Wednesday, April 14, 2010

Illegal Drugs and the Government

*******
Money Laundering and the Global Drug Trade Fueled by Capitalist Elites
By Tom Burghardt
Global Research, July 21, 2010
Antifascist Calling... - 2010-07-20
When investigative journalist Daniel Hopsicker broke the story four years ago that a DC-9 (N900SA) "registered to a company which once used as its address the hangar of Huffman Aviation, the flight school at the Venice, Florida Airport which trained both terrorist pilots who crashed planes into the World Trade Center, was caught in Campeche by the Mexican military ... carrying 5.5 tons of cocaine destined for the U.S.," it elicited a collective yawn from corporate media.
And when authorities searched the plane and found its cargo consisted solely of 128 identical black suitcases marked "private," packed with cocaine valued at more than $100 million, the silence was deafening.
But now a Bloomberg Markets magazine report, "Wachovia's Drug Habit," reveals that drug traffickers bought that plane, and perhaps fifty others, "with laundered funds they transferred through two of the biggest banks in the U.S.," Wachovia and Bank of America.
The Justice Department charge sheet against the bank tells us that between 2003 and 2008, Wachovia handled $378.4 billion for Mexican currency exchanges, "the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history."
"A sum" Bloomberg averred, equal to one-third of Mexico's current gross domestic product."
Since 2006, some 22,000 people have been killed in drug-related violence. Thousands more have been wounded, countless others "disappeared," torture and illegal imprisonment is rampant.
In a frightening echo of the Reagan administration's anti-communist jihad in Central America during the 1980s, the Bush and now, Obama administration has poured fuel on the fire with some $1.4 billion in "War on Drugs" funding under Plan Mérida. Much of that "aid" is destined to purchase military equipment for repressive police, specialized paramilitary units and the Mexican Army.
There is also evidence of direct U.S. military involvement. In June, The Narco News Bulletin reported that "a special operations task force under the command of the Pentagon is currently in place south of the border providing advice and training to the Mexican Army in gathering intelligence, infiltrating and, as needed, taking direct action against narco-trafficking organizations."
One former U.S. government official told investigative journalist Bill Conroy, "'Black operations have been going on forever. The recent [mainstream] media reports about those operations under the Obama administration make it sound like it's a big scoop, but it's nothing new for those who understand how things really work'."
But, as numerous investigations by American and Mexican journalists have revealed, there is strong evidence of collusion between the Mexican Army and the Juarez and Sinaloa drug cartels. A former Juarez police commander told NPR in May that "the intention of the army is to try and get rid of the Juarez cartel, so that [Joaquin "El Chapo" Guzman] Chapo's [Sinaloa] cartel is the strongest."
The cosy relations among the world's biggest banks, drug trafficking organizations and the U.S. military-intelligence apparatus is not however, a new phenomenon. What is different today is the scale and sheer scope of the corruption involved. As Michel Chossudovsky points out,
"This trade can only prosper if the main actors involved in narcotics have "political friends in high places."
As legal and illegal undertakings are increasingly intertwined, the dividing line between "businesspeople" and criminals is blurred. In turn, the relationship among criminals, politicians and members of the intelligence establishment has tainted the structures of the state and the role of its institutions, including the military." (The Global Economic Crisis: The Great Depression of the XXI Century, Montreal:Global Research, 2010, pp. 195-196)
While the Bloomberg story should cast new light on highly-profitable links amongst major financial institutions and narcotrafficking organizations in what may be protected drug rackets green-lighted by corrupt officials, media silence, particularly by outlets such as The Wall Street Journal and theFinancial Times, threaten to propel what should be an international scandal into a one-off news item scheduled for a trip down the memory hole.
"Cocaine One"
If, as New York Times columnist Thomas Friedman claims "the hidden hand of the market will never work without a hidden fist," then perhaps too, drug cartels work their "market magic" with their own "hidden fist" or, as the Russians like to say akrysha, a web of protectors--and facilitators--drawn from business, finance, organized crime and the secret world of intelligence.
Dubbed "Cocaine One" by Hopsicker, the DC-9 was curious for a number of reasons, not least of which was the fact that "one of the chief shareholders" of a dodgy outfit called SkyWay Aircraft "is a private investment bank in Dallas which also raised funds for a Mexican industrialist with reported ties to a Cali and Juarez Cartel narcotics trafficker."
More curious still, the airline kitted-out its fleet with distinctive colors and a seal "designed to impersonate planes from the U.S. Dept. of Homeland Security." And when he learned that "SkyWay's genesis can be traced to In-Q-Tel Inc., a secretive, Arlington, Va., investment group owned, operated, and financed out of the black box budget of the Central Intelligence Agency," well you can bet corporate media ran themselves ragged investigating that!
To top it off, when another drug plane crash landed in the Yucatan Peninsula eighteen months later and broke apart, a Gulfstream II business jet (N987SA) that spilled "4 tons of cocaine across a muddy field," Hopsicker reported that it had originated from the same network and used the same source for its financing, the "Casa de Cambio Puebla SA, a country-wide network of currency exchanges."
And to make matters even more intriguing from a parapolitical perspective, after searching through FAA records Hopsickerdiscovered that the Gulfstream II business jet "was owned by a secretive Midwestern media baron and Republican fund-raiser, who had a business partner who, incredibly, owned the otherAmerican drug plane, the DC-9, recently busted in Mexico."
In fact, as Bloomberg investigative journalist Michael Smith learned years later, these were the same planes and samecurrency exchange which Hopsicker reported back in 2007 traffickers had used to purchase drug jets with funds laundered through Wachovia.
"One customer that Wachovia took on in 2004 was Casa de Cambio Puebla SA," Smith wrote. The Puebla, Mexico currency exchange was the brainchild of Pedro Alatorre, a "businessman" who "had created front companies for cartels."
Alatorre, and 70 others connected to his network, were seized in 2007 by Mexican law enforcement officials. Authorities discovered that the accused drug money launderer and airline broker for the cartels controlled 23 accounts at the Wachovia Bank branch in Miami and that it held some $11 million, subsequently frozen by U.S. investigators.
In 2008, a Miami federal grand jury indicted Alatorre, now awaiting trial in Mexico along with three other executives, charging them with drug trafficking and money laundering, accusing the company of using "shell firms to launder $720 million through U.S. banks." The Justice Department is currently seeking Alatorre's extradition from Mexico.
According to Bloomberg, "Puebla executives used the stolen identities of 74 people to launder money through Wachovia accounts." Jose Luis Marmolejo, the former head of the Mexican attorney general's financial crimes unit told Smith, "Wachovia handled all the transfers, and they never reported any as suspicious."
