Milk of Paradise

by Lucy Inglis

  Another deliberate effect of Harrison was to pave the way for prohibition of alcohol. The passing of the Volstead Act delighted the temperance movement, and swathes of organized criminals across America and Mexico.

  According to the Federal Bureau of Investigation, organized crime is ‘any group having some manner of a formalized structure where the primary objective is to obtain money through illegal activities. Such groups maintain their position through the use of actual or threatened violence, corrupt public officials, graft or extortion, and generally having significant impact on the people in their locales, region or the country as a whole.’27 This definition is an oversimplification of the complicated nature of global organized crime, and underplays the deeply tribal and specialized nature of the biggest and most powerful gangs. These groups often operate on both sides of the law, and have far-reaching networks that cover not only narcotics, but also human trafficking, gun-running and political corruption. In each part of the world, the structure of organized crime, as it emerged globally in the early part of the twentieth century, was as individual as the countries from which it emanated. As the century has progressed, organized criminals have been some of the first to respond to economic and political change all over the world. In looking at the history of some of these gangs, the most impressive elements include adaptability and speed of action. Organized crime is a large part of the hierarchy of any society, larger than any law-enforcement body or politician in any country wishes to admit, and inside that hierarchy, heroin is at the very top.

  The Rise of Sinaloa

  Geographically and circumstantially, Mexico was in the perfect place to respond to Harrison and Volstead. The USA shares a 1,989-mile border with Mexico. The Mexican states most involved with drug production traditionally (and now) are Baja California, Sonora, Chihuahua, Sinaloa and Nayarit.

  In Sinaloa, in the Badiraguato area, the people had close ties to California, through Mexicali and Tijuana and also Arizona, where they sold their agricultural produce. Sinaloa had been growing opium poppies since at least 1886, courtesy of the Chinese who had arrived there in the late nineteenth century, allegedly when their boats were turned away from the United States. High in the mountains, villages are remote and close-knit, and families work together, as in every opium-growing region in the world. Domestic drug use, particularly of opium, was not tolerated. Marijuana was deemed more medicinal than recreational. What began in the late nineteenth and early twentieth century as supplementary income on what would have been a necessary journey anyway, morphed into full-time occupations, which then became dynastic businesses. Unlike almost every other Latin American drug-producing country, they do not involve themselves in politics, as this is judged too precarious, but maintain relationships with officials and the police. After all, everyone is in the business in some form or another. This is the reason behind the longevity of their leaders and family businesses. At this stage, they were not termed ‘cartels’, which came into use in the second half of the twentieth century.

  Mexico had traditionally imported considerable quantities of opium for smoking, for which it had a limited domestic market, leading US officials to believe it was then exported up the West Coast of America through Baja California, along with home-grown marijuana. The border, however, was so vast and so porous that there was no way of controlling it and Mexico had a negligible home market for drugs. Soldiers smoked marijuana, the Chinese smoked opium, artists and the middle classes took cocaine or morphine, which needed to be refined. There was not enough money to be had domestically, and demand from the north was far higher, particularly for opium. This suited the Sinaloans perfectly, and they even coined a term for the opium traffickers: gomeros.28

  With the 1909 Opium Smoking Exclusion Act, there was more demand for the Mexican opium than ever, and with the Harrison Act, there was also an immediate demand for morphine and heroin. Poppy planting spread rapidly to the other states, particularly when President Carranza stopped opium imports in 1916, and banned marijuana cultivation in 1920 in what was essentially a sop to America’s campaign to ban the drug. The ban made little impact on Mexico’s marijuana culture. But in 1920 the Mexican government also prohibited opium, opium derivatives and cocaine growing and handling, with a potential seven-year prison sentence if caught. The following year, the Mexican newspaper Excélsior, which ran a stern anti-trafficking campaign, informed its readers of a man caught with a kilo of heroin, which he declared was for personal use, and he was let off with a fine. Curiously, he had been caught coming into Mexico from the US, and not vice versa.

