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Approved for Release: 2016/05/23 C05596950 Directorate of Intelligence 1; -10- AI Political Stability: The Narcotics Connection An Intelligence Assessment GI 86-10014 March 1986 "P' 5 4 1 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Warning Notice Intelligence Sources or Methods Involved (WNINTEL) National Security Unauthorized Disclosure � Information Subject to Criminal Sanctions Dissemination Control �1thre$ iations N 01 OR\ (NI I NOCON TR AC I IN( I PROPIN (PR) OR( ON (0( RI I WN All material on this page is l:nclassilied. Not releasiible to foreign nationals Not releasable to contractors or contractor/consultants C;iution proprietary information involved Dissemination and extraction or information controlled bN originator This information has been ;iuthoriied for release to... N I Nil'. . Intelligence sources or methods in Classified h Declassifv. 0.ADR Derived from multiple sources Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Directorate of Intelligence Political Stability: The Narcotics Connection An Intelligence Assessment This paper, prepared by. incorporates assessments done by analysts in the narcotics branches of the Office of Global Issues and the Office of Imagery Analysis. It was coordinated with the Directorate of Operations Comments and queries are welcome and may be directed to the Chief, Terrorism/Narcotics Analysis Division, OG I Approved for Release: 2016/05/23 C05596950 GI S6-1001 4 Ai arch /956 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 (b)(3) key Judgments /0,17riatir)n available al I., January IQS6 �na, ii,ed III thi.s rep,a7 Political Stability: The Narcotics Connection The narcotics trade has the potential to affect political stability in several ways: � Large criminal trafficking organizations can use money and intimidation to influence political, economic, security, and social institutions. � Insurgents operating in narcotics producing and trafficking areas can gain access to large amounts of money and smuggling networks to enhance their antigovernment operations. � Urban terrorists can make enough money on a single, large transaction to finance annual operating costs. � Hostile states can use criminal narcotics organizations to obtain hard currency and to smuggle arms to insurgent or terrorist clients and to support other subversive activities beyond their borders (b)(3) (b)(3) Criminal narcotics trafficking organizations can exert significant economic and political influence over some regimes in the Western Hemisphere, including The Bahamas, Mexico, Colombia, Bolivia, Peru, Jamaica, and Panama. Such organizations are becoming important in Belize and certain Eastern Caribbean ministates. The extent of their influence enables these traffickers to undermine US-sponsored counternarcotics programs and could pose a threat to democratic institutions in some of these states. (b)(3) The value of the illegal drug industry totals tens of billions of dollars annually. Large trafficking organizations, such as the Colombian cocaine networks, can earn billions of dollars in only a few vears of supplying the US market. The infrastructures of these organizations rival most legiti- mate businesses and some governments. Traffickers have extensive finan- cial and commercial networks and co-opt or intimidate political and security officials. They have shown remarkable resilience in the face of international control programs, moving their operations to avoid interdic- tion and instituting countermeasures that complicate moves against them. (b)(3) The adverse influence of a large narcotics industry can take many forms: � Increased violence against officials associated with counternarcotics programs, including assassinations and bombings of property. � Subversion of democratic political institutions through corruption of government officials, contributions to political parties, organization of antigovernment demonstrations by peasant growers, and manipulation of public media. Approved for Release: 2016/05/23 C05596950 01 16 10014 11,11,11 Approved for Release: 2016/05/23 C05596950 � Loss of government revenues or the ability to control key economic or financial sectors through movements of illicit profits, manipulation of banking institutions, and dominance of local economies. � Degradation of the effectiveness and political reliability of military units through extensive involvement of officers and enlisted men in drug trafficking. � Social disruption from increased drug abuse and drug-related crime. � Tension with neighboring states over aggressive narcotics interdiction in sensitive border areas. Insurgent involvement in narcotics production and trafficking can provide access to large amounts of money for weapons and political action. It also can give insurgents contacts with smuggling networks capable of moving weapons through government checkpoints. Colombian (FARC), Burmese (BCP), and Kurdish insurgents regularly exploit narcotics trafficking for their own ends. Peruvian (SL) and Tamil groups are showing interest, and changing patterns in the drug trade could bring other insurgent groups into close contact with drug traffickers. Terrorist groups have shown less interest in drug trafficking, perhaps reflecting relatively fewer opportunities. Most terrorists obtain sufficient funds from other sources, but some, reportedly including some Palestinian terrorist groups, occasionally participate in drug deals Cuba, Bulgaria, Nicaragua, Syria, and North Korea have been implicated in drug trafficking. Motives vary, but involvement would enable officials to obtain hard currency and also provide access to established smuggling networks that can be used to further subversive political activities at the ex- pense of the United States and its friends: � Cuban authorities have aided selected traffickers since the 1970s, facilitating transshipment of drugs through Cuban territory. � Bulgaria, through its state trading corporation KINTEX, has been directly involved in aiding drug traffickers since the 1960s. Since a US demarche in 1982, such activities have been much less visible, but we sus- pect they continue. iv Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 (b)(3) � Syrian officials have taken advantage of changing drug trafficking routes between Southwest Asia and Europe to participate in the drug trade, but the level of involvement is not well documented. � North Korean overseas missions were implicated in drug trafficking between 1976 and 1983, an apparent response to hard currency con- straints that forced individual missions to finance much of their own operations. (b)(3) The influence of criminal trafficking groups and the involvement of insurgents, terrorists, and hostile states constrain US drug-control pro- grams in the Western Hemisphere. The consequences of aggressive government control programs under such conditions could pose severe political challenges to friendly regimes, especially those with democratic institutions, and spark increased social and economic disruption. Even so, we judge that most governments could do more to contain the problem, to keep traffickers off balance, to curtail their freedom of action, and to raise their costs of doing business. (b)(3) We judge that a concerted regional effort could have a demonstrable impact on the problem in the Western Hemisphere by undercutting the traffickers' ability to shift operations to escape enforcement pressure. Some Latin American governments have already called for a coordinated regional approach to countering the narcotics trade; Colombia has con- ducted joint interdiction efforts with some of its neighbors. Such programs will take time and resources to implement, and it is by no means clear that the governments involved can or will assign the priority to narcotics control that will be required to assure adequate resources. We expect traffickers to use every trick at their disposal to thwart control programs, including violence and political intimidation (b)(3) Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 (b)(3) Contents 1'c/ix Ke\ Judgments Scope Note Introduction Criminal Trafficking Organizations and Political Stability Drug-Related Violence ix Subversion of Political Institutions 3 Destabilization of Financial and Fconomic Institutions 5 Undermining Effectiveness of the Military 7 Social Disruption 9 Tensions With Neighbors 10 Countries of Most Immediate Concern 10 Insurgent Involvement in the Narcotics Industry 13 Groups Heavily Involved 14 Groups Well Placed To Participate 16 Changing Trafficking Patterns: Creating the Potential 20 for Involvement 'terrorist Use of the Narcotics Industry 20 State Involvement in the