STATEMENT BY NELSON GROSS SENIOR ADVISER TO THE SECRETARY OF STATE AND COORDINATOR FOR INTERNATIONAL NARCOTICS MATTERS BEFORE THE C

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP74B00415R000400050018-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 17
• Document Creation Date: December 16, 2016
• Document Release Date: June 10, 2005
• Sequence Number: 18
• Publication Date: June 9, 1972
• Content Type: STATEMENT

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STA'I'i:;MEHTZ BY
NELSON GROSS
SENIOR ADVISER TO The SECRETARY OF STATE
AND COORDINATOR FOR INTERNATIONAL NARCOTICS MATTERS
BEFORE TILE
CONGRESSIONAL INQUIRY REGARDING
INTERNATIONAL NARCOTICS TRAFFIC
JUNE 9, 1972
NEW YORK CITY
I welcome the opportunity of appearing today and
setting the record straight on the progress and the
integrity of the United States Government's anti-
narcotics program in Southeast Asia. I shall address
my statement essentially to the recent allegations
regarding that program made by Mr. Alfred 'W.. McCoy, a
student.at Yale, and then answer your questions.
With sll due respect to Mr. McCoy's obvious inter_esi:
in seeing the scourge of drug abuse brought to an end, our
official information reveals that much of what hco has
reported is out of date and thus must be labelled mis-
leading and inaccurate. The problem of drug abuse is an
emotionally-charted issue. While it may well make good
copy in the eyes of a book publishes to charge --- as
Mr. McCoy has done in sensational fashion -- that the
Government of the United 'States "is aiding and abetting the
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influx of heroin into our nation," nothing could be further
from the truth. Equally sensational and, as far as we can
ascertain, unsubstantiated, is the charge by Mr. McCoy that
high, government officials in Thailand, Laos and South Viet-
Nam "are actively engaged in the heroin traffic and are pro-
tecting the region's powerful narcotics syndicates."
Mr. McCoy somehow missed the name of the kingpin of the
heroin traffic in Southeast Asia. The :man is LO 1-Ising Han
of Burma. His control of the area opium runs the gamut from
opium poppy fields, along the smuggling routes, to his heroin
refineries.
LO has a virtual monopoly on heroin refining in the
section. Many of the refineries driven out of Laos and
Thailand have come under LO's control in Burma.
We have discussed the urgent problem posed by LO's
operation with the Burmese. But LO operates within insurgent-
controlled territory and is beyond the. controlof the Burmese
Government.
I now turn to the three major allegations made by Mr.
McCoy in his Juno 2 statement before the Foreign Operations
Subcommittee of the Appropriations Committee, U.S. Senate.
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1. "Much of the heroin entering the United States
now originates in Southeast Asia."
Southeast Asia is not a major source of heroin on our
market. While the "Golden Triangle" area of Burma, Laos,
and Thailand. yields an estimated two-thirds of the world's
illicit opium supply, most of that output is consumed
in traditional Asian markets. The overwhelming
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majority of the heroin coming to the United States
originates in the Middle East and is processed in European
lab6' before being smuggled into our country. We estimate
that probably only five percent,,certainly no more than
ten percent, of the heroin presently flowing to the
United States originates in Southeast Asia. Whatever the
figure., we are obviously concerned. We are further con-
cerned about the prospect of a swing in international
traffickers' interest from the Middle East to Southeast
Asia, particularly as the Turkish Government's ban on opium
POPPY cultivation results in diminished supplies.
2. "The governments of South Viet-Nam, Laos, and
Thailand are actively engaged in the heroin traffic."
It so happens that Mr. McCoy selected three of the
countries with which we are working very closely. Perhaps
progress has not been as rapid as one would like, but
drugs have been tole rated over many generations in these
countries, and the solution is far from an overnight solu-
tion. Trafficking in drugs in Thailand was legal until
1958, and riot until last November did, the Lao Government
move to prohibit drug trafficking. At the 'moment in Laos,
we have two BNDD agents with an additional one expected
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to arrive, four permanent Customs agents and five addi-
tion.i1. ones on TDY, two Public Safety Officers- with three
more scheduled to arrive in the near future, and one AID
official.
In Thailand, we have ten BNDD agents, two Customs
agents, and one Foreign Service Officer.
