Long before Roy Carlson’s Bank of America fronted the seed money to launch BCCI into the darker recesses of Pakistan, the Shah of Iran had been a major depositor at an equally nefarious bank based in Sydney, Australia, but with a far-flung network that spanned the globe.
As with his BCCI deposits, the Shah understood that his contributions Down Under were funding “black operations” for the CIA. In fact, the Shah single-handedly bankrolled a very large chunk of the Vietnam War.
The Shah’s investment adviser was CIA agent Kent Crane. Crane often flew from Tehran to Sydney with Rear Admiral Earl “Buddy” Yates. Yates served as Chief of Policy and Planning for the entire Pacific Command during the Vietnam War. He was a member of Naval Task Force-157 where he worked with Ted Shackley, Ed Wilson and the others who had set up shop in Tehran where they peddled arms to the Shah. While Crane was flying petrodollars to Australia, Ed Wilson was flying the Shah’s deposits north to the Swiss branch of the same bank. Just as Shackley & Company were arriving in Tehran, Yates jetted to Sydney to join the staff of Nugan Hand Bank.
Frank Nugan and Michael Hand founded Nugan Hand in 1969. Nugan was a prominent Sydney businessman with all the right connections. Hand was an American Green Beret and military intelligence officer who worked in Laos for Major General Richard Secord’s CIA opium courier Air America. Ted Shackley and Tom Clines were the CIA’s top two officials in Laos at the time. In 1976, Hand helped Secord, who was by then heading MAAG in Iran, to procure a spy vessel for the Iranian Navy. Ten of the nineteen stockholders in Nugan Hand Bank worked with either Air America or Continental Services, a subsidiary of Continental Airlines and CIA contract airline in SE Asia.
Air America re-supplied the CIA-created Meo Army in Laos, which fought a proxy war for the US against the communist Pathet Lao, whom had overrun the Plain of Jars region in 1964. Air America ferried weapons into remote Meo villages, then returned to its base at Long Tieng loaded with opium grown by the villagers.
Long Tieng was also the headquarters of General Vang Pao, who became the premier opium warlord in the Golden Triangle during the Vietnam War. Later he would serve Chinese intelligence in the Balkanization of Vietnam, Cambodia and Laos. By keeping these three nations in a permanent state of war both the Chinese and the Americans would benefit for many years. Some speculate that this was a key feature of the détente signed by President Nixon and Chinese Premier Zhou En-lai, who had himself been the target of CIA assassination attempts after he helped organize the ground-breaking 1955 Bandung Conference of Third World leaders.
When the Pathet Lao prevailed, taking over the entire country of Laos, the CIA abruptly pulled out of the Plain of Jars, leaving tens of thousands of Meo villagers to be slaughtered, ala Kurdistan. Buddy Yates of Nugan Hand Bank did manage to relocate 3,000 Meo to Grand Turk Island in the Caribbean. But the relocation was hardly humanitarian in nature. The CIA wanted a trained paramilitary force to guard the Turks & Caicos, which was to become an offshore banking center, an Enron partnership haven and an important transshipment point for Colombian cocaine. In 1982 the Chief Minister of Turks & Caicos was arrested in Miami with two other key government officials on charges of conspiring to smuggle cocaine.
At Long Tieng CIA opium was transferred from Air America planes to Vang Pao’s private airline, Xieng Khouang Air Transport, which then flew the opium into the Laotian capital Vientiane. Vang Pao’s airline was 100% funded by USAID. Since 1959, the US had also been funding Laotian Cabinet Minister and outspoken right-wing General Phoumi Nosavan. While Vang Pao handled the CIA’s Long Tieng opium, Nosavan and his partner, General Ouane Rattikone held a monopoly over the importation of Burmese Shan and Chinese Kuomintang opium into Laos.
The CIA had been meddling in Laos since the late 1950’s, first employing missionaries and Thai commandos to train and advise its surrogate Meo Army. According to Edward Lansdale, former Kennedy Defense Department official, by 1959 the CIA had sent eight Green Beret units into Laos. By 1963 a 100,000-man army had been assembled.
Highly decorated Green Beret Paul Withers said his most important task was to buy up the entire opium crop from certain villages in the region. CIA operative Del Rosario worked for Continental Air Service. He says that as late as 1971 Continental baggage coming out of Laos was marked either “rice” or “diverse”, the latter of which meant opium. Rosario would get messages over the phone saying, “…the customer is here…keep an eye on the planes from Ban Houai Sai. We’re sending some goods and somebody’s going to take care of it. Nobody’s allowed to touch anything”.
The CIA set up a Special Operations Group (SOG) in Laos headed by Ted Shackley and Tom Clines. SOG members included John Singlaub, Richard Secord, Watergate plumber Raphael Quintero, Nicaraguan contra handler Donald Gregg and a young Marine lieutenant named Oliver North.