Drug Trade 24 Cuba 24 Bulgaria 15 Nicaragua 26 Syria 27 North Korea 27 Iran, I.aos, Vietnam, and Afghanistan 28 Implications and Options 28 Appendixes A. 33 (b)(1) B. Major Narcotics Cultivation Areas and Trafficking Routes 35 vii Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 (b)(3) Scope Note Political Stability: The Narcotics Connection (b)(3) This assessment examines the ways in which narcotics production and trafficking can interact with political, economic, and security institutions to affect the stability of producing or trafficking countries. It is by its nature, therefore, a one-dimensional perspective on problems of political stability and makes no attempt to place narcotics-related "threats- on a continuum with other factors affecting political stability. Rather, it is an attempt to indicate how drug trafficking can complicate existing problems or be exploited by those who wish to do so. For most countries, available in- formation allows us only to raise the issue that the narcotics trade is likely to become an additional factor working against political stability. An understanding of the potentially destabilizing nature of a narcotics trade is important in assessing the potential constraints facing drug control programs (b)(3) ix Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 (b)(3) Political StahlHO: The Narcotics Connection Introduction The multibillion-dollar international narcotics indus- try has ramifications far beyond the immediate con- cerns of domestic law enforcement in consumer na- tions. It can also threaten the stability of countries friendly to the United States: � large criminal trafficking organizations use money and intimidation to influence economic, political, security, and social institutions in order to blunt I.lIS-sponsored counternarcotics programs and pre- vent local government action against them. � Insurgents operating in narcotics producing and trafficking areas can gain access to large amounts of money, and to smuggling networks that can be used to acquire or move arms, equipment, and personnel. � Urban terrorist groups can make enough money on a single, large transaction to finance their annual operating costs. � I lostile states can use criminal narcotics smuggling networks to obtain hard currency, to smuggle arms to insurgent or terrorist clients, and to support other subversive activities beyond their borders. � The problem is most severe in Latin America and the Caribbean where all four factors are present to some degree, but the drug trade also poses a threat to governments important to the United States elsewhere ( riminal Trafficking Organizations and Political Stability The existence of a large narcotics industry and power- ful criminal trafficking organizations in a country can threaten political, economic, and security institutions in a variety of ways. Countries with democratic (b)(3) institutions are particularly vulnerable because traf- fickers, by manipulating these institutions, jeopardize the basic system of government. The effect on US interests can range from a regime that is unwilling or unable to cooperate with US counternarcotics pro- grams to a government that has lost effective control over territory, elements of its judiciary or military, or its ability to plan and manage the economy. If the government affected is friendly to the United States and integral to US diplomatic and security. planning in a given region, the ramifications for American interests go far beyond concern for the effectiveness of narcotics programs. Trafficker influence over friendly governments is an immediate problem in Latin Amer- ica, but it is a potential problem in virtually any Third World country with a flourishing narcotics industry,. Most such states have weak political and economic institutions, and their security forces are generally mismatched in any contest with the trafficking organizations. (b)(3) Of immediate concern to us wherever narcotics traf- fickers can exercise strong regional or national influ- ence is their ability to twist public perception of the narcotics issue, making it part of the anti-US or anti- Western debate in the Third World. Through control of media, influence with public officials, and associa- tions with key opinionmakers, traffickers have been able to arouse public opinion against control measures by appealing to nationalist sentiments. Such activities affect more than bilateral cooperation on narcotics control measures: they can undermine the ability of a government to cooperate with the United States on a (b)(3) wide range of foreign policy or securit,N initiatives. They also plav into the hands of the USSR, Cuba, and other regimes that seek to foment or exploit anti- American sentiment. Pravda, for example, was quick 0/ S6 /OH/ 4 Ii OW, Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Figure 1. Aftermath of a ear bomb explosion on the street outside the US Embassy in November I4S4. he bombing was believed to be part of a campaign by Colombian drug traffickers- to in- timidate t'S and (Wombian drug law enlOrce- ment agent to portray US demarches to Mexico after the Febru- ary murder of a US Drug Enforcement Administra- tion (DEA) agent as Washington blaming the Third World for American problems Drug-Related Violence One of the most obvious manifestations of a powerful drug industry is an increase in drug-related violence against government narcotics control officers and high-level officials identified with drug control, in- cluding foreign citizens such as US embassy or nar- cotics control personnel. Traffickers have demonstrat- ed a willingness to use terrorist tactics in an attempt to undermine government authority and will to insti- tute strong counternarcotics measures. We see a direct correlation between enforcement successes and trafficker-sponsored violence against officials. Colombia. The assassination of a high-level assistant in the Justice Ministry in February 1984 and that of Justice Minister Lara Bonilla in April 1984 were traced to drug traffickers. The latter played a key role in government antinarcotics programs, and the former had publicly supported implementation of an extradi- tion treaty with the United States directed at drug traffickers. The respected Superior Court judge inves- tigating these murders was killed, presumably by drug traffickers, in July 1985. The Colombian Govern- ment's agreement to extradite traffickers triggered death threats to President Betancur among other Colombian officials, as well as senior US Embassy personnel and the Spanish Ambassador. Drug traf- fickers were probably responsible for a bomb that exploded near the US Embassy in Bogota in Novem- ber 1984, and perhaps for another near an American- owned language school. Peru. Nineteen members of a US-financed coca eradi- cation team were murdered in November 1984 during operations in a key coca-producing region, probably at the instigation of traffickers. The increased violence led to the resignation of large numbers of local officials and temporary suspension of eradication programs. Bolivia. Traffickers, in November 1984, attempted to kidnap a Bolivian legislator who was investigating links between the government and the cocaine trade, 2 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Mexico. In February 1985, traffickers abducted and murdered a DEA special agent and his Mexican pilot. Since 1982, press and DEA information indicate that some 100 Mexicans associated with narcotics control programs have been murdered by traffickers. Subversion of Political Institutions The narcotics trade directly threatens government stability' when traffickers subvert political institutions in order to undermine or prevent narcotics control programs and influence government and popular opin- ion in their favor. Corruption of bureaucrats, politi- cians, and police is a way of life to criminal traffickers and a common phenomenon in all important narcotics producing and trafficking countries. In some, howev- er, traffickers have gone beyond merely buying com- pliance from whomever is in charge to actively pro- moting politicians and policies that favor them. Attempts to manipulate local and national public opinion in favor of the narcotics industry are most common in Latin America but also occur elsewhere. In some places, traffickers exploit ethnic conflict to turn growers against the central government Colombia. One of the best examples of concerted attempts to manipulate the political system and public opinion in support of traffickers is the manner in which Colombia's extensive trafficking organizations operate. Traffickers contribute to campaigns of both parties to ensure themselves of friends in the