The Strength of the Wolf

by Douglas Valentine

  Ellsberg’s assertions may be true, but what is important is that Lansdale and Conein knew that certain Corsicans in Saigon shipped morphine base to associates in Marseilles. Although Conein, in his letter to Harper Row, denied having said so, McCoy quotes him as stating that it was impossible to completely stop the Corsicans from smuggling drugs, unless someone put the opium growers in Laos out of business. According to McCoy, that is “why Conein and Lansdale did not pass on the information they had to the US Bureau of Narcotics.”12

  CIA officers Lansdale and Conein knew that Corsican drug smuggling in Vietnam relied on the CIA-protected opium growers in the Golden Triangle, but they didn’t tell the FBN; which brings us back to the overarching fact, discovered by FBN Agent Bowman Taylor in Laos in 1963, that the CIA was not only protecting the opium growers in Laos, it was facilitating the drug trade in Vietnam. As FBN Agent Al Habib explained, “Vietnam was off-limits” because, as Sal Vizzini observed, “the CIA was flying opium to its warlords.” The FBN knew about the CIA’s involvement in the Hobbs case in 1964, and that Air America (aka Air Opium) was smuggling opium to Vietnamese officials. As we shall see, the FBN knew that top officials like Air Marshall Ky’s right-hand man, General Loan, were involved, as was Customs Director Nguyen Vinh Loc. As Habib noted in chapter 21, Vietnamese Customs had a warehouse full of confiscated opium that it sold “out the back door.”

  The CIA’s complicity in the Southeast Asian drug trade was known to the FBN in 1965, and yet it listed only two Southeast Asian drug smugglers in its International Book: Rolf Schmoll, a Corsican later identified as SDECE Agent Ange Simonpierri (the source in the Nebbia case and, through Paul Pasqualini, to Maurice Castellani); and Michel Libert, a Corsican residing in Saigon. And by never making public its knowledge of CIA drug smuggling, the FBN itself became complicit in the great conspiracy it had been searching for since its inception.13

  STRATEGIC INTELLIGENCE NETWORK 118A

  Not only was the CIA protecting the GVN’s top drug smuggling politicians and generals, their Corsican accomplices, and its private army of opium growers in Laos, it was managing the caravan that delivered raw opium to the world’s biggest opium market in Houei Sai, Laos. CIA officer William Young helped to initiate this operation. The son of an American missionary in Burma, Young learned the local dialects before he mastered English. During the Second World War, his family was forced to move to Chiang Mai in northern Thailand, and afterwards, Young’s father taught Ambassador William Donovan about the intricacies of the region’s opium business.

  Following a tour of duty with the US Army in Germany, Young was recruited into the CIA and, in 1958, was posted to Bangkok. When the CIA pretended to move its Kuomintang mercenaries out of Burma, he was reassigned to Chiang Mai, and from there led a succession of CIA case officers to the strategically placed Laotian and Burmese villages that would eventually serve as Agency bases. It was Young who introduced General Vang Pao, chief of the opium-growing Meo tribesmen, to Joe Houdichek, Pao’s first official CIA case officer.

  From his headquarters at Long Tieng, the CIA’s major air base on the south side of the opium-rich Plain Of Jars, Vang Pao conscripted some 30,000 Meo tribesmen into a secret army to fight the Laotian communists and their Vietnamese allies. In exchange for selling his people as cannon fodder, he was allowed to make a fortune selling opium. Much of the brokering was done at the village of Houei Sai in western Laos on the Thai border, in the heart of the opium-rich Golden Triangle formed by the borders of Burma, Thailand, and Laos. Vang Pao’s front man was the chieftain of the local Yao tribe, but behind the scenes Bill Young coordinated Pao with the generals and politicians running the Laotian Opium Administration, as well as with three Kuomintang generals inside Burma. These generals operated clandestine CIA radio listening posts inside Burma, and in return were allowed to move 90 percent of the opium that reached Houei Sai.14

  It was a happy arrangement until October 1964, when the Chinese detonated an atomic bomb at Lop Nor. That seminal event signaled a need for better intelligence inside China, and resulted in the CIA directing Bill Young to set up an intelligence network at Nam Yu, a few miles north of Houei Sai. The purpose of the 118A Strategic Intelligence Network was to use a Kuomintang opium caravan to insert agents inside China. The agents placed by Young in the caravan were his childhood friends, Lahu tribesmen Moody Taw and Isaac Lee. Young equipped them with the best CIA cameras, and while in China they photographed Chinese engineers building a road toward the Thai border, as well as the soldiers massing along it. Knowing the number and location of these Chinese troops helped the CIA plot a strategy for fighting the Vietnam War.

