#1 The Global Drug Meta-Group: Drugs, Managed Violence, and the Russian 9/11 – Peter Dale Scott, 29/10/2005

#2 Marx on the Opium Trade 1858-9

#3 Political Economy of Narcotics – An Overview – Hassan Bashir, June 2002

#6 Extract from Drugs, Oil and War – Peter Dale Scott, 2003

#11 Narco-dollars for Beginners “How the Money Works” in the Illicit Drug Trade – Catherine Austine Fitts, 2001

#13 Two articles on the banking connection: Drug Smuggling is HSBC's raison d'etre – Dan Glazbrook, RT.com, 31/01/2016; Drug money saves banks in the global crisis, claims UN advisor – Rajeev Syal, Guardian.co.uk, 13/12/2009

#14 The Spoils of War: Afghanistan's Multibillion Dollar Heroin Trade – Michel Chossudovsky, globalresearch.ca, 05/04/2004

#16 Extracts from Covert Information Action Bulletin 28, summer 1987: Running Drugs and Secret Wars – David Truong D. H.; The Australian Heroin Connection – Jerry Meldon; Strange Tales of Nugan Hand Drug Clients – Henrik Kruger; Afgan Rebels and Drugs – William Vornberger; The Cocaine Connection – Vince Bielski and Dennis Bernstein; Who Deals Drugs – Roman Berger

#17 Chapter 2 from Drugs, Oil and War – Peter Dale Scott, 2003

#22 Extracts from Covert Action Information Bulletin 65, Winter 1990: Dealing With Drugs in Cuba – Debra Evenson

#23 Marx quote on consumption shaping production, from Introduction to a Contribution to the Critique of Political Economy

#30 Extract from Narcoland - Anabel Hernández, 2014: The Mexican government, the police, the military: they are the cartel

#31 Extract from Narcoland - Anabel Hernández, 2014: El Mayo's air fleet

#32 Extract from Narcoland - Anabel Hernández, 2014: Bankers to the Pacific organization

#33 Capitalism Plus Dope Equals Genocide - Michael Cetewayo Tabor (Political Prisoner, NY 21), Black Panther Party, USA, 1970

#34 USER SUBMISSION: CBA money laundering allegations: How three men got away with it – Dylan Welch, ABC.net.au, 03/08/2017

#36 Trump pick for drug czar Tom Marino pulls out after report on opioid bill role – Ben Jacobs & Martin Pengelly, guardian.co.uk, 18/10/2017

#39 Profits of Drug Trade Drive Economic Boom in Myanmar – Thomas Fuller, nytimes.com, 05/06/2015

#40 Steve Bannon’s porn and meth house: “You have no idea what kind of evil stuff went on” - Jason Brad Berry, shareblue.com, 17/08/2017

#41 Quote from T. J. Dunning on the quest for profit, quoted by Marx in Capital volume 1

#42 Sócrates Rizzo: PRI Presidents oversaw drug trafficking – Gerardo, borderlandbeat.com, 27/02/2011

#45 Image: selected quotes from Loya-Castro; CONFIRMED: The DEA Struck A Deal With Mexico's Most Notorious Drug Cartel – Michael B Kelley, buisinessinsider.com, 13/01/2014; Image: United States: Areas of influence of Major Mexican Transnational Criminal Organisations (DEA)

#48 Brother of Afghan Leader Said to Be Paid by C.I.A. - Dexter Filkins, Mark Mazzetti & James Risen, nytimes.com, 27/10/2009; Image: Stratfor email 18/09/2012 regarding President Kazai's brother & the CIA

#49 The Serbian enclave of Kosovo, which recently declared independence, has turned into a major drug trade centre. According to Interpol, Europol, and the FBI, Kosovo is at the crossroads of global drug smuggling routes. - Vyacheslav Solovyov, Voice of Russia World Service, 29/03/2008

#51 US, Mexican Officials Brokering Deals with Drug “Cartels,” WikiLeaks Documents Show - Bill Conroy, narconeews.com, 20/08/2012

#52 High-Ranking Mexican Drug Cartel Member Makes Explosive Allegation: ‘Fast and Furious’ Is Not What You Think It Is - Jason Howerton, theblaze.com, 09/08/2012

#54 Leaked Memo: Corrupt DEA Agents in Colombia Help Narcos and Paramilitaries – Bill Conroy, narconews.com, 09/01/2006; Images: selected extracts from the leaked “Kent Memo” regarding the “Bogota Connection” - Thomas M. Kent, Trial Attorney, Wiretap Unit, 19/12/2004

55# Project EXPOSE MSM Reports: Major DEA Scandal & Time Magazine – nswbc.org, 11/06/2009

#58 Extract from Thick as Thieves - Christian de Brie, Le Monde Diplomatique, April 2000

#60 USER SUBMISSION: North Americans Spent $53.3 Billion On Marijuana Last Year, Most Of It Illegally – Ryan Grenoble, huffingtonpost.com, 17/01/2017

#61 Wachovia to settle drug-money laundering case – Curt Anderson, nbcnews.com, 17/03/2010

https://www.lobster-magazine.co.uk/articles/global-drug.htm posted:

The Global Drug Meta-Group: Drugs, Managed Violence, and the Russian 9/11

By Peter Dale Scott (18,734 words) 10/29/05

(I wish to acknowledge the invaluable assistance in the preparation of this essay from N, a Russian who for the time being prefers to remain anonymous.)

Tajik authorities have claimed repeatedly that neither the US nor NATO exerts any pressure on the drug warlords inside Afghanistan. "There's absolutely no threat to the labs inside Afghanistan," said Avaz Yuldashov of the Tajikistan Drug Control Agency. "Our intelligence shows there are 400 labs making heroin there, and 80 of them are situated right along our border ... Drug trafficking from Afghanistan is the main source of support for international terrorism now," Yuldashov pointed out last year.{1}

TABLE OF CONTENTS

I. The Meta-Group, the Russian 9/11, and Kosovo
Violence and the Political Requirements of the Global Drug Traffic
A Digression: Drugs, Meta-Groups and the Compradorial Revolution
The "Russian 9/11" in 1999: Bombings and Plans for War
The Meeting in Khashoggi's Villa, July 1999
Khashoggi's Interest in Chechnya
Dunlop's Redactions of His Source Yasenev
The Khashoggi Villa Meeting, Drugs, and Kosovo

II. The Meta-Group, Drugs, Salafist Islam, and America
The Role of Anton Surikov: The Dunlop and Yasenev Versions
Surikov, Muslim Insurrectionism, and Drug Trafficking
Allegations of Drug-Trafficking and Far West, Ltd
Far West, Ltd, Halliburton, Diligence LLC, New Bridge, and Neil Bush
The U.S. Contribution to the Afghan-Kosovo Drug Traffic
How the U.S. Restored Narco-Barons to Power in Afghanistan, 2001

III. The Meta-Group, the War on Terror, and 9/11
U.S. Geostrategic Goals and Chechnya
The Meta-Group's Geostrategic Goal: Maintain the War of Terror
Concluding Question: The Meta-Group and the United States Government
The False Dilemmas of 9/11 Theories

IV. The Meta-Group, the Russian 9/11, and Kosovo
Violence and the Political Requirements of the Global Drug Traffic[



In the last three decades, three important facts have emerged about the international drug traffic. The first is that it is both huge and growing.

Narcotics are estimated to be worth between $500 billion and $1 trillion a year, an amount, according to UN Secretary General Kofi Annan in remarks to a United Nations General Assembly session in June 2003, that is greater than the global oil and gas industry, and twice as large as the overall automobile industry.{2}

The second is that it is both worldwide and above all "highly integrated."{3} At global drug summits such as the one in Armenia in 1993, representatives of the Sicilian Mafia, the Brighton Beach Organizatsiya, and Colombian drug lords, have worked out a common modus operandi, with the laundering of dirty money entrusted chiefly to the lawless Russian banks.{4}

The third important fact, undeniable since the 1980 U.S. intervention in Afghanistan, is that governments with global pretensions will avail themselves, in pursuit of their own political ends, of the resources, both financial and political, of the drug traffic. It was striking in the 1980s that the CIA, in its choice of Afghan mujahedin leaders to back against the Soviet Union, passed over those with indigenous support in favor of those, notably Gulbuddin Hekmatyar, who dominated the heroin trade. The result was to enhance Hekmatyar's power until he became a leading heroin trafficker, not just in Afghanistan but in the world.{5}

Three more important features of the global drug traffic have been less noticed; thus although I regard them as facts I shall refer to them not as facts but as propositions to be tested against evidence. The first proposition is that the highly integrated drug traffic industry, in addition to serving the political ends of world powers, has its own political as well as economic objectives. It requires that in major growing areas there must be limited state control, a condition most easily reached by fostering regional rebellion and warfare, often fought by its own private armies. This is the on-going situation of designed violence in every major growing area, from Lebanon to Myanmar, Colombia to Afghanistan.

Once the local power of drug armies was enough in itself to neutralize the imposition of state authority. But today there are increasing signs that those at the highest level of the drug traffic will plot with the leaders of major states to ensure, or even to stage, violence that serves the power of the state and the industry alike.

Thanks to extensive research in Russia, we now have initial evidence of a second and even more significant proposition: There exists on the global level a drug meta-group, able to manipulate the resources of the drug traffic for its own political and business ends, without being at risk for actual trafficking. These ends include the creation of designed violence to serve the purposes of cabals in political power – most conspicuously in the case of the Yeltsin "family" in the Kremlin, but allegedly, according to Russian sources, also for those currently in power in the United States.

One piece of evidence for this consists in a meeting which took place in July 1999 in southern France near Nice, at the villa in Beaulieu of Adnan Khashoggi, once called "the richest man in the world." Those at the meeting included a member of the Yeltsin cabal in the Kremlin and four representatives from the meta-group, with passports from Venezuela, Turkey, United Arab Emirates and Germany. Between them they allegedly enjoyed excellent relations with:

1) Ayman al-Zawahiri, the acknowledged mastermind of 9/11 and senior mentor to Osama bin Laden.

2) Soviet military intelligence.

3) the FARC, the Colombian revolutionary group that has become increasingly involved in the drug traffic.

4) the Kosovo Liberation Army, a similarly involved group.

5) (according to a well-informed Russian source) the CIA.
The third important proposition is that a meta-group of this scale does not just help government agencies make history. I hope to show that it, and its predecessors, are powerful enough to help make history themselves. However they do not do so overtly, but as a hidden Force X whose presence is not normally acknowledged in the polite discourse of academic political scientists. On the contrary, as we shall see, references to it are usually suppressed.


A Digression: Drugs, Meta-Groups and the Compradorial Revolution

The question arises whether this is the only such meta-group in the international drug milieu. My tentative answer is that there are indeed other focal nodes for organized international drug trafficking, often above the reach of the law. (The remnants of the dissident Hekmatyar drug network in Afghanistan would be a prime example.) What is special about this meta-group is its global reach, which makes it of especial interest to the CIA and other pro-American agencies committed to globalization.

A drug meta-group with such broad connections is not unprecedented. A clear predecessor was the Bank of Credit and Commerce International (BCCI), a drug-laundering bank which was of use to CIA Director William Casey precisely because of its corrupt global reach. As a Washington insider said to two Time reporters covering BCCI,

They were the only way we could talk to certain folks, and they were the only vehicle available for some transactions. Who else could wire something together to Saudi Arabia, China, Israel, and the U.S.?{6}

It is worthy of note that Khashoggi has enjoyed intimate connections to both, as well as to western intelligence and western politicians.

The "wiring together" effected by drugs has helped give a significant boost to the global banking network, particularly in Russia and southeast Asia. In these areas it has also fostered trade and investment, bringing businessmen from previous diverse commercial areas into increasing contact with each other. From this perspective globalization can be seen as a compradorial revolution: compradorial classes have moved into positions of power, and in some cases their international networks have been more than a match for local state power.{6a}

There are three different ways in which this compradorial revolution has proceeded, and it could be shown that drugs have often helped supply a base for all three:

1) In some countries (as in Thailand, South Korea, Taiwan, and to some extent Indonesia) these classes have displaced military regimes. Drug-based fortunes clearly played a major role in the compradorial revolution of Thailand.

2) In some countries compradorial elements have succeeding in converting (or, depending on your point of view, corrupting) the cadres of socialist governments. Drugs have played a significant role in the compradorial embourgeoisement of China, Laos, and Cambodia, and may have played an indirect role in the case of Vietnam.

3) Recently – as in the "color revolutions" of eastern Europe and central Asia – compradorial elements have helped to oust the remnants of the former Soviet governing apparatus. I hope in this essay to give preliminary evidence that the global drug meta-group I have described has played a role in the "color revolutions" as well.

As to how many drug meta-groups exist in the world, I believe there are at least two. A second, which we will not examine here, oversees the new drug highway from north Myanmar (Burma) through the entrepreneurial zones of south China, and manages the international connections necessary to arrange for the smuggling of heroin and people into Australia and the eastern and western United States.

The relation of the west to this second or eastern meta-group is unknown, and in all probability it is highly complex and ambiguous. It is probably safe to say however that the global reach of the second meta-group, overseeing the much smaller flow of drugs east from Myanmar, is less than the first or western meta-group we shall discuss here, overseeing the far greater flow of drugs west from Afghanistan. (It has been estimated that by now Afghanistan supplies from 80 to 90 percent of the global heroin trade.){7}

The west, and particularly the United States, have not concealed their interest in the success of globalization and the "color revolutions." Unfortunately those who sing the praises of both neglect the terrible social costs of the drug traffic, and the Force X which so often is the underpinning of the compradorial revolution. Because the drug economy is often not integrated into the legal one, it tends to foster superwealth and income disparity. The benefits tend not to be enjoyed by a society as a whole, or even its middle class. This is even more true when the masters of the drug-traffic are not indigenous but alien (as is conspicuously the case in eastern Myanmar).{8}

There is an undeniable western face to the dominant meta-group. One member of the meta-group at the 1999 meeting, Anton Surikov, had spent time at the London Centre for Defence Studies; and in addition Surikov had had contacts with at least one senior CIA representative.{9} (Another member of the meta-group, former Lithuanian Defense Minister Audrius Butkevicius, was with Surikov at the London Centre.) We shall see that a third member, Ruslan Saidov, is said to have been paid as a CIA contract agent.

One of the alleged purposes of the meeting at the villa – but not the only one – was to give the Yeltsin "family" what it supposedly needed: a Russian 9/11.


The "Russian 9/11" in 1999: Bombings and Plans for War

Russia has been familiar for some time with charges that the bombings in Moscow in 1999, and an accompanying invasion of Russian Dagestan that rekindled the ongoing war in neighboring Chechnya, were both planned by representatives of the Islamist element in the Chechen resistance, in collusion with a representative of the Russian Kremlin.

Read synoptically, these stories indicate that the well-connected drug-trafficking meta-group, with connections to both the Kremlin and the CIA, arranged in advance for the bombings and invasion at the meeting in July 1999, at a French villa owned by the superrich arms merchant Adnan Khashoggi. The group allegedly operated with support from Saudi Arabia and organized global drug trafficking, some of it probably through Kosovo.

The group's business front, Far West, Ltd., is said to have CIA-approved contractual dealings with Halliburton for geopolitical purposes in the Caucasus, as well as dealings in Iraq with Diligence LLC, a group with connections to Joe Allbaugh (the FEMA chief in 2001) and to the President's younger brother Neil Bush. The head of Far West recently told a Russian outlet that "a well-known American corporation... is a co-founder of our agency."{10}

The evidence for this western face of the group is laid out in an article by a so-called Yuri Yasenev, which is clearly a compilation of extracts from intelligence reports, on a Russian website.{11} The article is cited – very selectively – as authoritative by a reputable Hoover Institution scholar, John B. Dunlop.{12} But Dunlop completely ignores, one might say, suppresses, Yasenev's case as I have summarized it above. He uses the article instead to document a more familiar case: that in 1999 the Yeltsin "family" in the Kremlin dealt with this same group to create what might be called the "Russian 9/11."

When I say that Dunlop suppresses certain details, I do not mean to suggest that he does so conspiratorially, or even consciously. My notion of deep politics, which I have developed elsewhere, posits that in every culture and society there are facts which tend to be suppressed collectively, because of the social and psychological costs of not doing so.{13} Like all other observers, I too have involuntarily suppressed facts and even memories about the drug traffic that were too provocative to be retained with equanimity.{14}

The drug traffic is often the beneficiary of this suppression, which leaves it more free to act without interference. In Deep Politics I referred to the pervasive influence of a U.S. government-drug collaboration which I called "Operation X," looking at it from the perspective of a parapolitical manipulation of the traffic by the government.{15} I wish now that I had written of a "Force X," a force which was no longer under total government control, and indeed could influence government behavior for its own ends.{16}

Dunlop's thesis is in itself an alarming one. It is that men of influence in the Kremlin, building on the connections established by the wealthy oligarch Boris Berezovskii, were able to arrange for staged violence, in order to reinforce support for an unpopular Russian government. This staged violence took the form of lethal bombings in the capital and an agreed-upon incursion by Chechens into Russian Dagestan.

This credible thesis is even more alarming when we consider that both Khashoggi and Berezovskii have purchased significant political influence in the West as well. In 2003 Khashoggi was negotiating with Richard Perle, a member of the Cheney-Rumsfeld clique who at the time was still Chairman of the U.S. Defense Policy Board, to invest considerable Saudi money in Perle's company Trireme.{17} Berezovskii is a shareholder in the software company, Ignite, of President Bush's delinquent brother Neil Bush.{18}

More significantly, Khashoggi and his connections have shown in the past their ability to influence, even distort, U.S. foreign policy, to the detriment of the latter. An important example was the ill-fated so-called Ghorbanifar initiative during Iran-Contra, to sell arms to the mullahs in Iran in exchange for the release of American hostages:

Ghorbanifar was not acting alone. Although he led us to believe he was using Iranian money, his forward purchases and bridge deposits were actually being bankrolled by Adnan Khashoggi {and BCCI}....Khashoggi had an on-and-off relationship with Israel for many years and evidently had been in the loop as Ghorbanifar's backer from the very beginning.{19}

Ghorbanifar could never have caused such embarrassment to the Reagan Administration if he had not been backed by deeper, hidden forces.

By the "Russian 9/11" I mean the bombings of Russian apartment buildings in 1999,
accompanied by the pre-arranged (and partly staged) second Russian invasion of Chechnya. For some time the West has heard versions of the claim that both events were planned at the time by Russian intelligence. For example Patrick Cockburn reported as follows in the Independent:

Boris Kagarlitsky, a member of the Russian Academy of Sciences Institute of Comparative Politics, writing in the weekly Novaya Gazeta, says that the bombings in Moscow and elsewhere were arranged by the GRU (the Russian military intelligence service). He says they used members of a group controlled by Shirvani Basayev, brother of the Chechen warlord Shamil Basayev, to plant the bombs. These killed 300 people in Buikask, Moscow and Volgodonsk in September.{20}

Cockburn's source, Boris Kagarlitskii, also accused Russian intelligence agents of planting at least one of the bombs.

Boris Kagarlitsky, a member of the Russian Institute for Comparative Politics, stated: "FSB officers were caught red-handed while planting the bomb. They were arrested by the police and they tried to save themselves by showing FSB identity cards." The first man to enter the basement, Police Inspector Andrei Chernyshev, related: "It was about 10 in the evening. There were some strangers who were seen leaving the basement. We were told about the men who came out from the basement and left the car with a licence number which was covered with paper. I went down to the basement. This block of flats had a very deep basement which was completely covered with water. We could see sacks of sugar and in them some electronic device, a few wires and a clock. We were shocked. We ran out of the basement and I stayed on watch by the entrance and my officers went to evacuate the people." Despite the arrest of the FSB officers by the police, they were quietly released when the secret service's Moscow headquarters intervened. The Observer reports that the next day, in an attempt to cover-up the discovery, "the FSB in Moscow announced that there had never been a bomb, only a training exercise."{21}

Western scholarly analyses have seen the bombings and war as part of a stratagem to boost the popularity of the Kremlin, and particularly the little-known new Prime Minister Putin, for the coming presidential elections in November 1999. The most thorough study, by John Dunlop of the Hoover Institution, blames the plotting on three protégés of the Russian oligarch Boris Berezovskii – Valentin Yumashev, Alexander Voloshin, and Roman Abramovich – who at this point were members of Yeltsin's "Family" in the Kremlin.{22} (As for Berezovskii himself, Dunlop writes that by mid-1999 "all of his real but beginning-to-dwindle political influence was obtained through the intercession of D'yachenko {Yeltsin's daughter} and Yumashev."){23}


The Meeting in Khashoggi's Villa, July 1999

A crucial piece of evidence for this thesis of Kremlin-structured violence is the meeting in July 1999, when Alexander Voloshin met in southern France with the Chechen warlord Shamil Basaev. In Dunlop's words,

On the day following the initial incursion of rebel forces into the Dagestani highlands in early August of 1999, the investigative weekly Versiya published a path-breaking report claiming that the head of the Russian Presidential Administration, Aleksandr Voloshin, had met secretly with the most wanted man in Russia, Shamil' Basaev, through the good offices of a retired officer in the GRU, Anton Surikov, at a villa belonging to international arms merchant Adnan Khashoggi located between Nice and Monaco.109 A source in French intelligence was credited by Versiya with supplying this information. The article stirred major interest in the Russian media, but at the time documentary confirmation was lacking.

By July of 2000, Versiya, in an effort of persistent journalistic digging, had unearthed what it regarded as the full story of what had occurred, with an acknowledged assist from French and Israeli intelligence. "The meeting {of Voloshin and Basaev}," the weekly related, "which supposedly took place at the dacha of the international arms dealer Adnan Khashoggi in the small town of Beaulieu near Nice, occurred on 4 July 1999.{24} Sources in the French special services had earlier communicated that information, in particular a certain professor of political science, a specialist in issues of Russian defense, security, and organized crime. He is well known for his contract work for French government establishments, including French counter-intelligence."110....

The investigative weekly then went on to summarize what it had learned from French and Israeli intelligence, as well as from its own journalistic digging: "A luxurious villa in the French city of Beaulieu, located between Nice and the principality of Monaco. This villa, according to the French special services, belongs to the international arms dealer Adnan Khashoggi. He is an Arab from Saudi Arabia, a billionaire with a complicated reputation. According to the French special services, and also to the French press, in June of 1999 there took up residence at the villa a Venezuelan banker named Alfonso Davidovich.111

In the Latin American press, he is said to be responsible for laundering the funds of the Columbian left insurrection organization FARC, which carries out an armed struggle with the official authorities, supported by the narcotics business."

110 Petr Pryanishnikov, "Voloshin I Basaev na lazurnom beregu: foto na pamyat'," Versiya, 4 July 2000. The article, accompanied by a photo, can be found at: http:www.compromat.ru/main/voloshin/basaev.htm

111 The article "Rossiyu zhdet oranzhevaya revolytsiya," compromat.ru, 17 December 2004 reports that Davidovich lives in Munich and enjoys both German and Venezuelan citizenship. He is also said to be personally acquainted with international arms dealer Khashoggi.{25}

Dunlop's massively documented essay is 52 pages long, with 142 footnotes. But having thus provocatively included references to both Khashoggi and narcotics, Dunlop does not mention either again. The failure to discuss Khashoggi is particularly surprising. If indeed the meeting took place at his villa, the proceedings were not only likely to be recorded, one would think that they were intended to be recorded.

One would also expect the participants to be confident that the recordings would reach western intelligence, as apparently they promply did. "In France and in the ranks of Israeli intelligence, Versiya wrote, it had been reported that `there exists a video-tape of the meeting at the villa in Beaulieu.'"{26} One would have expected that this video-tape might reach, not just the French and Mossad, but Khashoggi's long-time associates in U.S. intelligence as well.{27}


Khashoggi's Interest in Chechnya

Just as Berezovskii was at one point the richest man in Russia, so Khashoggi was once (according to his American biographer) "The Richest Man in the World." At one point indeed Khashoggi had an influence in American politics analogous to Berezovskii's in Russia. For example, Khashoggi attended both Nixon inaugurals and contributed money to his electoral campaigns. He admitted to giving $58,000 in 1968, but allegedly told Pierre Salinger he gave $1 million in 1972.{28} He also arranged a fund-raising event for Jimmy Carter's Center in Plains, Georgia, an event which probably originated in both men's connections to the Bank of Credit and Commerce International (BCCI).{29}

Khashoggi is usually thought of as an arms salesman. Although he has never been directly linked to the drug traffic, he was intimately involved in the affairs of the drug-laundering bank BCCI, with which he arranged an arms shipment as part of Oliver North's dealings in Iran-Contra.{30} He also became notorious for flying into Las Vegas from abroad and then rapidly losing vast sums of cash at the casino tables – a traditional form of money-laundering.{31} His name has surfaced in connection with a number of other scandals, from the illicit real estate ventures of the Marcos family in New York to a major defrauding of a Thai bank in 1998, which was followed by the Asian financial crisis of that year.

Khashoggi had had a financial interest in Chechnya, and connections with its leaders, since 1996, from his participation in a consortium called Caucasian Common Market AO. This was designed to raise $3 billion in the West and Japan for investment in Chechnya.{32} A principal organizer was former Chechen First Deputy Premier Khozh-Akhmed Nukhaev, in conjunction with Lord McAlpine of the Goldsmith family interests in London, and also American capital.{33} But according to the late Paul Klebnikov, Nukhaev had a background in Chechen organized crime, before developing "a radical ideology in line with the one espoused by Osama bin Laden's al-Qaeda network."{34}

Despite this background, Nukhaev found support and financing in Washington for his Caucasian-American Chamber of Commerce. According to once source, in 1997 Khashoggi introduced Nukhaev to former Secretary of State James Baker.{35}

However Dunlop's inquiry is focused, not on Khashoggi, but on Berezovskii and his representative Voloshin in the Kremlin:

In March of 2002 Interfax reported that, through his long-time business partner Badri Patarkatsishvili, Berezovskii had "supplied Chechen figures Kazbek Makhashev and Movladi Udugov with money to purchase the raid against Dagestan. According to witnesses, Berezovskii contributed 30 million rubles for the purpose."120 This payment, amounting to more than $1 million, if it occurred, may have been only one of several intended to underwrite a "short victorious war" in Dagestan.

120 "Berezovskii Sponsored Dagestan Raid, Top Policeman's Abduction -- Prosecutors," Interfax, 5 March 2002. A well-known journalist for RFE-RL, Andrei Babitskii, who frequently visited Chechnya during this period and was acquainted with a number of leading separatists, writes that he can confirm that Berezovskii did indeed speak by telephone with both Basaev and Movladi Udugov at this juncture. See Andrei Babibitskii, "Na voine," hro.org, 2 March 2004.

Dunlop is not alone in suspecting the hand of Berezovskii behind Voloshin's meeting with Basaev. So does Cockburn's source Boris Kagarlitskii (about whom we shall have more to say).{36} The Russian observer Lilia Shevtsova reports a rumor at this time that Berezovskii himself, along with his agent Alexander Voloshin, had met in France with Bazayev in the summer of 1999, just before the Dagestan invasion of August 2.{37}


Dunlop's Redactions of His Source Yasenev

Though he says nothing more about Khashoggi or drugs, Dunlop does however make one more reference to the alleged drug-money launderer Alfonso Davidovich:

"It soon emerged," Versiya continued, "that a very frequent visitor to Davidovich was a certain French businessman of Israeli-Soviet origin, a native of Sokhumi {Abkhazia}, 53-year-old Yakov Kosman. 112 Soon Kosman brought with him six persons who arrived via Austria carrying Turkish passports.{38} In one of the passports the French {authorities} identified a certain Tsveiba, who is accused by the Tbilisi authorities of having committed genocide during the Georgia-Abkhaz conflict." All of the visitors settled into the villa for a three weeks' stay.

"Soon," the account continues, "the special services succeeded in establishing that Kosman and Tsveiba went to the Nice airport, where they met two men who had arrived from Paris. Judging from their documents, one of those who arrived was Sultan Sosnaliev, who in the years of the Georgian-Abkhaz war served as the minister of defense of Abkhazia.113 Second there emerged from the airport one more native of Sokhumi -- Anton Surikov. According to rumors, during the years of the war in Abkhazia, he was subordinated to Sosnaliev and was responsible for questions of the organization of sabotage and was friendly with field commander Shamil' Basaev, who at that time headed the Chechen battalion."

The next arrival came by sea: "According to the precise information of the French and the Israelis, on 3 July at the port of Beaulieu a private English yacht 'Magiya' {Magic} arrived from Malta. From it to the shore came two passengers. If one is to believe the passport information, one of the 'Englishmen' was a certain Turk, in the past an advisor to the Islamicist premier of Turkey, {Necmettin} Erbakan, a rather influential figure in the Wahhabi circles of Turkey, the Middle East, and the Caucasus.114 From sources in the Russian special services we learned that Mekhmet is also a close friend of the not unknown Khattab."

"The second person," the account goes on, "to the surprise of the intelligence officers, was the Chechen field commander Shamil' Basaev.

112 Kosman is reported in the same 17 December 2004 issue of compromat.ru, to live in Nice and to possess German and, possibly, Israeli citizenship.

113 On Sosnaliev as Abkhazia's defense minister, see RFE-RL Newsline, 2 November 1993.

114 On Erbakan, see Shireen T. Hunter, Islam in Russia: The Politics of Identity and Security (Armonk, NY: M.E. Sharpe, 2004), p. 365.

Dunlop's cited source for information about both Davidovich and Kosman is an article by Yuri Yasenev, "Rossiyu zhdet oranzhevaya revolytsiya" ("An Orange Revolution is in Store for Russia"), on a Russian website, ru.compromat.{39} But Dunlop has significantly edited, one must even say censored, what Yasenev wrote.

In footnote 111 Dunlop says

The article "Rossiyu zhdet oranzhevaya revolytsiya," compromat.ru, 17 December 2004 reports that Davidovich lives in Munich and enjoys both German and Venezuelan citizenship. He is also said to be personally acquainted with international arms dealer Khashoggi.

radically curtailing Yasenev's description of Davidovich:

Alfonso Davidovich – (1948), Venezuelan, lives in Munich. Has German and Venezuelan citizenship.

Speaks Spanish, English, French, German, and Russian fluently. In the 1970s went through special training in the USSR (Privol'noe, Nikolaevskaya oblast) and East Germany.

Owns companies and banks in Barbados, the Caymans and other off-shores.

Has friendly relations with Hugo Chavez, and is acquainted with Fidel Castro, Marcus Wolf and Adnan Khashoggi. Has many contacts in Colombia, including FARC. In 1999 Davidovich was alleged to have engaged in arms trafficking for guerillas in Chiapas, Mexico and in money laundering for the Colombian drug mafia. Finances antiglobalization movement in Europe and Latin America."{40}

With respect to Yakov Kosman, Dunlap says: "Kosman is reported in the same 17 December 2004 issue of compromat.ru, to live in Nice and to possess German and, possibly, Israeli citizenship."

Compare this with what Yasenev wrote:

Yakov Abramovich Kosman (b. 1946), resides in Nice, France. Has German and, possibly, Israeli citizenship. Involved in real estate operations and banking. Has contacts with Kosovo Albanian criminal societies in European countries. In 1997-2000 he served as financial consultant to Hashim Thaçi, the chief commander of KLA."{41}

Consider that "In 1998, the U.S. State Department listed the KLA – formally known as the Ushtria Clirimtare e Kosoves, or UCK – as an international terrorist organization, saying it had bankrolled its operations with proceeds from the international heroin trade and from loans from known terrorists like Osama bin Laden."{42}


The Khashoggi Villa Meeting, Drugs, and Kosovo

It would appear that Davidovich and Kosman were in Khashoggi's villa to talk about more than just Chechnya, but that Dunlop did not wish to explore this possibility. For example, he acknowledges the presence of no less than four men of Abkhazian origin and/or influence at the meeting – Kosman, Tsveiba, Sosnaliev, and Surikov -- and yet offers no explanation whatsoever for their presence. (A glance at a map will show that Abkhazia is irrelevant to the subsequent events in Dagestan and Chechnya.)

It seems likely that a drug-route was discussed involving Abkhazia, which now "has become a key heroin transiting point."{43} Its drug-trafficking importance is noted by none other than Surikov himself:

In general then, the Chechen {drug-trafficking} group has allotted a very important place to Abkhazia in its plans. This is due firstly to the strong position of local field commanders after the end of the Georgian/Abkhazian conflict....Secondly...a large number of `volunteers' {notably Basaev} came from Chechnia and other North Caucasian republics....Amongst these people were a number of criminals whose presence facilitated later contacts with local undesirables....As a result of these developments Abkhazia today is one of the most criminalised areas of the former Soviet Union.{44}

Note that in this passage Surikov makes no reference to his own Abkhazian origin, his involvement as a GRU officer in the Russian-backed Abkhazian insurrection, and his friendship there with Basaev (referred to by Dunlop). Here and elsewhere in his text it would appear that the "Chechen group" he describes is one overseen by his own meta-group.

Russian observers have pointed out that the meeting(s) in France, which took place in June and/or July 1999, came shortly after the unexpected entry of Russian troops into Kosovo.

On June 11, 1999, 200 Russian troops in SFOR drove from Bosnia to Prishtina and secured Slatina airport. Gen Wesley Clark then ordered {UK} Gen. Sir Mike Jackson (who on June 9 had signed technical agreement for withdrawal of Yugoslav troops from Kosovo) "to seize the airport. Jackson responded, famously, that he would not start World War Three for him"{45}

Following two days of talks directly between Clinton and Yeltsin, the crisis was averted.
Instead there followed weeks of "protracted negotiations on Russia's role in the Kosovo peacekeeping mission."{46} In the end, under circumstances still not fully understood, the United States and NATO agreed that the Russians could stay.

The Russian troops finally withdrew from the airport in July 2003.{47} Significantly, a chart of Russian drug-trafficking prepared by one of Surikov's partners, Sergei Petrov, indicates that in 2003 Kosovo ceased to be a main point of export for Russian drugs, its place being taken by the Black Sea oil port of Novorossiysk.{48}

Within a year of the troops' arrival, by 2000, according to DEA statistics, Afghan heroin accounted for almost 20 percent of the heroin seized in the United States – nearly double the percentage taken four years earlier. Much of it was now distributed in America by Kosovar Albanians.{49}

It is significant therefore that

The `Pristina dash' by Russian parachutists in 1999 during the Kosovo crisis (the purpose of the `dash' was to force NATO to guarantee for Russia a separate sector of responsibility in Kosovo) was organized by the head of the General Staff, Anatoly Kvashnin, and his deputy, Leonid Ivashov, without the knowledge of minister of defense Igor Sergeyev and most likely without Yeltsin's knowledge.{50}

Yasenev says nothing about this, but does assert that Kvashnin was the Russian Army connection of two leading drug traffickers (Vladimir Filin andAlexey Likhvintsev) in the Saidov-Surikov group.


II. The Meta-Group, Drugs, Salafist Islam, and America
The Role of Anton Surikov: The Dunlop and Yasenev Versions

As we have seen, Dunlop describes Anton Surikov, the organizer of the Beaulieu meeting between Voloshin and Basaev, as "a retired officer in the GRU." He fails to quote from his source Yasenev's description of Surikov:

Anton Victorovich Surikov (b. 1961). Presents himself as political scientist. Responsible for informational and political projects. Actively publishes in press. Some of his publications resemble ciphered directives to the elements in Russian special services disloyal {emphasis added} to President Vladimir Putin. His other articles contain political messages intended for abroad. Surikov has contacts with F{ritz} Ermarth, former leading CIA analyst of the USSR and Russia, now in the Nixon Foundation....{51}

Surikov has close relations with Alexander Prokhanov and Alexander Nagorny {respectively, chief editor and assistant chief editor of newspaper "Zavtra"}, Anatoly Baranov {chief editor of Pravda.info and KPRF.ru}, Mikhail Delyagin,{52} former advisor to Mikhail Kasyanov{53}, Alexei Kondaurov (head of YUKOS security department, former general of KGB and FSB, State Duma deputy from CPRF), Ilya Ponomarev (former YUKOS CEO, CPRF).

In 2002-03, together with Kondaurov–who represented Mikhail Khodorkovsky and Leonid Nevzlin–Surikov, with the help of Victor Vidmanov, organized financing of CPRF by YUKOS shareholders and the individuals associated with OPS {the organized criminal society} (Yakov Kosman, Nikolai Lugovskoi) to the tune of $15 million.

Boris Kagarlitskii's essay and Yasenev's memo, taken from intelligence files, talk about Surikov, but from opposing perspectives. Kagarlitskii, a longtime dissident and foe of Putin, saw the Beaulieu meeting as the venue for Kremlin-instigated violence, designed to restore the Kremlin's popularity before the coming election. Yasenev's memo sees Surikov as part of an on-going effort to destabilize Russia, and weaken the Kremlin.

Kagarlitskii (and after him Dunlop) say almost nothing about Surikov, other than to refer to his past years with Russian military intelligence, the GRU. To quote Dunlop,

Kagarlitskii also notes: "During Primakov's time, Surikov worked on the staff of the government of the Russian Federation. Despite this fact, he also developed regular work relations with Voloshin's people." It seems therefore quite likely that Surikov and Voloshin were personally acquainted.{54}

However Yasenev's memo in December 2004 links Surikov, not to the government or Kremlin, but (through Kondaurov) to the sphere of the man who by that time had emerged as America's best friend and Putin's most powerful enemy in Russia, the oligarch Mikhail Khodorkovskii. (The Kondaurov-Khodorkovskii connection is abundantly documented: both men freely admit it.)

Forbes magazine, which underwrote Klebnikov's damning accounts of both Berezovskii and Nukhaev, wrote on March 18, 2002 that Khodorkovskii appeared "to be the West's best friend" in Russia. According to PBS in 2003, Khodorkovskii's firm Menatep shared business interests with the western investment firms Global Asset Management, the Blackstone Group, the Carlyle Group and AIG Capital Partners. In addition

He frequently travels to the United States. He reportedly dined with Condoleezza Rice last year and recently was a guest at Herb Allen's Idaho ranch, along with Bill Gates, Warren Buffett and other luminaries, for an annual telecommunications executives meeting.{55}

Quoting from an anti-Yeltsin essay of May 1999 by Surikov in Versiya, the American right-wing Jamestown Foundation agrees with Yasenev (against Kagarlitskii) that "Surikov is clearly in the camp of Yeltsin's opponents."{56} More recently Surikov has also shown himself to be anti-Putin, criticizing Putin's "obvious inability ... to struggle against terrorism effectively."{57}

Furthermore Surikov clearly had western support in his opposition to government corruption under Yeltsin. We need only look to the following description of a Surikov book published in London:

Crime in Russia: the international implications Anton Surikov London Defence Studies.

Examines (1) the growth of organized crime in post-Soviet Russia (2) the extraordinary extent to which the Colombian cartel has targeted Russia as a conduit for its penetration of the world market (3) the scale of drug-trafficking in Russia, predominantly by the 'Chechen group' controlled by the Dudayev regime.{58} The author's interesting career details are set out on a prelim page. The monograph is introduced by Jonathan Aves (lecturer in Russian studies at the University of Sussex) 'Introduction' pp1-6, 12 refs, detailing both the scale of the problem and Surikov's background expertise. This expertise has to be assumed by the reader, as the monograph contains no literature references of its own.{59}

According to his webpage at the IPROG website, Surikov spent the year 1994 at the Centre for Defence Studies, King's College, London.{60} (Audrius Butkevicius is said to have spent the year there as well.)

As for Yasenev's allegations that "Surikov has contacts with F. Ermarth," Surikov when questioned about this admitted it frankly: "I am personally acquainted with Mr. Ermarth as political scientist since 1996. It's well known by many people and we never hid this fact."{61} In saying this, Surikov was admitting to a CIA connection: Ermarth, a senior officer who twice served on the National Security Council, did not retire from the CIA until 1998. The two men had met in April 1996 at a Global International Security Seminar in Virginia.{62}

Above all, Kagarlitskii is silent about the charge which has since aroused controversy in the Russian media: Surikov's supposed involvement with "a group of renegade Soviet secret service officers who are allegedly involved in international drug trafficking and have ties with Western and Saudi security apparatus."{63}

It would be interesting to learn at what point Kagarlitskii first met Surikov, and whether Surikov was in fact the source for Kagarlitskii's article about the meeting in southern France. Today the two men are close, and serve together at the Moscow Institute for the Study of Globalization (IPROG).{64}


Saidov, Surikov, Muslim Insurrectionism, and Drug Trafficking

The most conspicuous clue to Dunlop's selectivity in his use of the Yasenev memo is his failure to identify "Mekhmet," the "certain Turk, in the past an advisor to the Islamicist premier of Turkey, {Necmettin} Erbakan."{65} Yasenev identifies Mekhmet, linking him not only to Erbakan but also to the CIA, to Saudi intelligence, and to al-Qaeda:

In 2003 the Turkish citizen Mehmet whose real name is Ruslan Saidov, persuaded the President of the Chechen Republic, Ahmed Kadyrov, that he could be of use with Kadyrov's policy of "national reconciliation." Saidov took part in organizing Kadyrov's visit to Saudi Arabia. There Kadyrov made an agreement with the head of Saudi intelligence, Prince Naif Ibn Abdel-Aziz, that the Arab militants under the Lieutenant Colonel Aziz ben Said ben Ali al Hamdi (alias Abu al Walid al-Hamadi), Prince Naif's subordinate, would be removed from Chechnya by May 2004. The agreement stipulated that Kadyrov guaranteed safe passage to Abu al-Walid. Playing a double game and intending to set up both parties, Saidov (probably together with Abu al-Walid himself) gave this information to the CIA. Apparently the CIA was concerned that having left Chechnya the Arab militants would resurface in Iraq and join the terrorist group of the Jordanian Abu Musab al-Zarqawi that belongs to the al-Qaida network.

Trying to prevent this, and besides, wanting to discredit Kadyrov in the eyes of Prince Naif, the CIA gave Saidov an "assignment". On April 13 in the Nozhai-Yurt district of Chechnya, Russian troops killed Abu al-Walid (or alleged having done so). Saidov paid $300,000 to those who carried out this operation. Their bosses in Moscow received $500,000. How much the CIA paid Saidov is unknown....

Yasenev describes Saidov as both a drug trafficker and an arms trafficker, involved with the supply of Russian arms to the Saudi-backed secessionists from Yemen in Aden. This was at a time when Russia had officially ceased support to the one-time Marxist country in favor of supporting Yemeni unity:{66}

In May-June 1994, Saidov together with Usman Imaev and Khozh-Ahmed Nukhaev and under an agreement with Pavel Grachev and Dzhohar Dudaev, organized twenty-two flights to airlift arms and ammunition via the Chechen airport Sheikh Mansur to the airport Aden in Yemen.{67}

In the spring of 1995 Saidov began to cooperate with the organized society, led by Vladimir Filin and Alexei Likhvintsev {see below} in handling {narcotics} traffic through the port of Novorossiysk.

Saidov is described by Yasenev as having good relations not only with the CIA, but also with both Turkish Islamists and even with Ayman al-Zawahiri, the man often described as both the "mastermind" behind 9/11 and the senior partner in al Qaeda with the younger bin Laden:{68}

Since August 1995 Saidov resides in Turkey.

In December 1995 he published an extremist book in Turkish The Muslims of the Caucasus in the 19th century: Genocide by Russia. The leader of the Welfare Party and the future Turkish Prime Minister, Necmettin Erbakan, gave a good review of this book. In July 1996 Saidov became his advisor.{69}

In December 1996 Ayman al-Zawahiri was arrested in Dagestan for illegal entry.{70} He carried a false Sudanese passport. When he was arrested Saidov went to Makhachkala {the capital of Dagestan}. There he organized a petition to the authorities in support of Zawahiri. It was signed by twenty-six Muslim clergymen and the Russian State Duma deputy, Nadirshakh Khachilaev.{71} Saidov managed to obtain a court decision, condemning Zawahiri to a six-month prison term, which had actually expired by that time....

Since the middle of the nineties, Saidov formed stable relations with the Saudi businessman Adnan Khashoggi, Prince Turki al-Faisal (then head of the Saudi intelligence and at present, Saudi Ambassador to Great Britain) and Prince Naif.{72}

In addition Yasenev made it clear that Saidov was not pro-Putin, but a Muslim activist who was passionately anti-Putin and indeed anti-Russian:

In September 2003, Saidov participated in the congress of the extremist organization Hizb ut-Tahrir al-Islami in Jordan. At this congress he announced that Hizb ut-Tahrir al-Islami was an organization effectively acting in the underground throughout Russia, Central Asia and the Crimea....{73}

On December 8, 2004 Saidov addressed Muslim youth in Moscow. In his words, "following Ukraine, the Orange Revolution is coming to Russia." "Our liberals say that in 2008 the situation in Moscow will be like the one in Kiev." However, everything will be different, and not in 2008, but earlier." "Amirs and mudjahideen will soon make the Kremlin shudder with horror." In 2005, "they will throw into hell the servant of Satan," i.e., President Putin, who is allegedly "wanted by the International Tribunal at The Hague."

