The CIA And The Drug Trade

By James Corbett, BoilingFrogs

Despite the American public’s sorry state of denial, complacency and/or apathy on the drug trade issue, the evidence for the US government’s criminal involvement is voluminous and incontrovertible.[4] The sordid history is a long one, and dates back decades before the CIA was created to the 1920s, when the US supported Chinese nationalist leader Chiang Kai-shek, who maintained his army with profits from the opium trade.

The cultivation of what we know today as the opium poppy goes back to the beginnings of recorded history, when the Sumerians in ancient Mesopotamia cultivated what they referred to as Hul Gil, or the “joy plant.” The practice was passed down through the Assyrians to the Babylonians and from there to the Egyptians, by which time the opium trade had begun to to flourish and was fast becoming the lynchpin of international trade across the Mediterranean into Europe.

Indeed, as far back as one cares to go, control of the international opium trade has been a key factor in the rise and fall of empires.

During the 18th century, the British monopolized the opium trade in India and shipped thousands of chests of opium per year to China as a way of financing their huge trade deficit with that nation. When the Chinese cracked down on opium trafficking in the mid-19th century, the British fought two wars to ensure their Chinese opium market.

By the 1830s, American traders were already getting in on the act, with Samuel Russell’s “Russell & Company” becoming the largest American trading house in China. Russell’s cousin, William Huntington Russell, founded Skull & Bones, a secret society at Yale that has formed the core of the American intelligence establishment, a set of documentable facts that the establishment media seems eager to avoid.

The association between Skull and Bones and the American intelligence establishment from the OSS to the CIA is well-established by now, with a litany of agents, directors, and of course Director of Central Intelligence, George “Poppy” Bush himself, having been Bonesmen before being recruited for the agency. But the connection between the CIA and the international drug trade is not simply a historical one about 19th century opium traders.

Just as the British empire was in part financed by their control of the opium trade through the British East India Company, so too has the CIA been found time after time to be at the heart of the modern international drug trade.

From its very inception, the CIA has been embroiled in the murky underworld of drug trafficking.

In the late 1940s, the CIA funneled arms and funds to the Corsican Mafia in return for their assistance in breaking up widespread labour strikes in France that were threatening to establish communist control over the Old Port of Marseille. The Corsican crime syndicate, in turn, used the CIA support to set up the trafficking network known as “The French Connection” which saw heroin smuggled from Turkey to France, and shipped to the US, feeding an American heroin epidemic.

In Burma in 1950, the CIA regrouped the remnants of the defeated Nationalist Chinese Army, or KMT, to start an invasion of Southern China and draw Chinese troops away from the Korean front.

Easily beaten back by Mao’s forces, the KMT instead turned their attention to occupying Burma, imposing an opium tax on all farmers in the opium-rich Shan highlands. Members of the Burmese military claimed that the KMT opium was flown out to Thailand and Taiwan on the same unmarked C-47s that the CIA had used to supply the group in the first place.

In the 1960s and early 1970s, the CIA recruited the Laotian Hmong tribe to fight communist forces in the region. The CIA encouraged the Hmong to grow opium instead of rice to make them dependent on CIA air drops of food. The agency could then force their compliance by threatening to withdraw the food aid. To make the deal even sweeter, they even located a heroin refinery at CIA headquarters in northern Loas and used Air America, a passenger and cargo airline that was covertly owned and operated by the CIA, to export the Laotian opium and heroin. Much of it ended up in Vietnam, causing an epidemic of heroin addiction in US soldiers.

In the 1980s, the locus of opium production shifted from the Golden Triangle, where the CIA was disengaging, to the Golden Crescent, where it was engaging with the Afghan mujahedeen in their CIA-funded struggle against the Soviets. Opium became a key funding mechanism for the insurgency, and as Peter Dale Scott explained on The Eyeopener earlier this year, the correlation between CIA involvement in the region and increasing opium production was not coincidental.