Some $300,000 was transferred by Wachovia to a Bank of America branch in Oklahoma City. With cash in hand Bloomberg reports, traffickers "used the funds to buy the DC-9 through Oklahoma City aircraft broker U.S. Aircraft Titles Inc." When queried by Smith about the sale, "U.S. Aircraft Titles President Sue White declined to comment."
Jeffrey Sloman, the federal prosecutor who handled the Wachovia case said in a press release that "Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations."
Yet, as Hopsicker wrote nearly three years ago, "the politically-explosive implications of the scandal may explain why American officials have been reluctant to move against, or even name, the true owners of the planes and basically 'turned a blind eye' to the American involvement exposed by the drug trafficking seizures."
As of this writing, no Americans have been criminally charged in the cash-for drug planes banking conspiracy.
"Troubled Assets" or Something More Sinister?
When Wells Fargo bought Wachovia, once America's fourth largest bank in 2008 at the fire-sale price of $12.8 billion, the bank and its former CEO, Kennedy "Ken" Thompson, who "retired at the request of the board" before the full-extent of the financial meltdown hit home, were in deep trouble.
Before the Wells takeover, Wachovia had been on a veritable shopping spree. After the firm's 2001 merger with First Union Bank, Wachovia merged with the Prudential Securities division of Prudential Financial, Inc., with Wachovia controlling the lion's share of the firm's $532.1 billion in assets. This was followed by the bank's purchase of Metropolitan West Securities, adding a $50 billion portfolio of securities and loans to the bank's Lending division. In 2004, Wachovia followed-up with the $14.3 billion acquisition of SouthTrust Corporation.
Apparently flush with cash and new market clout, Wachovia set it sights on acquiring California-based Golden West Financial. Golden West operated branches under the name World Savings Bank and was the nation's second largest savings and loan. At the time of the buy-out, Golden West had over $125 billion in assets. For Wachovia however, it was a deal too far.
With an enormous housing bubble fully inflated, and a new speculative merger-mania in full swing, one can only surmise that the need for liquidity at any price, had driven banking giants such as Wachovia to play dumb when shadier, yet highly-profitable transactions, such as the "arrangement" with Casa de Cambio Puebla SA, were involved.
Bleeding cash faster than you can say "mortgage backed securities," Wachovia was on the hook for their 2006 $26 billion buy-out of Golden West Financial at the peak of the housing bubble, a move that BusinessWeek reported generated "resistance from his own management team" but ignored by Thompson.
Why? "Because no one outside of Thompson and Golden West CEO Herb Sandler seemed to like the deal from the moment it was announced," a company insider told BusinessWeek.
While the buy-out may have given Thompson "the beachhead in California he had long desired ... the ink was barely dry on the Golden West deal in late 2006 when the housing bubble in markets including California and Florida began to deflate."
Hammered by the housing bust, Wachovia's share price, which had risen to $70.51 per share when the Golden West deal was announced had slid to $5.71 per share by October 2008. In other words, Wachovia, along with the world's economy, began circling the proverbial drain.
However you slice it, although it was clear that the Golden West deal had gone south quicker than you can say "credit default swaps," this didn't seem to stop Wachovia from paying "smartest guy in the room" Thompson $15.6 million in total compensation in 2007, a year after the fatal Golden West transaction. Nor did these losses stop the bank from showering Thompson with a severance package worth nearly $8 million.
But was something else going on here?
Wells Fargo bank admitted in a signed Deferred Prosecution Agreement with the federal government that they would not contest charges brought by the Justice Department in itsindictment of the bank.
The banking giant was forced to admit charges by prosecutors that "On numerous occasions, monies were deposited into a CDC [Casa de Cambio] by a drug trafficking organization. Using false identities, the CDC then wired that money through its Wachovia correspondent bank accounts for the purchase of airplanes for drug trafficking organizations. On various dates between 2004 and 2007, at least four of those airplanes were seized by foreign law enforcement agencies cooperating with the United States and were found to contain large quantities of cocaine."
Bloomberg reported that Wells Fargo, in the wake of the settlement "declined to answer specific questions, including how much it made by handling $378.4 billion--including $4 billion of cash--from Mexican exchange companies."
There was however, more than "troubled assets" and charges of money laundering to the story. In fact, the purchase of these drug planes have been tied to some of the Bush administration's most secretive "War On Terror" programs.
Drug Flights, CIA Renditions. Just Another Day at the Office!
Replicating a pattern used by the Central Intelligence Agency during the Iran-Contra scandal of the 1980s, the secret state used a network of cut-outs and legitimate businesses to transport prisoners to Agency black sites for "special handling."
During Iran-Contra it was "guns in, drugs out." Today one might say its "drugs in, tortured prisoners out." The results however, were the same; egregious crimes and lawbreaking on a staggering scale.
Subsequent investigations by Narco News revealed that "this particular Gulfstream II (tail number N987SA), was used between 2003 and 2005 by the CIA for at least three trips between the U.S. east coast and Guantanamo Bay, home to the infamous 'terrorist' prison camp," Bill Conroy reported.
"In addition," Conroy wrote, "the two SkyWay companies are associated with individuals who have done highly sensitive work for the Department of Defense or U.S. intelligence agencies, public records show and Narco News sources confirm."
According to AFP, the Mexican daily El Universal said "it had obtained documents from the United States and the European Parliament which 'show that that plane flew several times to Guantanamo, Cuba, presumably to transfer terrorism suspects,'" the French newswire reported.
The plane was carrying "Colombian drugs" bound for the U.S. for the "fugitive leader of Mexico's Sinaloa cartel, Joaquin 'Chapo' Guzman," when it crashed in the Yucatan.
According to El Universal, the Federal Aviation Administration's "logbook registered that the plane had traveled between US territory and the US military base in Guantanamo," and that its last registered owner was "Clyde O'Connor in Pompano Beach, Florida."
The Independent confirmed separately in January of this year that "Evidence points to aircraft--familiarly known as 'torture taxis'--used by the CIA to move captives seized in its kidnapping or 'extraordinary rendition' operations through Gatwick and other airports in the EU being simultaneously used for drug distribution in the Western hemisphere."
Hugh O'Shaughnessy, confirming earlier reporting by Bill Conroy and Daniel Hopsicker said that "a Gulfstream II jet aircraft N9875A identified by the British Government and the European Parliament as being involved in this traffic crashed in Mexico in September 2008 while en route from Colombia to the US with a load of more than three tons of cocaine."
While O'Shaughnessy got the tail-number and date wrong, he's correct when he states that U.S. intelligence assets "continue the drug dealing they indulged in during the Iran-Contra affair of the Reagan years."
