DRUG FALLOUT: The CIA's forty-year complicity
in the narcotics trade

by

Alfred W. McCOY

Last August, The San Jose Mercury News reported that Nicaraguan dealers connected to the CIA-backed contra rebels had sold tons of cocaine to Los Angeles's street gangs during the mid-1980s, sparking an explosive controversy over CIA links to drug lords. The product of a year's work by investigative reporter Gary Webb, the three-part "Dark Alliance" series stated that one contra-connected dealer was "the Johnny Appleseed of crack in California" -- the man who introduced cheap crack cocaine to the poor black neighborhoods of South Central Los Angeles.

To accompany the series, the San Jose Mercury News ran an editorial that said "the contra-run drug network opened the first conduit between Colombia's . . . cartels and L.A.'s black neighborhoods." The paper concluded that "it's impossible to believe that the Central Intelligence Agency didn't know about the contras' fundraising activities in Los Angeles." Going beyond the story itself, political activists and callers on black talk radio charged that the CIA had targeted their communities for crack.

This May, after months of controversy, the San Jose Mercury News published a remarkable apology. In a signed column, executive editor Jerry Ceppos criticized the story and undermined some of its claims. "Although members of the drug ring met with contra leaders paid by the CIA, I feel that we did not have proof that top CIA officials knew of the relationship," he wrote.

The Washington Post responded by lauding Ceppos -- and by condemning "the monstrousness of the charge that a secret government agency had created a national drug epidemic." In an op-ed in The New York Times, John Deutch, the recently retired director of the CIA, used the occasion to issue a carefully and cleverly worded denial that "the CIA has never directed or knowingly condoned drug smuggling into the United States." He added that "dedicated" CIA analysts and agents who "frequently run personal risks in fighting drugs deserve to have the allegations put fully to rest."

But before we issue the blanket absolution that Deutch demands, we need to take a hard look at the CIA and its practice -- in country after country -- of allying with drug traffickers and providing them with de facto protection from prosecution.

Throughout the forty years of the Cold War, the CIA joined with urban gangsters and rural warlords, many of them major drug dealers, to mount covert operations against communists around the globe. In one of history's accidents, the Iron Curtain fell along the border of the Asian opium zone, which stretches across 5,000 miles of mountains from Turkey to Thailand. In Burma during the 1950s, in Laos during the 1970s, and in Afghanistan during the 1980s, the CIA allied with highland warlords to mobilize tribal armies against the Soviet Union and China.

In each of these covert wars, Agency assets -- local informants -- used their alliance with the CIA to become major drug lords, expanding local opium production and shipping heroin to international markets, the United States included. Instead of stopping this drug dealing, the Agency tolerated it and, when necessary, blocked investigations. Since ruthless drug lords made effective anti-communist allies and opium amplified their power, CIA agents mounting delicate operations on their own, half a world from home, had no reason to complain. For the drug lords, it was an ideal arrangement. The CIA's major covert operations -- often lasting a decade -- provided them with de facto immunity within enforcement-free zones.

In Laos in the 1960s, the CIA battled local communists with a secret army of 30,000 Hmong -- a tough highland tribe whose only cash crop was opium. A handful of CIA agents relied on tribal leaders to provide troops and Lao generals to protect their cover. When Hmong officers loaded opium on the CIA's proprietary carrier Air America, the Agency did nothing. And when the Lao army's commander, General Ouane Rattikone, opened what was probably the world's largest heroin laboratory, the Agnecy again failed to act.

"The past involvement of many of these officers in drugs is well known," the CIA's Inspector General said in a still-classified 1972 report, "yet their goodwill ... considerably facilitates the military activities of Agency-supported irregulars."

Indeed, the CIA had a detailed knowledge of drug trafficking in the Golden Triangle -- that remote, rugged corner of Southeast Asia where Burma, Thailand, and Laos converge. In June 1971, The New York Times published extracts from another CIA report identifying twenty-one opium refineries in the Golden Triangle and stating that the "most important are located in the areas around Tachilek, Burma; Ban Houei Sai and Nam Keung in Laos; and Mae Salong in Thailand." Three of these areas were controlled by CIA allies: Nam Keung by the chief of CIA mercenaries for northwestern Laos; Ban Houei Sai by the commander of the Royal Lao Army; and Mae Salong by the Nationalist Chinese forces who had fought for the Agency in Burma. The CIA stated that the Ban Houei Sai laboratory, which was owned by General Ouane, was "believed capable of processing 100 kilos of raw opium per day," or 3.6 tongs of heroin a year -- a vast output considering the total yearly U.S. consuption of heroin was then less than ten tons.

