The Great Heroin Coup - Chapter 14

Note: This chapter was previously posted here, and became the motivation for additional background research. After posting the remainder of Henrik Kruger's book, we will pick up where we left off, back with the question, " Who engineered the heroin coup?"

Although Kruger began chapter fourteen of his book by going back in history to China in 1945, the elements involved in the heroin coup begin much earlier than that. Just as the Office of Strategic Services predated the Central Intelligence Agency, the Coordinator of Intelligence was the first method devised by the executive branch to collect intelligence abroad. 

Franklin Delano Roosevelt was elected in 1932, then again in 1934 and 1936. During his first year in office (1933) a real coup against his Presidency was averted when General Smedley Darlington Butler blew the whistle on mysterious American businessmen and bond brokers who had attempted to recruit  him to  serve as “assistant President,” a  so-called military straw man to prevent disgruntled World War I veterans from organizing a revolution against capitalism.

FDR would, therefore, have known by the time he ran in 1940, having completed three terms totaling twelve years in office, that he needed someone he could trust to gather intelligence for him. In July 1941 the President created the position of Coordinator of Information and appointed William J. Donovan to that post,  placing his eldest son James on its staff. 

A year earlier, following the fall of France to the Nazis in May 1940, President Roosevelt had devised a method of subsidizing the Allied forces while technically remaining neutral. The Neutrality Act had forbidden the U.S. to sell armaments on credit or to make loans to nations engaged in war. The Act was modified by a policy called "Cash and Carry," which morphed into Lend-Lease, which allowed the U.S. to "sell, transfer title to, exchange, lease, lend, or otherwise dispose of ... any defense article," if that country's defense was deemed vital to America's defense.

Because it was a method to pay for certain military goods, FDR had to appoint a banker to head the Office of Lend-Lease, and he chose one connected to the J.P. Morgan banking network--Edward Reilly Stettinius, Jr., the man he later chose to succeed Cordell Hull as Secretary of State. After FDR's death, Truman named Stettinius as the first U.S. Permanent Representative to the United Nations.

Proviso: Remember, it's always about the money. Follow it. It was the Morgan banking and corporate network which set up the Federal Reserve under Woodrow Wilson. Before that, Morgan bankers helped to incorporate opium profits of Americans and their Chinese partners into America's physical infrastructure. Opium had been the first commodity that produced huge surplus funds for Americans, the profits realized through sight drafts issued by London banks converting the silver paid by Cantonese traders into bank notes. One of the biggest Anglo-American banking concerns involved in sight drafts was the Brown family.

President Wilson's chief of staff, Colonel House, though a Texan, was very close to T.J. Coolidge, a member of the China-trading Coolidge family. Even though the combination of Stillman and Rockefeller had seemingly overtaken the Morgan investment portfolio with petroleum assets by the mid-1930's what had actually occurred was a merger of two banking empires (Morgan/Carnegie on the left and Stillman/Rockefeller on the right)  into one investment bank--Brown Brothers Harriman. Where the Gold Is has been leading up to this point in America's banking history, while Minor Musings left off exploring the same question some time ago with an article titled "The Power of the Browns." All these attempts at describing this elephant in the room are finally beginning to merge.

Selected Excerpt 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 13

CHAPTER FOURTEEN

HEROIN IN SOUTHEAST ASIA

Opium and gold as primary exchange media

The place was Kunming in the South China province of Yunnan. The time was the end of World War II. Amid the chaos of war, opium and gold became the primary media of exchange, and cult‑like bonds were forged among a small staff of Americans and high‑ranking Chinese. Yunnan was a center of Chinese opium cultivation and Kunming was the hotbed of military operations, among them Claire Chennault's 14th Air Force and Detachment 202 of the Office of Strategic Services (OSS).

Among Detachment 202's notorious collection of special agents, one in particular—E. Howard Hunt—has needed no introduction since the Watergate break‑in. In Kunming, the spy novelist who later became a comrade of Cuban exiles and China Lobbyists befriended an equally intriguing character, the French Foreign Legionnaire turned OSS agent, Captain Lucien Conein.[1] Although not part of Detachment 202 proper, Conein frequented Kunming while awaiting parachuting over Indochina.[2]

Detachment 202 was not the first of its kind. As we learn from the CIA's own website: "On April 14, 1942, William Donovan, as Coordinator of Information (forerunner of the Office of Strategic Services), activated Detachment 101 [under Carl F. Eifler] for action behind enemy lines in Burma. The first unit of its kind, the Detachment was charged with gathering intelligence, harassing the Japanese through guerrilla actions, identifying targets for the Army Air Force to bomb, and rescuing downed Allied airmen. Because Detachment 101 was never larger than a few hundred Americans, it relied on support from various tribal groups in Burma. In particular, the vigorously anti-Japanese Kachin people were vital to the unit’s success. By the time of its deactivation on July 12, 1945, Detachment 101 had scored impressive results."

Indochina remained Conein's base of operation after World War II, when, like Hunt, he slid over from the OSS to its successor, the CIA. He then operated throughout South and North Vietnam, Cambodia, and Burma, and became the top U.S. expert on the area‑as well as on the opium‑smuggling Corsican Mafia. He was Ambassador Henry Cabot Lodge's middle man in the 1963 plot to overthrow South  Vietnam's President Ngo Dinh Diem (who was assassinated along with his brother Ngo Dinh Nhu, the Corsicans' partner in the drug traffic). A decade later, Conein and Hunt, working for the Nixon White House Plumbers, would attempt to make it appear that the plot had been ordered by JFK. Both Conein and William Colby, mastermind of the CIA's Phoenix assassination program, were recalled to the U.S. at the start of the seventies.

