PART 3:THE POLITICS OF HEROIN IN S.E ASIA;

The Politics of Heroin in Southeast Asia 

By Alfred W. McCoy with 

Cathleen B. Read 

and Leonard P.Adams II 

4. 

Cold War Opium Boom 

It is March or April, the end of the dry season, in Southeast Asia's Golden Triangle. From the Kachin hills and Shan plateau of Burma to the mountains of northern Thailand and northern Laos, the ground is parched and the rains are only weeks away. In every hill tribe village-whether it be Meo, Yao, Lahu, Lisu, Wa, or Kachin-it is time to clear the fields for planting. On one of these hot, dusty mornings men, women, and children gather at the bottom of a wide hillside near the village, where for weeks the men have been chopping and slashing at the forest growth with single-bited axes The felled trees are tinderbox dry, 

Suddenly, the young men of the village race down the hill, igniting the timber with torches. Behind them, whirlwinds of flame shoot four hundred feet into the sky. Within the hour a billowing cloud of smoke rises two miles above the field. When the fires die down, the fields are covered with a nourishing layer of wood ash and the soil's moisture is sealed beneath the ground's fire-hardened surface. But before the planting can begin, these farmers must decide what crop they are going to plant-rice or poppies? 

Although their agricultural techniques hearken back to the Stone Age, these mountain farmers are very much a part of the modern world. And like farmers everywhere their basic economic decisions are controlled by larger forces-by the international market for commodities and the prices of manufactured goods. In their case the high cost of transportation to and from their remote mountain villages rules out most cash crops and leaves only two choices--opium or rice. The safe decision has always been to plant rice, since it can always be eaten if the market fails. A farmer can cultivate a small patch of poppy on the side, but he will not commit his full time to opium production unless he is sure that there is a market for his crop. 

A reliable market for their opium had developed in the early 1950's, when several major changes in the international opium trade slowed, and then halted, the imports of Chinese and Iranian opium that had supplied Southeast Asia's addicts for almost a hundred years. Then the Thai police, the Chinese Nationalist Army and French and American intelligence agencies allowed the mass narcotics addiction fostered by European colonialism to survive-and even thrive-in the 1950's by deliberately or inadvertently promoting local poppy cultivation in the Golden Triangle. 

As a result of the activities of these various military and intelligence agencies, Southeast Asia was completely self-sufficient in opium and had almost attained its present level of production by the end of the decade. Recent research by the U.S. Bureau of Narcotics has shown that by the late 1950's Southeast Asia's Golden Triangle region was producing approximately seven hundred tons of raw opium, or about 50 percent of the world's total illicit production. (1) 

The Meo of Indochina had long been the subject of pressures for large-scale poppy cultivation. During World War II the French colonial government was cut off from international supplies, and had, as has already been mentioned, imposed an opium tax to force the Meo of Laos and Tonkin to expand their opium production to meet wartime needs. But in 1948 the French government responded to international pressure by mounting a five-year campaign to abolish opium smoking in Indochina. However, French intelligence agencies, short of funds to finance their clandestine operations against the Communist Viet Minh, quickly and secretly took over the narcotics traffic. 

General Phao

In the Burma-Thailand area, during the early 1950's the CIA tried to use remnants of the defeated Chinese Nationalist Army (Kuomintang, or K.M.T) in an attempt to seal the Burma-China borderlands against a feared Chinese invasion of Southeast Asia. Nationalist troops turned out to be better opium traders than guerrillas, and used their American-supplied arms to force the Burmese hill tribes to expand production. They shipped the bumper harvests to northern Thailand, where they were sold to the Thai police force, which, coincidentally, was another CIA client. Under the direction of their commander, General Phao, the police used CIA-supplied equipment to transport the opium to Bangkok for export to the new markets of Malaysia, Indonesia, and Hong Kong. In 1954 a British customs officer in Singapore stated that Bangkok had become the opium capital of Asia and was distributing 30 percent of the region's opium. There was so much Burmese and Thai opium on the illicit market that it was selling for 25 percent less than Iranian opium and 40 percent less than the famous Indian brands. (2) 

Southeast Asia's opium trade had come a long way in 150 years: close to a million addicts provided a local market for opium and its derivatives; well-organized syndicates, their personnel mainly drawn from military and intelligence communities, provided the organizational expertise to move opium from the mountain fields to urban consumer markets; and an ample number of skilled highland cultivators were now devoting most of their agricultural labor to poppy cultivation. Although the region still exported only limited amounts of opium, morphine, and heroin to Europe and the United States, the region's narcotics trade was well enough developed by the late 1950's to meet any demands for more substantial shipments.  

