An Interview with Alfred McCoy

by David Barsamian

Conducted at University of Wisconsin-Madison, February 17,1990

Part Three

The CIA didn't know about that. I mean, they didn't care about that; they didn't worry about it. Once it was out of the mountains and out of the labs they didn't think about it very much. Now, what's the legacy of Laos. Well, the legacy of Laos, I think, is something that nobody's really thought about. Let's look at it. For ten years the CIA's biggest operation was completely integrated with the structure of the Indochina opium trade. The capacity of that army to fight and move, the capacity of those people to survive and to keep replacing soldiers (because they were killed by the tens of thousands). We were fighting with boy soldiers by the time it was over. I mean, those soldiers had to keep delivering the troops. The whole apparatus was integrated with the opium trade, the whole secret war apparatus was part of the opium trade. We ran that war through Vang Pao. He was a general in the Laotian army, but more importantly, he was the CIA's general. Now, Vang Pao was not from a traditional elite family. He was never very popular with the Hmong, certainly not at that time. And his capacity to get recruits out of the villages once the war started taking heavy casualties and people were seeing one and two and three sons dying, his capacity to extract more and more recruits to keep that war going relied upon him being able to pressure those villages.

I was in a village in Laos that stopped sending recruits and the CIA cut off the rice supply and those people were pushed to the brink of starvation. They had lost all the males down to the 14-year-olds. The village and district leader didn't want to send the 14-year-olds. "This is the next generation," he said. "If we lose these kids, then we will disappear. We won't produce another generation. We can't do this." And so he said no, we've been doing this for six or seven years now, we've lost everybody, we're not going to do it any more. So they cut off his rice.

The other thing that Vang Pao had was the opium. Remember, they had the two basic commodities - rice to survive and opium for cash to buy everything that they needed. So Vang Pao became the big opium broker for the Hmong and, as such, he gained extraordinary power over their economy and thus over their lives. So that by controlling those two products, opium and rice - the supply of rice and the export of opium from the villages - Vang Pao controlled those villages and could force them to support him even after the casualties began to mount.

My metaphor for Vang Pao is kind of like a Judas Goat. Do you know what a Judas goat is? In the stockyards, I don't know if it's still done, but let's say when you're leading sheep to the slaughter, there's a goat that will lead the sheep through the maze of the stockyards and then, as they're heading into the chute, the Judas goat jumps aside and the flock of sheep go pelting through to get hit with electrodes or hammers and be slaughtered. That's how you have to think of Vang Pao - as kind of like a tribal Judas goat leading the males to the slaughter. Except, the Hmong are not like sheep - they know what's going on - they know that they're being slaughtered. It's not like they're being slaughtered in one room at one time - they're being slaughtered slowly over a decade. So how does he get to keep leading them? Through the control over these two products.

You've got, then, a CIA secret war which in an essential way, in a fundamental way is linked with the opium traffic. More than that, it appears that a number of CIA operatives as individuals got involved. They started smuggling, started wheeling, started dealing and started doing a couple of bags here and there. We know, for example, there's a famous case of a CIA global money-moving bank called the Nugan-Hand bank which was established in Australia. The founder of that was a Michael John Hand. He was a green beret who was a contract CIA operative in Laos. When he first came to Australia in 1969-1970 Australian federal police got intelligence on him - I've seen the files - saying that what he's basically doing is he's bringing down light aircraft that are flying from Thailand to northern Australia into those abandoned air strips that were left over from World War II and he's dealing heroin. That's what Michael John Hand, according to Australian federal police intelligence, was doing. So, as individuals CIA operatives were getting involved and more or less what you've got then as a result of Laos is that the policy of integrating intelligence and cover operations with narcotics gets established.

You get, then, an entire generation of covert action warriors used to dealing with narcotics as a matter of policy. In short, you get a policy and personnel which integrates covert action with narcotics. This manifests itself in a number of ways. First of all the Nugan-Hand bank. Not only was it moving money globally for the CIA, but it was the major money laundering conduit that was trimming funds up to Southeast Asia from Australia and linking the Golden Triangle heroin trade of Southeast Asia with the urban markets of Australia. In Afghanistan as well, this same distributing pattern that we saw in Laos emerges.

