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The CIA & The Politics of Narcotics: An Interview with Alfred McCoy by David Barsamian (conducted at University of Wisconsin-Madison, February 17,1990)

Barsamian: This is David Barsamian and my guest is Alfred McCoy, author of "The Politics of Heroin in Southeast Asia" and "Drug Traffic: Narcotics and Organized Crime in Australia". Alfred McCoy is Professor of History at the University of Wisconsin at Madison.

In your book, The Politics of Heroin in Southeast Asia, you demarcate very carefully that the United States was poised at the end of World War II, in 1945, to... I don't have your exact words ... to terminate the problem of drug addiction in the United States and it could have done so but for forces that I'd like you to discuss - was unable to do so.

McCoy: The problem with America's failed chance at essentially reducing if not eliminating drugs as a problem was a contradiction between the needs of domestic policy and the national security state. After World War II the United States became a global power and set up a number of agencies to exercise this global power, most importantly the executive agency known as the U.S. Central Intelligence Agency when it was ultimately formed in 1948. The CIA, in order to conduct its campaign against communism, which was seen as an overweening evil that had to be stopped, was willing to ally with anybody and everybody that could provide during what was seen as a critical period, some strength, some support in the global struggle against communism.

In Europe and Asia the CIA allied themselves with major drug brokers and organized crime syndicates. In sum, what they did was to create a mainline flow of narcotics from the Middle East through Europe to the United States which dominated America's drug markets until the 1960s. At the same time, the CIA was forging alliances and protecting the traffickers in Europe, for reasons of intelligence. They also formed similar alliances in Asia - alliances which were actually deeper and had much more profound and lasting impact on the Asian drug trade.

As the European trade began to diminish in the late 1960s and early 1970s, the second stream, the flow of Asian drug traffic came into the United States and supplanted the old Turkey- Marseilles heroin connection. But, ultimately, when you look at the source of supply and the politics that provided drugs to America in the post-war era, you came down to this contradiction between the weak drug policy and same kind of vague commitment to doing something about drugs versus a very high profile, very important effort to contain communism globally. In this balance between an inarticulated, poorly formed narcotics policy and a very clear national goal of containing communism, narcotics policy was barely considered.

The CIA in this era was dealing with governments, intelligence chiefs, warlords, gangsters, traffickers of all sorts - good character was not considered of moment. The only thing that counted during the period from the late 1940s through the late 1960s was containing communism.

Barsamian: You trace the involvement of the Mafia - the U.S. Mafia - in the promotion of narcotics trafficking in the United States. How did the politics get involved with the Mafia?

McCoy: We have to step back a bit to the origin of the drug problem. Since the 1800s western societies - Europe, Australia, America - have had very extensive drug problems. Now, you can really divide the western world's century of mass drug abuse into two convenient periods. From the late 1800s to the present we can split it down the middle. From about the 1870s when you get big-time mass consumption of narcotics to the 1920s drugs were legal. The name "heroin" for example, was a trade name coined by the Bayer company. In 1898 they came up with a new product which seemed to be very good for respiratory ailments. They put it on the market and called it "heroin." That's where the term comes from. It's a trade name coined by one of the world's major pharmaceutical manufacturers.

The next year, 1899, they came up with another nifty new product that seemed to do the same thing for headaches that heroin did for respiratory ailments. They called the new product "aspirin." That one's worked out pretty well. So we got one winner and one loser during this same period of the global boom of pharmaceuticals.

It wasn't until the 1920s that there was a general consensus that law would be used to regulate personal behavior. So alcohol, gambling and narcotics were, during the 1920s, globally subject to regulation. So you have laws on the books in the United Kingdom, Australia, the United States - not only the nations themselves but their several states and provinces - banning the use of narcotics.

Narcotics moved from being a personal choice - something you picked up at your local pharmacy, your local drug store - to being a criminal act. The process by which it becomes illegal varied in every country and, in some cases every state. By the time you get to about 1930, drugs were illegal around the globe.

So, suddenly, who's moving the drugs? Well, it's syndicates. The abolition or the prohibition of alcohol, partial prohibition of alcohol in some countries and full prohibition in this country, combined with the prohibition of narcotics, transferred an enormous sector of the legitimate economy to syndicates. So that's where you got the rise of organized crime.

In 1932 the United States pulled back from the prohibition on alcohol It was gradual, it was slow, but the syndicates got out of the alcohol trade. But we've never pulled back from the prohibition of narcotics. It's remained illegal. That prohibition has become permanent. So, during the 1930s. the syndicates began moving into narcotics. They were of secondary importance initially to alcohol, but once alcohol became legal after 1932, narcotics became correspondingly more important.

During World War II things changed. All global commerce was disrupted. Military controls and war zones intervened with the normal trafficking routes. The drug trade was totally disrupted in the United States. In Asia it continued. The Japanese military intelligence dominated the manufacture and distribution of heroin from China. They used it very explicitly as a weapon against the Chinese resistance. They flooded China with heroin, financed all of their intelligence operations and special operations from the drug trade.

But in the United States and Europe, the drug traffic was disrupted. It largely disappeared. Survival had to do with, in part, some short-term tactical alliances with the Mafia. In 1943 the United States invaded Sicily as one of its two major invasions of Europe, a major event in the history of World War II, secondary to D-Day. That leap from North Africa and fighting up the boot of Italy, bloody horrible campaign that it was, was something that really concerned American military planners at the time. They apparently - the U.S. Navy in particular - forged a short-term political alliance with Lucky Luciano who'd been convicted for operating a brothel that employed something like a thousand prostitutes in New York City; he was in Dannemara State Prison in New York. The Navy cut a deal with him and he used his contacts with the Sicilian Mafia to get Mafia support because the Mafia politically dominated western Sicily which was the area where U.S. forces landed.

Mussolini, for reasons just purely of state, couldn't abide the Mafia. They didn't do what he wanted. He tried to break them. Under the U.S. military occupation of Sicily, the Mafia revived. There were some American mafiosi deported to Sicily after the war. They provided links back to the United States with their confreres in organized crime. Moreover, as the United States' campaign against communism got underway, particularly in the Mediterranean basin - in Italy and southern France - the United States formed tactical alliances with Corsican syndicates and with the Mafia too. It served as a counterweight to communist dockworker influence in places like Marseilles particularly.

The net result is that as a result of wartime policy and postwar anti-communist policy, you got a revival of organized crime operating initially under some kind of U.S. military-government protection and ultimately under CIA protection.

As the trafficking routes got re-established through the Middle East and Europe, ultimately to the United States, a revived, restored Mafia in Sicily, Corsican syndicates in Southern France, were major participants in this traffic.

Half a world away, in Asia, you get a similar phenomenon. We can talk about that if you want.

Barsamian: In fact, the recolonization of Indochina by the French at the end of World War II in 1946 led to what you call the first Indochina war, and the establishment of a major international narcotics trade which the French intelligence was very much involved with. Is that true?

McCoy: Yes, but again I think we have to stand back and look at this in somewhat broader perspective. It's one of the liabilities of being a history professor - I can't understand 1990 unless I know about 1890. It's just the way I see things. Things have historical roots and if you deal with present superficialities you won't have a clue as to what's going on.

