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People of the Opiate- Nation articl

Subject: People of the Opiate- Nation article (fwd)



December 16, 1996

by Dennis Bernstein and Leslie Kean

Burma's Dictatorship of Drugs

Burma - or Myanmar, more formally - makes the Western news pages mostly for
its repression of the struggling democracy movement led by Nobel peace
laureate Aung San Suu Kyi, who is continually harassed and was recently
physically attacked while trying to address her followers. But those who
dare to take a serious approach to drug eradication are likely to end up in
deadlier trouble with the ruling dictatorship, known as the State Law and
Order Restoration Council, or SLORC, which has incorporated the booming
heroin trade into the permanent economy of the country.

Consider the case of U Saw Lu, a revered leader in the mountainous poppy-
growing region of the Wa territory, one of many ethnic regions in Burma.
Lu, a Wa prince and chairman of the United Wa State Anti-Narcotics and
Development Organization, has waged a risky opium eradication campaign on
behalf of his people since the SLORC seized power in a 1988 coup.

In January 1992, after U Saw Lu informed the U.S. Drug Enforcement
Administration about the drug trafficking activities of a regional SLORC
intelligence chief and a local drug warlord, he found himself face to face
with a torture squad. According to D.E.A. "Sensitive" e-mail, "he was held
upside down for 56 days with 220 current attached to one of his favorite
appendages." A doctor who remained present through the torture sessions
revived Lu when he passed out. Urine was poured on his face and he was
beaten with chains as he lay near death next to a freshly dug grave. His
life was spared after Wa leaders threatened military action during a
meeting with SLORC's head of military intelligence, Lieut. Gen. Khin Nyunt.

"There were terrible scars all over his body after the torture," said
Benjamin Min, a former SLORC official from Rangoon, who quit the
dictatorship and joined Lu in his war against drugs. "He had internal
injuries and he needed medical attention."

Maj. Than Aye, the intelligence officer Lu had told the D.E.A. about,
supervised the torture sessions. The drug shipment Aye had been overseeing
was on its way to one of the world's most notorious drug kingpins, Lo Hsing
Han, destined to become a key business partner of Burma's emerging
narco-dictatorship. Major Aye has since been promoted to a high-level
government position by the ruling council.

According to Benjamin Min, Lu continued to work on opium eradication even
though he was warned during his torture to terminate any relationship with
the D.E.A. In 1993, Lu gave D.E.A. special agent Richard Horn a document
titled "The Bondage of Opium: The Agony of the Wa People, a Proposal and

In his plea, Lu outlined specific steps that were needed to promote opium
eradication among the Wa farmers, who provide 80 percent of Burma's opium
crop. The Wa, an ethnic minority of 1 million, live in a remote area of
Burma's Shan State where there are no roads, no educational system, no
medical clinics and electricity for less than 10 percent of families. Even
though the Wa farmers grow one of the globe's most sought- after crops,
they remain among the world's poorest peoples. Lu knew that any hope of
change had to include a serious plan for crop substitution. "Like the
heroin addicts that result from the opium, we too are in bondage. We are
searching for help to break that bondage," he wrote in his proposal to the

Communications between the D.E.A.'s Rangoon office and the higher officials
in Washington reveal that agent Horn had every intention of working with
the Wa people to implement Lu's proposal. But for reasons that remain
unclear, the Central Intelligence Agency and the State Department had other
ideas. D.E.A. Sensitive e-mails state that former C.I.A. Chief of Station
Arthur Brown "destroyed this project in one swift move." According to the
e-mails, Brown delivered an early version of the Wa proposal - signed by Lu
- to SLORC military intelligence officer Col. Kyaw Thein. When Thein
threatened to pick up Lu once more and teach him a lesson in respect, Horn
was able to intervene temporarily. In Horn's view, the C.I.A. destroyed a
unique opportunity for a dramatic drug eradication program in the poppy
fields of the world's biggest heroin producer. (Horn, now a D.E.A. group
supervisor in New Orleans, is suing the C.I.A., claiming it illegally
surveyed his residence in Rangoon to gain information about his plans,
which the CIA went on to foil.)

In September 1993, Horn was forced out of the country by the State
Department under pressure from the C.I.A. The plans of the Wa Prince and
his chief deputy, Benjamin Min, were crushed. A year later, Min risked his
life to take the Wa Proposal and Plea to policy-makers in Washington.
Before he left, the SLORC hatched a series of unsuccessful assassination
plots. In his sworn testimony to the Immigration and Naturalization
Service, which won him asylum in the United States, Min states, "Their aim
was to assassinate the Wa leaders, specifically U Saw Lu and myself as his
chief deputy."