Narco News, citing DEA sources, learned that the crashed Gulfstream loaded with four tons of cocaine "was part of an operation being carried out by a Department of Homeland Security agency."
However in a later report, Mark Conrad, a former supervisory special agent with ICE's predecessor agency, U.S. Customs, toldNarco News that the crashed Gulfstream used to transport drugs and prisoners was controlled by the CIA and "that the CIA, not ICE ... [was] actually the U.S. agency controlling the ... operation. If this were the case, then "any individuals or companies involved in a CIA-backed operation, even ones that are complicit in drug trafficking, would be off limits to U.S. law enforcers due to the cloak of national security the CIA can invoke."
In other words, a jet purchased by drug traffickers with funds laundered through an American bank and used in the CIA's "extraordinary rendition" program may have been part of aprotected drug operation by U.S. intelligence agencies. An operation furthermore, whose purpose is still unknown.
This report tracks closely with evidence uncovered by Peter Dale Scott. In a recent piece in Japan Focus Scott wrote that "it is not surprising that the U.S. Government, following the lead of the CIA, has over the years become a protector of drug traffickers against criminal prosecution in this country."
"A recent spectacular example" Scott tells us, drawing on research from his forthcoming book, is the curious case of CIA Venezuelan asset, General Ramon Guillén Davila.
General Ramon Guillén Davila, chief of a CIA-created anti-drug unit in Venezuela, was indicted in Miami for smuggling a ton of cocaine into the United States. According to the New York Times, "The CIA, over the objections of the Drug Enforcement Administration, approved the shipment of at least one ton of pure cocaine to Miami International Airport as a way of gathering information about the Colombian drug cartels." Time magazine reported that a single shipment amounted to 998 pounds, following earlier ones "totaling nearly 2,000 pounds." Mike Wallace confirmed that "the CIA-national guard undercover operation quickly accumulated this cocaine, over a ton and a half that was smuggled from Colombia into Venezuela." According to the Wall Street Journal, the total amount of drugs smuggled by Gen. Guillén may have been more than 22 tons. (Fueling America's War Machine: Deep Politics and the CIA's Global Drug Connection (in press, due Fall 2010 from Rowman & Littlefield).
Scott adds that "the United States never asked for Guillén's extradition from Venezuela to stand trial; and in 2007, when he was arrested in Venezuela for plotting to assassinate President Hugo Chavez, his indictment was still sealed in Miami. Meanwhile, CIA officer Mark McFarlin, whom DEA Chief Bonner had also wished to indict, was never indicted at all; he merely resigned."
But the stench of Iran-Contra, like that of the CIA's torture program, as with earlier secret state machinations with drug cartels never went away; in fact, like a cancer, one managed drug operation seamlessly metastasized into another.
Greasing the Wheels
The United Nations Office on Drugs and Crime (UNODOC) state in their 2010 Annual Report that "money-laundering is the method by which criminals disguise the illegal origins of their wealth and protect their asset bases in order to avoid suspicion of law enforcement and to prevent leaving a trail of incriminating evidence," and that financial institutions, particularly U.S. and European banks are key to efforts to choke-off illicit profits from the grisly trade.
The trouble is these institutions, along with U.S. intelligence agencies, are the problem.
UNODOC estimate that profits derived from narcotics rackets amount to some $600 billion annually and that up to $1.5 trilliondollars in drug money is laundered through seemingly legitimate enterprises.
Part of the fallout from capitalism's economic meltdown has been that "drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis," The Observer disclosed late last year.
Antonio Maria Costa, UNODOC's director, told the British newspaper he saw evidence that proceeds from the illicit trade were "the only liquid investment capital" available to some banks on the brink of collapse last year and that "a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result."
The UN drugs chief said that in "many instances, the money from drugs was the only liquid investment capital." And with markets tanking and major bank failures nearly a daily occurrence, "liquidity was the banking system's main problem and hence liquid capital became an important factor."
According to Costa, "Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way."
Web of Corruption
Although the UN's top anti-narcotics official declined to identify either the countries or banks that have benefited from the murderous trade, a web of corruption envelops the entire financial sector of the capitalist economy as the quest for "liquid assets" trumps everything.
Martin Woods, once director of Wachovia's anti-money-laundering unit in London told Bloomberg, "It's the banks laundering money for the cartels that finances the tragedy." Woods told the magazine he "quit the bank in disgust" after executives "ignored his documentation that drug dealers were funneling money through Wachovia's branch network."
Despite warnings from the Treasury Department since 1996 that Mexican currency exchanges were laundering drug money through U.S. banks, "Wachovia ignored warnings by regulators and police, according to the deferred-prosecution agreement,"Bloomberg reported.
"As early as 2004, Wachovia understood the risk," the bank admitted in court. "Despite these warnings, Wachovia remained in the business."
At the bank's anti-money laundering unit in London, Woods and his counterpart Jim DeFazio in Charlotte, NC told Smith "they suspected that drug dealers were using the bank to move funds."
Former Scotland Yard investigator Woods, said he "spotted illegible signatures and other suspicious markings on traveler's checks from Mexican exchange companies," and that he sent copies of his report to the U.K.'s Financial Services Authority, the DEA and U.S. Treasury Department.
But rather than being rewarded for his diligence, Woods told Smith "his bosses instructed him to keep quiet and tried to have him fired." In one meeting, "a bank official insisted Woods shouldn't have filed suspicious activity reports to the government, as both U.S. and U.K. laws require."
According to a whistleblower suit filed with an employment tribunal in London, Barrons reported last year before the Wachovia scandal broke, that Woods claimed "his bosses bullied and demoted him, then withdrew his reports of other suspicious activities in Eastern Europe."
It gets worse. Woods' complaint alleges "that Wachovia staff may have even tipped off Mexican-exchange clients about his laundering suspicions," and the veteran investigator told Wachovia officials "he feared for his safety."
In response, bank spokesperson Mary Eshet said at the time, "Wachovia believes that it has acted appropriately in its business dealings, and Mr. Woods' claims to the contrary are without merit."
Meanwhile, on the American side of the pond, 21-year FBI veteran DeFazio said "he told bank executives in 2005 that the DEA was probing the transfers through Wachovia to buy the planes." The bank ignored his warnings and continued along on their merry way until their indictment.
The law enforcement veteran told Bloomberg, "I think they looked at the money and said, 'The hell with it. We're going to bring it in, and look at all the money we'll make'."
The former Scotland yard investigator added, "If you don't see the correlation between the money laundering by banks and the 22,000 people killed in Mexico, you're missing the point."