  In the border areas, many American brewers, who had seen prohibition on the cards for a long time, and faced with the complete loss of their livelihood when Volstead passed in 1919, had already been moving over into Mexico, bringing brewing knowledge, skills and employment. They also had legitimate ties back in the US, and so had reasons to move between the two countries.

  In 1922, when the amendments to Harrison tightened opium prohibition to a stranglehold, the Federal Narcotics Control Board was founded to oversee the import and export of opiates and coca. In the State and Treasury departments were a number of like-minded individuals who were not satisfied with Harrison alone as a means of ending the opiate and cocaine problem of the United States, but were concerned with shutting off supply at source. These departments had, to an extent, been working with Mexico at cutting off some of the larger drug routes into the United States, but the implementation of the extreme version of the Harrison Act had created a huge black market in America instantly, one the Mexican traffickers were ready to exploit.

  All of this happened in the midst of the Mexican Revolution, making it far easier for the traffickers to exploit the unrest and inattention of the authorities. Border raids by the US authorities, mainly in Baja California, were the main opposition to what was an increasingly lucrative trade, but there were still hundreds of miles of porous border to take the goods across.

  Prohibition in the US caused a large spike in demand for drugs: they were easier to conceal and transport than bulky liquids, and as they were not all illegal anyway, people took what they could get. The ruined Mexican economy was given a huge boost by the brewing businesses, and by the business of smuggling alcohol and drugs back across the border. The Southern Pacific Railways newspaper vendors handled smaller shipments, passing them up the line to California, and soon the Mexican traffickers were making so much money they were investing in air transport. The most famous of the early traffickers was Enrique Fernández Puerta, the ‘Al Capone of Ciudad Juárez’, who was often escorted around the city in the 1920s by the police, although not at the time he was shot dead.29 It was so lucrative that before long Sinaloa had dozens of small, secluded airstrips. Alcohol prohibition only lasted thirteen years, but in that time a whole new drugs infrastructure was set up, one that had gone from a simple import and export smuggling business, to a production, refining and trafficking business on a grand scale, and people were making millions of dollars. At this time, the violence was relatively contained, and mainly involved standoffs between police and traffickers, and was done out of the way in suburban areas.

  Mexico’s narcotic cartel culture is relatively young in terms of organized crime, but it is enormously successful owing to a cluster of events that all happened within half a century: a war that created an effective yet corruptible military infrastructure, the arrival of the Chinese, a revolution and its largest neighbour declaring prohibition on drugs and alcohol.

  Ironically, Mexico City had been the first place to introduce opiate control in the Americas, in 1878, when a prescription from a doctor was required to obtain morphine.

  The Young Turks

  Arguably, Turkey has one of the oldest organized-crime histories in the world, based principally upon smuggling. It stretches back to the bandit gangs of the early Ottoman Empire, and then progresses through groups of rural gendarmes and the police force and the disbanded janissary corps. In addition, the Turkish population
was traditionally highly mobile on a seasonal basis, so crime was associated with this vagrancy. The ethnic cleansing in Macedonia during the First Balkan War (1912–13) added to this displacement. This movement of approximately half a million people into a land where the existing population already had little led to struggles for power and security. Albanians, Chechens and the Laz Muslim group were all strongly associated with criminal behaviour. The Laz Muslims in particular had a large presence in the Istanbul heroin trade. When the Young Turk dictatorship was established in 1913, these ethnic groups were not allowed to form ghettos but dispersed among local populations, where they could not make up more than 10 per cent.30 Still, the violence and general criminal behaviour got out of hand during the lawless days of the First World War refugee crisis, as Turkey’s many different peoples clashed. There was a strong incentive to band together and use violence if necessary to gain control over scarce resources, or to protect established smuggling activities.

