 percent of the world's opium production in the early
1970s. Today, the Golden Triangle still produces at least 90
tons per year of heroin destined for the American market.'
The CIA-backed KMT troops settled in Burma after World
War II and controlled the opium traffic for buyers in northern
Thailand and Bangkok. From 1948 on, American intelligence
activities in the Golden Triangle were intertwined with the
opium trade. Infiltration routes for CIA commando teams into
southern China were also used as drug smuggling routes for
traffickers in Burma and Thailand. Local Shan tribesmen pro-
vided the guides to both the Agency's teams and opium
caravans near the Burma-Chinese border. And the Agency had
maintained five secret training camps and two key listening
posts in the Shan states protected by its drug smuggling KMT
troops and local tribesmen."
Thailand was of course a major opium marketplace at the tip
of the Golden Triangle. The military cliques of strongmen
which ruled the country, beginning with General Phao Siyanon
in 1947, also controlled the Thai National Police Department
(TNPD) which was the largest opium traffic syndicate in the
country. These "strongmen" grew immensely wealthy from
their drug monopoly and from ties to the CIA.' Much of this
drug smuggling network remains very active today, and has
5. William M. Leary, Perilous Missions. Civil Air Transport and CIA
Covert Operations in Asia (University, Ala.: University of Alabama Press.
1984), p. 129.
6. Ibid., p. 131.
7. U.S. News and World Report, May 4, 1987, p. 33.
8. McCoy, op. cit., n. 1, pp. 306-8.
9. Thomas Lobe, United States Security Policy and Aid to the Thailand
Police, University of Denver Graduate School of International Studies: Mono-
graph Series in World Affairs, Vol. 14, No. 2 (Denver: University of Denver,
Colorado Seminary, 1977), p. 20.
Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8
 Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8
deep roots in Thailand's military and paramilitary circles.
The Agency's role was much more pervasive than that of
the French Service d'Action in Vietnam. The CIA founded and
trained General Phao's paramilitary police force, and equipped
it with artillery, tanks, and helicopters. The police force not
only protected Thai borders but also conducted commando
missions into Indochina, Burma, and China. U.S.
paramilitary specialists, either retired military personnel or
detailed from other departments, were brought to Bangkok to
train this new Border Patrol Police (BPP).
To manage the training and equipping of the BPP, the CIA
had asked a retired OSS China hand, the late Paul Helliwell, to
form a cover organization out of Miami. The Overseas
Southeast Asia Supply Company, or Sea Supply, had the sole
contract with Thailand for services to the BPP.10 Helliwell,
also Thailand's Consul in Miami during the early 1950s, was
one of the CIA's specialists on forming front companies and
laundering funds for "black" operations in the Caribbean in
support of the Agency's secret war against Cuba," es-
pecially in preparation for the 1961 Bay of Pigs invasion. The
Agency's primary airline, CAT, renamed Air America in the
late 1960s, flew military equipment from CIA depots in
Okinawa to Bangkok for Sea Supply.12 Within the
Thailand-Burma theater, CAT flights carried weapons,
paramilitary personnel, and opium for the Thai strongmen as
well.
By 1950, the CIA had created its own "Operation X" in
neighboring Thailand, larger and much more efficient than that
of the French SDECE. The historical roots of today's secret
supply network for the contras in Central America lie with the
CIA's paramilitary programs with the KMT and the BPP in
Southeast Asia. These covert operations provided the Agency
with considerable experience in the management of secret wars
and drug running.
The CIA's clandestine war against the Pathet Lao, which
involved at least fifty thousand Thai and Hmong mercenaries,
and some KMT troops, remains the largest in Agency history.
Air America had a fleet of several hundred of all kinds of
aircraft from 1968 on, operating out of six bases throughout
Thailand and Long Tieng, the Agency's operational
headquarters in northern Laos. Long Tieng was the main base
of the Hmong commanding general, Vang Pao, and the site of
his main heroin lab for the entire Golden Triangle region. In the
late 1960s, the Agency even assisted Vang Pao in his pur-
chase of Air America aircraft to form his own airline, Xieng
10. Ibid., p. 23.
11. Penny Lernoux, In Banks We Trust (Garden City. N.Y.: Anchor
Press/Doubleday, 1984), pp. 80-83.
12. Leary, op. cit., n. 5, p. 129.
Khouang Air Transport (XKAT). The airline flew cargos of
opium and heroin between Long Tieng and Vientiane. 13 The
Hmong mercenaries' heroin production went mostly to Laos's
prime drug king and merchant, General Ouane Rattikone, com-
mander of the Laotian Air Force.
It was during this period, between 1966 and 1969, that
several key players in the current weapons supply network to
the contras developed their skills in drug running and secret
war management. Theodore Shackley was CIA station chief in
Theodore G. Shackley.
Laos from 1966 to 1969 and the de facto chief of staff for the
Agency's secret war. Shackley later did a tour in South
Vietnam where he managed Operation Phoenix, the "pacifica-
tion" program against the Vietnamese. Tom Clines worked
under him in Laos, managing ground support activities for the
war. Richard Secord, then a lieutenant colonel detailed to the
Agency, was handling air support which included Air America
and other minor CIA proprietary airlines. Secord stayed on in
Thailand in the early 1970s to manage operations by U.S. Spe-
cial Forces and Hmong troops in Laos.
Together with Robert "Red" Jantzen, the Agency's station
chief in Thailand (1958-1969) and the infamous Edwin
Wilson, Shackley, Clines and Secord were cited in the late
1970s in the scandal of the collapse of the Nugan Hand Bank in
Australia. 14 The bank was found to be heavily involved in
drug trafficking between Thailand and Australia, as well as
13. Christopher Robbins, Air America: The Story of the CIA's Secret
Airlines (New York: Putnam's, 1979), p. 237.
14. Commonwealth-New South Wales Joint Task Force on Drug Traffick-
ing Report, Vol. 4, Nugan Hand (Part 11) (Sydney: Government Printing
Office, 1983).
Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8
 Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8
THE SOUTHEAST ASIA OPIUM TRAIL
DRUG TRAFFIC ROUTES FROM THE GROWING AREAS
Opium-growing areas
f--Lana route +--- Water route