But Wachovia wasn't the only large financial institution "missing the point." Bloomberg also revealed that Bank of America and the London-based "HSBC Holdings Plc, Europe's biggest bank by assets," American Express Bank, Banco Santander SA, Citigroup Inc., as well as "the world's largest money transfer firm," Western Union were also up to their eyeballs in dubious transactions.
In 1994 for example, American Express paid $14 million to settle with the federal government after "two employees were convicted in a criminal case involving drug trafficker Juan Garcia Abrego."
Yet between 1999-2004, Bloomberg reported "the bank failed to stop clients from laundering $55 million of narcotics funds, the bank admitted in a deferred-prosecution agreement in August 2007 ... and paid $65 million to the U.S. and promised not to break the law again." Charges were dismissed a year later under terms of the agreement.
And back in 2004, The Independent disclosed that "HSBC, the UK's largest bank, have been slammed for lax money-laundering procedures in a report by a US Senate subcommittee."
Journalists Hugh O'Shaughnessy and Paul Lashmar revealed that "the UK-based multinational stands accused of laxity in the fight against money laundering, drug trafficking, corruption and terrorism, notably in the oil-rich African state of Equatorial Guinea."
"In one of the few cases" when the scandal-plagued and now-shuttered Riggs Bank "seems to have properly followed US anti-money-laundering legislation," Riggs formally asked HSBC and a Spanish bank, Banco Santander, "to divulge the identities of the owners of two companies that kept accounts with them and that were receiving suspicious wire transfers totalling in excess of $35m (£20m). The banks refused to say who the owners were."
Bloomberg disclosed that "federal agents caught people who work for Mexican cartels depositing illicit funds in Bank of America accounts in Atlanta, Chicago and Brownsville, Texas, from 2002 to 2009." Authorities contend that "Mexican drug dealers used shell companies to open accounts at London-based HSBC."
Nevertheless, neither bank were accused of wrongdoing by the federal government and both firms denied any involvement in money laundering schemes.
Bank of America spokeswoman Shirley Norton told Smith that they "strictly follow the government rules." Norton said, "Bank of America takes its anti-money-laundering responsibilities very seriously," a fact not readily apparent from Bloomberg Marketsinvestigation.
Both Norton and HSBC spokesman Roy Caple told Smith that "[privacy] laws bar them from discussing specific clients."
And so it goes.
Fallout? What Fallout!
In the wake of Wachovia's admission to federal prosecutors, Wells Fargo will pay "$160 million in fines and penalties, less than 2 percent of its $12.3 billion profit in 2009."
"If Wells Fargo keeps its pledge," Bloomberg reports, then "according to the agreement [the federal government will] drop all charges against the bank in March 2011."
Why might that be? Large banks are immune from vigorous prosecution for violating the Bank Secrecy Act "by a variant of the too-big-to-fail theory."
Veteran Senate investigator Jack Blum, who led probes into the Iran-Contra drug connection and the CIA's favorite shadow bank during the 1980s, the Bank of Credit and Commerce (BCCI) toldBloomberg, "the theory is like a get-out-of-jail-free card for big banks."
"There's no capacity to regulate or punish them because they're too big to be threatened with failure," Blum says. "They seem to be willing to do anything that improves their bottom line, until they're caught."
Meanwhile as the bodies pile up, there's no jail time for executives and the assets of firms that could charitably be described as part of a "continuing criminal enterprise" haven't been seized; only a slap on the wrist and a promise to "do better next time."
*******
Opium and the CIA: Can the US Triumph in the Drug-Addicted War in Afghanistan?
By Prof Peter Dale Scott
URL of this article: www.globalresearch.ca/index.php?context=va&aid=18522
Global Research, April 9, 2010
Japan Focus - 2010-04-05
Alfred McCoy’s important new article (TomDispatch, posted on Global Research, April 5, 2010) deserves to mobilize Congress for a serious revaluation of America’s ill-considered military venture in Afghanistan. The answer to the question he poses in his title – “Can Anyone Pacify the World's Number One Narco-State? – is amply shown by his impressive essay to be a resounding “No!” . . . not until there is fundamental change in the goals and strategies both of Washington and of Kabul.
He amply documents that
• the Afghan state of Hamid Karzai is a corrupt narco-state, to which Afghans are forced to pay bribes each year $2.5 billion, a quarter of the nation’s economy;
• the Afghan economy is a narco-economy: in 2007 Afghanistan produced 8,200 tons of opium, a remarkable 53% of the country's GDP and 93% of global heroin supply.
Map of Afghanistan showing major poppy fields and intensity of conflict 2007-08
*******
• military options for dealing with the problem are at best ineffective and at worst counterproductive: McCoy argues that the best hope lies in reconstructing the Afghan countryside until food crops become a viable alternative to opium, a process that could take ten or fifteen years, or longer. (I shall argue later for an interim solution: licensing Afghanistan with the International Narcotics Board to sell its opium legally.)
Perhaps McCoy’s most telling argument is that in Colombia cocaine at its peak represented only about 3 percent of the national economy, yet both the FARC guerillas and the right-wing death squads, both amply funded by drugs, still continue to flourish in that country. To simply eradicate drugs, without first preparing for a substitute Afghan agriculture, would impose intolerable strains on an already ravaged rural society whose only significant income flow at this time derives from opium. One has only to look at the collapse of the Taliban in 2001, after a draconian Taliban-led reduction in Afghan drug production (from 4600 tons to 185 tons) left the country a hollow shell.
On its face, McCoy’s arguments would appear to be incontrovertible, and should, in a rational society, lead to a serious debate followed by a major change in America’s current military policy. McCoy has presented his case with considerable tact and diplomacy, to facilitate such a result.
The CIA’s Historic Responsibility for Global Drug Trafficking
Unfortunately, there are important reasons why such a positive outcome is unlikely any time soon. There are many reasons for this, but among them are some unpleasant realities which McCoy has either avoided or downplayed in his otherwise brilliant essay, and which have to be confronted if we will ever begin to implement sensible strategies in Afghanistan.
The first reality is that the extent of CIA involvement in and responsibility for the global drug traffic is a topic off limits for serious questioning in policy circles, electoral campaigns, and the mainstream media. Those who have challenged this taboo, like the journalist Gary Webb, have often seen their careers destroyed in consequence.
Since Alfred McCoy has done more than anyone else to heighten public awareness of CIA responsibility for drug trafficking in American war zones, I feel awkward about suggesting that he downplays it in his recent essay. True, he acknowledges that “Opium first emerged as a key force in Afghan politics during the CIA covert war against the Soviets,” and he adds that “the CIA's covert war served as the catalyst that transformed the Afghan-Pakistan borderlands into the world's largest heroin producing region.”
