Empire of Crime

by Tim Newark

  Put on trial, the two managed to argue convincingly that the hashish must have been placed in their cabin during a stopover in Piraeus, Greece, when they had switched cabins. The Egyptian customs officers had inadequately searched both of the accused men and had failed to pick up any further incriminating evidence. The case was dismissed, but that customs were on the right trail was revealed later.

  ‘That the [Oriental Products] Company is engaged in illicit traffic,’ said a report, ‘has been abundantly proved by the discovery – lucky, I understand – at Port Said of heroin, in cases supposed to contain olive oil and consigned by the Company to the Far East. There is no reason to suppose that the Agents of the Company are less unscrupulous than the Company itself.’

  Eventually, Russell Pasha got his chance to stand before the League of Nations in Geneva and put his case in January 1930. Although Egypt was still not a member of the League, the police chief was allowed to present his evidence of an international conspiracy to traffic narcotics and other prohibited drugs into Egypt.

  ‘I was extremely nervous at this my first appearance before the Advisory Committee,’ recalled Russell. ‘Untrained in Geneva etiquette, I was saved, however, from having to deliver a too personal assault by a subterfuge which served me well on this and other occasions.’

  He had sent his written report before his own arrival and this proved shocking enough for the Committee members. They were not expecting him to name companies and individuals involved and they advised him to refer only to Monsieur X or Y. But the report was dynamite and the thoroughness of its research demanded action. The immediate result was that Switzerland tightened up its anti-narcotics legislation and France promised to rein in its own activities. What both nations did not want was to be exposed in another public meeting at Geneva by Russell and his team.

  This success put the Central Narcotics Intelligence Bureau on the map and meant it started to receive even more top-quality information about drugs trafficking. What seemed to be happening was that as the spotlight was shone on manufacturers in Western and Central Europe, the major traffickers shifted their operations to Istanbul. Turkey produced a large legitimate crop of high-class opium, its government was not tied in to international conventions on narcotics export and it had a long coast – perfect for smuggling.

  Russell returned to Geneva in 1931 to expose the growing role of Turkey in the drugs trade. Its government seemed little inclined to do anything about what it considered legitimate business – until Russell spoke to the American Ambassador to Turkey. He communicated to Mustafa Kemal Ataturk, the Turkish soldier who became the first President of his country, that this was not only a problem that affected the health of the rest of the world but also his own nation, as the narcotics habit was spreading among the officers of his army.

  Ataturk shut down three major factories and introduced strict antitrafficking laws. As a consequence, some of the manufacturers moved far away to foreign concessions in China, while others set up factories in Bulgaria. One of these, near Sofia, churned out 1,500 kilos of heroin in its first two months. Middlemen then smuggled the drug into Germany and France, where it left from Hamburg for markets across the Atlantic, or from Marseilles to reach Egypt and the Far East via the imperial highway of the Suez Canal.

  Relentlessly, Russell sent his agents into Bulgaria, where they photographed the factories and got their balance sheets of opium imported and heroin exported. They then presented this material to the League of Nations in Geneva. The Bulgarian government reacted by shutting down the factories and the drugs merchants went on the run again.

  On 30 November 1931, an Italian-American stepped off the Simplon Express from Istanbul to Berlin. The German police arrested him and among his papers they found some very interesting names. He was plugged into a vast narcotics-trafficking network that truly spanned the globe, from China and Afghanistan to America. He was called August Del Grazio – known as ‘Little Augie’ on the streets of New York – and he had some very dangerous friends indeed. Among them top mafioso Charles ‘Lucky’ Luciano and mobster Jack ‘Legs’ Diamond. Russell Pasha was fascinated – but so was another emerging drugs-busting agent, the American Harry Anslinger.

  Putting together the pieces of this complex jigsaw of international drugs trafficking made Russell feel like an aviator flying above the clouds. ‘Occasional gaps in the clouds gave a glimpse now and then,’ he wrote, ‘but it is only now that the clouds have rolled away and a clear panorama has been spread out before us. Our geographical drug map is clear, the countries of raw material, the manufacturing centres, the railroads and sea routes, the ports of departure and ports of destination, all stand out.’

