One of the CIA’s strategic objectives had been to provoke an attack by China across the Burmese border in retaliation for forays by the KMT. This plan misfired, however. In 1961 the Chinese did indeed launch a drive into the Shan States, but at the request of the Burmese government to deal, once and for all, with the KMT. The People’s Liberation Army drove the KMT remnant into Thailand, where it settled outside Chiang Mai. After this operation the Burmese army discovered a fresh cache of weapons and supplies at the former KMT base, still in boxes with US markings, and containing more than five tons of ammunition and hundreds of rifles and machine guns. They also discovered more than a dozen opium-processing labs.
The CIA’s liaison to the KMT at its new quarters in Thailand was William Young, the son of a Baptist missionary. Young had joined the CIA in 1958 and quickly proved himself to be one of the Agency’s most capable hands, and one of the few CIA men respected by the tribal leaders. Young had been born in the Shan States and used his intimate knowledge of the culture and his fluency in the difficult languages of the hill country to recruit the local tribesmen as surrogate warriors in the CIA’s operations across Southeast Asia. Young was more than willing to indulge his hill tribe mercenaries in the opium trade with the excuse that “[a]s long as there is opium in Burma somebody will market it.”
In 1963 Young recruited KMT soldiers into a raiding force that led attacks on villages in northern Laos believed to be sympathetic to the Communist Pathet Lao. From 1962 to 1971 Young’s mercenaries carried out more than fifty cross-border ventures into China, where they monitored truck traffic and tapped phone lines. These expeditions were propelled by the CIA’s fear that China might intervene in Laos and Vietnam. His recruits were trained by the Thai secret police, taken to Mong Hkan, a CIA base near the Burma–China border, then from Mong Hkan into China using the Shan opium caravans as cover. The mules that carried bags of opium also packed radios and surveillance equipment.
One of the CIA-backed guerrilla groups was called the Sixteen Musketeers. This force was run by U Ba Thein, a leading Shan States revolutionary who for many years had funded his war against the Burmese government with opium sales. He had worked for British intelligence during World War II. In 1958 he joined forces with Gnar Kham to form the Shan Nationalist Army. To fund their operations U Ba Thein struck an opium deal with General Ouane Rattikone, the CIA asset who headed the Laotian army. Ouane also had another line of business. He oversaw the Laotian government’s secret Opium Administration, which was generating millions of dollars a year for the Laotian junta. Ouane had an enormous stockpile of weapons generously supplied by the CIA, which he traded for U Ba Thein’s opium shipments.
The Shan bought automatic weapons, machine guns, rockets and radios and within a year or two had amassed enough supplies to equip a 5,000-man army and gain control over more than 120 square miles of territory. U Ba Thein told historian Al McCoy in the early 1970s that the CIA’s William Young “knew about the arrangement, saw the arms and opium being exchanged and never made any move to stop it.” In a familiar pattern the CIA was to use General Ouane as the intermediary in the project of arming the Shan nationalists, thus slightly minimizing the risk of being directly denounced by the Burmese government.
In 1964 the Shan nationalist army and the CIA were dealt a serious blow when Gnar Kham, the popular leader of the Shan army who had managed by force of personality to weld together the fractious coalition, got in a dispute over an opium deal and was shot in the head and killed at Huei Krai, a small outpost on the opium trail connecting the poppy fields of Burma to General Ouane’s heroin labs in Laos.