  Once the 118A Network was up and running, Young turned it over to CIA officer Lou Ojibwe, and after Ojibwe was killed in the summer of 1965, Anthony Poshepny took charge. A Marine veteran who had served with the CIA in the Philippines, Indonesia, and Tibet, “Tony Poe” was the balding, robust model for Marlon Brando’s Colonel Kurtz in Apocalypse Now! He also served as a father figure to the junior CIA officers (including Terry Burke, the future acting chief of the Drug Enforcement Administration) he commanded in the savage jungles of Laos.

  In an interview with the author, Poe said he “hated” Vang Pao because he was selling guns to the communists. But Poe was a company man, and he remained silent and dutifully made sure that the CIA’s share of opium was delivered from Nam Yu to the airfield at Houei Sai. The opium was packed in oil drums, loaded on CIA C-47s, flown by Taiwanese mercenaries to the Gulf of Siam, then dropped into the sea and picked up by accomplices in sampans waiting at specified coordinates. The people on the sampans ferried the drugs to Hong Kong, where the opium was cooked into heroin by Kuomintang chemists and then sold to Mafiosi. As described by Young and Poe, this was the CIA’s private channel to its old Luciano Project partners in Hong Kong.

  Albert Habib, in a Memorandum Report dated 27 January 1966, cited CIA officer Don Wittaker as confirming that opium drums were dropped from planes, originating in Laos, to boats in the Gulf of Siam. Wittaker identified the chemist in Houei Sai, and fingered the local Yao leaders as the opium suppliers.

  By 1966, when Agent Doug Chandler arrived in Bangkok from New Orleans, the existence of the CIA’s 118A opium caravan was also known to the FBN. As Chandler recalls, “An interpreter took me to meet a Burmese warlord in Chiang Mai. Speaking perfect English, the warlord said he was a Michigan State graduate and the grandson of the king of Burma. Then he invited me to travel with the caravan that brought opium back from Burma.” Chandler pauses. “When I sent the information to the CIA, they looked away, and when I told the Embassy, they flipped out. We had agents in the caravan who knew where the Kuomintang heroin labs were located, but the Kuomintang was a uniformed army equipped with modern weapons, so the Thai government left them alone.”

  Meanwhile, Thai and Vietnamese officials were buying opium at Houei Sai, as were Corsicans and CIA renegades working for Air America and yet another CIA airline, Continental Air, which had a State Department contract to fly food and supplies to the Yao in Houei Sai. Also involved was Prime Minister Souvanna Phouma’s son, Panya, who built a Pepsi-Cola bottling plant in Vientiane, Laos, with US State Department support. Better than the real thing, the plant served both as a cover for buying the chemical precursors necessary for converting opium into heroin and as a money laundry for Vang Pao’s profits.15

  THE VIETNAMESE CONNECTION

  The FBN began documenting the CIA and Vietnamese drug smuggling conspiracy on 13 July 1966, when US Army Major Lee Waring introduced Al Habib to Tran Ngor An, a Military Security Service (MSS) agent assigned to the Vietnamese Embassy in Bangkok. Tran told Habib that one of his agents had penetrated a Viet Cong smuggling ring in Bangkok. Americans were the recipients in Saigon, and the Americans were sending the opium to Hong Kong to be refined into heroin. Tran then asked Habib to arrange for the US Air Force to ship 250 kilograms of opium to Saigon, in a controlled delivery, so the Vietnamese could bust the culprits there. Although Tran
would not identify his agent, or say where the opium was stashed, or provide the names and addresses of the recipients, he did grant Habib permission to accompany the shipment to Saigon – so Habib naively went ahead with the deal. On 5 August, he obtained the approval of the CIA station chief in Bangkok, Robert Jantzen, and of Major General Joseph Stilwell, the ranking US military commander in Thailand.16

  Then things got weird. Habib traveled to Saigon to meet General Loan’s assistant for foreign affairs, Nguyen Thanh Tung. At their meeting, Tung told Habib that Tran’s original plan had been changed, and that General Loan now wanted the 250 kilograms of opium to be delivered to the American receivers without an arrest being made. Tung justified this change in plan by explaining that the MSS agent in Thailand had irrefutable information that the VC were planning a second, larger shipment, consisting of two tons of opium. Tung reasoned that if the first shipment were allowed to pass freely, the MSS would be able to identify everyone in the VC’s opium smuggling network in Thailand, Malaya, and Laos. They could then make a more valuable seizure and arrest all of the enemy agents, as well as the Americans.