You have to understand, first of all, that the extensive opium trade in Indochina - mass consumption, particularly in the cities - was as a result of European colonial policy. Nowhere else in the world - and most of the tropical latitudes of the globe were colonized - Asia, Africa and Latin America at one time, entirely colonized.

It's only in Southeast Asia that the colonial governments paid for their very dynamic development, massive infrastructural projects, irrigation that transformed the landscape, massive road networks, rail networks, very dynamic colonial development - all of this was paid for by direct taxes upon Indochinese consumers. Taxes on alcohol, salt and particularly opium. In British Malaya, 40% of colonial taxes came from opium. In Thailand it was running about 15%. (Thailand was an independent state but they followed the colonial model.) In French Indochina it ranged about 15% from the period of the 1870s up through the 1950s when, as a result of UN pressure, all of these governments abolished the opium trade. Thailand was the second last to do it. Thailand didn't abolish its state opium monopoly - rather like an alcoholic beverage control that a lot of states have. They didn't abolish this until 1957 and Laos didn't abolish theirs until 1961.

So you had, then, mass opium consumption in Southeast Asia as a result of this colonial policy of making the colony pay with opium. That was the policy.

Now, most of the opium was not produced in Southeast Asia. It came from abroad - either Southern China or, particularly, India. The thing that changes significantly after World War II is not the emergence of Southeast Asia as a major area of opiate consumption - it had been so for a century or even more. What is significant is the emergence of the mountain areas of Southeast Asia as major areas of global opium production. Indeed, by the early 1960s, the largest single source of opium anywhere in the world was the so-called "Golden Triangle" region of Southeast Asia.

How did this come about? It comes about two ways. Most importantly, we have to look at North Burma. That's the bulk of the Golden Triangle. In fact, most of that imaginary geographical construct penned by some unknown journalist wag or geographer - nobody knows where this idea came from calling this sort of triangular-shaped highland zone where opium is grown in Southeast Asia "the Golden Triangle" - most of that triangle is in Burma, northeastern Burma in particular.

So, where did opium come from? Well, if you look at the British colonial records, because the British colonized Bunna, you find opium production up until 1945 in northeastern Burma was almost insignificant. There was very little grown. Most of the opium consumption in northeastern Burma came from India. Burma, after all, was a province of India under the British, so they just brought it in and sold it legally. Now, where the opium came from was a major CIA operation. One of the biggest - the only one I know of of its scale that is yet to be exposed by journalists or muckrakers of any sort. This was the attempt to overthrow the People's Republic of China.

In 1949 the Red Army, Mao's Red Army, drove south and they drove the Nationalist forces of Chiang Kai-Shek in two directions: one down to Taiwan to the East and secondly, into this redoubt, this highland plateau which is the Hunan province in southwestern China. The warlord of Hunan surprisingly surrendered, betrayed Chiang Kai-Shek, and surrendered to the communists. Chiang Kai-Shek's plan of having his old World War II redoubt which was the bastion of his resistance against the Japanese. This was Chiang Kai-Shek's old mountain bastion. He thought he could hold it and maybe use it for counter-attack. Well, the warlord of Hunan betrayed him for reasons nobody quite understands, turned it over to the communists, and Chiang's forces were suddenly without a redoubt. They fled across the border into the mountains of northeastern Burma, where the CIA set up a massive support operation, including an air link that was of the nature of the hump - the flight from India across the hump of the Himalayas into the Hunan province of southern China during World War II. They also rearranged the politics of Thailand. the CIA became involved in the factional politics among the military leadership in Thailand. They allied themselves with the commandant of the Thai national police, a particularly corrupt man named General Pao. General Pao went into the opium business with the nationalist Chinese forces in Laos.

What you had was the CIA sustaining nationalist Chinese forces in Northeastern Burma on the China border, supporting - we have records I think of two invasions of southern China by this force which left, in a couple of battles, dead white men on the field of battle. One can only suspect that they were CIA operatives or contract mercenaries working for the Agency, We don't know. No identification.

But anyway, these invasions failed. So why didn't they withdraw? Well, the CIA had the idea - and you can find these in formal National Security Council documents - the CIA and the Pentagon had the idea that there was going to be a massive Chinese invasion of Southeast Asia at some point. This was what the Vietnam war was all about: building up the South Vietnamese Army, to integrate, to become an Allied force within the U.S. conventional combat forces, to resist this projected Chinese invasion of Southeast Asia. The falling dominoes were not just going to fall from within, they were going to be pushed from without by an invading China.

So they kept the Nationalist Chinese forces up along this long difficult Burma border as a kind of trip-wire to detect a Chinese invasion of Southeast Asia and to run intelligence operations. They went into China, kidnapped Chinese officials, tapped phone lines, and bought newspapers - and they were maintained in northeastern Burma from 1949 until 1961 when a joint Communist Chinese-Burmese Army operation drove them into northern Thailand which is where they are today. But they still maintained their posts, even though they couldn't keep their base camps in Burma. That group, the Nationalist Chinese forces in northeastern Burma, transferred northeastern Burma from a region of very little opium production into the largest single producer of opium anywhere in the world today.

How did they do it? They did it through the classic colonial policy that we saw under Leopold of the Belgians in the Congo Free State. Under Leopold every peasant had to grow rubber and if you didn't deliver rubber, your children's limbs were amputated. I can show you a very famous photograph in book published by Macmillan University Press, The Colonial Empires by Professor B.K. Hildhouse(?) and there's a picture of an African man sitting on his porch looking at the feet of his daughter which had been amputated because he didn't deliver the rubber. It was such a brutal, horrific administration that the European colonial powers held a conference, took the Congo away from Leopold, and gave it to the Belgian parliament to administer. It was one of the great scandals of the 19th century, one of the horrors of colonialism. That great novel, Heart of Darkness, that became Apocalypse Now - that's written about the brutality of the Belgians in the Congo Free State.

There are many legacies in the European imagination of how horrible this was. Well, that's exactly what the Nationalist Chinese forces did to the Hill tribes of northeastern Burma. I've interviewed American Baptists missionaries who told me that ordinary peasants - hill tribesmen - who did not deliver their opium quota, suffered the loss of limbs. Fingers would be cut and hands were taken from you and your family.

So people produced.

Under this forced regime of occupation where you had the Nationalist Chinese forces backed by the CIA occupying the mountain areas, the prime opium growing areas in northeastern Burma, Burma went from maybe 7 or 8 tons of opium production per annum to anywhere up to 1,000 tons of production by the time the CIA's mercenaries were driven out in 1961. A thousand tons would have been, in any given year, up to 60 and 70% of the world's total illicit opium production coming from this one area as a result of a decade of CIA-Nationalist Chinese occupation.

The other Southeast Asian area was as you describe. Until 1950 France had an opium monopoly in Indochina. They were under pressure from the United States and UN to clean up. They signed the Segal(?) Convention on Narcotic Drugs with the United Nations and they abolished the opium monopoly. But it didn't disappear. The opium dens and opium shops were simply transferred from the French Ministry of Finance to French military intelligence and they, in turn, turned them over to a criminal syndicate that was running Saigon for the French, using their funds to buy daily intelligence and ferret out communist terrorists in the streets of Saigon.