The same goal of Muslim liberation was attributed by Yasenev to the organizer of the meeting in France, Anton Surikov:

On December 13 2004, in Adygeia, Surikov had a meeting with a group of Sufi believers and said this: "In the past we were against ahl-ad-dalala (those who gone astray) with their Arab money. We used to say that one should not separate from Russia. But now "Russia is on the brink of collapse and chaos." So "we'll be separating {from Russia} with all Muslims of the Caucasus." A new state will be created on our historical lands from Psou and the Black Sea to Laba and Kuban."

(The goal of splitting up Russia attributed here to Surikov is that which, in an earlier text co-authored by Surikov, is attributed by Russian "radicals" to the United States:

The radicals believe that the US actively utilizes Turkish and Muslim elements....From Azerbaijan, radicals foresee a strategic penetration which would irrevocably split the Federation. US influence would be distributed to the former Soviet Central Asian Republics, to Chechnya and the other North Caucasus Muslim autonomous republics of T{at}arstan and Bashkortostan. As a result Russian territorial integrity would be irreparably compromised.){74}

Yasenev claims also that, in the summer of 2004, the meta-group

started a project in the Near-Volgian Federal District to train cadres for Volga-Urals chapter of the international extremist organization Hizb ut-Tahrir, banned by the Supreme Court of the Russian Federation in 2003. The project is financed by private philanthropic foundations of the Arabic Emirates and Saudi Arabia.

In this context we can further question Dunlop's assumption that the 1999 meeting organized by Surikov in southern France was called to promote the intentions of the Yeltsin "family." In the light of the Yasenev essay, it is more likely to have served the purposes of militant Islam and the drug traffic.

The portraits of Saidov's and Surikov's connections with al-Zawahiri, Erbakan, and Hizb ut-Tahrir confirm the criticism, by the Indian analyst B. Raman and others, that American studies of Islamist jihadism err in their restrictive focus on al-Qaeda.{75} The full range of Islamic jihadism is far more complex.

In my conclusion I shall return to the possibility that U.S. government might share common goals with Hizb ut-Tahrir and the meta-group in Russia, even while combating the Islamist terrorism of al-Qaeda in the Middle East and the West.


III. Allegations of Drug-Trafficking and Far West, Ltd

Yasenev links Saidov, Surikov, and others to their former service in a drug-interception group in Afghanistan, under a Leonid Kosyakov who now headed a company called Far West, Ltd.:

Leonid Leonidovich Kosyakov, b. 1955, Ukrainian citizen. Until 2005 resided in Arab Emirates and Switzerland. Citizen of Ukraine. Retired from the service in May 1993. Presently the president of Far West Ltd. In 1983-85 Kosyakov was in command of a special group in Shindand (Afghanistan), assigned to intercept caravans with drugs. In different times under his direct command served Filin, Lunev, Likhvintsev, Surikov, Petrov, as well as Saidov{76}

Yasenev also presents testimony that this group developed into what the Russians call an OPS (an Organized Criminal Society) responsible for massive drug-trafficking:

These accusations were made by the former officer of the Main Intelligence Directorate of Ukraine Sergei Petrov (alias Serge Rodin, French citizen).

According to his testimony:

"The OPS {organized criminal society} was involved in drug trafficking since the beginning of 1990s:

-from 1995 the OPS transports heroin (produced in Afghanistan) from Tajikistan to European countries via Russia with the assistance of the Russian Defense Ministry.

- from 2000 the OPS is involved in smuggling Colombian cocaine to Russia through the seaports of Novorossiysk and St. Petersburg under the disguise of import shipments from Latin America.

Among the OPS contacts in Novorossyisk is Saidov; in St. Petersburg it used to be Roman Tsepov.

Received profits are used for personal enrichment of the OPS leaders, the officials at the Ministry of Defense who provide them with "the roof" {protection}, and for financing extremist activities."

In November of 2003, Rodin contacted the law enforcement agencies of Germany and France. Their investigation did not result in any actions against Filin, Likhvintsev, and their partners.

In January 2004, Rodin was blown up in his car in South Africa.

Yasenev's charge of a military organized crime group under Filin had been reported a year earlier by Russian journalist Nikita Kaledin:

There is a powerful military organized crime community which from 1992 through to the present has controlled substantial drug flows from Afghanistan to Russia and Europe and is also involved in laundering "dirty" money and is actively involved in Russia's political life. The community is controlled by former intelligence officers, Afghan war veterans, and now drugs barons Vova Filin and Lesha Pribalt. The former lives in Switzerland, the latter in London. Both make quite frequent trips to Moscow, Dushanbe, Nazran, and Khankala....

Filin and Pribalt literally flooded Russia with heroin. The Kremlin could not tolerate this abomination any longer and ordered a mighty "Chekist raid" {i.e., ordered the FSB to shut down the operation} against the narcobarons. However, it is rumored that the raid has ended up with the agreement that the latter would 1) share their profits; 2) help in the facilitating the peaceful referendum on the constitution in Chechnya; 3) bring some order to the drug market by liquidating the leaders of ethnic criminal groups."{77}

As if in fulfillment of the third point, Surikov in 2001 denounced the leaders of an influential Tajik heroin cartel, including the mayor of the Tajik capital, Dushanbe.{78} (Tajiks until then had been one of the ethnic mafias who most dominated the trafficking of Afghan heroin through Russia.)


Far West, Ltd, Halliburton, Diligence LLC, New Bridge, and Neil Bush

The connection to Far West, Ltd, of Filin, Likhvinsky, Surikov, and Saidov (along with Alfonso Davidovich) has since been stunningly corroborated by a news story on the Pravda-info website about Far West, Ltd, and Kosyakov's resignation from it.

At a meeting of its stockholders on 2 May in the Hotel Ritz Carlton in Dubai "Far West Ltd." accepted the retirement of the president of the Agency Leonid Kosiakov, who moved to government service in Ukraine. Vladimir Filin, member of the Editorial Board of "Pravda-info," was elected the new president, at the same time retaining his previous position as executive director. The meeting of stockholders, in accordance with its charter, selected new members of the board of directors of "Far West Ltd.," which will now contain 9 members. Besides Vladimir Filin, Anatolii Baranov and Anton Surikov, it will include four more members if the Editorial Board of "Pravda-info": Audrius Butkevicius, Aleksei Likhvintsev, Natal'ia Roeva, and Ruslan Saidov, and also Valerii Lunev,{79} a veteran of the Armed Forces, and Alfonso Davidovich, a political scientist from Venezuela.

Far West, the story said,

specializes in consulting work on questions of security in conducting business in regions of the world with unstable environments and hiring personnel for foreign private military companies {last three words in English}. Its head office is located in Switzerland. In addition, the Agency has a network of representatives in OAE {United Arab Emirates}, Afghanistan, Colombia, the autonomous region of Kosovo, the autonomous republic of Crimea, Georgia, and the Volga Federal District of the RF {Russian Federation}.{80}

Recently Filin gave Pravda.info some details about Far West's work, and revealed that the firm had been co-founded by "a sub-division of a well-known American corporation." He said that the company's new contract is

connected with the secured transport of commercial shipments from Afghanistan, where we have an office, to ports on the Black Sea. In Afghanistan there is a well-known U.S. air base in Bagram. It is connected by an aerial bridge with a number of other US air bases. For example, with the largest base in Frankfurt-on-Main, that's in Germany, with an intermediary landing in Chkalovsk, in the Moscow area. But the most commercially attractive route seems to be that from Bagram to the US air base in Magas, in Kyrgyzstan. By the way, it is quite near the Russian air base in Kant. A significant flow of shipments passes through Magas, there is a niche there for commercial shipments too. This is very profitable. It is much more profitable than routing commercial shipments from Afghanistan through Tajikistan. Therefore last year we completely withdrew from all shipping through Tajikistan and closed our office in that country.

Who are your partners?

Who our partners are is a commercial secret. I can say that they are four private firms from three countries, Turkey, Russia, and the USA,which engage among other things in shipping. One of these firms is a sub-division of a well-known American corporation. This firm is a co-founder of our agency.{81}

We can assume that Pravda.info is an inside source for information about Far West, for the two organizations seem in fact to be two different manifestations of the same group. Among the directors of Far West on the masthead of Pravda.info we find first of all Anton Surikov, followed by Anatolii Baranov, Aleksei Likhvintsev, Ruslan Saidov, Vladimir Filin, Natal'ia Roeva, and Audrius Butkevicius.{82}

Also on the Pravda.info masthead is Boris Kagarlitskii, who as we saw at the outset is a main source for the Western accounts of the meeting in southern France, by Patrick Cockburn, Nafeez Ahmed, and John Dunlop.{83} Many of the Far West directors, notably Anton Surikov, are or have been also associated with Kagarlitskii at the Russian Institute for Globalization Studies (IPROG).{84}

Although Filin and Pravda.info did not identify the foreign private military companies with which it worked, another source did:

Filin and Likhvintsev do business with foreign private military companies (PMCs):

- «Meteoric Tactical Solutions» (South Africa) – in Angola;

- «Kellogg, Brown &Root» (KBR Halliburton) – in Colombia, Afghanistan, Kosovo, Georgia, and Iraq.

- «Diligence Iraq LLC» (controlled by the Kuwaiti Mohammed as-Sagar) – in Iraq."

Their cooperation with these companies began in the end of 1994 in Angola on the initiative of Victor Bout, who was involved in the shipments of Soviet-made arms to the antigovernment group UNITA in exchange to raw diamonds.{85} Apparently, Bout became interested in Likhvintsev's contacts (L. worked in Angola in 1986-87). Later, in October of 1998, Filin, Likhvintsev's wife Liudmila Rozkina (b. 1966) and Anton Surikov (at that time he worked in the Russian government) established the company Far West Ltd., with the office in Lausanne, which officially does security consulting for business ventures in countries with unstable regimes. De facto, this is a legalized form of recruiting mercenaries for PMCs.{86}

Furthermore Yasenev claims that some of Far West's work with Halliburton is apparently approved by the CIA for geopolitical purposes:

In 2003-2004, Filin and Likhvintsev worked on the Georgian project, financed by KBR Halliburton, apparently, with the approval of the CIA. The project had the goal of weakening the competitors of Halliburton in the oil business and, in a broader context, of facilitating the geopolitical objectives of the United States in the Caucasus. The OPS man in Georgia is Audrius Butkevicius, former Lithuanian minister of defense, presently advisor to Badri Patarkatsishvili.{87}

Some of Yasenev's information about Diligence Iraq is corroborated by a Press Release from Diligence itself.{88}

Diligence LLC, a private military company (PMC), could be described as a CIA spin-off:

Diligence was founded by William Webster, the only man to head both the Central Intelligence Agency (CIA) and the Federal Bureau of Investigation. Mike Baker, its chief executive officer, spent 14 years at the CIA as a covert field operations officer specializing in counter-terrorism and counter-insurgency operations. Whitley Bruner, its chief operating officer in Baghdad, was once the CIA station chief in Iraq.{89}

Its partner in Diligence Middle East (DME) is New Bridge Strategies, whose political clout was described by the Financial Times:

New Bridge was established in May {2003} and came to public attention because of the Republican heavyweights on its board – most linked to one or other Bush administration {officials} or to the family itself. Those include Joe Allbaugh, George W. Bush's presidential campaign manager, and Ed Rogers and Lanny Griffith, former George H.W. Bush aids.{90}

Joe Allbaugh, the co-chairman of the company, was also head of the Federal Emergency Management Agency (FEMA), on the day of the 9/11 attacks, and indeed until March 2003, the month that the U.S. invaded Iraq.

The Financial Times wrote that the success of New Bridge in securing contracts had to do with their relationship to Neil Bush, the President's brother:

Two businessmen instrumental in setting up New Bridge Strategies, a well-connected Washington firm designed to help clients win contracts in Iraq, have previously used an association with the younger brother of President George W. Bush to seek business in the Middle East, an FT investigation has found.

John Howland, the company president, and Jamal Daniel, a principal, have maintained an important business relationship with Neil Bush stretching back several years. In Mr Daniel's case, the relationship spans more than a decade, with his French office arranging a trip for Mr Bush's family to Disneyland Paris in 1992, while his father, George H.W.Bush, was president.

On several occasions, the two have attempted to exploit their association with the president's brother to help win business and investors.

Three people contacted by the FT have seen letters written by Neil Bush recommending business ventures promoted by Mr Howland, Mr Daniel and his family in the Middle East. Mr Daniel has also had his photograph taken with the elder Mr Bush. Such letters and photographs can be valuable props when doing business in the Middle East.

Mr Daniel's Houston investment fund, Crest Investment Corporation, employs Neil Bush as co-chairman. Crest Investment also helped fund Neil Bush's Ignite!, an educational software company. Mr Daniel sometimes introduces himself as a founding backer of Mr Bush's company, a Middle-Eastern businessman who has met him said, and has persuaded the families of prominent leaders in the region to invest.{91}

Until recently, news stories about the international backers for Neil Bush's firm ignite have focused on Taiwanese businessmen, and Middle East billionaires, such as Defense Minister and Crown Prince of Dubai Sheikh Mohammed bin Rashid al Maktoum.{92} But it was a surprise to learn in September 2005 that "Exiled Russian tycoon Boris Berezovsky was in Riga along with Neil Bush, the brother of the U.S. president, to discuss an educational project with Latvian businessmen."{93} In an interview with Interfax, "Berezovsky pointed out that he is one of the shareholders of Ignite! Inc., an educational software company. U.S. President George W. Bush's brother Neil Bush is the company's chairman and chief executive."{94}


The U.S. Contribution to the Afghan-Kosovo Drug Traffic

Much remains to be learned about Far West, Ltd., its personnel, and the American firm which co-founded it. Reportedly it was founded in 1998; and already had Surikov and Saidov as directors when they attended the meeting in Khashoggi's villa in July 1999.

I suspect myself that the meeting did indeed have to do with destabilizing Russia, as Dunlop claimed. But I believe also that the group at the meeting was more concerned with facilitating drug-trafficking than with strengthening the Kremlin. I believe further that they also discussed the Russian presence in Kosovo, and the imminent increase in the flow of Afghan drugs through Kosovo.

That this flow is huge has been attested to by many observers. Russian sources estimate that from 1991 to 2003 the same group shipped to Western Europe up to 300 tons of heroin and sold it to wholesale buyers of Kosovo Albanian nationality. In the same period they sold up to 60 tons of heroin to Azeri and Roma (gypsy) wholesalers in the Volga and the Urals Federal Districts of Russia. The group's total receipts for heroin in 1991-2003 are estimated to be $5 billion.{95}

The chief narco-baron of the group is said to be Vladimir Filin, who is also the head of Far West. Here is a relevant interview Filin afforded to his colleague Alexander Nagorny at Filin's own alternate organization, Pravda.info:

There have been reports in mass media about the involvement of the U.S. military in Afghanistan in drug trafficking. I asked the well-known political scientist and specialist on organized crime Vladimir Filin to comment on this.

-Vladimir Ilyich, is it true that Americans are involved in drug business?

-Yes, they are in ideal situation for this. They control the Bagram airfield from where the Air Force transport planes fly to a U.S. military base in Germany. In the last two years this base became the largest transit hub for moving Afghan heroin to other US bases and installations in Europe. Much of it goes to Kosovo in the former Yugoslavia. From there the Kosovo Albanian mafia moves heroin back to Germany and other EU countries.

-Why such a complex arrangement?

Drug traffickers enjoy relative safety in military bases. There is no serious control there. German police cannot work there. However, outside of military bases German law-enforcement is in effect. True, any police can be bought. But the level of corruption in Germany is not as high as, say, in Russia. This is why it is more convenient for Americans to establish distribution centers in other places. I believe that, in time, such centers will move to their military installations in Poznan, Poland, and also in Romania and Bulgaria. Poland is already a EU member. Romania and Bulgaria are expected to be in 2007. Corruption in these countries is almost as high as in Russia.

-How big is American drug traffic to Europe and who is behind it?

-About 15-20 tons of heroin a year. When Poznan become open, I think it could rise to 50, even 70 tons. Behind this business are the CIA and the DIA (Defense Intelligence Agency). Actually, this is what they did already in Indochina in the 1960s-70s and in Central America in the 1980s.{96}

Under the circumstances I consider Filin to be no more reliable than his opposite number, Joseph D. Douglass, the author of Red Cocaine: The Drugging of America and the West. But legitimate questions abound as to why the USA empowered the KLA to take over Kosovo.

{"Peter Dale Scott has requested the deletion here of three erroneous paragraphs concerning Kosovo, Haiti, and AID. The error arose because his published source had misread and misunderstood an AID document."}


How the U.S. Restored Narco-Barons to Power in Afghanistan, 2001

It is clear that the Blair and Bush Administrations did have drugs in mind when in 2001 they developed a strategy for ousting the Taliban in Afghanistan. Their plans focused chiefly on Ahmad Shah Massoud, overcoming the long-time resistance in Washington to supporting this known drug trafficker.{100}

Massoud of course was also the most successful guerrilla opponent of the Taliban. A more naked example of a U.S. drug ally was Haji Zaman in Jalalabad.

When the Taliban claimed Jalalabad...Zaman had fled Afghanistan for a leisurely life in Dijon, France. Just a few years at the top of the heroin trade in Jalalabad had given "Mr. Ten Percent" a ticket to just about any destination he could have chosen. In late September 2001, British and American officials, keen to build up an opposition core to take back the country from the Taliban, met with and persuaded Zaman to return to Afghanistan.{101}

According to Asian sources, Zaman's long-time Pakistani drug-trafficking partner, Haji Ayub Afridi, was also released from a Pakistani jail at this time, "reportedly at the request of the CIA."{102}

The informed Indian observer B. Raman was outspoken about the U.S. use of narcobarons to oust the Taliban. Citing the subsequent failure to curb opium production, he wrote:

There are disturbing reports from reliable sources in Afghanistan that this marked lack of success in the heroin front is due to the fact that the Central Intelligence Agency (CIA) of the USA, which encouraged these heroin barons during the Afghan war of the 1980s in order to spread heroin-addiction amongst the Soviet troops, is now using them in its search for bin Laden and other surviving leaders of the Al Qaeda, by taking advantage of their local knowledge and contacts. These Pakistani heroin barons and their Afghan lieutenants are reported to have played an important role in facilitating the induction of Hamid Karzai into the Pashtun areas to counter the Taliban in November, 2001. It is alleged that in return for the services rendered by them, the USA has turned a blind eye to their heroin refineries and reserves.{103}

A third major narcobaron selected by the CIA, according to Raman, was Haji Abdul Qadeer.

Haji Abdul Qadeer was the CIA's choice {in 2001} as the Governor of the Nangarhar province in which Jalalabad is located. .... During the first Afghan war against the Soviet troops in the 1980s, he played an active role under the control of the CIA and the Directorate-General For External Security (DGES), the French external intelligence agency, in organizing the heroin trail to the Soviet troops from the heroin refineries of Pakistan owned by Haji Ayub Afridi, the Pakistani narcotics baron, who was a prized operative of the CIA in the 1980s. Abdul Qadeer and Afridi became very close associates in running this drug trade with the blessings of the CIA. Amongst others who were associated with this trade were Haji Mohammed Zaman and Hazrat Ali.{104}

If Raman is correct, therefore, the CIA not only blessed but controlled the flow of drugs from Afridi, Zaman, and Abdul Qadeer into the hands of Soviet troops like Vladimir Filin and Aleksei Likhvintsev.{105}


IV. The Meta-Group, the War on Terror, and 9/11
U.S. Geostrategic Goals and Chechnya

In the 1980s CIA Director William Casey used narcotics to achieve two goals, the immediate goal of weakening the Soviet occupation of Afghanistan, and the long-term goal of financing Islamist resistance to break up the Soviet Union.{106} According to the partisan but well-informed observer Yossef Bodansky, Director of the Congressional Task Force on Terrorism and Unconventional Warfare, the U.S. still pursues the goal of weakening destabilizing Russia.

As if reliving the "good ol' days" of Afghanistan of the 1980s, Washington is once again seeking to support and empower the most virulent anti-Western Islamist forces. The US crossed the line in mid-December 1999, when US officials participated in a formal meeting in Azerbaijan in which specific programs for the training and equipping of mujahedin from the Caucasus, Central/South Asia and the Arab world were discussed and agreed upon. This meeting led to Washington's tacit encouragement of both Muslim allies (mainly Turkey, Jordan and Saudi Arabia) and US "private security companies" (of the type which did the Clinton Administration's dirty job in the Balkans while skirting and violating the international embargo the US formally supported) to assist the Chechens and their Islamist allies to surge in the Spring of 2000 and sustain the ensuing jihad for a long time.

Washington's motivation is oil pipeline politics and the economy. Essentially, Washington is determined to deprive Russia of a viable pipeline route through spiraling violence and terrorism, the political fallout of media accusations of Russian war crimes. In the calculations of the Clinton Administration, a US-assisted escalation and expansion of the war in Chechnya should deliver the desired debilitation of Russia.

The Clinton Administration believes that the spiraling violence in the Caucasus will scare Western investors and oil buyers from making deals with Russia. Meanwhile, with the sudden US attempted rapprochement with Iran, the Clinton Administration is heralding the Azerbaijani southern route (with a little detour in Iran) as seemingly feasible. And so, in the Summer of 2000, the Clinton Administration keeps fanning the flames of the Islamist jihad in the Caucasus through covert assistance, tacit encouragement of allies to actively support the mujahedin, as well as the orchestrating of an intense media campaign against Russia and its conduct in Chechnya.{107}

The Caucasian Common Market project of Khashoggi, Lord McAlpine, and James Baker, can be seen as contributing to this goal. While these western investors may have sought profits as the result of their investment, they were perhaps more anxious to see the reduction of Russian influence, thus providing a more secure environment for the new Baku-Tbilisi-Ceyhan pipeline which western oil companies count on to deliver oil from the Caspian Basin to the Mediterranean.

As the State Department noted in 2005,

the involvement of U.S. firms in the development and export of Azerbaijani oil is key to our objectives of diversifying world oil supplies, providing a solid base for the regional economy, and promoting U.S. energy security.{108}

The Bush Administration committed an estimated $1.5 billion to the Caspian basin area, including an $11 million program to train a "pipeline protection battalion" for the special Georgian unit created to protect the Georgian section of the BTC pipeline.{109}


The Meta-Group's Geostrategic Goal: Maintain the War of Terror

The fact that the United States will use drug traffickers as geostrategic assets does not at all mean that Washington and the traffickers will necessarily have the same agendas. In theory at least, the contrary should be true. Although the United States may have used known traffickers like Zaman and Qadir to regain access to Afghanistan, its stated ultimate goal, and the one assumed by the mainstream media, was to reimpose its own kind of order. Whether the country is Afghanistan, Azerbaijan, Georgia, Colombia, or Kosovo, America's national interest is said to be to install and then protect pipelines. And pipelines require peace and security.

The prime geostrategic goal of the drug traffic in Afghanistan is precisely to prevent peace and security from happening. It is true that the international illicit drug industry, like the international oil industry, is polymorphous and flexible, relying on diversified sources and markets for its products in order to maintain its global dominance. But for the global drug traffic to prosper, there must always be key growing areas where there is ongoing violence, and state order does not prevail.

However, in speaking above of America's stated national interest, I do not assume that a U.S. government will always represent that national interest. Something else has happened in recent decades, the growth of the drug trade to the point that it now represents a significant portion of national and international wealth. And it has to be said that the American free enterprise system, like every other dominant political system in a current nation with world pretensions, will tend above all to represent the interests of the wealthy.

Thus Bush Administration policies cannot be assumed to reflect the national goals of peace and security, as outlined above. On the contrary, its shocking underfunding of Afghanistan's recovery, like its complex and destabilizing interventions in Georgia, suggest that it, as much as the drug traffic, hopes to utilize instability – as a pretext for maintaining unstable U.S. bases in countries like Uzbekistan, whose people eventually will more and more object to them. These policies can be said to favor the interests of the drug traffic more than the interests of security and orderly development.

A test of the Bush Administration's true intentions in the War on Terror came as early as November 2001. The Americans had learned, correctly, that Osama bin Laden was holed up in the caves of Tora Bora. While storming the caves was a difficult military challenge, surrounding and isolating them was well within the capacity of U.S. military strength. However General Franks, the United States commander, entrusted the task of capturing bin Laden to two local commanders: Hazrat Ali and Haji Zaman.

As we have seen, Hazrat Ali and Haji Zaman were not only drug lords, they were earlier part of the 1980s heroin trail to Soviet troops that had been organized "with the blessings of the CIA." Thus the U.S. could hardly plead ignorance as to these men's activities and interests, which clearly involved making sure that the writ of Kabul would never extend to their own Nangahar Province. For the drug trade to thrive in Afghanistan, it was necessary that the influence of Osama and the Taliban be preserved, not extinguished.

The folly of using Hazrat Ali and Haji Zaman was brought to Franks' attention at the time:

Military and intelligence officials had warned Franks and others that the two main Afghan commanders, Hazrat Ali and Haji Zaman, couldn't be trusted, and they proved to be correct. They were slow to move their troops into place and didn't attack until four days after American planes began bombing – leaving time for al-Qaida leaders to escape and leaving behind a rear guard of Arab, Chechen and Uzbek fighters.{110}

The failure to use U.S. troops cannot be attributed to the motive of appeasing local sentiments:

Pir Baksh Bardiwal, the intelligence chief for the Eastern Shura, said that he would welcome a massive influx of U.S. troops. He believed that the Pentagon planners were making a grave mistake by not surrounding Tora Bora.{111}

A U.S. journalist who was there, Philip Smucker, claims that the treachery of the local commanders went beyond their slowness to surround Tora Bora. He describes hearing how one lower level commander

whom Ali had assigned to guard the Pakistani border, had acted as an outright escort for al Qaeda.... "Ilyas Khel just showed the Arabs the way out of the country into Pakistan".....That Ali had entrusted {Khel, who had once served under the military commander of Osama's friend Younis Khalis} suggested to us that the escapes were part of a much broader conspiracy to assist al Qaeda right through to the end.{112}

How high up did this conspiracy go? Certainly Ali's failure to capture Osama could have been and was predicted. But if capturing Osama was indeed the U.S. goal (as announced at the time by Colin Powell), the real question is why the task was not entrusted to U.S. troops.

In the wake of 9/11, Sibel Edmonds, a former FBI translator, has claimed to possess information linking the American 9/11, and much else, to massive drug-trafficking which has corrupted high level U.S. officials. Among other things, she has claimed that the U.S. has never gone after top-level drug traffickers, because

this would upset "certain foreign relations." But it would also expose certain of our elected officials, who have significant connections with high-level drugs- and weapons-smuggling – and thus with the criminal underground, even with the terrorists themselves.....{113}

After Ms. Edmonds reported improprieties to her FBI employers, she was fired. She has appealed her firing, but the Bush administration has invoked the unusual claim of the "state-secrets privilege" to prevent the lawsuits she has filed from being heard in court. At this point we know little more than that what concerned her involved arms-dealing, drug-trafficking, and Turkey.

It is I think a matter of national priority to learn more about the American links to Far West, Ltd., the group accused of staging the Russian 9/11. It is a matter of more than purely historic interest to learn if that group's Islamist and American connections could have supplied a meeting-ground for staging the American 9/11 as well.

For at present America faces in Afghanistan, what Russia faces in Chechnya, a war which is favorable to drug trafficking but increasingly deleterious to national well-being.{114} The Bush Administration continues to use 9/11 to sell its Asian adventures to the American people. Meanwhile elements profiting from the flow of Afghan drugs continue to grow stronger and more dangerous to the well-being of both countries.


Concluding Question: The Meta-Group and the United States Government

It seems clear that the meta-group, with its influential connections on at least three continents, was powerful enough to effect changes, through the Russian 9/11, in Russian history. The question arises whether they could similarly effect changes in American history as well.

As we have seen Russian sources claim that the U.S. Government has had access to the meta-group, for such especially sensitive projects as the assassination of Abu al Walid al-Hamadi. They claim the meta-group's involvement in a number of U.S.-sponsored regime changes in eastern Europe, from the overthrow of Ceausescu in Romania to the recent deposition of Shevardnadze in Georgia. The Wall Street Journal attributed the latter to the work of "a raft of non-governmental organizations . . . supported by American and other Western foundations."{115} One of these was the Albert Einstein Institution, funded by both the NED and the Soros foundations, which helped to create the dissident youth movement Kmara in Georgia. Audrius Butkevicius, the meta-group member now resident in Georgia, is said to be closely connected with the Albert Einstein Institution.{116}

To this we should possibly add the so-called tulip revolution in March 2005 that ousted long-time leader Askar Akayev in Kyrgyzstan, (It was after this event that Far West opened its office in Kyrgyzstan.){117} Nagorny claims that the coup was organized by British intelligence and Chechens in Istanbul, with the "technical assistance" of Americans.{118} Since then the heroin traffic through Kyrgyzstan has allegedly almost trebled.{119}

Returning to a question raised earlier, it also seems possible that the U.S. government might contemplate using Hizb ut-Tahrir and the meta-group for political changes in Russia itself, even while combating the Islamism of al-Qaeda elsewhere. This would be far from the first time that the U.S. Government had used drug-trafficking proxies as assets, and would do a lot to explain the role of the U.S. in 2001 in restoring major drug traffickers to power in Afghanistan. Dubious figures like Nukhaev, Khodorkovskii, and Khashoggi have already shown their interest in such initiatives; and western business interests have shown their eagerness to work with these allies of the meta-group.

It is fitting to think of most U.S. intelligence assets as chess pieces, moved at the whim of their controllers. That is however not an apt metaphor for the meta-group, which clearly has the resources to negotiate and to exert its own influence interactively upon the governments it works with.

Since first hearing about the meta-group's role in the Russian 9/11, I have pondered the question whether it could have played a similar role in the American 9/11 as well. At this point I have to say that I have found no persuasive evidence that would prove its involvement. The fact remains that two informed and credible witnesses, Sibell Edmonds and Indira Singh, have spoken independently of the importance of international drug trafficking in the background of 9/11.

The Bush Administration has paid Sibell Edmonds the tribute of silencing her on the grounds of national interest. She has nonetheless made it clear that what she would talk about concerns that part of the world where the meta-group has influence:

SE {Sibell Edmonds}: It's interesting, in one of my interviews, they say "Turkish countries," but I believe they meant Turkic countries – that is, Turkey, Azerbaijan, and all the 'Stans, including Tajikistan and Kyrgyzstan, and {non-Turkic countries like} Afghanistan and Pakistan. All of these countries play a big part in the sort of things I have been talking about.

CD {Chris Deliso}: What, you mean drug-smuggling?

SE: Among other things. Yes, that is a major part of it. It's amazing that in this whole "war on terror" thing, no one ever talks about these issues.{120}

Indira Singh, who lost her high-tech job at J.P. Morgan after telling the FBI about Ptech and 9/11, was even more dramatic in her public testimony at a Canadian event:

I did a number of things in my research and when I ran into the drugs I was told that if I mentioned the money to the drugs around 9/11 that would be the end of me.{121}

The False Dilemmas of 9/11 Theories

I said earlier that by suppressing awareness of the role of drug-trafficking in our society, we give drug traffickers a de facto franchise to exert political influence without criticism or opposition. An example of this is the discussion of 9/11 in America, which usually fails to consider the meta-group among the list of possible suspects.

I have tried to suggest in this paper that in fact the meta-group had both motive – to restore the Afghan opium harvest and increase instability and chaos along the trade routes through Central Asia – and opportunity – to utilize its contacts with both al-Zawahiri in al Qaeda and the CIA in Washington. It is furthermore the best candidate to explain one of the more difficult anomalies (or indeed paradoxes) of the clues surrounding 9/11: that many of the clues lead in the direction of Saudi Arabia, but some lead also in a very different direction, towards Israel.{122}

Here it is worth quoting again the well-informed remark of a Washington insider about the meta-group's predecessor, BCCI: "Who else could wire something together to Saudi Arabia, China, Israel, and the U.S.?"{123} The current meta-group fills the same bill, for it unites supporters of Muslim Salafism (Saidov) with at least one Israeli citizen (Kosman).

The meta-group's involvement in the Russian 9/11 of course does nothing to prove its involvement in the American one. However awareness of its presence – as an unrecognized Force X operating in the world – makes previous discussions of 9/11 seem curiously limited. Again and again questions of responsibility have been unthinkingly limited to false dilemmas in which the possible involvement of this or any other Force X is excluded.

An early example is Michael Moore's naïve question to President Bush in Dude, Where's My Country: "Who attacked the United States on September 11 – a guy on dialysis from a cave in Afghanistan, or your friends, Saudi Arabia?"{124} A far more widespread dilemma is that articulated by David Ray Griffin in his searching critique of the 9/11 Commission Report:

There are two basic theories about 9/11. Each of these theories is a "conspiracy theory." One of these is the official conspiracy theory, according to which the attacks of 9/11 were planned and executed solely by al-Qaeda terrorists under the guidance of Osama bin Laden....Opposing this official theory is the {sic} alternative conspiracy theory, which holds that the attacks of 9/11 were able to succeed only because they were facilitated by the Bush administration and its agencies.{125}

Griffin of course is not consciously excluding a third possible theory – that a Force X was responsible. But his failure to acknowledge this possibility is an example of the almost universal cultural denial I referred to earlier. In America few are likely to conceive of the possibility that a force in contact with the U.S. government could be not just an asset, but a force exerting influence on that government.

My personal suggestion to 9/11 researchers is that they focus on the connections of the meta-group's firm Far West, Ltd. – in particular those which lead to Khashoggi, Berezovskii, Halliburton and Dick Cheney, and Diligence, Joe Allbaugh, and Neil Bush.

DIRECTORS OF FAR WEST, LTD.{126}

Leonid Leonidovich Kosyakov, b. 1955, Ukrainian citizen. Until 2005 resided in Dubai and Switzerland. '83-'85 - in command of a special GRU group in Shindand, West. Afghanistan, assigned to intercept caravans with drugs. In different times under his command served Filin, Lunev, Likhvintsev, Surikov, Saidov, and Petrov. Ret. in '93. Owns big travel company in Dubai. In the spring of 2005 was appointed to general's position in Ukrainian military intelligence (GUR) and stepped down as the official president of Far West Ltd.

Vladimir "Ilyich" Filin, b. 1960, Kiev, Ukraine. Ukrainian. Doctor of sciences (1982). In '83-84 served in a special unit of GRU in Western Afghanistan, assigned to intercept caravans with drugs. In 1993 retired from GRU in the rank of Lt.-Colonel. A British citizen since 2000. In 2004 Filin was listed as political scientist and expert on "revolutionary and guerilla movements in the developing world" at IPROG, the Moscow Institute for Globalization Studies.

Anatoly Baranov. Journalist. Under Masliukov-Primakov cabinet served as public relations executive director, Russian Aircraft Corporation MiG. In 2002 bought forum.msk.ru. Owner of Pravda-info. 2003 - Press secretary to the deputy prime minister Alyoshin (military-industrial complex). "Coordinator of media projects" at IPROG.

Audrius Butkevicius, Lithuanian. Presently resides in Georgia. Former Lithuanian minister of defense. Sentenced for bribery. Has close ties with Albert Einstein Institution. Member of Far West Ltd. board of directors and the editorial board of Pravda.info. '94 - visiting scholar at Centre for Defence Studies at King's College London (together with Anton Surikov and Igor Sutyagin, now in prison for espionage).

Alfonso Davidovich Ochoa (b. 1948), Venezuelan, resides in Munich, Germany. Has German and Venezuelan citizenship. In the 1970s went through special training in the USSR and East Germany. Was close to the Cuban General Arnaldo Ochoa Sanchez. In the past used passports in the names of Jose Rodriguez, Captain of the Cuban Army, and Jose Alva, Colombian citizen. Responsible for FWL office in Bogotá.

Alexei Likhvintsev ("Abdulla," "Pribalt"), b. 1959, Lviv, Ukraine. Ukrainian. British citizen (2000), resides in Britain (Scotland?). '84-85 special GRU unit based in Shindand, West. Afghanistan). Nov '87-Jan '89 - military advisor in Angola. 90'-'93 - together with Filin on assignment to sell the property of the Soviet Army in East Germany, did business with Kosovo Albanian companies. '93.

Valery Nikolaevich Lunev (b. 1960, Belorussia). Belorussian. '83-84 - special GRU unit based in Shindand, West. Afghanistan. Married to Dzhokhar Dudaev's relative Fatima (b. 1970). Retired from the military in March of 1995. Lunev is responsible for security and "strong arm operations". For his operations he hires the former and active duty officers of Russian secret services, including spetsnaz. Resides in the Netherlands, has Dutch citizenship. In 1990-91 Lunev took part in overthrowing the regime of Zviad Gamsahurdia in Georgia. Has extensive contacts in Tajikistan.

Ruslan Shamilievich Saidov (b. 1960, city of Khasavyurt, Dagestan). Avar Chechen-Spanish. Has Turkish passport in the name of Hungar (?) Mehmet and passport of Arab Emirates. '83-84 - special GRU unit based in Shindand, West. Afghanistan. Later, assignments in Lebanon and Syria. Ret. Major of GRU '93. Resides in Turkey since '95 and in Dubai. Advisor to Necmettin Erbakan - '96. Business partner of the Islamic Bank of Dubai and Habib Bank. Since mid-90s Saidov formed stable relations with the Saudi businessman Adnan Hashoggi, Prince Turki al-Faisal and Prince Na'f. Close to Basaev and Khattab.

Anton Victorovich Surikov , "Mansur" (Ancestral name: Mansur Ali-Hadzhi Natkhoev), b. 1961, Sukhimi, Georgia, USSR. Ethnic Adygei. Son of a leading figure in the Soviet military-industrial establishment. Resides in Moscow. Has Turkish and, possibly, US citizenship. Doctor of sciences. '84-served in a special GRU unit, based in Shindand, West. Afghanistan). '90-96 - Institute of USA and Canada. '92 - 93 - deputy of the Abkhazian minister of defense, makes friends with Shamil Basaev, commander of the special battalion trained by GRU. '94 - visiting scholar at the Center for Defense Studies, King's College London. '96 - ret. Colonel. Also on IPROG staff.

Yakov Abramovich Kosman (b. 1946), resides in Nice, France. Has German and, possibly, Israeli citizenship. Involved in real estate operations and banking. Has contacts with Kosovo Albanian criminal societies in European countries. In 1997-2000 he served as financial consultant to Hashim Thaçi, the chief commander of KLA. The new president of Far West, Ltd.

Peter Dale Scott's last book was Drugs, Oil, and War (2003). For the past three years he has been living in Berkeley and Thailand, while writing a book on oil, drugs, and 9/11. His website is www.peterdalescott.net



Footnotes

{1} Asia Times, 10/27/05, http://www.atimes.com/atimes/Central_Asia/GJ27Ag02.html.

{2} Nick Kochan, The Washing Machine: How Money Laundering and Terrorist Financing Soils Us (Mason, OH: Thomson, 2005), 124.

{3} Center for Strategic and International Studies, Washington, 2004; quoted in Kochan, The Washing Machine, 124: "The effects of this worldwide, highly integrated industry have been felt from Colombia to Thailand, from Afghanistan to Sudan, and from Russia to the United States. No country has been impervious. Transnational drug networks have exploded in response to the new conditions in the former Soviet Union. Particularly menacing are the connections that have been identified between networks in Latin America, Central and Eastern Europe, and the Soviet successor states."

{4} Robert I. Friedman, Red Mafiya: How the Russian Mob Has Invaded America (Boston: Little Brown, 2000), 208-09.

{5} Alfred W. McCoy, The Politics of Heroin in Southeast Asia (Chicago: Lawrence Hill Books/ Chicago Review Press, 2001); Peter Dale Scott, Drugs, Oil, and War (Lanham, MD: Rowman & Littlefield, 2003).

{6} Jonathan Beaty and S.C. Gwynne, The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI (New York: Random House, 1993), 347.

{6a} A comprador is an agent who acts as intermediary between local and international commerce. The term is used pejoratively in Marxist literature, but I use it neutrally here. Each compradorial revolution must be judged on its own merits

{7} "According to the UN, opium production {in Afghanistan} peaked in 2004 to near record levels of 4,200 metric tonnes - nearly 90% of the world market" (BBC News, 4/26/05, http://news.bbc.co.uk/1/hi/world/south_asia/4487433.stm).

{8} The former dominance of the Burma drug trade by the Taiwan-based Guomindang (GMD) has now been replaced in press accounts by the control of the United Wa State Army, an ostensibly indigenous group. At the heart of the Wa Army, however, control of the traffic by Taiwan intelligence endures. See Bertil Lintner, Burma in Revolt: Opium and Insurgency since 1948 (Chiang Mai: Silkworm, 1999), 321, 324, 380.

{9} Letter of Anton Surikov to Oleg Grechenevsky, discussed below: "I am personally acquainted with Mr. Ermarth as political scientist since 1996. It's well known by many people and we never hid this fact." Fritz Ermath did not retire from the CIA until 1998. Cf. Argumenty i Facty, 9/15/99, http://www.aif.ru/oldsite/986/art010.html. That the two men met in 1996 was indeed public knowledge. The Russian journal Commersant published a photo of the two men and others at the International Seminar on Global Security in Virginia, April, 1996.

{10} Interview, http://www.pravda.info/region/3601.html, discussed below. Cf. Letter of Anton Surikov to Oleg Grechenevsky, discussed below: "We cooperate with the American side in the sphere of commercial transportation not on the basis of direct commercial contracts between our agency {Far West, Ltd.} and the U. S. government, but through the intermediary company co-founded by the agency and a private U.S. company, which in its turn also interacts with the U.S. government."

{11} Yuri Yasenev, "Rossiyu zhdet oranzhevaya revolytsiya" ("An Orange Revolution is in Store for Russia"), http://www.compromat.ru/main/surikov/saidov.htm.

{12}John B. Dunlop, "Storm in Moscow": A Plan of the Yeltsin "Family" to Destabilize Russia

The Hoover Institution, October 8, 2004, http://www.sais-jhu.edu/programs/res/papers/Dunlop%20paper.pdf.

{13} Peter Dale Scott, Deep Politics and the Death of JFK (Berkeley: University of California Press, 1998), 6-15.

{14} See the anecdote in the latest edition of Alfred W. McCoy, The Politics of Heroin: CIA Complicity in the Global Drug Traffic (Chicago: Lawrence Hill Books/ Chicago Review Press, 2003), xii; discussed also in Peter Dale Scott, "The Sleep of Reason: Denial, Memory-Work, and the Reconstruction of Social Order," Literary Responses to Mass Violence (Waltham, MA: Brandeis University, 2004).

{15} Scott, Deep Politics, 164-81.

{16} This distinction between a government operation ad a socio-political force reflects the distinction I make between parapolitics and deep politics (Scott, Deep Politics, 6-12).

{17} Seymour Hersh, New Yorker, 3/17/03, http://www.newyorker.com/fact/content/?030317fa_fact. Soon after the exposure of Perle's contact with Khashoggi, which, Hersh argued, violated a federal Code of Conduct for government employees, Perle resigned his influential position as Chairman of the Defense Policy Board.

{18} Interfax, 9/21/05. See below.

{19} Richard Secord, with Jay Wurts, Honored and Betrayed: Irangate, Covert Affairs, and the Secret War in Laos (New York: John Wiley, 1992), 283-84; cf. Robert Parry, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq (Arlington, VA: Media Consortium, 2004), 136, 139.

{20} Patrick Cockburn, "Russia 'planned Chechen war before bombings,'" Independent, 1/29/00, http://www.naqshbandi.net/haqqani/features/caucasus/news/stepashin_confession.htm.

{21} Nafeez Mossadeq Ahmed, "The Smashing of Chechnya: An International Irrelevance.

A Case Study of the Role of Human Rights in Western Foreign Policy"

http://mediamonitors.net/mosaddeq5.html.

{22} John B. Dunlop, "`Storm in Moscow': A Plan of the Yeltsin "Family" to Destabilize Russia

The Hoover Institution, October 8, 2004, 15-17

{23} Dunlop, "`Storm in Moscow,'" 18.

{24} Although Dunlop does not mention it, Khashoggi "himself, in a letter addressed to Versiya, denied the allegation that the meeting occurred specifically at his estate" (Versiya, 2/3/00). The book Blowing Up Russia goes further, arguing that "no such meeting took place, and someone deliberately misinformed the Russian media." The logic advanced for this conclusion is that the bombings were not needed "by the insurgents in Chechnya to encourage the legal recognition of their independent republic" (Yuri Felshtinsky and Alexander Litvinenko, Blowing Up Russia {New York: S.P.I. Books, 2002}, 105, 108). However this "logic" ignores the more likely motive of Basaev: to weaken the influence of the moderate Chechen leader Maskhadov, and create future political space for action by Salafi Muslim jihadists. See Shireen T. Hunter, Islam in Russia: The Politics of Identity and Security (Armonk, NY: M.E. Sharpe, 2004), 152-55.