C. V. Starr

After Mao Tse‑tung's rise to power in China, OSS veterans formed a number of firms that would be linked both to the CIA and to its reactionary client regimes in the Far East. With financial assistance from his friends in Asia, OSS China hand C.V. Starr gained control of several U.S. insurance companies. As brought to light during the McClellan hearings, Jimmy Hoffa awarded one of them, U.S. Life, and a smaller company, Union Casualty —whose agents Paul and Allen Dorfman were among Hoffa's links to the underworld[3] —a Teamsters Union contract despite a lower bid from a larger, more reputable insurance firm.[4]

Starr's attorney was the powerful Washington‑based Tommy "The Cork" Corcoran. Corcoran's law partner, William Youngman [married to a descendant of Robert Bennet Forbes], was a director of U.S. Life. Corcoran's other clients included

• the United Fruit Company, 
• Chiang Kai‑shek's influential brother‑in‑law T.V. Soong, and 
• the mysterious airline, Civil Air Transport (CAT), of which 60 percent was owned by the Taiwan regime and 40 percent by the CIA.[5] 

On behalf of United Fruit, Corcoran triggered a CIA plot — in which E. Howard Hunt was the agency's chief political action officer — to overthrow Guatemala's President Jacobo Arbenz in 1954.[6]

OSS China hand Willis Bird settled in Bangkok, Thailand to head an office of Sea Supply, Inc., a CIA proprietary headquartered in Miami, which furnished weapons to opium‑smuggling Nationalist Chinese (KMT) troops in Burma. One William Bird, representing CAT in Bangkok, coordinated CAT airdrops to KMT troops and ran an engineering firm that constructed short airstrips used for the collection of Laotian opium.[7]

Sea Supply also provided arms and aid to Phao Sriyanonda, the head of Thailand's 45,000‑man paramilitary police force and reputedly one of the most corrupt men in the history of that corruption‑ridden nation. For years his troops protected KMT opium smugglers and directed the drug trade from Thailand.[8]

When President John F. Kennedy in 1962 attempted a crackdown on the most hawkish CIA elements in Indochina, he sought the prosecution of Willis Bird, who had been charged with the bribery of an aid official in Vientiane. But Bird never returned to the U.S. to stand trial.

Upon returning to Miami, the OSS Chief of Special Intelligence and head of Detachment 202 in Kunming, Colonel Paul Helliwell, was a busy man. In Miami offices of the American Bankers Insurance Co. [apparently incorporate in Nevada], he functioned simultaneously as the Thai consul, an the counsel for Sea Supply as well as for insurance companies run by his former subordinate C.V. Starr.[9] American Bankers Insurance was itself a most unusual firm; one of its directors, James L. King, was also a director of the Miami National Bank through which the Lansky syndicate reportedly passed millions en route to Geneva's Swiss Exchange and Investment Bank. One of the Swiss bank's directors, Lou Poller, also sat on the board of King's Miami National Bank.[10]

Moreover, in the fifties and sixties, Thai and Nationalist Chinese capital was invested in Florida's explosive development, much of it by way of the General Development Corporation controlled by associates of Meyer Lansky.[11] It's important to note the dubious alliance of Southeast Asian power groups with those concerned with Florida and Cuba. This early mutuality of business interests is the key to all that follows, and Miami is the nerve center to which we will continually return.

The alliance was comprised of the China Lobby, OSS China hands, Cuban exiles, the Lansky syndicate, and CIA hawks pushing for all‑out involvement in Indochina and against Castro's Cuba. It coalesced between 1961 and 1963, and its members had three things in common: a right wing political outlook, an interest in Asian opium, and a thirst for political might. The last factor led to another common denominator in which the alliance invested heavily: Richard M. Nixon.

Some people effectively overlap the entire spectrum of the alliance. Among them are Howard Hunt and Tommy Corcoran, the man behind United Fruit's dirty work. United Fruit was a client of the Miami‑based Double‑Chek Corp., a CIA front that supplied planes for the Bay of Pigs invasion.[12] Corcoran was the Washington escort of General Chennault's widow Anna Chen Chennault, erstwhile head of the China Lobby, the key to Southeast Asian opium.[13]

Another key figure in the China Lobby was weapons dealer/financier William Pawley, the American co-founder of Chennault's Flying Tigers.[14] Pawley's name was the password to intrigue: OSS China, Tommy Corcoran,[15] CIA cover firms,[16] and arms shipments to KMT Chinese on Taiwan in defiance of a State Department refusal of authorization." All were either directly or indirectly connected to Pawley. He also rubbed elbows with the U.S. heroin Mafia when, in 1963, he, Santo Trafficante, Jr. and Cuban exiles took part in one of the countless boat raids on Cuba.[18]

The China Lobby's Southeast Asian connection naturally went via the Taiwan regime, which controlled the opium‑growing Chinese in the Golden Triangle and, with the CIA, owned the opium‑running CAT airlines. As Ross Y. Koen wrote in 1964:

"There is considerable evidence that a number of Nationalist Chinese officials are engaged in the illegal smuggling of narcotics into the United States with the full knowledge and connivance of the Nationalist Chinese government. The evidence indicates that several prominent Americans have participated in and profited from these transactions. It indicates further that the narcotics business has been an important factor in the activities and permutations of the China Lobby." [19]

British writer Frank Robertson went one step further in 1977:

"Taiwan is a major link in the Far East narcotics route, and a heroin producer. Much of the acetic anhydride -‑ the chemical necessary for the transformation of morphine into heroin -‑ smuggled into Hong Kong and Thailand, comes from this island, a dictatorship under the iron rule of the late Chiang Kai‑shek's son, Chiang Chingkuo."[20]

When the Communists routed Chiang Kai‑shek's forces in 1949, some 10,000 KMT troops fled to Southeast Asia and settled in a remote part of Burma. Heavily armed, they soon assumed control of the area and intermarried with the local population. Under General Li Mi they continued to infiltrate China proper, but each time they were repulsed. While awaiting Chiang's signal for a final, two‑front onslaught, Burma's KMT army needed a source of income. Many had grown opium in Yunnan and so the poppies, which flourished on the hillsides, became the force's cash crop.

Around 1950 the CIA became interested in the KMT troops. With General Douglas MacArthur pushing to arm them for an attack on Red China, the agency secretly flew them weapons in CAT airplanes. But when the KMT instead used the weapons against the Burmese army, Burma protested before the UN, where it was decided that 2000 KMT troops would be flown by CAT to Taiwan by 1954. Those who eventually made the trip, however, were only farmers and mountain people in KMT uniforms, and the weapons they took out were obsolete.[21] Nonetheless, with help from the Red Chinese army, Burma drove most of the KMT forces into Thailand and Laos, though many later returned. The Kuomintang and their kin now number over 50,000. Though only a fraction are soldiers, the KMT still controls hundreds of thousands of Chinese occupying the region, especially in Thailand.

The junction of Burma, Thailand, and Laos, the Golden Triangle, is the site of the bulk of the world's opium production and thereby the source of enormous fortunes for the French and later the Americans. The French held effective control over the Southeast Asian opium traffic until 1965. Between 1946 and 1955 the Mixed Airborne Commando Group (MACG) and the French Air Force managed the shipment of opium from Burma to Laos. A guerilla corps comprised mostly of Laotian Meo tribesmen and led by Colonel Roger Trinquier, MACG remained unusually independent despite its direct connections to the SDECE and Deuxieme (Second) Bureau. To finance their secret Indochina operations, these organizations turned to the smuggling of gold and opium, with MACG in charge of the latter. Large quantities of opium were shipped to French Saigon headquarters and passed on to the Corsican Mafia, who in turn smuggled the drug to Marseille.

When the French withdrew from Indochina in 1955 after their defeat by the Vietminh, and after the CIA pushed aside the SDECE, MACG leaders communicating through CIA agent Lucien Conein offered the Americans their entire guerilla force. Against Conein's advice they refused.[22] History would cast doubt on the wisdom of that decision.

In 1955 CIA agent General Edward Lansdale began a war to liquidate the Corsican supply network. While Lansdale was cracking down on the French infrastructure, his employer the CIA was running proprietaries, like Sea Supply and CAT, that worked hand‑in‑hand with the opium‑smuggling Nationalist Chinese of the Golden Triangle, and with the corrupt Thai border police.[23]

The Lansdale/Corsican vendetta lasted several years, during which many attempts were made on Lansdale's life. Oddly enough, his principal informant on Corsican drug routes and connections was the former French Foreign Legionnaire, Lucien Conein, then of the CIA. Conein knew just about every opium field, smuggler, trail, airstrip, and Corsican in Southeast Asia. He spent his free time with the Corsicans, who considered him one of their own. Apparently they never realized it was he who was turning them in.[24]

When Lansdale returned from Vietnam in the late fifties, the Corsicans recouped some of their losses, chartering aging aircraft to establish Air Opium, which functioned until around 1965. That year, the Corsicans' nemesis Lansdale returned to Vietnam as an advisor to Amabassador[sic] Lodge. There was also an upheaval in the narcotics traffic, and perhaps the two were connected. CIA‑backed South Vietnamese and Laotian generals began taking over the opium traffic — and as they did so, increasing amounts of morphine and low‑quality heroin began showing up on the Saigon market.

The first heroin refineries sprang up in Laos under the control of General Ouane Rattikone. President Ky in Saigon was initially in charge of smuggling from the Laotian refineries to the South Vietnamese; and Lansdale's office, it is to be remembered, was working closely with Ky. Lansdale himself was one of Ky's heartiest supporters, and Conein went along with whatever Lansdale said.[25]

Ouane Rattikone

One result of the smuggling takeover by the generals was the end of the Corsicans' Air Opium. The KMT Chinese and Meo tribesmen who cultivated raw opium either transported it themselves to the refineries or had it flown there by the CIA via CAT and its successor, Air America, another agency proprietary. Though the Corsicans still sent drugs to Marseilles, the price was becoming prohibitive, since they were forced to buy opium and morphine in Saigon and Vientiane rather than pick up the opium for peanuts in the mountains.

