The Great Heroin Coup - Chapter 13

In chapter 13 Henrik Kruger gives us a timeline of events during Richard Nixon's presidency which led up to the Watergate affair. We should remember, as Nixon prepared to leave office, he turned to none other than George H. W. "Poppy" Bush as the only man he could trust.

We will, therefore, insert in brown type the interactions between Bush and Nixon into the timeline below .

fifteen months in Beijing from 1974-75

 Selected Excerpts from

THE GREAT HEROIN COUP - DRUGS, INTELLIGENCE AND INTERNATIONAL FASCISM

By Henrik Kruger; Jerry Meldon, Translator

South End Press©1980: Box 68 Astor Station, Boston, MA 02123

ISBN 0-89608-0319-5

240pps - one edition - out-of-print; Orginally published in Danish

Smukke Serge og Heroien; Bogan 1976

Previous chapters:

Foreword and Chapter 1

Chapters 2-5

Chapters 6-8

Chapters 9-12 

CHAPTER THIRTEEN

THE FATEFUL DAYS: A CHRONOLOGY OF THE HEROIN COUP

"We have turned the corner on heroin," declared a proud Richard Nixon [in 1974] after the massacre of the Corsican Mafia. But shutting off the pipeline of heroin from Marseille did not produce the shortage he predicted. Except for a brief period in 1973, the supply increased, tremendously. By 1975 the heroin glut far surpassed even that of the Corsican heyday of the late sixties. According to a 1977 report of the House Select Committee on Narcotics Abuse, heroin addiction had doubled in four years. One year later New York's special narcotics prosecutor, Sterling Johnson, Jr. stated: 

"There is more dope on the streets now than at any time since the late sixties and early seventies, when we had an epidemic going. We've got another epidemic, and more critical."[1]

When the heroin flow from Marseille was shut off in 1972‑73, two new sources of supply immediately filled the vacuum. 

• Southeast Asia-‑Laos, Burma and Thailand-‑suddenly produced vast amounts of white no. 4 heroin, the type that supposedly could only be produced by Marseilles chemists. The high quality heroin went primarily to the 40 percent of all U.S. heroin addicts who were living in New York, and who were accustomed to Marseille heroin. 
• The other new source was Mexico. But its product, the less pure "brown sugar," served mainly to regulate the market and to generate new customers.

The remarkable switch from Turkey‑Marseille‑U.S.A. to Southeast Asia‑Mexico‑U.S.A. shifted billions of dollars and the power that comes with it. Such a market revolution could not have happened without astute planning and direction, which demanded political savvy and political cooperation. 

The plans for this tremendous heroin coup were on somebody's drawing board before Nixon and Georges Pompidou met in early 1970. They were made long before Attorney General John Mitchell and French Justice Minister Raymond Marcellin met in Paris on 26 February 1971, when they signed the anti-narcotics agreement that led to the eradication of the Corsican drug Mafia. Most probably they were in place by 1968.

The occurrence of such a conspiratorial heroin coup is, of course, a hypothesis. In the following chapters I will trace the logic and the likelihood of its having transpired.

KRUGER'S HYPOTHESIS:

Involved in one way or another in the planning, the execution, or both, were:

1.   President Nixon and part of the White House staff;

2.   Meyer Lansky's corporate gangster syndicate--in particular its Cuban exile wing run by Florida capo Santo Trafficante, Jr.;

3.   The Cuba/China lobby;

4.   Ultra-reactionary forces in Southeast Asia, primarily the Kuomintang Chinese on Taiwan and in the Golden Triangle; and

5.   Intelligence and law enforcement factions of the CIA and BNDD/DEA.

 [Note from editor: It seems Kruger omitted one crucial element, however. He did not "follow the money." There is no mention of who would be laundering the profits, and why the shift was deemed to be necessary. Implicit in the term coup is the overthrow of one party in power by another, or in this case the supplanting of one group of bankers for another. Most people are not aware of the fact that George H.W. Bush's father, Prescott Bush, was a partner in the investment banking firm, Brown Brothers Harriman. It was for that firm, or rather for the powerful moneyed interests for whose benefit the firm worked, that George Bush actually worked. We can best determine how those interests were involved in the coup Kruger describes by adding George Bush to the timeline below, in brown type to distinguish it from Kruger's actual text.]

It was, needless to say, not a willful conspiracy of all the above. But we can assert with reasonable certainty that the CIA, Trafficante, and other mafiosi, certain Southeast Asians, and some people in the White House must have been in the know.