By 1971, 34 percent of all U.S. soldiers in South Vietnam were heroin addicts, according to a White House survey. There were more American heroin addicts in South Vietnam than in the entire United States -- largely supplied from heroin laboratories operated by CIA allies, though the White House failed to acknowledge that unpleasant fact. Since there was no indigenous local market, Asian drug lords started shipping Golden Triangle heroin not consumed by the GIs to the United States, where it soon won a significant share of the illicit market.

I took leave from graduate school in 1971 to investigate the Asian heroin trade. When I went to Laos, I was able to meet the Lao army commander, General Ouane, who graciously showed me his opium trafficking ledger - titled Controle de Opium au Laos. By contrast, the U.S. mission attempted a cover-up, insisting that the general and his subordinates were not involved in the drug trade. After I hiked into a remote Hmong village to investigate opium shipments on Air America, CIA Hmong mercenaries ambushed my research team, firing bursts from automatic weapons and forcing my local guards to return fire so we could escape to safety. Several days later, a CIA operative, George Cosgrove, threatened to kill my Lao interpreter, Phin Manivog, unless I stopped asking questions.

When my book The Politics of Heroin was in press, the CIA's deputy director for plans pressured my publisher to suppress it. And the Agency's general counsel demanded the right to prior review of my still-unpublished manuscript. In writing to request a copy of the galley proofs, CIA counsel Lawrence Houston assured my publisher that he "could demonstrate to you that a considerable number of Mr. McCoy's claims about this Agency's alleged involvement are totally false and without foundation."

To encourage compliance, he closed with his rather chilling view that no "responsible publisher would wish to be associated with an attack on our Government involving the vicious international drug traffic." After my publisher capitulated and the CIA reviewed my manuscript for a week, the Agency's general counsel wrote back, insisting that the "CIA has never been involved in the drug traffic and is actively engaged in fighting against it." In the midst of making his case that my book was unworthy of publication, he admitted that CIA agents had recently interviewed most of my sources in Laos, including General Ouane, and they had, as one would expect, retracted statements attributed to them in my manuscript.

After my book was published unaltered, the Agency mounted a successful disinformation campaign to discredit my findings that its Laotian allies were trafficking in opium and heroin. The CIA persuaded the House Foreign Relations Committee that my allegations were baseless.

Simultaneously, however, the CIA's own Inspector General conducted a classified internal investigation that eventually confirmed my allegations of drug-dealing by CIA assets. Five years later, long after my charges had been forgotten, a Senate Committee published a few revealing fragments from this secret report buried in the back pages of its massive investigation into CIA assassinations.

The Inspector General had, back in 1972, expressed "some concern" that "local officials with whom we are in contact ... have been or may be still involved in one way or another in the drug business. ... What to do about these people is a particularly troublesome problem, in view of its implications for some of our operations, particularly in Laos." In something akin to a reprimand of the Vientiane station, the Inspector General suggested that "the station will need additional guidance from headquarters" in understanding "the possible adverse repercussions" of its ties to Lao drug dealers. "The war has clearly been our overriding priority in Southeast Asia, and all other issues have taken second place," the Inspector General concluded in defense of the Agency's long history of inaction on drugs in Laos. "It would be foolish to deny this, and we see no reason to do so."

By the mid-1970s, Golden Triangle heroin syndicates were supplying an estimated 30 percent of U.S. demand. But Asia was too far away and the connections were too indirect for allegations of CIA complicity to pack any political punch. Most Americans did not see the equation between Agency alliances with distant Asian drug lords and heroin-dealing in their own cities.

Within a few years, the currents of global geopolitics then shifted in ways that pushed the CIA into new alliances with drug traffickers. In 1979, the Soviets invaded Afghanistan and the Sandinista revolution seized Nicaragua, prompting two CIA covert operations with some revealing similarities.

During the 1980s, while the Soviets occupied Afghanistan, the CIA, working through Pakistan's Inter-Service Intelligence, spent some $2 billion to support the Afghan resistance. When the operation started in 1979, this region grew opium only for regional markets and produced no heroin. Within two years, however, the Pakistan-Afghanistan borderlands became the world's top heroin producer, supplying 60 percent of U.S. demand. In Pakistan, the heroin-addict population went from near zero in 1979 to 5,000 in 1981 and to 1.2 million by 1985 -- a much steeper rise than in any other nation.

CIA assets again controlled this heroin trade. As the Mujaheddin guerrillas seized territory inside Afghanistan, they ordered peasants to plant opium as a revolutionary tax. Across the border in Pakistan, Afghan leaders and local syndicates under the protection of Pakistan Intelligence operated hundreds of heroin laboratories. During this decade of wide-open drug-dealing, the U.S. Drug Enforcement Agency in Islamabad failed to instigate major seizures or arrests.