In 1967 a three‑sided opium war broke out in Laos between a Burmese Shan State warlord, KMT Chinese and General Rattikone's Laotian army. Rattikone emerged victorious, capturing the opium shipment with the help of U.S.‑supplied aircraft. The KMT, for its part, managed to reassert its dominance over the warlord. The smuggling picture was becoming simplified, with Southeast Asian opium divided among fewer hands, and most of the Corsicans out of the way.

General Lansdale returned to the U.S. in 1967, leaving Conein in Vietnam. The next year Conein greeted a new boss, William Colby. Since 1962 Colby had run the agency's special division for covert operations in Southeast Asia, where his responsibilities included the " secret" CIA war in Laos with its 30,000‑man Meo army. He shared that responsibility with the U.S. ambassador [sic] in Laos, William H. Sullivan, who would later preside over the Tehran embassy during the fall of the Shah.

Many of the agents who ran the CIA's war in Laos had earlier trained Cuban exiles for the Bay of Pigs invasion, and afterward had taken part in the agency's continued secret operations against Cuba.[26] Since exiles were furnished by the Trafficante mob,[27] intelligence agents had intermingled with representatives of America's number one narcotics organization. The same agents would now become involved with the extensive opium smuggling from Meo tribesmen camps to Vientiane.[28]

In 1967 Colby devised a plan of terror for the "pacification" of Vietnam. Operation Phoenix organized the torture and murder of any Vietnamese suspected of the slightest association with Vietcong. Just as Lansdale was travelling home, Colby was sent to South Vietnam to put his brainchild to work. According to Colby's own testimony before a Senate committee, 20,857 Vietcong were murdered in Phoenix's first two years. The figure of the South Vietnamese government for the same period was over 40, 000.[29[

It was during Colby's tour in Vietnam that the heroin turned out by General Ouane Rattikone's labs appeared in quantity, and with unusually high quality. The great heroin wave brought on a GI addiction epidemic in 1970; Congressional reports indicated that some 22 percent of all U.S. soldiers sampled the drugs and 15 percent became hooked.[30]

Former Air Marshal, then Vice President, Nguyen Cao Ky (now alive and well in the United States) and his underlings still controlled most of the traffic. President Nguyen Van Thieu and his faction, comprised mostly of army and navy officers, were also in it up to their necks. According to NBC's Saigon correspondent, Thieu's closest advisor, General Dang Van Quang, was the man most responsible for the monkey on the U.S. Army's back. But the U.S. Saigon embassy, where Colby was second in command, found no substance to the accusations, Ky's record notwithstanding: Ky had been removed from U.S. Operation Haylift, which flew commando units into Laos, for loading his aircraft with opium on the return trips.

In the face of skyrocketing GI heroin abuse, the Army Criminal Investigation Division (CID) looked into General Ngo Dzu's complicity in the heroin traffic and filed a lengthy report at the U.S. embassy.[31] The embassy ignored the report and chose not to forward it to Washington.[32] The BNDD also investigated the roots of the heroin epidemic, but was impeded in its work by the CIA and U.S. embassy. In 1971, however, a string of heroin labs were uncovered in Thailand, and a number were closed down.

In 1971, furthermore, Colby and Conein were recalled to the United States. Colby became the Deputy Director of Operations, the man in charge of the CIA's covert operations. More remarkable, though, was Conein's homecoming after twenty‑four years of periodic service to the CIA in Indochina, raising the question of why the U.S.'s foremost expert on Indochina had been brought back to Washington just as the crucial phase of Vietnamization was about to begin.[33] Ironically, Corsican friends still around for Conein's departure presented him with a farewell gold medallion bearing the seal of the Corsican Union.

At the war's cataclysmic end, the CIA admitted that "certain elements in the organization" had been involved in opium smuggling and that the illegal activities of U.S. allies had been overlooked to retain their loyalties. In reality, the agency had been forced to confess because of its inability to refute the tales of returning GIs, among them that of Green Beret Paul Withers, a recipient of nine Purple Hearts, the Distinguished Service Cross and Silver and Bronze Stars:

"After completing basic training at Fort Dix in the fall of 1965 [Withers] was sent to Nha Trang, South Vietnam. Although he was ostensibly stationed there, he was placed on 'loan' to the CIA in January 1966 and sent to Pak Seng, Laos. Before going there he and his companions were stripped of their uniforms and all American credentials. They were issued Czechoslovakian guns and Korean uniforms. Paul even signed blank sheets of paper at the bottom and the CIA later typed out letters and sent them to his parents and wife. All this was done to hide the fact that there were American troops operating in Laos.