The plan took three years to execute. Though the major maneuvers began in 1970, one could detect the opening skirmishes soon after Nixon's election victory in 1968:

Kruger's Timeline:

• Henry Kissinger put pressure on Paraguay to extradite Auguste Ricord, the main Corsican supplier of narcotics to the U.S. market.[2] Paraguay's President Alfredo Stroessner at first chose to ignore that pressure.[3]

• In 1968 the Mafia's premier heroin importer, Santo Trafficante, Jr., travelled to Southeast Asia to check out possibilities for a new supply network involving Chinese opium merchants.[4] When he made the trip, the Corsican Mafia was supplying Trafficante with all the no. 4 heroin he could sell.

• Nixon and Pompidou met in January 1970 to restore close Franco‑American partnership. It was a crucial step in the destruction of the French narcotics apparatus that controlled 80 percent of the heroin trade.

• At the start of July 1970, White House staffer Egil Krogh proposed Operation Heroin, a major action against the narcotics smugglers. His idea was approved.

• U.S. Mafia capos held a summit July 4‑16 at the Hotel Sole in Palermo, Sicily. There they decided to pour money into Southeast Asia and transform it into the main source of heroin.[5]

• On 23 July 1970 Richard Nixon approved the Huston Plan to establish an espionage group that would supersede existing intelligence and enforcement agencies. The super‑group was to be steered from the White House, thus giving the president effective control over all intelligence--including domestic spying on U.S. citizens. The plan fell through, mostly due to the opposition of J. Edgar Hoover. However, the White House continued to develop the plan under cover of its fast‑growing, media‑hyped narcotics campaign.

• In August 1970 the Corsicans, apparently informed of the outcome of the Palermo meeting weeks earlier, called their Southeast Asian connections to an emergency meeting at Saigon's Continental Hotel. Thereafter two loads of morphine base would be sent to Marseille each month.[6] However, the shipments were continually sabotaged, and rarely arrived at their destination.

• Another major development in 1970 was the implementation of Nixon's Vietnamization program, through which the controls in Vietnam were returned to the CIA. The program pumped a fortune into South Vietnam, much of it pocketed by officials. Investigations of endemic corruption among non‑coms and senior U.S. Army personnel led to a Hong Kong office run by a lieutenant of drug czar Trafficante.[7]

• Pure no. 4 heroin appeared in Saigon in 1970, creating an epidemic of addiction among GIs. All previously available heroin had been of the coarse form that could only be smoked. The new heroin wave was hushed up. There were two other significant developments in 1970: (1) to end persistent rivalry among customs, the Internal Revenue Service (IRS) and the Bureau of Narcotics and Dangerous Drugs (BNDD), Nixon named the BNDD the sole U.S. representative on drug matters; and (2) the Mafia dispatched the notorious Tomasso Buscetta to Brazil to prepare a takeover of narcotics smuggling upon Auguste Ricord's extradition to the U.S.

• On 26 February 1971 France and the United States signed the definitive agreement for a combined assault on heroin. Within days Ricord was sentenced in absentia. On April 6 Roger Delouette was picked up in New York. As detailed in chapter ten, after that the Corsican network collapsed quickly.

George H. W. Bush was appointed to be Ambassador to the United Nations two days after the agreement was signed, his term beginning on March 1, 1971, replacing a career diplomat, Charles Woodruff Yost, a friend of the Dulles brothers' uncle, Secretary of State Robert Lansing. 

Yost had been called out of retirement when Nixon was inaugurated in 1969 to serve in that post. During his career Yost served as Ambassador to Laos (1955-1956) and Morocco (1958–1961), succeeded at Rabat by Philip W. Bonsal. Bonsal arrived in Morocco by way of Colombia (1955), Bolivia (1956 to 1959, and Cuba (appointed February 16, 1959 until mission was terminated October 28, 1960). Bonsal was the last U.S. Ambassador to Cuba.

• On 27 May 1971 Congressmen Morgan Murphy and Robert Steele issued their report, The World Heroin Problem. Among their sensational findings was that some 15 percent of the GIs in Vietnam were addicted to heroin. The causes were easy to identify. Most obvious was the sudden appearance of enormous quantities of no. 4 heroin. Fourteen‑year old girls sold 90 percent pure heroin for peanuts. Pushers stuffed it into soldiers' pockets free of charge. Add to that the crackdown that effectively eliminated marijuana and hash from the barracks.

