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Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8 Number 28 The CIA and Drugs $5.00 Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8 Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8 Editorial It is clearly appropriate, once again, to underscore the enormity of the CIA's sordid role in the world of drug traffick- ing. As we show in this issue, the CIA has been, from its in- ception, a major source of opium, heroin, and now crack. Revelations that the planes which fly weapons to the anti- Sandinista contras in Honduras and Costa Rica return filled with drugs, may-if they are allowed to be fully explored-yet shock the conscience of an American people numbed by a dec- ade of equally incredible revelations. CRIB has also learned that the CIA is receiving assistance in its Central American drug operations from an old ally, the mafia, which, after all, has been in the business since before the CIA existed. We hope to have this report in our next issue. Getting the information to the public may not be easy, as a recent Village Voice report details. Efforts by the office of the U.S. Attorney in Miami and by the staff of Senator John Kerry (Dem.-Mass.) to probe contra drug running have been con- tinually stymied by an administration, and its congressional backers, desperate to avoid the tarnish such investigations will give to the image of their "freedom fighters." Indeed, the efforts to discredit Sen. Kerry are monumental, ranging from a back-stabbing committee staff member to un- lawful interference with grand juries to disinformation cam- paigns in the media. Pressure on the TV networks has led to orders to correspondents not to cover the work of Kerry's subcommittee, and one, which ran the first of a three-part series on contra drug smuggling, abruptly canceled the other parts and fired its researcher. The cover-up is extensive. Drug Testing, CBW, and AIDS The CIA does not just run drugs; it tests them on people as well. In this issue we review some of the more notorious aspects of such programs, including an update on the history of U.S. involvement in chemical-biological warfare research and development. It is that work which leads to the special section of this issue (to be continued in the next), on AIDS. A number of re- searchers have raised the possibility that this dread epidemic is the result, either intended or accidental, of such CBW work. Because we believe that the AIDS crisis is of profound im- portance, we are publishing this material which reviews all of the theories under consideration. There is no smoking gun here; indeed the "experts" cannot agree on what causes AIDS, much less on how it works. But the evidence is very strong that nature alone is not responsible. Last Issue It was pure coincidence that our last issue, on the Religious Right, hit the stands as the Jim and Tammy Bakker scandal broke. What is deliberate, however, is the way the media's coverage of the exposes concentrated on sexual and financial shenanigans alone, virtually ignoring the deep ties of the religious ideologues to the contras and the Oliver North supply network, to prominent U.S. government officials, and to ex- treme rightwing groups around the world. ? Table of Contents Editorial 2 Drugs, Politics, and Disinformation Running Drugs and Secret Wars By Richard Hatch By David Truong D.H. 3 Lest We Forget The Australian Heroin Connection By Louis Wolf By Jerry Meldon 6 Mind Control in Canada Nugan Hand Drug Clients By Ken Lawrence By Henrik Kruger 9 Chemical-Biological Warfare Afghan Rebels and Drugs By Robert Lederer By William Vornberger 11 The Origin and Spread of AIDS The Cocaine Connection By Robert Lederer By Vince Bielski and Dennis Bernstein 13 Is AIDS Non-Infectious? Who Deals Drugs? By Nathaniel S. Lehrman By Roman Berger 17 Deltagate Doc-u-drama 19 By Ellen Ray and William Schaap Cover: Veteran and gay activist Leonard Matlovich, who has AIDS, being arrested at Washington rally by rubber-gloved police officer, June I, 1987. Credit: Jose R. Lopez, New York Times. CovertAction Information Bulletin, Number 28, Summer 1987; published by Covert Action Publications, Inc., a District of Columbia Nonprofit Corporation; Post Office Box 50272, Washington, DC 20004, (202) 737-5317, and c/o Institute for Media Analysis, Inc., 145 West 4th Street, New York, NY 10012 (212) 254-1061. Typeset by CAIB, printed by Faculty Press, Brooklyn, NY. Staff: Ellen Ray, William Schaap, Louis Wolf, and William Vornberger. Indexed in the Alternative Press Index. ISSN 0275-309X. 2 CovertAction Number 28 (Summer 1987) Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8 Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8 Running Drugs and Secret Wars By David Truong D.H.