"The mission in Laos was to make friends with the Meo people and organize and train them to fight the Pathet Lao. One of the main tasks was to buy up the entire local crop of opium. About twice a week an Air America plane would arrive with supplies and kilo bags of opium which were loaded on the plane. Each bag was marked with the symbol of the tribe."[34]

The CIA, reportedly, did not support any form of smuggling after 1968. Del Rosario, a former CIA operative, had something to say about that:

"In 1971 I was an operations assistant for Continental Air Service, which flew for the CIA in Laos. The company's transport planes shipped large quantities of rice. However, when the freight invoice was marked 'Diverse' I knew it was opium. As a rule an office telephone with a special number would ring and a voice would say 'The customer here'-‑that was the code designation for the CIA agents who had hired us. 'Keep an eye on the planes from Ban Houai Sai. We're sending some goods and someone's going to take care of it. Nobody's allowed to touch anything, and nothing can be unloaded,' was a typical message. These shipments were always top priority. Sometimes the opium was unloaded in Vientiane and stored in Air America depots. At other times it went on to Bangkok or Saigon.[35]

Even while the CIA trafficked in opium, President Nixon ranted on TV against drug abuse and lauded the crackdown against French smuggling networks.

pps. 129-139

Notes

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

2. Another of Conein's OSS sidekicks, Mitchell WerBell 111, was years later indicted in a major drug conspiracy case (T. Dunkin: "The Great Pot Plot," Soldier of Fortune, Vol. 2, No. 1, 1977), and now runs an antiterrorist training school in Georgia (T. Dunkin: "WerBell's Cobray School," Soldier of Fortune, Vol. 5, No. 1, 1980).

3. D. Moldea: The Hoffa Wars (Charter Books, 1978).

4. U.S. Congress, Senate, Select Committee on Improper Activities in the Labor or Management Field, Hearings, 85th Cong., 2nd Sess. (cited in P.D. Scott: The War Conspiracy, Bobbs‑Merrill, 1972).

5. CAT, which became Air America, was also identical with the "CATCL" that emerged from Claire Chennault's Flying Tigers.

6. D. Wise and T.B. Ross: The Invisible Government (Random House, 1964); Hunt, op. cit.

7. Scott, op. cit.

8. F. Robertson: Triangle of Death (Routledge and Keagen Paul, 1977); A. McCoy: The Politics of Heroin in Southeast Asia (Harper & Row, 1972).

9. Scott, op. cit.

10. New York Times, 1 December 1969; H. Messick: Lansky (Berkeley, 1971). 11. Carl 0. Hoffmann, the former OSS agent and general counsel of the Thai king in New York in 1945‑50, later became the chairman of Lansky associates' First Florida Resource Corp.

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

13. R.Y.Koen: The China Lobby in American Politics (Harper& Row, 1974). 14. Pawley, the ultraconservative former Pan Am executive and Assistant Secretary of both State and Defense, set up the Flying Tigers under a secret order of President Franklin D. Roosevelt exempting him from U.S. neutrality provisions; see A. Chan Chennault: Chennault's Flying Tigers (Eriksson, 1963).

15. Corcoran assisted in the establishment of the Flying Tigers and later Civil Air Transport; see Scott, op. cit.

16. Lindsey Hopkins, Jr., whose sizable investments included Miami Beach hotels, was an officer of the CIA proprietary, Zenith Technical Enterprises of Bay of Pigs note. He was also an officer of the Sperry Corp., through whose subsidiary, the Intercontinental Corp., Pawley helped found the Flying Tigers in 1941. Pawley was Intercontinental's president. See Scott, op. cit.

17. U.S. Congress, Senate, Committee on Judiciary, Communist Threat to the United States through the Caribbean, Hearings, 86th Cong., 2nd Sess. (cited in Scott, op. cit.).

18. See chapter fifteen; it has also been revealed that a prominent Chinese

American, Dr. Margaret Chung of San Francisco, who was a major supporter

of the Flying Tigers, trafficked in narcotics together with the Syndicate; see P.D. Scott: "Opium and Empire," Bulletin of Concerned Asian Scholars, September 1973.

19. Koen, op. cit. 20. Robertson, op. cit.. After a one‑year suspension, the U.S. State Department recently approved the sale of $280 million in military weaponry to the repressive Taiwan regime (New York Times, 20 January 1980), the same regime whose disdain for human rights was most recently expressed by the preparation of cases of sedition against sixty‑five opposition demonstrators (New York Times, 24 January 1980). The CIA's Taiwan station chief in the late fifties and early sixties, when the unholy alliances were forged, was Ray S. Cline. Closely associated with the China Lobby, Cline became famous for his drunken binges with Chiang Ching‑kuo, currently the president of Taiwan (see V. Marchetti and J.D. Marks: CIA and Cult of Intelligence, Jonathan Cape, 1974). A CIA hawk, Cline also helped a gigantic Bay of Pigs‑style invasion of the Chinese mainland which was rejected by President Kennedy. Cline is currently the "director of world power studies" at Georgetown's Center for Strategic and International Studies (CSIS), which, according to writer Fred Landis ("Georgetown's Ivory Tower for Spooks," Inquiry, 30 September 1979), "is rapidly becoming the New Right's most sophisticated propaganda mill." In testimony before the House Select Committee on Intelligence, Cline defended CIA manipulation of the press, saying "You know that first amendment is only an amendment."

21. McCoy, op. cit.

22. D. Warner: The Last Confucian (Angus & Robertson, 1964). 23. McCoy, op. cit.

24. Conein told writer McCoy: "The Corsicans are smarter, tougher and better organized than the Sicilians. They are absolutely ruthless and are the equal of anything we know about the Sicilians, but they hide their internal fighting better." (McCoy, op. cit.).

25. McCoy, op. cit.

26. T. Branch and G. Crile III: "The Kennedy Vendetta," Harper's, August 1975.

27. U.S. Congress, Senate, Select Committee to Study Governmental Operations with respect to Intelligence Activities, Alleged Assassination Plots Involving Foreign Leaders, Interim Report, 94th Cong., 1st Sess. Senate Report No. 94‑463, 1975.