Dirty Laundry

Burma has more than doubled its illicit drug exports since the SLORC
takeover in 1988. The U.S. Embassy in Rangoon reports that the area used
for poppy cultivation in Burma increased by two-thirds between 1987 and
1990. At a United Nations Drug Control Program (U.N.D.C.P.) regional
conference in November of 1993, French and American satellite surveys were
presented showing an explosion of poppy growing in areas directly under
SLORC control.

The U.N.D.C.P. also reported at the U.N.-sponsored Heads of Narcotics Law
Enforcement Agencies international meeting this November that the Asian
heroin trade reaps $63 billion in profits annually. Burma is by far the
largest exporter in the region, providing over 50 percent of the world's

This booming heroin trade has sent a flood of narco-dollars into Rangoon.
"All normal economic activities, if you can call anything in Burma normal,
are instruments of drug money laundering," says Francois Casanier, research
analyst with Geopolitical Drugwatch in Paris. "And no drug operation in
Burma can be run without the SLORC." A March 1996 narcotics report on Burma
by the US State Department points out that the country's "underdeveloped
banking system and lack of enforcement against money laundering have
created a business and investment environment conducive to the use of
drug-related proceeds in legitimate commerce." A study by the International
Monetary Fund cites large expenditures unaccounted for by the Burmese
government: Despite the fact that Burma's foreign exchange reserves for
1991 through 1993 were only approximately $300 million, the SLORC purchased
arms valued at $1.2 billion during the period.

According to a 1995 report on Burma's drug trade, the Australian Parliament
Committee of Foreign Affairs, Defence and Trade heard testimony that
Burma's "narcotics trade was protected at the highest level of the
Government" and that the SLORC's involvement occurs "on an individual basis
for personal profit, covering areas of responsibility for transport,
protection and patronage; and as a matter of policy, either explicit or
covert, in order to raise government revenue."

The integration of narco dollars into the national economy is further
highlighted by a new economic report from the U.S. Embassy in Rangoon.
Released in July, the "Country Commercial Guide" states that at least 50
percent of Burma's economy is unaccounted for and extralegal. "Exports of
opiates alone appear to be worth about as much as all legal exports," the
report says. The eighty-eight-page document is based on the SLORC's own
economic data. It goes on to say that investments in infrastructure and
hotels are coming from major opiate growing and opiate exporting
organizations and from those with close ties to these organizations.
"Barriers between the opiates sector and the legal economy appear to have
weakened in recent years, a trend that may have accelerated in the last few
months," it explains.

A four-year investigation conducted by intelligence analyst Casanier and a
team of researchers found that Burma's national company Myanmar Oil and Gas
Enterprise (MOGE) was "the main channel for laundering the revenues of
heroin produced and exported under the control of the Burmese army." In a
business deal signed with the French oil giant Total in 1992, and later
joined by Unocal, MOGE received a payment of $15 million. "Despite the fact
that MOGE has no assets besides the limited installments of its foreign
partners and makes no profit, and that the Burmese state never had the
capacity to allocate any currency credit to MOGE, the Singapore bank
accounts of this company have seen the transfer of hundreds of millions of
U.S. dollars," reports Casanier. According to a confidential MOGE file
reviewed by the investigators, funds exceeding $60 million and originating
from Burma's most renowned drug lord, Khun Sa, were channeled through the
company. "Drug money is irrigating every economic activity in Burma,"
Casanier says, "and big foreign partners are also seen by the SLORC as big
shields for money laundering."

Astonishingly, drug money is actually solicited by Burma's state-controlled
banks. The national bank in Rangoon openly provides money-laundering
services, turning drug money into clean money for a 40 percent cut.
Occasionally official announcements run in the state-controlled press
promoting specials at a reduced charge of 25 percent, no questions asked.
Bertil Lintner, a noted authority on Burma's drug trade, says there is a
private banking boom in Rangoon based on the influx of narco-dollars.