{25} John B. Dunlop, "Storm in Moscow": A Plan of the Yeltsin "Family" to Destabilize Russia

The Hoover Institution, October 8, 2004.

{26} Dunlop, "Storm in Moscow," 41: "At the end of June {2000} there arrived at the editorial board of Versiya a large postal envelope without a return address. In it was a photograph in which were depicted three men.... After a time, there was a telephone call to the editorial offices, and the man who called, who did not introduce himself, said: 'That is the photograph of the meeting of Voloshin with Basaev. It is easy to recognize Voloshin, but Basaev is the bearded man to the extreme right. That is what you wrote about {in the 3 August 1999 issue} and what you need.' The unidentified man explained that the photograph was from a still of footage shot with a video-camera..." (The third man in the photograph, Versiya asserted, was former GRU operative Anton Surikov.) Versiya published the photograph of the three men at the head of the article."

{27} Khashoggi's connections to U.S. intelligence date back to his involvement in Lockheed payoffs to Saudi politicians in the 1960s. These tended to overlap with CIA patterns of corruption; and the USAF actually ran a similar program with Lockheed, "code-named 'Operation Buttercup' that operated out of Norton Air Force Base in California from 1965 to 1972" (San Francisco Chronicle, 10/24/73, 22)." For the pattern of Lockheed payoffs tracking the CIA's, see Anthony Sampson, The Arms Bazaar (New York: Viking, 1977), 134, 227-8, 238.

{28} Anthony Summers with Robbyn Swann, The Arrogance of Power: The Secret World of Richard Nixon (New York: Viking, 2000), 283.

{29} Peter Truell and Larry Gurwin, False Profits: The Inside Story of BCCI, the World's Most Corrupt Financial Empire (Boston: Houghton Mifflin, 1992), 84.

{30} Robert Parry, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq (Arlington, VA: Media Consortium, 2004), 136, 139. A Portuguese newspaper article alleged that Khashoggi was a director of BCCI, and this claim has often been repeated. The best sources confirm only Khashoggi's profitable arms deals with the bank as co-investor, and his cousin Yassin's participation in a BCCI affiliate, Hong Kong Deposit and Guaranty (Truell and Gurwin, False Profits, 108-09, 129, 135-38).

{31} Ron Kessler, The Richest Man in the World , 181-83.

{32} "Separatism, Islam and Oil," http://www.globalsecurity.org/military/library/news/2000/02/game/344.htm. Cf. "The tendencies of interregional and international integration in North Caucasia," Caucasian Knot, eng.kavkaz.memo.ru/reginfotext/ engreginfo/id/560578.html: "One of the projects of Caucasian integration is called "Caucasian Common Market". It was offered in 1997 by Chechen politicians with the support of the western states – USA and Great Britain. This project is on the stage of implementation: in Georgia a branch of Caucasian Common Market is established, a company for insurance of foreign investments is established, an industrial construction consortium "Caucasus" is organised that apart from renovation of the port Poti plans to construct motorways and railways in Chechnya. The executive bodies of Caucasian Common Market are also represented in Baku. Caucasian-American chamber of commerce and as part of it Caucasian investment fund were organised in the USA. These organisations are going to collect 3 billion USD as the initial capital for the projects of Caucasian Common Market."

{33} Jamestown Foundation, Monitor, Vol. 3, Issue 206, 11/4/97. Another interested party before his tragic death with Princess Diana was Dodi al-Fayad, the owner of Harrod's and Khashoggi's nephew.

{34} AFP, "From criminal to Islamist: US journalist traces the life of a Chechen rebel," JRL 7252, 7/16/03, http://www.cdi.org/russia/johnson/7252-17.cfm#top. Nukhaev's criminal background was known in the West before his dealings with Lord McAlpine and (allegedly) James Baker. See A. Zhilin, " The Shadow of Chechen Crime over Moscow," Jamestown Foundation, 3/22/96, http://www.jamestown.org/publications_details.php?search=1&volume_id=3&issue_id=128&article_id=15.27; Paul Klebnikov, Razgovor S Varvarom Besedy S Chechenskim Polevym Komandirom Khozhakhmedom Nukhaevym O Banditizme I Islame (Talks with a Barbarian). . This background did not deter Margaret Thatcher from posing in a photograph with Nukhaev.

{35} "Caucasian diamond traffic" (Moscow, 2005), http://www.civilresearch.org/pdf/7.pdf: "In spring 1997 Adnan Khashoggi introduced Hozh-Ahmed Nukhaev to James Baker."

{36} Boris Kagarlitskii, "S terroristami ne razgovarivaem. No pomogaem?" Novaya gazeta, 24 January 2000; Boris Kagarlitskii, trans. Olga Kryazheva, "We Don't Talk To Terrorists. But We Help Them? A version of apartment explosions in Russia," Novaya Gazeta, 1/24/00, http://geocities.com/chechenistan/conspiracy.html).

{37} See Lilia Shevtsova, translated by Antonina Bouis, Putin's Russia (Washington: Carnegie Endowment for International Peace, 2003), 279, fn 15; citing Profil', 11/27/00, 18-20.

{38} For the complex story of Turkish involvement in the Chechen War, see e.g. "Turkey and the Chechens," BBC News, 3/16/01, http://news.bbc.co.uk/1/hi/world/europe/1223398.stm;. Hunter, Islam in Russia, 362-71.

{39} Yuri Yasenev, "Rossiyu zhdet oranzhevaya revolytsiya" ("An Orange Revolution is in Store for Russia"), http://www.compromat.ru/main/surikov/saidov.htm.

{40} Yuri Yasenev, "Rossiyu zhdet oranzhevaya revolytsiya" ("An Orange Revolution is in Store for Russia"), ru.compromat. This and other discrepancies between Dunlop and his source Yasenev were first pointed out by the Russian research group burtsev.ru at http://left.ru/2005/10/burtsev127.html .

{41} Yuri Yasenev, "Rossiyu zhdet oranzhevaya revolytsiya" ("An Orange Revolution is in Store for Russia"), ru.compromat..

{42} "KLA Funding Tied To Heroin Profits," Washington Times, 5/3/99.

{43} SIDA/Cornell Caspian Consulting, "The South Caucasus: A Regional Overview," 2002, http://www.cornellcaspian.com/sida/sida-cfl-2.html.

{44} Anton Surikov, Crime in Russia, 38-39.

{45} Tim Judah, Kosovo: War and Revenge (New Haven: Yale UP, 2002), 279, 284-85.

{46} Toronto Sun, 6/27/99.

{47} Pravda.ru, 7/3/03, http://english.pravda.ru/world/20/91/365/10389_peacekeepers.html.

{48} The map was allegedly shown by Surikov's partner Sergei Petrov to a Russian businessman in Geneva while discussing a drug deal (http://www.compromat.ru/main/surikov/a.htm).

{49} Peter Klebnikov, "Heroin Heroes," Mother Jones, January/February 2000, http://www.motherjones.com/news/feature/2000/01/heroin.html; Peter Dale Scott, "Deep Politics: Drugs, Oil, Covert Operations and Terrorism," http://socrates.berkeley.edu/~pdscott/911Background.htm.

{50} Shevtsova, Putin's Russia, 285, fn. 11.

{51} Yuri Yasenev, "Rossiyu zhdet oranzhevaya revolytsiya" ("An Orange Revolution is in Store for Russia"), ru.compromat. Cf. Robert I. Friedman, Red Mafiya: How the Russian Mob Has Invaded America (Boston: Little Brown, 2000), 265: "Astonishingly, both the {George H.W.} Bush and the Clinton administrations have unwittingly helped foster the Russian mob and the untrammeled corruption of post-Soviet Union Russia. When the CIA was asked in 1992 by Kroll and Associates, working on behalf of the Russian government, to help locate $20 billion that was hidden offshore by the KGB and the mob, the Bush national security team declined to cooperate. The Bush group rationalized, according to Fritz Ermarth, a top CIA policy analyst writing in The National Interest, `that capital flight is capital flight. It doesn't matter who has the money or how it was acquired even if by theft; so long as it is private, it will return to do good things if there was a market.'"

{52} Founder and Chair of IPROG Board and the Institute's director until April 2002 when he was replaced by Boris Kagarlitskii.

{53} Member of Yeltsin "family;" Deputy Minister of Finance and then Prime Minister for four years until fired by Putin 2/24/04.

{54} Dunlop, "Storm in Moscow," 44-45.

{55} PBS, Frontline, October 2003, http://www.pbs.org/frontlineworld/stories/moscow/khodorkovsky.html. Cf. Menatep Press Release of 4/30/02, http://www.groupmenatep.com/pressroom/pressroom_april_30_02.cfm: "30.04.2002: Group MENATEP Invests US $25 Million in Blackstone Capital Partners IV: Group MENATEP's GM Investment & Co Ltd has agreed to invest up to US $25 million in Blackstone Capital Partners IV, a private equity investment fund managed by The Blackstone Group, an investment bank with offices in New York and London. Primary investment targets will include major industrial, service and communications-related companies in the United States and Europe. In the last six months, Group MENATEP has made commitments to invest in excess of US $150 million with a number of investment firms, including AIG Capital Partners, Global Asset Management, The Carlyle Group, and now The Blackstone Group (Source: PR Newswire)."

{56}"Former Primakov Official Attacks High-Level Corruption and Yeltsin's Plans in 2000," Jamestown Foundation Monitor, 5/25/99, JRL 3306, http://www.cdi.org/russia/johnson/3306.html##9.

{57} Chechen Press, 5/28/05, http://www.chechenpress.co.uk/english/news/2005/05/28/08.shtml.

{58} As will be apparent in a moment, it makes sense that Surikov would have been opposed not only to Yeltsin but to the relatively secular, anti-Islamist Chechen leader Dzhokar Dudaev. For Dudaev see Shireen T. Hunter, Islam in Russia: The Politics of Identity and Security (Armonk, NY: M.E. Sharpe, 2004), 150-51.

{59} Military Policy Research, Archive Search Results, http://www.google.com/search?q=cache:Vt5emTAcJJEJ:www.mpr.co.uk/scripts/sweb.dll/li_archive_item%3Fmethod%3DGET%26object%3DLDS_1995_25_MAR+%22Crime+in+Russia:+the+international+implications+&hl=en. The full citation for the book is Anton Surikov, Crime in Russia: the International Implications (London: Brassey's for the Centre for Defence Studies, University of London, 1995). The database WorldCat lists it in three U.S. libraries: Columbia, Cornell, and the U.S. Army War College.

{60} www.iprog.ru/cast/?id=8.

{61} Letter of 9/17/05 to Oleg Grechenevsky, http://www.mail-archive.com/cia-drugs@yahoogroups.com/msg01967.html. According to one 1999 article in Russia, Ermarth introduced Surikov to Steve Forbes who offered to help him participate in the project –together with Ermarth and UK Ambassador Sir Rodric Braithwaite –to reveal the ties between the Yeltsin Administration and Russian corruption. But this claim needs to be treated with extreme caution, given the false stories at the time linking Ermarth, Braithwaite, and Surikov to an imaginary joint campaign against Russian corruption. See The Electronic Telegraph (UK), 9/11/99, JRI #3493, http://www.cdi.org/russia/johnson/3493.html.

{62} Commersant (n.d). In an alleged transcript of a drug-related dialogue beween Sergei {Petrov} and a businessman, the latter says, "You've said Surikov was also a CIA man." See transcript of audio recorded conversation between businessman Gennady Nikolaevich (GN) with Sergei (S), which took place on September 29, 2003 in the Hotel Noga Hilton in Geneva, http://www.compromat.ru/main/surikov/narko.htm.

{63} Left Front Press Conference, , http://left.ru/2005/11/preskonf_eng.html. Kagarlitskii was defended at the press conference by the former Yukos official Ilya Ponomarev.

{64} Another IPROG member is Ilya Ponomarev (see preceding footnote).

{65}Dunlop, "Storm in Moscow," 42. Dunlop's important and truncated description of Mekhmet has a strange and irrelevant citation: "On Erbakan, see Shireen T. Hunter, Islam in Russia: The Politics of Identity and Security (Armonk, NY: M.E. Sharpe, 2004), p. 365."But there is no need to identify Erbakan, and Hunter is silent about Mekhmet.

{66} See e.g. Mohamed H. Heikal, Daily Yomiuri, 8/8/94.

{67} Surikov's book, Crime in Russia, p. 33, confirms that "Chechen transport of armaments to Aden airport was even carried on during the civil war in Yemen in 1994."

{68} Independent (London), 8/5/05.

{69} Milli Görüş, the chief organization of Turks in Germany, is said to have as it goals the "abolition of the laicist government system in Turkey and the establishment of an Islamic state and social system ....Former Turkish prime minister Nehmettin Erbakan, whose Refah Party was banned by the Turkish Constitutional Court in January of 1998 for `activities against the country's secular regime,' is still Milli Görüş' undisputed leader, even if his nephew Mehmet Sabri Erbakan is its president" (Lorenzo Vidino, "The Muslim Brotherhood's Conquest of Europe," Middle East Quarterly, Winter 2005, http://www.meforum.org/article/687.

{70} Cf. Independent (London), 8/5/05.

{71} On 1/20/02, "Dagestani authorities announced that they had detained Nadirshakh Khachilaev, the leader of Dagestan's Laks minority groups and a former State Duma deputy, on suspicion of having organized the bombing of the Interior Ministry troop truck in Makhachkala. Khachilaev, who once headed the Union of Muslims of Russia and has also been described as one of Dagestan's most powerful mafia bosses, was detained along with another eight or so suspects over the weekend" ( Jamestown Foundation, Monitor, 1/21/02, http://jamestown.org/publications_details.php?volume_id=25&issue_id=2179&article_id=19084). Cf. Hunter, Islam in Russia, 264-65.

{72} Yuri Yasenev, "Rossiyu zhdet oranzhevaya revolytsiya" ("An Orange Revolution is in Store for Russia"), ru.compromat.

{73} "Russia is also concerned about the HT {Hizb ut-Tahrir al-Islami}, for it fears that the movement will spread to Muslim regions of Russia. Russian intelligence is now collaborating closely with the Central Asian states to combat the HT" (Ahmed Rashid, Jihad: The Rise of Militant Islam in Central Asia {New Haven: Yale UP, 2002}, 132). Cf. Surikov statement to Sufis below.

{74} Graeme Herd with Ene Rôngelep and Anton Surikov, Crisis for Estonia? Russia, Estonia and a Post-Chechen Cold War. London Defence Studies, 29 (London: Brassey's for the Centre for Defence Studies, 1994), 33.



{75} Cf. B. Raman, "Istanbul: The enemy within," Asia Times, 11/22/03, http://www.atimes.com/atimes/Middle_East/EK22Ak01.html. In this essay Raman shows the direct links between Turkish terrorists (former disciples of Erbakan) and groups like Lashkar-e-Toiba sponsored by Pakistan's ISI.

{76} Yuri Yasenev, "Rossiyu zhdet oranzhevaya revolytsiya" ("An Orange Revolution is in Store for Russia"), ru.compromat.

{77} "Geroinovyi tur." By Nikita Kaledin. Stringer-news, November 4, 2003: http://www.stringer-news.ru/Publication.mhtml?PubID=2448&Part=39; partially translated in "Afghan Drug Scene: The Poppy Power," News Central Asia, http://www.newscentralasia.com/modules.php?name=News&file=article&sid=406.

{78} Pravda.ru, 7/30/01, http://english.pravda.ru/main/2001/07/30/11317.html. Surikov's accusation was noted by Maureen Orth in the March 2002 issue of Vanity Fair: "To find out, I track down in Moscow the only Russian official who has spoken on the record about this issue. Dr. Anton V. Surikov is chief staff of the Committee of Industry, Construction, and High Technology in the Russian parliament. Last spring he told the Moscow News that the mayor of Dushanbe was a major drug dealer. That interview precipitated not only a denial from the mayor but also, according to Surikov, a demand that the Tajik journalist the mayor

erroneously believed was Surikov's source be arrested." In the same interview, Surikov also noted that, "as early as the mid-90s, the Russians were`buying heroin and transporting it from the northern part of Afghanistan to Russian military bases in Tajikistan by truck and helicopter.'"

{79} According to Yasenev, "Lunev is responsible for security and `strong arm operations'. For his operations he hires the former and active duty officers of Russian secret services, including spetsnaz. In 1990-91 Lunev took part in overthrowing the regime of Zviad Gamsahurdia in Georgia." Lunev thus helped install Shevardnadze, who in 1991 supported Yeltsin against Gorbachev.

{80} http://www.pravda.info/news/2695.html,

Анатолий Баранов и Антон Суриков вошли в состав руководства агентства «FarWestLtd» - 2005.05.03.

{81} http://www.pravda.info/region/3601.html.

{82} http://pravda.info/aboutus/.

{83} Kagarlitskii, Director of IPROG, has also published many books in English, as well as in The Nation, Zmag, Counterpunch, and other journals.

{84} Those in both organizations are Anton Surikov, Vladimir Filin, Ruslan Saidov, Anatolii Baranov, Audrius Butkevicius, and Natalia Roeva. This list differs from the paravda.info list only in the omission of Likhvintsev.

.

{85}For Bout's involvement with blood diamonds, and the US failure to deal with this problem, see Douglas Farah, Blood from Stones: The Secret Financial Network of Terror (New York: Broadway Books, 2004), especially 44: "Intelligence officials say Bout {following 9/11} flew U.S. clandestine operatives into Afghanistan and badly needed ammunition and other supplies to the Northern Alliance. In exchange, they said, his past activities would be ignored." For more on Bout see Nick Kochan, The Washing Machine: How Money Laundering and Terrorist Financing Soils Us (Mason, OH: Thomson, 2005), 36-61.

Cf. Robert Baer, Sleeping with the Devil (New York: Crown, 2003), 15: "In the early 1990s, Osama bin Laden's main supply sergeant was Victor Bout, a former Russian military officer who had served in Angola, where he got involved in arms trafficking and oil. ...Bout had a reputation for delivering anything, anywhere, including the nasty stuff."

{86} Yasenev, "Rossiyu zhdet oranzhevaya revolytsiya."

{87} Georgian tycoon, close associate of Boris Berezovskii. Cf. Klebnikov, Godfather of the Kremlin, 262: "Often Berezovskii acted in Chechnya through Badri Patarkatsishvili, the Logovaz partner who, according to the Russian security services, had long served as the company's primary intermediary with organized crime groups." Klebnikov reports (161, cf. 331) that Moscow police heard in early 1995 from a gangster that "he had been approached by Berezovsky's aide, Badri, with a contract for Listyev's assassination." (In February 1995 Listyev, the director of Russia's most important TV network ORT, was shot dead in his apartment building.)

{88} Diligence, LLC Press Release 12/8/03, http://www.diligencellc.com/DME_announce.html.

{89} David Isenberg, "Myths and mystery," Asia Times, 5/20/04.

{90}Financial Times, 12/11/03. Cf. Asia Times, 5/20/04.

http://www.corpwatch.org/article.php?id=9375. "Mr Daniel's Houston investment fund, Crest Investment Corporation, employs Neil Bush as co-chairman." Ed Rogers, Diligence's vice chairman, was one of George H.W. Bush's top assistants when he was US president. On resigning from the White House, he negotiated a lucrative contract to act as lobbyist for the former Saudi intelligence chief and BCCI front man Kamal Adham, at a time when American and British prosecutors were preparing criminal cases against him. Rogers used Khashoggi as a go-between to secure the contract, which was canceled after White House criticism of it (Truell and Gurwin, False Profits, 362-64).

{91} Ibid.

{92} Wayne Madsen,

{93} The Baltic Times, 9/23/05, http://www.baltictimes.com/hot1.php?art_id=13659.

{94} Interfax, 9/21/05, http://www.interfax.ru/e/B/politics/28.html?id_issue=11386915. Cf. http://www.mosnews.com/news/2005/09/22/berezovskyriga.shtml: "Berezovsky is meeting Neil Bush on business, as the U.S. president's brother is a stockholder of Berezovsky's educational company Ignite, the spokesperson {for Belokon Holding} said."

{95} www.compromat.ru/main/zuganov/surikov2.htm.

{96} Alexander Nagorny "Narcobarons from the CIA and MI-6" Pravda-info 2004.09.13 http://www.pravda.info/kompromat/1203.html.

59 Anthony Fenton, "Kosovo Liberation Army helps establish `Protectorate' in Haiti," citing Flashpoints interview, 11/19/04, www.flashpoints.net). Cf. Anthony Fenton, "Canada in Haiti: Humanitarian Extermination," CMAQ.net, 12/8/04; http://www.cmaq.net/fr/node.php?id=19240.

{98} San Francisco Chronicle, 5/5/99.

{99} New York Times, 6/2/04.

{100} Steve Coll, Ghost Wars: The Secret History of the CIA, Afghanistan, and Bin Laden, from the Soviet Invasion to September 10, 2001 (New York: Penguin Press, 2004), 536: "Massoud was a drug trafficker." Cf. 345, 430, 458, 516, 519.

{101} Philip Smucker, Al Qaeda's Great Escape: The Military and the Media on Terror's Trail (Washington: Brassey's, 2004), 9. Ironically, this decision by British and American officials (the latter almost certainly CIA) may have contributed to bin Laden's escape from Tora Bora in December 2001. Cf. CNN, 12/29/01: "Abdullah Tawheedi, a deputy head of intelligence in Afghanistan, says he has received `reliable information' that the terrorist leader paid a `large amount' of money to buy his way out of Afghanistan. Tawheedi named Haji Zaman -- a well-known independent military commander -- as the man responsible for taking bin Laden across the border to Pakistan. Ironically, Haji Zaman had recently been fighting against bin Laden and his al Qaeda organization. But Tawheedi says he believes Haji Zaman was apparently persuaded -- by money -- to help the terrorist leader."

{102} B. Raman, "Assassination of Haji Abdul Qadeer in Kabul," South Asia Analysis Group, Paper No. 489, www.saag.org/papers5/paper489.html: "11.With an Afghan passport, Afridi, a Pakistani national belonging to the Federally-Administered Tribal Areas (FATA), voluntarily traveled to Dubai , where he allegedly negotiated with American authorities the terms of his voluntary surrender and from there he boarded a cargo flight to the US in December 1995 to hand himself over to the US drug control authorities. He was sentenced to three and a half year's imprisonment. After serving his sentence, he returned to Pakistan in August,1999. He was arrested by the Pakistani drug control authorities and prosecuted in a drug smuggling case pending against him. The court sentenced him to seven years imprisonment in the middle of 2001. Hardly had he started his sentence in a Karachi jail, when he was got released by the ISI, reportedly at the request of the CIA, after the war against the Taliban and the Al Qaeda had started on October 7, 2001, and allowed to proceed to his home in the Khyber Agency." Cf. Asia Times Online, 12/4/01; Peter Dale Scott, "Pre-1990 Drug Networks Being Restored Under New Coalition?" http://ist-socrates.berkeley.edu/~pdscott/qf5.html.

{103} B. Raman, "Assassination of Haji Abdul Qadeer in Kabul, South Asia Analysis Group, Paper No. 489.

{104} Raman, op. cit., emphasis added.

{105} A possible explanation for the release and recruitment of major traffickers in 2001 would be the desire to combat the influence in the traffic of narco-barons who supported the Taliban, such as Bashir Noorzai and Juma Khan. The fact remains that the Taliban had effectively suppressed the planting of opium, a major event in drug suppression that has now been completely reversed by the U.S. invasion.

{106} Peter Dale Scott, Drugs, Oil, and War (Lanham, MD: Rowman & Littlefield, 2003), 49-50.

{107} Yossef Bodansky, "The Great Game for OIL," Defense & Foreign Affairs Strategic Policy, June-July 2000, pp. 4-10, http://news.suc.org/bydate/2000/Sep_28/11.html. Kagarlitsky's article itself can be seen as an important part of this campaign.

{108} U.S. Department of State, Congressional Budget Justification: Foreign Operations, Fiscal Year 2005, 363; quoted in Michael T. Klare, Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency (New York: Metropolitan Books/Henry Holt, 2004), 137.

{109} Klare, Blood and Oil, 136, 137.

{110} Knight-Ridder, 10/31/04.

{111} Smucker, Al Qaeda's Great Escape, 88.

{112} Smucker, Al Qaeda's Great Escape, 110-11. Some of those whose escape from Tora Bora was assisted later led terrorist attacks in Saudi Arabia and Morocco.

{113} Christopher Deliso, "The Stakes Are Too High for Us to Stop Fighting Now," interview with Sibel Edmonds, http://antiwar.com/deliso/. For a survey of the Sibel Edmonds story, see David Rose, "An Inconvenient Patriot," Vanity Fair, September 2005: "Much of what Edmonds reportedly heard seemed to concern not state espionage but criminal activity. There was talk, she told investigators, of laundering the profits of large-scale drug deals and of selling classified military technologies to the highest bidder."

{114} The Iraq War is also beneficial to the drug traffic. See the following story from the Balochistan Post, quoting the London Independent: ""BAGHDAD: The city, which had never seen heroin, a deadly addictive drug, until March 2003, is now flooded with narcotics including heroin. According to a report published by London's The Independent newspaper, the citizens of Baghdad complained that the drugs like heroin and cocaine were being peddled on the streets of the Iraqi metropolis. Some reports suggest that the drug and arms trafficking is patronized by the CIA to finance its covert operations worldwide."

{115} Wall Street Journal, 11/24/03.

{116} "In June 1992, independent Lithuanian Minister of Defense, Audrius Butkevicius, hosted a symposium to thank the Albert Einstein Institution's key role during the independence process of the Baltic countries" (Thierry Meyssan," The Albert Einstein Institution: non-violence according to the CIA," http://www.voltairenet.org/article30032.html). Cf. Paul Labarique : «Les dessous du coup d'État en Géorgie», text in French, Voltaire, January 7, 2004.

{117} Saidov, in his own words, was in Andijan at the time of the subsequent turmoil in the Uzbek Fergana Valley, which straddles the drug route through the Kyrgyz town of Osh: "`In May 11-18 I was in Uzbekistan, in the Fergana Valley, where I witnessed the suppression of the people's uprising in Andijan by the dictatorial regime of Islam Karimov,' - says the Dagestani historian Ruslan Saidov" (http://www.muslimuzbekistan.com/rus/rusnews/2005/05/rusnews30052005_5.html).

{118} http://www.apn.ru/?chapter_name=impres&data_id=430&do=view_single.

{119} Из Оша в Андижан("From Osh to Andijan"), http//www.polit.ru/analytics/2005/06/06/andij_print.html.

{120} Christopher Deliso, "The Stakes Are Too High for Us to Stop Fighting Now," interview with Sibel Edmonds, 8/15/05, http://antiwar.com/deliso/.

{121} Indira Singh testimony, 9/11 Citizen's Commission, 130, http://justicefor911.org/September-Hearings.doc.

{122} Khashoggi is perhaps the most famous example of a Saudi-Israel connection. One of the few in the United States who has dared to discuss the 9/11 clues pointing towards Israel is Michael C. Ruppert, Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil (Gabriola Island, BC: New Society Publishers, 2004), 259-68, 578-79.

{123} Jonathan Beaty and S.C. Gwynne, The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI (New York: Random House, 1993), 347.

{124} Michael Moore, Dude, Where's My Country (New York: Warner Books, 2003), 15. The same superficial analysis is a blemish of his film Fahrenheit 911.

{125} David Ray Griffin, The 9/11 Commission Report: Omissions and Distortions (Northampton, MA: Olive Branch Press/Interlink, 2004), 5.

{126} Commenting on the list published by Pravda.info on May 3, 2005, http://www.pravda.info/news/2695.html.

Edited by tears (Nov. 7, 2017 14:59:52)

http://www.defencejournal.com/2002/june/narcotics.htm posted:

Political Economy of Narcotics — An Overview
Columnist Hassan Bashir examines the ramifications of narcotics on the economy.

Introduction

The Problem Defined

In recent years, the world has watched narcotics cropping, trade and consumption turn into an international crisis of unprecedented gravity. The abuse and control of illicit narcotics have come to pervade major powers relations with the Third World. The issue is a constant source of conflict and mutual recrimination between North and South. Traditionally the main drug-producing countries were poor and essentially agricultural whereas the main consumer markets were the industrialized and rich states. This distinction, however, is also undergoing a change as we shall see later. The narcotics trade; generates a transfer of billions of dollars from North to South annually, and has attained an economic and political foothold in some Third World countries. The consuming and producing countries blame each other for the exponentially growing crisis and advocate respectively the supply-side and demand side solutions. Proposed plans for controlling drug cultivation and production often face nationalist resentment. Moreover, political elites in some Third World countries see anti-narcotics campaigns as imposing severe economic and social costs and also as creating new and formidable political challenges.

The cocaine traffic in the Western Hemisphere and heroin trade in some Asian states, constitute a particularly severe manifestation of the North-South conflict over drugs. The consumer states especially the US expend considerable diplomatic effort on pressing Pakistan, Bolivia, Colombia and Peru. The major countries reducing heroin and cocaine — to curb illicit narcotics cultivation and refining and thus trafficking into the US. The consumer states provide these producing countries with funding, technical assistance and personnel for narcotics control programmes, such arrangements bear heavy costs on these countries. Moreover, the issue has been linked to foreign aid. Countries that do not take effective measures to control illicit drug production trafficking and money laundering can lose certain specified economic and military assistance and trade preferences such as sugar quotas.

Supply-side moves, however, have been of little or no use in stemming the flow of drugs, into the main consumer markets of the same. These governments lack the resources to counter the traffic, there is in fact no compatibility between the resources available to drug traffickers and the resources available to drug combatants. Perhaps, even more important than this is that governments as well as important constituencies in the main producing countries do not give the war against narcotics their unconditional support, even though, this is true that drug trafficking in many respects adversely affects the source countries — rising number of drugs addicts, rampant corruption, escalating levels of violence, declining moral standards and above all a deteriorating national image, being few of the most obvious consequences. The reasons for this reticence are complex and are discussed in the coming chapters, however, several points deserve discussion at the outset.

First, anti-narcotics moves entail serious economic and political costs. Over the years, narcotics business has flourished with an amazing speed. In fact it can now duly be considered an industry, though of course illicit in nature.

The huge sums of narco-money are laundered through untraceable systems and invested in various sectors of national economic activity. Evidence suggests that in most drug producing countries, governments though theoretically dedicated to the war against drugs, do not discourage the flow of narco-money into the national economy. Any crackdown on narcotics industry, therefore, can seriously shrink the producer country’s foreign exchange reserves and also give rise to the unemployment figures to an unprecedented degree resultantly causing widespread discontent in the masses.

Second, the narcotics industry as a whole has accumulated significant political clout. Drug traffickers play the role of power brokers and are a major source of funding for political campaigns. Traffickers also have penetrated and corrupted nearly every important national institution.

Third, the war on narcotics is not especially popular in the growing regions, in fact it is perceived as a programme imposed on these regions by the consumer states and especially by the United States. Measures such as extradition, the spraying of illicit crops, armed operations attack against drug laboratories and economic sanctions against narcotics exporting countries, have provoked considerable anti-consumer sentiment. Furthermore, most leaders in producing countries see the supply-side approach to drug control as fundamentally flawed. In their view, demand not supply, drives the international drug traffic.

The problems of narcotics control, therefore, stem largely from the power of entrenched narcotics interests. However, such problems are also attributable to other factors like, unstable political structures, tensions between civilian and military authorities and the absence of strong public support. The governments of Pakistan, Colombia, Peru and most other producing states have never exercised full control over their national territories. Vast sections of these countries have always been a political no-man’s land. In these remote areas, traffickers establish their plantations, laboratories, air strips and storage facilities etc.

Public opinion imposes an additional constraint on drug control programmes. Top national leaders affirm their commitment to the war against drugs, but facts show that drug trafficking and drug abuse rank at the bottom of concerns of producer states publics, i.e. well below problems such as inflation, unemployment, crime and terrorism etc. Furthermore, there is a widespread belief in the public that the drug trade is beneficial for the economy, even if it is harmful in other respects.

The attitude of military establishments, also constitute an obstacle to narcotics control efforts. Corruption, strategic considerations, ideology, and institutional self-interest all affect the military’s posture vis-a-vis the war against drugs. Military factions in Colombia and Pakistan, for example, have been linked to cocaine and heroin traffickers. Moreover, the military, for its own institutional reasons, seeks to keep the police as ill-armed and as immobile as possible. In other words military opposition has prevented the drug enforcing agencies and civilian leaders in producing countries, from raising an effective drug-fighting force.

To sum up, many factors account for the narcotics producing governments difficulty in taking decisive action against the illicit drug trade. Crackdowns can cause serious repercussions in these states, where prices for licit exports have collapsed, and majority of population is unemployed or underemployed. Anti-drug policies can generate massive popular discontent and add to government political troubles. Also, that governments do not possess a popular mandate for carrying out a major anti-drug initiative. Furthermore, the drug issue clearly constitutes a source of conflict in civilian-military relations.

Due to the wide range of issues related to narcotics production and trafficking, it became almost impossible to take into account and analyze every facet of the problem within the confines as exercised in this study. The theme and scope of this study, therefore, has been limited to making a comparative analysis of narcotics menace as witnessed in Latin America and as emerging in Pakistan. Considered thoroughly are the dynamics of growth and control of narco-problem in both the regions.


Methodology

The methodological tools employed during the course of this study have been the primary as well as secondary sources of information. A simple deductive-interpretative method has been used to substantiate the arguments. The collection of data has been in the sphere of objective indicators like policy decisions by governments, various government reports on narcotics issue, surveys by law enforcing agencies and other organizations working on narcotics. Other than these, published works of various scholars who have analyzed different dimensions of the narcotics problem, have also been taken into account. Based on these objective criteria are the interpretations and deductions about these markers. This exercise has been organized in a manner to include the theoretical conceptualizations of capitalism as a mode of economic activity, and the place for the illegal business of narcotics in this broader theoretical framework.


Organization of the study

First chapter of the study gives an overview of the political economy of narcotics. Discussing briefly the working of the capitalist economy and the role of narcotics business in this framework. Also taken into account are the political forces which have helped in the emerging of drug trade as one of the most profitable illegal businesses in the history of the world.

Second and third chapters discuss in detail the dynamics of growth and control of the Latin American cocaine industry. Taken into account are the geography of cultivation, trafficking trends and politico-economic effects of the cocaine trade on these countries. The third chapter on dynamics of control views the drug law enforcement scenario, concentrating on role of the public opinion, governments and military.

Fourth and fifth chapters take into account the dynamics of growth and control of Pakistani heroin industry. Concentrating on the genesis of the drug problem in the country and whatever measures have been adopted to check the same.

Sixth chapter presents a comparison between Pakistan and select Latin American countries of Colombia, Bolivia and Peru. The conditions prevailing in all these drug producing states are compared and deductions have been made on their bases.


Chapter 1
Political Economy of Narcotics — An Overview

The cultivation and production of different narcotics is perhaps as ancient as the mankind itself. Ancient scriptures and other evidence confirms the use of narcotics as a centuries old tradition in various civilizations. However, the popularity and problems associated with drug use, are peculiar to the post industrial society. The drug phenomenon as it exists today shares its origins with other modern phenomenon, such as the ecological crisis.

Even though use of opium, coca and alcohol, is old and must certainly have caused problems for humanity for time immemorial. But the fact is that the use of these and their psychoactive after effects, did not spread to the masses to the extent that they do today. In the modern society there has been a kind of “massification” of drugs. Legal or illegal, they are available to all strata of people as commodities; at all hours of commerce, provided the customers can pay. This situation is new since the advent of capitalism.

The very essence of capitalism is that it tends to earn profit through surplus value, created by wage labourers in the process of producing commodities. In other words, under capitalism profit is created by paying the workers less than the total value that they produce. The difference between these two constitutes the surplus value. However, it remains only a potential profit and not an actual one. In order to realize a profit, the capitalist has to sell the commodities produced by labourers; to the consumers. Hence, establishing that in a capitalist system what is produced must be consumed before a profit can be realized. In other words, without consumption there is no profit. Therefore, consumption becomes a necessary link, in the cycle of capital formation and reproduction i.e. the basis; for the creation of surplus value and then its conversion into money, or realized profit.

Moreover, as under capitalism things are created not for their utility, but to be sold in order to realize the profit in shape of money; the production is potent with expansion. In other words when commodities are produced for the purpose of satisfying certain specific needs; the fulfilment of this purpose tends to put a limit on the level of production. However, if the same commodities, as in the capitalist system; are weighed for their exchange value in the course of which profits are realized; money making becomes an end in itself and the process of accumulating profit tends to proceed without bounds.

Furthermore, under these circumstances, the production should be kept up unstopped, until it meets up with its inherent contradictions like over-supply of goods exceeding the existing level of demand, which checks the flow of production. Past experiences in world economy show that over production, caused periodic recessions and depressions, which consequentially caused setbacks in profit making.

In order to counter this inherent tendency of production in a capitalist system, capitalists seek to expand their market to keep up with the production and in this quest they broaden the sphere of their economic activity on a systemic scale. In the pursuance of this purpose capitalist states in the post have followed and initiated policies like colonialism.

The expansion of the market, consequentially, results in increased consumption of commodities which as noted earlier works as the very basis of capital formation and reproduction.

To sum up capitalism, it is a system which focuses on earning profit through monetizing the surplus value of commodities. In doing so the capitalists increase their production and create markets in which the production gets consumed, giving them profits. This economic logic applies precisely to the reduction of narcotics under capitalism. However, the illicit nature of the commodity here creates certain exceptions, which are taken into account in the following discussion.

One important point to consider here would be that it is not simply the use of narcotics as a means of profit-making which encourages its production. Instead, it is the involvement of narcotics in the profit-making process under the capitalist mode of production which promotes their use in an increased way. In other words the production of drugs created out of the exigency of profit making, tends to push up the consumption level.

The medical profession has championed the use of these to deal with various behavioural manifestations, ranging from mild problems of living to severe psychoses. Moreover, in the process, the pharmaceutical industry has earned great profits and also helped create a whole generation of pill takers hooked on drug habits.

Another force which creates or has the potential to create a community of drug addicts as well as a realized version of the same is the role of medical profession in ousting the use of certain drugs from the arena of legitimacy. Where it may sound as a very right or even a moral one, the initiative has an inherent irony, that banning a drug does not necessarily make it go away, instead it may on the other hand increase its popularity by making it move alluring with the attached sensational publicity to that drug. In this context, the mass media also plays an important role by increasing campaigns on warning about drug dangers. This done in the name of health and morality where serves the purpose also links illicit drugs with the life in the fast lane and glamorize them. Hence, increasing the vulnerability of the populace towards drug addiction.

In sum, therefore, it can be said that the very working of the medical industrial complex in a capitalist framework facilitates the increased use of drugs. The forces which would have been considered sterile in a pre-capitalist society become instrumental in vice versa. However, modern drugs scenario also needs to be analyzed in its political context.

Drugs and politics, share a very long partnership. As referred to earlier the advent of capitalism initiated the need to find colonies for greater markets and resource bases in order to increase the wealth of nations. In achieving these ends, drugs were often used as the means. For example the British waged two wars in mid-19th century to force opium into China, which had imposed a ban on the drug. The larger issue behind these wars was opening up of China for commercial purposes, but the immediate cause of war was opium. Furthermore, in making these wars successful the British government also worked in close connection with the smugglers of the forbidden substance. Two conclusions can be derived from the above related incidents. One, the emergence of drug-politics and two accomplicity of a government with members of organized crime. However, this work pattern by any government and especially a colonial power was not so out of character in the colonial times and practically almost all colonial powers employed such methods. The larger aim of such methods was always opening up of new markets for the mother countries products and in a capitalist system any means which led to this aim were justified. Moreover, drugs themselves were a good source of revenue for the colonial power, therefore, they in fact encouraged the drug trade in pursuit of profit. The effects of such policies of production and consumption of drugs should be fairly visible.

The association between drug trafficking and national politics took a truly bizarre turn with the start of post-World War II era, when a threat was presumed to the capitalist system. The major characteristic of the post-World War II era was division of world into two diagonally apart blocs, which represented anti each other political and economic systems. Champions of the two blocs, the United States and the former USSR adopted different policies to protect their politico-economic systems against rising  challenges posed by each other; in peripheral areas of the world.

In turning back these challenges both the super powers, the US government as well as the political regimes in the former USSR, more than once turned for help to organized criminals and dictators, who enriched themselves through illegal means, drug trafficking inclusive. In other words as a return for the help provided by these counter-insurgent allies in holding down the rebellion at the edges of the empire against rising challenges, the governments of major powers have in the name of national security, tolerated, protected and even aided illegal drug trafficking activities.

This situation reveals an inherent paradox in anti-narcotics policies of world’s major powers, especially that of the US, which spends untold millions of dollars every year to halt the flow of illicit drugs into its borders and also to shut their production in the source countries. Moreover, it was the United States which for the first time declared drugs like Marijuana, Cocaine and Heroin etc illegal for all practical purposes, in the US in 1914. The US Government did so in order to stop the increasing drug abuse in America. The argument of the government was that an increased addict population was a threat to the national security of the United States.

The passing of law against narcotics use and trade did not stop the two; instead it took the drugs to the underworld where they opened doors for the elements of organized crime to start trafficking in this outlawed commodity, and feed the growing habit in the United States. Moreover, the banning of drugs increased their price to an unprecedented degree hence making the whole business too lucrative for any criminal organization to resist.

The governments which declared drugs and drugs trafficking illegal in the name of national security have helped the same in developing into most profitable criminal activity in the history of the world, and that too has been done for national security concerns. Furthermore, in a broader sense, banning of narcotics, tolerance towards narcotics trade and flourishing of the illicit narcotics industry; all have occurred for the cause of the capitalist world. That United States banned the drugs because it feared an unsustainable addict population. That the same tolerated the activities of organized criminals involved in narcotics trade in order to the capitalist economic order of the world. And that illicit narcotics trade flourished in order to meet the very essence of capitalism i.e. higher profits through greater consumption and increased production of goods.


Chapter 2
Latin American Cocaine Trade: The Dynamics of Control

The preceding discussion shows, that breaking the power of narcotics dealers and lobbies in Latin American countries will be extremely difficult. Serious structural barriers impede drug law enforcement in these countries, which include weak central governments, the lack of strong public support for narcotics control and divisions within governments over anti-drug policy.
To curb the crisis many industrialized states, which are also the largest consumer markets for drugs; support a number of supply side programmes in cocaine producing countries. Funding for these programmes, by United States alone has been upto $ 50 to $ 60 million a year. However, when compared to the earnings of the cocaine dealers which are between $ 5 to $ 6 billion per year; the funds allocated to anti-drug activities seem very meagre and one may conclude from this vast difference of figures that infusion of anti-drug aid, might not be the answer to the problem. The following discussion focuses at the narcotics control problem and strategies as posed and applied in narcotics producing Latin American nations. The discussion largely takes into account the US efforts to check the drug trade into her borders. US is the largest consumer market for drugs especially cocaine and has spent the most on anti-drug efforts.


The Problems in Effective Drug Control

Narcotics producing Latin American nations are poorly equipped politically and administratively to control cocaine trafficking across their borders. These governments often exercise little or no effective control over territories where drug production flourishes. Such areas are remote from metropolitan centres, relatively inaccessible, characterized by mountainous or jungle terrain, and patrolled by guerrillas or other hostile groups. Vast regions of northern Bolivia, eastern and southeastern Peru, and southern Colombia are in effect a no-man’s land where government forces vie for political control with drug traffickers and anti-government guerrillas.

In these existing conditions, the cocaine industry represents a force for colonization, bringing a human presence, road penetration networks, airstrips, satellite industries and some licit agriculture (mainly subsistence farming) to regions that previously were virtually uninhabited. However, cocaine industry tends to weaken governments’ already weak hold on their territories.

The other side of the territorial problem is official corruption. Bribery it can be argued, has long been the cement of political and social interaction in much of Latin America. However, drug traffickers, especially cocaine traffickers, capitalize on this tradition to transform the existing power structure, to create networks of compliant officials at national department and local levels. As already discussed these networks vitiate the effectiveness of criminal justice systems. In Bolivia during 1986, for example, Chapare traffickers reportedly were paying the police $ 20,000 to $ 25,000 for a 72 hour window of impunity for loading coca paste into air planes or for moving major shipments by land or by river. In Colombia, Medellin’s famous Olaya Pemana International Airport, located in the centre of the city, was for several months in 1986 the scene of a major cocaine smuggling operation that apparently was carried out with the full knowledge of police commando unit on permanent guard at the airport. As noted previously the Colombian mafia’s network of informants enables its Chief Executives to escape police dragnets and live a fairly comfortable existence in major cities such as Medellin and Cali. On the rare occasion when traffickers are arrested, they usually can bribe their way out of jail or right at the spot. Law enforcement in Latin American countries can hence be considered to work simply as a way to share in the proceeds of the drug trade. The police takes bribes for not making arrests and seizures. When the police do make successful crackdowns, the confiscated drugs are often resold on the illicit market.