Colombi- an Congress, and they have obtained a loyal cadre of representatives, largely from the northeastern mari- juana-growing region, who protect their interests. US Embassy officials report that one major marijuana trafficker, Pablo Escobar Gaviria, secured appoint- ment as an alternate Liberal Party member to Con- gress, and another founded his own political party. A friendly legislator used his position as President of the Senate Committee on Health and Education to rally public opposition to proposed aerial spraying of herbi- cides on narcotics crops in 1984. Embassy, press, 3 (b)" indicates that Colombian traffickct ,(b)(1) are perhaps the most advanced in their ability to kb) manipulate the media. One major trafficker, Carlos Lehder, owns a weekly newspaper to ensure continued favorable coverage; he also finances full page adver- tisements aimed at undermining government antidrug efforts by playing on nationalist themes. Other traf- fickers use sympathetic journalists to place articles depicting them as local benefactors and heroes. Some large traffickers finance civic projects such as parks, zoos, and publ'c housin2 protects to burnish their popular image (b)(3) Bolivia. Journalists report that traffickers stimulated an antigovernment demonstration by peasants in a major coca-growing area in 1984 in response to attempts to regulate the coca trade. Subsequently, the congress of the country's largest labor union called for free marketing of coca leaves and abrogation of US- Bolivian accords on drug control. According to the US Embassy, the narcotics industry contributed large amounts of money to both parties in the 1985 election to ensure a strong cadre of support against any plans to implement more effective control programs. The Interior Minister in the outgoing Siles administration, who controlled appointments of narcotics officials, was implicated in drug-related corruption. The situa- tion at the national level in Bolivia is an improvement over the earlier regime of Garcia Meza, who took power in 1980 in a coup that was financed by major (b)(3) traffickers. (b)(3) Belize. Government concern about opposition from politically influential marijuana farmers caused re- peated postponement of aerial eradication of marijua- na crops in Jamaica. 1985, according to Embassy' reporting. (b)(3) (b)(1) (b)(1) Jamaica also ha!(b)(i ) a strong "marijuana lobby" that successfully manipu- lates public opinion to thwart government actions; this "-Szt-pit� (b)(1) Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 lobby staged an "environmental" protest in 1984 to prevent an agricultural development project that would have flooded a prime growing area for a high- grade form of marijuana. Reporting from a variety of US Mission sources indicates that payoffs and politi- cal contributions from drug traffickers are an increas- ingly important source of funds for Jamaica's political parties. Although neither major party systematically solicits money from drug dealers, individuals in both the ruling Jamaica Labor Party and the opposition People's National Party have used drug money to support their activities. The Embassy reports that the People's National Party and the small but vocal Marxist Workers' Party of Jamaica purchase arms with drug money for use in the political wars. Peru. Narcotics-related corruption has been wide- spread, reaching to high levels of public and private institutions. Persons arrested for complicity in the drug trade in recent years have included doctors, senior police officials, a prominent member of the Chamber of Deputies, and the president of the Board of Directors of the national airline. implicated more than a dozen senators and deputies in some aspect of the illegal drug business. Under the Belaunde administration, traffickers so thoroughly suborned the judicial system that few were arrested and even fewer convicted; Recently elected President Alan Garcia has taken several high- ly publicized steps against drug-related corruption, including firing many high-ranking police officials, but it is too soon to judge the long-term impact of these moves or whether he will be able to sustain them Mexico. Pervasive corruption at all levels has under- mined narcotics control programs and resulted in police and government officials actively abetting traf- ficking operations. Several members of the Mexican Federal Judicial Police were implicated in the abduc- tion and death of a US DEA agent in February 1985. According to DEA reports, known associates of one influential trafficker include state governors, close friends of the Attorney General and of the President of Mexico, and a former Mexico City police chief. Figure 2. Mexican federal drug control agents killed by drug traffickers in November 1985. Reports from the US Embassy and Police reportedly provide protection for the narcotics industry and sometimes act as middlemen in transactions The Bahamas. Investigations by a Royal Commission of Inquiry in 1984 indicate that drug-related corrup- tion is widespread among lower level officials, and testimony suggests that substantial corruption exists at the middle levels, especially among the judiciary. The Bahamas has long been a major transit area for cocaine and marijuana to the United States. Although the commission cleared Prime Minister Pindling in 1984 of charges of personal involvement in drug trafficking, testimony before the commission impli- cated several high-level officials, including cabinet ministers. Despite a cabinet shuffle and subsequent 4 (b)(3) Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 offers of cooperation in US narcotics efforts, drug- related corruption continues to be a fact of life, and we suspect that those large traffickers with well- placed friends are likely to escape the consequences of any intensified counternarcotics program undertaken to mollify the United States Pakistan. Most opium is grown in northwest Pakistan, in areas that have traditionally sought autonomy at the expense of whatever government is in power. Traffickers are able to exploit strong tribal resent- ment or central authority to contest government at- tempts to control poppy cultivation and processing. In February 1985, villagers in Dir, North-West Frontier Province, made common cause with poppy growers to keep government eradication teams out, according to Embassy reports. In March 1985, government moves against a heroin laboratory in the tribal area of the Khyber Agency, North-West Frontier Province, re- sulted in a sharp firefight with local Pushtun tribes- men. Adding to government concern, these areas are along the border with Afghanistan, and Islamabad does not wish to provoke unrest in this crucial security ,one Thailand. Most opium is grown in tribal areas along Thailand's borders with Laos and Burma, areas of poor security and weak government control where the inhabitants do not identify with the regime in Bang- kok. Embassy reports suggest that some in the govern- ment, particularly the Royal Family, fear that a strong stance against poppy cultivation could lead to active 'antigovernment conflict and a resurgence of the Communist Party of Thailand insurgency, which was formerly strong in these areas. In the last year, the King has permitted eradication operations in some hilltribe areas in conjunction with rural development programs for poppy farmers. Destabilization of Financial and Economic Institutions The impact of the narcotics industry on national financial and economic institutions and policies is less well documented than that for political ones. A chief difficulty lies in determining how much of the narcot- ics earnings returns to the countries that produce and process the drugs. Offshore banking centers, particu- larly in areas that serve as crossroads for drug Figure 3. Thai King Rhumihol receives a small rose plant during a visit to a crop substitution project ill northern Thailand. The Thai royal family comider. hill tribes people, many at whom grow rTII1111, 1,1 be under their .yeeial protection (b)(3) (b)(3) trafficking, derive some of their business from moving drug money, but we cannot determine whether the share is large enough to influence national policy.. (b)(3) Individual banks or financial institutions, however, may be totally dependent on drug money and vulnera- ble to manipulation. At a minimum, a government's ability to monitor and control economic affairs is diminished by the presence of a pervasive under- ground economy fueled by drug money. Drug money movements are influenced not only by the same Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 A Profitable Enterprise US Government sources estimate that, worldwide, the dollar value