• On the day the Murphy‑Steele report was issued, Nixon, John Erlichman, and Krogh agreed to secretly budget $100 million for a covert BNDD kidnaping and assassination program. Before that the White House had asked BNDD director John Ingersoll to draft a plan for "clandestine law enforcement" that would include assassination of major traffickers.[8]

• Days later Nixon set up a special narcotics action and intelligence group right in the White House. In the same period the Special Investigation Unit (the infamous Plumbers) set up shop in Room 16 of the Executive Office Building. The two groups overlapped, and several of their members were associates of Mafia kingpin Trafficante.

• On 17 June 1971 Nixon, on television, declared war on narcotics: "If we cannot destroy the drug menace in America, then it will destroy us. I am not prepared to accept this alternative."

• On 30 June 1971 the United States and Turkey signed an agreement that would halt Turkish opium cultivation. In return the U.S. handed the Turkish government $30 million.

• On 1 July 1971 Nixon advisor Charles Colson recruited former CIA agent Howard Hunt as a White House consultant.[9] Hunt and Gordon Liddy would work out of Room 16 on narcotics intelligence, one of Hunt's specialties.

• On 25 July 1971 the Asian Peoples Anti‑Communist League (APACL) and World Anti‑Communist League (WACL) met in Manila. The two international lobbies for the Nationalist Chinese, prime bankrollers of international opium and heroin smuggling, angrily attacked Nixon for his approaching trip to Peking. [10]

•  In August 1971 the BNDD announced the location in Southeast Asia of twenty‑nine drug refineries, fifteen of them allegedly producing heroin. Among the largest was one in Vientiane, Laos, which was camouflaged as a Pepsi Cola plant. Nixon, representing Pepsi's interests in 1965, had promoted its construction. Though the plant never capped a bottle, it continued to be subsidized by U.S.A.I.D.[11]

• In October 1971 top BNDD analyst John Warner told an interviewer that the continued flooding of the U.S. heroin market, despite the shutdown of French supply routes, indicated that more than the previously assumed 5 percent of U.S. heroin was originating in Southeast Asia.

• On 1 November 1971 BNDD agents arrested a diplomat attached to the Philippine embassy in Laos, and a Chinese journalist from Thailand, attempting to smuggle forty kilos of heroin into the U.S.A. That same year BNDD agents at JFK airport arrested the son of Panama's ambassador to Taiwan with fifty kilos of heroin. Finally, and most dramatically, Parisian police nabbed the Laotian Prince Chao Sopsaisana attempting to smuggle in sixty kilos. Sopsaisana, the head Laotian delegate to the APACL, was about to become Laos' emissary in Paris.[12]

The focus nevertheless remained on the French narcotics traffickers. Nixon could also produce results in the newly arisen Southeast Asian danger zone, but those amounted to the smashing of the remnants of the Corsican Mafia and their Southeast Asian supply network.

Through it all the U.S. supported Marshall Nguyen Cao Ky and other South Vietnamese politicians known to be making immense profits from the heroin traffic. When U.S. reporters exposed Ky's narcotics airlift, the CIA station and U.S. embassy in Saigon issued blanket denials. [13]

• In late 1971 BNDD director Ingersoll issued the following statement: "The CIA has for some time been this Bureau's strongest partner in identifying foreign sources and routes of illegal trade in narcotics. Liaison between our two agencies is close and constant in matters of mutual interest. Much of the progress we are now making in identifying overseas narcotics traffic can, in fact, be attributed to CIA cooperation." [14]

The catch was that BNDD "progress" and CIA "cooperation" went only as far as the French Mafia. CIA cooperation on Southeast Asia was another matter. The agency hindered BNDD agents and kept the press in the dark, while itself smuggling large quantities of opium via Air America.[15] A notable discrepancy arose in 1972 between CIA and BNDD estimates of the heroin traffic. CIA reports had 25 percent of the heroin coming from Mexico, the rest from Marseilles. The BNDD estimated that Southeast Asia already supplied 30 percent of the heroin on the U.S. market.[16]

• In January 1972 Nixon created, again by decree, the Office for Drug Abuse Law Enforcement (ODALE) to flush out pushers in thirty‑eight cities. Simultaneously, New York's police narcotics squad was reorganized following revelations of blatant corruption. ODALE ceased to exist on 1 July 1973 when it, the BNDD and the narcotics intelligence branches of the Justice Department and Customs Bureau were merged to become the Drug Enforcement Administration (DEA), which now operates in the U.S. and worldwide.

• On 17 July 1972 James McCord, Frank Sturgis, Bernard Barker, Eugenio Rolando Martinez, and Virgilio Gonzalez, led by Hunt and Liddy, broke into the Democrats' Watergate offices in Washington. Of these seven men, four were from Miami, four were active or former agents of the CIA, four had been involved in the Bay of Pigs invasion, and three were closely linked to the Cuban narcotics Mafia.