Corruption has devastating effects on drug law enforcement in Latin America. Unfortunately, the disease has no cure. In the Andean countries, the cocaine industry represents one of the few important sources of wealth. At the same instance, poverty in these countries is rampant, economic opportunities are circumscribed and salaries of public servants often barely exceed the subsistence level. Under such conditions cocaine dealers find it easy to co-opt parts of the state apparatus. A survey of the Medellin Metropolitan Police Department says:

“Only corruption can explain how a second lieutenant earning 35,000 pesos a month can make a million-peso deposit in his account and live in 18-million peso apartment”.

Hence, for a vast group of underpaid policemen, judges and government officials in Colombia and elsewhere in the Andean world, the price of honesty may seem excessively high.


Public Opinion

The success of any drug control programme in any society, requires among other things, a high degree of political consensus. The top leadership in drug producing nations lacks this will. However, the same is not reflected at the grass root levels. There is not yet an awakened public consensus against drugs in the Andean countries. According to various US surveys drug trafficking ranks near the bottom of public concerns in Colombia, Bolivia and Peru. The drug trade is outranked by problems such as unemployment; poverty; terrorism; and the lack of housing; education and health care. In short Andean publics do not view the drug problem as a survival issue.

Moreover, the cocaine industry is not usually a prime target of politicians seeking election to public office. The candidates, it seems evidently, do not presume the subject to be of concern to the voters or may be they think that raising the drug may make them lose their votes instead of gaining. In addition, the prevailing attitude towards drug control is characterized by ambivalence, pessimism and hostility. There is a widely held perception in Latin American countries that the drug traffic is good for the economy even if it is harmful in other respects. Top leaders and officials appear to share this perception. For example, Bolivia’s president Victor Paz Estenssoro remarked in 1986, ‘cocaine has gained an importance in our economy in direct response to the shrinking of the formal economy’.

Estenssoro and other leaders would be well aware of the destabilizing effects of drug trafficking on government institutions, on public morals, and on their countries international relations. Yet they seem as afraid of the narcotics control as they are of the narcotics industry and the mafia itself. The debt crisis, economic stagnation and rampant unemployment that haunt most countries in the region reinforce this vision. Indeed, if the cocaine industry disappears from the scene tomorrow the results will be catastrophic, the evaporation of hard currency reserves massive unemployment, an increase in crime and subversion in rural areas and a flood of new migrants to cities; are few to be mentioned. Such a situation could only play into the hands of extremist groups and may cause the seizure of power by the military.

Other than these obstacles in the way to effective narcotics control in Latin America, a major one still needs to be discussed. The Latin Americans resent US interference in their affairs. As discussed previously. Narcotics lobbies consistently equate drug control with a loss of national sovereignty. The populace and intellectuals of drug producing nations often question both the legitimacy and the effectiveness of Washington’s supply-side approaches to drug control.

In sum, anti-drug policies in the drug producing countries do not enjoy wide popular or official support. Latin American public see drug control programmes as a low national priority. Governments likewise are inclined to feel that the war against drugs interferes with more pressing priorities, for example, coping with unemployment and poverty, and servicing foreign debt. Moreover, Latin Americans from top government officials to down think that successful crackdown on drugs will hurt the economy.

Finally, there is a tendency to view drugs as essentially a consumer side problem and the solution presented by most Latin Americans is that consumer countries should reduce their intake of cocaine and other harmful drugs.


The Role of Latin American Governments

Most Latin American governments find themselves in an awkward situation in the war against narcotics. At one place cocaine trade is an important source for injecting needed dollars into Andean economies; and gives employment to a vast section of their populace. Therefore, any anti-narcotics activity calls for a massive opposition from those who make their living from the industry. Moreover, waging and investing in the wars against narcotics comes into direct conflict with other priorities e.g. coping with inflation and unemployment, promoting economic growth and combating crime and subversion.

At the same point, Latin American governments are under some domestic and international pressure to control drug trafficking. The public consensus on drugs, as discussed earlier, is not very highly developed, but there is some concern, especially over increased consumption of coca products among young people. Moreover, these governments face the threat of reprisals by the US for not taking strong action.

These paradoxical tendencies condition the ways that governments approach narcotics control. There have been several distinct approaches. First, governments set up elaborate bureaucratic structures for fighting the drugs trafficking. Second, they sought to maximize the inflow of international narcotics related assistance. Third, they have tried to refocus drug control strategy, stressing interdiction over eradication. However, continuing controversy over narcotics policy within the bureaucracy and within the society at large has immobilized governments in important ways. They cannot implement enforcement measures that could materially advance the cause of drug control. Significant measures apparently on hold include the use of herbicides to eradicate coca and the extradition of leading cocaine traffickers to the United States.


US Pressures for Coca Eradication

The United States exerts the strongest pressures on Latin American governments over coca eradication. US legislation makes aid to Peru and Bolivia contingent on those countries’ progress towards eradication, as a relatively cheaper solution to her own drug problem, the officials believe it is easier to locate and destroy crops than to locate and destroy laboratories. However, eradicating coca in the field will pose a great problem for Latin American governments, in the shape of protests by coca growers, the number of these farmers goes into tens of thousands. Other than this it is believed by the governments of most coca growing countries that if the crop is totally eradicated the anti-government guerrilla groups will become more powerful and effective. This will be so because the unemployed of the drug industry will share their anti-government feelings with the guerrillas. This situation on the whole will result in serious political and social consequences. Due to these reasons most drug producing countries have kept the eradication of coca programmes at a standstill. At this point the last hope for winning the war against cocaine in Latin America is the large-scale application of herbicides against coca plants. However, even this faces a major challenge by the governments and in fact even more by the environmentalists. Application of large scale herbicides will damage the jungle and might also pose serious consequences for human beings and the wildlife. Moreover, companies that manufacture herbicides are also very cautious on the issue these companies are almost certainly afraid of lawsuits stemming from improper use of their chemicals. One especially interesting case in this regard was in Peru where Eli Lilly a manufacturing company, refused to supply tebuthiuron (trade name spike), for coca eradication programmes. A company representative gave the press statement that improper use of the chemical can cause irreversible damage to flora and fauna and even affect human beings if it is not applied with extreme caution. The Peruvian press reprinted certain sections of the brochure which was distributed with the chemical. It stated that the compound could destroy the roots of trees, shrubs and other vegetables and cause vomiting and pulmonary and heart damages in humans. This incident gave rise to a debate inside US where the state’s stand was that spike was less toxic than aspirin, micotive and nitrate fertilizers. Whereas, the environmentalists equalled the compounds spray with unleashing of an atomic bomb in the region. They further argued that drug producing nations are basically agrarian societies which depend on earth for subsistence and if the agricultural base is destroyed, one should not hope to have a promotion in economic development through harvests of legal products. Another problem in this context was raised by the Peruvian agriculturists and environmentalists; that the heavy rainfall in Upper Huallaga would wash the chemicals from the leaves even before it would have killed the plant. Moreover, the chemical would, along the rainwater mix into streams and canals, hence causing serious damage to the licit  crops and other plant life.

Keeping these considerations in mind the anti-spraying lobby seems at this point to have the upper hand. Other spraying, manual eradication of coca crops is almost impossible because of the geographical remoteness of coca-growing areas and as noted earlier because of the presence of anti-government guerrillas in these regions. The US officials and experts, themselves are not very hopeful but the success of their efforts for eradication. As one US official reportedly said that “the programme was troubled from the very beginning. It was all highly improvised, we had minimal resources and no scientific support”. The US chemical manufacturers are also not willing to extend their support and demand indemnification against lawsuits if the State Department decides to use their product for coca radication programmes.


Extradition Treaty

The US-drug producing nations treaty on extradition is far an important tool of drug enforcement. According to the US State Department the purpose of this treaty is to show that there is no safe haven for traffickers in their native countries, who violate US drug laws. The treaty has essentially been an important tool of drug control between US and Colombia. After the assassination of Laa Bovilla, the Justice Minister, in April 1984, the Colombian government cooperated upto a point in implementing the treaty. By June 1987 when the same ceased to be operative, the US had submitted some 140 requests for drug trafficking and related offences; 24 of these requests were approved and 16 persons have actually been extradited.

The rationale and the need for the extradition treaty stemmed from the pourous system of criminal justice in the drug producing nations. These systems convict only a small percentage of those tried for narcotics related offences and usually those who are convicted are small fry. The drug mafia’s use of bribes, threats and violence, as discussed previously, neutralizes many judges. Judges are often poorly trained or incompetent, and the judicial system is overloaded. Due to these reasons most experts strongly favour extradition as a counterweight to the weak judicial system of drug producing nations.

Yet many people see extradition as an example of colonial justice and a renunciation of sovereignty. Opposition to the treaty in fact has been widespread and at times even violent. The narcotics lobby has mounted an intense propaganda campaign against extradition and may well have resorted to stronger measures. However, the greatest hurdle in the way of extradition stays to be the nationalist sentiment in the populace. Moreover, the same sentiment exists in the law making personnel of these countries. For example, in Colombia sharing of this sentiment in the people and the Congress ran overwhelmingly against the treaty. And in June 1987 the extradition treaty finally collapsed in Colombia by the order of the Supreme Court. No doubt death threats from drug trafficker’s influenced the court’s decision, but public opinion was also in this favour.


The Military’s Role in Drug Control

The Latin American militaries do not exactly have a major anti-narcotics mission. However, they occasionally provide logistical support, such as helicopters and pilots, for anti-narcotics operations controlled and executed by anti-drug units of national police. Historically, the military has not ventured for a major role in the war against drugs, instead it has always viewed the same as a threat to its corporate interests.

Furthermore, there have in fact been episodes of collaboration between the military and the narco traffickers throughout the Andean world. The linkages may derive from corruption, from strategic considerations or even from shared political and ideological values. Also the inherent nationalism of the Armed Forces has been a barrier to increased international cooperation against narcotics.

Finally there is a rivalry and a historical animosity between the military and the national police in the Adean countries. Military establishments seek effective control over the legitimate use of force in their societies, for this reason, they have resisted efforts by the national police to develop an independent drug-fighting capability.

Latin American military establishments generally see themselves as guardians of the nation. Also, they seek to monopolize the legitimate use of force within their territories. Both attitudes have posed a problem for narcotics control efforts in Latin America. For example, the Peruvian military, has been openly hostile to transitional collaboration against drug trafficking. This has been partly so because Peru traditionally has had bad relations with its neighbours and in part because the military’s rival, the national police, has played a leading role in such collaboration. Almost in all drug producing Latin American countries, the military has been suspicious of US narcotics assistance programmes to the extent that they add to the overall capabilities of the police. Efforts by the US to increase significantly its aid to the anti-drug police could run afoul of the military and conceivably even evoke to destabilize civilian governments. In these countries, the military’s instinct has always been to keep the police in check, and it has acted accordingly.

The above facts relay clearly that drugs have emerged as a significant problem in civil-military relations in Latin American nations. The military sees anti-drug strategies as a tool of civilian politics. On the other hand the chance cannot be ruled out that civilian leaders in these countries, may be tempted to build up the power of the police as a counterweight to the Armed Forces and may see drug fighting as a convenient excuse for doing so.

Hence, in the current circumstances an effective anti-narcotics strike force without antagonizing the military is not possible, or for that matter one can say that if it is possible even then the chances are not particularly good. The problem can perhaps be diluted by providing both the military and the police with hi-tech weapons in amounts that does not disturb the existing force ratios. However, for such a solution to work, the military will have to sacrifice its sheer monopoly over the significant tools of legitimate violence. Another option in this context can be the creation of an effective anti-narcotics unit inside the Armed Forces, however, regarding military’s present stance, of counting narcotics fighting out of its main objectives, such an idea might not be favoured by the military. In sum, therefore, the dilemma is not an easy one to be resolved.


Spending on Drug Control

Latin American governments see the war on drugs as a drain on scarce resources and as under funded by the international community. They refer to the awesome economic and military power of the cocaine barons and the relatively low levels of international support as reasons for their failure to control the drug traffic. In addition, governments in varying measures perceive narcotics control as imposing economic and social side effects, principally in the form of lost income and jobs. The rich drug consuming countries, in their view, should compensate for their losses with major new infusions of money and development assistance. However, these arguments by the Latin American governments can be called an excuse of not having the true will to fight drugs. But to an extent their argument is valid as well because the fight between the governments and their opponents is grossly unequal. The traffickers are by far more equipped in every sense than the governments. But leaving aside these discussions of anti and pro drug lobbies, one can clearly interpret the only message being relayed by the Andean governments i.e. that International Drug Trafficking Organizations are extremely powerful, and that the producer countries do not possess the means to fight them and nothing short of a massive infusion of international aid can alter the situation. Finally, a constant feature of Latin American and Int’l anti-narcotics agencies negotiations, has been the demand for compensating the socio-economic losses that these governments bear as a result of successful crackdown on drugs industry. What is important here is that the argument is not limited to compensate for eradicated coca cultivation but that they want a compensation in the form of foreign exchange which earlier used to come from cocaine earnings.

Given the cocaine industry’s strong economic and political foothold in drug producing nations, such desires for compensation are understandable, but at the same time they are highly unrealistic. The international anti-narcotics agencies do not think any point of compensating an activity which should not have been there in the first place and is highly inhuman, immoral and illegal. This stance by the agencies may make Latin Americans, losers in the compensation game. But in the absence of safety-net programmes for coca farmers and others whose survival is tied to the cocaine industry, countries which produce drugs will continue to have little interest in the success of drug control programmes. After all why should they themselves welcome a political economic and social chaos in their respective countries.


Chapter 3
Pakistan Heroin Trade: The Dynamics of Growth
Geography of Cultivation

Heroin is derived from the opium gum, harvested from the poppy plant. The cultivation of poppy in the Indian sub-continent is centuries old. It is believed that the plant was brought by armies of Alexander the great into the region. But even otherwise narcotics are rooted deep in the history of the sub-continent and especially the Indus valley region. The ancient Hindu scriptures — the Vedas, also describe the ritual use of ‘soma’, a narcotic drink.

Today, opium poppies are grown and harvested in Burma, Thailand and Laos, the three are also called the Southeast Asian Golden Triangle. And in Iran, Afghanistan and Pakistan also known as the Southwest Asian Golden Crescent. Other than these Asian countries the plant is also found in Mexico. 

In Pakistan, the poppy plant is found in abundance in the North West Frontier Province (NWFP) and the Potohar region of the Punjab province. However, the concentration of poppy growth is in the Tribal areas of NWFP where the government has the least interference because of the areas’ being recognized as a political non-man’s land. These are remote mountain areas and ideal for Opium poppy cultivation.

From Opium to Heroin

Opium (papaner somiferum) grows in a variety of climates, preferring cool temperatures and strong sunlight during its growing season. The plant grows about one metre high and after three months of plantation it produces a bright red flower. The petals drop to the ground exposing a green seed pod about the size and shape of an egg. The bulb produces a milky white gum. Farmers collect the opium latex by making a series of shallow, parallel incisions across the bulbs’ surface with a special curved knife. As the white sap seeps out of the incisions and congeals on the bulb’s surface, it changes to a brownish black. The farmer collects the opium by scraping it off the bulb with a flat, blunt knife, sometimes returning for a second or third tapping.

In further refining steps, the opium collected by the farmers is turned into a more potent extract. This requires a strict and accurate level of standardization and quality   control. The chemist starts with heating the water and adds raw opium to it until it dissolves. Then the organic waste is precipitated out of the solution by adding ordinary time to it. The residue is, morphine, suspended in the chalky white water. Once this is achieved, there is a second round of heating, this time concentrated ammonia is added to the residue solution, causing the morphine to solidify and drop to the bottom. The liquid is then filtered through flannel leaving chunky white kernals of morphine on the cloth. Once dried and packed for shipment, the morphine usually weighs about the tenth of the weight of the raw opium from which it was extracted.

After the achievement of morphine, there follows a five step process in which morphine molecules are chemically bound with acetic acid and refined into heroin. This is a more sophisticated operation requiring heating, filtering and crystallization. The compound at the end of the process is a fluffy white powder, 80-90% pure known as No. 4 heroin.

Heroin is most typically consumed by whaling or smoking. The most common way is that of “chasing the dragon i.e. heating the heroin over a piece of tin foil from a cigarette package and aspirating the fumes. Other methods are taking the drug intravenously, through injections; this is highly dangerous because intravenous forms of use are associated with AIDS and Hepatitis. Heroin is a particularly dangerous drug because of the ease with which a user can over dose. A lethal dose of heroin is only 10 to 15 times a normal one.


En route to the market

As discussed earlier Pakistan is a major producer of opium as well as a processor of opium into heroin. Moreover, much of the opium grown in the neighbouring country, Afghanistan, is also processed into heroin, in the North West Frontier Province of Pakistan. Other than this drug growing and producing capability, Pakistan also serves as an important transit country for drug shipments; destined for international drug markets.

The long coastal belt and porous borders with Iran and Afghanistan, make Pakistan’s geographical position an ideal one for drug trafficking to the great consumer markets of the west. Annually, almost 200 tons of heroin is smuggled through various sea and land routes to different destinations all over the world.

Oldest and the most frequent of the routes used by traffickers for shipping narcotics, has been through the port of Karachi and the surrounding coastal area. These are ideal places for shipping big consignments to Africa, Europe and the United States. Vessels carrying drug loads, normally leave Karachi port for Yemen and Southern Europe, through the Red Sea, or they follow the African route which goes via Somalia and Ethiopia to Kenya and onwards.

In recent years the Makran coast has also become popular for the purpose. Drug consignments are loaded on small launches and are carried from coastal areas to the high seas, where they are transferred to ships. In fact the long and virtually unguarded coast line is regarded as the safest route to be adopted, by the traffickers.

For the consignments destined towards Central Europe, the Balkan land route, is considered to be the most feasible. This route goes from Afghanistan, Iran and Turkey, leading to former Yugoslavia and Bulgaria. From Turkey routes lead to Western Europe as well. Moreover, the disintegration of Soviet Union and the emergence of new Central Asian States bordering Afghanistan, and Iran, have opened up new and safer land routes for traffickers to ship heroin to Europe. For example, drugs can now be carried through Afghanistan, passing Ukraine and Russia to move onwards.

However, the long and rugged routes of Balochistan, are the most favoured by the traffickers, for moving drug consignments to the launching points of their international destinations. This is so because first of all it is almost impossible for the law enforcement agencies to intercept the traffickers’ convoys, due to the difficult terrain of the region and the highly concealed mountainous routes. Second, that the law enforcement agencies have very limited means to fight their opponents, who have now built up their private armies, comprising mainly of the Afghan war veterans and refugees. Also through their phenomenal drug earnings the drug barons have equipped these small armies in the best possible manner and they have a communication network and fire power which can be well compared to any modern sophisticated fighting squad. In fact, Balochistan has almost become a place where narcotics dealers no more need to work in a clandestine way.

This emergence of Balochistan and the Makran coast as a safe haven for drug smugglers attributes to the Afghan war and the situation in Iran in the early 80’s. The two made the region economically vulnerable to smuggling. According to a CIA report at the height of Iran-Iraq war, when Iran faced an acute wheat shortage, Khomeini government tacitly arranged for the smuggling of wheat from Pakistan. It is suspected with substantial evidence that under cover of wheat huge consignments of drugs found their way to Iran and from there to other parts of the world. Drug trafficking routes in Balochistan lead to the coasts of Jiwani, Pasni, Gwadar and Ormara, which then work as outlets to the international waters, as discussed earlier in this chapter.

Other than these land and sea routes, used for the drug trade, the traffickers have invented novel means of smuggling drugs into the consumer markets of the United States and Western Europe. These include, trafficking by relying on the international postal system. In July 1983 e.g, US customs officials at JFK Airport seized one kilogram of heroin concealed in rolled newspapers destined for Pakistan nationals residing in New York. Similarly, two other packages each containing half kilograms of heroin were destined for Berkley, California. Rolled newspapers and magazines can conceal upto one kilogram of heroin and are generally sealed in plastic. Drugs are also sent through the mail concealed in shipments of textiles, clothing and other durable goods.


The Drug Economy

Pakistan today is one of the largest heroin exporter of the world, with an annual export of upto 200 tons. The trade generates billions of dollars for the drug barons, who administer and run hundreds of illegal heroin factories in the country. These drug lords, with the help of narco-money have developed strong connections in the administration, law enforcing agencies, military and the political elite of the country. Drug money today has seeped into every sphere of life in Pakistan. Many of the barons have turned towards politics or are major financers of the political campaigns. Massive returns have lured a large number of businessmen, traders, professionals and even house wives into the lucrative drug trade. Pakistani airlines and sea vessels are becoming known as drug carriers. Expansion of the drug trade at such a wide scale has had profound effects on the country’s economy.

First of all, the drug trade has brought unprecedented prosperity to the opium poppy growers. As discussed earlier, the plant is the only cash crop of the regions where it is grown. Plus the trafficking organizations provide the growers with as much facilities as possible. This keeps the incentive of growing poppy; fresh in the farms, and the heroin industry supplied with raw material. Moreover, agents of the drug mafia offer locals who own herds of camels, boats and pick-ups, huge amount for their services. For example, the camel herders are asked to deliver consignments to the coast, where launches and boats wait to be loaded. These people are paid 10,000 to 20,000 rupees per trip and assured full support in case they are arrested. Amount paid by the drug mafia to these locals for their services equals their earnings in months otherwise.

Hence, at a very low level the drug industry works as an efficient and concerned employer, bringing prosperity and job security to its employees. However, as witnessed in the Latin American case the amounts spent on those hanging to the lower rungs of mafia are the smallest part of the total earnings of those in the upper echelons. Moreover, any short-term benefits of the drug trade are totally meaningless, when compared to its long-term negative effects.

The narco-money earned by the barons, forms a major part of Pakistan’s economy, particularly in the informal sectors. Many of the country’s industrialists and businessmen are suspected to have made their fortunes, through narcotics trade. Within last ten years, a new trade of industrialists, contractors and businessmen, who were totally obscure ten years ago, have come to dominate the investment scene. Although, the source of these new entrepreneurs’ wealth may not always be substantiated, but it is common knowledge that narcotics has had a major role in their sudden rise to the top from almost nowhere. Most of those who have benefited from the drug trade, have gone into diverse fields of business, where they have established themselves as respectable citizens.

Pakistan is believed to earn around $8 to $10 billion from the overall global drug trade. This makes narcotics revenue far higher than the country’s annual budget and almost one fourth of the annual GDP of $40 billion. However, as noted earlier, only a fraction of drug money comes back to the country. According to one estimate only five percent of the revenue is channelized through different means into the economy. The narcotics revenue is largely invested in sectors such as real estate, construction and to some extent transport. Real estate is the most risk-free and lucrative investment as the money invested cannot be traced easily. Moreover, the booms in real estate prices in metropolitan centres of the country well justified the enormous bank accounts and high living standards of those involved in the drug trade. Many Economists believe that the construction industry has also absorbed a substantial amount of this money. Other major investments have been in the private transport sector.

In the last decade, it seems that drug money has created its own protected sectors. The narcotics underworld provides not only funds but also protection to the people involved in the business. However, the greater part of the drug money goes into extravagant lifestyles of the drug dealers, which in turn makes room for inflation. Even though the narcotics revenue coming back to Pakistan is very small as compared to the actual size of the drug trade of the country, but still it has shown serious negative effects on the national economy. To list few of these, the foreign earnings from narco-trafficking usually translate into an overvaluing of Rupee of 25-30%. This makes it very hard for legitimate exporters to recover their costs.

This increasing foothold of the mafia in country’s politics, and the creation of a shadow economy by huge sums of narcomoney, flowing into the country has made both the political and the economic scenario of Pakistan an unstable one. Such a situation works as a deterrent for foreign investors, who are or otherwise would have been interested in making investments in the country.

The very fact that drug traffickers do not pay taxes for their huge earnings, practically strips the government from any revenues to be earned from the profitable drug trade. Instead, the same brings an ill-reputation and the role of the Government of Pakistan under severe criticism of international agencies and great powers, who are also the largest consumer markets for drugs and are worst affected by the drug trade.

As discussed earlier, some drug money does contribute to economic growth and bring prosperity to limited pockets of the society. But this happens in a very unbalanced fashion, making the relation between drug money and economic growth a highly unclear one. In other words, the expenditure of drug money in the overall economic activity of Pakistan is in sectors other than those counted as core economic activities. For example, as stated earlier, drug traffickers invest normally in real estate, construction and transport sectors, such expenditures short change core economic activities like mining and manufacturing etc. However, whatever expenditure of drug money is made, creates numerous economic linkages of multiplier effects, that stimulate the economy to an extent. But this cannot exactly be counted as a positive impact of the drug trade on national economy, because it strengthens the roots and support for the drug mafia, which has already become very powerful in the country. Hence, making it almost impossible for law enforcement agencies to do their job. Moreover, as seen in the Latin American case. If the heroin industry gets as powerful, the shutting down or successful crackdowns would create an economic and political chaos.

Here the question can be raised, that if the heroin industry is contributing positively, to the otherwise weak economy of Pakistan, why in the first place should it be shut down? The question is in fact often asked by the not fully awarded public and is often believed by certain political leaders of the country. Statistics show that eversince Pakistanis have effectively become involved in the international drug trade the domestic consumer market for heroin and other opiates has expanded as well e.g. since 1981 when the first ever case of heroin addiction was reported in Pakistan till today, the figures for people addicted to one or other forms of narcotics has reached a staggering 2.1 million. According to a PNCB survey almost one out of every 19 males in Pakistan uses drugs. These conditions raise serious concerns regarding the societal fabric of the country. Moreover, with an increase in the spread of drugs in society, the drug related crimes are on an increase as well. Even though these fall in the category of petty crimes such as theft, shop lifting etc. but they reflect on the building law abusing behaviour of the populace.

Hence, if the drug industry is allowed to flourish it will emerge as a serious threat to existing values, family fabrics, law enforcement and Pakistan’s relations with the developed world as well, due to international nature of the drug trade. Such a state of affairs would in turn pose a serious threat to the country’s national security. In simple words, therefore, one can say that any short-term advantages of the drug trade are washed away with serious long-term implications.

Moreover, facts show that, drug trafficking has negatively affected different development programmes being run in Pakistan. This has mainly  been so because the drug industry has stacked cards against the enterprises set up as an alternative to itself. For example, in the Gadoon Amazai, production factors have been distorted. Labour wages for those involved in poppy growing are four to five times more than what has been offered as an alternative, hence, the whole project, has become uncompetitive. Moreover, the drug industry has strengthened the merchants who are the intermediate links in the market now are opposing and creating hurdles in the way of more equitable development in the rural areas, where poppy is grown.


Money Laundering

The money earned from narcotics trade is laundered by passing through a number of intermediate agencies, including trading houses and International Banks. The whole process is spread over several countries. Once through a complete process the narco-money becomes almost untraceable.

A routine money laundering process follows a typical pattern, spread over at least four trading houses and banks. First of all, as soon as the narcotics leave the Pakistani border, messages are conveyed to the concerned people at the destination of the consignment, who when actually get in possession of the drug load, make payments, which normally go into millions of dollars. These people, at the receiving end make transfers of the required sum from a parent account to the bank accounts in different countries. These huge sums are then invested and reinvested repeatedly in commodities or stocks and shares. Shiploads of commodities such as wheat and bullion are bought and sold on the high seas and in various countries. Investments and reinvestments are also made in the chip stocks, shares and other safe securities.

After passing through numerous cycles of investments, money finds its way back to where it was actually originated. This time it is in the form of various company accounts. These companies then transfer the money to the parent account.

The next step in the process is to actually transport the money, or a part of it, to Pakistan. Normally it is in shape of gold, dollars, and coins on other costly commodities, those destinations are specific areas along Pakistan’s western coast. Apart from these, money from the receiving end reaches Pakistan, through the personal remittances and personal allowances of over- seas Pakistanis. The papers of Pakistanis, particularly blue collar labourers, in foreign countries are especially useful for this. In return for his operation, each remitter gets a small percentage for the service.

Finally, once the money reaches the home country i.e. Pakistan, it becomes visible in the form of various ventures e.g. jewellery shops, car showrooms and real estate agencies etc.


Heroin traffickers and the political system

Other than the serious implications for national economy, as discussed in the preceding pages of this chapter, what asks for a more alarming attention regarding the illicit heroin trade is the creeping of this problem into Pakistan’s political scenario.

In the last decade, those involved in heroin trafficking have reaped enormous profits. Looking at the illicit nature of this business it comes as obvious to anyone, that the traffickers would do anything to buy security for themselves and stay away from arrest and prosecution by law enforcement agencies. Therefore, most drug barons spend large sums of their drug money on corrupting the vital state departments like police, judiciary, the political parties, media and even the military. Drug barons have allegedly been reported to have strong connections with influentials of all these state departments. Pakistani experts on narcotics believe that narcotics money now fuels the political system, supporting party organizations and mandatory campaigns. Narcomoney buys protection for the drug mafia at the highest political levels in the country. Moreover, in 1991 changes in the Government of Pakistan’s (GOP) foreign exchange regime, have made it possible for the drug barons to transfer narcodollars, otherwise deposited in foreign banks and financial institutions, to Pakistan and launder these as well as legitimize themselves by buying into banks and industrial conglomerates.

The contacts of drug barons have been known right from the time when the drug trade became of any significance in context of Pakistan i.e. the early years of Dictator General Zia-ul-Haq’s regime. At the time Pakistan had a front-line state status with the US as well, due to the Soviet-Afghan war. The United States giving its communism containment policy a preference over the narcotics control issue was giving massive aid and military supplies to Pakistan, in order to help Afghan resistance forces. It is suspected that the military ruler of Pakistan was deliberately overlooking the growing drug trade or might himself have been involved in the business. So much so that by the middle of 1983, Zia’s 4th year in power, US narcotics control officials reported that between 85 and 90 percent of the Heroin reaching the East Coast of the United States and the countries of Western Europe was coming from Pakistan. It becomes very interesting here to note that while Zia’s military government hanged thousands of people, as Amnesty International puts it, without even prosecution through trials, the heroin mafia could manage to stay untouched and protected. Moreover, top officials in the Zia regime and people otherwise close enough to the military ruler have been known to have strong links with traffickers as well as being involved in the narcotics trafficking themselves. The point that Pakistan achieved the status of largest exporter of heroin during his regime and that no worthwhile actions against heroin traffickers, during the same, reflect on the nature of mafia intervention into the political system of Pakistan.

The first serious efforts to control the heroin trafficking in Pakistan were made by Mohammad Khan Junejo’s elected government, in 1985. However, Junejo’s government did not enjoy absolute powers and in fact was only a civilian buffer created by General Zia-ul-Haq to give a cover of legitimacy to his military rule. Hence, no significant achievement could be had during the so-called elected representative government, and the drug problem continued to escalate to unprecedented heights.

Evidence suggests that most members of the Pakistan mafia are either politicians themselves or are associated closely to the national leaders and influential politicians. In the wake of such circumstances, local and international drug enforcement agencies seem to be fighting a losing war, they have failed to collect or use evidence to convict the top barons. Whereas on the other hand the political power of the barons is increasing unimaginably.

The power and money of the drug barons has infiltrated into almost every sphere of political activity in Pakistan. As noted, the barons invest heavily in political campaigns or themselves stand for the political office. They corrupt the law enforcement agencies and have also developed small, sophisticated and dangerously armed armies of their own. Such a situation has made them quite out of reach of the anti-narcotics forces. Moreover, the creeping of these people into the parliament of the country, resulted in acute lack of will by the government to launch effective operations against narcotics trafficking.

If the situation prevails and the whole matter is continually neglected, it would not be wrong to suspect that democracy and the democratic institutions, which are already in a very fragile and nascent state, may collapse totally or otherwise come under direct control of the drug mafia.

The infusion of narcotics and especially heroin, might not have essentially changed the way in which the Pakistan underworld worked. The organized criminals and law offenders have always kept familial or symbiotic connections with the political elites. The under world works through a long-established patron-client system that trades protections for contributions. The introduction of narcotics, however, has changed the magnitude of the underworld operations, increasing the criminals resources to unprecedented heights and enabling them to, corrupt vast sections of law enforcing agencies, and political elites. Also they can now invest heavily in the world of finance and trade. In other words Heroin trafficking has made the whole under world a far more lucrative business to join, than it could ever be. The resources provided by drug trafficking, have made the criminals far more superior to their anti-counterparts, hence making them more secure, and also reflecting on the point that even if serious efforts to check the trade are made it would not at all be an easy task. This argument can be substantiated with the fact that even though the last three governments of Pakistan have kept narcotics on top of their priority lists but the drug trade and the number of domestic addicts are on an increase. Moreover, Pakistan is now globally considered a drugs producing and exporting country and is seen with disrespect as well as considered a violator of human rights. The international community is constantly increasing the pressures on the Government of Pakistan to check and eliminate its drug trade. If the government has to regain its lost integrity it should not just stay theoretically dedicated to the task of narcotics elimination but show a political will to fight drug trafficking.


Chapter 4
Pakistan Heroin Trade: The Dynamics of Control

The previous chapter discusses the enormous growth of narcotics trafficking in Pakistan. The drug mafia has penetrated deep into the country’s political and economic system, and with its enormous resources has corrupted the vital state departments to buy security and protection for itself. The drug barons have created heavily armed fighting units for shipping their consignments safely to their destinations. Over  the last decade the domestic consumption of narcotics, especially heroin, has increased many times. Moreover, the drug related crime and the size of the underworld operations have increased to the limits, unknown at any time in Pakistan’s history.

This chapter focuses at the problems and achievements in effective drug control taking into account and analyzing roles of the government, media, public opinion, non-governmental organizations and different law enforcement agencies.


Problems in effective Drug Control

A thorough study of the rise of narcotics industry of Pakistan, reveals its deep connection with the Soviet-Afghan war and the Iranian revolution. As noted earlier Pakistan came on the international drug scene in early 1980s. At the same time the war in Afghanistan was on and Pakistan was supporting the Afghan resistance groups, fighting against the Soviets, with the help of United States. It is believed that the resistance groups and also the Inter Services Intelligence (ISI) of Pakistan, used drug money to finance the war, besides the American support. Moreover, organized cultivation of poppy, processing of it into heroin and trafficking, coincide with the years, when Afghan Mujahideen were allowed to cross the border into Pakistan as refugees. The Newsline magazine reports that

“... the CIA and the ISI patronized the tribes living in the Pushto speaking Balochistan belt bordering Afghanistan to keep the Mujahideen’s supply line secure ... tribals and Afghan commanders in the border belt are becoming increasingly independent and resorting to ... providing protection for drug traffickers.”

Moreover, evidence suggests that heroin manufacturers of NWFP and FATA, with the help of their counterparts in the Pushto belt of Balochistan shifted their industry to north-east Balochistan en route to the international market through Makran.

The alleged association of Gen. Zia-ul-Haq with drug dealers further supports this argument, as the General was deeply concerned with the Afghan war and in fact termed it as ‘Jihad.’ After the withdrawal of Soviet forces from Afghanistan, there prevails a state of acute lawlessness in the country. With connections and routes already established during the war years, most or all of the Afghan poppy crop comes to Pakistan for processing into heroin and other opium derivatives.
Furthermore, the disintegration of Soviet Unions into Central Independent states has facilitated and opened up new, safer land routes for drug trafficking. The Afghan war veterans have joined private armies of narcotics dealers in Pakistan, making them stronger in terms of fighting the law enforcing agencies.

Revolution in Iran is the second most important event, which has a lot to do with Pakistan’s rise to the status of largest heroin exporter in the world. Before the revolution Iran had an addict population of over one million, however, once the Islamic government took charge, it implemented serious actions against those related to the drug abuse and trafficking, and almost virtually shut down the market for narcotics in the country. This directed the flow of narcotics, which were previously being shipped to Iran, towards Pakistan and resulted in a rapid growth of drug addiction in the country, and institutional development of the Pakistani drug mafia.

With political instability in Afghanistan and difficult entry of narcotics into Iran, the focus of the narcotics trafficking organizations is on Pakistan. This has resulted in an enormous build up of strength, power and organization of the mafia and it can now compete and be successful in fighting all the control measures adopted by anti-narcotics forces. With mafia chiefs deeply connected to the country’s political elite, it has also become very difficult for the government to develop a sincere will for fighting the drug abuse.

Moreover, the investment of huge amounts of narcotics money into different sectors of the national economy has resulted in a chain of multiplier effects. If a successful crackdown on narcotics industry is made, the economy will get devoid of a large share of investment and Pakistan may come under severe economic chaos. Therefore, any plans for the eradication of narcotics industry should provide, if not equal then strong substitutes for dependants of the drug industry at any stage of the process. In this context a number of local and international agencies are working on development projects in the narcotics growing and producing areas. However, the success of these, is not very visible when compared to the parallel growth of narcotics trafficking. It has been reported that execution of development projects by the foreign aid agencies is half-hearted and perfunctory, and has been extremely slow, when compared to the working of the same in other narcotics-producing countries of the world e.g. Thailand. But this is just one side of the story, the foreign agencies argument in this respect is that the development works are slow because of institutional hazards in Pakistan. The foreign aid officials have reportedly complained that the reason why their projects are taking so long is because they are in the hands of the provincial governments. As noted earlier the provincial governments of the poppy growing provinces are heavily penetrated by the drug barons, therefore, there stands a very valid chance that most narcotics control projects stay ineffective or are hurdled by the local governments.

Pakistan is one of the three poppy growing countries in the region known as the Southwest Asian Golden Crescent. The region has an abundant plantation of the opium poppy and processing of it into heroin. The Government of Pakistan and the international drug enforcing agencies especially the US Drug Enforcement Agency (DEA) are trying to control this in Pakistan. However, most poppy growing areas in the country come under the tribal belt where the government has not got a full control and most of these are considered autonomous. Therefore, even if the anti-narcotics strategies become effective and poppy cultivation in Pakistan controlled, the trafficking and production of narcotics will not be hampered. Because the supply line for the narcotics industry will shift across the border in Afghanistan. As discussed earlier in this chapter the political instability in Afghanistan makes it impossible for Washington to pressurize Kabul on the issue and local and international drug enforcing agencies to gain any positive results regarding the control of poppy cultivation. In fact, instead of having any success in controlling the drug menace, it has been reported that most of the international aid to Afghanistan for developing the agricultural infrastructure for the purpose of providing substitute crops for poppy, had been used to improve the yield of the latter! 

From these facts one can see that there is a “balloon effect” working in the Golden Crescent. that, even if the production of poppy is controlled in one country, the raw material for heroin industry will come from the second in the region, and the drug trafficking will continue as ever. This situation suggests that if narcotics are to be checked in Pakistan they should be checked in the whole Golden Crescent. This, however, is not possible at the moment because of Pakistan government’s incomplete access to home poppy growing areas, the deep links of these areas with Afghanistan, the political instability in Afghanistan and Washington’s  inacess to both Kabul and Tehran. The same facts suggest that a successful crackdown on drugs industry requires demand side solutions as well. Narcotics are popular, even with all the risks and anti-public opinion involved, only because of the reason that they are a readily accepted and well paid commodity in the world market. To check the narcotics trafficking, US and other developed countries of the world need to break the demand for narcotics in their countries.

Other than these systemic and large scale factors there are societal causes as well, which are producing hurdles in the way of effective drug enforcement. For example, there can be seen an overall collapse of ethnic standards throughout the Pakistani society and institutions. According to the September 1992 CIA report, Pakistan is at a stage of development wherein corruption is simply the norm. The influentials in any field of life, in the country, use the law in their favour and are in most cases out of its reach. The law stands effective only in the case of poor. Minor things like telephone connections cannot be had without bribing the concerned officials. The situation has in fact degraded to the extent that one has to give a bribe, in order to get his child into a decent school.

Hence, an overall view of Pakistani society presents a world of petty corruption where whole functional segments of social order are eroded almost beyond recovery. In such circumstances, it becomes very easy for the drug barons to place their own people into important places, particularly when they have the help of the country’s political elite. The same situation also makes it very difficult to survive, for whatever little number of honest individuals left in the society. Moreover, the ties of blood and kinship are the key relationships in Pakistani society. Anyone who is in an influential service under the pressures of family and kinfolk, tries or is compelled to make the most out of it.

In such existing conditions, people and events become of a dual nature, one what they seem on the face value and second what they actually are. Hence, the validity of both becomes highly questionable. In the context of narcotics, the available information on the issue, role of anti-narcotics state agencies, the police and claims of non-involvement in the business in any way by concerned influentials, all need to be questioned and thoroughly researched before acceptance. Moreover, certain incidents and information have assured narcotics experts that what is reported about drug busts and arrests is only half the real story. For example the reported break-up of a drug ring involving senior police and PNCB officials in Punjab in mid-1991, was actually the result of a bitter struggle inside the police over drug payoffs.

Such complicity of the society and state machinery in drug trade makes it a difficult task, beyond imagination, to control the drug menace. There have been very few positive results in this context in the past, the following parts of this chapter take into account and analyze the efforts and achievements in drug control by different anti-narcotics forces.


Role of the government

The Government of Pakistan has got a mixed record on narcotics enforcement. Considering the annual yield of heroin exported out of the country, the amount of narcotics seizures by different law enforcing agencies, is very little. At present there are over ten such agencies working in the country (names and amount of narcotics seizures by each in 1992 is given in table 1). However, as discussed earlier, the working of these agencies is not adequate and requires a more sincere will to fight narcotics. In the wake of current US pressure to move narcotics on top of Government of Pakistan’s (GOP) priority list, and the serious attitude of last four governments there are chances of a betterment in the performance of these agencies.

TABLE 1
Heroin seizures, by each Agency
(PNCB data for 1990)
________________________________
Agency                         Heroin (Kg.)
________________________________
Coastal Guards                            0.0
Customs                                   703.2
Excise                                      554.4
Frontier Constabulary            1,750.9
Levies                                     100.0
PNCB                                    921.0
Police                                   2,314.1
Pak Rangers                              62.0
Railways Police                         44.6
________________________________
Source: Pakistan Narcotics Control Board.

Other than interdicting the processed heroin during shipment the GOP has declared a ban on poppy cultivation in the country. Every spring the government launches its mandatory campaign to destroy the standing poppy crop in the NWFP, where virtually, all of the Pakistani poppy plantation is done. Results of these campaigns have been positive in few areas. The government claims to have reduced the all time high 80,000 acres under poppy cultivation in 1978 to 12,000 acres in 1992. This statement also coincides with the reduction in heroin production during the same years i.e. from 800 tons to 200 tons. These figures reflect that the government has been successful in implementing its narcotics control strategy. But the facts when explored in detail deny this achievement. Even though the figures of reduction in poppy crop and heroin manufacturing are true but this decrease has more to do with the price of narcotics in the market than with the government actions. The price of heroin in the same years had sunk from 3000 rupees per kilo to 500 rupees for the same quantity. The drastic fall in price reflects on the over abundance of opium coming for processing into heroin. This excessive supply may have resulted because of massive poppy growth in Afghanistan. In fact it is suspected that Afghanistan poppy cultivation has given Pakistan a more specialized role in the industry, that of processing poppy into heroin. This situation washes away the governments claims of decreased poppy cultivation in country as in actuality the whole problem stays where it previously was.

Other than efforts for eradicating poppy cultivation, the GOP formed a committee in 1991 to introduce extensive reforms in policy, administration and legislation as well as the allocation of sufficient funds to narcotics control efforts. The committee devised certain laws which can be very effective in controlling the narcotics production and trafficking. These include suggestions of bringing the local law in conformity with the 1988 UN convention on narcotics. However, till now nothing significant has been achieved in this respect because of many institutional hazards and pressing demands on country’s limited resources. Moreover, the main focus of Pakistani drug enforcement agencies is on narcotics seizures rather than being on the arrest and prosecution of major drug barons. These agencies lack institutional initiative, resources to follow up on seizures with case preparation, and co-ordination among each other. Political interference in the working of these agencies and the judiciary is yet another hurdle in enhancing the commitment of narcotics investigators. Furthermore, as stated earlier, illicit money and influence of drug barons has infiltrated deep into these agencies and hampers their working.

Pakistan is a party to the three UN conventions on narcotics, and also gets narcotics related assistance from the US under the terms of bilateral letters of agreement which are subject to annual renewal. Pakistan is also a signatory to the extradition treaty with US and is liable to transfer its nationals to US accused of drug related crimes in the US.

These actions by the GOP suggest that it is trying to help and participate in every possible manner, in the global war against narcotics. But that narco trafficking is on an increase suggests that the government is only theoretically  dedicated to the task and lacks political will to enforce the initiatives listed before. This lack of political will can be attributed to a number of reasons, first, the existing political structure of Pakistan does not give any security or assurance to the government that it will complete its term. The 8th amendment in the constitution has given the powers to the President, of dissolving the national assembly, at any moment. This resulted in the fall of three elected representative governments in the country, within five years, which is otherwise the normal time of service for one single government. If the political situation stays stable one can hope for some betterment in the GOP’s narcotics control efforts.