and related cost to society of the illegal drug industry may total $150-300 billion annually. The clandestine nature of the trade complicates not only estimates of its profits but also any attempt to determine the destination of the profits, in particular what share eventually returns to the countries in- volved in production and trafficking. According to our estimates, for example, some $5-15 billion in drug revenues left the United States in 1983, but much of this did not return to the Latin American countries that are the major source of drugs reaching the US market We suspect that drug money returned home by traffickers probably did not constitute more than 10 percent of the GNP of any producing country, but such dollars probably represented the principal un- regulated source of hard currency in many source and transit countries. In 1983, for example, earnings removed from the United States by Colombian traf- fickers were roughly double Colombia's external current account deficit that year. The temptation to tap into this seemingly unlimited flow of money is strong not only for individuals interested in improv- ing their personal financial situation but also for governments or subnational groups short of cash and not particularly fastidious about where they acquire it. We judge some of the officials of debt-ridden governments might see a deal with the traffickers as preferable to domestic austerity measures. Most of the income from drug sales is earned by distributors in major markets, with significantly less accruing to those involved in production and trans- port. Profits on a given transaction vary greatly depending on the point in the production/trafficking chain the closer to the retail sales end of the chain, the greater the markup. Even though the grower receives very little relative to the street price in the United States, his profit is still subtantially greater than it would be from any other agricultural crop. Estimates of farm income in one coca-growing area conclude that annual profits from coca were as much as $1,800 to $2,400, in sharp contrast to $750 to $900 for cacao, $750 for rice, and $260 for corn The billionaires of the international narcotics indus- try are the large Colombian cocaine-trafficking orga- nizations that supply the US market, for their control extends from acquisition of the raw materials in the coca-producing countries of South America through wholesale distribution in the United States. We esti- mate that gross receipts of Colombian trafficking organizations from US sales in 1983 were $6-8 billion and that about half of this was profit. In terms of affluence, the Colombians' closest competitors are the Mexican traffickers, who also handle multiple drugs and operate deep within the US market. One Mexican trafficker this year claimed a personal fortune of $3 billion. Such large profits provide a slush fund to underwrite anything the traffickers choose to do, including instituting countermeasures against drug-control efforts. economic forces that motivate other investors but also by countermeasures against the drug trade all along the trafficking route. We judge that the erratic ebb and flow of drug money is destabilizing to both the money supply and the exchange markets in affected areas Whether the national economies of the producer and trafficker countries reap economic benefits or prob- lems from the narcotics trade is less important than the perception of leaders and citizens that the benefits are enormous. This perception can prevent govern- ments with large foreign debts and failing domestic economies from invoking strict counternarcotics pro- grams. Revenues returned to source countries can give the traffickers a strong grip on rural drug cultivating 6 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 or trafficking areas. In some producing countries, drugs have become the leading agricultural export: in all of them, the income from drug crops greatly exceeds that possible from any alternative use of the same land and labor, according to US and other agricultual experts. In some areas of Mexico. DEA reports that drug plantations are the principal employer Some observers are also concerned that the growing attractiveness of drug cultivation may divert needed resources, including manpower, pesticides, herbicides, and fertili.zers from lcoil export crops and needed foodstuffs. Colombia. Embassy estimates indicate that drug money flows into Colombia during the 1970s substan- tially blunted the impact of the oil price increase on foreign exchange balances. The clandestine inflow of drug dollars was sufficient to create a major upheaval in the exchange markets. In 1980 as much as $2 billion in drug money may have entered Colombia. This declined to less than $1 billion in 1984, partly in response to government abrogation of banking regula- tions that had encouraged drug money return. The Betancur government in 1985 discussed legislation that seemed designed to reverse this trend, despite a continuing national campaign against the drug trade spurred by last year's assassination of Justice Minister Lara Bonilla. Panama. A favorite crossroads for moving and supply- ing the drug trade, Panama also is a major financial center for drug money laundering and investment. Panama's strict bank secrecy laws and general laissez faire attitude toward financial activities work to the traffickers' advantage. Panama's emergence as a major banking center coincides with the expansion of the Colombian narcotics industry. DEA reports indicate that a Panamanian bank, when it opened in 1975, had as a major investor and officer the Colom- bian drug trafficker Gilberto Rodriguez Orjuelo. One recent report suggests traffickers also use Panamani- an institutions as investment centers. Drug money dollars probably play a bigger role in Panama than in any other Latin American offshore banking center, and traffickers and their beneficiaries could bring strong pressure to bear on the government should it try to move against them 7 Peru. The impact of a booming narcotics industry on the local economy can be seen in the town of Tingo Maria in Peru's Upper I luallaga River Valley. A small jungle village before the coca boom, visitors report it now features a market filled with expensive consumer goods, new hotels, a thriving commercial sector, and people with money to spend. Soil and climatic conditions in the area are generally unfavor-(b)(3) able to the cultivation of other cash crops, and lack of transportation would make it difficult to get them to market. As long as the farmer can make an estimated $100 from a hectare of coca, compared with only $10 from a hectare planted in rice or corn, any attempt by. (b)(3) the government to end the narcotics trade without compensating economic aid could bring severe eco- nomic depression to the area and could trigger a serious antigovernment backlash (b)(3) Undermining Effectiveness of the Military The impact of the narcotics industry on the military is of direct concern because many Third World govern- ments depend heavily on their armed forces both for internal security and for political support. In many countries military officers have been directly implicat- ed in drug trafficking in their areas of responsibility. Such involvement can degrade the overall effective- ness of the military in performing its security mission. Even in countries where there is limited direct in- volvement, the narcotics trade can be a source of dissension within the military and between military (b)(3) and political leaders. Frequently, only the armed forces have the equipment, training, and skill to combat effectively a large, well-equipped drug traf- ficking organization. Government attempts to involve the military forces in drug control, however, can meet with resistance from commanders who see drug con- trol as a police function or who fear the corrupting influence of involvement in narcotics control. (b)(3) Mexico. The Army, along with the Attorney al's office, is involved in eradication programs (b)(1) low-level military men accept payoff(b)(1) to burn fields after, rather than before, the harvest and to allow traffickers through roadblocks estab- lished to search for illegal drugs. In major drug- producing areas, battalion and zone commanders have (b)(3) Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Figure 4. Member of the Mexican armed forces during a raid on an opium poppy field in Mexico. been implicated in protection of or participation in the drug trade, according to DEA sources least protect favored associates or family members. The current armed forces commander General Nor- iega has close business and social ties to several people