This is one case that hasn't been well studied. I've spoken to one correspondent for the Far East Economic Review which is a Dow-Jones Publication, Mr. Lawrence Lifschultz(?), a friend of mine, and what he found was something of a similar pattern that I found in Laos. He was a correspondent in Pakistan and Afghanistan during the Mujahadeen campaign and he wrote articles in the Nation and elsewhere describing this similar pattern. You've got Pakistani government officials very heavily involved in narcotics, you've got the Mujahadeen manufacturing heroin, they're exporting it to Europe and the United States. They're using it to support their guerrilla campaign. the Pakistanis and the CIA are complicitous on the level of (1) not doing anything or (2) actually getting involved in the case of some of the Pakistani elite. So, it's a case where the Mujahadee operation becomes ultimately integrated with the narcotics trade and the CIA is fully informed of the integration and doesn't do anything about it.

Moving on to our fourth instance, one close to home, is the whole Iran-contra operation.

First of all, I think the Laos parallel is very strong in the Iran-contra operation. Just in the formal outlines of the policy - you know, you've got the contras on the border of Nicaragua, they're a mercenary army, they're supported through a humanitarian operation, they're given U.S. logistic support, they're given U.S. equipment and they're given U.S. air power backup to deliver the equipment and the logistic support. All the personnel that are involved in that operation are Laos veterans. Ted Shackley, Thomas Clines, Oliver North, Richard Secord - they all served in Laos during thirteen-year war. They are all part of that policy of integrating narcotics and being complicitous in the narcotics trade in the furtherance of covert action.

In this case, what I think we can see is it's not just the same. It's not just simply that the CIA was complicitous in allowing the contras to deal in cocaine, to serve as a link between the Andes and across the Caribbean into the United States. I think we can see the situation has gotten worse. In Laos, as I said, the CIA was hands-off. Once it got beyond their secret base, they wouldn't touch it. They gave Vang Pao the aircraft and once it got any further they didn't really know about it and didn't want to know about it. They remained ignorant about it. And ultimately what you're looking at was a traffic that was in a remote region which, in a way I don't think the CIA saw was going to happen, wound up serving Americans. An estimate of 50% of U.S. combat forces in Vietnam taking drugs, that was common at that time. But it's still remote and it's still not going directly into the United States.

The level of cynicism in Central America is even worse. We're not talking about original traffic or moving the raw product - we're talking about taking finished cocaine, providing aircraft, moreover providing protection for these traffickers as they fly across the Caribbean with these massive loads of cocaine. Now, I don't know. Can one estimate what percentage of the cocaine was politically protected by these intelligence operations. Until there's a formal investigation, which there's not likely to be, it's difficult to say.

I think that one can say that as you look at the drugs flowing into the United States during the 1960s when this Lao operation was going, there was probably a much smaller percentage of narcotics entering the United States from politically protected brokers than there is today. In other words, this CIA policy of integrating covert action operations with narcotics, both at a level of individuals being involved and also just turning a blind eye to the fact that our allies are drug brokers, this complicity in the narcotics trade has gotten worse. It's closer to home. It's not moving the raw material out in the jungles, it's actually bringing the finished narcotics, cocaine, into the United States. So it's gotten that much closer to home and that much more cynical.

Barsamian: Could you talk about the 1971 Nixon "War on Drugs" and the 1989 version of the same war launched by George Bush? Do you see any parallels?

McCoy: The parallel is striking and I'm surprised that commentators haven't made more of it. My own feeling is that the Bush war on drugs is modeled exactly on the war fought by his mentor, president Bush's mentor, Richard Nixon. America has in its history of a century of drug abuse, attempted two times a solution to the drug problem. The first one was the Nixon war on drugs in 1972-73 and the second is now the Bush war on drugs.

Let's look at the Nixon war on drugs in order to get some sense of the probable outcome of the Bush war. Nixon declared war on drugs in 1973 in the Anatolian plateau. There's a pretty good book by a man named Robert J. Epstein called Agency of Fear looking at the drug agency involved in this war on drugs. What he concluded was that Nixon was faced with a delicate political problem when he took office. He'd promised law and order.