SOG trained special Meo sparrow units which assassinated more than 100,000 civilians in Laos, Cambodia and Vietnam between 1966 and 1975. SOG was the key component of Operation Phoenix, which was directly supervised by CIA Director Bill Colby and William Sullivan, later US Ambassador to Iran. Operation Phoenix was funded through Vang Pao, Nosavan and Rattakone heroin sales, as were many of the CIA’s endeavors overseen by Colby, who moonlighted as legal and political adviser for Nugan Hand Bank and was the bank’s “branch manager” in Panama City.
Miami mobster Santos Trafficante followed the Shackley Operation Mongoose crew to SE Asia. When Vang Pao’s opium reached Vientiane, it would be delivered to heroin labs set up in that city. General Phoumi Nosavan’s Burmese opium arrived at these same refineries, which were run by General Ouane Rattikone, but owned by a more familiar entity.
When the Pathet Lao took the capital city they found that by far the largest of these labs doubled as the national bottling plant for Pepsi Cola. The plant’s construction had been paid for by US taxpayers under a USAID program. The lawyer who landed this corporate welfare package for Pepsi was soon-to-be-President Richard Nixon.
From Vientiane, the heroin moved down the Ho Chi Minh Trail, where, according to New York Times reports, US-allied South Vietnamese Special Forces picked it up and flew it to military bases in Saigon.
Heroin traffic intensified in 1963 following the CIA-sponsored assassination of Vietnamese President Ngo Dien Diem and his brother Ngo Dinh Nhu. Orchestrated by CIA operative Lucien Conein, the coup gave rise to a new Opium Monopoly led by US puppets General Nguyen Ngoc Loan and Premier Nguyen Cao Ky.
Ky worked closely with Edward Lansdale in overseeing the transport of Vientiane heroin to Saigon. While heroin traffic exploded into Saigon, US defense contractors made sure that the arms pipeline going north up the Ho Chi Minh Trail was also bursting at the seams.
While Vang Pao ran the opium trade in Laos, the CIA was also working with Major On Chan and U Ba Thein, whose Shan people in Burma were at the center of a guns for opium exchange in Kentung State. The Shan had been drawn into CIA designs back in 1950 when the Company regrouped remnants of the Chinese Kuomintang Nationalist Army (KMT) which had been defeated by Mao Zedong’s Revolutionary Army during the Chinese Revolution.
From sanctuary in the Burmese Shan States, the CIA trained KMT rebels who fought a protracted guerrilla war against the Maoist government in China which overthrew the Nationalist government of Chaing Kai-Shek in 1947. CIA-predecessor OSS (Office of Strategic Services) arrived in China to train KMT troops by 1943 in a futile attempt to head off the Chinese Revolution.
Claire Chennault and William Pawley’s 14th Air Force, better known as the Flying Tigers, arrived in China’s Yunnan Province where the poppy fields were in full bloom. Pawley was later sighted on a Bay of Pigs invasion boat alongside Santos Trafficante. Pawley owned sugar refineries and the national bus line of Cuba before Castro’s revolutionaries overthrew the Batista regime.
OSS Detachment 202 set up bases in Kunming and Shanghai. Members included E. Howard Hunt, Lucien Conien, Willis Bird, Mitchell Werbell III and Paul Helliwell.
Howard Hunt was later a Watergate Plumber and Bay of Pigs veteran whose Miami Double-Chek CIA front was utilized by Ted Shackley and Santos Trafficante during Operation Mongoose. He oversaw the 1954 CIA coup that deposed Guatemala’s leftist President Jacobo Arbenz. Hunt was in Dallas the day President Kennedy was assassinated and is identified by many researchers as one of the “tramps” who lingered on the railroad tracks behind the grassy knoll from where the fatal shots were fired.
Lucien Conein worked with Edward Lansdale, who later ran the Bay of Pigs fiasco and was also involved in the Kennedy assassination. Conein worked with the Mixed Airborne Commando Group in taking over the SE Asian heroin trade from the French Connection. Conein and Lansdale installed Vietnamese President Nguyen Van Thieu to run the Saigon heroin trade and in 1963 orchestrated the overthrow of the Diem regime in Vietnam to install the Opium Monopoly government.
Willis Bird set up a business in Bangkok that specialized in building airstrips in Laos to facilitate opium exports. Mitchell Werbell III would become one of the world’s foremost arms dealers and a paramilitary trainer for corporate America’s private intelligence networks.
Paul Helliwell went on to found Sea Supply, the ugly stepfather to Air America. Long before Secord’s boys were flying Vang Pao opium into Long Tieng, Chennault’s Flying Tigers, Helliwell’s Sea Supply and another CIA airline, Civil Air Transport, were shipping KMT opium out of Burma.
Chinese dictator Chaing Kai-Shek fled to Taiwan with China’s gold reserves to set up a government-in-exile that exists to this day. Taiwan is home to the China Lobby, which is synonymous with the SE Asian heroin trade. The acetic anhydride necessary to transform morphine into heroin is manufactured almost exclusively in Taiwan. The country’s Bamboo Union is a powerful narcotics and arms syndicate. Its Hawaiian affiliate Bishop, Baldwin, Rewald, Dillingham & Wong launders drug money for CIA operations in SE Asia. Taiwanese mercenaries and advisers, trained by the CIA, have been deployed as CIA surrogates to battle revolutionaries in places like the Philippines, Indonesia and Guatemala.