Father and Son: A Drug Legacy

The SLORC's close relationship with Burma's most powerful drug traffickers
was revealed to the world at this past spring's wedding celebration of
entrepreneur Steven Law, son of legendary druglord Lo Hsing Han, who as of
1994 controlled the most heavily armed drug-trafficking organization in
Southeast Asia. It is doubtful that anyone attending this lavish affair was
thinking about the torture suffered by U Saw Lu for trying to impede Han's
drug trade back in 1992. The family's guest of honor was Hotels and Tourism
Minister Lieut. Gen. Kyaw Ba, whose presence, along with three other SLORC
ministers and four Cabinet ministers, lent strong political overt ones to
the celebration. Other well known traffickers were also in attendance. The
event received significant exposure in the New Light of Myanmar, the
state-controlled paper.

Lo Hsing Han's drug links to top levels of the SLORC are well documented. A
memo from the Thai Government's Office of Narcotics Control Board names the
SLORC's military intelligence chief, Lieut. Gen. Khin Nyunt, as one
"supporter." It goes on to say that in February 1993, Lo Hsing Han was
granted the "privilege from Brig. Gen. Khin Nyunt to smuggle heroin from
the Kokang group to Tachilek [on the Thai border] without interception."

Steven Law is the managing director of Asia World Company Limited, a
trading and development firm in Rangoon whose chairman is his father, Lo
Hsing Han. Founded in 1992, Asia World reports it's "authorized capital" to
have been $40 million, and it has since invested an estimated $200 million
in construction projects around Rangoon. In a joint venture with the SLORC,
Law's company was given a twenty-five-year contract in April for a new
wharf at Yangon Port, which handles over 90 percent of Burma's exports.
With the SLORC's blessings, one of the world's biggest heroin traffickers
will thus own and operate a port sending ships loaded with cargo to the
United States and countries around the world. (While Steven Law is being
honored in Burma, he has been forbidden entrance into the United States due
to "suspicion of involvement in narcotics trafficking," according to a US
State Department official who asked not to be named.)

'Our Own Blood Brethren'

The SLORC's budding relationship with the recently "surrendered" Khun Sa,
the world's most wanted heroin smuggler, was by all accounts a leap forward
in the junta's solidification of the narco-dictatorship. In January of this
year, the SLORC ceremoniously welcomed Khun Sa and his associates into
Rangoon as "our own blood brethren." Intelligence chief Khin Nyunt said in
a speech that "we will look after them well on humanitarian grounds and for
the sake of national spirit." Drug expert Bertil Lintner sums up thereality
of the situation: "Khun Sa's 'surrender' has brought the last warlord out
of the jungles and into Rangoon - where he, like everybody else these days,
can continue his business. Millions of dollars have been transferred from
bank accounts abroad to Rangoon since Khun Sa settled there."

The deal for Khun Sa's new alliance with the SLORC was negotiated by
SLORC's Defense Commander Gen. Maung Aye and Khun Sa's uncle in Rangoon in
December 1995. It was highly fitting that the powerful hard-liner Maung Aye
should serve as negotiator. In his previous post as head of the Eastern
Command, the area in which Khun Sa maintained his drug operations, numerous
sources report that Maung Aye was on Khun Sa's payroll for allowing drug
operations to continue unimpeded. He has since been promoted to
Vice-Chairman, the second most powerful position in the SLORC, and is
expected to succeed the Chairman, Gen. Than Shwe, when he retires.

This past spring, Khun Sa was given a commercial bus concession from
Rangoon into Shan State, the location of his drug empire along the China
border. His third son, Sam Seun, is investing $20 million in the
development of a forty-four-acre plot that was presented as a gift to Khun
Sa by the SLORC at the time of their deal. As reported by the Bangkok Post,
the tourist facility, situated along the Thai border, will include a
gambling casino, large hotel and "other forms of entertainment." Thai
officials are worried about the increase in drug trafficking and money
laundering that will result from Khun Sa's family enterprise.