* World War II had barely ended when major western powers scrambled to reassert control over their former colonies. Asia was one region where France, England, and the U.S. reached understanding about their respective spheres of influence. In September 1945, France sought to reestablish her rule over Indochina and other former colonies where she had been un- ceremoniously humiliated by the Axis powers. With British assistance, and strengthened by Truman's policy against independence movements in Indochina, the French returned to Indochina to begin their disastrous nine-year war against the Viet Minh, Vietnam's burgeoning independence movement. In exchange for French support of America's Marshall Plan and anticommunist operations throughout Europe, the United States contributed to France's reconquest of Indochina. By the time of the French defeat at Dien Bien Phu in 1954, the U.S. had spent $3.5 billion, or seventy-five percent of French war costs in Indochina. Nevertheless, throughout the war, the French found themselves short of funds to finance their covert operations against the Viet Minh. Thus in 1951, the French intelligence service, SDECE (Service de Documentation Exte- rieure et du Contre-Espionage), and its covert operations branch, Service d'Action, took over the enormous opium trade in French Indochina.' Known as the "Opium Monopoly," the opium trade was first established by the French in the 1880s to finance their colonial rule over Indochina. Service d'Action had dubbed its opium-financed secret war "Operation X."3 The operation in- volved French-trained commandos made up of Hmong and other tribesmen to be sent into action against Viet Minh strongholds and a distribution network of French-sponsored local pirates who ran hundreds of opium dens throughout Vietnam and Laos. Operation X included a supporting cast of Corsican underworld characters and their small airline, "Air Opium," shuttling drug cargos between Laos and Vietnam. The Corsicans had links with their equally enterprising col- leagues in France. In post-war metropolitan France the CIA had made its own alliance with the Corsican underworld in its program to neutralize the influence of French Communist trade unions.' During the same period, in neighboring Thailand, the U.S. had established a major presence. U.S. intelligence activities in Thailand were part of a broad covert program, sanctioned by the Joint Chiefs of Staff and the Truman White House, against the newly established Chinese Communist government. Since 1948, the Office for Policy Coordination under the late Frank Wisner, driven by Cold War fever, had initiated a number of covert operations in Europe and laid the ground for more anti- communist operations in Asia. * David Truong D.H. is a researcher and policy analyst and a long-time watcher of U.S. intelligence activities in the Third World. 1. Alfred McCoy, The Politics of Heroin in Southeast Asia (New York: Harper & Row, 1972), pp. 92-109. 2. Ibid., pp. 73-75. 3. Ibid., pp. 99-100. 4. Ibid., pp. 37-47. Civil Air Transport (CAT), American intelligence's first proprietary airline in the Far East, flew clandestine missions and drops for the OPC and later for the CIA throughout In- dochina, Thailand, Burma and southern and eastern China. In early February 1951, the CIA initiated Operation PAPER, the first major paramilitary operation in that part of Southeast Asia. It involved the invasion of Yunnan province, southern China, by some 4,000 Kuomintang troops based in Mong Hsat, Burma.5 KMT General Li Mi's troops met defeat and were driven back to Burma; with continued CIA assistance, the KMT again tried twice to invade Yunnan province before retrenching itself in the territory of the Shan States in Burma.' In the decades that followed, Thailand became the launching pad for the multitude of U.S. covert operations against China. Throughout the 1960s and early 1970s, as the U.S. increased its role in Laos and South Vietnam, the Agency developed its Thai-based covert, paramilitary programs against Indochina and the rest of Southeast Asia. This theater of clandestine operations was also a major opium growing region, stretching from southern Yunnan to neighboring Burma's Shan states, northern Thailand, and northern Laos. It was commonly known as the "Golden Triangle" to opium and heroin traffickers, and was the source of 70 percent of the world's opium production in the early 1970s. Today, the Golden Triangle still produces at least 90 tons per year of heroin destined for the American market.' The CIA-backed KMT troops settled in Burma after World War II and controlled the opium traffic for buyers in northern Thailand and Bangkok. From 1948 on, American intelligence activities in the Golden Triangle were intertwined with the opium trade. Infiltration routes for CIA commando teams into southern China were also used as drug smuggling routes for traffickers in Burma and Thailand. Local Shan tribesmen pro- vided the guides to both the Agency's teams and opium caravans near the Burma-Chinese border. And the Agency had maintained five secret training camps and two key listening posts in the Shan states protected by its drug smuggling KMT troops and local tribesmen." Thailand was of course a major opium marketplace at the tip of the Golden Triangle. The military cliques of strongmen which ruled the country, beginning with General Phao Siyanon in 1947, also controlled the Thai National Police Department (TNPD) which was the largest opium traffic syndicate in the country. These "strongmen" grew immensely wealthy from their drug monopoly and from ties to the CIA.' Much of this drug smuggling network remains very active today, and has 5. William M. Leary, Perilous Missions. Civil Air Transport and CIA Covert Operations in Asia (University, Ala.: University of Alabama Press. 