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Large Opium Trade Is Product Of War

The second and probably
major, route is from Burma or Laos
to Saigon or to ocean drops in the
Gulf of Siam, then it goes either
through the Middle Last and
Marseilles to the U.S. or through
Hong Kong and Singapore to the
West Coast.

A final route runs directly from
outposts held by Nationalist
Chinese troops in Thailand to
Taiwan and then to the U.S. by a
variety of means.

One of the most successful of
the op entrepreneurs who travel
these routes, a time reporter wrote
in 1967. P. Chan Chi-foo, a
half Chinese, half-Shan Burmese
modern day warlord who might
have stepped out of a Joseph
Comedy adventure yarn.

Mr. Chan is a soft-spoken,
mild-mannered man in his late
thirties who, it is said, is totally
ruthless. He has tremendous
knowledge of the geography and
people of northwestern Burma and
is said it move easily among them,
conversing in several dialects.

Yet he is also able to deal
comfortably with bankers and
other businessmen who finance his
operations from such centers as
Bangkok and Vientiane. Under
Chan Chi-foo's command are from
1000-2000 well-armed men, with
the feudal hierarchy spreading
down to encompass another 3000
hill tribesmen, porters, hunters and
opium growers who pay him fealty
and whom he regards about the
same as the more than 500 small
mules he uses for transport.

Operation

Moving the opium from Burma
to Thailand or Laos is a big and
dangerous operation. One of Chan's
caravans, says one awe-struck
observer, may stretch in single file
for well over a mile and may
include 200 mules, 200 porters,
200 cooks and camp attendants,
and about 400 armed guards.

Such a caravan can easily carry
15 to 20 tons of opium worth
nearly a million dollars when
delivered to the syndicate men in
Laos or Thailand.

To get his caravans to market,
however, Chan must pay a price,
for the crucial part of his route is
heavily patrolled not by Thais or
Laotians but by nomadic Nationalist
Chinese or Kuomintang (KNT)
troops. Still supported by the ruling
KMT or Taiwan. Generalissimo
Chiang Kai-shek's 93rd Division
controls a major part of the opium
flowing out of Burma and Thailand.
Kai-shek's 93rd Division controls a
major part of the opium flowing
out of Burma and Thailand.

Roving bands of mercenary
bandits, they fled to northern
Burma in 1949 as Chiang's armies
were being routed on the Chinese
mainland, and have maintained
themselves since by buying opium
from the nearby Meo tribesmen
which they then resell, or by
exacting tribute payments from
entrepreneurs like Chan Chi-foo.

As travellers to the area attest,
these troops also supplement their
income by running intelligence
operations into China and Burma
for the U.S.

Guerrillas

The Burmese Government
regularly complained about all this
activity to the United Nations, the
Taiwan government and the United
States, charging the Americans and
Taiwanese with actively supplying
and supporting the KMT, which in
turn has organized anti-government
guerrillas.

In 1959 Burmese ground troops
seized three opium processing
plants set up by the KMT guerrillas
at Wonton; the troops also took an
airstrip the Chinese had used to fly
in reinforcements.

By February 1961 the Burmese
had pushed the KMT troops
southeast into the Thai-Burmese
and Thai-Laotian border areas,
where they now hold at least eight
village bases. Just last year a
reporter who was at Chieng Mai
Thailand, say Thai troops and
American advisors as well as
military supplies provided by the
Taiwan government.

KMT Troops

The Taiwan government, he
noted, maintains an information
office there and regularly
accompanies the KMT troops on
their forays into China to
proselytize among the peasants of
Yunnan province. These sorties are
coordinated by the CIA (which is
feverishly active if not wholly
successful in this area), and the
United States even provides its own
backwater R&R for the weary
KMT, flying its helicopters from
hilltop to hilltop to pick up the
Chinese (and the Establishment
reporter who supplied this
information) for organized
basketball tournaments.