Chiang Kai-Shek’s routed KMT fighters fled to Burma, Laos and Thailand where they began cultivating poppies in the new “Golden Triangle”. By 1971 KMT caravans controlled one third of the world’s opium trade. Spearheading the KMT opium production effort was CIA liaison General Li Mi. Much KMT opium went through Vientiane, down the Ho Chi Minh trail, and into the hands of the Saigon Opium Monopoly.
But the KMT’s biggest customer was another CIA client, General Phao Srriyanonda of Thailand, who dispatched Thai military personnel to guard the Shan villages where the opium was grown. Another Thai official linked to both the CIA and the opium trade is General Kriangsak Chamanand, a graduate of the US military’s National Defense University who seized power in a bloody coup in 1976. Chamanand supplied mercenaries to the CIA for its attacks on the Laotian government while receiving bribes from three different rebel armies controlling Golden Triangle opium who also enjoyed CIA support.
In 1973 the CIA prevented the DEA from investigating Lu Hsu-Shui, one of the top four drug smugglers in the Golden Triangle, saying he was an informant in a “high-level sensitive national security operation”. That same year the CIA shut down a case against Thai national Puttaporn Khram Khruan, who was nabbed at Chicago O’Hare Airport carrying 59 pounds of heroin. The CIA said the case would, “prove embarrassing because of Mr. Khruan’s involvement with CIA activities in Thailand, Burma and elsewhere”. A former KMT officer has testified that the CIA knew Khruan was a major heroin trafficker. In fact, Khruan was on CIA payroll. His handler was the US Consul at Chiang Mai. His job was to guard KMT Army opium caravans.
In 1977 the House Government Operations Subcommittee accused the CIA of helping an Asian heroin ring, then lying to Congress about it. That same year President Jimmy Carter refused to sign an agreement to eradicate Golden Triangle poppies.
Danish journalist Henrik Kruger penned The Great Heroin Coup. He argues that it was the OSS veterans based in Kunming, China who first got the US government involved with the drug trade. During WWII this same bunch had worked with the Corsican Mafia in Marseilles. In return for Mafia strong-arming of radical French dockworkers unions, the CIA allowed the Corsicans to ship their opium from that port, even supplying CIA chemists to formulate the smack. When the French pulled out of Vietnam in 1954, the Corsicans stayed behind to operate Air Opium. Kruger believes Nixon used the Vietnam War as a means to take control of the global drug trade.
By the end of the war 3 million Vietnamese people were dead. Hundreds of thousands more died in CIA adventures in Laos, Cambodia, Burma, Thailand and China. Thirty thousand US soldiers became heroin addicts and 70% of the world’s heroin was being supplied from the Golden Triangle.
In 1975 Cambodia fell to the Khmer Rouge whose leader Pol Pot launched a genocide that rivaled the earlier purges of Hitler and Stalin. The Khmer Rouge, with vigorous support from the CIA, killed 1.5 million Cambodians, then invaded socialist Vietnam, which had just repelled a decade-long US aggression. The Vietnamese countered by toppling the Khmer Rouge in 1979 with help from an uprising by the Cambodian people.
A socialist government led by Hun Sen was established in Cambodia, while the reactionary Khmer Rouge launched guerrilla raids from US-allied Thailand and joined long-time CIA puppet Prince Norodom Sihanouk in launching a parallel government known as the Coalition Government of Democratic Kampuchea, which the West was quick to recognize.
The CIA had sponsored the coup in Cambodia in 1970 which brought Sihanouk to power and now sent advisers and arms to Sihanouk, whose forces were under Khmer Rouge command. US officials pressured aid groups to support the Khmer Rouge with food aid. During 1989-90 peace negotiations the US insisted the Khmer Rouge be given a prominent role in the new Cambodian government. As one US negotiator put it, “No Khmer Rouge. No deal”. There was no peace deal. As Hun Sen’s troops rounded up the last Khmer Rouge guerrillas in 1998, Khmer Rouge warlord Ta Mok offered, through Thai military channels, to turn over Pol Pot to US authorities. US officials turned down the offer and Pol Pot died in 1999.
The US then pressured UN Secretary General Kofi Anan to press Hun Sen’s Cambodian People’s Party into limiting an investigation of the Khmer Rouge to only the four years which the Khmer Rouge were in power. Despite all manner of economic blackmail, the Cambodians stood their ground and on February 8, 2002 Hun Sen told the UN to take a hike and announced a sweeping investigation into the true power that lurked behind General Pol Pot and his Khmer Rouge butchers.
Dean Henderson is the author of five books:Big Oil & Their Bankers in the Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror Network, The Grateful Unrich: Revolution in 50 Countries, Das Kartell der Federal Reserve, Stickin’ it to the Matrix & The Federal Reserve Cartel. You can subscribe free to his weekly Left Hook column @www.hendersonlefthook.wordpress.com