And in Viet-Nam, there are ten Public Safety Officers,
two Customs agents, and one BNDD agent.
I should like to provide additional comments on each
of the three countries:
South Viet-Nam -- The U. S. troop withdrawal and
suppression efforts have knocked the bottom out of the
heroin' market in Viet-Nam, causing prices to plummet from
$8,000 per kilo last year to $3,000 or less at present.
All indications are that heroin sellers have had little
success in building an alternative market among the
'Vietnamese to replace their lost G.I. consumers. In such
a situation, it is logical that suppliers will be tempted
to seek channels to other markets, including the United
States. Fcr this reason, our authorities in Viet-Nam have
been watching intently for signs of such a development.
Our most recent intelligence indicates that there is no
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organized apparatus smuggling heroin from Viet-Nam to the
U.S. Without exception, those implicated in such activities
have been low level, individual entrepreneurs who lack an
organized distribution system. With the disappearance of
the G.I. market, many traffickers in the region appear to
be abandoning heroin to return to the traditional opium
trade.
The Government of Viet-Nam with the cooperation of
the U.S. Mission has made considerable progress in reducing
narcotics traffic and drug abuse. The U.S. Mission has
been intensely aware of the heroin traffic in Viet-Nam
since the drug first app~ ared in late. 1969 and first
became available to U.S. servicemen during the first half
of 1970. In March 1970 the Bureau of Narcotics and
Dangerous Drugs (BNDD) initiated a survey to define the
role of Asia in the world's narcotics traffic which laid
the groundwork for addressing the basic problems in South-
east Asia of production, distribution, suppression, and
rehabilitation. As evidence of the Mission's concern over
increasing drug abuse, MACV carried out a nationwide drug
survey in July 1970 which indicated that: heroin was being
introduced in Vict-Nam in 'considerable quantity. As a
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result, a MACV drug abuse task force was formed in August
:L970, and a comprehensive drug suppression' program was
developed and carried into effect. Under the program
Combined Anti-narcotics Enforcement Committees were
established in each, military region. A joint American and
'Vietnamese Narcotics Investigation Detachment was to gather
drug intelligence and provide a coordinated investigative
capability to eradicate large supply sources of n.arcotics?.
Another important feature was the establis.hrnent of a
joint U.S. Service Customs Group.
On the civil side, the Mission developed a narcotics
control action plan which calls for the involvement of all
elements concerned with the suppression of drug abuse and
trafficking.
As soon as the narcotics problem began to assume
serious proportions, high level coordination and planning
efforts began between thoMiss ion and, the Government of
Viet--Nam. Prime Minister Khiem initiated a program to
reduce the use of and traffic in drugs throughout the
country. Ambassador Bunker and General Abrams met with
President Thieu to discuss specific measures, and as a
result President Thieu designated a team of experienced
intelligence and police officials to develop and carry
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out an effective action program. He also set up inter-
ministerial drug. suppression coumnittees. at the national
and provincial levels, replaced key personnel in the police
and other areas affecting narcotics activities, and dictated
a nationwide customs crackdown to seal off all airports and
harbors through South Viet--Nam. A tax-free reward system
was established and a drug education campaign was begun.
Prime Minister Khiem was given direct supervision of the
national campaign and was instructed to use the coordinating;
machinery of the pacification program to carry it out.
As a :result of these combined U.S. Mission/Vietnamese
Government efforts, the number of arrests on narcotics
charges went' from 2,911 in 1969 to 6,464 in 1971. Heroin
seizures throughout Viet-Nam rose from 12 pounds in 1969.
to 271 pounds in 1971 and opium seizures increased from
11 pounds in 1969 to 1,071 pounds in 1971. Most important,
the big time traffickers no longer find it profitable or
safe to operate in the country. Even now, under existing
conditions of martial law and the requirements of national
defense against the North Vietnamese invasion, joint
U.S./South V .etnamcse narcotics operations continue.
The arrest last year of two pro-Thieu members of the
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se i.s an indi cut'i.on t.hce'Vietriainese (Govc!rnment: is
Lower house
actively engaged against the heroin traffic. One was
dismi.&sed and the other was sentenced to seven years.