Also in the 1980s, the US supported the Contras in their fight against the Sandanista government in Nicaragua. Officially barred from arming and funding the Contras by congress, the CIA came up with a scheme to sell arms to Iran and use the funds to illegally arm and supply the Contras. CIA-protected drug smugglers flew down to Nicaragua loaded with arms to supply the Contras and flew back loaded with Columbian cocaine. A decade later, investigative reporter Gary Webb used official government documents to prove that the CIA had sheltered these drug smuggling operatives and followed the trail of this cheap Columbian cocaine to the beginning of the crack epidemic in South-Central LA.

Despite the numerous, documented and fully admitted examples of CIA involvement in drug dealing in the past, the idea that the agency is still tied in with international drug traffickers is largely dismissed as the stuff of conspiracy theory.

Over the last several years, however, some sensational but under-reported stories of plane crashes in Mexico have served to focus attention once again on the issue of agency complicity in drug dealing.

In 2004, a Beech 200 was apprehended in Nicaragua with 1100 kilos of cocaine. It was bearing a false tail number for a CIA aircraft owned by a CIA shell company.

In 2006, a DC9 was seized on a jungle airstrip in the Yucatan carrying 5.5 tons of cocaine packed into 126 identical black suitcases. The plane’s owner was linked to a company called Skyway Communications, whose CEO, James Kent, had previously held contract positions supporting intelligence projects for the DoD.

In 2007, a Grumman Gulfstream II jet crashed in Mexico carrying 3.3 tons of Columbian cocaine linked to the Mexican Sinaloa drug cartel. Later it was revealed that the plane had previously been used by the CIA to carry out rendition flights to Guantanamo Bay.

In 2008, a Cessna 402c aircraft was seized in Columbia with 850 kilos of cocaine bound for the United States. The plane’s purchase history links it to a company that one ex-CIA asset has fingered as a company that has a history of being involved in US government operations.

Now, the issue of intelligence agency drug dealing has once again raised its head in spectacular fashion in a rather unlikely place: a Chicago federal courtroom.

The case revolves around the prosecution of an accused Mexican drug trafficker, Jesus Vicente Zambada Niebla. Zambada Niebla is part of the famed Sinaloa drug cartel, an organization that has risen in Calderon’s Mexico to become one of the most powerful international drug trafficking cartels in the region, if not on the globe.

His case revolves around “Fast and Furious,” an offshoot of the ATF’s Project Gunrunner which was ostensibly set up to stop the flow of illegal weapons into Mexico but has in fact allowed over 2000 guns to be smuggled under the ATF’s nose into the hands of Mexican drug gangs.

Zambada Niebla is in court on charges of serving as the logistical coordinator for the Sinaloa cartel, helping to import tons of cocaine into the us by land, rail, and air.

The only problem is that Zambada Niebla is now claiming to to be an asset of the US government. In response to this claim, US government prosecutors are attempting to invoke the “Classified Information Procedures Act” to keep classified material relation to national security out of public court proceedings.

According to a former federal agent contacted for comment on the case by Bill Conroy of NarcoNews, the invocation of CIPA means that CIA involvement in the case “is a very reasonable conclusion” and that “there is hot stuff to hide.”

Earlier this week, I had the chance to talk to Bill Conroy about the case, and about the possible relationship between the CIA and the Mexican drug cartels.

Despite the startling nature of the case, and the likelihood of agency complicity in drug trafficking into the United States yet again, the establishment media has been almost completely silent on this aspect of the Fast and Furious scandal, with Bill Conroy at NarcoNews being one of the only reporters on the beat at the moment.

Perhaps this is not surprising, given the shameful history of the American media in their coverage of CIA-drug connections in the past.

After the publication of Gary Webb’s expose on the CIA-Contra drug connections in the San Jose Mercury News in 1996, he was subjected to a fierce critique from the Washington Post, the LA Times and the New York Times. The backlash eventually forced Webb’s editors at the Mercury News to back away from the story. The CIA’s own internal investigation by Inspector General Frederick Hitz vindicated much of Webb’s reporting, but Webb remained a journalistic outcast and the story was commonly believed to be discredited.

In 2004, Gary Webb was found dead from two gunshot wounds to the head. The death was ruled a suicide.