  On 11 August, Habib presented the plan to William F. Porter, the deputy US ambassador in Saigon. Porter adamantly refused to go along with it. He didn’t trust Loan, and “was apprehensive of a set-up by the Vietnamese which could possibly involve blackmail.”17 Referring to the Hobbs case, Porter rhetorically asked Habib what it would be like if the Vietnamese seized 250 kilograms of opium on a US Air Force plane. On the other hand, Porter wanted to know what the Vietnamese were plotting, so he directed Habib to proceed with the plan, but to delay the operation by telling Tran that there was a problem getting the plane. Porter also instructed Habib to introduce an undercover CIA agent into the investigation – at which point the case began to unravel.

  Upon arriving back in Bangkok, Habib was introduced by Tran to Le Dinh Tam, the second secretary at the Vietnamese Embassy in Bangkok. Tam handled the logistical aspect of the Vietnamese smuggling operation in Thailand, and at a meeting on 16 August, Tam threatened to cancel the 250-kilogram shipment unless Habib immediately supplied the US Air Force plane. When Habib refused, Tam flew to Saigon to confer with Tung, and when he returned on 2 September, he told Habib that the MSS had transported the shipment by boat to Saigon, delivered it to the recipients, and, with Vietnamese Customs, seized the opium and arrested two suspects. Tam then surprised Habib by revealing that he was in possession of the additional two tons of opium, which he had obtained in Houei Sai. He insisted that the Americans transport that immense shipment immediately, as a sign of good faith, or else the Vietnamese would do it themselves.

  Confounded and amazed at Tam’s audacity, Habib traveled to Saigon and – after checking with Vietnamese Customs and its American advisors – found no evidence of any drug seizures or arrests. Suspecting foul play, he approached the CIA and, at an 8 September meeting with someone named Lucid (perhaps Lucien?), he was told that Ambassador Henry Cabot Lodge would not allow him to continue with his investigation. Habib returned to Bangkok, and Tam proceeded to deliver the two tons of opium to waiting Americans in Saigon.

  THE REAL POLITICS OF HEROIN IN VIETNAM

  As a result of Habib’s investigation, the CIA was forced to conduct a perfunctory investigation of Loan’s activities, after which he was cleared of any wrongdoing. The reason for this was quite simple: Loan provided personal security to CIA officers in Saigon. That’s right. Just as Lansdale had forged a truce with the Corsicans to protect himself, CIA officers protected the GVN’s official drug ring because their lives depended on it. The situation hadn’t changed since 1955, when Lansdale kicked the French out of Saigon and installed the Ngo regime. McCoy quotes Conein as saying that, after the Ngos were assassinated in November 1963, “the same professionals who organized corruption for them were still in charge of police and intelligence. Loan simply passed the word among these guys and put the old [drug smuggling] system back together again.”18

  Within this system, Nguyen Thanh Tung, alias Mai Den, was Loan’s narcotics manager. Tung had learned the ropes while serving in Dr. Tuyen’s secret drug smuggling secret service, and he had gone to work for Loan after the 1963 coup d’état. To help conceal Tung’s activities, Loan appointed him chief of the Central Intelligence Office’s Foreign Intelligence Branch in early 1966, right after Habib discovered the Bangkok operation. Created by the CIA in 1961, the CIO was the GVN’s equivalent of the CIA, and CIO officials worked within all the political, security, and military branches of the GVN. In this way, with the support of the CIA, Tung “used his CIO agents to weave a net of drug contacts across the Golden Triangle.”19

  McCoy’s assertions about Tung are qualified by Colonel Tulius Acampora, the US Army counterintelligence officer who for six years had conducted joint CIA/FBN drug smuggling cases with his friend, Hank Manfredi, in Rome. In mid-1966, Acampora was reassigned to Saigon as General Loan’s CIA advisor on security matters. Acampora maintained this counterpart relationship with Loan throughout the war, and formed a close friendship with him as well. He came to know many of Loan’s deepest secrets, and he says that Loan was not aware of everything that Tung did. Acampora describes Tung as “a former Binh Xuyen gangster and hatchet man for the Kuomintang who was appointed over Loan’s objections.”