The communists were running a terrorist campaign against the French. A Frenchman would sit down in a cafe and a 12-year-old boy would come up to him and put a gun to the back of his head and shoot him and disappear into a crowd. That's the kind of operation. The French were powerless to control that and they set up a very elaborate intelligence apparatus to try and stop that terror. Money was the fuel that drove that engine and the money came from drugs.

Moreover, there were Corsican syndicates that dominated the inner-city economy of Indochina, based in Saigon. They began exporting to Europe where part of the so-called Marseilles connection which has been celebrated in films - the connection where it's supposed to be opium from Turkey coming through the laboratories of Marseilles and then on to the United States - part of that production - we don't know how much - in fact, came from Saigon.

So, it's as a result of French counter-insurgency efforts in Indochina where they integrate narcotics into their intelligence operations, but primarily it's as a result of CIA operations in Burma that we get the so-called Golden Triangle where it's northeastern Burma and the adjacent area of northern Laos going into high-scale production.

When the Americans moved into Indochina after the French departed in 1955, we picked up the same tribes, the Hmong, the same politics of narcotics, the politics of heroin, that the French had established. By the 1960s we were operating, particularly the CIA, in collusion with the major traffickers exporting from the mountains not only to meet the consumption needs of Southeast Asia itself, but in the first instance America's combat forces fighting in Vietnam and ultimately the world market. Southeast Asia today, by the way, is the number one source of American heroin. That's our major source. So it's those very mountains of Burma, those very fields that were cleared and put to the poppy as a result of this Nationalist Chinese-CIA counterinsurgency intervention policy - that army that the CIA maintained there - that's supplying America's addicts today with illicit heroin.

Barsamian: Was the anti-communist ideology so powerful and so strong that the CIA would risk the worldwide opprobrium of being linked with drug trafficking? Why would they take that risk?

McCoy: It's easy. Look, it's effective. I interviewed a guy named Lt. Col Lucien Conein who, since I published my book now despises me, and I asked Col Conein why they worked with the Corsicans in Saigon, for example. He said that there aren't very many groups that know the clandestine arts. When you think about the essential skills it takes to have an extra-legal operation - to have somebody killed, to mobilize a crowd, to do what it does when societies are in flux, when power is unclear and to be grabbed and shaped and molded into a new state - you want to overthrow a government and put a new one in - how do you do it? Who does this? Accountants? - They go to the office every day. Students? They go to classes - they're good for maybe one riot or something, but they've got to get on to medical school or law or whatever they're doing. Where do you get people who have this kind of skill? You have your own operatives and they're limited. Particularly if you're a foreigner, your capacity to move something in the streets is very limited. You know, sometimes you can turn to a state intelligence agency in a country you're working with, but most effectively you can turn to the underworld. That's why the CIA always worked very effectively with the warlords of the Golden Triangle. It's worked very effectively with Corsican syndicates in Europe, worked very effectively and continuously with American Mafia - because they have the same clandestine arts. They operate with the same techniques.

And they have the same kind of amorality. They are natural allies. There was a conversion of cultures between the milieu of the underworld and the world of the clandestine operative.

Barsamian: The French intelligence services used the services of the Corsican Mafia during the first Indochina war and many of those Corsicans remained behind and the Americans picked them up. But then you have the introduction of the American Mafia itself with the full-scale American intervention in Indochina: people like Santo Trafficante getting involved.

McCoy: I was interested in discovering during the course of my research in Saigon in 1971 that the last of the founding generation of the Mafia - I read these Mafia histories and I wonder if they're accurate, but you know, if you read enough of them and they're talking about the formation of a Commission, the big five families getting together and setting this thing up - but sometimes you wonder if it isn't a fairy tale but everybody keeps repeating it. So let's just assume as kind of a footnote that this may not be accurate. But let's assume this is some kind of story that's accurate. The last of the founding generation of Mafia titans was Santo Trafficante, Jr. He was the boss of Tampa. He also ran Cuba for the Mafia. Cuba was one of the major conduits of Marseilles heroin. The raw opium would come from Indochina through the Suez Canal, across the Mediterranean to Marseilles - or it would come through Turkey, down through Lebanon, then across the Mediterranean to the port of Marseilles. There it was refined and it would enter the United States.

Back in 1950, because of the very substantial Mafia presence in Cuba - they owned most of the casinos, they operated a lot of the prostitution industry and they were on good terms with the Batista dictatorship. It was their major offshore operating zone. It was a kind of vice free port. Santo Trafficante is believed to have been heavily involved in narcotics importation operations in a general kind of way as somebody who was very heavily involved in Cuba. Cuba was supposed to be - again, in these Mafia fairy tales - something of a neutral zone. It was nobody's territory. But Trafficante kind of ran it, providing a certain amount of protection and order for organized crime because he was southern Florida and it was a natural territory for him to expand into.

Well, in the late 1960s, Trafficante and his consigliere, his counselor - again, in these Mafia charts, the number three man was a guy named Dominic Furchi(?). Dominic Furchi and Santo Trafficante took a trip and went to Hong Kong and they went to Saigon. When they were in Saigon they met with old man Furchi's kid, Frank Furchi. Now, Frank Furchi had set himself up in Saigon and was involved in this shady world of contracting all of these kind of murky private business operations that were what you might call black marketeering on the fringes of this massive U.S. war effort. Wherever you get armies operating in the midst of war zones you get an enormous amount of black market activity. Prostitution, clubs, entertainment, purloining of military equipment - you know, there's just so much men and movement and violence and such a risk that freelancers would come in there and wheel and deal and make money.

This young Furchi was in there. There was a group of Corsicans that was still operating left over from the first Indochina war and they were dealing. Some of them were ex-nazi Gestapo officers that had come out there as well. It was a remarkable polyglot group of adventurers. Trafficante is believed, according to Hong Kong police intelligence, to have explored getting an Asian heroin connection. Some police I talked to during this period were convinced that, in fact, he did provide the basic contacts and connections during his trip which began to see the start of substantial flows of heroin from Southeast Asia to the United States. Now, whether or not, again, this is a Mafia fairy tale, nonetheless statistically it is after about 1970 that we see the flow of Number 4 pure white powder heroin moving from Southeast Asia to the United States, being detected in chemical analysis of street samples.

Barsamian: One thing that has kind of perplexed me on this particular issue - you know, the CIA being involved in drug trafficking in Southeast Asia - very soon we see that heroin flowing into the veins of the American GIs stationed in Southeast Asia who are reputedly there to defeat the communists. That's kind of bizarre to say the least.

McCoy: When I published my book I got a lot of flak from people on the left saying that I was probably a CIA agent because I was so moderate in my analysis. The thesis in the heated political times of the early 1970s about drugs was this. The CIA had two problems - or the American ruling class - whoever these invisibles are that control this complex uncontrollable country - supposedly had two problems. One was insurgency of minorities - I'm speaking of black uprisings in the cities of America. Another was winning the war in Vietnam. So they put one and one together and they came up with two: the Southeast Asian drug trade. Their vision was - you know, like the CIA Deputy Director in charge of global narcotics trafficking sort of telling the Hmong caravans to get moving out of the highlands of Southeast Asia. "Let's get that caravan now into the lab. Okay, let's get that heroin loaded onto the aircraft right. Okay, now we've got it into Harlem. Okay, get that kid, Kid, step forward and buy the bag." Okay, you know, that's it. Potentially insurgent youth has been narcotized. Write him off for black power.