In the end, perhaps it is a simple matter of economics. There are billions of dollars per year to be made in keeping the drug trade going, and it has long been established that Wall Street and the major American banks rely on drug money as a ready source of liquid capital.

In late 2009, Antonio Maria Costa, the head of the UN Office on Drugs and Crime, even went on record to say that it was primarily drug money that kept the American financial system afloat during the 2008 crisis, estimating that some $352 billion dollars of drug profits had been laundered via the major US banks during that time.

With those kinds of funds at stake, it is unsurprising to see a media-government-banking nexus develop around the status quo of a never-ending war on drugs, aided, abetted and facilitated by the modern-day British East India Company, the CIA.

As Presidential candidate Ron Paul pointed out during his 1988 run for the White House, it is not until the people take back their government and repeal the drug laws that help to maintain this phony drug war and artificially inflate the prices of this age-old scourge that we can begin to actually deal with the root of the drug problem, and at the same time remove one of the key funding sources for the CIA’s illegal operations.

Afghanistan: CIA’s Shady History of Drug Trafficking By Abby Martin

Afghanistan remains the longest military quagmire in US history. Aside from troops still occupying the country, thousands of private contractors are on the ground that the Pentagon can’t even account for.

The Centers for Disease Control warned of record-breaking numbers of heroin deaths in the United States. “Heroin use more than doubled among young adults ages 18–25 in the past decade,” the CDC reported.

In the same month, it was reported that opium production is stronger than ever in Afghanistan, which now produces 90 percent of the world’s supply of the plant that’s refined to create heroin. This rise in production would have been impossible prior to the U.S.-led invasion, and it comes despite some $8.4 billion spent in counternarcotics efforts by the U.S., specifically designated to wipe out opium production in Afghanistan.

The Taliban had successfully eradicated the opium crop in the Golden Crescent before the US invasion. Now, more than 90% of the world’s heroin comes from the war torn country. Despite the United States spending nearly $8 billion to fight the Afghan narcotics trade, the country is producing more opium than ever.

Immediately following the October 2001 invasion, opium markets were restored. By early 2002, the opium price (in dollars/kg) was almost 10 times higher than in 2000. In 2001, under the Taliban opiate production stood at 185 tons, increasing  to 3400 tons in 2002 under the US sponsored puppet regime of President Hamid Karzai.

After more than fourteen years of military occupation, Afghanistan’s opium trade isn’t just sustaining, it’s thriving more than ever before. According to a recent report from the UN Office on Drugs and Crime, 2013 saw opium production surge to record highs:

“The harvest this May resulted in 5,500 metric tons of opium, 49 percent higher than last year and more than the combined output of the rest of the world.”

Wow, that’s a lot of opium – and a lot of money being made. Under the watchful eye of the U.S., opium use expanded to new parts of Afghanistan and growers now make use of modern, advanced agricultural technologies.

During the eighties, the CIA financially and logistically backed anti-communist contras in Nicaragua who also happened to be international drug traffickers. In the mid-1980s, Afghanistan produced about 20 percent of the world’s opium. Today it produces more than 80 percent.

Academi, better known by its former name, Blackwater earned $569 million from counternarcotics contracts in Afghanistan. The notorious company has been the biggest beneficiary of counternarcotics expenditure in the war-torn country.

Former Afghan President Hamid Karzai’s late half-brother, Ahmed Wali Karzai, was deeply involved in the heroin trade. Mr. Karzai has denied being involved in the drug trade.

There is no conclusive proof that the CIA is physically running opium out of Afghanistan. However, it’s hard to believe that a region under full US military occupation – with guard posts and surveillance drones monitoring the mountains of Tora Bora – aren’t able to track supply routes of opium exported from the country’s various poppy farms (you know, the ones the US military are guarding).

In today’s globalized world of rule-for-profit, one can’t discount the role that multinational corporations play in US foreign policy decisions either. Not only have oil companies and private military contractors made a killing off the occupation, big pharmaceutical companies, which collectively lobby over 250 million dollars annually to Congress, need opium latex to manufacture drugs for this pill happy nation.