cited by DEA as drug traffickers. Investigations connected with the destruction in 1984 of a cocaine laboratory being built by Colombian traffickers in Darien Province brought allegations that the Execu- tive Secretary of the Armed Forces General Staff had accepted sizable bribes from Colombian trafficker Jorge Luis Ochoa in return for protecting the labora- tory operations from enforcement. Colombia. some local military commanders in Colombian drug- producing areas are heavily involved in drug-related activities and tell of military personnel loading drugs on aircraft, Air Force personnel operating their own drug-smuggling operations out of a Colombian air base, and bribery of field-level officers in the Army, Navy, and Air Force. We have no reports of high-level participation in the drug trade, although this situation could change as junior field-grade officers are promoted Peru. The military is not involved in drug control, and reports from various Embassy sources indicate that senior officers have resisted efforts to include it because they fear the potentially corrupting influence on military units. extensive corruption already exists at the field level. Some officers have been accused of looking the other way when drug shipments arrive at border checkpoints in the drug-producing region of north- eastern Peru. Air Force officers have been accused of permitting drugs to move through airports under their control, and some reports allege that Air Force planes have been used to transport drugs from growin areas to collection centers Panama. Drug control falls under the purview of the Panama Defense Forces, and DEA reports have indicated over the past several years that senior officers participate directly in the drug trade or at Bolivia. Direct military involvement at high levels has probably lessened since the late 1970s and early 1980s, when drug-related corruption was the norm at the highest levels of the military and government. US officials in La Paz reported that, during that period, Col. Luis Arce Gomez, a leading field commander 8 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 and subsequent Interior Minister, operated his own cocaine network and demanded a percentage from other traffickers. The most notorious military drug traffickers were purged during the recent Siles admin- istration, but the problem continues at the field levels, particularly in the drug-producing regions. Reports also continue to allege associations between drug traffickers and high-ranking officers. Bolivian Air Force personnel and equipment continue to be impli- cated in the transport of drugs F�Havy boats assigned to patrol against drug and other smuggling are being used to transport drugs on the interior waterway Pakistan. All of involvement by field-level officers are com- mon and seem credible, given the overall level of corruption in Pakistan and the widespread problems of narcotics trafficking Thailand. In the past, high-ranking officers of the Thai military, including former Prime Minister kriangsak, were implicated in the narcotics trade, but this no longer appears to be the case. One high- ranking police officer, however, allegedly runs a nar- cotics smuggling ring Involvement at the midlevels exists, especially among units charged with suppression activities along the Thai-Burmese border in northern Thailand A I hai investigation discovered some Arms officers ��ere running their own heroin trafficking network from a camp in central Thailand that serves as a distribution point for both civilian and military traf- fickers. Because military personnel and vehicles are not subjected to searches at police checkpoints intend- ed to control drug smuggling to Bangkok, poorly paid militar� personnel can earn large profits, especially as national control programs succeed in tightening up the overall situation 9 Figure 5. Btoldhi.ct monk mealint; a na whit," al a temple in I hadand Iii Social Disruption The social disruption caused by the drug abuse and ODX1) violent crime that frequently accompany a well-devel- oped narcotics industry can also lead to political problems for the government. Almost every major drug-producing country is experiencing a rise in do-(b)(3) mestic drug abuse, a byproduct of burgeoning narcot- ics production and the desire by the traffickers to find new markets. Coca-producing countries have always had a large population that chewed the coca leaf, but now they are developing urban addict populations that use semirefined and refined coca products. Jamaica and The Bahamas, countries that are major traffickopm) ing and transshipment points for South American (bvi) cocaine en route to the United States, have begun t(i jk experience cocaine abuse problems of their own. (b)(1) Pakistan, though it long had a number of opium (b)(1) smokers, reports an increase in heroin addicts from almost none in 1980 to an estimated 200,000 to 300,000 in 1985. ((b)(1) The governments of countries involved in the narcot- ics industry also report a rising rate of violence, including crimes by those seeking to buy drugs and by those trafficking them. Violence between competing trafficking networks have spilled over into the streets endangering the general public. Officials in Trinidad (b)(3) Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 and Tobago point to their country's growing impor- tance as a transshipment point in the Caribbean narcotics trade as the reason for the recent upsurge in illegal weapons imports. The methods used to smuggle the drugs can also be used to bring in the weapons For the Caribbean states heavily dependent on foreign tourists, a reputation for a high crime rate can dry up this important source of hard currency for the nation- al economy. Tensions With Neighbors Because narcotics operations, whether growing or trafficking, frequently occur in areas far from the government's control and often in regions where international borders are poorly defined, aggressive narcotics control programs by a country can some- times lead to tensions with its neighbors. Pakistan, for example, must take care that any major operations against opium growers and refiners in its North-West Frontier Province not provide the Afghan regime and its Soviet advisers with an excuse to allege provoca- tion and launch military attacks against Pakistan. Thailand and Burma have regarded each other with distrust for years in the area of the Golden Triangle heroin centers, and Thai operations in pursuit of opium traffickers can cause friction with Rangoon, which suspects Bangkok of supporting anti-Burmese insurgents in the area. Similar problems have existed in South America, for example, along the Ecuador- ean-Peruvian border. At present, however, the prevail- ing trend in South America and elsewhere is toward greater cooperation against drug traffickers. Countries of Most Immediate Concern We judge that criminal trafficking organizations can already pose a serious threat to the political or economic well-being of several Latin American or Caribbean countries important to the United States. In any of these countries, a large-scale antinarcotics campaign would be disruptive to the national life and could precipitate a serious confrontation with consid- erable violence. We judge, however, that, despite their public statements, none of these governments can or will put sufficient pressure on traffickers to force a showdown in the near term. We believe that govern- ment counternarcotics programs probably can put the less influential or powerful traffickers out of business, but we expect the major traffickers to remain secure, although their operations can be disrupted and made costlier. For their part, traffickers would prefer to maintain the status quo, avoiding a confrontation that would upset existing business relationships Traffickers in Colombia have been able to avoid most of the consequences of the state of siege, either by moving their operations or by blunting government activities. If they believed that they were in serious danger, we expect the traffickers would make good their threats of assassination and bombing against local and foreign officials. They could also precipitate capital flight, which could severely undercut the country's financial stability. In a democratic country, like Colombia, trafficker pene- tration of the media and elected political bodies could be used to turn popular opinion against the govern- ment even though polls indicate t at many Colomhi- 1- ans oppose the narcotics industry. The newly elected government of Bolivia has an uncertain hold, and the fragile economy could with- stand few shocks. Some rural areas are a coca mono- culture with no other economic base. Any