I didn't see things operating quite so comprehensively. What I saw going on was like this. And this is why I was accused by people on the left of being moderate and cowardly in my analysis. When you do this kind of research, when you move into this murky world of rumors, conspiracy, the shadow universe that is organized crime, narcotics and intelligence, you've got to adopt, I think, a minimalist approach. You can't say anything you don't have a source for. You can suspect all you want. But when you speak or write, you just don't say it. That's speculation. You have a drink and you talk it over when you're working with your colleagues trying to figure it out, then you can go into anything you want. But when you actually speak or write, you've got to stick to the facts. Otherwise, you're not doing your job ... it's nonsense. So I adopted a policy that I had to have sources. In fact, my book when it was published was gone over by a corporate lawyer at Harper & Row which is a big publishing firm. The CIA actually got a copy of the manuscript and tried to get certain passages deleted and removed. They pressured the corporation for the right to do that. Ultimately I had to stand behind every sentence. I had to have sources for it. The lawyers went through every sentence and said, "Where's this?" I had to have an interview notebook, I had to show my logic.

What I found was this. This is my image. In effect the CIA's involvement in narcotics was originally specific. It was going on in Laos and it didn't get much beyond Laos. The Agency in Laos was, just like the agency globally in the 1940s and 50s, myopic, short-sighted. It was fighting a war. It was trying to stop the Ho Chi Minh trail from operating. In order to do so it had a 30,000 man mercenary army made up largely of Hmong hill tribesmen who lived in the area and were opium growers. The consequences of their complicity in the narcotics traffic was something they just weren't interested in. From 1964-65 to 1975 they ran this secret war with a massive

army of 30,000 men - an operation of an unequaled duration and size. The CIA has never, ever run as big an operation. I think that's even bigger

than the Burma operation they ran. The Nationalist Chinese forces never got to that size.

Barsamian: What about Afghanistan?

McCoy: That didn't last eleven years. When did it start? About '81 and it's already over. It didn't make it. It lasted eight years. I don't think also .. you see, the Mujahadin are not as integrated with the CIA. Those were just rebels that the CIA was backing. This is a 30,000 man army that the CIA ran. It was their army. They bought every bullet, they trained

every soldier, they had a mercenary officer corps under General Vang Pao that they ran. It wasn't a "hands-off' operation. It was their army. That's

why we've got all these Hmong in Los Angeles and Minnesota and Wisconsin - because we're looking after our loyal tribe that fought and died for us in some kind of twisted logic. But that's why they're all here. That's why we have all these mountain peasants trying to adapt to life in this country.

Anyway, the CIA was complicitous in the Laotian drug trade at a number of levels. First of all, let's look at the situation. Why would the CIA be complicitous in the drug trade? Okay. They are allying themselves with a people which grows two products up in the mountains: they grow rice for subsistence and they grow opium for cash. They've grown opium really at a high level since World War II. They grew small amounts before, but with the boom in production in the Golden Triangle their production of opium expanded and they became dependent upon it as a source for cash.

When the CIA allied itself with this tribe, after a few years, by 1970, the economy, the culture, the whole of Hmong tribal society and the CIA's secret army were one. It was a total merger. It was as much an alliance between the CIA and the Hmong as it was between the United States and Great Britain in World War II. We just didn't give the British bullets, we financed their whole economy. We integrated our economy, our polity with Britain. Two societies, two states merged.

Well, in a funny kind of way, that's what's going on in Laos right now. The rice crop disappears because of the Meo policy of slash and burn - they chop down the trees, they burn it, that clears the land and leaves ash and phosphate on the ground and you get maybe two or three rice crops out of it before the land goes bad and the men, because there's a distribution of labor in the tribes, the men have to cut down the trees. The women till the crop, harvest the rice crop. Now, opium, well done, can go ten or twelve years whereas rice can only go two or three. So once it was started, very quickly the Hmong ran out of rice and the CIA began dropping rice to them. But they still had their opium. Now, the Hmong growing opium meant the CIA felt that they had to support the Meo's opium crop because there's only two cash crops. So they started actually using their remarkably extensive energistics network of light aircraft and helicopters to actually move the opium out of the mountains for the Meo because the war had disrupted the normal caravan routes of Chinese merchants that comb the hills for the opium. That was gone by 1966 as the war spread. So the CIA collected the opium and became the major source of transport, moving the opium from field to market, getting into the actual flow of regional international commerce.

Barsamian: This is the Air America fleet?

McCoy: This is the Air America fleet, yeah. It's the CIA's contract airline. It's just a fig leaf. It was the CIA's airline.

Barsamian: I notice you use Hmong and Meo interchangeably. Is that correct?

McCoy: Yes. The word has been used traditionally, Hmong, but it means slave in Chinese. But if you look at all the ethnographic literature before the Hmong migrated to this country, it always refers to them as Meo. Since they've gotten here, the Hmong have regarded Meo as an impolite term and everybody... You know, one of the dynamics of a multi-cultural society is that the group gets to pick its own name. If African-Americans want to be African-Americans, that's what you call them and you don't worry about it. The oppressed get to pick the label of their oppression. So if the Hmongs want to be called Hmongs, we call them Hmong.

Anyway, the CIA was absolutely aware of what it was doing. I went into a Meo district - I spent ten days there in 1971 - and I went house to house and asked every farmer how much opium they grew this year, last year, the year before. I went back ten years. I said, "Okay, now, how much do you grow." They said, "Well, we each grow about ten kilos," which will make you one kilo of heroin by the time you boil it down and combine it." Most of them grow about ten kilos from their fields. So, "What do you do with your ten kilos?" "Well, up to about five years the Chinese used to come through with their mules and we'd sell it to them and they'd give us some cloth, some money, this or that and flashlight batteries, whatever, and we'd deal with them. Or sometimes we'd take it down to the market down in the provincial capital." "So what have you done over the last few years?" "What happens is the Air America helicopter comes in and officers in the army, Hmong officers in the army, get out and we sell them our opium."

Opium stinks. It's like wrapping up cow dung in leaves. You've got a whole helicopter full of cow dung and you'd say to the pilot, the American CIA pilot - do you know what you're carrying? He'd say, "Yeah, I'm carrying cow dung." "How do you know?" "Well, I can smell it." Opium, in that kind of confined space, load up a helicopter with opium and you know what you're carrying. Everybody knows what it smells like. So they all knew that they were carrying it. This entire district that I interviewed established a pattern beyond doubt. The helicopters came there and left.

Where did it go? It went down to a place name Long Tien. Long Tien was one of the most secret U.S. installations anywhere in the world. It was the headquarters of the whole secret war in Laos, this attempt to fight the Ho Chi Minh trail, to cut it with this mercenary army. Long Tien was closed to any American other than somebody that had top intelligence classification.