The CIA’s covert activities in Burma also fueled the operations of one of the world’s most notorious heroin lords, Khun Sa, born in a small mountain hamlet in the Shan States near the Chinese border. His father was a KMT soldier and his mother a Shan. He had received military training by the KMT and in 1963 was tapped by the Burmese government to head up a local defense force, the KYYY, against the Shan rebels. Instead of paying Khun Sa in money or provisions, the Burmese government granted him a concession to use state roads and facilities for drug trafficking. With the backing of the Burmese government Khun Sa’s opium trading soon posed a threat to the KMT’s monopoly, giving rise to an opium war of 1967. Khun Sa had sent 500 men and 300 mules carrying 16 tons of raw opium across 200 miles of mountain trails for delivery to General Ouane Rattikone’s heroin factory in the small lumber town of Ban Khwan on the Mekong River. Khun Sa’s caravan was shadowed most of the way by KMT forces, who launched an ambush about fifty miles outside Ban Khwan. The Shan traders fended off the attack, escaped across the Mekong and set up a defensive position in the town. The KMT forces regrouped and launched another attack. At this point General Ouane relayed word that both the Shan and the KMT should leave Laos or face attack by his men. The KMT forces demanded a payment of $250,000 to retreat. Khun Sa told his forces to remain in place till they received a $500,000 payment for the opium shipment. The next morning six bombers from the Laotian air force, then under the control of the CIA, flew over the village and dropped 500-pound bombs on both the KMT and Khun Sa’s troops. The bombing continued for two days. The KMT forces eventually fled north, deeper into Laos, while the Shan headed across the river, leaving behind most of the opium – which General Ouane promptly dispatched his men to retrieve.
The drug war left Ouane richer than ever, Khun Sa in a weakened state from which it took him a decade to recover, and the KMT in control of 80 percent of the opium market in Burma, according to a survey of opium trading the CIA requested William Young to prepare in 1968. As General Tuan Shi-wen told a reporter for the London Weekend Telegraph, “Necessity knows no law. We have to continue to fight the evil of communism, and to fight you must have an army and an army must have guns and to buy guns you must have money. In these mountains the only money is opium.” In late 1960 Burmese opium was selling for $60 a kilo in Chiang Mai, where the going price for an M-16 was $250.
Khun Sa made his comeback in the early 1980s after he forged an alliance with the Shan rebels whom he had once been paid in drugs by the Burmese government to put down. He ran his new opium empire from the small mountain village of Wan Ho Mong, ten miles from the Thai border. By the late 1980s he had built a 20,000-man rebel force called the Mong Tai Army, and had amassed a prodigious amount of money from his control of almost 300,000 acres of land in the Shan States given over to the opium poppy. There were twenty heroin factories under his control, and his gross revenues were reckoned by Newsweek to amount to $1.5 billion a year, which – even at the $500,000 a month he claimed it cost to supply and feed his army – left him with plenty in savings.
In 1988 the Burmese government was taken over by the State Law and Order Restoration Council, or SLORC. To fund its new regime the SLORC set a goal of doubling opium exports, and by 1990 Burma was producing more than 60 percent of the world’s heroin supply, valued at more than $40 billion a year. The SLORC used the proceeds of this trade to bought $1.2 billion worth of military hardware, according to the International Monetary Fund. The US Embassy in Rangoon noted flatly that “exports of opium appear to be worth about as much as all legal exports.” Banks in Rangoon were, and at the time of writing still are, offering money laundering services at a 40 percent commission. The profits of Khun Sa and other opium lords were cleansed by comingling them with the huge revenue stream from the SLORC’s favored oil companies, UNOCAL (from the US) and Total (from France).
In 1992 U Saw Lu, a leader of a Wa tribe in the Shan States, began a campaign to try to shift his region’s agriculture out of opium production. He told agents from the US Drug Enforcement Agency about the opium-running practices of Major Than Aye, an intelligence officer with the SLORC. News of this exchange soon made its way to SLORC agents, who arrested U Saw Lu, and began fifty-six days of appalling tortures, during which he was hung upside down, beaten with chains, and had electric wires attached to his genitals while buckets of urine were dashed in his face. Lu’s tortu
re was overseen by Major Than Aye, the very man he had informed on to the DEA. Than had every intention of killing the Wa leader, whose life was spared only after other Wa leaders threatened to take up arms against the SLORC regime.
When U Saw Lu recovered, he didn’t back down. Instead, he prepared a detailed plan to substitute other crops for opium in the Wa region. The report was titled “The Bondage of Opium – The Agony of the Wa People, a Proposal and Plan.”