Second reason, is the funding of political parties by drug barons and the presence of these people in the parliament of the country. One can obviously not expect these barons to work against themselves.

Finally, governments lack of control in the poppy growing areas and country’s porous border with Afghanistan where the situation stays to be warlike, can be termed as factors in hampering the government’s efforts, in controlling narcotics effectively.


US Pressures for eradication of Poppy crop and extradition of traffickers

United States Government (USG)  is the most concerned for checking narcotics production and trafficking in Pakistan. This is so because the US is world’s largest narcotics consuming market with a total addict population of around 6 million. Most of the drug consignments moving out of Pakistan’s borders are destined towards the United States. To stop this massive production and movement of narcotics the USG, through diplomatic initiative, anti-narcotics assistance programmes and law enforcement activities, has been trying to increase the willingness of the GOP to devote energy and resources to combat the menace. The USG over the years has increased pressure on the GOP for making anti-narcotics law enforcement more effective and also has been urging the GOP to bring its law in conformity with 1988 UN convention. The USG also demands the latter to increase the areas where opium poppy ban is enforced. Moreover, the USG is supporting a number of drug related development programmes in poppy growing areas and in collaboration with the United Nations Drug Control Programme (UNDCP), Integrated Drug Demand Reduction Programme, the same is trying to increase the awareness in general public about serious after effects of narcotics production and trafficking. In this context the USG is interested in developing a strong anti-drugs constituency in Pakistan.

In context of the development programmes the USG supported projects in the opium poppy growing areas of the NWFP, focusing on roads and the development of other vital infrastructure. The programmes aim at gradual expansion of the poppy ban, destruction of heroin laboratories, giving greater access to GOP political authorities and law enforcement agencies and increased economic viability of substitute crops. It is generally believed by the governments of both the countries that with vital infrastructure like roads, education and communication etc. the poppy growers will have a number of options to follow. Plus the same will give the GOP an upperhand in asking for poppy eradication in the region.

To ensure the correct implication of its narcotics control strategies the USG has inserted certain “poppy clauses” into its aid programme for the control of narcotics production. These clauses state that project disbursements will stop, if it is found that poppy is being grown in any area where a USG supported project is growing underway. The aid will resume only if the poppy crop is totally eradicated from the area.

The GOP has till now extended full co-operation to its counterpart in the US. However, partly due to its own weaknesses and partly due to an inherent paradox in the US policy nothing much has changed on the control scene. The US, even though has always taken the narcotics issue as a vital factor for her national security. But during the early years of Zia’s regime it constantly overlooked the rise of drug mafia in the country (see the beginning of this chapter) and the alleged involvement of President Zia in narcotics related matters. Now that the Soviet-Afghan war is over, and the mafia has become a vital component of country’s political and economic system, countering the narco problem in Pakistan has become almost an impossible task.

Moreover, many GOP officials blame different US anti-narcotics agencies especially the US DEA for not extending full support in successfully prosecuting the main narco barons of the country. For example in the case of Haji Iqbal Baig, who was released on October 2nd 1989 due to insufficient evidence, many senior government officials complained privately to the journalists that US and other western narcotics agencies let them down in providing access to crucial evidence. Moreover, it is argued that had the US arranged Baig’s arrest outside Pakistan, it would not have been so easy for him to have bailed himself out. Also there was evidence against the accused during Zia years but the US DEA never secured his assets then. Had that been done there are chances of unravelling the principal thread in a long drug connection. Moreover, as in the Norwegian connection where the arrested was given the status of state witness on request, and the Norwegian officials got a lead to more important figures in the drug syndicate, the US could have also followed the same design. Had the DEA secured an arrest at a place and time where powerful political figures in the Pakistan government with alleged links to the accused would not be in a position to protect the target of investigation, much positive could be had in Haji Baig’s case.

The above facts, in other words say that the US has shown a conflicting political agenda and did not want to press matters beyond a certain point in order to avoid compromise associations of a particular strategic nature. And it comes without saying that forceful crackdowns on drug industry in the early years of its formation, would not have resulted in a drug milieu as it exists today where the US and Pakistan both have got little chances of controlling the drug menace upto a satisfactory level.


Public Opinion
The role of public opinion is crucial in the success of any strategy to control the drug abuse. As discussed earlier in this chapter the state of Pakistani society is such where petty crime is abundant and people go for short-term monetary benefits rather than keeping an eye on the long-term consequences of anything. The struggle for money and elevated social status do not make them realize their complicity in the drug trade. Instead there are stereo type justifications with almost everyone in the society. For example, most people lead a case of Alcohol versus Heroin. It is argued that as they are tolerating the western narcotic the west should also tolerate their product, it simply is a tit for tat business. However, in the making of this argument most forget the rise in domestic consumption of heroin. In a short period of 13 years Pakistan’s drug addict population has gone from a virtual zero to around 2 million and is still rising. The same on the other hand, shows the lack of integration in the populace and absence of the idea of nationhood, which espouses the concept of a common destiny for all members of a community. People often fail to realize that if the drug mafia completely encroaches country’s political and economic stage, they will be the worst affectees of the situation.

Moreover, one finds a popular anti-US sentiment in the populace. As most drug control programmes are US sponsored it is believed that the whole business is a US strategy for enforcing its imperialist designs on Pakistan. This is often substantiated with the US operation in Panama. The situation generates a hatred and insecurity in the populace and as an immediate shield, to this feared US intervention policy, many believe that supply of heroin to US should continue or even be increased.

In these circumstances the government’s efforts for controlling narcotics go half lost even at the time they are launched. Moreover, in the quasi independent areas of NWFP where most of the poppy is cultivated, the plant is the only source of revenue for the farmers. Every year when the government officials try to bring the poppy ban in effect, violent clashes take place, in one such incident two enforcement officers lost their lives in an armed clash in 1986. The incident gave rise to the hatred already prevailing in the grower community and in general public as well, against the law enforcing agencies. The fact that the whole operation was US sponsored further aggravated the situation.

The famous Gadoon Amazai project also depicts on the reason as to why alternatives to poppy growing are not very successful. Most alternative strategies involve industrial projects which are not labour intensive, whereas poppy growing or farming in general is a labour intensive work. Hence, even if an alternative is provided not many can benefit. On the other hand the standing poppy crop is destroyed on the grounds that development has reached the place. This situation further strengthens the desire to grow poppy, among the farmers. Moreover, the drug mafia presents a very lucrative package to the growers, which cannot be compared to anything offered by the alternative governmental options.

Other than these facts, poppy growing is also used as a bargaining lever by the growers. Most farmers in poppy growing areas have reportedly blackmailed the government officials with threats of growing poppy, if they are not provided with basic facilities. Moreover, the temptation of receiving development funds and the acceptance of political demands is also encouraging poppy cultivation in new areas. The situation till now and results of anti-narcotics policies in growing areas show that farmers do not intend to let this bargaining lever got out of their hands. If the government wants to secure any positive results it will have to increase awareness through education and media in order to first buildup a strong anti-narcotics public opinion which is acutely missing in these areas, in specific and in the whole society, in general.


Role of the NGOs

At present there are a number of local and international non-governmental organizations working for development and control of drug abuse in Pakistan. Keeping in mind the corrupt nature of Pakistani society and government more and more aid donors for development and narcotics control have come to believe that NGOs can prove to be far more effective than government law enforcing agencies, in controlling the drug menace.

Over the years NGOs have devised ways in which to slowly but surely create public awareness against narcotics and other alike social evils, in the populace. NGOs are also more effective in the sense that they focus their attention on the problems of a community at the grass root level. In other words NGOs go more for the people and less for the institutions. Moreover, with flexible structures they are instrumental in collecting first hand information to illuminate situations which require specialized consideration and urgent interventions. In simple terms, it can be said that NGOs have an edge over GOs because they can be more innovative, in fighting drug abuse.

In Pakistan there are at present more than 50 NGOs working against drug abuse. These organizations basically are interested in the following areas:
- Treatment (Detoxification of addicts).
- Rehabilitation of addicts in society and job placements.
- Education of parents to protect the children from the abuse of narcotic drugs.
- Involvement of community for intervention against narcotics availability and prevention of their use.
- Assistance to law enforcement agencies in the control of narcotics distribution and interdiction of trafficking.
- Creation of awareness against narcotics through meetings, publications and distribution of literatures, posters, stickers and leaflets.

The modus operandi of NGOs, reflects a very wise approach of curbing the drug demon at its root. Moreover, NGOs seem to make up for the most vital part missing in the dynamics of control of drug abuse in the Pakistani society and that is building up of a considerable anti-narcotics constituency in the populace. If successful in this task they might well be able to produce an advocate for narcotics eradication in the society, which will be effective in making the government and political elites change their priorities. Moreover, the working of NGOs seems to be more focused at demand reduction i.e. it involves education about drug abuse at all levels. This method of controlling the drug menace can be much more effective than the supply reduction techniques which aims at keeping drugs away from reaching the addict population. It comes as obvious to the thinking that with no demand, less and less drugs will be produced.

However, even though NGOs are on a right track for controlling drug abuse but keeping in mind their limited funds, limited number, small area of operation and size of the drug problem in Pakistan, little positive can be hoped for in this context. NGOs may be successful in creating small drug free zones within the cities and specific rural settings, but at the moment to expect the same effects for the whole society, will be nothing more than wishful thinking. If the governments and international donor agencies elevate the status of these organizations and help them in becoming operational at a broader level, much positive results can be expected to have in controlling the narcotics consumption as well as production.


Net Assessment

The episodes recounted in the preceding pages reflect on the dynamics of control of drug abuse in Pakistan. There does not seem to be any prospect of sudden or major change in Pakistan’s narcotics profile. The country lacks both a political will to fight the drug menace and a strong anti-narcotics public opinion. Various control programmes are in action in the country with local and foreign assistance, but the fact that too many powerful interests are benefiting directly or indirectly from narcotics, has undermined the chances of positive achievements by these programmes. Moreover, the country needs to develop more programmes aimed at demand reduction. This can be done by mobilizing the NGOs at a much broader level.

The United States which has a strong interest in curbing the Pakistani heroin industry, has lost her influence and credibility which it gained during the Afghan war years by backing the then government. Today, if the US wants to clear the Pakistani drug mafia it will have to rebuild strong ties with the country’s political elite and populace as well. This can be done by reassessing the vital bones of contention between the two states. These include the nuclear issue and the Kashmir problem. The US should reevaluate its stand of asking Pakistan to sign the NPT regardless of India’s doing the same. Other conditions, as imposed by the ‘Presslers’ Amendment’ should be reviewed as well. In short, US needs to build up a renewed sense of common strategic purposes with Pakistan which include narcotics alongside, other important concerns like stabilizing the political situation in Afghanistan and the strengthening of moderate political and social alternatives in the Islamic world, etc.


Chapter 5
Latin America and Pakistan: A Comparison

Study of growth and control patterns of the illicit narcotics industry in Pakistan and Latin America reveals a striking resemblance between the two experiences. The geography of cultivation of coca and poppy plants, the underdeveloped and autonomous nature of these areas, work patterns of the drug mafia in both Latin America and Pakistan, the economic impact of narcotics trade, the existing social conditions of the concerned countries and the responses of their governments — all share almost the same dialectics.

However, Latin American experience stays by far an advanced case of narcotics abuse in every sense, when compared to Pakistan. The Latin American mafia, over the years, has almost got itself recognized by creating a pro-narcotics lobby in the populace. Pakistan seems to be following rapidly in the Latin American footsteps but the situation still cannot be called as adverse as in Colombia, Bolivia or Peru.

This chapter discusses the similarities and differences in both experiences.

Similarities

Both, coca and poppy plants, are grown in remote regions where climatic conditions are not suitable for other crops to flourish. Also both the plants do not require a great deal of care, as in the case of other typical licit crops. These areas are underdeveloped and their inhabitants are cut off from metropolitan cities in their respective countries. There are no or little communication links available to these people. Historically, these areas are either a political no-man’s-land or enjoy a certain degree of autonomy from their governments.
In such circumstances the drugs industry has acted as a colonial force, introducing vital components of a modern civilization in these areas. These include, communication networks, satellite industries and some limit agriculture etc. But most of all, narcotics industry has become the only source of welfare to the people of narcotics growing regions. It pays them more than they can earn from any other source, it saves them the need to go to the market to sell their product, it compensates their losses and provides them with a chance of earning a living. In short, narcotics industry is the only concerned employer in narcotics growing areas, which are otherwise seriously neglected by their local governments.

Both coca and poppy growing areas extend to their alikes in the neighbouring countries and because of their autonomous nature, provide traffickers an easy movement across borders. Moreover, same creates a standby facility if in case the narcotics crop is adversely effected in one country by unfavourable climatic conditions or crop eradication attempts by law enforcing agencies. The geographical conformity has also resulted in a specialized division of labour. For example, in the Latin American case Colombia is practically only a processor of coca-into cocaine whereas Peru and Bolivia concentrate more on coca growing. Similarly, it is suspected that decreased poppy cultivation in Pakistan may be because there is abundance of the quality poppy growing areas in Afghanistan. Hence, in short, the political geography of narcotics growing regions has facilitated the narcotics industry, in both Latin America and in the Southwest Asian, Golden Crescent, in becoming more systematic.

The societal conditions in the narcotics producing countries of Latin America and Pakistan are also quite identical. All are post-colonial, under developed states, where the populace lacks integration. Moreover, due to low living standards because of being under- developed, petty corruption is a norm. The populace looks more towards the short-term monetary benefits and less attention goes to the long-term implications of most social phenomenon. Furthermore there is acute deficiency of strong public opinion against narcotics in the peoples of Latin America and Pakistan. Instead, in fact there is a pro-narcotics exporting lobby present in both the regions. In case of Latin American countries especially Colombia this constitutes a sizeable proportion of the population. Whereas in case of Pakistan the same is just emerging.

The pro-narcotics lobby is present and growing too, because of the presence of an anti-US sentiment in the masses. In case of Latin American countries this sentiment may have emerged because of North American domination throughout in history and also due to the nationalist feeling which sees US assistance for narcotics control as a direct intervention in those nation’s sovereign matters. In case of Pakistan, on the other hand, anti-US feelings in the populace seem to have developed from the past experiences like the 1965 and 1971 wars in which the US backed out of supporting the country. Moreover, the strong influence of religion in the country makes the populace think of the developed west in general as non-believers. Moreover, conditions like ‘Pressler’s Amendment’ make the people feel that US supports India more than Pakistan, the two being traditional rivals.

In short, therefore, the US moves to control narcotics are viewed by both the regions as attempts of imposing US imperialist designs on the latter.

Huge drug trade revenues in both the regions have increased the magnitude of underworld operations. These revenues have created black economies in drug producing countries which are almost equal or even larger in size than the national economy. Even though very small proportions of narco money is spent in the home countries but even that small amount is huge enough. The narco money is expended in certain typical areas of the overall economic activity. For example cattle ranches, real estate and transport etc. This pattern of investment has a dual effect, first that it creates multiplier effects which increases the number of those indirectly dependent on narcotics industry. Second, that it does not contribute in any sense to the vital economic activity for development of the country, for example activities like mining and heavy industry.

In other words narcotics industry in both the regions, does not act as any motor for economic development and whatever little economic prosperity is brought about by narcotics revenue is in a very unbalanced fashion.

On the other hand narcotics money has made the Latin American and Pakistani drug mafia, very strong. Drug barons in both the regions are few of the richest men in the world. With such economic resources at their disposal and the fore described societal conditions in Latin America and Pakistan, drug barons have penetrated deep into the economic and political milieus of their respective countries.

Drug barons in both regions spend large sums to back the political parties in their election campaigns and at various instances these barons have themselves stood for political offices. Financing of political parties enables these barons to extend pressing demands to the political regime working in their governments, the same gives them a chance of influencing narcotics related law enforcement. On the other hand the political elites who have taken the funding from the drug barons keep a rather compromising attitude in the fear of blackmailing.

Heavy encroachment of drug mafia on producing nations economic and political scenarios has created the belief in the national leaders minds that a successful crackdown on drugs industry will result in a state of total economic, political and social chaos. Moreover, in both Latin America and Pakistan due to being underdeveloped, there are other important concerns for the governments to deal with. For example, unemployment or under employment, poverty and lack of welfare systems. In the wake of such circumstances, it is a common belief with the governments and the populace as well that fighting drug abuse is not as vital as other issues for national security.

The neglect of fighting drug abuse in Latin American countries and Pakistan and the prevailing social discontent, has resulted in a sharp increase of domestic consumer markets in these countries. With this the drug barons and the mafia have become even more entrenched in their respective social set ups, consequentially giving rise to drug related petty crime and corruption. The societies of drug producing countries being more vulnerable to corruption has enabled the mafia to infiltrate deep into the state machinery. The Latin American and Pakistani drug barons have placed their men at sensitive positions in vital state departments like police, judiciary, foreign affairs and even defence ministers. This has resulted in the build up of a strategic intelligence capability for the drug mafia, with which they can keep a check on their anti-counter parts’ strategies.

With their huge drug trade revenues drug lords have acquired extremely sophisticated weaponry, far advanced in nature to what is available with the law enforcing agencies. Similarly, Pakistani drug barons have employed the Afghan war veterans and have virtually created private armies of their own. Other than this the drug mafia in both the regions makes an open display of arms, in order to deter the anti-narcotics demands.

The dynamics of control of narcotics, in Latin America and Pakistan also share a common unfolding of events. In both the regions states are characterized by weak central governments, which lack the strength to launch an effective war on drug mafia to curb the drug menace. Governments at several instances have either been an accomplice to the drug trade or have been known to ignore the illegal activities of the mafia. The cases of General Luis Garcia Meza’s regime in Bolivia and President Zia-ul-Haq’s regime in Pakistan can be quoted in this context. Moreover, the lack of resources has often hampered of any anti-narcotics efforts by these states. On the outset governments seem to be dedicated for fighting the drug abuse, however, on a closer analysis one finds an acute shortage of political will to serve this cause.

United States is the worst affected of Latin American and Pakistan narcotics trafficking. Therefore, it funds a majority of anti-narcotics projects in the two regions. Most of these projects are identical in nature in both Latin America and Pakistan. These projects include, crop substitution programmes, development in narcotics growing areas, technical assistance to local law enforcing agencies, and funding of the non-governmental organizations, which are dedicated to fighting drug abuse. Moreover, through diplomatic efforts US tries to compel these states to eradicate coca and poppy plantations and also extradite leading narcotics criminals for prosecution and trial in the US.

However, US efforts in curbing the drug menace possess an inherent paradox. It seems that the American Central Intelligence Agency (CIA) has often got into a marriage of convenience with underworld organizations to advance Washington’s political agenda abroad. For example, during the Soviet-Afghan war years Washington strengthened the border tribes of Afghanistan in order to create a strong Afghan resistance against the Soviets. These tribes which were historically known to have smuggling as their major occupation, today are the centres of activity for narcotics trafficking and production. In the Latin American context it is often argued by analysts that without the CIA complicity General Luis Garcia Meza would not have been able to come into power. The General was later accused by the CIA to have been grossly involved in narcotics trafficking.

Hence, in both cases that is, Latin America and Pakistan, CIA and other vital United States government agencies, have been factors in the development of narcotics trade. The same can be accounted for as a reason in compromising the arrest, prosecution and extradition of few of the most infamous drug lords, in the two regions, the case of Haji Iqbal Baig being an example. Moreover, the US seems to be dealing with the problem of her domestic narcotics consumption market, by applying supply-side strategies i.e. in other words the US is attempting to solve, what is largely a domestic problem at its foreign source.

In a nutshell, therefore, it can be concluded that in both Latin America and Pakistan, a number of drug enforcement policies are underway but to the lack of anti-narcotics constituency in the populace and strong governmental initiative and the presence of anti-US sentiment, fear of US imperialism along with immense resources of drug mafia, nothing positive seems to be in the course of narcotics control. Instead, it can be said that the way circumstances are moving in favour of the drug lords, whatever control scenario present in drug producing states may well be reversed.


Differences in the Pakistan and Latin America Experience

The preceding discussion reveals that dynamics of narcotics trafficking and production in Latin America and Pakistan are moving in a symmetry. However, the cases are not exactly identical. In its existence the Latin American mafia it is far more advanced and recognized than their Pakistani counterparts.

As noted earlier the Latin American drug mafia has evolved a certain political, economic and social philosophy, over the years. The drug lords refer to themselves as success stories in a capitalist world and also claim that war against them, by the US is a tactic of extending US imperialism in the underdeveloped states. The lords also accuse their local governments of being US cronies, as they are assisting the US in her motives.

Moveover, the Latin American drug barons have spent heavily on public service works. These works are normally done in areas out of reach of the local governments. Hence the drug barons have created a soft corner in the hearts of the populace for the drug mafia. The creation of this pro-coca lobby in their respective states have given the Latin American mafia an advocate for their illegal activities.

In the economic sense the cocaine industry has completely overshadowed the national economy in Latin America. The case of Medallin can be quoted in this context where an almost virtual collapse of the textile sector was supported and filled for by the narcotics industry. Such a deep penetration into country’s national economy, has made the governments in Latin American narcotics producing states, review and fear the total and complete eradication of the narcotics industry. In fact the governments, through their various actions, seem to recognize the presence of mafia, in a context which is not criminal.

These circumstances are peculiar to the cocaine industry when it is compared with its counterpart in Pakistan. The Pakistani mafia by and large, is still a highly evolved case of organized crime. Moreover, the sharp increase in domestic narcotics consuming population is raising serious concerns with the Pakistani analysts, intellectuals and even government. The situation, where cannot be called exactly hopeful can also be not termed as hopeless as in Latin America. Increasing role of the NGOs in Pakistani development can also be called a positive step towards narcotics control in the country.

Narco-Dollars for Beginners "How the Money Works" in the Illicit Drug Trade
by Catherine Austin Fitts
Special to the Narco News Bulletin, 2001

Contents
Part I: Narco Dollars for Dummies
A Simple Framework: The Solari Index and the Dow Jones Index
The Economics of Production: Sam and Dave Do Boat Loads of White Agricultural Substances
Many Boatloads Later
A Real World Example: NYSE’s Richard Grasso and the Ultimate New Business "Cold Call"

Part II: Narco Dollars On Your Map
Getting Out of Narco Dollars HQ
Georgie, West Philadelphia and the Stock Market
The Narco Dollar Double Bind: Dow Jones Index Up, Solari Index Down
It’s Not Just About Profit, It’s About the Pop

Part III: Drugs as Currency
The Hickory Valley-Philadelphia Fast Food Franchise Pop
Enforcement: At the Heart of the Double Bind
Drugs as Currency
In Defense of the American Drug Lords
The Pogo Problem: We Have Met the Enemy and It is Us
The National Security Council’s Double Bind in 1996
Solari Index Up, Dow Up, Debt Down

Bibliography

Narco News Publisher’s Note: Catherine Austin Fitts is a former managing director and member of the board of directors of Dillon Read & Co, Inc, a former Assistant Secretary of Housing-Federal Housing Commissioner in the first Bush Administration, and the former President of The Hamilton Securities Group, Inc. She is the President of Solari, Inc, an investment advisory firm. Solari provides risk management services to investors through Sanders Research Associates in London.

"The Latin American drug cartels have stretched their tentacles much deeper into our lives than most people believe. It’s possible they are calling the shots at all levels of government." --William Colby, former CIA Director, 1995

Part I: Narco Dollars for Dummies
A Simple Framework: The Solari Index and the Dow Jones Index

The Solari Index is my way of estimating how well a place is doing. It is based upon the percentage of people in a place who believe that a child can leave their home and go to the nearest place to buy a popsicle and come home alone safely. When I was a child growing up in the 1950’s at 48th and Larchwood in West Philadelphia, the Solari Index was 100 percent. It was unthinkable that a child was not safe running up to the stores on Spruce Street for a popsicle and some pin ball. The Dow Jones was about 500, the Solari Index was 100 percent and our debt per person was very low. Of course I did notthink about it that way at the time. All I knew was that life on the street with my buddies was sweet.

Today, the Dow Jones is over 9,000, debt per person is over $100,000 and my favorite hairdresser in Philadelphia, Al at the Hair Hut in West Philadelphia, and I just had a debate yesterday afternoon while Al was cutting my hair about whether the Solari Index in my old neighborhood was 0 percent (my position) or 10 percent (Al’s position). Men always think it is higher than women.

Despite the boy-girl spread between us, it is fair to say that Al and I agree that the Solari Index is in the tank -- both in the streets of Philadelphia and throughout America. Life on the street ain’t sweet any more. I watched the slide of the Solari Index as a child. A lot of it had to do with narcotics trafficking and the people that narco dollars put in power on our streets -- and in city hall, in the banks, in Congress and the corporations and investors down town and that ring the city.

My mission is to see the Solari Index return to 100 percent and to do so in a manner that moves the Dow up and our debt per person down and makes me and my partners a whole pile of money.

A few years back when my efforts to improve the Solari Index were threatening to reduce narcotics profits in a few places, I discovered that I could not look to the enforcement or the judicial establishment funded with my tax dollars to protect me. Narco dollars had the upper hand throughout government and the legal establishment.

That’s when I decided that I would have to learn how the money works on the drug trade. Here is what I have learned that has been useful to me -- and may help you have a better map of how narco dollars impact you, your business, your family and the Solari Index in your neighborhood.


The Economics of Production: Sam and Dave Do Boat Loads of White Agricultural Substances

Okay, let’s start at ground zero. It is 1947, and World War II is over. America is ready to go back to work to build the corporate economy. We are in New Orleans on the docks. Two boats pull into the docks. The first boat is full of a white agricultural product grown in Latin America called sugar. The owner of the cargo, lets call him Sam, sells his boat load of white agricultural substance to the sugar wholesaler on the docks for how much money?

Ok, so let’s say that Sam sells his entire boatload of sugar to the sugar wholesaler on the
docks for X dollars. Now, after Sam pays his workers and all his costs of growing and transporting the sugar, and after he and his wife spend the weekend in New Orleans and he pays himself a bonus and buys some new harvest equipment and pays his taxes, how much cash does he have left to
deposit into his bank account? Or, another way of saying this is: What is Sam’s net cash margin on his sugar business?

Well, it depends on how lucky and hard working and smart Sam is, but let’s say that Sam has worked his proverbial you know what off and he makes around 5-10 percent. Sam the sugar man has a 5-10 percent cash profit margin. Let’s call Sam’s margin S for slim or SLIM
PERCENTAGE.

Back on the docks, the second boat -- an exact replica of the boat carrying Sam’s sugar -- is a boat carrying Dave’s white agricultural product called drugs. In those days this was more likely to be heroin, these days more likely to be cocaine. Whatever the precise species, the planting, harvesting and production of this white agricultural substance, Dave’s drugs, are remarkably like Sam’s sugar.

Ok, so if Sam the sugar man sold his sugar to the sugar wholesaler for X dollars, how much will Dave the drug man sell his drugs to the drug wholesaler for? Well, where Sam is getting pennies, Dave is getting bills. If Sam had sales of X dollars, let say that Dave had sales of 50-100 times X. Dave may carry the same amount of white stuff in a boat but from a financial point of view, Dave the drug man has a lot more "sales per boat" than Sam the sugar man.

Now, after Dave pays his workers and all his costs of growing and transporting the drugs, and after he and his wife spend the weekend in New Orleans and he pays himself a bonus and buys some new harvest and radar equipment and spends what he needs on bribes and bonuses to a few enforcement and intelligence operatives and retainers to his several law firms, how much cash does he have left to deposit into his bank account? Or, another way of saying this is what is Dave’s net cash margin on his drug business?

It’s also going to be a multiple of Sam’s margin, right? Maybe it will be 20 percent or 30 percent or more? Let’s call it B for Big, or BIG PERCENTAGE. Dave the drug man has a much bigger "cash profit per boat" than Sam the sugar man. Part of that is, of course, once Dave has set up his money laundering schemes, even after a 4-10 percent take for the money laundering fees, it’s fair to say his tax rate of 0 percent is lower than Sam’s tax rate. While it is expensive to set up all the many schemes Dave might use to launder his money, once you do it you can save a lot avoiding some or all of the IRS’s take.

Look at your estimate of Sam and Dave’s sales and profits. Now answer for yourself the following questions.

Who is going to get laid more, Sam or Dave?
Who is going to be more popular with the local bankers, Sam or Dave?
Who is going to have a bigger stock market portfolio with a large investment house, Sam or Dave?
Who is going to donate more money to political campaigns, Sam or Dave?
Whose wife is going to be bigger in the local charities, Sam or Dave’s?
Whose companies will have more prestigous law firms on retainer, Sam or Dave’s?
Who is going to buy the other’s company first, Sam or Dave? Is Dave the drug man going to buy Sam the sugar man’s company, or is Sam the sugar man going to buy Dave the drug man’s company?
When they want to buy the other’s company, will the bankers, lawyers and investment houses and politicians back Sam the sugar man or Dave the drug man?
Whose son or grandson has a better chance of getting into Harvard or getting a job offer at Goldman
Sachs, Sam or Dave’s?

Don’t listen to me. And don’t listen to Peter Jennings, Dan Rather or Tom Brokaw. Who do you think pays their salaries? Who owns the companies they work for? Sam or Dave? Don’t listen to anyone else. Think about the numbers and listen to your heart. What do you believe?

There is very little about how the money works on the drug trade that you cannot know for yourself by coming to grips with the economics over a fifty year period of Sam and Dave and their boat loads of white agricultural substance. It is the magic of compound interest. As one of my former partners used to say, "Cash flow is more important than your mother."


Many Boatloads Later

It’s more than fifty years now since the boats transporting Sam and Dave’s white agricultural products docked in New Orleans. I don’t know what the Narco National Product (Solari’s term for that portion of the GNP coming from narco dollars) was in 1947, but lets say it was a billion dollars or less. Today, the Narco National Product that number is estimated to be about $400 billion globally and about $150 billion plus in the United States.

It helps to look at the business globally as the United States is the world leader in global money laundering. According to the Department of Justice, the US launders between $500 billion -- $1 trillion annually. I have little idea what percentage of that is narco dollars, but it is probably safe to assume that at least $100-200 billion relates to US drug import-exports and retail trade.

Ok, so let’s think about how much Sam and Dave have in accumulated profits in their bank
and brokerage accounts. Let’s assume that the US narco national product in 1947 was $1 billion and it has grown to about $150 billion today. Assume a straight line of growth from $1 billion - $150 billion, so the business grows about $3 billion a year and then tops out at $150 billion as the Solari Index has bottomed out at or near 0 percent. America is about as stoned on illegal drugs as it can get, and growth in controlled "Schedule II" substances has moved to Ritalin and other cocaine-like drugs for kids that government programs and health insurance will now finance. Let’s take the BIG PERCENT margin that we estimated for Dave the drug man’s net cash margin. Let’s say that every year from 1947 through 2001, that the cash flow sales available for reinvestment from drug profits grew by $3 billion a year, throwing off that number times BIG PERCENT. Okay, assume that the reinvested profit grew at the compound growth rate of the Standard & Poor’s 500 as it got reinvested along the way.

That amount is an estimate for the equity owned and controlled by those who have profited in the drug trade. Total narco dollars. How much money is that? I made an Excel spread-sheet once to estimate total narco capital in the economy. My numbers showed that Dave the drug man had bought up not only Sam’s companies, but -- if you throw in other organized crime cash flows -- a controlling position in about most everything on the New York Stock Exchange.

When you think about it, this analysis make sense. The folks with the BIG PERCENT – big cash margin -- would end up rich and in power and the guys working their you-know-what off for SLIM PERCENT -- a low cash margin -- would end up working for them.


NYSE Chairman Richard Grasso with a FARC Commmander


A Real World Example: NYSE’s Richard Grasso and the Ultimate New Business "Cold Call"

Lest you think my comment about the New York Stock Exchange is too strong, let’s look at one event that occurred before our "war on drugs" went into high gear through Plan Colombia, banging heads over narco dollar market share in Latin America. In late June 1999, numerous news services, including Associated Press, reported that Richard Grasso, Chairman of the New York Stock Exchange flew to Colombia to meet with a spokesperson for Raul Reyes of the Revolutionary Armed Forces of Columbia (FARC), the supposed "narco terrorists" with whom we are now at war.

The purpose of the trip was "to bring a message of cooperation from U.S. financial services" and to discuss foreign investment and the future role of U.S. businesses in Colombia. Some reading in between the lines said to me that Grasso’s mission related to the continued circulation of cocaine capital through the US financial system. FARC, the Colombian rebels, were circulating their profits back into local development without the assistance of the American banking and investment system. Worse yet for the outlook for the US stock market’s strength from $500 billion -- $1 trillion in annual money laundering -- FARC was calling for the decriminalization of cocaine.

To understand the threat of decriminalization of the drug trade, just go back to your Sam and Dave estimate and recalculate the numbers given what decriminalization does to drive BIG PERCENT back to SLIM PERCENT and what that means to Wall Street and Washington’s cash flows. No narco dollars, no reinvestment into the stock markets, no campaign contributions.

It was only a few days after Grasso’s trip that BBC Newsreported a General Accounting Office (GAO) report to Congress as saying: "Colombia’s cocaine and heroin production is set to rise by as much as 50 percent as the U.S. backed drug war flounders, due largely to the growing strength of Marxist rebels"

I deduced from this incident that the liquidity of the NY Stock Exchange was sufficiently dependent on high margin cocaine profits (BIG PERCENT) that the Chairman of the New York Stock Exchange was willing for Associated Pressto acknowledge he is making "cold calls" in rebel controlled peace zones in Colombian villages. "Cold calls" is what we used to call new business visits we would pay to people we had not yet done business with when I was on Wall Street.

I presume Grasso’s trip was not successful in turning the cash flow tide. Hence, Plan Colombia is proceeding apace to try to move narco deposits out of FARC’s control and back to the control of our traditional allies and, even if that does not work, to move Citibank’s market share and that of the other large US banks and financial institutions steadily up in Latin America.

Buy Banamex anyone?


Part II: Narco Dollars On Your Map

It helps to look at the drug markets by looking at a map of the United States.

What are the four states with the largest market share in illegal narcotics trafficking? Draw a
map if you want and shade them in on your map.

Yup. You got it.

New York, California, Texas and Florida.

It makes sense. Those are the biggest states. They have big coastal areas and borders and big ports. It would make sense that the population would grow in the big states where the trade and business flow grows. If you check back to Part I of "Narco Dollars for Dummies", we described two businesses. One was Sam’s sugar business that had a SLIM PERCENTAGE profit. The other was Dave’s drug business that had a BIG PERCENTAGE profit. It would make sense that these four states would be real big in both Sam’s sugar business and Dave’s drug businesses.

OK. Now. What are the four states with the biggest business in money laundering of narco profits and other profits of organized crime?

Not surprising? Same four states. They are all known as banking power places.

New York, California, Texas and Florida.

What’s next? What are the four states with the biggest business in taking the laundered narco profits and using them to deposit money in a bank, or to buy another company, or to start a new company, or just buy stock in the stock market? That’s what I call the reinvestment business.

Same four, right? New York, California, Texas and Florida.

Who were the governors of these four states in 1996?

Well, let’s see. Jeb Bush was the governor of Florida. Governor Jeb was the son of George H. W. Bush, the former head of an oil company in Texas and Mexico and the former head of the CIA and the former head of the various drug enforcement efforts as Vice President and President. Then George W. Bush, also the son of George H. W. Bush, was the governor of Texas. So the governors of two of the largest narco dollar market share states just happen to be the sons of the former chief of the secret police.

Do you think it is possible to become the governor of a state with the support of the SLIM PERCENTAGE profit businesses and the opposition of the BIG PERCENTAGE profit businesses, particularly after the BIG PRECENTAGE profits have bought up all the SLIM PERCENTAGE profit businesses?

What about president?

Of course, George W. is President today fueled by the single most successful campaign fundraising in the history of Western civilization. Now do you know why Hillary Clinton wanted to be a Senator from New York? Now do you know why Andrew Cuomo wants to be New York governor and is reported to be doing polls to see if people associate him with the Mafia and organized crime?

When you think about it, the President would need to win the majority of the people who donate from the SLIM PERCENTAGE profit businesses but control the reinvestment of the BIG PERCENTAGE profit industry cash flow to win. The competition for the support of the people who control the reinvestment from the BIG PERCENTAGE profit business cash flow in the biggest states would be fierce.

According to the Center for Responsive Politics analysis of the 2000 elections , donors in California, New York, the District of Colombia Metro Area (which is full of lawyers and lobbyists who represent all the other states), Texas and Florida contributed $666.8 million, or approximately 47 percent of a total of $1.427 billion in donations.

I can just paraphrase Tina Turner singing in the background. Care to hum along with us? . . .."What’s drugs got to do . . . got to do . . . with it?"


Getting Out of Narco Dollars HQ

In 1996, my company and I were targeted by a private informant and a group of investigators working for the Department of Justice and the Department of Housing and Urban Development (HUD). If you have ever seen the movie Enemy of the State with Will Smith and Gene Hackman, then you understand how the drill works.

Will Smith plays a successful Washington lawyer who is targeted in a phony frame and smear by a US intelligence agency. The spooky types have high-speed access to every last piece of data on the information highway -- from Will’s bank account to his telephone conversations -- and the wherewithal to engineer a smear campaign through the papers and the Council on Foreign Relations types.

The organizer of an investment conference once introduced me by saying, "Who here has seen the movie Enemy of the State? The woman I am about to introduce to you played Will Smith in real life."

One day I was a wealthy entrepreneur with a beautiful home, a successful business and money in the bank. I had been a partner and member of the board of directors of a Wall Street firm and then Assistant Secretary of Housing-Federal Housing Commissioner during the Bush Administration. I had been invited to serve as a governor of the Federal Reserve Board and instead started my own company in Washington, The Hamilton Securities Group.

Thanks to our leadership in digital technology, financial software and analytics, Hamilton was doing well and poised for significant financial growth. One of my software tool innovations, Community Wizard, helped communities access data about how all the money works in their place. Accessible through the World Wide Web, Community Wizard was illuminating an unusual pattern of defaults on HUD mortgages and other government and homeowner losses in areas in which the CIA had admitted to facilitating cocaine trafficking by Iran Contra supporters.

According to the CIA, we were paying our government to help the narco dollars make money in a way that -- if you read Community Wizard’s comic book-like money maps --was losing taxpayers and homeowners billions of dollars. The next day I was hunted, living through 18 audits and investigations and a smear campaign directed not just at me but also at members of my family, colleagues and friends who helped me. I believe that the smear campaign originated at the highest levels. For more than two years I lived through serious physical harassment and surveillance. This included burglary, stalking, having houseguests followed and dead animals left on the doormat. The hardest part was the necessity of keeping quiet about the physical danger lest it cost me more support or harm my credibility. Most people simply do not believe that such things are possible in
America.

In 1999, I sold everything to pay what to date is approximately $6 million of legal and administrative costs. My estimate of equity destroyed, damages and opportunity costs is $250 million. I moved to a system of living in several places on an unpredictable schedule in the hope that this would push up the cost of surveillance and harassment and so dissuade my tormentors from following.

The places were chosen to move me as far away as possible from the corridors of power in Washington and on Wall Street filled with people benefiting from narco dollars and their reinvestment. That strategy-combined with excellent legal and administrative work by a first rate team of very courageous people -- has been successful in besting the targeting. It made it possible for me to understand how our economic addiction to narco dollars worked and how to it was draining our neighborhoods. I teamed up with the members of my family and friends and their neighbors who were getting drained.

Four days after InsightMagazine published its cover story on me this summer, the head investigator targeting us resigned unexpectedly. Three weeks later the last of 18 audits and investigations was suddenly closed down. A follow-up article by Insight’sPaul Rodriguez described the closed investigation as something that "many inside both HUD and the Department of Justice regarded as a political vendetta against Fitts."

The miracle had happened. We have overcome a serious targeting. Like in the movie where Will Smith comes out fine, my story has a happy ending. It’s a wonderful feeling. As Winston Churchill’s once said, "Nothing is more exhilarating than being shot at without result."

I believe that one of the reasons for my happy ending was that our actions to deal with the investigation reflected the understanding of narco dollars that I acquired from living and traveling throughout America and talking with people from all walks of life about how narco dollars were impacting our lives and neighborhoods in many different places.

Understanding narco dollars is something I need to know to help entrepreneurs around the country build the profitable deals and businesses that will get the Solari Index and Dow Jones in our neighborhoods rising together. Where I live, folks do not want to know about what is wrong on the Titanic. They do not want to know that a flood of narco dollars is rolling over us. They know these things. What they want to know is how to build arks.


Georgie, West Philadelphia and the Stock Market

One of my new homes is in the city in Philadelphia, near where I grew up in West Philadelphia. Another is in a very beautiful and close knit farming community in Hickory Valley, Tennessee where my father’s family has lived since the 1850’s. Once a month I drive to Philadelphia from my home in Hickory Valley to attend a boardmeeting. I stay in a lovely little apartment in the first floor of a row house owned by my friend Georgie.

Georgie is one of my favorite people in the world. She lives in the apartment on the second floor. Just about my favorite thing in the world is hanging out with Georgie. We watch Oprah, we talk, we go to movies, and we giggle over ice cream with long names and cookies. Georgie is an awesome cook and my little apartment fills up daily with the smells of something delicious that Georgie is making.

One day, Forest, my dog, and I were up in Georgie’s apartment to enjoy a fresh plate of scrapple that Georgie had fried up that morning. The conversation turned to narco dollars. Georgie said that looking at the big picture was simply too overwhelming. Couldn’t I explain this without using the words millions or billions -- just dollars and cents in terms of our neighborhood in West Philadelphia?

I always have this problem explaining international money flows to moms and grandmoms. Most really great women want to know about the real world. The world of real people – her world full of her kids and grandkids and other kids she loves.

So we got out a blank piece of paper and started to estimate.

Every day there are two or three teenagers on the corner dealing drugs across from our home in Philadelphia. We figured that if they had a 50% deal with a supplier, did $300 a day of sales each, and worked 250 days a year that their supplier could run his net profits of approximately $100,000 through a local fast food restaurant that was owned by a publicly traded company
.
Assuming that company has a stock market value that is a multiple of 20-30 times its profits, a handful of illiterate teenagers could generate approximately $2-3 million in stock market value for a major corporation, not to mention a nice flow of deposits and business for the Philadelphia banks and insurance companies.


The Narco Dollar Double Bind: Dow Jones Index Up, Solari Index Down

As described in Part I, the Solari Index is my way of estimating how well a place is doing. It is based upon the percentage of people in a place who believe that a child can leave their home and go to the nearest place to buy a Popsicle and come home alone safely. The Solari Index is about how safe you feel you and your neighbor’s kids are.

When I was a child growing up in the 1950’s at 48th and Larchwood in West Philadelphia, the Solari Index was 100 percent. It was unthinkable that a child was not safe running up to the stores on Spruce Street for a Popsicle and some pinball. The Dow Jones was about 500, the Solari Index was 100 percent and our debt per person was very low. Of course I did not think about it that way at the time. All I knew was that life on the street with my buddies was sweet.

Today, the Dow Jones is over 9,000, debt per person is over $100,000, and I think the Solari Index in my old neighborhood is 0 percent.

Life on the street ain’t sweet anymore.

To understand how this works, we need to understand "pop."


It’s Not Just About Profit, It’s About the Pop

Here is the part that is particularly hard for women. It took several times at our sheet of paper before Georgie understood what I was saying. The power of narco dollars comes when you combine drug trafficking with the stock market. The "pop" is a word I learned on Wall Street to describe the multiple of income at which a stock trades. So if a stock like PepsiCo trades at 20 times it’s income, that means for every $100,000 of income it makes, it’s stock goes up $2 million. The company may make $100,000, but its "pop" is $2 million. Folks make money in the stock market from the stock
going up. On Wall Street, it’s all about "pop."

The people who own a corporation make money on the stock going up. So a company has investors, with the most powerful investors typically being large institutions who are typically represented on the board of the company. The board is the group of people who decides what goes. The senior management officials who run the company day to day are also on the board. Most of the money they make comes from stock options that they get to encourage them to get the stock to go up for the investors. That means that what everyone who runs the company wants is for the stock to go up. The way to do that is to increase net income or to increase the multiple at which the stock trades.

So in the case of PepsiCo described above, if the management increases soda pop sales in a way that net income goes up by $100,000, the stock goes up $2 million. Now let’s say, the board and management do a whole series of things to attract new investors and improve the company’s image and, as a result, the stock starts trading at 22 times profits. Then, the stock value goes up even more. Whether increasing net income or increasing the multiple at which the stock market values the company profits, the board and the management are focused on making the stock go up. That is how their money works.