I learned from Hmong sources that Vang Pao operated a very large heroin lab there. At this point the CIA got hands off. They didn't mind moving the opium out of the hills, but when it came to actually carrying the Number 4 heroin that came out of that lab, they wouldn't touch that. What they did was they established a private air line for Vang Pao called Zeng Kwan(?) Air Transport, the province where he came from was Zeng Kwan. So they created, you know, home-town province airlines and gave it to Vang Pao. They were hands-off from that point.

Then what happened was there was a flow, there were other labs, and the Chief of Staff of the Royal Laotian army - 99% of the Royal Laotian army's budget came from the United States - the Chief of Staff of the Laotian army operated the largest heroin refinery in the world in northwestern Laos. This flow of heroin went down to southern Laos where Nguyen Cao Ky's sister ran a hotel. There were three routes into Vietnam from southern Laos. One was Nguyen Cao Ky's pilots would fly over from Tonsonhut(?) Airport in Saigon and would pick up and fly back in. The Prime Minister of Vietnam, the President of Vietnam also had their own distribution apparatuses. Our allies in Vietnam, the three major political players, ran heroin distribution networks. There was a time in the 1970s when I think half a dozen members of the South Vietnamese parliament were picked up by customs by mistake carrying heroin in from Laos and Thailand. You know, the whole South Vietnamese government was dealing heroin to our troops. That was where it was coming from.

The CIA didn't know about that. I mean, they didn't care about that; they didn't worry about it. Once it was out of the mountains and out of the labs they didn't think about it very much. Now, what's the legacy of Laos. Well, the legacy of Laos, I think, is something that nobody's really thought about. Let's look at it. For ten years the CIA's biggest operation was completely integrated with the structure of the Indochina opium trade. The capacity of that army to fight and move, the capacity of those people to survive and to keep replacing soldiers (because they were killed by the tens of thousands). We were fighting with boy soldiers by the time it was over. I mean, those soldiers had to keep delivering the troops. The whole apparatus was integrated with the opium trade, the whole secret war apparatus was part of the opium trade. We ran that war through Vang Pao. He was a general in the Laotian army, but more importantly, he was the CIA's general. Now, Vang Pao was not from a traditional elite family. He was never very popular with the Hmong, certainly not at that time. And his capacity to get recruits out of the villages once the war started taking heavy casualties and people were seeing one and two and three sons dying, his capacity to extract more and more recruits to keep that war going relied upon him being able to pressure those villages.

I was in a village in Laos that stopped sending recruits and the CIA cut off the rice supply and those people were pushed to the brink of starvation. They had lost all the males down to the 14-year-olds. The village and district leader didn't want to send the 14-year-olds. "This is the next generation," he said. "If we lose these kids, then we will disappear. We won't produce another generation. We can't do this." And so he said no, we've been doing this for six or seven years now, we've lost everybody, we're not going to do it any more. So they cut off his rice.

The other thing that Vang Pao had was the opium. Remember, they had the two basic commodities - rice to survive and opium for cash to buy everything that they needed. So Vang Pao became the big opium broker for the Hmong and, as such, he gained extraordinary power over their economy and thus over their lives. So that by controlling those two products, opium and rice - the supply of rice and the export of opium from the villages - Vang Pao controlled those villages and could force them to support him even after the casualties began to mount.

My metaphor for Vang Pao is kind of like a Judas Goat. Do you know what a Judas goat is? In the stockyards, I don't know if it's still done, but let's say when you're leading sheep to the slaughter, there's a goat that will lead the sheep through the maze of the stockyards and then, as they're heading into the chute, the Judas goat jumps aside and the flock of sheep go pelting through to get hit with electrodes or hammers and be slaughtered. That's how you have to think of Vang Pao - as kind of like a tribal Judas goat leading the males to the slaughter. Except, the Hmong are not like sheep - they know what's going on - they know that they're being slaughtered. It's not like they're being slaughtered in one room at one time - they're being slaughtered slowly over a decade. So how does he get to keep leading them? Through the control over these two products.

You've got, then, a CIA secret war which in an essential way, in a fundamental way is linked with the opium traffic. More than that, it appears that a number of CIA operatives as individuals got involved. They started smuggling, started wheeling, started dealing and started doing a couple of bags here and there. We know, for example, there's a famous case of a CIA global money-moving bank called the Nugan-Hand bankwhich was established in Australia. The founder of that was a Michael John Hand. He was a green beret who was a contract CIA operative in Laos. When he first came to Australia in 1969-1970 Australian federal police got intelligence on him - I've seen the files - saying that what he's basically doing is he's bringing down light aircraft that are flying from Thailand to northern Australia into those abandoned air strips that were left over from World War II and he's dealing heroin. That's what Michael John Hand, according to Australian federal police intelligence, was doing. So, as individuals CIA operatives were getting involved and more or less what you've got then as a result of Laos is that the policy of integrating intelligence and cover operations with narcotics gets established.

You get, then, an entire generation of covert action warriors used to dealing with narcotics as a matter of policy. In short, you get a policy and personnel which integrates covert action with narcotics. This manifests itself in a number of ways. First of all the Nugan-Hand bank. Not only was it moving money globally for the CIA, but it was the major money laundering conduit that was trimming funds up to Southeast Asia from Australia and linking the Golden Triangle heroin trade of Southeast Asia with the urban markets of Australia. In Afghanistan as well, this same distributing pattern that we saw in Laos emerges.

This is one case that hasn't been well studied. I've spoken to one correspondent for the Far East Economic Review which is a Dow-Jones Publication, Mr. Lawrence Lifschultz(?), a friend of mine, and what he found was something of a similar pattern that I found in Laos. He was a correspondent in Pakistan and Afghanistan during the Mujahadeen campaign and he wrote articles in the Nation and elsewhere describing this similar pattern. You've got Pakistani government officials very heavily involved in narcotics, you've got the Mujahadeen manufacturing heroin, they're exporting it to Europe and the United States. They're using it to support their guerrilla campaign. the Pakistanis and the CIA are complicitous on the level of (1) not doing anything or (2) actually getting involved in the case of some of the Pakistani elite. So, it's a case where the Mujahadee operation becomes ultimately integrated with the narcotics trade and the CIA is fully informed of the integration and doesn't do anything about it.

Moving on to our fourth instance, one close to home, is the whole Iran-contra operation.

First of all, I think the Laos parallel is very strong in the Iran-contra operation. Just in the formal outlines of the policy - you know, you've got the contras on the border of Nicaragua, they're a mercenary army, they're supported through a humanitarian operation, they're given U.S. logistic support, they're given U.S. equipment and they're given U.S. air power backup to deliver the equipment and the logistic support. All the personnel that are involved in that operation are Laos veterans. Ted Shackley, Thomas Clines, Oliver North, Richard Secord - they all served in Laos during thiten-year war. They are all part of that policy of integrating narcotics andbeing complicitous in the narcotics trade in the furtherance of covert action.