Multinational corporations are in it for the long haul, despite how low public support is for the war. A little mentioned strategic pact has already been signed that will allow a US troop presence to remain in Afghanistan until 2024.

Clearly, this war is meant to be sustained.

The revenues generated from the CIA sponsored Afghan drug trade are sizeable. The Afghan trade in opiates constitutes a large share of the worldwide annual turnover of narcotics, which was estimated by the United Nations to be of the order of $400-500 billion. (Douglas Keh, Drug Money in a Changing World, Technical document No. 4, 1998, Vienna UNDCP, p. 4. See also United Nations Drug Control Program, Report of the International Narcotics Control Board for 1999, E/INCB/1999/1 United Nations, Vienna 1999, p. 49-51, and Richard Lapper, UN Fears Growth of Heroin Trade, Financial Times, 24 February 2000). At the time these UN figures were first brought out (1994), the (estimated) global trade in drugs was of the same order of magnitude as the global trade in oil.

The IMF estimated global money laundering to be between 590 billion and 1.5 trillion dollars a year, representing 2-5 percent of global GDP. (Asian Banker, 15 August 2003). A large share of global money laundering as estimated by the IMF is linked to the trade in narcotics.

Based on recent figures (2003), drug trafficking constitutes “the third biggest global commodity in cash terms after oil and the arms trade.” (The Independent, 29 February 2004).

Moreover, the above figures including those on money laundering, confirm that the bulk of the revenues associated with the global trade in narcotics are not appropriated by terrorist groups and warlords, as suggested by the UNODC report.

There are powerful business and financial interests behind narcotics. From this standpoint, geopolitical and military control over the drug routes is as strategic as oil and oil pipelines.

However, what distinguishes narcotics from legal commodity trade is that narcotics constitutes a major source of wealth formation not only for organized crime but also for the US intelligence apparatus, which increasingly constitutes a powerful actor in the spheres of finance and banking.

The multi-billion dollar revenues of narcotics are deposited in the Western banking system. Most of the large international banks together with their affiliates in the offshore banking havens launder large amounts of narco-dollars.

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank’s $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on the week of the court settlement.

The conclusion to the case was only the tip of an iceberg, demonstrating the role of the “legal” banking sector in swilling hundreds of billions of dollars – the blood money from the murderous drug trade in Mexico and other places in the world – around their global operations, now bailed out by the taxpayer.

At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United Nations office on drugs and crime, said he had evidence to suggest the proceeds from drugs and crime were “the only liquid investment capital” available to banks on the brink of collapse. “Inter-bank loans were funded by money that originated from the drugs trade,” he said. “There were signs that some banks were rescued that way.”

Antonio Maria Costa, who was executive director of the UN’s office on drugs and crime from May 2002 to August 2010, charts the history of the contamination of the global banking industry by drug and criminal money since his first initiatives to try to curb it from the European commission during the 1990s. “The connection between organized crime and financial institutions started in the late 1970s, early 1980s,” he says, “when the mafia became globalized.”

Until then, criminal money had circulated largely in cash, with the authorities making the occasional, spectacular “sting” or haul. During Costa’s time as director for economics and finance at the EC in Brussels, from 1987, inroads were made against penetration of banks by criminal laundering, and “criminal money started moving back to cash, out of the financial institutions and banks. Then two things happened: the financial crisis in Russia, after the emergence of the Russian mafia, and the crises of 2003 and 2007-08.

“With these crises,” says Costa, “the banking sector was short of liquidity, the banks exposed themselves to the criminal syndicates, who had cash in hand.”

New York and London, have become the world’s two biggest laundries of criminal and drug money, and offshore tax havens. Not the Cayman Islands, not the Isle of Man or Jersey. The big laundering is right through the City of London and Wall Street.

[British] Financial Services Authority’s legal advice: it has been advised that the confidentiality of banking and bankers takes primacy over the public information disclosure act. That is how the priorities work: secrecy first, public interest second.

WHERE IS IT ALL COMING FROM?