The winner in the global corporate game is the guy who has the most income running through the highest multiple stocks. He is the winning pop player. Like the guy who wins at monopoly because he buys up all the properties on the board, he can buy up all the other companies.

So if I have a company that has a $100,000 of income and a stock trading at 20 times earnings, if I can find a way to run $100,000 of narcotics sales by a few teenagers in West Philadelphia through my financial statements, I can get my stock market value to go up from $2 million - $4 million. I can double my "pop." That is a quick $2 million profit from putting a few teenagers to work driving the Solari Index down in their neighborhood. Bottom line, I can make a lot of quick money on the stock going up and the Solari Index going down OK, now what does this all mean for the Solari Index in Philadelphia? If I am a group of mothers in my neighborhood who want the Solari Index to go back up to a 100%, what’s stopping me?

Well, if the Department of Justice is correct about $500 billion-to-1 trillion of annual money laundering in the US, then about $20-40 billion should move annually through the Philadelphia Federal Reserve District.

Assuming a 20% margin for the BIG PERCENTAGE profits and a 20 times multiple on the stock of the companies that Dave and his investors and banking partners were using to launder the money, let’s look at how much of the stock market value would be "addicted" to the drug and money laundering profits flowing through the Philadelphia area.

The total stock market value generated in the Philadelphia area with $20-40 billion in narco retail sales would be about $80-160 billion. If you add all the things you could do with debt or and other ways to increase the multiples, and you could get that even higher, say $100-250 billion.

Assuming that there are 3 million people in the greater Philadelphia area, the total stock market value generated would average anywhere from $27,000-to-$85,000 per person. Imagine what would happen to the economy in Philadelphia if this stock market value suddenly disappeared because all the teenagers in Philadelphia stopped dealing or buying drugs?

Imagine what happens to your stock multiple if you are a Philadelphia corporate chieftain and you don’t run narco dollars or large purchases fueled by narco dollars through your financial statements and you don’t attract narco dollars to reinvest in your stock? What happens to your corporate income and your stock profit if the ones who invest narco dollars-- accumulated over the last fifty years compounding at their magical compound interest --don’t like you? How is everyone in Philadelphia who loses money on your stock going down going to feel about you?

The Department of Justice says that we launder $500 billion - $1 trillion. Multiply those times a BIG PERCENTAGE cash flow profit margin. Now figure how much of that "income" gets run through the income statement of publicly traded banks and companies and multiply that number by the multiple of income at which their stocks trade.

Voila.I don’t know what your number is. All I know is that, as Ed Sullivan used to say, it is "really, really BIG."


Understanding Money Laundering in America

Part III: Drugs as Currency

"Who can compete with the government?"
--John Gotti, Jr.

The Hickory Valley-Philadelphia Fast Food Franchise Pop

Two things helped me understand money laundering in America. First, as I drove from Hickory Valley to Philadelphia once a month and drove around the country with my dog Forest all sorts of people started to teach me about how the money worked truckers and the ladies who run the brand-name motels and the folks who work the late shifts at the gas station food marts. Second, I read Black Money, a mystery novel by Michael Thomas, a former partner of the Wall Street firm, Lehman Brothers.

In Black Moneya government investigator investigating S&L fraud starts to look into the revenues and expenses of a fast food chain, which is experiencing far more deposits from sales than it is selling pizzas. As Thomas walks you through a handful of the near infinite number of possible money laundering schemes known to mankind, you start to get a sense for some of the economics of fast food franchises that have nothing to do with feeding people.

After I finished Black Money I started to pay attention to "how the money works" at the fast food and motel franchises at every interstate exit between Tennessee and Philadelphia. What I noticed about them was that no matter when I drove by -- day or night, weekday or weekend -- some of them were suprisingly empty. Indeed, one or two name brands were defined by their perpetual emptiness. Conversations every time I stopped filled in a lot here and there about how much cash was coming in and going out on the food and retail business.

Some quick estimation on what was being spent per interstate exit to start up and operate all the retail establishments versus what was coming in the door in terms of legitimate business said that some businesses had to be an excuse, an excuse to generate stock market capital gains by combining laundered money or phony profits with retail franchises -- or both. The problems this presents to people trying to run an honest business are numerous. The problems it creates for our work ethic and culture are numerous too. It increasingly puts the low performance people in charge, and everyone starts to behave like and follow them.

For example, I drove ten miles to Bolivar, our county seat, one night to go through the car wash at the local big chain publicly traded gas station. I tried to pay for a three-dollar car wash with quarters. I was told they would not take coins. It was a policy. Counting coins was too much work, the person at the register and then the manager said as they sat and gossiped with their friends, no other customers in sight. So I got back in my car and drove ten miles home and washed the car with a hose and some paper towels, the symbolic economy being too busy to care about steady customers or to do the real work in the concrete world.

If you are feeling energetic, go drive around to a few areas with a heavy concentration of retail fast food and motel franchises. Try estimating out the numbers. See how they work for you in your place. Are your local businesses in the retail business or the money laundromat business or both?

Another quick and dirty estimation technique for your neighborhood is to take the Department of Justice’s figure of $500 billion - $1 trillion and divide by 281 million Americans for a "per American" estimate of money laundering market share. Now multiply that times the number of p eople in your area. Now divide by the number of local banks.

What do the numbers say to you?

The next time you are out on the streets, see if you can guess where the money is. It’s bound to be there someplace.


Enforcement: At the Heart of the Double Bind

I tend not to get bogged down in discussions about how the various police, enforcement and prosecution industries relate to narco dollars. Here is my bottom line on how the money works on enforcement and the war on drugs.

Every year since I was a child the Solari Index goes down and the budgets that I pay for as a taxpayer to fund more enforcement, prosecution and incarceration go up. If you look at what taxpayers are paying, you would think we were picking up all the narco dollar industry’s expenses.

The more we pay for enforcement, the more the Solari Index goes down and drug profits go up. The more we pay for national security, the more thousands of boat loads of white agricultural products seem to have no problem moving back and forth across the borders.

After fifty years, the correlation is documented and clear.

What is also clear is that the person who has inside help from the national security, intelligence, enforcement and prosecution bureaucracies will have the biggest BIG PERCENTAGE cash margin (see Parts I & II for background on BIG vs. SLIM PERCENTAGE).

John Gotti, Jr, not a reliable source, when asked by a reporter whether or not the New York Gotti family was dealing in narcotics said, "No, who can compete with the government?" The CIA, also not a reliable source, backs up Mr. Gotti’s postion. According to the CIA’s own Inspector General, the government has been facilitating drug trafficking. Indeed, according to the CIA and DOJ (Dept. of Justice), the CIA and DOJ created a memorandum of understanding that permitted the CIA to help its allies and assets to traffic in drugs and not have to report it.

Where I come from powerful people pay for performance. I can only presume that the narco dollars are getting the performance they want from the expenditure of our tax dollars for more and more enforcement. After all, enforcement keeps profit margins up and the franchise controlled.

The best example I know is my own case. My estimate is that the federal enforcement establishment may have spent more to target me over the last six years than they spent to get Bin Laden before September 11. They clearly were not hampered in my case by having to respect the spirit or the letter of the law. I deduce from that only that the Solari model is not as good for the narco dollar and money laundering businesses as Bin Laden was -- at least until recently.


Drugs as Currency

One of challenges of doing the numbers on the narcotics business is that narcotics are not always a commodity -- sometimes narcotics are a currency used to pay for other things. The arms industry sometimes markets to third world countries, or groups such as terrorists, who cannot pay with cash, but can pay with drugs. So, for example, it is not unusual to see arms-drugs transshipment operations, in which payment for arms is taken with drugs and then the drugs retailed in the US to facilitate the arms trading and profits.

A case in point is the Iran-Contra operation at Mena, Arkansas . It has been alleged that Oliver North and the White House (National Security Council) were dealing drugs through Mena not to make money, but to facilitate arms shipments. Mena has received attention as a result of its alleged financial contribution to Bill and Hillary Clinton’s rise to national prominence.

You also see the arms-drugs relationship as you estimate how the money works on the private profits from various taxpayer funded wars. Vietnam, Kosovo, Plan Colombia , Afghanistan, what do they all have in common? Drugs, oil and gas, arms. Add gold, currency and bank market share and you have the top of my checklist for understanding how the money works on any war or "low intensity conflict" around the globe.

Many of the members of our global leadership were trained in wartime narcotics trafficking in Asia during WWII. George H. W. Bush and his generation watched our ally Chang Kai Shek finance his army and covert operations with opium. I am told that the Flying Tigers were the model that taught Air America how to fly dope.

If you trace back the history of the family and family networks of America’s leaders and numerous other leaders around the world, what you will find is that narcotics and arms trafficking are a multigenerational theme that has criss-crossed through Asia, North America, Europe, Latin America and Eurasia and back through the City of London and Wall Street to the great pools of financial capital. Many a great American and British fortune got going in the Chinese opium trade.

One of the benefits of learning how narco dollars work is that it will help you sort through the money laundering and insider trading news on the War on Terrorism. Terrorism and narcotics trafficking often get linked through narcotics as currency. Terrorists need guns. Narco dollars need private protection and covert operations.


In Defense of the American Drug Lords

It’s 1947. You want to make sure that America wins in the great game of globalization. The winner will be the country that accumulates the largest pool of capital to finance its corporations and investment in new technology. That is a problem because Americans vote for leaders who help them spend, not save. No matter how hard Sam the sugar man works and no matter how much he saves, how much capital can be pooled at SLIM PERCENTAGE? It is fair to say it is not enough to beat the investment network that can pool capital at BIG PRECENTAGE growth rates. (See Part I for the story of Sam and Dave).

Indeed, what a history of narcotics trafficking and piracy and various other forms of organized crime over the last five hundred years show is that our leaders have been in a double bind for centuries. The only thing more dangerous than getting caught doing organized crime, is not being in control of the reinvested cash flows from it. This is why monarchs played footsie with pirates in Elizabethan times and no doubt have been doing so ever since.

After taxation, organized crime is a society’s way of forming lots of pools of low cost cash capital. Organized crime is a banking and venture capital business. So the reality is that if you want to control the cash flow and capital that controls the overworld, you’ve got to control the cash flows getting generated by the underworld. Indeed, you’ve got to have an underworld. If it does not exist, you need to outlaw some things to get one going.

Here is the bottom line on how the money works on narco dollars. Unless Sam switches to dope, Dave will win his wife, his mistress, his banker, buy his company, buy his Congressman and be the star at the local charities. Everyone will admire and pay attention to Dave.

It’s the power of compound interest.

It’s 1947. If you don’t do it, you will be the loser. What would you do?


The Pogo Problem: We Have Met the Enemy and It is Us

The Sam and Dave dilemma of "to deal or not to deal" is made worse by the power of
popular opinion.

Last summer, I made a presentation called "How the Money Works on Organized Crime" to a wonderful group of about 100 people at an annual conference for a spiritually focused foundation in Philadelphia. This is a group of people who are committed to contributing to the spiritual evolution of our culture.

After walking through the various Sam and Dave dilemmas with Sam’s SLIM PERCENTAGE profits sugar business and Dave’s BIG PERCENTAGE profits drug business, as well as the intersection between the stock market and campaign fundraising and narco dollars for about an hour, I asked the group what would happen to the stock market if we decriminalized or legalized drugs?

The stock market would crash, they said.

What would happen to financing the government deficit if we enforced all money-laundering laws? Since most of the bank wire transfers are batched and run through the New York Federal Reserve Bank, this should not really be that hard, right?

Their taxes might go up. Worse, yet, their government checks might stop, they said. I then asked them to imagine a big red button at the front of the lectern. By the power of our imaginations, if they pushed that button they could decriminalize narcotics trafficking and stop all money laundering in the United States.

Who would push the button?

It turns out that in an audience of approximately 100 people committed to spiritually evolve our society that only one person would push the button. Upon reflection, 99 would not. I asked why.
They said that if they pushed the button, their mutual funds would go down and their government checks might stop.

I commented that what they were proposing is that an entire infrastructure of people continue to market narcotics to their children and grandchildren to ensure that their mutual and pension funds stay high in value.

They said, yes, that’s right.

Which is why I say that America is not addicted to narcotics as much as it is addicted to narco dollars.


The National Security Council’s Double Bind in 1996

Here is the acid test.

It’s August 1996. Gary Webb has just broken the story in the San Jose Mercury Newsabout the CIA helping to deal drugs into South Central LA. He has put the legal documents up on their website. The proof is hard. The government is dealing drugs. Catherine Austin Fitts’s company is publishing a tool on the web called Community Wizard that shows maps with Geographic Information Systems software that include patterns of defaults on HUD mortgages in the areas of LA with the heaviest concentration of CIA supported Iran Contra drug trafficking.

The patterns between HUD defaulted mortgages and narco dollars are much too close for comfort. What would you do if you were Bob Rubin (Secretary of Treasury, now Co-Chairman of Citicorp), Larry Summers (Deputy Secretary of Treasury, now President of Harvard), John Hawke (Undersecretary of the Treasury; now Comptroller of the Currency), Al Gore (Vice President, now teaching) and John Deutch (Director of the CIA, now teaching) sitting on the national security council or the related narco dollars task force? Would you target Webb and get him fired and the story discredited or would you let the story grow and flourish?

Would you target Fitts and have her business and her software tools and databases destroyed or would you let her business flourish, allowing every community to see and track the narco dollars that were helping to drive their Solari Index to 0% while driving the Dow Jones Index higher?

Which will it be in an election year? Will you do everything you can do to attract the reinvestment of the narco dollars into your campaign and into the stock market or will you let Fitts and Webb continue to illuminate "how the money works" on narco dollars in a way that might crash the stock market and make it harder and more expensive for the government to finance the deficit?

Before you answer, let me tell you one more story.

In 1999, I was at a revival for Christian women. One of the presidential candidates made a guest appearance. A friend of mine, an Afro-American minister, who used to work for the Drug Enforcement Agency (DEA), leapt to her feet to applaud him with tremendous enthusiasm. I was surprised at her response given that she understood his success in attracting narco dollars not to mention his and his colleague’s silence on Gary Webb’s Dark Alliance reports and the subsequent CIA admission of drug dealing by the government.

She looked at me and said, "He is going to be the winner." So I said, "You mean, I am a loser because I tried to stop the corruption and he is a winner because he profited from it and helped it grow. So you will clap for him and not for me." She replied, "That’s right. You are a loser. He is a winner"

Not such an easy decision to vote for the "rule of law" is it?

Indeed, Webb got fired and Fitts’ was targeted and, after spending $6 million on legal and related expenses, my fortune sank down to the same 0% as the Solari Index.

But whatever I do, I can’t blame it just on the top guys. Whatever they did, whoever it was, they were doing what it took to please and win the crowd.

Americans love a winner.


Solari Index Up, Dow Up, Debt Down

The good news on all of this is that there are solutions. New technology blesses us with the potential tools we can use to radically increase productivity in a way that can "jump the curve" on our narco dollar addiction.

Will it happen? I don’t know.

My pastor says, "If we can face it, God can fix it." The question is can we face our addiction to narco dollars? Can we do it in a way that entrepreneurs like me can build successful businesses and transactions that profit from getting the Solari Index and the Dow Jones Index to go up together?

Sound impossible? Far from it. It’s quite possible. Add up all the current income generated by small businesses in America. It is currently valued at a multiple of 1-5 times because it is private-not publicly traded in a liquid stock market. Investors have no way to invest in a liquid publicly traded stock.

The creation of a solari, a local knowledge manager/databank that publishes neighborhood financial statements and information and tracks the Solari Index in your place, can make it possible for your neighborhood to create a mutual fund that could channel capital to the profitable small businesses in your neighborhood so that participating small business income could start to trade at a multiple of 10 times -- even 20 times or 30 times eventually. The potential capital gains are in the trillions of dollars.

That is a lot of low cost capital that local entrepreneurs can use to create jobs and to build their businesses -- even start new ones.

Better yet, while your doing that how about reengineering billions of federal, state and local government investment that has a negative return on investment to both taxpayers and communities to a positive return on investment. More big capital gains that can be securitized and traded in a liquid stock market -- again the potential profits are in the trillions.

Finally, add up the value of all the homes and real estate in your community. OK, what would happen to the value of that equity if the Solari Index went back up to 100 percent? Real estate financed through a local trust or REIT or mutual fund that could be traded in the stock market would create a way for investors to start to "trade places." That means they would profit from the Solari Index going up along with local real estate owners, homeowners and small business folks. Add some more trillions to the potential capital gains.

Helping the Solari Index rise back to 100% is the biggest capital gains opportunity in America, particularly when combined with reengineering government investment and pooling small business equity in a manner that provides competitive access to the stock market. Generations of accumulated narco dollars could do very well investing successfully in such a capital gains opportunity.

A trillion here, a trillion there -- pretty soon you are talking about a lot of "pop." It can only happen if we can look into the face of our addiction and start having a conversation about how we move out of our current financial incentives that keep the Solari Index down to a more positive, sustainable and wealthy future for our children and grandchildren. For example, think about what would happen if every government worker in America had their annual salary fluctuate based on the performance of the Solari Index in their jurisdiction? I bet it would take about three years to get the Solari Index back to 100%.

That is why all the yah-yah in Washington about new stricter money laundering laws to deal with terrorism won’t work. If government officials and bankers can keep making money when the Solari Index is at 0%, it will not rise no matter how many people -- innocent or guilty -- we put in jail. The day we decide that government officials only make money for performance and all the companies that get money from government -- whether contractors or banks that use taxpayers credit -- only get money if we are better off and the Solari Index is rising, is when we will start to face and solve the real problems in a money making way.

It’s time to face our addiction to narco dollars and to grapple with how to reverse our incentive systems. It is time to figure out how publicly traded companies and our banks and insurance companies can make more money from our kids succeeding then from them failing. Indeed, it can be done.

So here is my last message on how the money works on narco dollars. Now that we have run the Solari Index down to near 0% while fueling the rise of the Dow Jones about 20X since I was a kid, the new opportunity is going to be the fortunes to be made on businesses and investment vehicles that fuel the Solari Index rising.

Wouldn’t you pay for streets to be sweet for your child once again? Especially if it made you a whole bunch of money on an IPO of your neighborhood mutual or venture fund in thestock market?

I want to make money on kids succeeding. I want to teach Dave a way to make more money by getting out of narco dollars and backing Sam starting a solari and "trading places." My money is on Solari rising.

Bibliography
After three years of plowing through hundreds of books, videos and articles, here are the sources that I found most useful tohelping me understand "how the money works" in the drug trade. Assuming that you are a busy person who knows nothing about narco dollars and does not want to become an expert -- you just want to have a good map of "how the money works" in your world -- I have put an (*) next to my top four book and one video recommendations. These are the ones that will be the most useful to help you understand the drug trade and what it means to you, your family, your business and the Solari Index in your neighborhood.

Books:
Black Money, Michael Thomas, Crown (HC) / St Martins (paper), 1994/95 (*)
Blowback: America’s Recruitment of Nazis and Its Effects on the Cold War ,Christopher Simpson, Weidenfeld & Nicholson, 1988
The Boys on the Tracks,Mara Leveritt. St. Martin’s Press, 1999, http://www.maraleveritt.com/botthome.htm
Cocaine Politics: Drugs, Armies, and the CIA in Central America,Peter Dale Scott & Jonathan Marshall. Berkeley: University of California Press, 1998.
The Collected Works of Col. L. Fletcher Prouty, including, The Secret Team: The CIA and Its Allies in Control of the United States and the World,Col. L. Fletcher Prouty (Ret.) and Understanding Special Operations And Their Impact on The Vietnam War Era - 1989 Interview with L. Fletcher Prouty Colonel USAF (Retired),by David Ratcliffe, rathaus reality press, 1999. http://www.ratical.org/ratville/JFK/ST/ / http://www.ratical.org/ratville/JFK/USO/
CD-Rom, available from http://www.prouty.org/cdrom.html at The Col. L. Fletcher Prouty Reference Site
CRA$HMAKER: A Federal Affaire, a novel of love, death and the Federal Reserve ,Victor Sperandeo & Alvaro Almeida, http://www.crashmaker.com/
Dark Alliance, Gary Webb. New York: St. Martin’s Press, 1998.(*)
Deep Politics and the Death of JFK, Peter Dale Scott . Berkley: University of California Press, 1996. See Deep Politics: Some Further Thoughts (http://roswell.fortunecity.com/angelic/96/pdscot~1.htm)
Dope, Inc.: Britain’s Opium War Against the United States,Konstandinos Kalimtgis, 1978
Double Cross: The Explosive Inside Story of the Mobster Who Controlled America,Sam & Chuck Giancana. New York: Warner Books, 1998
False Profits: The Inside Story of BCCI, the World’s Most Corrupt Financial Empire,Peter Truell & Larry Gurwin. Boston: Houghton Mifflin Company, 1992.
Hot Money and the Politics of Debt,R. T. Naylor. Montreal: Black Rose Books, 1994.(*)
The Money and the Power: The Making of Las Vegas and Its Hold on America ,Sally Denton and Roger Morris http://www.randomhouse.com/knopf/authors/dentonmorris/
The Mafia, CIA and George Bush,Pete Brewton. New York: S.P.I., 1992. Introduction: http://www.freerepublic.com/forum/a389b6a173e33.htm
Opium, Empire and the Global Political Economy,Carl A Trocki. Routledge: Taylor & Francis Group, 1999.(*)
The Politics of Heroin: CIA Complicity in the Global Drug Trade,Alfred W. McCoy Lawrence Hill Books, 1991.
Powderburns: Cocaine, Contras and the Drug War,Celerino Castillo, Dave Harmon, Mosaic Press, 1994
Red Mafiya : How the Russian Mob Has Invaded America,Robert I. Friedman, Little Brown & Company, 2000
Rulers of Evil: Useful Knowledge about Governing Bodies,F. Tupper Saussy HarperCollins, 2001
WhiteOut: The CIA, Drugs, and the Press,Alexander Cockburn and Jeffrey St. Clair. Verso, London:1998.

Articles:
"Albert Vincent Carone: The Missing Link Between Iran-Contra Cocaine Operations and Organized Crime", Mike Ruppert. From the Wilderness Publications, 1994. www.copvcia.com.
A Collection of Articles and Essays, Catherine Austin Fitts, http://www.solari.com/gideon/articles/index.html
A Collection of Articles re: the Targeting of Catherine Austin Fitts: http://www.solari.com/media/articles%20on%20gideon.htm
William Chambliss, Various articles on piracy and smuggling, http://www.criminology.fsu.edu/crimtheory/chambliss.htm http://www.gwu.edu/~soc/w_chambliss.html
Disinfo.com on Drugs, all articles by Preston Peet, http://www.disinfo.com/pages/list/Drugs/by_author/
Has Dirty Money Polluted Bank of New York? Kelly O’Meara,

Mena, Arkansas: Various articles:
The Crimes of Mena, by Sally Denton & Roger Morris, 7/95 http://www.ratical.org/ratville/JFK/crimesOfMena.html
The Boys on the Track, various articles by Mara Leveritt, http://www.maraleveritt.com/
Gray Money, by Mark Swaney, http://www.whatreallyhappened.com/RANCHO/POLITICS/MENA/gray_money.html
Murder, Mayhem and Mystery in Mena, Preston Peet, http://www.disinfo.com/pages/dossier/id329/pg1/
The Mystery of the "Lost" Mena Report; Gray Money: the Continued Cover-Up, by Mark Swaney http://www.sierratimes.com/archive/files/jul/26/arms072601.htm
What Really Happened, Mena Archives: http://www.whatreallyhappened.com/RANCHO/POLITICS/MENA/mena.html
The Crimes of Mena, by Roger Morris and Sally Denton, http://www.whatreallyhappened.com/RANCHO/POLITICS/MENA/crimes_of_mena.html
Sam Smith’s Progressive Review, The Clinton Scandals (see Mena sections): http://prorev.com/wwindex.htm
Narco News, www.narconews.com, Al Giordano, Publisher
The Spooky-Minded Professor: CIA Cover Up Meister Gets Princeton Job, by Uri Dowbenko, http://www.steamshovelpress.com/offlineillumination4.html
Up Against the Beast: High Level Drug Running, by Uri Dowbenko, http://www.nexusmagazine.com/beast2.html

Catherine Austin Fitts:
Articles About:
http://www.solari.com/media/articles%20on%20gideon.htm
Articles By:
http://www.solari.com/gideon/articles/

Videos:
Air America, Mel Gibson
Bullworth, Warren Beatty
From http://www.fromthewilderness.com/store/videos.html:
CIA Director John Deutch in Watts Video: Special Town Hall Meeting with John Deutch & Juanita McDonald,
October 15, 1996 (*)
Mike Ruppert on CIA & Drugs: The Confession & The Impeachment, From The Wilderness. Video, 1999.
The Salon At Fraser Court, Mike Ruppert, From the Wilderness Video, 1999.
Enemy of the State, Will Smith & Gene Hackman
Telefon, Charles Bronson and Lee Remick
Wag the Dog, Dustin Hoffman

https://www.rt.com/op-edge/330781-drug-smuggling-hsbc-crimes/ posted:

Drug smuggling is HSBC’s raison d’etre

RT. com, Dan Glazebrook, 31 Jan, 2016

The powerful bank is in the news for attempting to suppress a report into money laundering. This is no surprise as the company’s entire history, right up to the present day, is one of financing drug cartels.

HSBC is not known for its transparency. Britain’s wealthiest company, with a stock market valuation of $215 billion, has enough advertising muscle in the British press to ensure that critical investigative pieces have been spiked in both the Sunday Times and the Daily Telegraph – in the latter case, causing that newspaper’s chief political commentator to resign in protest.

Then last year, the bank’s friends in the Swiss government sentenced the whistleblower who exposed the bank’s massive facilitation of tax avoidance to five years in prison, the longest sentence ever demanded by the country’s public ministry for a banking data theft case.

And back in 2011, HSBC was revealed to be the UK financial sector’s most enthusiastic user of tax havens, with no less than 556 subsidiary companies based in offshore jurisdictions. Tax havens, as leading expert Nicholas Shaxson notes, “are characterized by secrecy… what they are fundamentally about is escape – escape from the rules, laws, regulations of jurisdictions elsewhere. You move your money offshore and you can then escape the laws that you don’t like”.

This is clearly an institution with much to hide.

So it should not have surprised anybody when, earlier this month, it was revealed that HSBC is now seeking to block the publication of a report into HSBC’s compliance with anti-money laundering laws. After all, it was only three years ago that HSBC was hit with a massive $1.9 billion fine for laundering around $1 billion on behalf of some of the world’s most vicious gangsters.

According to US Assistant Attorney General Lanny Breuer, "from 2006 to 2010, the Sinaloa cartel in Mexico, the Norte del Valle cartel in Colombia, and other drug traffickers laundered at least $881 million in illegal narcotics trafficking proceeds through HSBC Bank USA. These traffickers didn't have to try very hard."

This is putting it mildly; in fact HSBC went to great lengths to facilitate the drug cartels. As Matt Taibbi wrote in his definitive piece on the scandal, HSBC “ran a preposterous offshore operation in Mexico that allowed anyone to walk into any HSBC Mexico branch and open a US-dollar account (HSBC Mexico accounts had to be in pesos) via a so-called ‘Cayman Islands branch’ of HSBC Mexico. The evidence suggests customers barely had to submit a real name and address, much less explain the legitimate origins of their deposits.”

The bank did have a system in place to identify ‘suspicious activity’, but it routinely flouted it. As Nafeez Ahmed has written, “By 2010, HSBC had racked up a backlog of 17,000 suspicious activity alerts that it had simply ignored. Yet the bank’s standard response when it received its next government cease-and-desist order was simply to ‘clear’ the alerts, and give assurances that everything was fine. According to former HSBC compliance officer and whistleblower Everett Stern, the bank’s executives were deliberately ignoring and violating anti-money laundering regulations.”

Taibbi wrote that “In one four-year period between 2006 and 2009, an astonishing $200 trillion in wire transfers (including from high risk countries like Mexico) went through without any monitoring at all. The bank also failed to do due diligence on the purchase of an incredible $9 billion in physical US dollars from Mexico and played a key role in the so-called Black Market Peso Exchange, which allowed drug cartels in both Mexico and Colombia to convert US dollars from drug sales into pesos to be used back home. Drug agents discovered that dealers in Mexico were building special cash boxes to fit the precise dimensions of HSBC teller windows”.

HSBC’s customers – cartels like Colombia’s Norte del Valle and Mexico’s Sinaloa – were at the time involved in mass murder and abuse of the most psychopathic variety, including beheadings and torture videos. The official death toll from these groups in Mexico alone is 83,000 over the past decade. That they have the capacity to carry out violence on such a massive scale is the result of the massive financial growth of their industry. And that growth was willfully facilitated by HSBC.

Given that this has all now been established in court, were the rule of law actually applied, the bank’s Charter would have been revoked, and its directors (including former Tory Trade Minister Stephen Green) would now be in jail. The reason this did not happen is that the sheer size of HSBC’s operations make it too strategically important to close down.

“Had the US authorities decided to press charges”, explained Assistant Attorney General Lenny Breuer, “HSBC would almost certainly have lost its banking license in the US, the future of the institution would have been under threat and the entire banking system would have been destabilised.”

That is to say, HSBC’s wealth and power put it officially above the law. Even its $1.9 billion fine, massive though it might seem, amounted to a mere five weeks profit for the bank. But all of this is entirely in keeping for a bank whose roots lie precisely in illegality, drug trading and massive violence.

HSBC’s website notes that it was formed in 1865 to “to finance trade between Europe and Asia”, while the official 763-page history of the company explains that “the expansion of international trade with China had inevitably led to demand for trade finance and money-changing facilities – demand that the traditional Chinese banks, the quianzhuang, had been unable to meet”, with HSBC kindly stepping in to help. Yet neither source deigns to tell their readers of exactly what this trade consisted.

The previous century had seen a huge growth in UK imports of tea from China; indeed, these were growing so large that Britain’s silver supplies were draining away to China to pay for them. The problem for Britain was that it had nothing China wanted to buy in return; as Emperor Qian Long explained in a long letter to King George III in 1793, “our Celestial Empire possesses all things in prolific abundance and lacks no product within its own borders. There was therefore no need to import the manufactures of outside barbarians in exchange for our own produce.” But the traders of the British East India Company, which had taken control of Bengal in 1757, came up with an ingenious solution. They would force the dispossessed peasantry of India – starving and desperate following the Company’s destruction of their textile industry through extortionate taxes, plunder and the imposition of ‘free trade’ – onto newly founded opium plantations, and sell this to the Chinese.

This was entirely illegal; but that posed no problem for the British, who simply bribed corrupt Chinese officials to turn a blind eye to the trade. By the 1830s the trade had reached 40,000 chests per annum; selling for up to $1,000 per chest, the trade became, according to Frederic Wakeman, “the world’s most valuable single commodity trade of the nineteenth century”, and accounted for almost two-thirds of British overseas trade with China.

But this tidy little scam came under serious threat in 1839. By that time, the trade had grown so large that China’s silver was now draining away to Britain to pay for the drug, and the Emperor decided to launch a crackdown. As the Le Monde Diplomatique recounted recently, “a senior Chinese government official, Lin Zexu, known for his competence and moral standing, issued a warrant for [British opium trader Thomas} Dent’s arrest in an attempt to close his warehouses” and eventually forced the British superintendent of trade to surrender 10,000 chests, which were then destroyed.

China’s flagrant attempt to protect its citizens and enforce its own laws was deemed an affront too far for the British, who responded by sending gunboats to the coast of China, and opening fire. Town after town was destroyed by cannon fire, and then looted by British troops; indeed, according to historian John Newsinger, “it was during this war that the Hindi word ‘lut’ entered the English language as the word ‘loot’”. In one town alone, Tin-hai, over 2000 Chinese were killed, with the India Gazette reporting that “a more complete pillage could not be conceived…the plunder only ceased when there was nothing to take or destroy”.

This destruction continued for three years, until the Chinese agreed to the British terms: handing over Hong Kong to the British, opening more Chinese ports to British trade; paying the full costs of their own bombardment; and fully compensating the opium traders for the loss of their property.

A second war followed, lasting from 1856 to 1860. This one was even more destructive, with British warships advancing up the Peiho River to Beijing itself, eventually reaching the Emperor’s majestic Summer Palace. Captain Charles Gordon explained that his troops, “after pillaging it burned the whole place, destroying in a vandal manner most valuable property…everybody was wild for plunder.”

One of the items looted was the Emperor’s pet Pekinese dog, taken as a present for Queen Victoria. She called it Looty.

This time, the Chinese were forced to legalize the opium trade. Over the decades that followed, the trade would reach dizzying heights, with British opium exports climbing to 60,000 chests per year by the 1860s, and 100,000 in the 1880s, making it, according to the Cambridge History of China, “the most long continued and systematic crime of modern times”, with millions of Chinese addicts paying the price.

This was the trade which HSBC was created to facilitate. Thomas Dent – the opium trader whose arrest helped trigger the first of the ‘opium wars’ – was one of its founders. Another was Thomas Sutherland, the Hong Kong superintendent of British shipping company P and O and chairman of Hong Kong and Whampoa dock; opium accounted for 70 percent of maritime freight from India to China at the time.

As the British research group Corporate Watch has shown, “After the second round of wars the Chinese government could only pay off its massive war fines by turning to such merchants as the Hong King and Shanghai Bank. According to one historian, 'They...had the effect of placing the revenues of China almost totally in foreign control.'”

In other words, then as now, the sheer overwhelming dominance of the bank and its backers created an economic dependency on it which effectively put it above the law.

The combined impact of Chinese government’s dependency and the growing opium trade created profits which catapulted HSBC to the position of most profitable British bank (either overseas or domestic) within 25 years of its foundation. It would stay at or near this position right up to the present day.

Following legalization, Chinese opium production took off, eventually eclipsing even British imports, which ended in 1917. But by this time, HSBC was fully embedded in the Chinese economy, able to position itself as chief financier of the new Chinese entrepeneurs.

When this production itself was wiped out by the victorious Communist Party in 1949, production shifted to South Asia (with help from the CIA, according to Peter Dale Scott). HSBC followed. According to Richard Roberts and David Kynaston in their official history of HSBC, The Lion Wakes: “In search of new business, the bank expanded operations elsewhere in Asia in the 1950s and 1960s. In particular, it extended its branch network in Singapore and Malaysia, and for the first time opened branches in Borneo.”

Today, drug profits form a major part of the entire global financial system. According to a 2005 UN report, the illegal drugs trade was worth £177 billion per year, equating to a staggering 8-9 percent of total world trade; the latest UN figure is £320 billion per year. Of this, Alain Labrousse of Geopolitical Drug Dispatch, estimates that around 80 percent of the profits end up “in the banks of the wealthy countries.”

Indeed, so dependent has the financial system become on the illicit trade that in 2009, the UN drugs tsar testified that it was only laundered drug money that kept the global economy from collapsing during the crisis of 2007-8.

Little wonder, then, that wherever you look - from Afghanistan, to Kosovo, to Libya, to Mexico and Colombia, and even ‘at home’ – the policies of the world’s leading financial centers serve to boost the production, distribution and profitability of the drugs trade.

And little wonder that HSBC is still keeping their ‘money laundering checks’ to themselves.

2.

https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims posted:

Drug money saved banks in global crisis, claims UN advisor

Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions

Guardian.co.uk, Rajeev Syal, Sunday 13 December 2009

Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said.

Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.

"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.

"That was the moment [last year} when the system was basically paralysed because of the unwillingness of banks to lend money to one another. The progressive liquidisation to the system and the progressive improvement by some banks of their share values [has meant that} the problem [of illegal money} has become much less serious than it was," he said.

The IMF estimated that large US and European banks lost more than $1tn on toxic assets and from bad loans from January 2007 to September 2009 and more than 200 mortgage lenders went bankrupt. Many major institutions either failed, were acquired under duress, or were subject to government takeover.

Gangs are now believed to make most of their profits from the drugs trade and are estimated to be worth £352bn, the UN says. They have traditionally kept proceeds in cash or moved it offshore to hide it from the authorities. It is understood that evidence that drug money has flowed into banks came from officials in Britain, Switzerland, Italy and the US.

British bankers would want to see any evidence that Costa has to back his claims. A British Bankers' Association spokesman said: "We have not been party to any regulatory dialogue that would support a theory of this kind. There was clearly a lack of liquidity in the system and to a large degree this was filled by the intervention of central banks."

tears posted:

from Pete Dale Scott's drugs oil and war, ill post more of the relevant bits of this when i've made them into real words from pdf words

This is Chapter 2, happy reading

Chapter 2
Indochina, Colombia, and Afghanistan: Emerging Patterns

As in Afghanistan in the 1980s or Laos in the 1960s, our principal proxy in the 2001-2002 Afghan war was a dominant element in the regional drug traffic. In Colombia also, we are fighting a war (supposedly on drugs but in fact financed in part by drugs) with a drug proxy-the corrupt Colombian army and its even more corrupt paramilitary auxiliaries. In 2001 Colombian government sources estimated that 40 percent of Colombian cocaine exports were controlled by right-wing paramilitary warlords and their trafficking allies. Meanwhile the amount controlled by the Revolutionary Armed Forces of Colombia (FARC), the target of the U.S. “war on drugs,’’ was estimated by the Colombian government to be 2.5 percent.{1}

The oil aspect of the Colombian conflict is also conspicuous. The origins of the current U.S. presence in Colombia can be traced back to 1984, one year after the discovery by Occidental Oil of the billion-barrel Caiio Limon oilfield in 1983. A concerted U.S. propaganda campaign was mounted in 1984 against alleged drug trafficking by a conspiracy involving Nicaraguan Sandinistas, Colombian “narco-guerrillas,” and traffickers in Medellin, notably Carlos Lehder and Pablo Escobar. This campaign distorted the truth in two related respects: it falsely implicated the FARC and it rewrote history to efface references to the Medellin cartel’s competitors in Cali, who were closer to the army and national security apparatus. But it led to the national security decision directives of 1986 and 1989 that created a U.S. military presence in Colombia.{2}

Consider also the pattern of drugs and oil that emerged in Southeast Asia following the victory of the Chinese revolution and the exile of the Kuomintang to Taiwan. The U.S. drug proxies in Laos, including the Hmong, Laotian, and former KMT armies, were all major drug traffickers. The KMT armies were also principal agents in building up Laotian drug production, from an estimated 50 tons in 1953 to 100-150 tons in 1968.{3}

Oil, especially the offshore oil deposits of the South China Sea, helps explain the general U.S. interest in Southeast Asia. In the speeches of Americans like Nixon who defended or lobbied for an increased U.S. presence in the region, the U.S. presence in Vietnam, as in SEAT0 (Southeast Asia Treaty Organization) before it, was defined as the “shield” protecting anticommunist forces in Indonesia.{4}

One of the most industrious of such lobbyists was William Henderson, who was simultaneously an officer of the American Friends of Vietnam and an adviser on International Affairs to Socony Mobil (a major oil investor in Indonesia). The 1970 U.S. incursion into Cambodia followed aerial surveys of Cambodian offshore waters by U.S. Navy planes, following which Union Oil of California (now Unocal), established in Thailand by 1963, acquired a concession for all onshore Cambodian oil and much offshore oil as well.{5}

THE UNDERLYING PATTERNS
Dramatic Boost to International Drug Trafficking, Including a Rise in U.S. Drug Consumption, with Each War

When the CIA began its covert involvement in Burma in the early 1950s, local opium production was in the order of eighty tons a year. Ten years later, thanks to KMT warlords supported by CIA and Civil Air Transport (later Air America), the region produced 300-400 tons a year.{6} During the Vietnam War, production at one point reached 1,200 tons a year. By 1971 there were also seven heroin labs in the region, one of which, close to the forward CIA base of Ban Houei Sai in Laos, was estimated to produce 3.6 tons of heroin a year.{7}

With the waning of the Vietnam War, opium production in the Golden Triangle also declined. In the case of Laos, it plummeted from two hundred tons in 1975 to thirty tons in 1984.{8} Heroin consumption in the United States also declined. Although the decline in Laotian production has been attributed to drought conditions, a related factor was clearly the increase in cultivation in the so-called Golden Crescent along the border between Pakistan and Afghanistan, from 400 tons in 1971 to 1,200 tons in 1978.{9} This coincided with a number of political developments in the region, including an increase in Pakistani support for Afghan Islamic resistance movements following a left-wing Afghan coup in 1973.{10}

The decline in U.S. heroin consumption also occurred in the context of an increase in other areas, notably Europe and Australia. In the case of Australia, the first major drug imports were financed by the Nugan Hand Bank, organized in part by veterans of U.S. Special Forces and CIA in Laos. The bank combined drug financing with arms deals and support for CIA covert operations in other regions such as Africa.{11} The Australian surge occurred just as Richard Nixon Emerging Patterns inaugurated a “war on drugs” to keep opium and heroin from reaching the United States.{12}

The U.S. military intervention in Colombia has also been accompanied, as I predicted in 1991, by a dramatic increase in coca production (from 3.8 to 12.3 thousand hectares between 1991 and 1999).{13} These boosts are cumulative, and up to now not permanently reversible. The U.S. Bureau of Narcotics reported in 1970 that annual illicit opium production at that time was between 1,250 and 1,400 tons, more than half of it coming from the Golden Triangle of Burma, Laos, and Thailand (which before World War II accounted for about 47 tons).{14} In 1999 the United Nations put the opium production of Afghanistan alone at 4,600 tons, or 70 percent of the world’s crop.{15}

The strengthening of the global narcotics traffic has fueled other smuggling and related criminal activities, leading to the consolidation of an international criminal milieu. Chinese Triads, Japanese Yakuza, Russian gangs, and the Mafias of Italy, America, and Colombia have now combined into a “worldwide criminal consortium” that is, according to experts, “growing exponentially.” {l6} Delegates to a global crime conference in November 1994 were informed that organized crime generates $750 billion annually; many of these illicit dollars end up corrupting markets, institutions, businessmen, and of course politicians.{17} Writing in 1997 of his experience in exposing BCCI, Senator John Kerry concluded that “today globalized crime can rob the U.S. not only of our money but also of our way of life.”{18}

We can take his words as a prophecy now fulfilled. Although al-Qaeda and the Taliban might appear on the surface to exemplify a “clash” of civilizations, their activities were paid for, as noted above, by heroin and other transactions at the very heart of this global crime milieu that transcends religious boundaries.


Accelerating U.S. Dependency on International Oil and Petrodollars in the Context of Globalization and War

At the height of the Vietnam War, with inflation threatening to wreck his domestic program for a “great society,” Lyndon Johnson relaxed the import quota system that had been introduced by Eisenhower to protect domestic U.S. oil production.{19} This increased U.S. vulnerability pressure from OPEC oil boycotts in the 1970s, and that vulnerability would be further heightened after Nixon abolished quotas altogether in 1973.

The United States handled the quadrupling of oil prices in the 1970s by arranging, by means of secret agreements with the Saudis, to recycle petrodollars back into the U.S. economy. The first of these deals assured a special and ongoing Saudi stake in the health of the U.S. dollar; the second secured continuing Saudi support for the pricing of all OPEC oil in dollars.{20} These two deals assured that the U.S. economy would not be impoverished by OPEC oil price hikes. The heaviest burdens would be borne instead by the economies of less developed countries.{21}

From these developments emerged the twin phenomena underlying 911 triumphalist U.S. unilateralism on the one hand and global Third World indebtedness on the other. The secret deals increased U.S.-Saudi interdependence at the expense of the international comity that had been the basis of U.S. prosperity since World War II. They also increased Saudi leverage on U.S. foreign policy, as was seen in the 1979 sale of F-15 fighter planes to Saudi Arabia, against strong Israeli opposition.{22} In particular they explain why George Bush moved so swiftly in 1990 to counter the threat posed by Saddam Hussein to U.S.-Saudi security in the Persian Gulf. The threat was not just that the United States itself would lose oil from the Gulf, against which it was partially insured by the redundancy in world oil supplies. A bigger threat was that Saddam would become the dominant power in the Persian Gulf, directly controlling 20 percent of OPEC production and 25 percent of world oil reserves.{23}

The U.S.-Saudi deals also increased U.S. dependence on oil- and drug-funded Arab assets such as BCCI - the Bank of Credit and Commerce International - which in the 1980s became a chief paymaster for the anti-Soviet Afghan mujahedin and even ran arms directly to them from Karachi.{24} (The failure of the U.S. government to investigate and prosecute BCCI reflected not only the extent of BCCI penetration of U.S. ruling circles but also U.S. economic dependence on the continued influx of petrodollars and narco-dollars. As a former NSC economist commented, “{Treasury Secretary James} Baker didn’t pursue BCCI because he thought a prosecution of the bank would damage the United States’ reputation as a safe haven for flight capital and overseas investments.”{25}

Some had expected that the successful OPEC revolt in the 1970s against Washington’s and London’s economic policies would presage a “new economic order” that would strengthen the South vis-a-vis the North. The secret Saudi - U.S. deals led to a different outcome: a “new world order” that saw increasing U.S. military dominance combined with increasing economic instability and occasional crises elsewhere. Statistics reveal the change in direction. Between 1960 and 1980 per capita income grew 73 percent in Latin America and 34 percent in Africa. Between 1980 and 2000 income grew less than 6 percent in Latin America, and declined by 23 percent in Africa.{26}

This loss of economic stability and momentum, combined with political impotence in the face of U.S. military hegemony, are of course root factors to be addressed in any serious effort to combat terrorism.