sign that the government planned a significant move against the narcotics industry could bring serious local unrest in the growing areas, economic dislocation, and prob- ably strong reprisals from within the regime, perhaps from the military. In Peru, where the economy is in disrepair and democratic institutions have a tenuous hold at best, large numbers of peasants earn their living from the narcotics industry. A concerted assault on the coca trade in rural areas without parallel economic development could bring depression there 10 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Trafficking Organizations Criminal drug trafficking organizations range from small, specialized operations active in one segment of the production, trafficking, or distribution of a .specif- ic drug to large, sophisticated enterprises that resem- ble a vertically integrated multinational company in their size, scope, and manner of operations. The best examples cif the latter type are the large Colombian organizations, which dominate the production, pro- cessing, and distribution of cocaine for the US mar- ket. Such organizations may distribute thou.sand.s of i/o,Qranis of cocaine to the United States, earning billions of dollars in just a few years of operation. These large networks handle all aspects of the trade: purchase of the raw product in Bolivia, Peru, or elsewhere; processing either nearby or at an interme- diate stop such as Mexico: and wholesale distribution in the United States. Although a large trafficking network may specialize in one drug, such as cocaine, it Call use its infrastructure and contacts to handle other drugs in response to shifting market preference or to exploit targets of opportunity; for e.vample, Colombian marijuana traffickers began supplying the 1'5' market with methaqualone when that became popular. Members of the drug trafficking fraternity usually know one another and cooperate on occasion, ft r example, to send a large shipment: they also compete, sometimes violently, as one attempts to increase his .share at another's expense. The infr astructure of a large network rivals most legitimate businesses and even some national govern- ments in the amount of property. sophistication of equipment, and network of financial, political, and commercial contacts. Large cocaine trafficking orga- nizations,1Or e.vample, frequently control .fleets of Nmall aircraft Many With sophisticated communica- tiOnS gear and reconfigured with extra fuel tanks that are used to carry drugs, people, and 111011ey between Latin America and the United States. These operations are supported by a network of clandestine airfields, sonic of them fairly large with concrete runways, others .small dirt strips. The organizations al.so have sizable numbers of trucks, small and large boats, helicopters, and any other form of tran.sport needed to move the drugs ji-om remote growing areas to clandestine processing sites and eventually to the LS market. To disguise and facilitate their illegal activities, traffickers buy or create cover businesse.s, including transport companies, machine shops, ship- yards, crop-dusting firms, and ranches. Traffickers also need access to financial networks capable of moving and laundering their profits and arranging payments to creditors. These networks consist of both underground anti legitimate financial in.stitution.s. A.s a re.sult, most traffickers have cultivated important contacts among banks, money exchange houses, and investment jirms. (b)(3) In addition to their extensive financial and commer- cial networks, trafficking organizations shield and protect their operations by co-opting or intimidating political and legal out In some small towns or rural areas, the trafficking network may function a.s a de,fa cto political institution paralleling the government apparatus. Traffickers' bribe politicians, finance political campaigns, and corrupt government(m3) narcotics enforcement officials at all levels. Law enforcement personnel are particularly vulnerable in most Third World countries because they are poorly paid, have low morale, receive inferior equipment, and are generally regarded as .second rate by compar- ison with the armed .1Orces. Trafficking organizations may also employ private armies, in some case.s composed of local police .forces, to protect or further their operations. (b)(3) Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 that alienated the peasants and encouraged antigov- ernment dissidents. We do not expect the govern- ments of Colombia, Bolivia, or Peru to launch such a frontal assault, but, if they did, we are concerned that the involvement of military personnel in the coca trade in all three countries would undercut the reli- ability of any local units commanded to assault the traffickers Jamaica has been a major supplier of the US market for marijuana and has recently become an important transshipment point for cocaine. Government moves against cultivation of marijuana have aroused a strong political lobby against the present regime, but thus far major traffickers have not sought to exercise their muscle. Some reportedly believe they are im- mune from government interference because they have subverted enough police or military personnel to guarantee the safety of their operations. Most can probably afford to miss a few harvests, given the recent oversupply of marijuana on the US market. In our judgment, recent evidence that the government is serious about moving against the narcotics trade will cause traffickers and growers to step up pressure on Seaga by increasing attempts to corrupt or co-opt local political institutions. Panama differs from the preceding countries in that its involvement is largely financial. We judge that drug money is a crucial ingredient in Panama's success as an international banking center, although we cannot estimate the extent. Consequently, traffick- ers have financial leverage in addition to the influence they have acquired through close associations with key military personnel in the ruling circles. If Colom- bian traffickers begin to relocate refining operations to Panama, we would expect the drug-related corrup- tion to spread d-ener into the military and civ'l administrations The charges against the Pindling government of The Bahamas in the media and as a result of the High Commission investigations in 1984 represented a ma- jor political scandal but evidently did little damage to the Prime Minister's political position with his constit- uents. We judge that, despite evidence of some coop- eration with US counternarcotics programs, the Pin- dling government will do little that might threaten traffickers with good political connections to the regime Figure 6. Bahamian Prime Minister Pindling (center, carrying papers) leaves the House of .4ssembly in Nassau October 1984 cdier his first appearance in Parliament following the depar- ture o/ Jive Cabinet ministers .from office in the wake of drug corruption investigations. Several Latin American countries on the fringes of established producing or trafficking areas are being drawn into the narcotics trade as a result of changing situations elsewhere. In some cases, these countries have weakening economies in which traditional crops or industries are suffering a declining world market, and the drug trade may well become an attractive alternative to unemployed peasants. We consider these countries vulnerable to increased influence by traffickers The marijuana lobby already exerts political influence in Belize, according to Embassy reporting, but we judge that the growing importance of marijuana as an export crop could markedly increase this. The decline of traditional cash crops, such as sugar, and the availability of easily cultivated land make Belize attractive as an alternative growing site to Colombia and Jamaica, where government eradication efforts continue. The need for alternative processing facilities for coca have led to increased use of Argentina as a site for cocaine laboratories and as a transshipment point, according to DEA assessments. We are con- cerned that, given past military involvement in the 12 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 narcotics trade, the traffickers might establish alli- ances with dissident rightwing political groups to ensure protection. Various states in the Eastern Ca- ribbean could become important transshipment points for cocaine from South America as US enforcement efforts make present Western Caribbean routes less attractive. We judge that few of these states have police forces capable of dealing with an influx of well- organized criminal trafficking organizations and that these ministates risk coming under