• The same day Nixon telegrammed Pompidou his congratulations. Two days earlier, France had closed out a series of raids against the Marseilles heroin labs. The great heroin coup was well on its way to completion.

• On 9 August 1972 Nixon made William C. Sullivan the director of the Office of National Narcotics Intelligence (ONNI), which would coordinate domestic drug intelligence. Sullivan had been the president's choice to head the Huston Plan's aborted super‑intelligence agency.[17]

With Egil Krogh executive director of the Cabinet Committee on International Narcotics Control, covering foreign narcotics intelligence,[18] complete control over narcotics management was in the president's hands.

• In August 1972 U.S. troops were withdrawn from South Vietnam. The country was turned over to the CIA and a narcotics trafficking South Vietnamese government.

• In late August, in the midst of Nixon's reelection campaign, the BNDD announced the first noticeable heroin shortage on the streets of America. Nixon's battle with the French Mafia had borne fruit. Soon he would rid the U.S.A. entirely of the White Death. However, someone had forgotten to mention that returning GIs had helped triple the U.S. addict population from the 1969 figure of 250,000. In reality, then, the total heroin supply was appreciably greater than that prevailing prior to Nixon's campaign against the French. Americans, however, would reelect Nixon, who cited apparent gains in foreign affairs and the struggle against the drug plague.

• On 12 August 1972 New York crime families decided at a Staten Island summit to resume the drug traffic they had supposedly abandoned in the fifties.[19] Citing "social responsibility," they decried the Cuban and Black Mafias' sale of heroin in the suburbs to children of "decent people," and vowed that the drugs would thereafter remain in the ghetto. But the importance of the families had waned. Others, especially Trafficante's Cuban organization, had become too strong.

The heroin coup was complete by 1973. 

Bush remained at the United Nations until January 18, 1973. The next day he replaced Bob Dole as Chairman of the Republican National Committee, where he stayed until September 16, 1974, the month after Nixon resigned. The new President Gerald Ford, then named Bush Chief of the Liaison Office to China, and in October 1974, the Bushes traveled to Peking, where he served during the critical period when the United States was renewing ties with the People's Republic of China. Four years later this position would be upgraded to an ambassadorship.

While Bush was placed in charge of the RNC, an old spy named David K.E. Bruce was sent to China, prior to the official establishment of diplomatic relations, as head of U.S. Liaison Office in Peking (now Beijing). Bruce held the office from March 15, 1973 until September 25, 1974 and was replaced by Bush, who remained until Christmas 1975. In 1976, Bush was appointed Director of the Central Intelligence Agency.

From 1985 until 1989, the man named Ambassador to China, Winston Lord, was, like Bush, a member of  Yale secret society, Skull and Bones. Lord had been on the planning staff of Nixon's National Security Council, served as National Security Adviser Henry Kissinger's special assistant who accompanied him on his secret trip to China in 1971. He not only went with Nixon to China the following year, but he engaged in talks with the Chinese leader in which the Secretary of State himself was not involved.

Bush's predecessor in China, David K.E. Bruce, had married Ailsa Mellon Bruce, daughter of former Secretary of the Treasury Andrew Mellon. Mellon had been in Woodrow Wilson's cabinet at the same time the Dulles' uncle Robert Lansing was Secretary of State. Ailsa's cousin, Margaret Mellon, had married Tommy Hitchcock, a polo-playing investment banker who on the same polo team with Averell Harriman, Prescott Bush's senior partner at Brown Brothers Harriman. Their son, Billy Mellon Hitchcock, was a friend of LSD guru Timothy Leary, and during the same time that the heroin coup was in the works, Billy was caught up in a scandal involving the CIA-tested hallucinogen, LSD. In 2002 I wrote a series called "Follow the Yellow Brick Road," about the collapse of Enron, in which the following paragraph appeared:

The Mellon family had close ties with the O.S.S.  London station chief David K.E. Bruce was married to Andrew Mellon’s daughter. Also, the Mellon uncles were social friends of CIA director Richard Helms during the late 60s and early 70s. Bobby Lehman, who gave Billy Mellon Hitchcock a job at Lehman Brothers in 1961 also had participated with W.A. Harriman and Co. in aviation issues (Lehman, Billy's father Tommy Hitchcock and Averell Harriman were on the same polo team). Lehman Brothers also financed David Sarnoff’s Radio Corporation of America, which served as Sir William “Intrepid” Stephenson’s headquarters in New York until the O.S.S. was established. Like Drexel & Co., Lehman Brothers would also be bought out by European old-money families. It first merged with Kuhn Loeb and later with the company formed by the merger between Shearson Hayden Stone and Loeb Rhoades--forming Shearson Lehman American Express, which in 1992 was controlled by Edmund Safra and Carl Lindner (each with about 4%). This leads us to wonder who Lindner was fronting for. Could it have been the same old-world aristocrats, heavily involved in the global drug trade?...