In previous years, the SLORC had claimed it could not crack down on drugs
due to Khun Sa's control of Shan State and that his surrender would result
in a substantial reduction in drug exports. "On the contrary, there will be
more opium," Khun Sa mused a few months before securing his deal, knowing
that it would give the SLORC access to his refineries in Shan State. Banpot
Piamdee, head of the Northern Narcotics Prevention and Suppression Centre
in Thailand, and international narcotics agents confirmed that Khun Sa's
surrender has done absolutely nothing to stem the flow of heroin out of
Burma. In fact, the US State Department's annual opium survey shows that
this year's harvest was 9% larger than last year's. Winston Lord, Assistant
Secretary of State for East Asia and the Pacific, called the SLORC's new
partnership with Khun Sa a "defeat for the control of drugs in all our

The Shan Herald Agency for News reported on August 2 that the heroin
refineries in the jungles of Khun Sa's territory, owned by two of the
druglord's followers, had stopped functioning for two months when the
Burmese occupied the area at the time of Khun Sa's departure for Rangoon.
However, refinery operators were given the green light by SLORC troops in
mid-March and are back in full swing, "enjoying more freedom than before."
The Bangkok Post reported on August 21 that "Rangoon has officially allowed
former Mong Tai Army soldiers [Khun Sa's army] and Shan People at Ho Mong
[Khun Sa's former headquarters] to grow opium poppies to ease poverty in
the area."

Along with Lo Hsing Han and Khun Sa, other ethnic drug traffickers have
also benefited from good relationships with the Rangoon junta, according to
this spring's State Department Narcotics Report. Following a list of the
names of eight top traffickers from the Shan, Kachin and Wa areas, the
report points out that the SLORC has given these individuals "significant
political legitimacy" by referring to them as "leaders of national races."
Several of them have even been handpicked to help write the nation's new
Constitution. It is hardly surprising that the SLORC refused a U.S. offer
of $2 million to extradite Khun Sa to stand trial here. (Khun Sa was
indicted in a US federal court in December 1989 on charges of smuggling
more than $350 million worth of heroin into the U.S. between 1986 and

Heroin, Vegetables and Cigarettes

Outside of Rangoon, SLORC local commanders and their brigades carry out
policies that actively promote the expansion of poppy growing. Payoffs,
kickbacks and extortion by the military in connection with opium growing
and drug transport are factors of daily life for most villagers. Due to
cease-fire agreements signed with fifteen ethnic minorities since 1989, the
SLORC army now has full access to every border in Burma and control of
border check points for the first time.

Geopolitical Drugwatch researcher Casanier says that SLORC army officials
extort "taxes" from impoverished opium growers to supplement their meager
salaries. This monthly, per-acre extortion forces villagers to continue
farming opium simply to be able to meet the tax quota, thereby keeping them
dependent on the cash crop. If villagers do not deliver, their livestock is
confiscated, family members are held for ransom, or they are taken away and
used as forced labor on infrastructure projects. The less lucky ones,
usually the village headmen, are arrested and tortured.

SLORC Minister for Hotels and Tourism Lieut. Gen. Kyaw Ba, the guest of
honor at Steven Law's wedding, became rich from drug payoffs, according to
several sources, when he served as Northern Commander in Kachin State prior
to his promotion to the SLORC. Like many military commanders, he was the
beneficiary of a portion of the opium taxes and bribes that filter up from
battalions and the payoffs that come down from the drug lords. "Khun Sa
[has] paid 500,000 kyat ($5,000) a month since 1992 to one general who was
commanding this region," one officer of his army in Shan State told

Loong Kyong, a 45 year old Shan farmer who fled to Thailand, told human
rights investigators this past May that Burmese soldiers actually encourage
rice farmers to substitute opium for their rice crop. "The reason the
Burmese say not to grow rice is that if you grow rice you have to give some
to the rebel groups, and to others, and you have to get your rice milled,"
he said. "So they say just grow opium and you can easily get money and buy
your rice. The military will buy the opium."

All over Burma, rural communities are succumbing to the supplies of cheap
heroin distributed unchecked in their villages. "Drug users and retail drug
dealers can increasingly by found everywhere," reports the Shan Herald
Agency for News. "Amphetamines and heroin are being bought and sold like
vegetables from roadside peddlers." Rangoon and Mandalay, Burma's second
largest city, are also facing heroin epidemics.

"Only since the 1988 SLORC takeover have chemicals needed to refine the
purest grades of heroin become available in Burma's most remote areas,"
states a drug eradication proposal presented by the people of Wa State to
the International Conference on Drugs in Portugal in March. "Local militia
groups, formerly opposed to the government and long-linked to the heroin
trade, now do business freely through SLORC-controlled frontier areas." The
Australian Parliament Committee of Foreign Affairs was told last year that
"opium is warehoused at Burmese military bases, while trucks transporting
narcotics are sometimes escorted by military vehicles to avoid inspection
en route."