  Russell Pasha had done an outstanding job of exposing the global trade in illicit drugs, but it was another thing to stop the lethal men running it.

  5

  THE FEARLESS MR ANSLINGER

  ‘AS A YOUNGSTER OF 12, visiting the house of a neighbouring farmer, I heard the screaming of a woman on the second floor,’ recalled Harry J. Anslinger. ‘I had never heard such cries of pain before. The woman, I learned later, was addicted, like many other women of that period, to morphine.’

  As the little boy shrank away from the terrible sound, the woman’s husband rushed down the stairs and thrust a piece of paper into Anslinger’s hands. It was an order for a package he had to pick up from the local drugstore. Anslinger leapt into a cart and lashed at the horses to get to the store as fast he could before, he believed, the woman died. The druggist handed over the package containing the morphine and the boy got it back to the farm. A little while later a hush settled over the house.

  ‘I never forgot those screams,’ said Anslinger. ‘Nor did I forget that the morphine she had required was sold to a 12-year-old boy, no questions asked.’

  Twenty-six years later, Anslinger was US Commissioner of Narcotics. The first Director of the Federal Bureau of Narcotics, he was charged with enforcing the Harrison Act of 1914 and subsequent legislation that controlled the possession and production of opium and coca-derived drugs in the USA. The seeds of his deep hatred of organised crime were sown on this journey from delivery boy to drugs tsar.

  Born in the rural township of Altoona, Pennsylvania, the son of a Swiss barber, Anslinger studied engineering at the state university. He paid for his tuition fees by playing piano in silent movie theatres. His first job was with the Pennsylvania Railroad, working alongside construction crews. Many of them were Italian immigrants and several of those came from Sicily. As Anslinger ate his lunch alongside these tough workers, he took a liking to a rugged Italian called Giovanni. He came from a big family and had big dreams for them in America, planning to make the most of his opportunity in a new land to work hard and provide for them. One day, Anslinger found Giovanni in a ditch, shot several times, with blood pumping out of his body.

  Rushing the Italian to hospital, Anslinger learned from his workmates that Giovanni didn’t like to be pushed around. Most of them paid tribute money to a squat, powerfully built Sicilian called ‘Big Mouth Sam’, but Giovanni refused – and was shot as a result. Big Mouth Sam had the reputation of belonging to the Black Hand, a gang running a protection racket in the style of the Mafia.

  Fearlessly, the 6 ft, 200 lb Anslinger confronted the Sicilian bully.

  ‘I’m Giovanni’s boss and friend,’ he told him.

  The Sicilian blinked.

  ‘What I got to do with Giovanni? I don’t know no Giovanni.’

  ‘If Giovanni dies, I’m going to see to it that you hang,’ threatened Anslinger. ‘And if he lives and you ever bother him again, or any of my men, or try to shake them down any more, I’ll kill you with my own hands.’

  Anslinger wasn’t kidding. Big Mouth Sam backed off and Giovanni lived.

  Although seemingly destined for a career on the railroad, Anslinger was becoming aware of the increasing problem of drug-taking among his own generation. Aside from the farmer’s addicted wife, he was profoundly bothered by the news of a
talented teenage pool player in his home town who had got hooked on opium and died two years later. His inner sense of justice urged him to get more directly involved in this new plague and if it meant confronting organised crime, he’d already had a taste of that. It was a sentiment that chimed with the concerns of his government.

  The US government first came across narcotics as a major problem in its Philippines territory, recently won from the Spanish Empire in its war of 1898. Charles Henry Brent was a missionary Episcopal bishop posted to the Philippines and he was shocked at the level of opium addiction among its population. He initiated a commission to investigate and control opium usage. His recommendations got to the desk of President Theodore Roosevelt and he called for an international conference on the subject of opium, held in Shanghai in 1909.