U.S. WARS IN THE LIGHT OF THE INTERNATIONAL DRUG TRADE

The examples cited above, of drug factors underlying U.S. interventions, illustrate what 1 mean by deep politics. The point is not to suggest that the increase in drug consumption was a conscious aim of high-level U.S. planning, but that it was a direct consequence of policy decisions. There are, however, grounds for considering a different question: Did successive crises in the illicit drug traffic induce some drug-trafficking U.S. interest groups and allies to press successfully for U.S. involvement in an Asian war? This is a question asked in my book The War Conspiracy.{27} Although I had partly retreated from this question by the time I finished the book in 1971, conspicuous recent developments have persuaded me to revive it today.

I have no evidence that the U.S. government intervened militarily as a conscious means of maintaining control over the global drug traffic. However, conscious decisions were definitely made, time after time, to ally the United States with local drug proxies. The U.S. motives for doing so were usually to minimize the costs and exposure of direct engagement. However, the drug proxies and their associates appear to have exploited these conditions of nonaccountability with escalations to meet their own drug agendas, particularly at moments when the survival of the drug traffic was threatened.

The whole history of the United States in the Far East since World War II has involved from the beginning a drug trafficking proxy - the KMT - that from the days of the China lobby had obtained or purchased significant support within the U.S. political establishment. Although the picture is a complex one defying reduction, one can certainly see the role of the China lobby as a factor in the events leading to America’s first war on the Asian mainland - the Korean War in 1950.{28} This was right after the victorious armies of Mao Tse-tung began to eliminate Chinese opium, the source of 85 percent of the world’s heroin.

Furthermore, drugs from regions where the CIA has been active have tended to migrate through other countries of CIA penetration, and more importantly through and to agencies and groups that can be classified as CIA assets. In the 1950s opium from Indochina traveled through Iran and Lebanon to the Corsican Mafia in Marseilles and the Sicilian Mafia under Lucky Luciano.{29} In the 1980s mujahedin heroin was reaching the Sicilian Mafia via the Turkish Gray Wolves, who “worked in tandem with the Turkish Army’s Counter-Guerrilla Organization, which functioned as the Turrkish branch of the CIA’s multinational ‘stay behind’ program.{30} The routes shifted with the politics of the times, but the CIA denominator remained constant.

The following sections examine moments in which U.S. wars were deeply intertwined with the world drug traffic, beginning with the most recent.


2001

In October 2001 a UN report confirmed that the Taliban had successfully eliminated the year’s opium production in Afghanistan, which in recent years had supplied 90 percent of Europe’s heroin. However, it appears that what would have been the world’s largest curtailment of opium production in half a century has now been reversed. Following the defeat of the Taliban, farmers began replanting wheat fields with opium poppy; and it is now estimated that in 2002 opium harvest is about 3,700 tons (3,400 metric tons, or more than the 2000 harvest.){31}

On October 16, 2001, the United Nations Office for Drug Control and Crime Prevention released its Afghanistan annual opium poppy survey for 2001. It reported that the 2000 ban on opium imposed by the Taliban was almost universally enforced. The estimated 2001 crop of 185 metric tons was only 6 percent of Afghanistan’s 2000 total of 3,276 tons, which had been more than half the world’s output. Over 90 percent of the 2001 crop came from provinces under the control of America’s eventual ally the Northern Alliance, where the area under cultivation radically increased. Helmand province under the Taliban, the highest cultivating area in 2000, recorded no poppy cultivation in the 2001 season.{32}

The UN ODCCP report further noted that the approximately 3,100-ton reduction in 2001 opium production in Afghanistan (compared to 2000) was not offset by increases in other countries. As Jane’s Intelligence Review (October 22,2001) noted, “The ban imposed by Taliban supreme leader Mullah Mohammad Omar in July 2000 . . . resulted in some 70% of the world’s illicit opium production being wiped out virtually at a stroke.” Those skeptical about Mullah Omar’s motives for the ban speculated that the Taliban held substantial reserves of processed opium and wished to drive up prices. Nevertheless, even the U.S. State Department reported in March 2002 that the Taliban’s ban had been “remarkably successful,” reducing total Afghan opium production from 3,656 tons in 2000 to 74 tons in 2001. More credible explanations stress the Taliban’s efforts to gain legitimacy and recognition from the United States and other nations, a policy that proved abortive. Despite the ban, Afghanistan remained (in the words of the report) “one of the world’s leading opium producers by virtue of continued cultivation in its northern provinces {controlled by the Northern Alliance}.”{33}

As the Taliban was ousted from province after province in 2001, starving farmers everywhere started to replant the one lucrative crop available to them, often at the behest of local commanders. The crop augured the return of warlordism to Afghanistan-regional commanders and armies, financed by the opium in their area, jealously refusing to relinquish such a lucrative income source to a central government. Thus there could be a revival of the vicious internecine feuds that took so many civilian lives in the 1990s after the Soviet withdrawal.{34}

The London Observer on November 25, 2001, reported that “Western and Pakistani officials fear that, within a year or two, Afghanistan could again reach its peak production figures of 60,000 hectares of poppies producing 2,800 tonnes of opium-more than half the world’s output.” It reported further on December 10, 2001, “With the Taliban gone, Afghanistan’s farmers are going back to their old, lucrative ways. In the tribal areas of Pakistan, where most of the opium is processed, prices have plummeted in expectation of a bumper crop.”

The Financial Times (London) reported (February 18, 2002): “The U.S. and United Nations have ignored repeated calls by the international antidrugs community to address the increasing menace of Afghanistan’s opium cultivation, threatening a rift between Europe and the U.S. as they begin to reconstruct the country.”

The initial failure of the U.S. press to report or comment on these developments was an ominous sign that the U.S. government might be prepared to see its former proteges finance themselves once again through the drug traffic. More ominous was active disinformation by officials of the U.S. government. The Taliban’s drastic reduction in opium cultivation was ignored, and indeed misrepresented, by CIA Director George Tenet in his report to Congress on February 7, 2001, in a speech that threatened retaliatory strikes against the Taliban: “Production in Afghanistan has been exploding, accounting for 72 percent of illicit global opium production in 2000. The drug threat is increasingly intertwined with other threats. For example, the Taliban regime in Afghanistan, which allows bin Laden and other terrorists to operate on its territory, encourages and profits from the drug trade.”{35}

On January 17, 2002, Afghanistan’s new leader Hamid Karzai issued a new ban on opium poppy cultivation and promised to work with donors to ensure it could be implemented. However, as the State Department reported, “Whether factions will follow a ban on poppy cultivation, issued by the Interim Authority is uncertain. The Northern Alliance, for example, has, so far as the U.S. is aware, taken no action against cultivation and trafficking in the area it controls. There have also been recent reports of farmers cultivating a second opium crop in Northern Alliance-controlled areas.”{36}

As a result, drugs have continued to flow north into Tajikistan and Kyrgyzstan, where they finance Islamist radical groups. Author-journalist Ahmed Rashid has reported the conviction of Tajik officials that the main drug-financed group they faced, the Islamic Movement of Uzbekistan (IMU), was being covertly assisted by Russia “because Moscow was trying to pressure {Uzbek dictator} Karimov into accepting Russian troops and greater Russian influence in Uzbekistan. . . . Other Tajik officials claimed that the IMU was supported by Saudi Arabia and Pakistan, who were backing Islamic movements in Central Asia in order to gain leverage in the region.”{37} Rashid himself confirms both Saudi funds and ISI “discreet support” for the IMU, adding that “senior ISI officials are convinced that the IMU has close intelligence links to Russia.”{38}

We are still waiting for a clearer American resolve to deal with the restored drug flows it has created, for adequate funds to restore the shattered Afghan economy, and for a firm commitment to address the problem of warlordism. Until then, it can only be concluded that once again the United States is unprepared to challenge the drug politics of its proxies in the region. Perhaps there are some in the U.S. government who, like their Russian counterparts, accept the corruption of the Central Asian states through drugs as a means of increasing influence over politicians there.{39}


1979

The situation in 2001 recreated many elements of the 1980s, when, in the words of the Washington Post (May 13, 1990), U.S. officials ignored heroin trafficking by the mujahedin “because U.S. narcotics policy in Afghanistan has been subordinated to the war against Soviet influence there.”

The consequences of that official toleration of trafficking have been summarized vividly by Michael Griffin:

By the mid-l980s, the processing and export of heroin had created a black economy in Pakistan of about $8 billion-half the size of the official one-and Pakistan’s military administration was showing signs of evolving into a fully-blown narco-government. . . . The number of Pakistani addicts, meanwhile, had spiralled from nil in 1979 to between 1.2 and 1.7 million at the end of 1988. Such a rapid rate would have been impossible without the protection or active collaboration of the ISI which, empowered by CIA funding and arms deliveries, had grown from a small military department into a modem intelligence network with a staff of 150,000 and hundreds of millions of dollars a year at its disposal. . . . The U.S. colluded in the development of this new heroin source for fear of undermining the CIA’s working alliance for the mjahedin.{40}

Many authors besides Griffin have seen this enormous expansion of the drug trade as a by-product of the anti-Soviet war. But there are signs that opium traffickers did more than just profit from the war: they may have helped induce it. It is certain that the buildup of opium and heroin production along the Afghan-Pakistan frontier was not a consequence of the war: it preceded it. What is particularly eye-catching is that, in 1979 just as in 2001, the war helped avert what would otherwise have been an acute drop in world opium production from earlier heights.

In his important book The Politics of Heroin, Alfred McCoy notes that heroin from southern Asia had been insignificant in the global market until the late 1970s, when there was a two-year failure of the monsoon rains in the Burma-Laos area. It was in response to this drought that Pakistani cultivation increased and heroin labs opened in the North-West Frontier province by 1979 (a fact duly noted by the Canadian Maclean’s Magazine of April 30, 1979).

McCoy notes the subsequent increase: “By 1980 Pakistan-Afghan opium dominated the European market and supplied 60 percent of America’s illicit demand as well.”{41} He also records that Gulbuddin Hekmatyar controlled a complex of six heroin laboratories in the Koh-i-Sultan district of Baluchistan, a region (we are told elsewhere) “where the ISI was in total control” {42}

This timetable raises the same question as events in 2001. What forces led the CIA in May 1979, armed with an NSC authorization from Brzezinski one month earlier, to work with the Pakistani ISI and its protege Hekmatyar in the context of an already burgeoning heroin trade that would come to dominate the activities of the ISI-Hekmatyar connection?{43}

Before that time the CIA had already cultivated Pakistani assets that would become an integral part of the Afghan arms pipeline. One was the Gulf Group shipping line of the Gokal brothers, a firm that was heavily involved in shipping goods to Third World countries for American aid programs.{44} Another was BCCI, the biggest financier of Gulf Group.{45} BCCI chairman Agha Hasan Abedi had been suspected of links to U.S. intelligence even before he founded BCCI in 1972.{46} BCCI’s inside connection to the CIA appears to have been strengthened in 1976, when under CIA Director George Bush “the CIA strengthened its relationships with so-called friendly Arab intelligence agencies. One of the most important of these was Saudi Arabia’s intelligence service {the Istakhbarat}, run by Kamal Adham, Prince Turki {al-Faisal al-Saud}, and Abdul-Raouf Khalil, all of whom were BCCI insiders.”{47}

BCCI’s links with the CIA milieu-and more specifically with CIA Director Bush and his eventual successor, William Casey, are said to have increased in 1976, after Bush’s non-reappointment by Jimmy Carter. At this time the swelling ranks of ex-CIA operatives, dismissed for the sake of a downsized clandestine service, are said to have combined to create a shadow “CIA-in-exile” - an “off-the-books group made up of the old boys.”{48} It has been alleged that in 1976 CIA Director Bush acted with British intelligence and with William Casey (who at the time was campaign manager for Reagan’s first presidential campaign) to help set up the Cayman Island affiliate (and intelligence connection) of the BCCI.{49}

The purpose was to establish BCCI as “an intelligence consortium among the British, the Americans, and the Arabs.”{50} According to this theory, the Syrian drug dealer Monzer al-Kassar, who had been recruited by British intelligence, “played a key role in this. . . . He convinced all the terrorist groups, from Abu Nidal to the Marxists, to transfer their accounts to the new BCCI branch in London. There the secret service could easily wiretap and decipher every coded transfer.”{51} The Kerry-Brown Senate report on BCCI confirmed that information on the Monzer al-Kassar and Abu Nidal accounts at the London BCCI branch had been passed on to British and American intelligence by the branch manager who was apparently “a paid informant.”{52} It also criticized the “casual manner” in which BCCI had been regulated in England, leading to a climax in which “the Bank of England had . . . inadvertently become partner to a cover-up of BCCI’s criminality.”{53}

A third firm that became part of the Afghan arms pipeline was Global International Airways of Kansas City. It had already expanded in 1979, thanks to “money borrowed from an Arabian international bank” - allegedly BCCI.{54} (Meanwhile the CIA was funding its Afghan operatives with currency purchased from the Swiss firm Shakarchi Trading, which was later revealed to have laundered profits from both Afghan heroin and Colombian cocaine.{55}

From the outset Abedi’s entry into U.S. banking was tied to the achievement of personal influence to effect national policy changes, allegedly with the help of pro-Arab elements in the CIA, extending to President Jimmy Carter, after a number of favors to Carter’s embattled budget director, Bert Lance. Long after leaving the presidency, Carter continued to tour the world in Abedi’s BCCI plane, allowing Abedi to profit from joint appearances with Carter in Kenya, Ghana, Pakistan, Bangladesh, China, Thailand, and the Soviet Union, “all key targets of BCCI business development.”{56}

However, Abedi’s efforts with Carter met with only limited success after 1979. In that year the U.S.-brokered Camp David settlement failed to satisfy a key Saudi demand that Israel relinquish East Jerusalem and the Temple Mount.{57} In April 1979 the United States also stopped economic aid to Pakistan because of its development, financed by BCCI and by drugs, of an atomic bomb.{58} Meanwhile Saudi intelligence and BCCI continued to have better relations with some CIA personnel than with the White House.{59} BCCI’s strenuous efforts to acquire an American bank in Washington, starting in 1978, were unsuccessful as long as Carter was president. However, they were unanimously approved in 1981 under the new Reagan-Bush administration.{60}

In Pakistan, meanwhile, Abedi was extremely close to General Mohammed Zia-ul-Haq, who seized power in 1977. Abedi and Zia also met frequently with Fazle Haq or Huq, the man whom Zia appointed military governor of the North-West Frontier province, and allegedly the patron of the Pakistani heroin refiners who bought the mujahedin opium.{61} Like Abedi, Fazle Haq became known as a CIA asset; he was also listed with Interpol by 1982 as an international narcotics trafficker.{62}

Drugs may have been at the heart of this relationship from the outset. A BCCI informant told U.S. authorities that Abedi’s influence with Zia “benefited from the backing of a Pakistani named Fazle Haq, who was . . . heavily engaged in narcotics trafficking and moving the heroin money through the bank.”{63} DEA headquarters in Washington told reporters they knew nothing about Fazle Haq. But a highly placed U.S. official explained to Time correspondent Jonathan Beaty that this was because Haq “was our man. . . everybody knew that Haq was also running the drug trade,” and “BCCI was completely involved.”{64}

We have already seen that Brzezinski subsequently claimed responsibility for the CIA-ISI intervention in Afghanistan. However, in a 1989 interview Fazle Haq maintained that it was the Pakistanis (including himself) who pressured Brzezinski to back the ISI clients in Afghanistan: “I told Brzezinski you screwed up in Vietnam and Korea; you better get it right this time.”{65} In his book Drugs in South Asia, M. Emdad-ul Haq speculates further that Fazle Haq was the “foreign trained adviser” who, according to The Hindustan Times, had suggested to General Zia that he use drug money to meet the Soviet challenge.{66}

It is clear that in May 1979, months before the Soviet invasion, the ISI put the CIA in contact with Hekmatyar, the ISI protege who would become the central figure in mujahedin drug trafficking.{67} The CIA did so at a time the international heroin trade had suffered a major drop-off in opium from the Golden Triangle and thus needed to build up a new source. After Pakistan banned opium cultivation in February 1979 and Iran followed suit in April, the absence of legal controls in the Pashtun areas of Pakistan and Afghanistan “attracted Western drug cartels and ‘scientists’ {including “some ‘fortune-seekers’ from Europe and the US”} to establish heroin processing facilities in the tribal belt.”{68} All this new attention from “the international drug syndicates” apparently came before either the CIA active intervention in Afghanistan in August 1979 or the Soviet invasion in December.{69}

No one can doubt the importance of drug trafficking to the ISI as an asset in support of policy goals and also (for some) as a source of personal profit. Through the 1980s and 1990s, the ISI clearly allowed Hekmatyar to use drugs to increase his influence vis-a-vis other Afghan commanders over which the ISI had less control.{70}

Control of drug flows appears to have become part of the CIA-ISI strategy for carrying the Afghan war north into the Soviet Union. As a first step, Casey appears to have promoted a plan, suggested to him by Alexandre de Marenches, that the CIA supply drugs on the sly to Soviet troops.{71} Although de Marenches subsequently denied that the plan went forward, there are reports that heroin, hashish, and even cocaine from Latin America soon reached Soviet troops, and that the CIA-ISI-linked bank BCCI, along with “a few American intelligence operatives were deeply enmeshed in the drug trade” before the war was over.{72} Maureen Orth heard from Mathea Falco, head of International Narcotics Control for the State Department under Jimmy Carter, that the CIA and ISI together encouraged the mujahedin to addict the Soviet troops.{73}

But the plans went farther. In 1984, during a secret visit by CIA Director Casey to Pakistan, “Casey startled his Pakistani hosts by proposing that they take the Afghan war into enemy territory - into the Soviet Union itself. . . . Pakistani intelligence officers - partly inspired by Casey - began independently to train Afghans and funnel CIA supplies for scattered strikes against military installations, factories and storage depots within Soviet territory. . . . The attacks later alarmed U.S. officials in Washington, who saw military raids on Soviet territory as ‘an incredible escalation,’ according to Graham Fuller, then a senior U.S. intelligence {CIA} official who counseled against any such raids.”{74}

“Thus it was,” according to Pakistani Brigadier Mohammed Yousaf, “the U.S. that put in train a major escalation of the war which, over the next three years, culminated in numerous cross-border raids and sabotage missions” north of the Amu Dararya.{75} According to Ahmed Rashid, “In 1986 the secret services of the United States, Great Britain, and Pakistan agreed on a plan to launch guerilla attacks into Tajikistan and Uzbekistan.”{76} The task “was given to the ISI’s favorite Mujaheddin leader Gulbuddin” Hekmatyar{77} who by this time was supplementing his CIA and Saudi income with the proceeds of his heroin labs “in the Koh-i-Sultan area {of Pakistan}, where the ISI was in total control.”{78} At the same time the CIA also helped ISI and Saudi Arabia distribute in the Soviet Union thousands of Korans that had been translated into Uzbek, an important contribution to the spread of Islamism in Central Asia today.{79}

Casey was an oilman, and his Central Asian initiative of 1984 was made at a time when right-wing oil interests in Texas already had their eyes on Caspian basin oil. His cross-border guerrillas, recruited from ethnic Uzbeks and Tajiks, evolved in time into heroin-financed Islamist groups like the IMU who became the scourge of Central Asia in the 1990.{80}

There is also a second question: How far back did this use of Hekmatyar and drugs go, and who originated it? Did CIA initiate the May 1979 contact with Hekmatyar as part of Carter’s and Brzezinski’s national policy? Or did Abedi, Haq and company, enjoying a special relationship with pro-Saudi elements in the CIA, arrange the contact on behalf of drug interests that would soon profit handsomely?{81} Or did the CIA strengthen the drug trafficking position of its friends such as BCCI and Fazle Haq because it feared the Soviet-backed and heroin-financed intelligence activities among Muslims of men like Rifaat Assad, who controlled the drugs and laboratories of Lebanon’s Bekaa valley?{82}

If that question cannot yet be definitively answered, it is clear that BCCI and its affiliated Gokal shipping interests (and possibly Global International Airways) soon formed the backbone of the CIA-ISI arms pipeline to Gulbuddin Hekmatyar. And the United States, fully conscious of Hekmatyar’s drug trafficking and anti-Americanism, never exerted pressure to have the ISI deny him U.S. aid.{83} This inaction is the more striking because of Hekmatyar’s conspicuous failure to contribute to the mujahedin military campaign.{84}


1959

This brings me to the original thesis of my 1972 book, The War Conspiracy. In 1959 drug trafficking elements in Southeast Asia, fearing the loss of their opium sources and connections, had simulated a phony war crisis in Laos. I suspected, but could not prove, that they did so in order to secure a new basis for drug operations in that country with a CIA airline the KMT partly controlled, Civil Air Transport (known after 1959 as Air America).{85} This simulation involved collusion with elements in the CIA and US. armed forces who shared the KMT goal of reconquering China.

Lacking certain proof, I formulated this hypothesis very tentatively in 1972, and again in the new preface I wrote to the book in early 2001.{86} However events since 9/11 embolden me to raise it again as a question. In 1959, as again in 1979 and 2001, the local drug trade was threatened by political developments; and the threat vanished after both a CIA-backed escalation and the elevation to power of drug trafficking elements.{87}

The pressures in 1959 were coming from tribesmen in northeastern Laos, from Burma, and from Thailand. For years KMT drugs had been routinely “seized” by Thai border police and then sold locally or to Hong Kong traffickers, to the profit of the CIA’s puppet in Thailand, Phao Sriyanon.{88} This came to an abrupt end in 1959, when

Field Marshal Sarit {Thanarat of Thailand} unleashed a full military assault on the opium trade. At one minute after midnight on July 1, 1959, Sarit’s forces swept the country, raiding opium dens, seizing their stocks, and confiscating opium pipes. . . .Speaking to his people, Sarit declared that “1 July 1959 can be considered a date of historical significance because it began the first chapter of a new age in the history of the Thai nation.”{89}

I recount in part III how a new chapter in the history of Laos began with a conspiratorial “crisis” only two weeks later, on July 16, 1959. Since 1958, KMT forces, under pressure in Burma, had begun relocating to towns like Ban Houei Sai and Nam Tha in northwestern Laos that would soon become opium centers and CIA bases. By March 1959 they were being supplied in Laos by what Bernard Fall called “an airlift of ‘unknown planes”’ - almost certainly from the Taiwanese airline Civil Air Transport (CAT), which fronted for the CIA proprietary known since 1959 as Air America.{90} The CIA owned 40 percent of the company; KMT bankers owned 60 percent.{91} The planes had been supplying the KMT opium bases continuously since 1951.

The result of the phony Laotian crisis of July-August 1959 was to give official White House sanction to a continuous Air America airlift to Laos.{92} Air America planes soon began the major airlift to Hmong (Meo) camps in northeast Laos as well. By 1965 they became the primary means of exporting the Hmong’s traditional cash crop, opium, and by 1968 were also carrying heroin. Apparently most of this ended up in traditional KMT networks through Hong Kong to the United States.

The 1959 “crisis” was the first of a series that between 1961 and 1964 would lead to greater and greater U.S. involvement in first Laos and then Vietnam. Air America’s support for a drug trafficking rebel Laotian leader, Phoumi Nosavan, contributed to these crises. Clearly the “crises” combined stimulus from outside the U.S. government with high-level support inside it. We know now that a plan for a KMT reinvasion of South China, a plan first authorized by Truman in 1951, continued to be supported long after the Korean War by some high-level generals and CIA officials. These ranged from extremists like Air Force General Curtis LeMay, who wrote privately about “nuking the chinks,” to CIA Deputy Director Ray Cline, who had served as CIA station chief in Taipei.{93} The plan was revived by right-wing oppositionists in the 1959-1962 period, when to the old McCarthyite question, Who lost China? was added a new one, Who lost Cuba?{94}

Perhaps the most vocal advocate of the plan from 1959 to 1965 was the KMT- sponsored Asian People’s Anti-Communist League (after 1966 the World Anti- Communist League), whose member agency at its Taiwan headquarters also sponsored the airlift to the KMT opium camps of western Laos.{95}

The KMT’s stake in the CAT airlift to its troops in the “fertile triangle” became obvious in 1961, when Fang Chih, a member of the KMT Central Supervisory Committee and secretary-general of the Free China Relief Agency (FCRA), admitted responsibility for an unlisted CAT plane that had just been shot down over Thailand by the Burmese Air Force. . . . The unpublicized visit to Laos of Fang Chih, in the weeks immediately preceding the phony Laos “invasion” of 1959, suggests that the narcotics traffic, as well as Pathet Lao activity, may have been a reason why CAT’s planes inaugurated their flights in that year into the opium-growing Meo areas of Sam Neua province.{96}

But KMT machinations fomenting a phony Laos crisis in 1959 would have gone unheeded had it not been for support from the local CIA station, and higher.{97} A key role was played by the influential CIA ally Joseph Alsop, an old China hand and columnist whose inflammatory reports from Laos helped trigger the U.S. authorization for charter Air America airlift.{98}

We should not be surprised that the CIA and its friends took steps to protect and strengthen the KMT drug traffic in 1959, at a time when that traffic was being challenged. For a decade the CIA and its part-owned proprietary CAT had played a key role in building up the traffic, as the most dependable CIA asset in East and Southeast Asia. The origins of that collaboration merit closer study.


NOTES

1. Newsweek, May 21, 2001: “Colombian intelligence sources now estimate that 40 percent of the country’s total cocaine exports are controlled by these right-wing warlords and their allies in the narcotics underworld.” Sun Francisco Chronicle, June 21, 2001: “The Colombian government’s planning department estimates that the FARC earns $290 million yearly from the drug trade. That represents less than 2.5 percent of the value of Colombia’s estimated annual cocaine output of 580 tons.”
2. Scott and Marshall, Cocaine Politics, 96-103.
3. Alfred W. McCoy, The Politics of Heroin: CIA Complicity in the Global Trade (New York Lawrence Hill, 1991), 299.
4. Richard Nixon, “Asia after Vietnam,” Foreign Affairs, October 1967, 11 1. Other examples in Peter Dale Scott, “Exporting Military-Economic Development,” in Malcolm Caldwell, ed., Ten Years’ Military Terror in Indonesia (Nottingham, U.K.: Spokesman, 5. Peter Dale Scott, The War Conspiracy: The Secret Road to the Second Indochina
5. Peter Dale Scott, The War Conspiracy: The Secret Road to the Second Indochina War (Indianapolis: Bobbs-Memll, 1972), 154-67.
6. McCoy, Politics, 162.
7. McCoy, Politics, 286-87.
8. Peter Dale Scott, “Honduras, the Contra Support Networks, and Cocaine: How the U.S. Government Has Augmented America’s Drug Crisis,” in Alfred W. McCoy and Alan A. Block, eds., War on Drugs: Studies in the Failure of US. Narcotics Policy (Boulder, Colo.: Westview, 1992), 126-27.
9. McCoy, Politics, 446.
10. M. Emdad-ul Haq, Drugs in South Asia: From the Opium Trade to the Present Day (New York: St. Martin’s, 2000), 175-86; Rashid, Taliban, 12-13.
11. Jonathan Marshall, Peter Dale Scott, and Jane Hunter, The Iran-Contra Connection: Secret Teams and Covert Operations in the Reagan Era (Boston: South End, 1987), 36-40; McCoy, Politics, 461-79; Jonathan Marshall, Drug Wars: Corruption, Counterinsurgency, and Covert Operations in the Third World (Forestville, Calif.: Cohan & Cohen, 1991), 55-56; Jonathan Kwitny, The Crimes of Patriots (New York Simon & Schuster, 1987).
12. Among the unanswered questions about Nugan Hand: Why was its regional branch in Chiangmai, Thailand, located down the hall from the local DEA office? Why did so many CIA veterans become Nugan Hand bank officers, despite their lack of training? Why, when Australian officials asked for FBI help when prosecuting the bank, were their requests for Nugan Hand bank documents turned down by the United States on grounds of “national security”?
13. Scott, “Honduras, the Contra Support Networks, and Cocaine,” 126-27.
14. McCoy, Politics, 191, and sources therein cited.
15. John K. Cooley, Unholy Wars: Afghanistan, America, and International Terrorism (London: Pluto, 2000), 139.
16. Claire Sterling, Thieves’ World: The Threat of the New Global Network of Organized Crime (New York: Simon & Schuster, 1994), 44; citing lecture of November 1990 by Italian Judge Giovanni Falcone.
17. Antonio Nicaso and Lee Lamothe, Global Mafia: The New World Order of Organized Crime (Toronto: Macmillan Canada, 1995), xiii.
18. Kerry, New War, 18.
19. Yergin, The Prize, 538-39.
20. David E. Spiro, The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets (Ithaca, N.Y.: Cornell University Press, 1999), x: “In 1974 Simon negotiated a secret deal so the Saudi central bank could buy U.S. Treasury securities outside of the normal auction. A few years later, Treasury Secretary Michael Blumenthal cut a secret deal with the Saudis so that OPEC would continue to price oil in dollars. These deals were secret because the United States had promised other industrialized democracies that it would not pursue such unilateral policies.” Cf. 103-12.
21. “So long as OPEC oil was priced in U.S. dollars, and so long as OPEC invested the dollars in U.S. government instruments, the U.S. government enjoyed a double loan. The first part of the loan was for oil. The government could print dollars to pay for oil, and the American economy did not have to produce goods and services in exchange for the oil until OPEC used the dollars for goods and services. Obviously, the strategy could not work if dollars were not a means of exchange for oil. The second part of the loan was from all other economies that had to pay dollars for oil but could not print currency. Those economies had to trade their goods and services for dollars in order to pay OPEC” (Spiro, Hidden Hand, 121).
22. John Loftus and Mark Aarons, The Secret War against the Jews (New York St. Martin’s, 1994), 343, who do not mention the two secret financial deals with the Saudis, offer a different and I think one-sided account of the sale of the F-15s; cf. Spiro, Hidden Hand, 123-24.
23. Yergin, The Prize, 772.
24. Cooley, Unholy Wars, 116-17.
25. Jonathan Beaty and S. C. Gwynne, The Outlaw Bank: A Wild Ride into the Heart of BCCZ (New York Random House, 1993), 357.
26. Greg Palast, The Best Democracy Money Can Buy (London: Pluto, 2002), 48. Palast supplies examples of how the W, created at Bretton Woods in 1944 to promote economic stabilization and growth, has since 1980 promoted the opposite by policies that contract economies to preserve debt payments. Cf. Nobel-winning economist Joseph Stiglitz, formerly of the World Bank, on the IMF response to the Asian crisis of 1997: “It went to the countries and told them to be more contractionary than they wanted, to increase interest rates enormously. It was just the opposite of the economic analysis that was the basis of the founding of the W. Why? In order to make sure that creditors got repaid” (Joseph Stiglitz, interview by Lucy Komisar, Progressive, June 2000, 34).
27. See this book, 194-95.
28. Bruce Cumings, The Origins of the Korean War. Vol. 2, The Roaring of the Cataract, 1947-1950 (Princeton: Princeton University Press, 1990), 106-17, 599-602 (especially 601), and passim.
29. For the CIA connections to the Lucian0 and Corsican Mafias, see Peter Dale Scott, foreword to Henrik Kriiger, The Great Heroin Coup (Boston: South End, 1980), 3, 14-15.
30. Martin A. Lee, The Beast Reawakens (Boston: Little, Brown, 1997), 202.
3 1. Washington Post, December 10, 2001 ; Sun Francisco Chronicle, December 21, 2001 (replanting); New York Times, October 28, 2002 (3,700 tons). A metric ton is 1.1 tons.
32. United Nations Office for Drug Control and Crime Prevention, Afghanistan Annual Opium Poppy Survey, 2001.
33. U.S. Department of State, International Narcotics Strategy Report, 2001, www.state.gov/g/inVrls/nrcrpt/2001/rpt/8482.htm.
34. Thus the revival of the Afghan opium economy is good news for Islamist terrorists from Kosovo to Kashmir, who have depended on it since the connection was established with ISI encouragement in the 1980s.
35. Statement by director of Central Intelligence George J. Tenet before the Senate Select Committee on Intelligence, February 7, 2001, www.cia.gov/cia/public-affairs/speeches/achives/200 1AJNCLASWWT-02072 00 1 .html.
36. U.S. Department of State, International Narcotics Strategy Report, 2001.
37. Ahmed Rashid, Jihad: The Rise of Militant Islam in Central Asia (New Haven: Yale
38. Rashid, Jihad, 214-16.
39. In Peter Dale Scott, Deep Politics and the Death of JFK (Berkeley: University of California Press, 1996), 203, I reported how a U.S. oil company employed a major Sicilian Mafia figure as managing director of a subsidiary, prior to that subsidiary’s securing oil University Press, 2002), 178. leases in ’hnisia. I commented that “it is normal, not unusual, for the entry of major US. firms into Third World countries to be facilitated and sustained, indeed made possible, by corruption.” Rashid’s book Jihad corroborates how Western oil company investments are “creating an extremely wealthy, corrupt minority class” in the Central Asian states, thereby “breeding even greater social discontent” (p. 237). Olivier Roy has written that “it is the Americans who have made inroads in Central Asia, primarily because of the oil and gas interests. Chevron and Unocal are political actors who talk as equals with the States (that is, with the presidents). The oil companies have come to play a greater and greater role in the area” (quoted in Richard Labkvikre, Dollars for Terror: The United States and Islam (New York Algora, 2000), 280; Labkvi2re gives no citation, but Roy has confirmed to me that he wrote these words for Le Monde Diplomatique).
40. Michael Griffin, Reaping the Whirlwind: The Taliban Movement in Afghanistan (London: Pluto, 2001). 145-46. Cf. Christina Lamb, Waiting fordllah: Pakistan’s Strug- gle for Democracy (New York: Viking, 1991), 195: “The Afghan war had made Pakistan the world’s largest supplier of heroin, and by 1989 drugs were bringing in at least $4 billion a year-more foreign exchange than all Pakistan’s legal exports combined.” Lamb cites Pakistan Narcotics Control Board figures; also Melvyn Levitsky, U.S. assistant secretary of state for international narcotics, before a House committee, Washington, January 8, 1989. Giovanni Quaglia, the chief of operations for the UN Office of Drug Control, has estimated that the total contraband economy in Pakistan now amounts to $15 billion (Orth, Vanity Fair, March 2002, 178).
41. McCoy, Politics, 447; cf. 446. For his production figures in Pakistan, Afghanistan, and Iran, McCoy cites U.S. State Department statistics. But according to other sources, including a 1986 U.S. congressional report, these statistics were politically manipulated to show a drop in Pakistan-Afghan production in the 1980s, accompanied by an increase in Iranian production. (The State Department actually “claimed that due to climatic conditions opium production in Pakistan and Afghanistan dropped in the 1980s.”) The reverse was almost certainly true: see M. Emdad-ul Haq, Drugs in South Asia, 194-95.
42. McCoy, Politics, 458; Griffin, Reaping the Whirlwind, 148 (labs); Emdad-ul Haq, Drugs in South Asia, 189 (ISI).
43. Lawrence Lifschultz, “Pakistan: The Empire of Heroin,” in War on Drugs, 451.
44. Peter Truell and Larry Gurwin, False Profits: The Inside Story of BCCI, the World’s Most Corrupt Financial Empire (Boston: Houghton Mifflin, 1992), 123.
45. Kerry-Brown Report: U.S. Congress, Senate, Committee on Foreign Relations, The BCCI Affair, by Senator John Kerry and Senator Hank Brown (Washington, D.C.: GPO, 1992), 27-28.
46. Truell and Gurwin, False Projits, 123.
47. Truell and Gurwin, False Profits, 130.
48. Joseph J. Trento, The Secret History of the CIA (New York Brum/Crown/Random House, 2001), 410,467.
49. Loftus and Aarons, Secret War, 395. The Cayman Islands affiliate was an inner bank, International Credit and Investment Company Ltd. (ICIC). The law firm that established ICIC for BCCI, Bruce Campbell & Company, also acted as registered agent for the CIA-related Australian drug bank, Nugan Hand. Nugan Hand and BCCI also used the same auditors, Price Waterhouse (Truell and Gurwin, False Projits, 125). 50. This theory correlates with the widely held observation that CIA officers let go by Carter’s DCI, Admiral Stansfield ’hner, regrouped as a “shadow” agency with outside backing and funding: “The CIA did not like President Jimmy Carter. . . . The wolves in Clandestine Services went for the president’s jugular, and eventually destroyed his presidency. . . . non-hiring of George Bush gave momentum to the creation of a CIA in exile. This was a group of out-of-work agents. . . . By the time Reagan and Bush took office, they had a choice of two CIA’s they could do business with+ne that required oversight by Congress, and another off-the-books group made up of the old boys” (Trento, Secret History, 466-67).
51. Loftus and Aarons, Secret War, 395. Loftus and Aarons refer to various news stories leaked later by Mossad, such as the following: “The CIA had a covert relationship with BCCI in 1976. At the very same time, George Bush was director of the CIA. We are told the late William Casey . . . met secretly and regularly with the BCCI bank’s founder, Aga Hassan Abedi” (Arnold Fine, Jewish Press, March 6, 1992).
52. Kerry-Brown Report, 68; cf. 611.
53. Kerry-Brown Report, 361-63. For a more severe account of British passivity in the
BCCI case, see Beaty and Gwynne, Outlaw Bank, 105-7.
54. Quotation from Stephen Pizzo, Mary Fricker, and Paul Muolo, Inside Job: The Looting of America’s Savings and Loans (New York McGraw-Hill, 1989), 89. 55. Marshall, Drug Wars, 52; Robert I. Friedman, Red Majya (Boston: Little, Brown, 2000), 226-27; Independent (London), February 18, 1990.
56. Beaty and Gwynne, Outlaw Bank, 195-96. In the end Carter took millions from Abedi, “including $1.5 million long after BCCI was indicted and convicted for laundering drug money” (Beaty and Gwynne, Outlaw Bank, 63).
57. Robert Lacey, The Kingdom: Arabia and the House of Sa’ud (New York Avon,
58. New York Times, July 16, 1980, April 16, 1979; Washington Post, April 18, 1979 (aid cutoff); Beaty and Gwynne, Outlaw Bank, 238, 255, 272-77 (BCCI).
59. Kerry-Brown Report, 300, citing New York Times, December 6, 1981: “While Adham was still in place as the CIA’s liaison in 1977, the CIA station chief for Saudi Arabia, Raymond H. Close, chose to go to work for Adham upon leaving the CIA. . . . As Jeff Gerth of the New York Times reported in 1981 . . . ‘some think Mr. Close may still be working for the CIA in some capacity, although he officially retired in 1977. They add that a further complicating factor is that some Saudis privately share the same perception.’ The Times account describes how Close had actually given approval to weapons sales from Saudi Arabia to Pakistan in the early 1970’s, in contravention to the ‘official policy’ enunciated by the American ambassador.” Cf. Cooley, Unholy Wars,
60. James Ring Adams and Douglas Frantz, A Full Service Bank (New York Pocket Books, 1992), 64-72. Until 1977 Financial General had been controlled by General George Olmsted, the head of OSS China during World War II.
61. True11 and Gurwin, False Projts, 160-61; McCoy, Politics, 454; Lawrence Lif-schultz, “Pakistan: The Empire of Heroin,” in War on Drugs, 342. Zia’s role in appointing Fazle Haq is reported by Alain Labrousse, La drogue, l’argent et les armes (Paris: Fayard, 1991), 110.
62. Beaty and Gwynne, Outlaw Bank, 52 (CIA); Lifschultz, “Pakistan,” 342 (Interpol).
63. Beaty and Gwynne, Outlaw Bank, 48. The informant, named here as “Muza,” is identified by Adams (p. 257) and the Kerry-Brown Report (p. 348, cf. p. 226) as Amir Lodhi. 1981), 451-55.
112-13.
64. Beaty and Gwynne, Outlaw Bank, 52.
65. General Fazle Haq (on Pakistan’s confidence that Washington would back their decision to support the Afghan resistance); quoted in Christina Lamb , Waiting for Allah, 222 (cf. 206); cited in M. Emdad-ul Haq, Drugs in South Asia, 185. 66. M. Emdad-ul Haq, Drugs in South Asia, 187; citing Hindustan Times, October 1, 1994. Fazle Haq’s story (that the U.S. backing of the mujahedin was in response to a Pakistani initiative) is corroborated by Robert Gates of the CIA. His memoir speaks of “an approach by a senior Pakistani official to an Agency officer” in March 1979, four months before Carter “signed the first finding to help the Mujahedin covertly.” Robert M. Gates, From the Shadows (New York Simon & Schuster, 1996), 144, 146. Haq’s suggestion might explain the CIA-backed ISI decision to focus aid on Gulbuddin Hekmatyar, whose Hizb-i-Islami faction was allegedly ignored and “almost non-existent” during the formation of the first organized Afghan resistance in Pakistan in mid-1978. See M. Emdad-ul Haq, Drugs in South Asia, 187 (cf. 185); citing Hamidullah Amin and Gordon B. Schiltz, A Geography of Afghanistan (Kabul: Centre for Afghanistan Studies, 1984), 381. Cf. Larry Goodson, Afghanistan’s Endless War: State Failure, Regional Politics, and the Rise of the Taliban (Seattle: University of Washington Press, 2001), 56; Cooley, Unholy Wars, 64.
67. McCoy, Politics, 451; Lifschultz, “Pakistan,” 321-23,326.
68. M. Emdad-ul Haq, Drugs in South Asia, 188. The transnational drug presence in Afghanistan was even clearer by the 1990s, when a French journalist learned “that ‘the Pakistanis’-presumably the ISI’s clandestine operators . . . had actually provided seed grains of a new and more productive species of poppy . . . said to have come from Burma . . . and Africa, probably Kenya” (Stephane Allix, La petite cuillkre de SchihLrazade, sur la route de l’hhoine [Paris: Editions Ramsay, 19981, 33-34; Cooley, Unholy Wars, 150; cf. Griffin, Reaping the Whirlwind, 148).
69. According to a contemporary account, Americans and Europeans started becoming involved in drug smuggling out of Afghanistan from the early 1970s; see Catherine Lamour and Michel R. Lamberti, The Zntemational Connection: Opiumfrom Growers to Pushers (New York Pantheon, 1974), 190-92.
70. Cf. Maureen Orth, Vanity Fair, March 2002, 170. As late as 2001, one ISI general was convicted in Pakistan for having “assets disproportionate to his known sources of income” (Orth, Vanity Fair, 152).
71. Cooley, Unholy Wars, 128-29; Beaty and Gwynne, Outlaw Bank, 305-6.
72. Beaty and Gwynne, Outlaw Bank, 306, 82; also Allix, La petite cuillt?re, 35,95.
73. Maureen Orth, Vanity Fair, March 2002, 170-71. A Tajik sociologist added that she knew “drugs were massively distributed at that time,” and that she often heard how Russian soldiers were “invited to taste.”
74. Washington Post, July 19, 1992.
75. Mohammed Yousaf and Mark Adkin, Afghanistan-Bear Trap: The Defeat of a
76. Rashid, Jihad, 43.
77. Rashid, Taliban, 129.
78. M. Emdad-ul Haq, Drugs in South Asia, 189.
79. Yousaf, Bear Trap, 193; Rashid, Jihad, 223.
80. Allix, La petite cuillkre, 100. Superpower (Havertown, Penn.: Casemate, 2001), 189.
81. For BCCI and drugs, see, for example, Kerry-Brown Report, 49-51; True11 and
82. Loftus and Aarons, Secret War, 381-82.
83. Bergen, Holy War Inc., 67.
84. Bergen, Holy War Inc., 70.
85. See this book, 142-152; also 188-94.
86. See this book, xvi-xvii, cf. 188-89.
87. See this book, 128-32. In 1970, following Arthur Schlesinger, I treated the 1960 CIA station chief in Laos, Gordon Jorgensen, as an opponent of local KMT plotting. I soon realized that he was removed in 1962 because of his backing for the right-wing anti-neutralist Phoumi Nosavan (Peter Dale Scott, “Vietnamization and the Drama of the Pentagon Papers,” in The Pentagon Papers, Senator Gravel ed. [Boston: Beacon, 19721, 5231; cf. McCoy, Politics, 300).
Gurwin, False Projts, 160.
88. McCoy, Politics, 162, 184-86; Scott, this book, 192-93.
89. McCoy, Politics, 190. This statement indicated a reorganization of the drug trade, not an abolition. The legal opium monopoly in Thailand ended in 1959, as did that of Laos two years later. The traffic continued to prosper and consolidate under the new conditions. 90. Bernard Fall, Anatomy ofa Crisis (Garden City, N.Y.: Doubleday, 1969), 99; this book, 195.
91. See this book, 194-95.
92. Two key authorizations for the CAT/Air America airlift to Laos, on September 4, 1959, and again in mid-December 1960, were made on presidential authority at a time when Eisenhower was in fact not in his office, and Vice President Richard Nixon may have acted on his behalf. I was first drawn to the possibility of an ongoing conspiratorial CAT-Nixon connection by events just before the 1968 election, when undeniably Nixon conspired (there is no other word) with Anna Chennault, the Chinese wife of CAT founder Claire Chennault. The two managed to induce South Vietnamese President Thieu to reject the plans announced by Lyndon Johnson for peace talks. Thieu’s announcement was made on November 2, only three days before the election.
93. Scott, War Conspiracy, 64 (Cline); Cumings, Origins, 102 (LeMay). LeMay’s remark was made in the 1960s in a note to his friend Whiting Willauer (one of the founders of CAT).
94. See Anthony Kubek, How the Far East Was Lost (Chicago: Henry Regnery, 1963); discussed in Scott, Deep Politics, 292-93.
95. In April 1971 the French learned that a long-time APACL delegate, Prince Sopsai-sana of Laos, had arrived at Orly with a suitcase of heroin “worth $13.5 million on the streets of New York” (McCoy, Politics, 283-84).
96. See this book, 194. Today I would discount the “Pathet Lao activity” even more than I did in 1972.
97. The CIA station chief in 1959, Henry Hecksher, went on to be the CIA station chief in Chile in 1970, when he played a key role acting behind the ambassador’s back in the anti-Allende coup plot that led to the murder of General Rent5 Schneider. See Seymour Hersh, The Price ofpower (New York: Summit Books/Simon & Schuster, 1983), 267-68, 288-89, 293, passim.
98. A mutual friend later told me that Alsop admitted to him he had written these columns in the belief that he was “helping out.”

arrested_development_marry_me.webm

https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/appx1.htm posted:

3. Production not only provides the material to satisfy a need, but it also provides the need for the material. When consumption emerges from its original primitive crudeness and immediacy – and its remaining in that state would be due to the fact that production was still primitively crude – then it is itself as a desire brought about by the object. The need felt for the object is induced by the perception of the object. An objet d'art creates a public that has artistic taste and is able to enjoy beauty – and the same can be said of any other product. Production accordingly produces not only an object for the subject, but also a subject for the object.

actually thats not my favorite translation *digs out book*

Third. Production not only supplies the want with material, but supplies the material with want. When consumption emerges from its first stage of natural crudeness and directness - and its continuation in that state would in itself be the result of a production still remaining in a state of natural crudeness - it is itself furthered by its object as a moving spring. The want of it which consumption experiences is created by its appreciation of the product. The object of art, as well as any other product, creates an artistic and beauty-enjoying public. Production thus produces not only an object for the individual, but also the individual for the object.

insta_gramsci posted:

awesome thread, has anyone read dawn paley's drug war capitalism? i haven't gotten to yet, it's a few years old, but it looks like a solid read

tanks v much

ijust read the excerpt available here: http://www.truth-out.org/progressivepicks/item/27962-south-of-the-us-border-the-war-on-drugs-is-really-a-war-on-people

reading it, it might be a good opportunity to define some terms,

The "war on drugs" tends to be what books (like this one) seem to focus on - that is how the US disgusises its imperialism and military maintinence of amerikkkan domination at home and abroad as "the war on drugs" under which is found an anti-communist, anti-liberation, anti-human war. The war on drugs is the imperialist war

The "Drug war" on the other hand, which I feel is far less examined (and the side that goes deep into parapolitics) i tend to define as the brutal war that takes place between monopolies and capitalists for the imcomprehensibly large profits that stem from the global drugs trade. The drug war is the capitalist war

of course they're just two sides of the same coin and so bound up that you cant consider one without the other, which is why things purely focusing on the "war on drugs" without examining the "drugs war" seem to fall flat.