This problem is unlikely to go away anytime soon. There are as many opioid prescriptions written annually in the US as there are adults. With just 5% of the world’s population, the US consumes 80% of its opioids. And the impact goes beyond the health and wellness of the population.

Afghanistan supply’s about 90% of the worlds opium. We arrived in 2001. In the following nine years opium production has surged 700%. Recording all time record harvests beginning around 2010.

During the time opium production was being ramped up in Afghanistan, Mexico was retooling their ability to convert ever larger supply’s of opium into increasingly potent heroin and developing new infrastructure to transport it.

During the decade or so all this was going on in Afghanistan and Mexico, scripts here in America for Oxycontin, Fentanyl, Hydrocodone and the like were wildly available to any person claiming chronic pain. Nothing was done to confirm the claims of pain, sorta like the stated income, liar loans that set up the housing collapse. Basically scripts were available to almost anyone for the asking.

That all ended one day in 2011.

Almost overnight The Oxycontin and Fentanyl was turned into useless plastic and millions of scripts across the country were shut down with the exception of those few in truly chronic pain.

Simultaneously and amazingly as if by magic, that very day every city in America suddenly had a fresh two ton supply of high quality vary affordable heroin. In fact the prices have never been lower and the quality never higher.

At the start of the ’60s over 80% of black households were two parent homes and it was also the early ’60’s when heroin started mysteriously flooding into black neighborhoods all across the nation. This was a time when blacks were routinely denied jobs or any way to support their families. In 1964 President Johnson and the Democrats declared “War on Poverty” suddenly plenty of cash and housing became available to poor families with children and it only had one rule (besides income). “No adult male (the father) is to live in the home of family receiving aid” This rule was vigorously enforced with random unannounced home inspections. They would go through your closets and drawers looking for any sign of a man (the father) living in the home. I know this, I lived it, I remember it, as if it were yesterday. This strange lady opening my drawers looking at my stuff and my mom freaking out if her boyfriend ever left something of his at the house. This went on for over a generation. Having more children was encouraged by having no limits on the number and increasing benefits for every additional child. Marriage for young women was discouraged by the simple fact you lose that safety net and it just became a way of life. Before all this the black family was a strong one, headed by men tempered by 300 years of slavery who demanded strict discipline and control.

Johnson and the Democrats managed to break the back of the black family in a generation. The results of blacks raised without a father being self-evident. They turned the greatest country in the world into a zoo. Fuck da police.

Prohibition KILLS

America is the largest drug market in the world. We’re 5 percent of the world’s population — we consume 25 percent of the world’s illegal drugs. Mexico has the misfortune to share a 2,000 mile border with the largest drug market in the world. At the end of the day, they’ll run out of products. It’s the illegality that makes those territories so valuable. If you criminalize anything only criminals can sell it. If only criminals can sell it, there’s no recourse to law, there’s only recourse to violence. That’s created the cartels. It’s our simultaneous appetite for — and prohibition of — drugs that makes those border territories worth killing for.

On the effect legalizing marijuana (just in Washington and Colorado) has had on Mexican trafficking

Just two states that have legalized marijuana, do you know what’s happened in Mexico? Forty percent of Mexican marijuana imports, they’ve been cut by 40 percent. In Durango and Sinaloa, where most of the marijuana is grown, they’ve almost stopped growing it now, because they can’t compete with the American quality and the American market. I’m not making this up; you get this from Customs and from DEA, from the people who are trying to intercept it on the border and judge how much is coming through as a percentage of how much they seize, and what they’re telling us is it’s down 37 percent over the last two years. So by stopping fighting, just two states stopping fighting the war on that drug, it has been effective.

Recognize drug laws as the price-support program that they are. If this stuff was trading at its actual cost, without the illegality premium, there wouldn’t be enough money in drugs to support the cartels. But don’t take my word for it, just ask Al Capone. Notice gangsters don’t sell liquor any more. And there are no more drive-bys by bootleggers.