In 1993 Wa gave his plan to the new DEA agent in Rangoon, Richard Horn. Horn was a 23-year veteran of the DEA who saw his appointment as head of the Agency’s bureau in Rangoon as his “dream job.” He seized on U Saw Lu’s ideas as an exciting opportunity and began to support him and his Wa comrades. But the CIA station chief in Rangoon, Arthur Brown, got a copy of Lu’s report and leaked it to his friends in SLORC intelligence. The SLORC tried to arrest Lu again, and were only dissuaded after Horn’s intervention. Horn himself now paid the price for sticking his nose into such affairs of state. According to a suit he later filed against the CIA, the first intimation he had of the Agency’s hostility was what he construed as an attempt to set him up for assassination. He also discovered that his phone lines were being tapped and that his own conversations with his superiors at DEA HQ back in Washington were being quoted verbatim by Franklin Huddle, the number two at the US Embassy in the latter’s communications to the State Department. Horn was angered not only by this personal harassment but by the fact that the CIA was continuing to provide intelligence and training to SLORC’s internal security force, even as the Agency sabotaged his attempts to back U Saw Lu’s anti-opium plans. Finally, the DEA recalled Horn and he was reassigned to New Orleans. He filed suit against the CIA in 1994 as an individual and again in 1996 as part of a class action suit by a number of DEA agents, charging that they had been harassed, intimidated and secretly spied on by the CIA. The court documents related to this lawsuit are sealed.
In 1996 the SLORC made a deal with Khun Sa. The warlord had been indicted by the US Justice Department in 1990, but the SLORC announced that he would neither be sent to the US nor brought up on any charges in his own country. Instead, he was given the Burma-to-Thailand taxi concession and a 44-acre site outside Rangoon where his son has plans to build a gambling and shopping complex. Khun Sa predicted that his deal with the SLORC wouldn’t end the opium trade in the Shan States. “On the contrary, there will be more. My people need to grow opium to make a living. If Americans and Europeans didn’t come here there would be no drug trade.”
Sources
Our description of the British opium trade is based largely on three less than satisfactory books, Michael Greenberg’s British Trade and the Opening of China, David Owen’s 65-year-old British Opium Policy in China and India and Arthur Waley’s The Opium War Through Chinese Eyes. Joseph Stilwell’s own writings provide the best guide to his frustrating experience in China. Harris Smith’s book on the OSS is excellent on the disastrous decision-making by American anti-Communists in the waning days of the war in Asia. Smith’s history of the OSS far surpasses any similar work on the CIA. Our profile of Tu Yueh-sheng draws heavily on essays by Y. C. Wang and Jonathan Marshall. William Corson and David Wise give useful accounts of the CIA’s much overlooked early misadventures in Burma. Al McCoy’s Politics of Heroin, as always, was an indispensable map to the confusing terrain of Southeast Asia’s narcotics trade. Over the past two years, Dennis Bernstein and Leslie Kean have written fine articles on the horrors of contemporary Burma. Equally informative was the Frontline series on the Burma opium trade written by Adrian Cowell. Bertel Lintner has reported on Burma and the Shan States with consistent brilliance in the Far Eastern Economic Review.
Anderson, Martin Edwin. “Spy Agency Rivalries.” Washington Times, Dec. 19, 1994.
Associated Press. “DEA Agent Sues CIA over Mission.” Washington Times, Oct. 28, 1994.
Bernstein, Dennis, and Leslie Kean. “People of the Opiate: Burma’s Dictatorship Touches Everything, Even the CIA.” Nation, Dec. 16, 1996.
Berrigan, Darrell. “They Smuggle Dope by the Ton.” Saturday Evening Post, May 5, 1956.
Boyle, John Hunter. China and Japan at War, 1937–1945. Stanford Univ. Press, 1972.
Brown, Richard Harvey. “Drug Policies and Politics in Comparative Perspective: The Case of Opium in India, China, Britain and the United States.” Paper presented at Drug Policy seminar at Columbia University, Feb. 1993.
Chennault, Claire. Way of a Fighter: The Memoirs of Claire Chennault. Putnam, 1949.
Colby, Gerard, and Charlotte Dennett. Thy Will Be Done. HarperCollins, 1996.
Corson, William. The Armies of Ignorance. Dial, 1977.
Cowell, Adrian. “The Opium Kings.” (Transcript) Frontline/WGBH, May 20, 1997.