  It was followed by the 1912 International Opium Convention, signed at the Hague – the first dangerous drugs control treaty. Uniting 13 nations, including Great Britain, the US, Germany, France, China and Japan, it called on them to ‘control or to cause to be controlled, all persons manufacturing, importing, selling, distributing, and exporting morphine, cocaine, and their respective salts’.

  Despite these efforts, the Americans felt the British Empire was to blame for the opium epidemic in the Philippines. They pointed the finger at the smuggling of the drug from their protectorate in North Borneo. At first, the British responded to American concerns by abolishing the farming of opium in North Borneo and assuming direct control of its trafficking. But this failed to halt the smugglers.

  After several years of increasing levels of opium coming into their islands – reaching a value worth $1.8 million in 1918 – the Americans had had enough. A statement from the US Secretary of War was addressed to Lord Curzon, the British Foreign Secretary.

  ‘This government has devoted all existing energies to stop this traffic,’ said the Americans, ‘and is now about to initiate a campaign with swifter patrol vessels and sea planes. Chinese residents of Sandakan are active agents in procuring and selling this drug to Moros. These wholesalers are believed to be the chief source of the practice of introducing opium into the Philippine Islands, a practice designed to corrupt and debauch the residents of this island.’

  What is clear in this aggressive statement is that despite the well-meaning efforts of the British to prohibit the sale of opium abroad, the trade was being taken over by Chinese residents within their empire.

  ‘Legitimate trade between the Philippine Islands and British North Borneo is almost infinitesimal,’ continued the Americans. ‘The 40 or 50 small vessels from the Philippines entering Sandakan harbor each month are almost exclusively dedicated to the nefarious traffic in opium.’

  The British Colonial Office forwarded these concerns to the Secretary of the North Borneo Chartered Company (NBCC), charged with running this protectorate, and got a robust reply.

  ‘The [US] Secretary of War is mistaken in the assumption that the North Borneo Government expected to stop all smuggling,’ noted the NBCC. ‘The North Borneo Government never indulged in such ambitious hopes; what they expected and what has occurred is considerable diminution of the smuggling, and to that end they have made strenuous exertions.’

  Furthermore, said the Secretary of the NBCC, the Philippine government were not innocent victims but complicit in the trade themselves.

  ‘In recent years it has been generally believed in the Territory by the Officers of the North Borneo Government that the revenue cutters employed by the Philippine Government – manned and officered by Philippinos [sic] – were themselves accomplices in these nefarious practices.’

  In fact, American boats were observed to have invaded their coastal waters. ‘Some natives of Sulu reported that a motor boat manned by Filipinos had chased them near the shore at the entrance of Sandakan Bay,’ said the Governor of North Borneo. ‘They were afraid and jumped overboard and swam ashore, running into the village. Their boat was not seen again. One witness swore that the motor boat belonged to United States SS Mindoro, and others recognised her as belonging to an American revenue cruiser.’

  The British were sanguine about these infringements, but they were to be noted as increasing the tension in the area.

  ‘The opium traffic in North Borneo is most carefully supervised and restricted,’ insisted the Secretary of the NBCC, ‘and its consumption is entirely confined to the Chinese adult population. Any tendency of the habit spreading to the non-Chinese population would be promptly dealt with. There is however no sign of any such tendency, indeed the indigenous native population prefer the intoxicating liquor which they distil from the rice of their own production, and which is much more pernicious than opium consumed in moderate quantities.’

  To help reduce the amount of opium consumed by the Chinese population of North Borneo, the British had almost doubled its price per ounce between 1914 and 1919. At the end of the day, however, ‘an appreciable amount of opium can be easily carried on the person of the smuggler, and consequently the difficulty of ascertaining whether or not smuggling is taking place is very difficult’.

  As far as the British were concerned, they were doing their best. The Americans were less reassured and continued to view the British Empire with suspicion – a stance that would be taken up by Harry Anslinger.