In this case, what I think we can see is it's not just the same. It's not just simply that the CIA was complicitous in allowing the contras to deal in cocaine, to serve as a link between the Andes and across the Caribbean into the United States. I think we can see the situation has gotten worse. In Laos, as I said, the CIA was hands-off. Once it got beyond their secret base, they wouldn't touch it. They gave Vang Pao the aircraft and once it got any further they didn't really know about it and didn't want to know about it. They remained ignorant about it. And ultimately what you're looking at was a traffic that was in a remote region which, in a way I don'tthink the CIA saw was going to happen, wound up serving Americans. An estimate of 50% of U.S. combat forces in Vietnam taking drugs, what was common at that time. But it's still remote and it's still not going directly into the United States.

The level of cynicism in Central America is even worse. We're not talking about original traffic or moving the raw product - we're talking about taking finished cocaine, providing aircraft, moreover providing protection for these traffickers as they fly across the Caribbean with these massive loads of cocaine. Now, I don't know. Can one estimate what percentage of the cocaine was politically protected by these intelligence operations. Until there's a formal investigation, which there's not likely to be, it's difficult to say.

I think that one can say that as you look at the drugs flowing into the United States during the 1960s when this Lao operation was going, there was probably a much smaller percentage of narcotics entering the United States from politically protected brokers than there is today. In other words, this CIA policy of integrating covert action operations with narcotics, both at a level of individuals being involved and also just turning a blind eye to the fact that our allies are drug brokers, this complicity in the narcotics trade has gotten worse. It's closer to home. It's not moving the raw material out in the jungles, it's actually bringing the finished narcotics, cocaine, into the United States. So it's gotten that much closer to homeand that much more cynical.

Barsamian: Could you talk about the 1971 Nixon "War on Drugs" and the 1989 version of the same war launched by George Bush? Do you see any parallels?

McCoy: The parallel is striking and I'm surprised that commentators haven't made more of it. My own feeling is that the Bush war on drugs is modeled exactly on the war fought by his mentor, president Bush's mentor, Richard Nixon. America has in its history of a century of drug abuse, attempted two times a solution to the drug problem. The first one was the Nixon war on drugs in 1972-73 and the second is now the Bush war on drugs.

Let's look at the Nixon war on drugs in order to get some sense of the probable outcome of the Bush war. Nixon declared war on drugs in 1973 in the Anatolian plateau. There's a pretty good book by a man named Robert J. Epstein called Agency of Fear looking at the drug agency involved in this war on drugs. What he concluded was that Nixon was faced with a delicate political problem when he took office. He'd promised law and order.

Once he got into office, Epstein says that he found out that the federal government's actual intervention in law enforcement in the United States is minimal. It's local police that do law enforcement. It's everybody's property taxes that put cops in their cars. So the American president may be powerful in many respects, but he's not powerful in law enforcement areas. What Nixon very quickly worked out is the only substantive area law enforcement where the federal government had any authority and capacity for action was in narcotics. So what he did was he manufactured a crisis and then he came up with a solution.

The crisis came from a series of press releases from the Drug Enforcement Administration, releasing statistics showing a massive expansion in the number of addicts. Now, they even took me in on this. I read those statistics like everybody else and I said, "My god, this is getting out of control." But all they had done was to change the statistical ratio. In the 1960s before Nixon, our numbers of drug addicts - about 60,000 - came from two things: (1) a central registry of addicts into which police put the name of every addict. Another way figures were derived was through a statistical ratio between the number of bodies in the morgue from overdoses and the overall addict population. All the DEA did under Nixon was to change the ratio between corpses and addicts. They just simply said ... I forget now the statistics - let's say it was 1 to 2. For every corpse you're likely to have two addicts. Then they made it 1 to 10 - for every corpse you can have ten addicts. So suddenly we had this massive expansion but it was just a result of statistical manipulation, changing the ratio between the known (the corpse) and the unknown (the number of addicts). In this way they manufactured this enormous sense of crisis.

Moreover, there was more crime that was probably somewhat drug-related in the 60s and 70s - maybe, maybe not, I don't know. But in any case, they made this equation. We've got more drugs, we've got more addicts, we've got more crime. Having manufactured this crisis, having "discovered" the problem of this massive expansion in heroin addiction, Nixon then declared war as his solution.

Nixon's image of the drug trade went like this: that there was raw opium being diverted from licensed opium growers in Turkey. There is, in fact, a legitimate pharmaceutical need for morphine which comes, like heroin, from the opium poppy. Turkey was a legal producer of opium for the pharmaceutical market, for patient's in hospitals who are dying of cancer and in incredible pain - they needed morphine. Troops use it in battle - it's a big market for people in accidents, all sorts of things. It's an important drug and has been for millennia.

Turkey was a legitimate producer but what was happening, according to Nixon, was that peasants were producing more than their quota and selling it to the black market; it was working its way down through Lebanon, across the Mediterranean into Marseilles labs and then the United States. So Nixon said that he was going to fight his war on drugs, battle one on the Anatolian plateau of Turkey. It was a very simple war. It was a war that didn't involve very much. All Nixon did was announce this war. He then used the very close defense relationship between Turkey and the United States to pressure the Turks through normal well-established diplomatic channels, to force their farmers to go out of production.

The Turkish government was faced with a choice - they could risk their whole strategic relationship with the United States in defense of farmers from a remote small region who were producing a minor product. Although it offended nationalism, they did it. They went along with it. Nixon also offered them, I think, $35 million to develop substitute crops, so there was a carrot-and-a-stick. The stick was the threat of a troubled strategic relationship and the carrot was this foreign aid bonus that was going to help these farmers produce a new crop.

So the Turks went along and it was a very simple battle. Nixon then declared war. He started then manipulating the statistics downward, changing them so the public would see the problem was getting under control. Then Watergate intervened and all of his political plans went awry. A number of the people that were hired for his super drug agency called DALE became, in fact, the people that were involved in the Watergate conspiracy itself. So, as Watergate erupted, his whole drug program blew up and he got into a whole set of different problems and his drug strategy went away. But the DEA, long after the klieg lights were turned off and the correspondents went home, was still fighting the war on drugs and we went to Nixon to Ford and Carter. They had greatly expanded operational funds and a greatly expanded establishment.

What the first war of drugs seemed to have produced, on balance, was a worsening of America's drug problem. The attempted interdiction failed - not only did it fail, it worsened the drug problem. Why do I say this, because it's a fairly strong conclusion? It's one I reached by looking at it.

The United States applied a very simple law enforcement model to a complex global commodity trade. Let me look at those words now. What's a law enforcement model? Okay. You've got a prostitute or a group of prostitutes operating on a street corner in a brothel. You raid them, you put them in jail, you stop prostitution. It can be done. You've got somebody, let's say, more localized - running peep shows. Close them down. There goes peep shows. You've got people doing, let's say, stealing cars and cutting up auto parts - well, you can handle that. It's localized. It's within police capacities. This is a simple thing. This is a small business, being run by a limited number of definable vice entrepreneurs. They are subject to an enforcement operation which can wipe out their business.