Afghan heroin & the CIA By Andrew G. Marshall

This report is about American and British involvement in the Afghan drug trade in opium, focusing on the history of such involvement, and the nature of the drug trade since the 2001 occupation of Afghanistan. Today, Afghanistan supplies “more than 90 per cent of the world’s illicit opium, from which heroin is made,”[1] so who’s profiting from the trade?

In 2002, former Additional Secretary in the Cabinet Secretariat of the Government of India wrote that, in regard to the failure to combat the rise in opium production, “this marked lack of success in the heroin front is due to the fact that the Central Intelligence Agency (CIA) of the USA, which encouraged these heroin barons during the Afghan war of the 1980s in order to spread heroin-addiction amongst the Soviet troops, is now using them in its search for bin Laden and other surviving leaders of the Al Qaeda.”[21]
The Hindu reported in 2008 that, “90 per cent of the heroin sold in Russia comes from Afghanistan,” and Putin was quoted as saying, “Unfortunately, they (NATO) are doing nothing to reduce the narcotic threat from Afghanistan even a tiny bit,” and that the coalition forces were “sitting back and watching caravans haul drugs across Afghanistan to the former Soviet Union and Europe.” The article then reported that, “according to unconfirmed reports the U.S. military transport aviation is used for the delivery of drugs from Afghanistan to the American airbases, Ganci in Kyrgyzstan and Incirlik in Turkey,” and that, “It has been reported earlier that the CIA is involved in Afghanistan’s opium production, or is at least protecting it.” One Russian journalist quoted anonymous Afghan officials as saying, “85 per cent of all drugs produced in southern and southeastern provinces are shipped abroad by U.S. aviation.”[22]

Who Profits from the Drug Trade? Wall Street and Big Banks

Michel Chossudovsky describes the heroin trade as a “hierarchy of prices,” with the drug’s street price, (what it is sold for in largely Western cities around the world), is 80 to 100 times the price paid to the farmers who cultivate it in Afghanistan.[25] The IMF reported that in the late 1990s, money laundering accounted for 2-5% of the world’s GDP, and that a large percentage of the 590 billion to 1.5 trillion dollars in annual money laundering is “directly linked to the trade in narcotics.” This lucrative trade in narcotics produces profits which are “laundered in the numerous offshore banking havens in Switzerland, Luxembourg, the British Channel Islands, the Cayman Islands and some 50 other locations around the globe.” These offshore havens “are controlled by major Western banks and financial institutions” which “have a vested interest in maintaining and sustaining the drug trade.”

An example of the interest of Wall Street and London bankers in the international drug trade, we can look to Colombia and the FARC rebel group. In “1999, NYSE [New York Stock Exchange] Chairman Dick Grasso traveled to Colombia and met with the leader of the FARC rebels controlling the southern third of the country.” “Grasso had asked the Colombian rebels to invest their profits in Wall Street.”[27] The Associated Press reported that Grasso told the rebel leader to, “make peace and expect great economic benefits from global investors,” and invited the rebel leader to visit Wall Street.[28] To allow for drug investment in Western financial institutions, “major banks like Citigroup, Bank of America, Morgan Stanley, Deutsche Bank, and JPMorgan Chase all offer private client services for the very wealthy with very few questions asked.”

It is not surprising that opioid and opiate medication abuse is on the rise because people can easily get such drugs online without a prescription, not to mention the fact that heroin continues to flow into the country despite the War on Drugs.

When I was growing up, I use to fight my brothers until I learned that’s a tactic, called ‘divide and conquer’. So then I fought the police until I learned that they are only pawns. Cops write tickets but politicians write the laws. So then I fought the government until I saw them taking orders from their campaign contributors, the corporations. So, now I fight CEOs, generals and robber barons. The corporate elite who bought the government and turned paradise into military waste.

We have given them every benefit of the doubt, every chance to reform, we can not in good conscience continue to wait and hope. The time is now, we must act. They won’t listen until we make some noise.

Stay Informed: 

Federal Agents Allowed Tons Of Cocaine To Be Smuggled Into The U.S.

CNN: CIA admits it overlooked Contras’ links to drugs

Fast and Furious Scandal: New Details Emerge on How the U.S. Government Armed Mexican Drug Cartels