  It was while investigating accidents on the Pennsylvania Railroad that Anslinger developed his detecting techniques, and when his boss was seconded to head the state police, the young man went with him. By 1916, Anslinger was running a department of 2,500 personnel and was tasked with investigating arsons. When the US entered the First World War, he volunteered for officer training but was rejected because of a childhood eye injury. Instead, he served in the Ordnance Department, assisting the Chief of Equipment Inspection. Again, his talents were recognised and in 1918 he was transferred to the diplomatic corps, where his fluent German, learned from his Swiss parents, proved useful.

  ‘It was a time of tensions,’ recalled Anslinger. ‘Every government – including our own – was eager to obtain every scrap of information possible, especially as the war drew to its close.’

  Stationed in the Hague, Anslinger had to go undercover, mixing with politicians and high society to glean any useful intelligence. His greatest coup was to bluff his way into travelling with the staff of the Kaiser, then about to abdicate as leader of the defeated German nation. Pretending to be a concerned German official, Anslinger advised against abdication. ‘Had he not done so, the Kaiser might well have stayed on the throne,’ speculated Anslinger, ‘forestalling any chance for a future Hitler gaining power, or a Second World War erupting.’ It was a giant claim, that Anslinger could have stopped a world war! But it revealed the ego and ambition of a gentleman who was keen to take on the big foes of his day.

  He served briefly as American Vice-Consul in Hamburg, Germany, and part of his job at the time was to repatriate American sailors. ‘Young fellows,’ he noted, ‘whose faces bore the stamp of the opium smoker, the user of morphine or the new “kick” called heroin. I saw it also on the skeleton faces of men in other countries, seeking visas or other help from us.’ Anslinger was witnessing at first hand the great wartime leap in illicit drug use described by Sir Malcolm Delevingne.

  Anslinger also had a brush with communist agents endeavouring to slip into America and spark revolution there. He tried to warn his superiors in Washington, but they assured him Communism would collapse within a few years and not to worry about it.

  ‘Decades later, in the world of narcotics,’ said Anslinger, ‘I met this same Red enemy – with the same ultimate goals. And in some measure, I also met the same puzzling unconcern.’ Then it would come from the Chinese, who would use their mastery of drugs trafficking as a political weapon.

  Anslinger was positioning himself as a lone ranger, alert to America’s future problems before she had even fully considered them herself.

  In 1923, Anslinger was shifted to consular work in Venezuela. He hated it, as it had taken him
away from the intrigue of Weimar Germany. He had recently married a relative of the Secretary of the Treasury, Andrew W. Mellon, and found the South American climate unfavourable for bringing up a family. Eventually, he was moved to a more congenial posting in Nassau, the Bahamas. As a centre of alcohol smuggling, this was just what he wanted to get his teeth into. Prohibition was in force and rumrunners were using it as a base for bringing illicit liquor into the US.

  Yet again, the Americans became frustrated by what they considered to be the lackadaisical attitude of the British imperial authorities on the islands. They felt the British could be doing a lot more to hinder the smugglers and forced a conference on them in London in 1926. This time Anslinger was there to challenge their lack of action. He testified to seeing ships loaded with liquor passing in broad daylight from British-controlled ports in the Bahamas to deliver their cargo to bootleggers in the Florida Keys.

  Reluctantly, the local British colonial authorities caved in over this activity – which was not at all illegal in their eyes and no doubt furnished their pockets to some degree. They agreed to take a more vigorous attitude to enforcing Prohibition laws by expecting ships to provide them with a certificate of landing. The US Treasury Department was amazed at Anslinger’s success and borrowed the young diplomat to pursue similar agreements with Canada, France and Cuba. Anslinger stayed with the Treasury for the rest of his life.

  While dealing with illicit alcohol smuggling, Anslinger was aware of the next big threat to his country.

  ‘Another danger was growing almost unnoticed,’ he warned. ‘The big organised bootleg gangs were looking to the future when Prohibition would be out. They would have to find other outlets. One lucrative outlet, even then occupying much of the international underworld of that time, was that of narcotics. Big chemical plants of Europe and Asia already were producing vast quantities of drugs which came into this country by various routes and smuggling techniques.’