Once he got into office, Epstein says that he found out that the federal government's actual intervention in law enforcement in the United States is minimal. It's local police that do law enforcement. It's everybody's property taxes that put cops in their cars. So the American president may be powerful in many respects, but he's not powerful in law enforcement areas. What Nixon very quickly worked out is the only substantive area law enforcement where the federal government had any authority and capacity for action was in narcotics. So what he did was he manufactured a crisis and then he came up with a solution.

The crisis came from a series of press releases from the Drug Enforcement Administration, releasing statistics showing a massive expansion in the number of addicts. Now, they even took me in on this. I read those statistics like everybody else and I said, "My god, this is getting out of control." But all they had done was to change the statistical ratio. In the 1960s before Nixon, our numbers of drug addicts - about 60,000 - came from two things: (1) a central registry of addicts into which police put the name of every addict. Another way figures were derived was through a statistical ratio between the number of bodies in the morgue from overdoses and the overall addict population. All the DEA did under Nixon was to change the ratio between corpses and addicts. They just simply said ... I forget now the statistics - let's say it was 1 to 2. For every corpse you're likely to have two addicts. Then they made it 1 to 10 - for every corpse you can have ten addicts. So suddenly we had this massive expansion but it was just a result of statistical manipulation, changing the ratio between the known (the corpse) and the unknown (the number of addicts). In this way they manufactured this enormous sense of crisis.

Moreover, there was more crime that was probably somewhat drug-related in the 60s and 70s - maybe, maybe not, I don't know. But in any case, they made this equation. We've got more drugs, we've got more addicts, we've got more crime. Having manufactured this crisis, having "discovered" the problem of this massive expansion in heroin addiction, Nixon then declared war as his solution.

Nixon's image of the drug trade went like this: that there was raw opium being diverted from licensed opium growers in Turkey. There is, in fact, a legitimate pharmaceutical need for morphine which comes, like heroin, from the opium poppy. Turkey was a legal producer of opium for the pharmaceutical market, for patient's in hospitals who are dying of cancer and in incredible pain - they needed morphine. Troops use it in battle - it's a big market for people in accidents, all sorts of things. It's an important drug and has been for millennia.

Turkey was a legitimate producer but what was happening, according to Nixon, was that peasants were producing more than their quota and selling it to the black market; it was working its way down through Lebanon, across the Mediterranean into Marseilles labs and then the United States. So Nixon said that he was going to fight his war on drugs, battle one on the Anatolian plateau of Turkey. It was a very simple war. It was a war that didn't involve very much. All Nixon did was announce this war. He then used the very close defense relationship between Turkey and the United States to pressure the Turks through normal well-established diplomatic channels, to force their farmers to go out of production.

The Turkish government was faced with a choice - they could risk their whole strategic relationship with the United States in defense of farmers from a remote small region who were producing a minor product. Although it offended nationalism, they did it. They went along with it. Nixon also offered them, I think, $35 million to develop substitute crops, so there was a carrot-and-a-stick. The stick was the threat of a troubled strategic relationship and the carrot was this foreign aid bonus that was going to help these farmers produce a new crop.

So the Turks went along and it was a very simple battle. Nixon then declared war. He started then manipulating the statistics downward, changing them so the public would see the problem was getting under control. Then Watergate intervened and all of his political plans went awry. A number of the people that were hired for his super drug agency called DALE became, in fact, the people that were involved in the Watergate conspiracy itself. So, as Watergate erupted, his whole drug program blew up and he got into a whole set of different problems and his drug strategy went away. But the DEA, long after the klieg lights were turned off and the correspondents went home, was still fighting the war on drugs and we went to Nixon to Ford and Carter. They had greatly expanded operational funds and a greatly expanded establishment.

What the first war of drugs seemed to have produced, on balance, was a worsening of America's drug problem. The attempted interdiction failed - not only did it fail, it worsened the drug problem. Why do I say this, because it's a fairly strong conclusion? It's one I reached by looking at it.