  With its refusal to enter into the Versailles or Hague negotiations, when it became a republic in 1923 Turkey was still producing opium legally, and was soon the most important post-Hague supplier in Europe, with the best product. It also had miles of infrastructure and factories dedicated to the production of morphine and heroin. The republic’s first president, Mustafa Kemal (later given the surname Atatürk – ‘Father of the Turks’ – by the Turkish Parliament), attempted to use this to secure power over the now extremely lucrative morphine market, before Ankara would consider discussing the Hague Convention. The US, in the form of drug czar Harry Anslinger, first head of the newly formed Federal Bureau of Narcotics (1930), attempted to pressure Turkey, saying they knew that people in power in Turkey were profiting from opium smuggling, thereby implying that the organized crime in Turkey was at the top rather than the bottom, and that a total ban would convince people of the honesty of the regime. Ultimately, on Christmas Day 1932, Kemal announced that Turkey would abide by the Hague Convention and reduce Turkey’s opium fields to no more than was needed for medicinal purposes. Despite the accession, and the US’s satisfaction with their inspection of closed factories, Turkey’s output of illicit heroin appeared to remain unchanged, no doubt owing to the ‘not tens but hundreds of small, clandestine drug plants operating in Turkey without fear or interference’.31

  The most well-known man of the period to take advantage of these plants was not, in fact, Turkish, but a Greek using the Turkish criminal network to build one of the largest narcotics empires of the time. Elias, or Elie, Eliopoulos was born into a privileged family in Piraeus in 1894. He and his younger brothers George and Athanasius were well educated and well travelled, and in 1943 in New York, Elie and George were charged with smuggling $2 million worth of morphine into Hoboken in 1931. They had, in 1927, been searching for a new place to invest their money, and were impressed by the efforts of the League of Nations to limit the world’s supply of opiates. After trips to Paris and Tientsin, they ‘decided that the narcotics business had a sound future with impressive profit in prospect’.32

  They set up in Paris and established the ‘biggest share of the world’s illicit trade in opium, morphine and heroin ever organized in one system’,33 before things became too tight with the law and they had to leave for Turkey. There, they found it was not a gentleman’s game, and thievery and double-crosses were rife. A Grecian shipping agent blackmailed them into using his services by telling the brothers that he and his company were ‘informants of the League’. Adapting to this new way of business, the Eliopoulos brothers attempted to charge an American dealer twice for 1,000 pounds of morphine and were hoisted by their own petard when the Hoboken shipment was impounded. Tired of their losses, they took their money out of opiates and put it into gold and bauxite mining. Their great mistake was to visit New York, imagining that they were protected by the statute of limitations. They were tried and convicted, much to the delight of the federal prosecutors, but on appeal it was found that the timeframe for prosecution had indeed expired and they were free to go. Elie returned to Greece and the family business, which was mainly arms dealing.

  Shanghai’s Green Gang

  Opium trading has always had one foot either side of the legal line, but nowhere was it done in such style as in Shanghai, with its beautiful colonial architecture, exclusive clubs and smart parties. Before 1910, the most powerful figure in opium, both legal and illegal, in Shanghai was Edward Isaac Ezra, a Chinese-born Jewish businessman. Born in 1883, he was already making a fortune at seventeen from construction and later hotels, but it was opium that made him truly rich. In 1913, he became chairman of the Shanghai Opium Combine and amassed a legal fortune of around $20 million. He may have gained much more, running illegal opium to San Francisco with his younger twin brothers, Judah and Isaac, had it not been for the work of one woman: the remarkable American codebreaker Elizebeth Smith Friedman (her forename was down to her mother, who detested the idea that she would ever be called Eliza). Born in Indiana in 1892, Friedman graduated with a degree in English literature, but found an interest in secret writing when she met her future husband in her first job at Riverbank Laboratories cryptography centre, and she was very young when she began to work for the US government on intercepting and breaking messages that were to do with drugs, and later rum-running during prohibition. She was soon onto the brothers’ operation, for which they used an increasingly complicated messaging system. Her code-breaking skills revealed the illegal side of the business and they were exposed. She went on to have a great career breaking other opium rings in the US and Canada, and was later the security advisor for the International Monetary Fund. Upon his arrest, Ezra gained immunity by turning in business associate and fellow crook Paul Yip, but it was his brother Judah’s gambling habit that saw Ezra leave Shanghai public life. A remarkable businessman, Ezra died of a cerebral haemorrhage aged only thirty-eight, leaving the way clear for the rise of Shanghai’s Green Gang.