28. C. Lamour and M.R. Lamberti: Les Grandes Maneuvres de l'0pium (Editions du Seuil, 1972); McCoy, op. cit.; Committee of Concerned Asian Scholars: The Opium Rail (New England Free Press, 1971).

29. Marchetti and Marks, op. cit.

30. Congressman M.F. Murphy and R.H. Steele: The World Heroin Problem (U.S. Govt. Printing Office, 1971).

31. Like Nguyen Cao Ky, Ngo Dzu came to the U.S. as a refugee after the final debacle in South Vietnam. Though accused by Rep. Steele of responsibility for the addiction of thousands of GIs to heroin, Dzu went about as a free man until his 13 February 1977 death in Sacramento of apparent heart failure.

32. McCoy, op. cit.

33. Conein's summons home coincided with Howard Hunt's recruitment by the White House and the creation of the special narcotics and Plumbers groups. 34. Committee of Concerned Asian Scholars, op. cit. 35. Lamour and Lamberti, op. cit. (quote retranslated from the French).

Continued here.

Who Engineered the Heroin Coup?

Refer back to our October 8 posting of the excerpt from Heroin in Southeast Asia. We inserted a map of the Yunnan province of China, showing Kunming, "the hotbed of military operations," of  

1. Claire Chennault's 14th Air Force and of 

2. the Office of Strategic Services (OSS) Detachment 202.

These military operations in this area of China were occurring at the tail end of WWII, and would lead up to the Korean War a few years later.  Kruger's focus in his book was on Captain Lucien Conein, the French Foreign Legionnaire turned OSS agent for the United States. Why? Because he points to our trail of money. Remember, we ALWAYS follow the money.

When President Truman agreed to drop the bombs on Japan, abruptly ending WWII, the old China hands realized their government budget to fight Chinese Communists had just dried up. They had to build an alternative supply to finance the "nationalist" Chinese forces led by the American-educated Soong family satellites, groomed to set up China's central bank by donors to Southern Christian colleges since the time Charlie Soon first arrived in North Carolina.

Background Reading to Get Up to Speed

Readers who have not already done so should familiarize themselves with this author's other blog, which has long followed the trail of opium money through the Forbes family that culminates into today's United States Secretary of State John Kerry, particularly at this point with his ancestor known as Jack Forbes, a contemporary of Secretary of State (later President) John Quincy Adams, who was the actual creator of the Monroe Doctrine during his tenure in the State Department. It was J.Q. Adams who was then handling the career of the first John Murray "Jack" Forbes, not to be confused with his nephew of that name who rose to opium fame several decades later.

At the other website, Where the Gold Is,  I posited that J.Q. Adams had accomplished his purpose of strengthening the nascent U.S. republic by allowing Jack Forbes, the consul he named to an important post in Europe as French hero Napoleon was shipped off to Elba. It should be remembered that at that time the French were our allies, while the victor, the British, were our avowed enemies. Thus, it was of little significance to Adams at that time that the only way that Forbes' consulate post, where he was sent to spy on the British enemy, could be financed was by allowing him to enter into commercial partnerships with family members, also based at the foreign consulate.

Jack's youngest brother, Ralph Bennet Forbes, was one of several partners who took advantage of that opportunity to trade in China following the tanking of his own business using slaves to grow sugar cane in what is now the island of Haiti/Dominican Republic (then known as Santo Domingo). There Ralph had become acquainted with James and Thomas Handasyd Perkins, ship owners involved in the triangular barter trading pattern between the island, New England and, during colonial days, Liverpool. They had seen much of their business interests destroyed, however, when revolutionary Americans boycotted and blockaded trade with the former "mother country."

As so often happens, his working relationship with the Perkins brothers led to marriage to their younger sister, Margaret Perkins. Quoting now from my other blog:

By 1811 Ralph had already been married to Margaret Perkins 12 years, and the brothers had given up trade in the West Indies for the East Indies, with China. In the meantime the young Robbins cousin [James Murray Robbins] went to Europe to replace Ralph Forbes. The editor of The Letters reports that President Monroe, through his secretary of state, Jack's old friend J.Q. Adams, called Forbes home and entrusted him with negotiations following Napoleon's defeat at the hands of the British, while the teenage Robbins was sent to Elsinore [Helsingor], Denmark, not far from Jack's 1813 post in Copenhagen. Was he merely there to keep his eyes and ears open and courier intelligence back? ... Did President Monroe, the last Founding Father to serve as chief executive of the United States, know what was about to hit the fan? Did anyone understand at the time that the cost of such intelligence to the new nation was to allow those consular officials free reign in smuggling drugs?

Kris Millegan's Theory

My early research has been guided and directed since about 1996 by the profound ideas and reading of the publisher of Trine Day books, who was then a mere hippie musician turned philosopher--Kris Millegan, who posted the following statement in 2000 to a research group to which I then was a participant:

Forced out of the lucrative African slave trade by US law and Caribbean slave revolts, leaders of the Cabot, Lowell, Higginson, Forbes, Cushing and Sturgis families had married Perkins' siblings and children. The Perkins opium business had made a fortune and established power over these families. By the 1830s, the Russells bought out the Perkinses and made Connecticut the primary center of the US opium racket. Massachusetts families (Coolidge, Sturgis, Forbes and Delano) joined Connecticut (Alsop) and New York (Low) smuggler-millionaires under Russell Trust. By 1856, Russell Trust Incorporated their open pirate emblem -- the skull and cross bones.