This is not true of narcotics. The variables, the points of pressure are global. We can't control them all. For two centuries now we've had integration of the first world demand for drugs, initially legal and now illegal - people in this society, and they're different people at different times, take illicit drugs. They take coca and opiate based products. They take cocaine and heroin and they have now for centuries. So this well-established demand for drugs, which save for the disruption of war has never gone away, it's just constant, there's a market here, has been tied into the complex political economy of the highland regions of the Andes and the southern Asian mountain rim. You're not talking about small localized areas. You're talking about the whole Andes, from Bolivia all the way through to Ecuador for coca. In Asia, for opium, when you actually look at a map, you're looking at almost a unitary drug zone that ranges for nearly 5,000 miles across the southern rim of Asia. It starts in the rest in the Anatolia plateau of Turkey, it then goes into Afghanistan, Pakistan, India, Burma, Thailand, Laos, and once upon a time North Vietnam but not any more. It runs right across the whole southern rim of the Asian land mass. So when Nixon came into Anatolia and wiped out the Anatolian market, Anatolia is just one player! In fact, if you look at the percentages, they were less than 10% of the illicit market. What did that do?

Well, as any farmer will tell you, if Russia doesn't produce any wheat, we're going to do very well here. We will know about that - if we don't know about it this year, we'll know about it next year - American farmers will get more money. They will go out and plant more wheat - they'll have a big bumper crop because Russia's not producing wheat, the crop's failed, the price goes up.

Well, in the case of the Nixon drug war in Anatolia, we wiped out illicit production in Anatolia. What happened? The price for reliable, available illicit narcotics shot up in the world. So Southeast Asia's Golden Triangle, which is the world's largest supplier, met that demand. So we got then the Southeast Asian market, which had hitherto been just regional, coming out of the mountains of Southeast Asia to the cities of Southeast Asia - now began to export to the United States, let's say the northwestern United States. By 1974 in Seattle, nearly 50% of all the drug seizures in the streets of Seattle were from Southeast Asia. So the Nixon White House got upset - "We just wiped it out in Turkey! Let's get a firebreak team out to Southeast Asia!" So they sent a firebreak team out to Southeast Asia, okay. They sent 40 agents into Bangkok and they're all bankrolled to the hilt. They rented an entire division of the Thai national police!

They put out the word on the streets that anybody that sells drugs can turn the drug buyer in and, no questions asked, they'll give him a bonus. So in Bangkok if you were a dealer you could sell to a foreign buyer and you could then turn around and turn them in so you get a percentage bonus on busting this guy! They actually then put what I call a "customs shield" down. The cost of expo went up because you had all these seizures. For every kilo you're sending, maybe you're losing one in three - we don't know how many they were sendingexactly, but they were losing a lot. The seizures went way up.

So, what did the drug exporters of Southeast Asia do? Well, I wasn't privy to their councils, nobody was. My feeling is the drug warlords of Southeast Asia sat around and were faced with two choices: (1) they could go out of business, but they weren't about to do that; and (2) they find a new market.That's what they did. They found new markets and I'm sure they thought it over like we would. Mere are only four areas of the world that have the standards of living to support the very high cost of international narcotics trafficking. They're North America(Canada and the United States), Japan, Europe and Australia. Well, the North American market was closed for reasons we just described, so what did the exporters do? They started exporting to Australia and Europe. Australia and Europe had no drug problem. In 1970, Holland had maybe 800 addicts. In 1976 Holland had 10,000 addicts. And that's what happened all over Europe. Europe's got a big drug problem. The Southeast Asian syndicates just started shipping straight to Europe.

Australia had no drug problem in 1975. They now have a drug problem with heroin, as large in proportion as the United States. It came from the same period. So you suddenly have two big new markets - not only America as your destination. Well, meanwhile, American dealers can't get their stuff fromSoutheast Asia so they turn to Mexico. Mexico booms, Mexico gets closed down and then they turn to Southwest Asia - Pakistan and Afghanistan. In short, what you get as a result of this attempt at suppression is an elaboration of global trafficking routes - not just one big market, America, but now three big markets - Europe, Australia and America. And not just one major source, Turkey, but in fact, the whole of this mountain band of Asia is ready to supply the world. There's now been a disruption with cocaine in Central America because of all this pressure and there's been some disruption in Afghanistan. Southeast Asia is now number one. In short, what we have then is an elaboration of trafficking routes - more areas of consumption, more areas of production, more tightly knit together so that the attempted interdiction complicated the global trafficking to the point that it's now beyond any interdiction effort. I would think that the probable consequences of the Bush attempted interdiction in Latin America will be similar. You can't predict quite how it's going to work out, but based on what we knowfrom the Nixon drug wars, it'll make the problem worse.

Barsamian: And in your view, the enforcement effort has been totally compromised?

McCoy: Well, yeah, the enforcement effort such as it is. Although, you know, it's usually run by bureaucrats that are reasonably dedicated to what they're doing. If you meet drug agents and you talk to them about whatthey're doing, they believe they're trying to do something good. They think that keeping drugs out of America is a good thing to do and I think that everybody would agree that these guys are doing an important job. That's why we keep hiring more of them and they get killed like Camarena in Mexico and take a lot of risks. I'm not talking about them, okay? But what are they essentially trying to do? What are these drug agents trying to do?

They're trying to find out who the drug brokers are, they're trying to get the drug brokers arrested, they're trying to get the host government where they're operating - whether it be Mexico or Thailand - to use their very substantial police forces to crack down on the drug lords. The next thing they're trying to do is to cut the connection between 'Thailand and Mexico or Central America and the United States. So, over the short term, they're trying to stop the drugs, make seizures, disrupt it. Over the long term, identify the traffickers, the brokers and their political supporters, and get these guys out of business. That's the job of the anti-drug bureaucracy.

It's only been a strong bureaucracy now for about 15 years, since the Nixon war on drugs they beefed the DEA up and it keeps getting beefed up. One of the things that will happen as a result of the Bush drug war I expectwill be another major expansion of the DEA. Working against that has been the Central Intelligence Agency. Because of their mandate to stop communism or to run a secret army in Laos or to harass the Nicaragua government with the contra operation - because they've had a political covert action mandate- they have found it convenient to ally themselves with the very drug brokers the DEA is trying to put in jail. While you're working with the CIAyou are untouchable. The CIA backs you up. There are instances of minor traffickers being arrested in the United States for importing drugs and the CIA will actually go to the local police and courts and get them off and out because oftentimes they threaten to talk, make trouble, so the CIA just gets them out. What the CIA does in these known instances it does more broadly. I, for example, had reason to gather evidence based on talking to American officials in my own inquiry that the Chief of Staff of the Royal Laotian Army and the commander of the CIA secret army was involved in drugs. What happened when I made this allegation? The CIA did everything to discredit my allegations. They attacked me. 'They didn't attack Vang Pao who was operating a heroin ring. They didn't go after General Owen Radicone(?) who had the world's biggest heroin operation - they went after me! They tried to suppress my book, they threatened to murder my sources, they spent $25 million in staging a massive opium burning by the Nationalist Chinese forces in northern Thailand announcing they were retiring from the drug trade. I mean, they went through all kinds of hoops to discredit me and my allegations. They protect these guys. While you're working with the agency, you are protected.