1984), p. 129. 6. Ibid., p. 131. 7. U.S. News and World Report, May 4, 1987, p. 33. 8. McCoy, op. cit., n. 1, pp. 306-8. 9. Thomas Lobe, United States Security Policy and Aid to the Thailand Police, University of Denver Graduate School of International Studies: Mono- graph Series in World Affairs, Vol. 14, No. 2 (Denver: University of Denver, Colorado Seminary, 1977), p. 20. Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8 Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8 deep roots in Thailand's military and paramilitary circles. The Agency's role was much more pervasive than that of the French Service d'Action in Vietnam. The CIA founded and trained General Phao's paramilitary police force, and equipped it with artillery, tanks, and helicopters. The police force not only protected Thai borders but also conducted commando missions into Indochina, Burma, and China. U.S. paramilitary specialists, either retired military personnel or detailed from other departments, were brought to Bangkok to train this new Border Patrol Police (BPP). To manage the training and equipping of the BPP, the CIA had asked a retired OSS China hand, the late Paul Helliwell, to form a cover organization out of Miami. The Overseas Southeast Asia Supply Company, or Sea Supply, had the sole contract with Thailand for services to the BPP.10 Helliwell, also Thailand's Consul in Miami during the early 1950s, was one of the CIA's specialists on forming front companies and laundering funds for "black" operations in the Caribbean in support of the Agency's secret war against Cuba," es- pecially in preparation for the 1961 Bay of Pigs invasion. The Agency's primary airline, CAT, renamed Air America in the late 1960s, flew military equipment from CIA depots in Okinawa to Bangkok for Sea Supply.12 Within the Thailand-Burma theater, CAT flights carried weapons, paramilitary personnel, and opium for the Thai strongmen as well. By 1950, the CIA had created its own "Operation X" in neighboring Thailand, larger and much more efficient than that of the French SDECE. The historical roots of today's secret supply network for the contras in Central America lie with the CIA's paramilitary programs with the KMT and the BPP in Southeast Asia. These covert operations provided the Agency with considerable experience in the management of secret wars and drug running. The CIA's clandestine war against the Pathet Lao, which involved at least fifty thousand Thai and Hmong mercenaries, and some KMT troops, remains the largest in Agency history. Air America had a fleet of several hundred of all kinds of aircraft from 1968 on, operating out of six bases throughout Thailand and Long Tieng, the Agency's operational headquarters in northern Laos. Long Tieng was the main base of the Hmong commanding general, Vang Pao, and the site of his main heroin lab for the entire Golden Triangle region. In the late 1960s, the Agency even assisted Vang Pao in his pur- chase of Air America aircraft to form his own airline, Xieng 10. Ibid., p. 23. 11. Penny Lernoux, In Banks We Trust (Garden City. N.Y.: Anchor Press/Doubleday, 1984), pp. 80-83. 12. Leary, op. cit., n. 5, p. 129. Khouang Air Transport (XKAT). The airline flew cargos of opium and heroin between Long Tieng and Vientiane. 13 The Hmong mercenaries' heroin production went mostly to Laos's prime drug king and merchant, General Ouane Rattikone, com- mander of the Laotian Air Force. It was during this period, between 1966 and 1969, that several key players in the current weapons supply network to the contras developed their skills in drug running and secret war management. Theodore Shackley was CIA station chief in Theodore G. Shackley. Laos from 1966 to 1969 and the de facto chief of staff for the Agency's secret war. Shackley later did a tour in South Vietnam where he managed Operation Phoenix, the "pacifica- tion" program against the Vietnamese. Tom Clines worked under him in Laos, managing ground support activities for the war. Richard Secord, then a lieutenant colonel detailed to the Agency, was handling air support which included Air America and other minor CIA proprietary airlines. Secord stayed on in Thailand in the early 1970s to manage operations by U.S. Spe- cial Forces and Hmong troops in Laos. Together with Robert "Red" Jantzen, the Agency's station chief in Thailand (1958-1969) and the infamous Edwin Wilson, Shackley, Clines and Secord were cited in the late 1970s in the scandal of the collapse of the Nugan Hand Bank in Australia. 14 The bank was found to be heavily involved in drug trafficking between Thailand and Australia, as well as 13. Christopher Robbins, Air America: The Story of the CIA's Secret Airlines (New York: Putnam's, 1979), p. 237. 14. Commonwealth-New South Wales Joint Task Force on Drug Traffick- ing Report, Vol. 4, Nugan Hand (Part 11) (Sydney: Government Printing Office, 1983). Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8 Approved For Release 2010/06/03: CIA-RDP90-00845R000100170001-8 THE SOUTHEAST ASIA OPIUM TRAIL DRUG TRAFFIC ROUTES FROM THE GROWING AREAS Opium-growing areas f--Lana route +--- Water route