the influence of such networks before they are sufficiently aware of the problem to take action Insurgent Inlohement in the Narcotics Industry Involvement in narcotics production and trafficking by antigovernment insurgent or separatist groups in countries friendly to the United States can increase the threat to government stability and jeopardize US diplomatic and security interests in the region. Sever- al major rural insurgencies regularly obtain money and weapons through direct or indirect participation in the drug trade. The size of the narcotics trade has increased so dramatically in the last decade that these groups have been able to find a niche without threat- ening the activities of criminal trafficking organiza- tions. For purposes of this discussion, we differentiate between insurgents and terrorists. Among insurgents we include those groups that seek to control territory, generally have an army of sorts, and frequently engage government forces in unit-sized confronta- tions. Insurgents also tend to operate in rural areas beyond government control. We consider as terrorist groups those that are generally urban; tend to attack civilian, noncombatant, or unprotected targets; and usually avoid setpiece battles with police or military. Insurgents often have the opportunity, motive, and capability to participate systematically in the drug trade. Insurgency and illicit drug cultivation tend to occur in remote regions, where the government pres- ence is limited and rugged terrain makes it difficult for the police and military forces to operate. People in these areas often feel little connection to the national regime, feelings that are exacerbated by a weak or 13 nonexistent national economic and political infra- structure. Some insurgent leaders may have ideologi- cal misgivings about cooperating with traffickers, and traffickers may. prefer the political status quo because they have made arrangements with it; but colocation of the two activities tends to invite interaction and can eventually lead to a systematic link. Both groups operate illegally and will inevitably come into contact as each searches for weapons and equipment, clandes- tine transportation, corrupt officials, and intelligence on police and military forces (b)(3) (b)(3) Certain factors may make cooperation between the two attractive. The drug trade offers insurgents access to sizable amounts of money to obtain arms and equipment and to finance political and social welfare programs. Some insurgent groups tax drug producers and traffickers in the same fashion as any other economic enterprise occurring in areas where they operate. Other groups, however, encourage growers and refiners in their area and provide protection or transportation. Some eventually become full-fledged narcotics trafficking operations in their own right. The extent of involvement varies with need and opportunity; some groups have become heavily en- gaged in narcotics only after other sources of financ- ing dried up. From the traffickers' perspective, well- armed insurgents can provide protection from police. Both traffickers and insurgents need clandestine smuggling networks, the one to ship drugs out of the region, the other to bring arms in. In both cases, projecting the appearance of defending local interests against national government actions provides a com- mon cause and helps enlist popular support. Insur- gents may see support to local peasants involved in drug cultivation as a convenient way to side with them against the national government. Insurgent involvement in the drug trade probably has a relatively small impact on the overall narcotics situation. Access to the money available from narcot- ics, however, can significantly enhance the capability of insurgent forces a particularly serious concern in countries where the national military forces arc poorly armed and trained. Insurgents who can establish their (b)(3) (b)(3) Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 own arms pipeline based on narcotics smuggling are also less dependent on outside supporters. The types of weapons most insurgent groups favor are low-cost, small arms easily purchased on the gray arms market. Thus far, insurgents involved in the narcotics industry have been largely restricted to growing and refining the drugs, the least profitable part of the industry. Nonetheless, if they can control production or refining from a large area, they have a very lucrative business, one that is much more profitable than any other enterprise available to groups operating in remote Third World areas. The only comparable support would be an unlimited money and equipment pipeline from a major state supporter We are also concerned that, in addition to using the narcotics trade to acquire revenue, insurgent and other dissident groups may capitalize on the resent- ment that could be aroused in rural areas by aggres- sive government narcotics control programs. Active counternarcotics programs that upset rural economies and make enemies of peasant growers could play into the hands of insurgent groups looking for adherents. The insurgents need not make the first approach; traffickers and growers seeking to shield their activi- ties from government enforcement might well ap- proach the insurgents offering cooperation against government forces. Groups Heavily Involved We judge that the involvement of certain insurgent groups in the narcotics industry is extensive enough to enhance the threat they can pose to regimes friendly to or important to the United States. We believe that the continued growth of the international narcotics trade, including the opening of and spread to new markets, may lead these insurgent groups to expand their involvement and, thus, the benefits they derive. Revolutionary Armed Forces of Colombia (FARC). The largest and most formidable insurgent group in Colombia, FARC was established in 1966 as the military arm of the Colombian Communist Party. FARC involvement in the dru trade is well docu- mented in Embass reports, which also indicate that about half of its front groups operate in areas where coca or marijuana is grown. It first became involved in narcotics in about 1977 when it began exacting fees from growers and traffickers in FARC-controlled territory and obtaining arms from traffickers in return for protection. This activity was sanctioned by the National Directorate in May 1982, FARC is an example of a group whose initial ideological reservations about involvement in the drug trade were overcome as it realized the benefits that could be derived. According to US Embassy reports, FARC has established pro- duction quotas for coca in some areas under its control, and at least one FARC front in southeast Colombia was formed expressly to organize profits from coca production to support activities by other fronts. FARC units in the Golfo de Uraba trade drugs for guns with organized smuggling networks. Some reports indicate that the Communist Party may be directing this activity and may be using its channels and contacts to find markets abroad. If so, this would give FARC access to the high-profit end of the drug trade and make it the first Latin American insurgent group to control drug production from growing through marketing the finished product Burmese Communist Party (BCP). A large number of ethnic separatist groups and insurgents are involved in opium cultivation and trafficking in Burma, but the only one that poses a military threat to the central government is the BCP. Reports from the US Embas- sy in Rangoon indicate that BCP leaders were initial- ly opposed to opium cultivation in areas under their 14 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Figure 7 Narcotic Production and Operating Areas of Major Trafficking Groups in the Golden Triangle India Tauoggyi. tj Burma China BCP headquarters � Poppy cultivation Operating areas BCP (Burmese Communist Party) trX�. SUA (Shan United Army) MI CIF (Chinese Irregular Forces) Refining areas ;40 BCP controlled SUA controlled 25Kilorneters 25 Miles Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 control, but, in the late 1970s, they sought to compen- sate for reduced Chinese financial support by system- atically exploitating the opium business. According to the Embassy, the BCP now sponsors opium cultiva- tion and trafficking activities in areas under its control; these areas account for some 70 percent of Burma's production, making the BCP the principal purchaser of raw opium from Burmese farmers. The value to the BCP of merchandizing this is estimated at $4-8 million. The BCP earns most of its narcotics revenue from transporting opium and opium products to the Thai border area for other