Although the KMT troops are
often referred to as "remnants,"
they are not just debris left behind
by history. They are in fact an
important link in American and
Taiwan policy toward Communist
China.

Not only does Chiang Kai-shek
maintain direct contact with his old
93rd, but fresh recruits are
frequently sent to maintain a troop
level of from 5000 to 7000 men,
according to a top-ranking foreign
aid official in the U.S. government.

And, as the New York Times has
noted, Chiang Kai-shek's son, Chian
Chin-Kuo, is widely believed to be
in charge of the KM T operations
from his position as chief of the
Taiwan secret police.

BPP

The KMT are tolerated by the
Thais for several reasons: they have
helped in the counter insurgency
efforts of the Thai and U.S.
governments against the hill
tribespeople in Thailand; they have
aided the training and recruiting of
Burmese guerrillas armies for the
CIA: and they offer a payoff to the
Border Patrol Police (BPP) and
through them to the second most
powerful man in Thailand, Minister
of the Interior Gen. Prapasx
Charusathira.

The BPP were trained in the '50s
by the CIA and are now financed
and advised by AID and are flown
from border village to border village
by Air America. The BPP act as
middlemen in the opium trade
between the KMT in the remote
regions of Thailand and the Chinese
merchants in Bangkok.

The relationships, of course, are
flexible and changing, with each
group wanting to maximize profits
and minimize antagonisms and
dangers. But the established routes
vary, and sometimes double crosses
are intentional.

In the summer of 1967 Chan
Chi-foo set out from Burma
through the KMT's territory with
300 men and 200 packhorses
carrying nine tons of opium, with
no intention of paying the usual fee
of $80,000 protection money. But
troops cut off the group near the
Laotian village of Ban Houei Sai in
an ambush that turned into a
pitched battle.

Kingpin

Neither group, however, had
counted on the involvement of the
kingpin of the area's opium trade:
the CIA-backed Royal Lao
Government Army and Air Force,
under the command of General
Ouane Rathikoune. Hearing of the
skirmish, the general pulled his
armed forces out of the Plain of
Jars in northeastern Laos where
they were supposed to be fighting
the Pathet Lao guerrillas, and
engaged two companies and his
entire air force in a battle of
extermination against both sides.

The result was nearly 30 KMT
and Burmese dead and a half-ton
windfall of opium for the Royal
Lao government.

In a moment of revealing
frankness shortly after the battle,
General Rathikoune far
from denying the role that opium
played, told several reporters that
the opium trades were "not bad
Laos." The trade provides cash
income for the Meo hill tribes, he
argued, who would otherwise be
penniless and therefore a threat to
Laos's political stability.

Lao Elite

He also argued that the trade
gives the Lao elite (which includes
government officials) a chance to
accumulate capital to ultimately
invest in legitimate enterprises,
thus building up Laos's economy.

But if these rationalizations
seemed weak, far less convincing
was the general's assertion that,
since he is in total control of the
trade now, when the time comes to
put an end to it, he will simply put
an end to it.

It is unlikely that Gen.
Rathikoune, one of the chief
warlords of the opium dynasty, will
decide to end the trade soon. Right
outside the village of Ban Houei
Sai, hidden in the jungle, are several
of his refineries — called "cookers"
— which manufacture crude
morphine (which is refined into
heroin at a later transport point)
under the supervision of
professional pharmacists imported
from Bangkok.

Gen. Rathikoune also has
"cookers" in the nearby villages of
Ban Khwan, Phan Phung and Ban
Khueng (the latter for opium grown
by the Yao tribe). Most of the
opium he procures comes from
Burma in the caravans such as Chan
Chi-foo's; the rest comes from
Thailand or from the hill
tribespeople (Meo and Yao) in the
area near Ban Houei Sai.

Gen. Rathikoune flies the dope
from the Ben Houei Sai area to
Luang Prabang, the Royalist
capital, in helicopters given by the
United States military aid program.

End Of Part One