Millegan's theory related to the importance of Yale secret society, Skull and Bone, which he had found to be steeped in the long history of U.S. Central Intelligence Agency involvement in the Southeast Asian drug trade. Millegan was an avid reader who shared his insights by posting excerpts of books he read on this subject, one of which was Henrik Kruger's book, Heroin in Southeast Asia, cited previously. Much of this history has been made into an excellent online book by William P. Litynski, in downloadable format, called An Illustrated History of the China Trade and the Opium Wars.

Litynski mentions that William Russell, trustee of Yale University from 1745 to 1761, had two great-grandsons from two different sons. One was the China-trading Russell and Co. co-founder, Samuel Wadsworth Russell, and another was Skull and Bones co-founder, William Huntington Russell. This fact alone seems to indicate a connection between Yale and the opium trade in China worth pursuing. There are also many important links between the trade in opium in those days, not only with Yale, but with Harvard and Princeton as well, all of which occur because of the close family connections within the management of those three universities.

In January 2012 I traced the various ancestries, first by starting with John Kerry's relationship back through the Forbes family, and then by the Russell family's long connections to Yale and to the founding of Skull and Bones--a project I had been working on for several years. See 2004 article, "Primer on Controlling People, Using Their Own Money." As one can see, the same themes run over and over throughout this history.

In a more recent project, I showed how those same families who were involved in subsidizing the Skull and Bones (Russell Trust) network through the Morgan banking empire were, according to Antony Sutton's research, overthrown after the 1929 crash from a technology based on electric powered streetcars (Morgan) to one envisioning individually owned petroleum-fueled vehicles (Rockefeller). Both group of investors have been heavily entrenched within the Order of Skull and Bones. Whoever controls Skull and Bones thus seems to control the direction of American investment.

Now, Back to Heroin and French Indochina

Thomas Gardiner Corcoran, a/k/a Tommy the Cork, a contemporary of Jesse Jones in Herbert Hoover's Reconstruction Finance Corporation, had cemented his Texas connection in 1937 by lobbying for Sam Rayburn to become Speaker of the House of Representatives. Corcoran took a great deal of political flak for the maneuvers (such as the "Court packing plan) he handled for FDR; because of his loyalty, according to author David McKean, in October 1940 he was assigned to perform an undercover task in China:

The importance of being a Delano

Roosevelt conveyed to him, again through Lauchlin Currie, that he wanted to establish a private corporation to provide assistance to the Chinese. Corcoran thought the president's idea was ingenious, and later wrote that "if we'd tried to set up a government corporation per se, or do the work out of a Federal office, there would have been devil to pay on the Hill." Instead, Corcoran set up a civilian corporation, which he chartered in Delaware and, at the suggestion of the president, named China Defense Supplies. It would be, as Corcoran later recalled, "the entire lend lease operation" for Asia.
 
In order to provide the company with the stamp of respectability, Roosevelt arranged for his elderly uncle, Frederick Delano, who'd spent a lifetime in the China trade, to be co-chairman. The other chairman was T.V. Soong, Chiang's personal representative who frequently visited Washington to lobby for aid to his government. Soong, a Harvard graduate, was also Chiang's finance minister, as well as his banker and his brother-in-law. And he was a close friend of David Corcoran, whom he had met when the younger Corcoran was working in the Far East.

It just so happens that David was one of Tommy the Cork's brothers. Drew Pearson wrote about the Corcoran family's involvement in the quasi-government corporation in his August 1, 1942 column, which is so incredible it must be printed here in full, with emphasis added in italics:

WASHINGTON — For a long time official Washington never knew that the celebrated Tommy "the Cork" Corcoran ever had anyone else in his family. The public spotlight which beat down on him as the most intimate adviser of the president was so intent that it put everyone else in the shadow.

Recently, however, Washington has discovered two of his brothers. In fact, it has become very much aware of them. One is Howard Corcoran, assistant United States district attorney in New York, the man primarily responsible for the wholesale arrests in the German-American bund. For more than a year, Howard Corcoran waged an up-hill battle to round up the bund. Other federal officials argued that the bund could not be touched, most of the members being American citizens. Some of the leaders might be arrested, but that was all, they said.

Bund's Nemesis

Howard Corcoran, however, maintained that the proper strategy was not to arrest the leaders and scare the others underground, but to watch the entire organization, then make wholesale arrests. This quiet surveillance was carried on for more than a year, and resulted in the largest arrest in our history. David Corcoran, the other brain trust brother, is fighting the nazis in a unique manner. He has become the chief American spearhead in routing the nazi drug trust from South America.

To appreciate the importance of this, it is necessary to know that the drug industry for years has been the chief undercover organization for nazi propaganda in Latin-America. Nazi traveling salesmen, penetrating the byways, were able to report on everything a foreign military power wanted to know, in addition to arranging political contacts, and using radio and newspaper advertisements to spread nazi "kultur" among Latin-American good neighbors.