*******
But in a very strange sentence, McCoy suggests that the CIA was passively drawn into drug alliances in the course of combating Soviet forces in Afghanistan in the years 1979-88, whereas in fact the CIA clearly helped create them precisely to fight the Soviets:
In one of history's ironic accidents, the southern reach of communist China and the Soviet Union had coincided with Asia's opium zone along this same mountain rim, drawing the CIA into ambiguous alliances with the region's highland warlords.
There was no such “accident” in Afghanistan, where the first local drug lords on an international scale – Gulbuddin Hekmatyar and Abu Rasul Sayyaf – were in fact launched internationally as a result of massive and ill-advised assistance from the CIA, in conjunction with the governments of Pakistan and Saudi Arabia. While other local resistance forces were accorded second-class status, these two clients of Pakistan and Saudi Arabia, precisely because they lacked local support, pioneered the use of opium and heroin to build up their fighting power and financial resources. Both, moreover, became agents of salafist extremism, attacking the indigenous Sufi-influenced Islam of Afghanistan. And ultimately both became sponsors of al Qaeda.
CIA involvement in the drug trade hardly began with its involvement in the Soviet-Afghan war. To a certain degree, the CIA’s responsibility for the present dominant role of Afghanistan in the global heroin traffic merely replicated what had happened earlier in Burma, Thailand, and Laos between the late 1940s and the 1970s. These countries also only became factors in the international drug traffic as a result of CIA assistance (after the French, in the case of Laos) to what would otherwise have been only local traffickers.
One cannot talk of “ironic accidents” here either. McCoy himself has shown how, in all of these countries, the CIA not only tolerated but assisted the growth of drug-financed anti-Communist assets, to offset the danger of Communist Chinese penetration into Southeast Asia. As in Afghanistan today CIA assistance helped turn the Golden Triangle, from the 1940s to the 1970s, into a leading source for the world’s opium.
In this same period the CIA recruited assets along the smuggling routes of the Asian opium traffic as well, in countries such as Turkey, Lebanon, Italy, France, Cuba, Honduras, and Mexico. These assets have included government officials like Manuel Noriega of Panama or Vladimiro Montesinos of Peru, often senior figures in CIA-assisted police and intelligence services. But they have also included insurrectionary movements, ranging from the Contras in Nicaragua in the 1980s to (according to Robert Baer and Seymour Hersh) the al Qaeda-linked Jundallah, operating today in Iran and Baluchistan.
CIA map tracing opium traffic from Afghanistan to Europe, 1998. The CIA cite, updated in 2008 states “Most Southwest Asian heroin flows overland through Iran and Turkey to Europe via the Balkans.” But in fact drugs also flow through the states of the former Soviet Union, and through Pakistan and Dubai.
*******
The Karzai Government, not the Taliban, Dominate the Afghan Dope Economy
Perhaps the best example of such CIA influence via drug traffickers today is in Afghanistan itself, where those accused of drug trafficking include President Karzai’s brother, Ahmed Wali Karzai (an active CIA asset), and Abdul Rashid Dostum (a former CIA asset). The drug corruption of the Afghan government must be attributed at least in part to the U.S. and CIA decision in 2001 to launch an invasion with the support of the Northern Alliance, a movement that Washington knew to be drug-corrupted.
In this way the U.S. consciously recreated in Afghanistan the situation it had created earlier in Vietnam. There too (like Ahmed Wali Karzai a half century later) the president’s brother, Ngo dinh Nhu, used drugs to finance a private network that was used to rig an election for Ngo dinh Diem. Thomas H. Johnson, coordinator of anthropological research studies at the Naval Postgraduate School, has pointed out the unlikelihood of a counterinsurgency program succeeding when that program is in support of a local government that is flagrantly dysfunctional and corrupt.
Thus I take issue with McCoy when he, echoing the mainstream U.S. media, depicts the Afghan drug economy as one dominated by the Taliban. (In McCoy’s words, “If the insurgents capture that illicit economy, as the Taliban have done, then the task becomes little short of insurmountable.”) The Taliban’s share of the Afghan opium economy is variously estimated from $90 to $400 million. But the U.N. Office on Drugs and Crime (UNODC) estimates that the total Afghan annual earnings from opium and heroin are in the order of from $2.8 to $3.4 billion.
*******
Clearly the Taliban have not “captured” this economy, of which the largest share by far is controlled by supporters of the Karzai government. In 2006 a report to the World Bank argued “that at the top level, around 25-30 key traffickers, the majority of them in southern Afghanistan, control major transactions and transfers, working closely with sponsors in top government and political positions.” In 2007 the London Daily Mail reported that "the four largest players in the heroin business are all senior members of the Afghan government."
The American media have confronted neither this basic fact nor the way in which it has distorted America’s opium and war policies in Afghanistan. The Obama administration appears to have shifted away from the ill-advised eradication programs of the Bush era, which are certain to lose the hearts and minds of the peasantry. It has moved instead towards a policy of selective interdiction of the traffic, explicitly limited to attacks on drug traffickers who are supporting the insurgents.
This policy may or may not be effective in weakening the Taliban. But to target what constitutes about a tenth of the total traffic will clearly never end Afghanistan’s current status as the world’s number one narco-state. Nor will it end the current world post-1980s heroin epidemic, which has created five million addicts in Pakistan, over two million addicts inside Russia, eight hundred thousand addicts in America, over fifteen million addicts in the world, and one million addicts inside Afghanistan itself. Nor will it end the current world post-1980s heroin epidemic, which has created five million addicts in Pakistan, over two million addicts inside Russia, eight hundred thousand addicts in America, over fifteen million addicts in the world, and one million addicts inside Afghanistan itself.
The Obama government’s policy of selective interdiction also helps explain its reluctance to consider the most reasonable and humane solution to the world’s Afghan heroin epidemic. This is the “poppy for medicine” initiative of the International Council on Security and Development (ICOS, formerly known as The Senlis Council): to establish a trial licensing scheme, allowing farmers to sell their opium for the production of much-needed essential medicines such as morphine and codeine.
The proposal has received support from the European Parliament and in Canada; but it has come under heavy attack in the United States, chiefly on the grounds that it might well lead to an increase in opium production. It would however provide a short-term answer to the heroin epidemic that is devastating Europe and Russia – something not achieved by McCoy’s long-term alternative of crop substitution over ten or fifteen years, still less by the current Obama administration’s program of selective elimination of opium supplies.
An unspoken consequence of the “poppy for medicine” initiative would be to shrink the illicit drug proceeds that are helping to support the Karzai government. Whether for this reason, or simply because anything that smacks of legalizing drugs is a tabooed subject in Washington, the “poppy for medicine” initiative is unlikely to be endorsed by the Obama administration.