So at critical points in the history of the international drug trade, the CIA has moved in and allied itself with local drug brokers. Often times the brokers have been able to use that alliance to their advantage and at a critical time when they were making new connections, they were reaching out and opening new markets there their whole apparatus was exposed in a way that it won't be once they get it tied down and get the procedures established. At this critical point they're under protection from the CIA.

Barsamian: Are there any facets of the documentation that you developed and the evidence that you uncovered in your research in writing The Politics of Heroin in Southeast Asia, any new information that you've uncovered in recent years that you might add or change regarding your original investigations?

McCoy: The book was, for whatever reason, pretty solid. A number of CIA people I've met since have said that it's pretty accurate. Some of them - the only complaints I've had are some who say that "it wasn't really us in analysis, it was really the covert action boys." It was really what's called "plans," the director of the plans, which is one of four divisions of the CIA. A lot of agency people who I'm sure are in intelligence analysis feel kind of besmirched and offended, but they generally agree that it's a pretty accurate depiction of what's going on.

Barsamian: Do you think that the current war on drugs might be used as a vehicle of U.S. intervention in foreign countries?

McCoy: That is something I can't answer. We can only speculate. This is a conversation, so I'll speculate. The evidence brought out by Jonathan Marshall who's preparing a book on cocaine in Central America - he's the op ed page editor of the Oakland Tribune - and most recently by the New York Times, raises real questions about the Panama operation. I mean, Noriega was portrayed as this desperate drug lord, this satanic figure that had to be knocked out in order for the drug war to go ahead. And we knocked out this evil man, Noriega, and put him on trial in Miami.

Then we put in a government which, according to the New York Times g don't know if you saw that report) ... a government which is, in fact, linked either personally or their relatives are linked with the Panamanian banking industry.

Now ... why is there a big banking industry in Panama?

Panama is a little tiny country that was formerly a province of Colombia before the United States separated them and built the canal. For Colombians, Panama is just like next door. It's the old province. And yet it's not a part of Colombia any more. So if you're a Panamanian cocaine

merchant, if you're the Medellin cartel or the Cali cartel, where do you do your banking? You don't do it in Bogota, you do it in Panama City and you do it through these big Panamanian banks. If you've ever noticed the photographs of the financial district of Panama City, it looks like a mini-Wall Street or a mini4owntown Los Angeles. Why? Why in this poor economy do you have this elaborate banking structure? It's built from money laundering and the Endara government, as individuals - and of his vice presidents, several of his cabinet ministers - are an the boards of banks which have been big in the money laundering industry. Moreover, one of Endara's key cabinet people was actually a lawyer for one of the big drug lords of Colombia. So what you're looking at is we replaced Manuel Noriega who is supposedly this evil drug dealer who moved a million dollars of drugs and made $4 million from the Medellin cartel - we replace this guy with people who represent the Panamanian money- laundering industry which was moving the money from the United States to Colombia. We got rid of some petty thug, some tough guy on the street who's stealing hubcaps, and we put the Mafia in power.

Why? Why? I don't know yet. I mean, what it means to me is that the whole Panamanian operation didn't have anything to do with the drug war. I think it has to do with essentially trying to maintain influence in Panama. And Noriega, whatever else he was, was a nationalist who was very good at manipulating the United States. I think that infuriated us. Just to continue my speculative theme, my scenario - uninformed and totally ignorant, just based at looking at Laos and then guessing what could be going on in Colombia and Panama - my scenario would be that the hidden history of Panama maybe reads like this:

You have a nationalist general who takes this colonial creation of the United States, this country of Panama, and gives it some dignity, a charismatic figure - General Omar Torrijos. The United States hated Torrijos. They hated him why? Because Torrijos was a convincing nationalist. He mobilized the Panamanian people, he had some kind of intentional prestige, and he forced the United States to give up our greatest jewel of empire - the canal, which for a certain type of American is embedded in our consciousness. I mean, what India was to the British, what the Netherlands Indies was to Holland, the Panama Canal is to us. That's our empire, you know, our great triumph.

So Torrijos took away the canal and - guess what!? - Reagan comes into office and Torrijos has an aircraft accident.

Why? How? It's never been explained. Maybe he was killed. The CIA runs a lot of maintenance and aircraft firms in the Caribbean - maybe they did it. Anyhow, somebody kills Torrijos so they're looking around for some new pliable man to put in power to make sure they don't have trouble. So they install Noriega and they know Noriega's reliable because they know Noriega's been doing the drug operations for them in a small kind of petty way. So they know they've got him. He's manageable - he moves the drugs, he does whatever he wants, he's the intelligence chief under Torrijos. Now he's the CIA's liaison and perfectly reliable. What does Noriega do? He turns around and does exactly what Torrijos did. He plays to the nationalist crowd, he uses the drug money and the Panamanian economy to build up an independent political base so that he's no longer controllable. So what do we do? We stigmatize him as a drug lord, we go in and invade, we get rid of him, we put in an ugly, pliable government. We got rid of a man who maybe made $4 million from drugs and we replace him with a cabinet who are representatives of a multi-billion dollar bank-cum-money laundering industry.

To me the logic is not so much to get rid of drugs but to maintain U.S. influence in a key strategic area at a time when the Canal is about to be turned over and the Canal still remains strategically significant for the United States. So my hunch, my guess, my uninformed opinion is that the Panamanian intervention has very little to do with drugs and everything to do with U.S. power abroad We dressed up our national strategic interest,no longer in the ball gown of anti-communism but in the formal wear of anti-narcotics policy. We're still just maintaining U.S. power and it's likely that the drug war is going to have other episodes like this. Whether or not the whole drug war will ultimately become a prisoner, a creation of U.S. global strategic interests I don't know. It's too early to say. But inthis particular instance the major battle in the drug war looks very dubious.

Barsamian: In your view, there will be a marked increase and expansion of drug addiction and drug use in the United States, Europe and Australia - Incidentally, earlier you mentioned that the drug flow went into Europe and Australia, but not into Japan, is that correct?

McCoy: Yes.

Barsamian: Why not?

McCoy: The relationship between the ruling Liberal Democratic Party (the conservatives) and the big organized crime syndicates, which are enormous in Japan, is a very tight one and has been historically since the end of World War II. There's been a very close integration with the organized crime operations and the ruling conservative party. The conservatives have been in power now in Japan since 1948. It's one of the longest reigns of any party anywhere in the world. There's a kind of entente, an understanding between the syndicates and the government - it's not rigid - but the basic understanding is no drugs. That's the basic thing. Don't move drugs. And the Japanese police are ruthlessly efficient. If any of the syndicates, any of the big families - some of them have 10,000 members in them - broke this rule, the police have sufficient mechanisms of control to punish them for it. So in this complex politics of organized crime in Japan, they can do prostitution, they can do all kinds of fraud, they can do many things - but not drugs. So Japan's never opened up.

DeGaulle had a very similar relationship with the Corsican syndicates during his reign in the 1960s and early 1970s. The understanding was that the Corsican syndicates in Marseilles would manufacture in Marseilles under protection. But they would not sell in France. They would only export to the United States. That began to break down. DeGaulle died, Pompidoux replaced him and the Gaullists lost power, there was pressure on the syndicates, some new groups came in and started breaking the rule, and France wound up with a drug problem. But for practically a decade that rule held.

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