The United States applied a very simple law enforcement model to a complex global commodity trade. Let me look at those words now. What's a law enforcement model? Okay. You've got a prostitute or a group of prostitutes operating on a street corner in a brothel. You raid them, you put them in jail, you stop prostitution. It can be done. You've got somebody, let's say, more localized - running peep shows. Close them down. There goes peep shows. You've got people doing, let's say, stealing cars and cutting up auto parts - well, you can handle that. It's localized. It's within police capacities. This is a simple thing. This is a small business, being run by a limited number of definable vice entrepreneurs. They are subject to an enforcement operation which can wipe out their business.

This is not true of narcotics. The variables, the points of pressure are global. We can't control them all. For two centuries now we've had integration of the first world demand for drugs, initially legal and now illegal - people in this society, and they're different people at different times, take illicit drugs. They take coca and opiate based products. They take cocaine and heroin and they have now for centuries. So this well-established demand for drugs, which save for the disruption of war has never gone away, it's just constant, there's a market here, has been tied into the complex political economy of the highland regions of the Andes and the southern Asian mountain rim. You're not talking about small localized areas. You're talking about the whole Andes, from Bolivia all the way through to Ecuador for coca. In Asia, for opium, when you actually look at a map, you're looking at almost a unitary drug zone that ranges for nearly 5,000 miles across the southern rim of Asia. It starts in the rest in the Anatolia plateau of Turkey, it then goes into Afghanistan, Pakistan, India, Burma, Thailand, Laos, and once upon a time North Vietnam but not any more. It runs right across the whole southern rim of the Asian land mass. So when Nixon came into Anatolia and wiped out the Anatolian market, Anatolia is just one player! In fact, if you look at the percentages, they were less than 10% of the illicit market. What did that do?

Well, as any farmer will tell you, if Russia doesn't produce any wheat, we're going to do very well here. We will know about that - if we don't know about it this year, we'll know about it next year - American farmers will get more money. They will go out and plant more wheat - they'll have a big bumper crop because Russia's not producing wheat, the crop's failed, the price goes up.

Well, in the case of the Nixon drug war in Anatolia, we wiped out illicit production in Anatolia. What happened? The price for reliable, available illicit narcotics shot up in the world. So Southeast Asia's Golden Triangle, which is the world's largest supplier, met that demand. So we got then the Southeast Asian market, which had hitherto been just regional, coming out of the mountains of Southeast Asia to the cities of Southeast Asia - now began to export to the United States, let's say the northwestern United States. By 1974 in Seattle, nearly 50% of all the drug seizures in the streets of Seattle were from Southeast Asia. So the Nixon White House got upset - "We just wiped it out in Turkey! Let's get a firebreak team out to Southeast Asia!" So they sent a firebreak team out to Southeast Asia, okay. They sent 40 agents into Bangkok and they're all bankrolled to the hilt. They rented an entire division of the Thai national police!

They put out the word on the streets that anybody that sells drugs can turn the drug buyer in and, no questions asked, they'll give him a bonus. So in Bangkok if you were a dealer you could sell to a foreign buyer and you could then turn around and turn them in so you get a percentage bonus on busting this guy! They actually then put what I call a "customs shield" down. The cost of expo went up because you had all these seizures. For every kilo you're sending, maybe you're losing one in three - we don't know how many they were sending exactly, but they were losing a lot. The seizures went way up.

So, what did the drug exporters of Southeast Asia do? Well, I wasn't privy to their councils, nobody was. My feeling is the drug warlords of Southeast Asia sat around and were faced with two choices: (1) they could go out of business, but they weren't about to do that; and (2) they find a new market. That's what they did. They found new markets and I'm sure they thought it over like we would. Mere are only four areas of the world that have the standards of living to support the very high cost of international narcotics trafficking. They're North America(Canada and the United States), Japan, Europe and Australia. Well, the North American market was closed for reasons we just described, so what did the exporters do? They started exporting to Australia and Europe. Australia and Europe had no drug problem. In 1970, Holland had maybe 800 addicts. In 1976 Holland had 10,000 addicts. And that's what happened all over Europe. Europe's got a big drug problem. The Southeast Asian syndicates just started shipping straight to Europe.

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