Laos *- The Narcotics Control Law implemented last
November makes any commercial transaction involving opium
or its derivatives illegal and for the first time gives
the Lao Government a legal basis for interdicting.illicit
traffic. Strict controls have also been placed on the
importation and distribution of acetic anhydride, a chemical.
required in the?huroin refining process. Last November 7,
'730 :gallons of acetic anhydride -- enough to make three
tons of he~,oin were seized. Also several seizures of
opium and heroin have been made. The most recent seizures
were 28 kilos of opium on May 26 arid 30 kilos of opium and
9 kilos of #4 heroin on June 7. Inspection procedures on
domestic aid international air routes have been tightened up.
In the absence of laws forbidding narcotics trafficking,
Lao law enforcement agencies had not been staffed, trained
.or equipped to interdict the traffic. Therefore, since
passage of the law, the Government has concentrated on
establishi.ng an equivalent of the BNDD to lead and
coordii-a to narcotics control. It is headed by a military
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officer who reports directly to the Prime Minister and
has jurisdiction over civilian and military enforcement
effor4 s?. The Lao national police and customs agency have
also established special narcotics control units.
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The U.S. Mission was most effective in encouraging the
passage of the Lao law. Our narcotics enforcement advisers
from the BNDD, Customs, and USAID's Public Safety Division
are hard at work advising and training their Lao counter-
parts in Vientiane and other key points, including Ban Houei
Sai in the Golden Triangle. Specialized equipment will, be
provided to the new narcotics agencies as their personnel are
trained to use it.
The prod-action of opium in Laos, which may have been as
high as 100 tons a year, has been sharply curtailed, and our
intelligence indicates that the flow of opium and heroin
through the country have also decreased considerably.
In Mr. McCoy's.statement of June 2, he indicated that
most of the opium traffic in northeast: Laos'in controlled by
Vang Pao. This statement ignores the fact that most of
northeast Laos is controlled by the North Vietnamese. Opium
production in those areas of northeast Laos still under Lao
Government control could not exceed more than a few tons a
year, and these are consumed by the hill tribesmen. As for
Vang Pao, he has taken a strong public position against opium
cultivation and trafficking by the Meo. He considers opium
addiction a serious problem among his people and wishes to
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prevent further addiction and to rehabilate those already
addicted.
As for Ouan Rathikoun, it may be'that he was involved
in the opium traffic before it was illegal, but we are not
aware of anything more than unsubstantiated allegations con-
cerning his past or present complicity. With regard to his
"control" of the "largest heroin laboratory in Laos," once
again, all we have is allegation. Mr. McCoy was apparently
referring to a refinery at Ban Houie Tap which was abandoned
last summer. Equipment and chemicals were discovered in the
jungle and seized by a team of Lao narcotics agents. Mr.
McCoy quoted a CIA source in stating that this refinery had
a capacity of 3 , 000 kilos of heroin per year. Members of
our Mission have examined the site and have estimated that
it could have produced less than 1,000 kilos assuming a
24-hour-a-day operation.
With regard to Mr. McCoy's allegation concerning Air
America, I should like to quote the following statement
released in Washington on June 2 by the Managing Director
of Air America:..
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"Mr. Alfred W. McCoy today told the Senate i oreigLL
Operations Committee: 'In Northern Laos, Air America air-
craft and helicopters chartered by the U.S.CIA and USAID
have been transporting opium harvested by the agency's
tribal nferaenaries on a regular basis.'
"This statement is utterly and absolutely false. AA
and USAID have cooperated in a security program which effec-
tively prevents the carriage of drugs on.any of the airline's
equipment. This program is constantly being reviewed to
make sure that drug smugglers cannot misuse the company's
facilities. There is an intensive program of inspection of
both passengers and cargo carried out in close collaboration
with local and U.S. authorities. At up-country sites, in-
spectors ihspect all baggage of passengers and crew members
departing from their stdtions. All. cargo placed aboard up-
country sites is inspected by members of the inspection
service.. All baggage of persons departing Vientiane on AA,
CASI 'arid Lao air development are inspected. Where boarding
passengers refuse to submit to inspection or are found to
have contraband in their possession, they are denied the
right to board the aircraft and their names are turned over
to local Lao authorities. Through these and related measures,
attempts by individuals to carry opium on company airplanes
have been detected and prevented. These small ti.riie
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smugglers and users are, the greatest threat and the
security inspection service has constituted an effective
deterrent.