In May 1990, as the CIA operation was winding down, The Washington Post published a front-page expose charging that Gulbudin Hekmatar, the CIA's favored Afghan leader, was a major heroin manufacturer. The Post argued, in a manner similar to the San Jose Mercury News's later report about the contras, that U.S. officials had refused to investigate charges of heroin dealing by its Afghan allies "because U.S. narcotics policy in Afghanistan has been subordinated to the war against Soviet influence there."

In 1995, the former CIA director of the Afghan operation, Charles Cogan, admitted the CIA had indeed sacrificed the drug war to fight the Cold War. "Our main mission was to do as much damage as possible to the Soviets. We didn't really have the resources or the time to devote to an investigation of the drug trade," he told an Australian television reporter. "I don't think that we need to apologize for this. Every situation has its fallout. ... There was fallout in terms of drugs, yes. But the main objective was accomplished. The Soviets left Afghanistan."

Again, distance and complexity insulated the CIA from any political fallout. Once the heroin left Pakistan's laboratories, the Sicilian mafia managed its export to the United States, and a chain of syndicate-controlled pizza parlors distributed the drugs to street gangs in American cities, according to report by the Drug Enforement Agency. Most ordinary Americans did not see the links between the CIA's alliance with Afghan drug lords, the pizza parlors, and the heroin on U.S. streets.

In Central America, proximity simplified the political equation. According to sections of the San Jose Mercury News story that the mainstream press have not contested, this "dark alliance" began in the early 1980s when the contra revolt against Nicaragua's leftist Sandinista government was failing for want of funds. In 1981, the CIA hired ex-Nicaraguan army Colonel Enrique Bermudez to organize what became the main contra guerrilla army, the Nicaraguan Democratic Front. Bermudez then accepted funds from two Nicaraguan exiles active in the crack trade to supplement meager Agency funding.

In California, Danilo Blandon, the former director of Nicaragua's farm-marketing program, used his business skills to open a new drug-distribution network. Blandon allied with the rising young black drug dealer "Freeway Rick" Ross to convert tons of cocaine into low-cost crack for a growing market among the city's poor African Americans. With supplies of cheap cocaine from Central America, Ross undercut rival dealers and built a booming drug business that spread up the California coast and across the Midwest. Ross and Blandon avoided arrest for years. But in the late 1980s, the operation lost its contra connection. Both dealers were soon arrested on drug charges. Freeway Rick started serving a ten-year sentence, while the Justice Department intervened to free the contra-connected Blandon and send him home as a well-paid Drug Enforcement Agency (DEA) informant.

Other responsible sources have made similar allegations about contra involvement in cocaine smuggling to the United States. In December 1985, the Associated Press issued a story about the contra alliance with cocaine smugglers. "Nicaraguan rebels operating in northern Costa Rica have engaged in cocaine trafficking," wrote AP reporters Robert Parry and Brian Barger, "in part to help finance their war against Nicaragua's leftist government, according to U.S. investigators and American volunteers who work with the rebels." As evidence, the reporters cited a CIA intelligence report noting "the contras in Nicaragua had bought aircraft with drug profits."

After lengthy investigations, a U.S. Senate subcommittee chaired by John Kerry, the Democratic Senator from Massachusetts, issued a report in 1988 concluding that "individuals associated with the contra movement" were traffickers; cocaine smugglers had participated in "contra supply operations"; and the U.S. State Department had made "payments to drug traffickers ... for humanitarian assistance to the contras, in some cases after the traffickers had been indicted ... on drug charges."

During this decade of contra operations from bases in southern Honduras, the region was effectively closed to narcotics investigations. In 1983, at the height of the contra war, the DEA suddenly shut down its Honduran office even though the agent there, Tomas Zepeda, had, in his words, "generated a substantial amount of useful intelligence" about Honduran military involvement in the cocaine traffic to the United States. "The Pentagon made it clear that we were in the way," an anonymous DEA agent explained. "They had more important business." As host to the main contra bases and the CIA's supply operation, the Honduran military, like the commander of the Royal Laotian Army and Pakistani Intelligence, were spared investigation of their involvement in drug trafficking.

Looking back on these tangled, covert-action alliances, I do not believe that the CIA actually targeted any group of Americans for drug use --- whether GIs in South Vietnam or African Americans in South Central.

But it is indisputable that the CIA allied with warlords, colonels, and criminals who used the Agency's protection to deal drugs. CIA agents regarded narcotics as mere "fallout." For CIA agents in Laos, the heroin epidemic among GIs in Vietnam was only "fallout." For agents in Pakistan and Central America, drug shipments to America were just "fallout."

For Vietnam vets and African Americans who live with the pain of this fallout, such CIA involvement remains profoundly disturbing. And no amount of CIA blanket denials, no amount of backpedaling from the executive editor of the San Jose Mercury News, no amount of handwringing from The Washington Post, can make that pain go away.