Edited by tears (July 21, 2017 13:21:43)

El Mayo's air fleet

During its so-called war on drugs, the Calderon government dealt some much-publicized blows to members of the Sinaloa cartel, in an attempt to distract public attention from the many clues to its complicity with that organization. These blows were always aimed at middle-level personnel. They never struck at the heart of the cartel: its top leaders and its core business.

The Sinaloa cartel's main artery runs through Mexico City airport. It remains intact and fully operational, pumping money to the leaders, money which in turn empowers them to continue their criminal enterprise. Inside Mexico City International Airport (AICM), on the inner road from Terminal 1 to Terminal 2, are the offices and hangars of Aviones, S.A., a company that officially does aircraft repairs.13 It's a good location. It has hangars, maintenance and repair sheds, a spare parts center, and 50,000 square feet of apron that connects directly to the runways. The company has branches at several other airports in the center of the country, in the State of Mexico, in Puebla, and in Cuernavaca. It also hires out airplanes, according to the brochure.

In his sworn statement of 2008, the PGR's protected witness Richard Arroyo, code name Maria Fernanda, insisted that in this firm's AICM hangar, drugs and cash belonging to El Mayo and El Chapo's Sinaloa cartel are loaded and unloaded every day.

I wish to state that next to Terminal 2 in the AICM, although I don't remember the exact address, we have a company called Aviones which is right next to the AESA {ASESA} hangar, with direct access to the airport, and you can see the name from outside, blue lettering on a white facade, and you can make out its offices, on two floors, employing around thirty people.

To get in, there is a security barrier manned by a policeman. Inside there is this blue cargo plane we never had a chance to use, but which was bought with illicit money. At least it was blue last time I saw it, they paint it every month. We also have two helicopters in there, one of them hired out to the municipality of Ecatapec, the other is getting a propeller fixed. Both were bought with illicit money. We also use these helicopters to spot enemy positions and for leisure trips. There are three fuel tanks of ours, too, two small ones and one large. They are white with the name “Aviafuel” written on them.

Maria Fernanda's description of the building and how to get there was accurate. What's more, this was not the first time that Aviones S.A. had come to the PGR's attention. The file from a previous investigation (siedo/ueicc s/132/2008) states that on March 30, 2008, police officers from the PFP then headed by Edgar Millan used official vehicles to escort a shipment of chemical precursors to the Aviones hangar. The container was carrying 600 kilograms of ephedrine, which had come in from the Netherlands on KLM flight 685.14

On December 1, 2008, the PGR recognized that there is sufficient evidence to say for certain that the accused {the Zambada clan} were active in operations such as drug trafficking at Mexico City International Airport.

The company Aviones, S.A. was founded in Mexico City in 1948. Its original registered owners were Hector Mariscal, Benjamin Burillo, Raul Esponda, and Aaron Saenz Garza, who appeared as the only shareholders. According to its constitution, the company provided a range of services pertaining to the purchase and rehabilitation of aircraft, broad enough brief to enable El Mayo Zambada and his henchmen, years later, to acquire the necessary narco-planes, as well as assure secondary services such as maintenance and refueling. The firm has been ensconced in AICM since at least 1978.

It seems that Benjamin Burillo is uncle to Alejandro Burillo Azcarraga, the cousin of Emilio Azcarraga, the chairman of Mexico's biggest TV empire, Televisa. Aaron Saenz was a politician and military man who held posts in several post-revolutionary governments, before founding key companies like the airline Mexicana de Aviacion, the bank Banca Confia, Seguros Atlas insurance company, and a number of sugar mills. Today the official owners of this company, that El Mayo's stepson insisted was linked to the Sinaloa cartel, are another company, Consan (the majority shareholder), plus various members of the Saenz Couret and Saenz Hirschfeld families, who in turn also own Consan. The business history of the “official” owners of Aviones S.A. is itself controversial. Several of the shareholders have been implicated in financial scandals, including the Banca Confia and Atlas Insurance affairs.15


Complicity and negligence at Mexico City airport

Indeed, everything to do with this company, Aviones, is murky. From January 2005 to the end of 2012, the director general of Mexico City International Airport was Hector Velazquez Corona, a man close to Felipe Calderon.16 In spite of the scandals over what seem to be the Sinaloa cartel's operations in the airport, he was not replaced by Calderon. In June 2012, Proceso magazine reported allegations in El Universal that the US Justice Department regarded Velazquez Corona as linked to organized crime, along with the PGR's swift denial of it in a communique on the same day: the PGR claimed it had no data justifying such a link, and had never heard of one from its regular contacts in the US.17 Velazquez Corona did not last into a third presidency: the current AICM director is Alfonso Sarabia de la Garza.

The AICM management refuses to give any explanation of since when, how, and why a company apparently controlled by El Mayo Zambada has a strategically placed hangar in the country's principal airport. The only thing that is known for certain is that on August 1, 1994, five months before the end of Carlos Salinas's presidency, it was granted a contract to occupy the hangar, valid until July 31, 2008. On November 17, 2005, during the government of Vicente Fox, and with Velazquez now head of the airport administration, the company was given an extension.

The airport administration did reveal in 2010 that Aviones was paying to the AICM the modest sum of 41,030 pesos ($3,200 at the time) per month in rent for the hangar, excluding value added tax. This is absurdly little compared with the millions of dollars in profit it can bring in every week. Although the airport administration admits that Aviones no longer has a valid rental contract, they are unable or unwilling to take the space away from the company, regardless of its alleged drug links.18

Another serious irregularity that ought to be enough to stop Aviones from using the hangar is the fact that it has agreed to share this space with another company, MTC Aviacion, in clear contravention of AICM rules. This other company, founded in 1997, also provides aircraft repair services, as well as running an air taxi service. In fact, private flights have been banned from Mexico City airport since 1994; but for some reason that doesn't apply in this case. It seems to be the only one allowed to fly private planes in and out of the capital's prized airport.

The official response of the airport administration to this firm was evasive, and suggests complicity. Although they said that Aviones was illegally sharing its hangar, they claimed not to know the name of the company it shares it with, even though it is clearly the administration's responsibility to know. And although AICM accepted that this constituted grounds to evict, the company continues to operate unhindered four years after the direct accusations made by El Rey Zambada's stepson.19

If it is true that Aviones S.A. is owned by members of the Sinaloa cartel, as Richard Maria Fernanda Arroyo testified, then this would surely constitute the biggest scandal of corruption and collusion with the drug cartels in recent decades, one which would necessarily implicate authorities at the highest levels in the Secretariat of Communications and Transport, the Mexico City Airport administration, the Secretariat of Public Security, and even the Secretariat of Defense.

Sedena contracts a drug-related company

Aviones S.A., a company allegedly controlled by El Mayo Zambada, had thirty-two contracts with the Secretariat of Defense between 2001 and 2008, for the maintenance of planes belonging to the Mexican Army and Air Force. In the words of El Mayo's nephew, the government put its planes literally in the hands of the enemy. But were they really the enemy?

Twenty-two of these contracts were signed by Sedena during the Fox administration, and ten during Calderon's. The concessions were granted by General Fausto Zamorano, in the former case, and by General Augusto Garcia Ochoa in the latter. (Garcia Ochoa, one of the closest associates of the then Defense Secretary, General Galvan, was hoping to take over that very post in the next government, even though questions have hung over his career ever since he was accused by his colleague Gutierrez Rebollo of protecting Amado Carrillo Fuentes, back in the 1990s.)

The majority of the contracts with Aviones were granted directly or by invitation to two or three companies; that is to say, they were not put out to tender. They include the purchase of spare parts, repairs and routine maintenance. They show that at different times Sedena handed over to the alleged narco-company everything from its Bell 206 helicopters, to a Boeing 727, and a giant Hercules C-130, as well as an array of light aircraft including no fewer than sixty-seven Cessna 182 Skylanes. Some of the contracts explicitly give Aviones the right to take the military planes on test flights after they've been repaired. For the delivery of spare parts purchased by Sedena from Aviones, they also make available the military airbase of Santa Lucia, in the State of Mexico, as well as the Lester Industries airstrip in San Antonio, Texas.20 Other contracts, like the maintenance policy for the Cessnas, signed in August 2003, allow for Aviones to take the defective planes to a suitable place for their repair.

In 2009, the Navy Secretariat likewise signed two contracts with Aviones for the purchase of spare parts. The National Institute of Geography and Information Technology signed twelve contracts between 2004 and 2009. Eleven were for the repair of its Cessnas and one was for “Air transport”, even though Aviones has no license to offer this kind of service.

One other public security institution that used Aviones was the Preventive Federal Police (PFP), with contracts signed in 1999, when the head was Wilfrido Robledo and Genaro Garcia Luna was coordinator of intelligence for crime prevention.

On September 19, 2000, the PFP bought five Cessna 182s from Aviones for $1.18 million. Public auditors criticized that contract, saying it was tweaked to suit the company's interests, including the provision for the planes to be delivered at Cessna Aircraft's installations in Independence, Kansas. It also noted that although the Aviones offer had supposedly been the cheapest, it ended up being more expensive.21

AFI and SSP help unload drugs at airports

In addition to Aviones S.A., Maria Fernanda said that since 2007 they had been able to count on a whole network of SSP and AFI officials who would help them to bring in planes and get the merchandise out. It's worth recalling that until the beginning of 2010, the AFI and the SSP were both controlled, simultaneously, by Garcia Luna.

Maria Fernanda specifically identified the regional delegate of the AFI in the Metropolitan Attorney General's Office, Roberto Sanchez, who was appointed by Garcia Luna. They paid him $75,000 a month to work for the Sinaloa cartel, $50,000 of which were for him and $25,000 for his second-in-command, identified only by the code X1.22

Maria Fernanda also mentioned another AFI agent who worked for them, Edwin Gonzalez, who was attached to the airport from the metropolitan PGR. Apparently he helped them bring in suitcases full of cocaine, for which service he was paid $10,000 a month. He carried out arrests in the airport for us, and helped provide us with security as far as the exit when we brought in a plane loaded with cocaine, said El Mayo's talkative nephew.

For his part, Edgar Bayardo remembered Gonzalez recruiting “Mules” to carry drugs or money for the organization, often to other countries. He described one occasion, before the split in The Federation, when Sergio Villarreal, El Grande, who ran the airport operations for El Mayo, sent one of the people recruited by Gonzalez to Venezuela, where he was supposedly received by some government authorities. He didn't say who they were or what posts they held, only that they received money from the drug traffickers.

After the testimony against him, Edwin Gonzalez was arrested on December 13, 2008 when he went to make a statement. Three days later he was given a conditional release, on the grounds of changed legal circumstances, suggesting he too has become a protected witness. Sanchez, however, in spite of the accusations against him, continued in his same job at least until May 2009.

Another PGR witness, codenamed Jennifer, who claimed to have worked for Edgar Valdez and his boss, El Barbas, stated that Mexico City was not the only airport used by The Federation. They also favored Cancun, on the Caribbean coast. According to Jennifer, Arturo Beltran Leyva controlled that airport on behalf of the whole Federation, giving orders to let all the associates freely move their merchandise by plane, as though he owned the place. Between March 2007 and February 2008, for an outlay of just over $19 million, The Federation apparently unloaded thirteen planes at Cancun airport, with the complicity of authorities at all levels.

The split in The Federation forced the officials who worked for it to negotiate with one side or the other to save their lives. When AFI agent Edgar Ramos, El Chuta, the organization's contact at Cancun airport, heard about the quarrel between the bosses, he got Gonzalez to arrange for him to meet El Rey Zambada in Mexico City. Maria Fernanda tells the story:

He wanted to persuade the organization not to take reprisals against him for belonging to the Beltran Leyva group, and promised in advance he wouldn't support Arturo Beltran against us. They met in the middle of July that year {2008} at one of the offices in that city, specifically a building in Calle Rio Bamba. Jesus Zambada Garcia told him they wouldn't take any reprisals, he would just have to make sure he didn't interfere with them and undertake not to handle any merchandise from Arturo at the airport, because that region was now controlled by the Zambadas's organization.

Later El Chuta was transferred to Mexico City, where he continued to help El Mayo and his clan. From there he served the Sinaloa cartel by unloading suitcases of cocaine and loading money into planes, together with the Preventive Federal Police, recalled protected witness Jennifer.

In the midst of this web of complicity around Mexico City airport, on the morning of June 25, 2012, the country awoke to shocking news: a shoot-out in Terminal 2 of the International Airport between two sets of Federal Police officers when the force was under the command of Luis Cardenas Palomino, who is alleged to be a drug lord disguised as a police chief. The dispute was over another cargo of drugs being handled by the PF. Two of the officers involved in the firefight publicly identified Cardenas as the person who coordinated these drug shipments in the AICM. But despite the scandal, the police chiefs kept their jobs.

https://www.marxists.org/history/usa/workers/black-panthers/1970/dope.htm posted:

Capitalism Plus Dope Equals Genocide

By Michael Cetewayo Tabor (Political Prisoner, NY 21)
Black Panther Party, USA


I. The Problem.

Recently in the Black colony of Harlem a 12 year old Black boy was murdered by an overdose of heroin. Less than two weeks later a 15 year old Black girl met the same tragic fate. During the year 1969 in New York City alone there were over 900 deaths resulting from drug addiction. Of these 210 were youths ranging in age from 12 to 19. Of the over 900 dead, the overwhelming majority were Black and Puerto Rican. It is estimated that there are at least 25,000 youths addicted to narcotics in New York City - and that is a conservative estimate.

Drug addiction in the colonized ghettos of America has constituted a major problem for over 15 years. Its use is so widespread that it can - without fear of exaggeration - be termed a "plague". It has reached epidemic proportions, and it is still growing. But it has only been within the last few years that the racist US government has considered drug addiction "a matter of grave concern". It is interesting to note that this growing concern on the part of the government is proportionate to the spread of the plague into the inner sanctums of the White middle and upper-class communities. As long as the plague was confined to the ghetto, the government did not see fit to deem it a problem. But as soon as college professors, demagogic politicians, money-crazed finance capitalists and industrialists discovered that their own sons and daughters had fallen victim to the plague, a virtual "state of national emergency" was declared. This is significant, for it provides us with a clue to the understanding of the plague as it relates to Black people.

From the Federal Bureau of Narcotics, to the clergy, to members of the medical profession, so-called educators, psychologists, right on down tot the chemically enslaved addicts on the street corner, the hopes for effectively curbing the spread of the plague are dishearteningly dim. Despite the stiffer jail sentences being meted out to those whom the law defines as 'drug profiteers' - a euphemism for illegal capitalists - there are more dope dealers now that ever before. Despite the ever increasing number of preventive and rehabilitative programs the plague proliferates; it threatens to devour and entire generation of youth.

The basic reason why the plague cannot be stopped by the, drug prevention and rehabilitation programs is that these programs, with their archaic, bourgeois Freudian approach and their unrealistic therapeutic communities, do not deal with the causes of the problem. These programs deliberately negate or at best deal flippantly with the socio-economic origin of drug addiction. These programs sanctimoniously deny the fact that capitalist exploitation and racial oppression are the main contributing factors to drug addiction in regard to Black people. These programs were never intended to cure Black addicts. They can't even cure the White addicts they were designed for.

This fascist government defines the cause of addiction as the importation of the plague into the country by smugglers. They themselves even admit that stopping the entry of the plague is impossible. For every kilo (2.2 lbs.) of heroin they confiscate, at least 25 kilos get past customs agents. The government is well aware of the fact that even if they were able to stop the importation of heroin, dope dealers and addicts would simply find another drug to take its place. The government is totally incapable of addressing itself to the true causes of drug addiction, for to do so would necessitate effecting a radical transformation of this society. The social consciousness of this society, the values, mores and traditions would have to be altered. And this would be impossible without totally changing the way in which the means of producing social wealth is owned and distributed. Only a revolution can eliminate the plague.

Drug addiction is a monstrous symptom of the malignancy which is ravaging the social fabric of this capitalist system. Drug addiction is a social phenomena that grows organically from the social system. Every social phenomenon that emanates from a social system that is predicated upon and driven by bitter class antagonisms that result from class exploitation must 'be been from a class point ,of view.


II. Escapism and Self-Destruction

In regard to Black people, our problems are compounded and take on appalling dimensions as a result of the racist dehumanization that we are subjected to. To understand the plague as it relates to Black people, we must analyze the effects of capitalist economic exploitation and racist dehumanization.

The heinous and sadistic program of annihilating the humanity of Black people that was initiated over 400 years ago by money-mad slave masters and that has continued unabated until this very day is deliberate and systematic. It is done for the purpose of justifying and facilitating our exploitation. Since the reality of our objective existence seemed to confirm the racist doctrines of White superiority and its antithesis, Black inferiority, and since we lacked an understanding of our condition, we internalized the racist propaganda of our oppressors. We began to believe that we were inherently inferior to Whites. These feelings of inferiority gave birth to a sense of self-hatred which finds expression in self-destructive behavior patterns. The wretchedness of our plight, our sense of powerlessness and despair created within our minds a predisposition toward the use of any substance which produces euphoric illusions. We are inclined to use anything that enables us to suffer peacefully. We have developed an escapist complex. This escapist complex is self-destructive.

The depraved capitalist-racist oppressor exploits these psychological and emotional deficiencies for all they are worth. The oppressor encourages our participation in any activity that is self-destructive. Our self-destructive behavior patterns and our escapist tendencies constitute a source of profits for the capitalists. They also, by weakening, dividing and destroying us, reinforce the strength of the oppressor enabling him to: Perpetuate his domination over us.

Fratricidal street-gang fighting is a direct manifestation of a self-destructive behavior pattern. It is also a form of escapism by which Black youths vent their rage, frustrations and despair on each other rather than dealing with the true enemy. Pathological religionism or the fanatical indulgence in religion is essentially escapist because it encourages the victim to concentrate his attention, energy and hope for salvation and freedom upon a dubious, mystical force. It discourages confronting the actual causes of our misery and deprivation. It encourages the focusing of attention upon pie in the sky, rather than the securing of more lamb chops right here on planet earth. It also serves as a source of profits for those religious charlatans, preachers and ministers who exploit it.

Alcoholism is both self-destructive and escapist. It is also a source of tremendous profits for the capitalists. The amazingly high number of bars and liquor stores in the Black communities testify to this tragic fact. The capitalist liquor industry could prosper just on the business it does in the Black ghetto alone.


III. The Heroin Addict

The most escapist and self-destructive activity for us and one of the most profitable for the capitalist, and therefore the most encouraged by him, is drug addiction, specifically heroin addiction.

About 1898 a German chemist discovered diacetylmorphine, heroin. It was hailed as the perfect drug for curing morphine addicts. But soon it became apparent that it was more addictive than morphine. By the 1920's there were addicts who were injecting heroin directly into their veins. Heroin production in the United States was discontinued 'and the drug was no longer used as an antidote for morphine addiction and as a pain killer.

Heroin addiction, the plague, the scourge of the Black colonies of Babylon. The plague, whose spiritual, moral, psychological, physical and social destructive powers greatly exceed that of any disease hitherto known to humanity. The plague, opium from Turkey, shipped to Marseilles, converted into morphine base, then processed into heroin, smuggled into America, cut, diluted, then placed into the Black ghetto. The plague, poisonous, lethal, white powdery substance, sold by depraved, money-crazed beasts to Black youths who are desperately seeking a kick, a high, a means, anything that will help to make them oblivious to the squalor, to the abject poverty, disease and degradation that engulfs them in their daily existence.

Initially the plague does just that. Under its sinister influence, the oppressive, nauseous, ghetto prison is transformed into a virtual Black Valhalla. One becomes impervious to the rancid stench of urine-soaked tenement dungeons, unaffected by the piercing cries of anguish of Black folks driven to the brink of insanity by a sadistic, social system. Unaffected by the deafening wail of pig-police car sirens as they tear through the streets of the Black Hell en route to answer a 1013 call from some other pig-police who is in a state of well-deserved distress. Unaffected by the trash cans whose decayed, disease carrying, garbage has overflowed to fill the ghetto streets.

Yes, under its ecstatic influence one is made oblivious to ugly realities. But there is a trick, a cruel monstrous trick, a deadly flimflam awaiting its naive, youthful victim, for, as the illusionary beauty of the heroin-induced high begins to vanish, correspondingly, the temporary immunity from reality attained under its chemical trance vanishes. The reality that the pathetic victim sought so desperately to escape, once again descends upon and re-engulfs him. The rancid stench of urine-soaked tenement dungeons begins to assail his nostrils. Those Black cries of anguish seem to blend with the wailing sirens of pig-police cars. He hears them now, very loud, and very clear--in stereophonic sound. And that garbage that flows over onto the streets from uncollected trash cans is felt underfoot.

The young victim is not long in discovering that only by taking another dosage will he be able to attain sanctuary from his hideous reality. Each shot of the plague that he injects into his blood system brings him that much closer to the grave. Soon he is strung-out, hooked. He is physiologically and psychologically dependent on the plague. Both his body and mind have become addicted to heroin. He has now become a full-time, chartered member of the Cloud 9 Society. His physical body begins to take on a decimated appearance. A shameless disregard is displayed toward his clothes. That his shirt is filthy and his shoes are soleless, leaving him to walk virtually on his naked feet, does not matter. That his unwashed body now emits a most foul odor disturbs him but little. That his non-addicted friends now shun him and look upon him with contempt matters not, for the feelings are mutual. They no longer have anything in common. Everything ceases to matter. Everything except heroin, the plague.

As he continues, his body begins to build up an immunity to the drug. Now, in order to attain his euphoric high he must increase his dosage. This means that he must obtain more money. So enslaved has he now become that he will do anything for a bag, for a "shot". To lie, to steal, to cheat, to rob is nothing to him. Whatever he must do for a "shot" he will do, he must do, for he is a slave to the plague.

The vicious cycle grinds into motion. He violates what the ruling class defines as being the law in order to secure money to feed his sickness. Inevitably he gets flagged-off, busted. He goes to jail, and after he has served out his sentence he is released. The first thing he wants is a shot. The cycle continues. And he plunges deeper and deeper into the abysmal pit of degradation. And there, always there and ever willing, for a price of course, to meet the addict's demand for dope is the cop-man, the dealer, purveyor of poison, distributor of death, merciless, murdering scum, of the planet, vile capitalists, salesmen of death on the installment plan, the dope pusher, the plague-man.


IV. Capitalism and Crime

Dope selling is beyond a doubt one of the most profitable capitalist undertakings. The profits from it soar into billions. Internationally and domestically the trade and distribution of heroin is ultimately controlled by the Cosa Nostra, the Mafia.

Much of the profits amassed from the drug business is used to finance so-called legitimate businesses. These legitimate businesses that are controlled by the Mafia are also used to facilitate their drug-smuggling activities. Given the fact that organized crime is a business and an ever-expanding one at that, it is constantly seeking new areas of investment to increase profits. Hence, more and more illegal profits are being channeled into legitimate businesses. Partnerships between the Mafia and "reputable businessmen" are the order of the day. There is a direct relationship between legitimate and illegitimate capitalists.

Over the years a number of politicians and foreign ambassadors and wealthy businessmen have been arrested in this country for drug activities. Others, because of their wealth and influence, were able to avoid arrest. In the fall of 1969 it was discovered that a group of prominent New York financiers was financing an international drug smuggling operation. No indictments were handed down. Shortly after that a group of wealthy South American businessmen were arrested in a plush New York City hotel with over $10 million worth of drugs.

Given the predatory and voracious nature of the capitalist, it should come as no surprise that so-called legitimate businessmen are deeply involved in the drug trade. Capitalists are motivated by an insatiable lust for profits. They will do anything for money. The activities of organized crime and the "legitimate capitalists" are so inextricably tied up, so thoroughly interwoven, that from our vantage point any distinction made between them is purely academic.

The legitimization of the Mafia, their increased emphasis upon investing in, and establishing corporations, has been accelerated by the stiffer prison sentences that are being meted out to drug profiteers. In New York this has resulted in the gradual withdrawal of the Mafia from their position of actual leadership of the New York drug trade. The New York drug trade is now dominated by Cuban exiles, many of whom were military officers and police agents in the pre-revolutionary, repressive Batista regime. They equal the Mafia in ruthlessness and greed.

These new local dope kingpins have established a broad network of international smuggling operations. They utilize the traditional trade routes and create new ones, as indicated by the increased number of Narcotics Bureau seizures of dope coming from South America.

The concept of Black Power has influenced the thinking of every segment of the Black community. It has come to mean Black control of the institutions and activities that are centered in the Black community. Black teachers demand Black community control of the ghetto schools. Black businessmen and merchants advocate the expulsion of White businessmen from the ghetto so that they can maximize their profits. Black numbers-game operators are demanding total control of the ghetto numbers operations. And Black dope dealers are demanding community control of heroin. It is a tragedy that in New York the greatest gains made in the realm of Black community control have been made by Black racketeers, numbers-game bankers and dope dealers, by the Black illegal capitalists. Prior to 1967 it was a rarity to find a Black dope dealer who handled more than 3 kilos (1 kilo equals 2.2 lbs.) of heroin at any given time. Independent Black importers were unheard of. Now, there is an entire class of Blacks who have become importers, using Mafia supplied lists of European connections.

The extent and instant rate of profits reaped from the dope industry could arouse the envy of U.S. Steel, General Motors and Standard Oil. From the highest level to the lowest, the profits are enormous. If the individual is sufficiently ambitious, cunning, ruthless and vicious, he may graduate from the status of street peddler to big-time wholesaler and distributor in a short span of time.

A characteristic feature of class and racial oppression is the ruling class policy of brainwashing the oppressed into accepting their oppression. Initially, this program is carried out by viciously implanting fear into the minds and sowing the seeds of inferiority in the souls of the oppressed. But as the objective conditions and the balance of forces become more favorable for the oppressed and more adverse to the oppressor, it becomes necessary for the oppressor to modify his program and adopt more subtle and devious methods to maintain his rule. The oppressor attempts to throw the oppressed psychologically off-balance by combining a policy of vicious repression with spectacular gestures of good-will and service.

Given the fact that Black people have abandoned the non-functional and ineffective tactics of the "Civil Rights" era and have now resolved to attain their long overdue liberation by any means necessary, it has become necessary for the oppressor to deploy more occupation forces into the Black colony. The oppressor, particularly in New York, realizes that this cannot be done overtly without intensifying the revolutionary fervor of the Black people in the colony. Therefore, a pretext is needed for placing more pigs in the ghetto.

And what is the pretext? It goes like this: Responsible negro community leaders have informed us, and their reports concur with police findings, that the negro community is ravaged by crime, muggings, burglaries, murders and mayhem. The streets are unsafe, business establishments are infested by armed robbers, commerce cannot function. City Hall agrees with negro residents that the main cause for this horrible situation is the dope addicts who prey on innocent people. Yes, the dope addicts are to blame for the ever-increasing crime rate. And City Hall will answer the desperate cry of negro residents for greater protection--send in more police!

That victims of the plague are responsible for most of the crimes in the Black ghettos is a fact. That Black drug addicts perpetrate most of their robberies, burglaries and thefts in the Black community against Black people cannot be denied. But before, out of desperation, we jump up and scream for more police protection, we better remember who put the plague in Harlem, Bedford Stuyvesant and the other Black communities. We better remember who ultimately profits from the drug addiction of Black people. We better remember that the police are alien hostile troops sent into the Black colonies by the ruling class, not to protect the lives of Black people, but rather to protect the economic interests and the private property of the capitalists and to make certain that Black people don't get out of place. Rockefeller and Lindsay could care less about the lives of Black people. And if we don't know by now how the police feel about us, then we are really in bad shape.


V. Pig Police

The plague could never flourish in the Black colonies if it were not for the active support of the occupation forces, the police. That narcotics arrests have increased in no way mitigates the fact that the police give dope peddlers immunity from arrest in exchange for money pay-offs.

It is, also the practice of pig-police, especially narcotics agents, to seize a quantity of drugs from one dealer, arrest him, but only turn in a portion of the confiscated drugs for evidence. The rest is given to another dealer who sells it and gives a percentage of the profits to the narcotics agents. The pig-police also utilize informers who are dealers. In return for information, they receive immunity from arrest. The police cannot solve the problem, for they are a part of the problem.

When you consider that a kilo of heroin purchased by an importer for $6,000, when cut and bagged and distributed will bring back a profit of$300,000in a week's time, it becomes easier to understand that even if the death penalty were imposed on drug profiteers, it would not deter the trade.

The lying devious puppets of the bourgeois ruling class, the demagogic politicians of Capitol Hill have now passed a law which gives narcotics agents the right to crash into a person's home without knocking, on the pretext of looking for narcotics and "other evidence". This law was ostensibly passed to prevent dope dealers from destroying the dope and "other evidence." Now, anyone who thinks that this law will be confined to just suspected drug dealers is laboring under a tragic and possibly suicidal delusion. To assume that only suspected drug dealers will be affected by this law is to negate the reality of present-day America. To allow yourself to think for one moment that this law only applies to suspected drug dealers is to deny that the laws being passed, the policies being implemented, and the methods and tactics of the police have become blatantly and shamelessly fascist.

It should come as no surprise when the homes of revolutionaries and other progressive and true freedom-loving people are invaded by the police on the pretext of searching for drugs and "other evidence". A number of revolutionaries have already been imprisoned on framed-up narcotics charges. Lee Otis was given 30 years and Martin Sostre was sentenced to 41 years on trumped-up narcotics charges. Rest assured this policy will be intensified. It would do us well to consider what kicking in .a person's door in search of drugs and "other evidence" actually means. What is "other evidence"? The bourgeois, fascist law-makers have not specified what constitutes "other evidence". The No-Knock Law !s an integral part of the fascist trip that this country has embarked upon.

Before, when the home of a Black person was burglarized by a drug addict, or a sister had her purse snatched, the police took all night to respond to the call, or didn't respond at all. The burglar or purse-matcher was hardly ever caught. In most instances, when someone was arrested, it was the wrong person. But when an exploiting capitalist business establishment in that very same ghetto, especially a White one, gets ripped-off, there are immediately 15 siren-wailing police cars on the set, and three dozen pigs are running up and down the street, waving guns in everybody's face. And you can lay 5 to 1 odds that somebody is going to jail for it. Whether or not the arrested person perpetrated the act is irrelevant from the pigs' standpoint. The racist pig-police use Blacks as an outlet for their sadistic impulses, inadequacies and frustrations. Now that more police have been sent in, the situation has gone from bad to worse.


VI. Revolution

The racist pig-police, the demagogic politicians .and the avaricious big businessmen who control the politicians are delighted that Black youths have fallen victim to the plague. They are delighted for two reasons: one, it is economically profitable, and two, they realize that as long as they can keep our Black youths standing on the street corners "nodding" from a "shot" of heroin, they won't have to worry about us waging an effective struggle for liberation. As long as our young Black brothers and sisters are chasing the bag, as long as they are trying to cop a fix, the rule of our oppressors is secure and our hopes for freedom are dead. It is the youth who make the revolution and it is the youth who carry it out. Without our young, we will never be able to forge a revolutionary force.

We are the only ones capable of eradicating the plague from our communities. It will not be an easy task. It will require tremendous effort. It will have to be a revolutionary program, a people's program.

The Black Panther Party is presently in the process of formulating a program to combat the plague. It will be controlled totally by the people. We, the people, must stamp out the plague, and we will. Dope is a form of genocide in which the victim pays to be killed.

SEIZE THE TIME!

INTENSIFY THE STRUGGLE!

DESTROY THE PLAGUE!

ALL POWER TO THE PEOPLE!



Michael "Cetewayo" Tabor

N. Y. Panther 21, Political Prisoner

https://www.nytimes.com/2015/06/06/world/asia/profits-from-illicit-drug-trade-at-root-of-myanmars-boom.html posted:

Profits of Drug Trade Drive Economic Boom in Myanmar

By THOMAS FULLER JUNE 5, 2015

YANGON, Myanmar — Visitors flying into this buzzing tropical metropolis step into a modern glass-and-steel airport that symbolizes both Myanmar’s aspirations to rejoin the wider world after years of isolation and the country’s troubled past.

The company that built the terminal, Asia World, was started by one of the country’s premier drug kingpins, a warlord whose militia peddled heroin extracted from the opium fields of the mountainous hinterlands. It is nearly impossible to visit Myanmar today and not encounter the company’s other projects: roads, hydroelectric dams, the country’s biggest ports and one of its most luxurious hotels, the Sule Shangri-La in downtown Yangon.

There is no evidence to suggest the company has any current ties to drug trafficking, but as Myanmar strives to modernize after decades of dictatorial rule, Asia World’s role in that effort provides a prominent example of how the drug trade is inextricably intertwined with the country’s new economy and lies at the root of many of its efforts to rebuild.

“The seed capital of the Burmese economy is heroin,” said Ronald Findlay, an economist at Columbia University who was born in colonial Burma, which the military government renamed Myanmar in 1989. “If that’s an exaggeration, it’s not a huge one.”

According to interviews with real estate brokers, economists, and current and former law enforcement agents, illicit drug profits have been a major source of investment in rebuilding the country, and companies linked to the drug trade are building new roads and bridges and reshaping the skyline of the biggest city, Yangon.

Until recently, Yangon was a low-rise city frozen in time, where dangerously potholed sidewalks bordered decrepit colonial buildings. Today cranes swing in nearly every corner of the city and billboards promote the opulence of soon-to-be high-rise condominiums.

While the new infrastructure may be welcome, the drug economy threatens the country’s transition to democracy, one of the Obama administration’s signal foreign policy accomplishments. The drug trade, analysts say, reinforces corruption, bolsters the power of the military and threatens to return Myanmar to a pariah state instead of the democratic ally the administration hopes for.

Since Myanmar began opening up to the world four years ago, heroin trafficking has surged. The United Nations estimates that opium poppy cultivation has nearly tripled over the last six years. Myanmar has become the world’s second-largest producer of heroin, as well as the region’s leading supplier of methamphetamine.

Sean Turnell, an Australian scholar and one of the leading experts on the country’s economy, estimates that Myanmar’s drug tycoons have annual revenues of around $2 billion.

Yet in a country where many business deals and real estate transactions are still done in cash and less than 15 percent of adults have a bank account, it is nearly impossible to trace where all that money goes.

“There is no document trail,” Mr. Turnell said. Following the drug money, he said, “is like nailing jelly to a wall.”

Its impact, however, is clear.

Real estate agents and economists say the drug trade has helped fuel the vertiginous rise in property prices in Myanmar’s major cities.

“Almost everyone involved in this business is laundering money,” said U Sai Khung Noung, the managing director of a real estate company in Yangon that bears his name.

He calculates that average prices for apartments in Yangon rose 600 percent over the past decade to an average of $250 per square foot, higher than the average price for a new condominium in much wealthier Bangkok.

Illegal drugs are not the only source of black-market cash. During military rule, which ended in 2011, illegal trade in teak, jade and precious gems also created huge off-the-books fortunes. Starting in 2007, when the government slashed real estate taxes to 15 percent from a prohibitive 50 percent, traffickers seized the opportunity to convert their cash to real estate.

U Khin Maung Aye, a real estate agent in Yangon, said a home buyer brought him a down payment, the equivalent of $200,000, in cash stuffed into rice sacks, not uncommon for home purchases.

“It took two men to pick up each bag,” Mr. Khin Maung Aye said. “I couldn’t carry it myself.”

The buyer was later arrested on drug trafficking charges and sentenced to 20 years in prison, the police said.

But such arrests are relatively rare in a country with weak law enforcement and where vast swaths of the country are under the control of ethnic militias, not the central government.

The government says it is trying to crack down on the drug trade and money laundering, but officials say law enforcement is hampered by the legacy of a dictatorship under which the educational system was destroyed, millions of Myanmar’s most talented citizens fled the country, and the economy and banking system were rendered dysfunctional.

U Ye Htut, the head of Myanmar’s Ministry of Information, said the government had introduced regulations and checks to trace dirty money.

“There is positive movement on this issue,” he said in an interview. “There is more transparency for anti-money-laundering issues here and more accountability. It can now be debated publicly.”

But a government adviser, U Tin Maung Than, a director of the Myanmar Development Resource Institute, a research organization, says the government does not have the wherewithal to distinguish good from bad money.

“There is no effective mechanism or capacity to crack down on money laundering and corruption,” he said.

Because most of the economy is informal — unregulated and all cash — Mr. Tin Maung Than said, “if we cracked down on informal-sector businesses and black money, we would not have enough space in prisons in Myanmar.”

“Almost every business here is in the informal sector,” he said.

Although regulations exist on paper to trace ill-gotten money, real estate agents say the government’s unofficial policy appears to be don’t ask, don’t tell.

“If you pay the tax, they don’t ask you where the money comes from,” said Mr. Sai Khung Noung, the real estate director. “If the government doesn’t check this, how am I supposed to know where the money comes from?”

For Asia World, one of the country’s pre-eminent builders of infrastructure, the heroin money trail is no secret.

Founded by Lo Hsing Han, a drug lord once described by the United States as the “kingpin of the heroin traffic in Southeast Asia,” Asia World led the way in converting heroin proceeds into legitimate businesses.

Mr. Lo, who died in 2013, hailed from an ethnic Chinese group, the Kokang, who occupy an impoverished region in northern Myanmar that for years had only two main businesses: tea and opium.

His drug business was tolerated because the ruling military junta found him useful in negotiating with ethnic rebels. A 2007 United States diplomatic cable made public by WikiLeaks said that Mr. Lo had been given a heroin “concession” by the government in exchange for helping to arrange cease-fire agreements with rebels.

Mr. Lo and his son, Steven Law, were two of the military’s most important business partners and were awarded contracts to build roads, provincial seaports and other large infrastructure projects.

In response to questions hand-delivered to Asia World’s Yangon headquarters, an inconspicuous seven-story building a few blocks from the Irrawaddy River, an assistant to Mr. Law said Friday that he had received the letter and “he replied he does not want to spend time answering it.”

John M. Whalen, the former head of the Myanmar office of the United States Drug Enforcement Administration, says the rise of Asia World was followed by the appearance of other companies with unexplained wealth, many of them with connections to the impoverished areas along the borders with Thailand and China, where the drug trade flourishes.

“We started seeing a lot of these companies cropping up out of nowhere with a lot of money to invest,” he said. “There was no indication of the source of their funds. We still see that with all of the construction that’s going on today.”

Among those companies is the Shwe Taung Group, which built and operates one of the biggest and most modern shopping malls in Yangon, Junction Square. The company’s website boasts of its building housing developments, office towers, condominiums, hospitals, school and university buildings, television and radio production complexes, “and a lot more.”

The company’s chairman, Aik Htun, was cited by the United States Treasury Department as “having connections with the narcotics trade.” He was also a founder, director and co-owner of the now-defunct Asia Wealth Bank, which was the target of Treasury Department sanctions in 2003 because it posed “an unacceptable risk of money laundering and other financial crimes” and was “linked to narcotics traffickers.”

After the United States imposed sanctions on Asia Wealth Bank and the Burmese authorities withdrew its license, Mr. Aik Htun changed the name of his corporate holdings, which were part of the same group as Asia Wealth Bank, to the Shwe Taung Group.

Mr. Aik Htun also did not answer questions hand-delivered to his secretary at the company’s headquarters.

One of the largest real estate developers in the country, Jewellery Luck, was tied to a large heroin seizure six years ago.

The police found 37 packs of heroin concealed in a shipment of timber that the company was sending to a customer in Taiwan. Photos from the police investigation file documented how the heroin packs, each the size of a hardcover book, were carefully hidden in cavities carved out of the wooden planks.

The police arrested five people and seized an additional 220 pounds of heroin, with a street value of millions of dollars, stashed in a house in Yangon.

A company executive, U Tin Tun Oo, whose father heads the company, said the heroin had been planted by the customers, who removed the wood for inspection before shipping and inserted the heroin before returning it.

No company employees were charged, Mr. Tin Tun Oo said, and he denied that the company had profited from heroin trafficking.

“No such money comes from drugs,” he said in an interview. “Not a cent.”

Mr. Whalen, the former D.E.A. agent, said company officials probably would have been charged had the seizure taken place in the United States.

“It was clear that the company was deeply involved,” he said. “As with most cases in Myanmar, the big guys didn’t get charged.”

Jewellery Luck is building two large condominium projects in Yangon, including one advertised as the tallest condominium in the country, a 33-story complex overlooking the golden spire of the city’s premier landmark, Shwedagon Pagoda. Sales are cash only.

Jewellery Luck owns half of the recently completed Kempinski Hotel in Naypyidaw, the capital, where President Obama stayed during a summit meeting in November. He was the first guest to occupy the hotel’s largest suite, a luxurious villa with four bedrooms and its own private dining room, swimming pool and gym.

At Jewellery Luck’s headquarters in Yangon, a framed photograph sits on a conference room table showing Mr. Tin Tun Oo and other company executives with Mr. Obama, smiling.



Wai Moe contributed reporting.

A version of this article appears in print on June 6, 2015, on Page A1 of the New York edition with the headline: Profits of Heroin Trade Drive Economic Boom in Myanmar.

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