  The Triads are, as already stated, a political movement as well as a collection of secret societies and criminal gangs. In Shanghai in the late 1920s and the 30s they were so enmeshed in the political movements operating at the time that they were pivotal to the Green Gang’s success. Between 1910 and 1930, the population of Shanghai trebled to just over 3 million, bringing many unskilled workers and Green Gang society members, which led to racketeering, extortion and anything that would turn a profit. The Green Gang was, in fact, many gangs under an umbrella name, and competition was fierce. In terms of controlling Shanghai revenue, control of the supply of heroin to the French Concession area was crucial. Three men, Huang Jinrong, Du Yuesheng and Zhang Xiaolin, joined together to take over this supply, which they hoped would allow them to dominate the other Green Gangs. To do this, they decided to cultivate the new Guomindang regime, which had just come to power in China. The charismatic Du Yuesheng met with the party representatives and offered to keep all the other Green Gang members in line, as long as their opium supply system was not interfered with. The men were also concerned that, as the government was poor, it was going to try and co-opt the opium business with an official monopoly. To do that, it had to come to an agreement with the Green Gang.

  What followed was a power struggle in which the government repeatedly asked for loans, which the ‘Three Prosperities Company’ (the official trading name that Huang Jinrong, Du Yuesheng and Zhang Xiaolin had adopted) refused, as the government had no security, and the government threatened to shut off their opium supply. By 1933, the Three Prosperities were controlling and refining a significant proportion of the opiates that passed down the Yangtze River.

  Because of the instability of the political situation, it was necessary for Du Yuesheng, as the frontman, to maintain good relations with an almost endless parade of warlords and political figures. Operating out of the French Concession gave them a measure of safety and they had extended their interests into gambling, with much success. By this time, the authorities in Paris had been informed of the level of influence the Th
ree Prosperities had built up and decided they needed to scour the French Concession of their influence, and organized crime. So, in 1932, the gang ended up back in Shanghai.

  The Japanese invasion of Manchuria after the Mukden Incident in 1931, essentially an attempt to create a Japanese-sponsored opium monopoly for the crops they were growing in Korea, destabilized Shanghai, creating opportunities for rival Green Gangs. The governance of Shanghai was taken over by members of the bourgeois community until order was restored. Months later, they sent a telegram to the government demanding they be allowed to offer advice on the situation. In such chaos, the Green Gangs were thriving.

  The Three Prosperities played a prominent role in setting up relief for the Manchurian refugees and assisting in aid efforts. Such charitable works gave them ample opportunity for extortion and embezzlement. Then, Du Yuesheng decided to try and legitimize the opium sale, owing to being under enormous pressure from the French authorities to get out of the business. He applied to hold opium auctions in return for a kickback to the government of three million Chinese silver dollars and set up the Shanghai Peace Preservation Corps for the purpose of protecting his shipments.34 The Guomindang government agreed, and the Three Prosperities was no more. Du Yuesheng had become legitimate.

  Du Yuesheng worked closely with the bourgeois organization, which now had a strong political voice, and instead of two partners he appointed two deputies, one involved in labour unions and one politically and socially active. This brought the seamen’s union and the river under his control, and kept him well connected. He then created the Endurance Club, an elite network for politicians, governors and business. With the cooperation of the minister of finance and the mayor of Shanghai, Du Yuesheng had achieved his goal of creating his own opium monopoly whilst still remaining a member of the Shanghai Civic Society.