trafficking organiza- tions to refine, but it is a growing source of refined heroin. At present, the BCP's heroin markets are concentrated in northern and central Burma, al- though it sells to Indian traders in western Burma and sends small amounts south to Rangoon. Embassy sources indicate that the BCP has formed alliances with a number of major traffickers in order to harness their expertise to develop its narcotics trade. One result of this activity has been a growing tendency for the BCP to become more of a narcotics trafficking organization and less of a political group committed to the overthrow of the Rangoon government As for the other Burmese groups heavily involved in narcotics cultivation and smuggling, expert observers of the drug situation in the Golden Triangle report that, unlike the BCP, they show little interest in seizing and holding territory beyond what they need for their narcotics business, and they have long since abandoned any political agenda. The Shan United Army, though once a politically motivated ethnic separatist group, is today solely a criminal trafficking organization seeking to acquire a monopoly of opium refining along the Burmese-Thai border. The Chinese Irregular Force, involved in drug trafficking since the 1950s, is also a refiner and trafficker in heroin and has connections with Chinese crime syndicates in Hong Kong and elsewhere. The Thai Revolutionary Army and the Kachin Independence Army also tax opium production, extort money from local traffickers and caravans, and act as brokers between growers and refiners. The latter, which has recently begun refining heroin, still maintains some political interests and activities, whereas the former expends all of its ener- gies in the narcotics business. Kurdish Dissident Groups. Kurdish dissidents in the Iranian-Turkish-Iraqi border area became prominent in the drug trade in the mid-to-late 1970s as Turkish traffickers sought new sources of supplies in response to a crackdown by Ankara on domestic production, Iranian Kurds supplied the opium, either from local production or by trade from Afghanistan, and Turkish Kurds acted as refiners and traffickers. ome Kurdish groups regularly trade narcotics for weapons, andE a Kurdish insurrection in Iran in late 1980 was armed in large part through barter arrangements involving drugs. Martial law was im- posed in the Kurdish areas in eastern Turkey in 1981, but recent reports indicate that drug refining and smuggling continue. Turkish authorities allege that Kurds from Turkey have established major smuggling networks in Europe where they exchange drugs for weapons that are smuggled into Turkey, both for Kurds themselves and also for Turkish political ex- tremist organizations. Reports indicate that Bulgaria is often the source for the weapons. Embassy reports show that, unlike other insurgents involved in the drug trade, the Kurds are involved all along the trafficking chain from production through refining, often in eastern Turkey, and marketing in Europe. As a result, they have access to greater profits as well as a smuggling infrastructure for moving supplies to the rebellion. Groups Well Placed To Participate The following groups bear watching because they have shown some occasional interest in narcotics as a fundraising proposition or because they are located in areas where the narcotics industry is expanding rapid- ly. In some cases the groups are small and pose no particular threat to the government, but systematic exploitation of narcotics money and connections could change this The National Liberation Army of Colombia (ELN). ELN is a small Marxist-Leninist organization estab- lished in the early 1960s with cells throughout Colom- bia. It allegedly extorts money from coca growers and 16 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Figure 8 Narcotics Cultivation and Rural Fronts of Principal Insurgent Groups Santa Marta � Barranquilla. Cartagena� cojii liANA'aana.17\, , DiNften Province Medel!in It Buenaventura. Ecuador lbaque G OTA Colombia Peru 11 Coca cultivation Marijuana cultivation Cocaine hydrochloride processing area Principal insurgent groups FARC (Revolfrhonary Aimed Forces of (olombia) M-19 (19th of April Movement) EPL (People's Libmation Army) ELN (Army of National Liticration) Nnt,, All pm, i wnop, [In whim non/ iii finqnt,i its vvnil to nInn, nwn Arauca 1(10 KtI ttttititi 200 Venezuela eticia 01 0 Brazil 9t0. Amazon Boundary representation Is not necessarily authontative 1// 164 1 8E-31 3 86 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 cultivates some marijuana itself, but most of its operating expenses are covered by bank robberies, kidnapings, and extortion from legitimate businesses. Colombian drug traf ickers have solicited protection from the FIN during the recent government drug crackdown. Peoples Liberation Army of Colombia (EPL). A small group active in the Golfo de Uraba area and Cordoba Department, EPL was associated with the now-de- funct pro-Bejing Colombian Communist Party/Marx- ist-Leninist. Colombian authorities suspect that the FPI. gets some weapons from drug traffickers in the Golfo de Uraba area and that it may also cultivate and traffic in marijuana. We believe, however, that most of LPL's funding, like most of the ELN, comes from other forms of crime ,S'endero Luminoso (SL). In contrast to the preceding two minor insurgencies in Colombia, the SL of Peru has sustained a debilitating insurrection against the government. It is based primarily in the Ayacucho region, a coca-growing area, but in 1984 it opened a second front in the upper Huallaga River Valley near the center of Peru's illicit coca industry. The SL's stated goal is to mobilize Peruvian Indians against the government. Peruvian Indians are the main coca growers and would be major losers in any serious government attempts to control coca cultivation. Thus far, Embassy reports indicate that SL involvement with narcotics apparently has been limited to extort- ing, money from traffickers operating in its territory individual SL operating units, especially in the Upper Huallaga River region, may find narcotics trafficking a conve- nient way to obtain funds for improved weapons and other material. The longer the SL operates in major coca-producing areas, the more likely it is to be drawn into the trade, first on an ad hoc basis and ultimately in a more systematic fashion Tamil Dissidents. Tamils in Sri Lanka have increas- ingly resorted to terrorist tactics to press their sepa- ratist insurgency they have tried to exploit Sri Lanka's growing importance as a transshipment point for Southwest Asian heroin to obtain funds for their movement. Most of the evidence so far comes from European drug investiga- tions of Tamil couriers. The insurgents still obtain most of their financing from extortion and robberies in Sri Lanka and from funds provided by Tamils living overseas. India, which previously provided some weapons and other support, has recently backed away, according to Embassy reports, and this move could stimulate further Tamil involvement in drug smug- gling to compensate for lost support Tamils are seeking to establish a full-fledged trafficking network in Europe, but it is by no means clear that the insurgents are directly associated with this activity; the operation could be simply a criminal enterprise. We judge, however, that drug trafficking is likely to become more important to the insurgents if support from India and overseas Tamils continues to decline Lebanese-Based Palestinian Guerrilla Groups. These groups allegedly benefit from drug smuggling, but we have little evidence to indicate that it is more than an occasional sideline. Hashish is produced in the Bekaa Valley in Lebanon, and we also have unconfirmed reports of heroin refineries in the vicinity. Some groups unable to acquire support from other sources undoubtedly participate in the drug trade, as do individual members of all groups. We consider it unlikely that drug trafficking will become a major activity for these Lebanese-based Palestinian guerril- las as long as other sources of income remain available. The New People's Army (NPA). The NPA of the Philippines has allegedly developed small marijuana cultivation and processing operations in northern and central Luzon The NPA also reportedly sells some marijuana on the international market, but we have no information on the trafficking network it uses. Thus far, evidence from press, sources 18 Approved for Release: 2016/05/23 C05596950 Approved for Release: 2016/05/23 C05596950 Figure 9 Coca Cultivation and Sender() Lutninoso (SL) Insurgent Operating Areas Tumbes Cajamarca. Coca cultivation Cocaine hydrochloride J processing area ,*