[Paul] Helliwell also set up the Castle Bank in the Bahamas to launder money flowing from the sale of drugs from Burma and Thailand used to finance [Claire] Chennault's airline. Castle Bank would eventually be connected to Billy Mellon Hitchcock's profits from selling LSD to California college students....In 1967 Hitchcock left his job at Lehman Brothers to become a partner in Delafield and Delafield, based on the institutional account he brought in from IOS. It was the Delafield bank which handled the stock for the conversion of Mary Carter Paint to Resorts International. In 1969 Hitchcock left Delafield. By then he was living in Sausalito, California and already enmeshed in operations to spread the use of LSD among the youth of California. To learn more about Billy Mellon Hitchcock's role in bringing LSD to America, see Chapter 2 of Acid Dreams, The Complete Social History of LSD: The CIA, the Sixties, and Beyond, New York: Grove Weidenfeld. ©1985 by Lee & Shlain at http://www.druglibrary.org/schaffer/lsd/dreams2.htm.

The French were out, and new labs, routes, and buyer networks were in place, with Southeast Asia the main supplier. That year the U.S. heroin supply did fall noticeably, largely because part of the plan was about to fall through. South Vietnam, Laos, and Cambodia were slipping out of U.S. hands, Forcing traffickers and bankrollers to regroup in safer surroundings, above all in Thailand. [20]

A final item of interest in 1973 was the appearance before a Senate committee of the international speculator and smuggler Frank Peroff, who had served as an undercover agent for the DEA against the Cotroni brothers of Montreal. He testified that the renegade international businessman, Robert Vesco — a major supporter of Richard Nixon — and his associate Norman Leblanc, were bankrollers of international heroin trafficking.[21]

pps. 121-128

Notes

1. B. Herbert: "The Fleetwood Kids," Penthouse, August 1978.

2. L. Gonzalez‑Mata: Cygne (Grasset, 1976).

3. Interestingly, CIA agent Fernand Legros arrived that year in Paraguay and negotiated a weapons deal with the regime of dictator Stroessner; see R. Peyrefitte: La Vie Extraordinaire de Fernand Legros (Albin Michel, 1976).

4. A. McCoy: The Politics of Heroin in Southeast Asia (Harper and Row, 1972). Prior to the publication of this book on 20 August 1972, Cord Meyer, Jr., a CIA covert operations division leader, visited Harper and Row to demand the galleys. The publisher refused, subject to receipt of an official CIA request. When that came, the proofs were delivered over McCoy's objections. The agency returned them with corrections, but the publisher rejected them, and the book was published unaltered.

5. F. Wulff in the Danish Rapport, 14 April 1975.

6. C. Lamour and M.R. Lamberti: Les Grandes Maneuvres de l'0pium

(Editions de Seuil, 1972).

7. McCoy, op. cit.

8. E.J. Epstein: Agency of Fear (Putnam, 1977).

9. E.H. Hunt: Undercover (Berkeley‑Putnam, 1974).

10. Documents of the 5th WACL and 17th APACL Conference, Taiwan, November 1971.

11. N.A. C.L.A. Report, October 1972.

12. P.D. Scott: "From Dallas to Watergate," Ramparts, November 1973.

13. McCoy, op. cit.

14. The Committee of Concerned Asian Scholars: The Opium Rail (New

England Free Press, 1971).

15. P.D. Scott: The War Conspiracy (Bobbs‑Merrill, 1972).

16. McCoy, op. cit.

17. S. Blumental: "How the FBI Tried to Destroy the Black Panthers," in

Government by Gunplay, S. Blumental and H. Yazijian, Eds. (New American

Library, 1976).

18. P.D. Scott: "From Dallas to Watergate," op. cit.

19. The Newsday Staff: The Heroin Rail (Souvenir Press, 1974).

20. The heroin entrepreneurs had also been unduly optimistic about their

supply. By the start of 1973 they began investing in a new, European market,

while still supplying the U.S. Nonetheless, the slight hitch in Southeast Asia

was rapidly dealt with, and soon the flood of heroin hit Europe like a tidal

wave.

21. L.H. Whittemore: Peroff (Ballantine Books, 1975).

See Chapter 14 here.