So important is this drug propaganda network that until a short time ago the nazis flew essential drugs into South America, smuggled aspirin from the United States through pro-nazi Latin-American armies and, thanks to the large stocks accumulated before war broke, have continued to carry on. For a long time the state department and the Rockefeller committee have been trying to get the United States firms to carry similar radio and newspaper propaganda, and now give credit to David Corcoran for doing the most outstanding job along this line.

Guns Turned Around

It is paradoxical that the commercial instrument through which Corcoran works is a firm that for a time had patent connections with the German drug trust. Corcoran's firm, the Sydney Ross Co., is a subsidiary of Sterling Products, the biggest drug business in the U.S.A. [Sterling purchased the U.S. assets of the German Bayer AG, including its patent to aspirin.] Its enormous resources, once partially derived from its relationship with the German drug trust, now have been completely  reversed and, through Sydney Ross, thrown into an economic war to the death in Latin America. As one Washington official expressed it: "We have boarded the Bismarck and turned her guns around."

[According to International Directory of Company Histories, Vol. 1. St. James Press, 1988 relative to Sterling Drug, Inc."

 In the 1920's cartels with German companies were condoned as a means of helping Germany's beleaguered post-war economy. Yet, as argued in 1942 Fortune magazine article, it was at this early stage that the German government laid the foundation for a policy of economic fascism. At the roots of the struggle over "a simple glassine envelope containing two aspirin-compound tablets" was "Germany's attempt to reduce a continent to the economic and political status of a colony."

Whatever real or imagined designs Germany had in regard to its Latin American market, however, it soon became apparent that it was neither economically nor politically viable for Sterling to continue conducting business with Farben. Coming within a hairsbreadth of suffering U.S. government action, two Sterling subsidiaries in Latin America, Winthrop Products, Inc. and the Sydney Ross Co., suddenly became the advanced guard for a U.S. trade-war policy against Germany. In other words, an all out economic war to gain hegemony over the Latin American market was waged against Farben; as far as Sterling was concerned the cartel ceased to exist.

This sudden turnaround seemed inconsistent in light of the previous intimate business dealings between the two companies. The initial agreement of 1923 called for Sterling to supply aspirin to the Latin American market only if Farben were at any time unable to do so. Yet as late as 1941, during the British blockade of Nazi occupied Europe, Farben asked Sterling to violate the agreement between the two companies and send Winthrop ethical drugs to Latin America. After two and a half days of debate William Erhard Weiss (at that time chairman of the board) ordered the shipment sent.]

Dave Corcoran, the driving force behind the Latin-American Sydney Ross venture, got to it in a roundabout way, in fact via Asia. Originally he was preparing for a medical career, but a girl diverted him into Asiatic trade. When he was graduated from Princeton, he was entered at Oxford for medical studies, but he fell in love and wanted to get married. His father insisted he have a professional education first. A medical course would take several years, so Dave fished through college catalogues to find the professional education requiring the least time. He took a two-year course at the Harvard business school.

Romance Changes Career 

At the end of the course, he married his girl and went to work for an Asiatic trading company. In the far east, he became Tokyo manager of General Motors, saw the movement through Japan of the first military trucks for the conquest of Manchukuo, left General Motors to sell American pharmaceuticals for Sterling Products in China, the Philippines, Malaya and India. Later, Corcoran was lent to Washington as president of China Defense Supplies, Inc., of the lend-lease corporation, and was the first of the crusaders to get supplies up the Burma road, to make up for the trucks he had sent into Manchuria ten years ago.

About this time Sterling Products promised the justice department to compensate for its previous partnership with the Germans by trying to drive the German drug business off the commercial map of Latin America. It seemed an impossible job. But Sterling fished Dave Corcoran out of its pocket and put him in charge of an economic drive against the key item in the German line — aspirin, which had been trademarked and advertised in Latin America for nearly 20 years and had a practical monopoly.

Corcoran had to begin from scratch with a new name. The Germans had stocks carefully accumulated against the possibility of war. Corcoran had to export from the U.S.A., often by the air, as submarines handicapped shipping routes. The Germans had a solid, 65-year-old organization; Corcoran had only a handful of young Americans.

Dave Goes Into Action

The way the Sydney Ross Co. swung into action still has Latin America gasping. Corcoran called in his old team from all over the world and scoured the lists for every good export man he had ever known. In six months, the Latin American organization had tripled. The new trade name "mejoral" became the subject of the biggest American promotion job in Latin American history.

Overnight, Sidney Ross became the biggest radio and newspaper advertiser and the biggest sound and movie truck operator in Latin America. For the first time the American government has a Latin-American "sales" organization comparable to anything the Germans ever had in their commercial conquests. This organization covers not only the city areas, but follows the trail of famous German peddler and his mule throughout the interior.

The success of the drive has been phenomenal. Wherever Sydney Ross can get supplies it is already consistently outselling the Germans and has developed such a fierce competitive technique that anti-monopoly cranks in Washington already are more concerned that Sydney Ross will dominate the market than lambasting the Germans. All of which causes Dave Corcoran to remark:

"Monopoly! About the same kind of monopoly the marines had at Wake island!"

(Copyright, 1942, by United Feature Syndicate, Inc.)

Once you have time to digest all this, we'll be back with more about Tommy the Cork's law partner, William Sterling Youngman, Jr. who is the central man in this story. In 1934 Youngman was licensed to practice law, and in April 1937 was married to Elsie Hooper Perkins. We pick up there next time. Be ready!