Afghan Heroin and the CIA’s Global Drug Connection
There is another important paragraph where McCoy, I think misleadingly, focuses attention on Afghanistan, rather than America itself, as the locus of the problem:
At a drug conference in Kabul this month, the head of Russia's Federal Narcotics Service estimated the value of Afghanistan's current opium crop at $65 billion. Only $500 million of that vast sum goes to Afghanistan's farmers, $300 million to the Taliban guerrillas, and the $64 billion balance "to the drug mafia," leaving ample funds to corrupt the Karzai government (emphasis added) in a nation whose total GDP is only $10 billion.
What this paragraph omits is the pertinent fact that, according to the U.N. Office on Drugs and Crime, only 5 or 6 percent of that $65 billion, or from $2.8 to $3.4 billion, stays inside Afghanistan itself.13 An estimated 80 percent of the earnings from the drug trade are derived from the countries of consumption – in this case, Russia, Europe, and America. Thus we should not think for a moment that the only government corrupted by the Afghan drug trade is the country of origin. Everywhere the traffic has become substantial, even if only in transit, it has survived through protection, which in other words means corruption.
There is no evidence to suggest that drug money from the CIA’s trafficker assets fattened the financial accounts of the CIA itself, or of its officers. But the CIA profited indirectly from the drug traffic, and developed over the years a close relationship with it. The CIA’s off-the-books war in Laos was one extreme case where it fought a war, using as its chief assets the Royal Laotian Army of General Ouane Rattikone and the Hmong Army of General Vang Pao, which were, in large part, drug-financed. The CIA’s massive Afghanistan operation in the 1980s was another example of a war that was in part drug-financed.
Protection for Drug Trafficking in America
Thus it is not surprising that the U.S. Government, following the lead of the CIA, has over the years become a protector of drug traffickers against criminal prosecution in this country. For example both the FBI and CIA intervened in 1981 to block the indictment (on stolen car charges) of the drug-trafficking Mexican intelligence czar Miguel Nazar Haro, claiming that Nazar was “an essential repeat essential contact for CIA station in Mexico City,” on matters of “terrorism, intelligence, and counterintelligence.” When Associate Attorney General Lowell Jensen refused to proceed with Nazar’s indictment, the San Diego U.S. Attorney, William Kennedy, publicly exposed his intervention. For this he was promptly fired.
A recent spectacular example of CIA drug involvement was the case of the CIA’s Venezuelan asset General Ramon Guillén Davila. As I write in my forthcoming book, Fueling America's War Machine,
General Ramon Guillén Davila, chief of a CIA-created anti-drug unit in Venezuela, was indicted in Miami for smuggling a ton of cocaine into the United States. According to the New York Times, "The CIA, over the objections of the Drug Enforcement Administration, approved the shipment of at least one ton of pure cocaine to Miami International Airport as a way of gathering information about the Colombian drug cartels." Time magazine reported that a single shipment amounted to 998 pounds, following earlier ones “totaling nearly 2,000 pounds.” Mike Wallace confirmed that “the CIA-national guard undercover operation quickly accumulated this cocaine, over a ton and a half that was smuggled from Colombia into Venezuela.” According to the Wall Street Journal, the total amount of drugs smuggled by Gen. Guillén may have been more than 22 tons.
But the United States never asked for Guillén’s extradition from Venezuela to stand trial; and in 2007, when he was arrested in Venezuela for plotting to assassinate President Hugo Chavez, his indictment was still sealed in Miami. Meanwhile, CIA officer Mark McFarlin, whom DEA Chief Bonner had also wished to indict, was never indicted at all; he merely resigned.
Nothing in short happened to the principals in this case, which probably only surfaced in the media because of the social unrest generated in the same period by Gary Webb’s stories in the San Jose Mercury about the CIA, Contras, and cocaine.
Banks and Drug Money Laundering
Other institutions with a direct stake in the international drug traffic include major banks, which make loans to countries like Colombia and Mexico knowing full well that drug flows will help underwrite those loans’ repayment. A number of our biggest banks, including Citibank, Bank of New York, and Bank of Boston, have been identified as money laundering conduits, yet never have faced penalties serious enough to change their behavior. In short, United States involvement in the international drug traffic links the CIA, major financial interests, and criminal interests in this country and abroad.
Antonio Maria Costa, head of the UN Office on Drugs and Crime, has said that “Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis.” According to the London Observer, Costa:
...said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result... Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said.
A striking example of drug clout in Washington was the influence exercised in the 1980s by the drug money-laundering Bank of Credit and Commerce International (BCCI). As I report in my book, among the
highly-placed recipients of largesse from BCCI, its owners, and its affiliates, were Ronald Reagan’s Treasury Secretary James Baker, who declined to investigate BCCI; and Democratic Senator Joseph Biden and Republican Senator Orrin Hatch, the ranking members of the Senate Judiciary Committee, which declined to investigate BCCI.
In the end it was not Washington that first moved to terminate the banking activities in America of BCCI and its illegal U.S. subsidiaries; it was the determined activity of two outsiders -- Washington lawyer Jack Blum and Manhattan District Attorney Robert Morgenthau.
Conclusion: The Source of the Global Drug problem is not Kabul, but Washington
I understand why McCoy, in his desire to change an ill-fated policy, is more decorous than I am in acknowledging the extent to which powerful American institutions—government, intelligence and finance—and not just the Karzai government, have been corrupted by the pervasive international drug traffic. But I believe that his tactfulness will prove counter-productive. The biggest source of the global drug problem is not in Kabul, but in Washington. To change this scandal will require the airing of facts which McCoy, in this essay, is reluctant to address.
In his magisterial work, The Politics of Heroin, McCoy tells the story of Carter’s White House drug advisor David Musto. In 1980 Musto told the White House Strategy Council on Drug Abuse that “we were going into Afghanistan to support the opium growers in their rebellion against the Soviets. Shouldn’t we try to avoid what we had done in Laos?” Denied access by the CIA to data to which he was legally entitled, Musto took his concerns public in May 1980, noting in a New York Times op-ed that Golden Crescent heroin was already (and for the first time) causing a medical crisis in New York. And he warned, presciently, that “this crisis is bound to worsen.”
Musto hoped that he could achieve a change of policy by going public with a sensible warning about a disastrous drug-assisted adventure in Afghanistan. But his wise words were powerless against the relentless determination of what I have called the U.S. war machine in our government and political economy. I fear that McCoy’s sensible message, by being decorous precisely where it is now necessary to be outspoken, will suffer the same fate.
*******
Heroin hits small-town America
`We're up to our eyeballs in it'
By Tim Jones
Tribune national correspondent
Published May 4, 2003 - Chicago Tribune
LEXINGTON, Ohio -- A costly struggle against heroin rages in the comfy, cedar-paneled home on West Hanley Road, and everyone inside is losing.