  This is not to suggest that Tung had snookered Loan. The two men had reached an unspoken accommodation. In the same way Mafiosi bring out the voters and otherwise serve politicians in America, Tung was granted free passage in order to serve his patrons. For example, it was Tung’s goon squad that quelled the Buddhist riots in Hue in the mid-1960s, thus sparing the regular Army unit commanders from suffering any political backlash. Tung’s thugs also tried to offset the political influence the CIA exercised through its unilateral recruitment of Ky’s political enemies, including labor leaders, Buddhist monks, and private businessmen.

  A sophisticated man who enjoyed his Courvoisier and Gaulloises, Loan did not ask Tung how he financed his goon squad. Nor did he presume to challenge the prerogatives of the Kuomintang Chinese, French landowners, or Corsican gangsters who provided him with similar services. For example, the owner of the Continental Hotel, Monsieur Franchini, had wired the most elegant rooms so that Loan’s agents could conduct the same sort of MKULTRA sexual blackmail schemes that the CIA used to bring politicians into line in America. Only in this case, the people being blackmailed were the Americans in charge of administering the war in Vietnam.

  GOING TO THE SOURCE IN LAOS

  As American participation in the war escalated through 1966, Laos became the critical flanking operation. Of particular concern was the Ho Chi Minh Trail, which wiggled through Laos into Cambodia, and enabled the North Vietnamese Army to supply the Viet Cong. Interdicting the Ho Chi Minh Trail was necessary to winning the war, but Laos was a neutral country, so the quiet Americans relied on extra-legal methods: bombing the trail to smithereens was the job of the CIA-managed 56th Air Commando Wing in Thailand, while the task of interdicting troop movement along the Trail fell to the CIA’s secret army of hill tribesmen, stationed in strategic outposts along the so-called Laotian Corridor.

  Chief among these outposts was Pakse, a city of 8,000 on the western edge of the Bolovens Plateau in a southern province ruled by Prince Boun Oum Champassak, an advisor to the Laotian Opium Administration. The CIA base chief at Pakse, where opium was sold openly on the streets, was David Morales. A former station chief in Havana, and a former member of Lansdale’s Operation Mongoose, Morales (aka Poncho) facilitated the opium trade in Pakse for the local Laotian police and military commanders, in coordination with Air America.

  According to McCoy, Pakse was the site of the biggest South Vietnamese opium-smuggling operation, managed jointly by Laotian officials working with Nguyen Cao Ky’s elder sister, Mrs. Nguyen Thi Li; KMT financier Huu Tim Heng; Loan’s spymaster Mai Den; and Major Pham Phung Tien, Ky’s successor as commander of South Vietnam’s CIA trained and equipped First Transport Group
.20

  The CIA knew all about this operation too, but it looked the other way, because the American military’s ability to bomb the Ho Chi Minh Trail depended on the Laotian and South Vietnamese air forces, which were based in places like Pakse. That’s why, in 1966, the CIA launched Operation Palace Dog in concert with the US Air Force. The stated purpose was to train Laotian and South Vietnamese pilots, but its secret mission was to provide security for the joint Laotian/Vietnamese drug-smuggling operation. It may also have been the conduit by which the CIA flew narcotics directly to the United States. Palace Dog aircraft were used to fly medicines from the World Medical Relief warehouse in Detroit to Vang Pao’s secret army at Long Tieng. It’s not hard to imagine what came back to Detroit in Palace Dog planes, and by 1967 the military and the US Customs service were conducting secret investigations of both Palace Dog and Air America.

  “It was getting bad,” recalls senior Customs official Dave Ellis, who was then making regular trips to Vietnam. “It was an ugly war, so the CIA looked away from Air America and Continental Airlines. But as the war started escalating, they started getting apprehensive.”

  As world attention focused ever more closely on America’s conduct in the Vietnam War, the CIA’s need to conceal its major role in the regional drug trade became a top priority. The climactic point came in June 1967, when Burmese warlord Khun Sa decided to sell sixteen tons of opium in Houei Sai. Construing this as a challenge to their precious monopoly over supply, the Kuomintang generals mobilized their forces in Burma and marched across the border into Laos. Apprised of the situation, CIA station chief Ted Shackley in Vientiane informed Pat Landry, chief of the CIA’s major support base in Udorn, Thailand. Landry ordered Air Force Major Richard Secord to send a squadron of T-28s to the rescue. Within hours, the battle had ended with both Khun Sa and the Kuomintang in full retreat, and the Laotians in total control.21