In Burma's northernmost Kachin state, things have also taken a turn for the
worse. Three years before the Kachin signed a cease fire agreement with the
SLORC in 1994, Kachin leaders had mounted an "Opium Free State" campaign
that brought a drastic reduction in poppy cultivation to parts of their
territory. The 1996 report "Current Status of Drug Eradication in Kachin
State" by the Kachin Independence Organization claims a
"dramatic...resurgence of poppy cultivation and opium production in areas
that were previously considered to be 90 per cent contained."

Benjamin Min, formerly with the SLORC Ministry of Mines, and independent
human rights investigators describe the devastating impact of drugs in the
jade mines of the remote Kachin State. Managers of the SLORC-owned mines,
some in joint ventures with Chinese business men, are giving their workers
the option of receiving compensation in hard drugs rather than cash. Up to
200,000 miners, who travel from their villages out of desperation for work,
can be found in one mine where drugs are cheap and shooting galleries
service hundreds with one needle. Min reports that two thirds of the
100,000 workers at Hpakant Jade Mine, owned entirely by SLORC, have chosen
to be paid by drugs in lieu of cash. And the only way large shipments of
illegal substances can find their way into Kachin State is through
SLORC-controlled gates. More than 90 percent of the addicts in the region
are H.I.V. positive, according to a U.N. report.

Kachin leaders and independent analysts believe that drugs are used as a
tacit tool of control by the military to pacify the Kachin population. "In
the Kachin people's minds, the heroin tragedy is a form of cultural
genocide for eliminating large portions of a volatile minority that has
strong sentiments against the government," stated a U.S. human rights
investigator who has managed to penetrate the restricted areas. Michael
Jala Maran, executive director of the Pan Kachin Development Society,
returned to Thailand in September from a distressful visit to Kachin State.
"The AIDS situation is a complete disaster," he said. "I'd call it the
result of the deliberate politics of heroin visited on the Kachin people
since the nefarious ceasefire."

Needle sharing, a proliferation of brothels, a death of public education
and virtually no medical care have created an explosion in the number of
AIDS cases, with dangerous implications for the region. The U.N. reports
that 60-70 percent of IV drug users in Burma are H.I.V. positive. (Even the
SLORC acknowledges that there are more than 400,000 H.I.V. positive people
in Burma.) The World Health Organization figure for the overall number of
addicts is close to 500,000, or 1 percent of the population, but other
experts say that a more realistic figure is 2 - 4 percent. Millions of
migrants are pouring out of Burma into neighboring Thailand, China and
India, carrying H.I.V. with them. The Southeast Asian Information Network
points to the dramatic correlations between the heroin routes out of Burma
and the rise of the AIDS epidemic in the country's neighbors. The highest
rates of H.I.V. infection in both China and India lie right at their border
with Burma.

There is a direct correlation between the rise in heroin production in
Burma and a resurgence of heroin use in the last five years in the United
States. Government figures show that the volume of heroin imported into
this country, and likewise heroin consumption, has doubled since the
mid-eighties. The amount of Burmese heroin sold in New York City has
tripled since 1989, according to Jane's Intelligence Review. The March
State Department report and interviews with U.S. officials indicate that
more than 60 percent of heroin seized in the United States comes from

Madeleine Albright, U.S. ambassador to the U.N., recently described Burma
as closely resembling the Orwell novel 1984. "The authorities there are
among the most repressive and intrusive on earth," she said. "The rule of
law so ardently desired elsewhere has here been perverted for there is no
connection between justice and law." Yet this is a story that goes beyond
the usual realm of human rights: Burma's ruling junta appears willing to
addict an entire nation to drugs, both by setting up a long-term financial
dependency on the heroin trade and by fostering a massive upsurge in drug
usage. And the enormous financial payout from the SLORC's pro-drug policies
helps the narco-dictatorship secure its hold on power against the
struggling democracy movement.

Meanwhile, the heroin pipeline from Burma to the United States is opened up
full blast, and mainlining has become trendy among U.S. youth. San
Francisco Police Sergeant John Murphy said in July that buying heroin in
his city is "as easy as buying a pack of cigarettes."

Dennis Bernstein, an associate editor with Pacific News Service, is
co-producer of Flashpoints at KPFA-FM in Berkeley, CA. Leslie Kean, a
writer based in Mill Valley, CA, is co-author of Burma's Revolution of the
Spirit: The Struggle for Democratic Freedom and Dignity (Aperture, 1994).
This article was written with the support of the Fund for Investigative

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