The adult sons of Steve and Chris Thomas have stolen more than $50,000 from their parents' business to support their heroin addictions. The Thomas home is in a lockdown state, with money and other valuables that could be traded for drugs kept away from the boys. A bolt lock protects the master bedroom.
The Thomases now finance their vending machine business on low-interest introductory credit card offers, switching to new cards every 6 months.
Last week a Richland County judge arraigned Mark, 22, and Matt, 18, on felony drug possession charges. The next day Mark Thomas was caught by his parents using heroin again and, as has happened before, was thrown out of the house. It's a war with no victory in sight.
"I don't know what we're going to do," Chris Thomas said.
This is but one snapshot of a rising tide of small-town heroin abuse in the Midwest, occurring in tidy little communities with town squares, bicycles on front lawns and American flags flapping in the breeze. Hospitals and drug counselors note an alarming spike in overdoses, and overmatched police agencies are scrambling to address a drug onslaught once deemed the exclusive purview of big cities and longtime addicts.
In the northern Ohio railroad town of Willard, population 6,800, police are investigating five fatal heroin overdoses since December, two of them on a recent weekend.
"All of a sudden it blossomed," is how Capt. Robert McLaughlin of the Huron County Sheriff's Department described the arrival of heroin. "We're up to our eyeballs in it."
Although marijuana, sheltered among the tall stalks of cornfields, and crack cocaine, brought in from Detroit, had long been the mainstays in the tightly defined universe of illegal drug users, police officials and treatment experts say the heroin market has expanded beyond the predictable clientele.
More troubling, the price of heroin is dropping, the availability is increasing and the purity of the drug is rising. "It is much stronger than what abusers are used to," said Mansfield Police Chief Phil Messer, who leads a 10-county drug task force called METRICH.
This region of Ohio, described ruefully by one undercover police officer as "conveniently located" amid the inverted urban triangle of Detroit, Cleveland and Columbus, is especially susceptible to drug trafficking because of easy access to several major highways. Formerly isolated and exclusively rural communities are now primarily bedroom communities. It was often considered the "Crossroads of America," but many of Ohio's small towns have lost their insularity and are now part of interstate drug traffic.
Deb Kline, a nurse in rural Crestline, said the number of intravenous heroin addicts treated at Freedom Hall Treatment Center, about an hour north of Columbus, has quadrupled. Worse, Kline said, the universe of drug abusers is expanding from hardened addicts in their 40s and 50s to people in their early 20s.
"Kids who come from upper-middle class families, kids who had pretty decent high school careers," she said. "I wish I knew why."
Few people wonder more than the Thomases, who built their home 15 years ago amid the tall pines in rural Lexington, population 4,200. As Steve Thomas put it, they came to raise their boys "away from the bull-crap of the city." He was building what would become a thriving vending machine business.
"We're first-generation success," the 54-year-old Thomas likes to say, pointing to the 61-inch Sony TV in the living room. The TV is a symbol of achievement, he said. Leading by the example of hard work was the best teacher for his boys, Thomas believes.
Early signs of trouble
There were early signs of drug trouble with Mark, who started smoking marijuana at 14. Steve Thomas said he would occasionally smoke marijuana in front of his boys. "I knew when to stop and I expected the boys to be just as responsible with drugs as I was," he said.
They weren't.
Then teenagers, Mark and Matt would help their parents empty the coin trays from pop, cigarette, candy, pinball and other machines. Every night the Thomases would bring bags of coins home. They said they wanted to be home for their boys.
The skimming began at least two years ago--a few hundred here and there that would soon end up in the eager hands of heroin dealers on the east side of Columbus, about an hour away. Both boys had cars and every other day would make the run to Columbus.
"Steve would come home and wonder where the money was going," Chris Thomas said. "We never dreamed our kids would take it."
Their sons had stolen at least $50,000, but Round 2, the in-house war, had only begun. More thefts followed--money, alcohol, prescription drugs, keys to vending machines. After throwing the kids out of the house, they changed the locks. Mark and Matt crawled through the attic and dropped in through a ceiling entry.
"We don't keep any money here, and what we do have we hide. We don't keep keys to anything here," Steve Thomas said. "It's like the enemy living right beside you, right under your nose."
Chris Thomas, 52, rattles off the specific dates, seared in her memory, of devastating events in the family's war with heroin. The car accidents, multiple DUI charges, the credit card spending binges, the relapses into drug use, the days they threw their sons out, and last New Year's Eve--when they were arrested for possession of heroin--are recounted, sometimes by the time of day. The question "Is he alive?" has worked its way into the daily vernacular.
`I feel very betrayed'
Steve Thomas said he could shoot the person who turned Mark onto drugs, but he won't.
"I feel very betrayed, especially by my oldest son. They should give loyalty to their parents. They deceived me," he said. "I don't understand why my son doesn't have this hunger for knowledge and growth and achievement."
And he doesn't understand how anyone could take heroin.
"And you never will because you're not an addict," Chris Thomas said.
Their anger is mixed with guilt and second thoughts about all the long hours spent building a business. Chris Thomas clings to hope, however frail, and pulls the lyrics of music that Mark recently wrote, expressing remorse for his addiction:
"I was so numb and had no feeling to feel,
I was so dumb because I never realized this was real.
I still didn't care when you gave all you could give,
I just got around and got high with no reason to live."
That hope withered last week when she found a bag of heroin in Mark's room. Once again, Mark is out of the house. He is living temporarily in a family-owned apartment in nearby Mansfield, paying $20 a day to his parents. "I told him that was the last kind gesture," Chris Thomas said. "That was hard for me."
For now, Matt stays at home with his parents. He passed a milestone Friday. He has been drug-free for 90 days. That gives his mom cause for hope.
But neither parent expressed much confidence about their sons' future. They've been through too much to be optimistic. "I really get the feeling that Mark's never gonna quit," Steve Thomas said. "With Matt it can go either way.
"We just want the boys to get on with their lives so we can get on with ours," he said.
The nightmare for the Thomases reflects, in part, the new availability of illegal drugs. The reasons for the surge in heroin use vary--a poor economy, proximity to big cities and increased competition among dealers.
Sgt. Rick Sexton of the Willard Police Department said the annual influx into the region of migrant workers from Mexico, a country that is a major source of illegal drugs, is also a factor. Some police officials point to the post-9/11 obsession with terrorism, saying it has diverted attention from the drug fight.
Availability increasing
"The feds are claiming there are more drugs being seized at the border. But we haven't seen the effects of that locally. We haven't seen a spike in prices that would occur if interdiction efforts were working," Messer said.