Faligot, Roger. Invisible Empire: The Overseas Chinese. Putnam, 1995.
Gravel, Mike, ed. The Pentagon Papers: The Defense Department History of US Decision-making on Vietnam. Beacon, 1971.
Greenberg, Michael. British Trade and the Opening of China, 1800–42. Cambridge Univ. Press, 1951.
Isikoff, Michael. “International Opium Crop Production up 8 Percent Last Year; Despite US Efforts Against Poppy Crop, Concern Grows About Expanding Heroin Market.” Washington Post, March 1, 1992.
Kean, Leslie, and Dennis Bernstein. “Burma–Singapore Axis: Globalizing the Heroin Trade.” Covert Action Quarterly, Spring 1998.
Kerry, John. The New War: The Web of Crime that Threatens America’s Security. Simon and Schuster, 1996.
Kleinknecht, William. The New Ethnic Mobs: The Changing Face of Organized Crime in America. Free Press, 1996.
Kohn, Marek. Narcomania: On Heroin. Faber and Faber, 1987.
Kwitny, Jonathan. The Crimes of Patriots: A True Tale of Dope, Dirty Money and the CIA. Norton, 1987.
Lamour, Catherine, and Michel Lamberti. The International Connection: Opium from Growers to Pushers. Pantheon, 1974.
Latimer, Dean, and Jeff Goldberg. Flowers in the Blood: The Story of Opium. Franklin Watts, 1981.
LaGesse, David and George Rodriguez. “Drug War Often Finds CIA at Odds with DEA.” Dallas Morning News, Feb. 16, 1997.
Liu, Melinda. “Burma’s Money Tree.” Newsweek, May 15, 1989.
McAllister, J. F. “Getting in the Way of Good Policy.” Time, Nov. 7, 1994.
Marshall, Jonathan. “Opium and the Politics of Gangsterism in Nationalist China, 1927–1945.” Bulletin of Concerned Asian Scholars. July/Sept. 1976.
——. Drug Wars. Cohan and Cohen, 1991.
Miles, Milton. A Different Kind of War. Doubleday, 1967.
Morley, Jefferson, and Malcolm Byrne. “The Drug War and ‘National Security.’ ” Dissent, Winter 1989.
Musto, David. The American Disease: The Origins of Narcotics Control. Yale Univ. Press, 1973.
Owen, David. British Opium Policy in China and India. Yale Univ. Press, 1934.
Robinson, Jeffrey. The Laundrymen. Arcade, 1996.
Rush, James. Opium to Java. Cornell, 1990.
Shannon, Eileen. Desperados: Latin Drug Lords, US Lawmen, and the War America Can’t Win. Viking, 1988.
Smith, R. Harris. OSS: The Secret History of America’s First Central Intelligence Agency. Univ. of California Press, 1972.
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Stilwell, Joseph. The Stilwell Papers. Sloane, 1948.
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——. Select Committee on Narcotics Abuse and Control. Opium Production, Narcotics Financing, and Trafficking in Southeast Asia. Government Printing Office, 1977.
——. Committee on International Relations. Proposal to Control Opium from the Golden Triangle and Terminate the Shan Opium Trade. Government Pr
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Wise, David, and Thomas Ross. The Invisible Government. Random House, 1964.
10
Armies and Addicts: Vietnam and Laos
At 7:30 a.m., on March 16, 1968, Task Force Barker descended on the small hamlet of My Lai in the Quang Nai province of South Vietnam. Two squads cordoned off the village and one, led by Lieutenant William Calley, moved in and, accompanied by US Army Intelligence officers, began to slaughter all the inhabitants. Over the next eight hours US soldiers methodically killed 504 men, women and children. As the late Ron Ridenhour, who first exposed the massacre, said years later to one of the present authors, “Above My Lai were helicopters filled with the entire command staff of the brigade, division and task force. All three tiers in the chain of command were literally flying overhead while it was going on. It takes a long time to kill 600 people. It’s a dirty job, you might say. These guys were flying overhead from 7:30 in the morning, when the unit first landed and began to move into those hamlets. They were there at least two hours, at 500 feet, 1000 feet and 1500 feet.”
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