"Through. its many years in the Far East, AA and its
.employees have been well aware of the dangers of drug use
and the drug traffic. .It has been the policy of the company
and its many loyal employees to do everything in their power
to oppose any traffic in drugs. To this end there has been
close cooperation between the company and U.S..and local
authorities concerned with the drug problem.
If Mr. McCoy or any other individual can bring any
proof that any Air America employee has been connected in
any niai?her w tli the drug: t'taffic appropriate- disciplinary
action"will be taken and .the matter referred to the proper
authorities."
Thailand -- For some years the Thai Government has been
engaged in a major effort to settle the Meo hill peoples and
to bring them under control. Unfortunately, these RTG efforts
have been a major source of Meo resentment toward the Thai
and have helped make the Meo receptive to Communist anti-
government propaganda and insurgency. In addition to mil-
itary efforts to put down the Communist: rebellion, the Thai
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are trying to improve hill tribe welfare. Particularly
noteworthy is the ' interest of the King of Thailand in the'
welfare of the hill peoples: he is assisting in the de-
velopment of other cash crops as alternatives to the opium
poppy.
Enforcement efforts by the Thai Government are hindered
by the impossibility of controlling adequately a long and
mountainous border and the complexities of controlling
passenger and commercial traffic inside Thailand. In its
efforts to control narcotics trafficking, the RTG has ini-
tiated a resettlement program for the Chinese irregular
Forces (CIF) under which the CIFs would turn over all their
opium stocks to the RTG and cease their involvement with
narcotics in return to land upon which to settle. Twenty-
six tons of CIF opium were burned by the RTG in March 1972.
During the past year, the Thai have increased their
efforts in the drug field with U. S. and UN assistance.
US/Thai Memorandum of, Understanding was signed in Septembers
1971 providing for increased Thai enforcement capability
through U. S. assistance to Thai police and customs officials.
The Thai also signed an agreement with the UN in December
1971 establishing a program to deal with the long-range
aspects of the drug abuse problem through crop substitution
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and addict rehabilitation.
After the US/"1'h~ai Memorandum of Understanding was
si.~ ned, a planning group was, formed and has been negotiat-
ing specific programs for, implementation of the ag rC'ement
BNDI) has assigned agents in Bangkok and Chiang; Mai while
U. S. Customs Service personnel are serving in Bangkok. Thai
police have recently moved to crack down on local traffickers
and several major Thai and American traffickers have been.
arrested. A promising start has been made and programs be-
gun which have the potential to bring the drug problem under
increasing control.
Based on all. intelligence informnion av.'Yi.lable, the
leaders of the Thal. Government are not engaged in the Opium
or heroin tra:cfic, nor are they extending protection to
traffickers. There, have been reports of corruption amolig
some working Level narcotics officials. Police: General
Prasert, head of the Thai National Police and a member of
the ruling National Executive Council, has stated publicly
that he would punish any corrupt official..
3. "']'hcc U. S. Government is aware of this traffic, 1.-ut:
h.at; not moved to sLop it and has consciously concealed
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evidence of the involvement of our Southeast Asian Allies."
Clearly, the U. S. Government is aware of narcotics
trafficking i.n Sout.laeast. Asia, but to say we have done noCh.
i_ng to counter it is patently inaccurate. Since the Pres-
iclent' s message to Congress on June 17, :L971, we have
urgently to commit Customs, PNDD, CIA, AID, and State Dcpa L:--
Cnent personnel. and resources to the fight against inter-
national clr.u ; trafficking. Moreover, far from concealing
involvement of persons involved in pushing drugs, our Govern-
nment has been sharing intelligence with friendly governments
in a concentrated effort to uncover the. various persons and
systems which are operating in the area.
We feel -h-hat the drug problem is a major facet in our
bilateral relations with many countries throughout the world.
We have made that point.clear to those countries and we are
asking them. to join with us in the fi ht:. The Governments
of Thailand, Laos, and Vietnam have already joined us in the
fight rnn.d , while we have a long way to go, we feel that dur-
ing; the past year some real progress has been achieved.
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