"The availability is increasing. We're seeing a lot of young people--high school kids--using heroin," Messer said.
That analysis is confirmed by addicts, who were accustomed to dealing with older adults and driving an hour to get their fix.
"When I first started, I had to go to Cleveland or Columbus to get it," said a heroin addict who now does undercover drug buys for METRICH in Mansfield. "It's much easier to get now. I don't have to run all over the place to find it. Now it's just down the street.
"People figure they can deal drugs because of terrorism and the war. They figure everybody's got their minds on that," the addict said.
An old industrial city of 50,000, Mansfield offers a grim reminder of possible consequences of drug trafficking--three state penitentiaries and the now-abandoned gothic prison used in the movie "The Shawshank Redemption." At SCCI Hospital, emergency room doctors have a ringside seat to the effects of the drug trade.
"We see a ton of prescription drug abuse, and I've seen more heroin in the last two years than I've seen in the previous 10," said Dr. Anthony Midkiff.
To be sure, heroin is not the only drug threat in the region. In some rural counties, crystal meth is a bigger problem. In Richland County, it's crack cocaine.
Paul Jones, an investigator with the Richland County Coroner's Office, said drug users are mixing prescription drugs. When combined with heroin, the powerful pain reliever OxyContin or methamphetamine, an addictive stimulant, "it can be just enough to push them over the edge, and they don't realize it," Jones said.
*******
The war on (certain) drugs
Noam Chomsky in What Uncle Sam Really Wants
One substitute for the disappearing Evil Empire has been the threat of drug traffickers from Latin America. In early September 1989, a major government-media blitz was launched by the President. That month the AP wires carried more stories about drugs than about Latin America, Asia, the Middle East and Africa combined. If you looked at television, every news program had a big section on how drugs were destroying our society, becoming the greatest threat to our existence, etc.
The effect on public opinion was immediate. When Bush won the 1988 election, people said the budget deficit was the biggest problem facing the country. Only about 3% named drugs. After the media blitz, concern over the budget was way down and drugs had soared to about 40% to 45%, which is highly unusual for an open question (where no specific answers are suggested).
Now, when some client state complains that the US government isn't sending it enough money, they no longer say, "we need it to stop the Russians" - rather, "we need it to stop drug trafficking." Like the Soviet threat, this enemy provides a good excuse for a US military presence where there's rebel activity or other unrest.
So internationally, "the war on drugs" provides a cover for intervention.
Domestically, it has little to do with drugs but a lot to do with distracting the population, increasing repression in the inner cities, and building support for the attack on civil liberties.
That's not to say that "substance abuse" isn't a serious problem. At the time the drug war was launched, deaths from tobacco were estimated at about 300,000 a year, with perhaps another 100,000 from alcohol. But these aren't the drugs the Bush administration targeted. It went after illegal drugs, which had caused many fewer deaths - over 3500 a year - according to official figures. One reason for going after these drugs was that their use had been declining for some years, so the Bush administration could safely predict that its drug war would "succeed" in lowering drug use.
The Administration also targeted marijuana, which hadn't caused any known deaths among some 60 million users. In fact, the crackdown has exacerbated the drug problem - many marijuana users have turned from this relatively harmless drug to more dangerous drugs like cocaine, which are easier to conceal.
Just as the drug war was launched with great fanfare in September 1989, the US Trade Representative (USTR) panel held a hearing in Washington to consider a tobacco industry request that the US impose sanctions on Thailand in retaliation for its efforts to restrict US tobacco imports and advertising. Such US government actions had already rammed this lethal addictive narcotic down the throats of consumers in Japan, South Korea and Taiwan, with human costs of the kind already indicated.
The US Surgeon General, Everett Koop, testified at the USTR panel that "when we are pleading with foreign governments to stop the flow of cocaine, it is the height of hypocrisy for the United States to export tobacco." He added, "years from now, our nation will look back on this application of free trade policy and find it scandalous."
Thai witnesses also protested, predicting that the consequence of US sanctions would be to reverse a decline in smoking achieved by their government's campaign against tobacco use.
Responding to the US tobacco companies' claim that their product is the best in the world, a Thai witness said, "Certainly in the Golden Triangle we have some of the best products, but we never ask the principle of free trade to govern such products. In fact we suppressed [them]." Critics recalled the Opium War 150 years earlier, when the British government compelled China to open its doors to opium from British India, sanctimoniously pleading the virtues of free trade as they forcefully imposed large-scale drug addiction on China. (Left: The Shanghai tailoring tradition has the same origin as most Western influence in China: Opium. The British were buying vast quantities of tea and silk to take back to England and had only illegal narcotics to close the trade gap. Poppy farms and opium processing plants in India, fast clipper ships to bring the product to the China market, and heavily-guarded opium storage hulks moored off the coast where local smugglers could pick up supplies.)
Here we have the biggest drug story of the day. Imagine the screaming headlines: "U.S. Government The World's Leading Drug Peddler." It would surely sell papers. But the story passed virtually unreported, and with not a hint of the obvious conclusions.
Another aspect of the drug problem, which also received little attention, is the leading role of the US government in stimulating drug trafficking since World War II. This happened in part when the US began its postwar task of undermining the anti-fascist resistance and the labor movement became an important target.
In France, the threat of political power and influence of the labor movement was enhanced by its steps to impede the flow of arms to French forces seeking to reconquer their former colony of Vietnam with US aid. So the CIA undertook to weaken and split the French labor movement - with the aid of top American labor leaders, who were quite proud of their role.
The task required strikebreakers and goons. There was an obvious supplier: the Mafia. Of course, they didn't take on this work just for the fun of it. They wanted a return for their efforts. And it was given to them: they were authorized to reestablish the heroin racket that had been suppressed by the fascist governments - the famous "French connection" that dominated the drug trade until the 1960s.
By then, the center of the drug trade shifted to Indochina, particularly Laos and Thailand. The shift was again a by-product of a CIA operation - the "secret war" fought in those countries during the Vietnam War by a CIA mercenary army. They also wanted a payoff for their contributions. Later, as the CIA shifted its activities to Pakistan and Afghanistan, the drug racket boomed there.
The clandestine war against Nicaragua also provided a shot in the arm to drug traffickers in the region, as illegal CIA arms flights to the US mercenary forces offered an easy way to ship drugs back to the US, sometimes through US Air Force bases, traffickers report.
The close correlation between the drug racket and international terrorism (sometimes called "counterinsurgency," "low intensity conflict" or some other euphemism) is not surprising. Clandestine operations need plenty of money, which should be undetectable. And they need criminal operatives as well. The rest follows.
*******