French Indochina: Opium 

Espionage and "Operation X" 

The French colonial government's campaign gradually to eliminate opium addiction, which began in 1946 with the abolition of the Opium Monopoly, never had a chance of success. Desperately short of funds, French intelligence and paramilitary agencies took over the opium traffic in order to finance their covert operations during the First Indochina War (1946-1954). As soon as the civil administration would abolish some aspect of the trade, French intelligence services proceeded to take it over. By 1951 they controlled most of the opium trade-from the mountain poppy fields to the urban smoking dens. Dubbed "Operation X" by insiders, this clandestine opium traffic produced a legacy of Corsican narcotics syndicates and corrupted French intelligence officers who remain even today key figures in the international narcotics trade. 

The First Indochina War was a bitter nine-year struggle between a dying French colonial empire and an emerging Vietnamese nation. It was a war of contrasts. On one side was the French Expeditionary Corps, one of the proudest, most professional military organizations in the world, with a tradition going back more than three hundred years to the time of Louis XIV. Arrayed against it was the Viet Minh, an agglomeration of weak guerrilla bands, the oldest of which had only two years of sporadic military experience when the war broke out in 1946. The French commanders struck poses of almost fictional proportions: General de Lattre, the gentleman warrior; Gen. Raoul Salan, the hardened Indochina hand; Maj. Roger Trinquier, the cold-blooded, scientific tactician; and Capt. Antoine Savani, the Corsican Machiavelli. The Viet Minh commanders were shadowy figures, rarely emerging into public view, and when they did, attributing their successes to the correctness of the party line or the courage of the rank and file. French military publicists wrote of the excellence of this general's tactical understanding or that general's brilliant maneuvers, while the Viet Minh press projected socialist caricatures of struggling workers and peasants, heroic front-line fighters, and party wisdom. 

These superficialities were indicative of the profound differences in the two armies. At the beginning of the war the French high command viewed the conflict as a tactical exercise whose outcome would be determined, according to traditional military doctrines, by controlling territory and winning battles. The Viet Minh understood the war in radically different terms; to them, the war was not a military problem, it was a political one. As the Viet Minh commander, Gen. Vo Nguyen Giap, has noted: "political activities were more important than military activities, and fighting less important than propaganda; armed activity was used to safeguard, consolidate, and develop political bases." (3)

The Viet Minh's goal was to develop a political program that would draw the entire population regardless of race, religion, sex, or class background into the struggle for national liberation. Theirs was a romantic vision of the mass uprising: resistance becoming so widespread and so intense that the French would be harassed everywhere. Once the front line troops and the masses in the rear were determined to win, the tactical questions of how to apply this force were rather elementary. 

The French suffered through several years of frustrating stalemate before realizing that their application of classical textbook precepts was losing the war. But they slowly developed a new strategy of counter guerrilla, or counterinsurgency, warfare. By 1950- 1951 younger, innovative French officers had abandoned the conventional war precepts that essentially visualized Indochina as a depopulated staging ground for fortified lines, massive sweeps, and flanking maneuvers. Instead Indochina became a vast chessboard where hill tribes, bandits, and religious minorities could be used as pawns to hold certain territories and prevent Viet Minh infiltration. The French concluded formal alliances with a number of these ethnic or religious factions and supplied them with arms and money to keep the Viet Minh out of their area. The French hope was to atomize the Viet Minh's mobilized, unified mass into a mosaic of autonomous fiefs hostile to the revolutionary movement. 

Maj. Roger Trinquier and Capt. Antoine Savani were the most important apostles of this new military doctrine. Captain Savani secured portions of Cochin China (comprising Saigon and the Mekong Delta) by rallying river pirates, Catholics, and messianic religious cults to the French side. Along the spine of the Annamite Mountains from the Central Highlands to the China border, Major Trinquier recruited an incredible variety of hill tribes; by 1954 more than forty thousand tribal mercenaries were busy ambushing Viet Minh supply lines, safeguarding territory, and providing intelligence. Other French officers organized Catholic militia from parishes in the Tonkin Delta, Nung pirates on the Tonkin Gulf, and a Catholic militia in Hue. 

Although the French euphemistically referred to these local troops as "supplementary forces" and attempted to legitimize their leaders with ranks, commissions, and military decorations, they were little more than mercenaries and very greedy, very expensive mercenaries at that. To ensure the loyalty of the Binh Xuyen river pirates who guarded Saigon, the French allowed them to organize a variety of lucrative criminal enterprises and paid them an annual stipend of $85,000 as well. (4) Trinquier may have had forty thousand hill tribe guerrillas under his command by 1954, but he also had to pay dearly for their services: he needed an initial outlay of $15,000 for basic training, arms, and bonuses to set up each mercenary unit of 150 men. (5) It is no exaggeration to say that the success of Savani's and Trinquier's work depended almost entirely on adequate financing; if they were well funded they could expand their programs almost indefinitely, but without capital they could not even begin. 

But the counterinsurgency efforts were continually plagued by a lack of money. The war was tremendously unpopular in France, and the French National Assembly reduced its outlay to barely enough for the regular military units, leaving almost nothing for extras such as paramilitary or intelligence work. Moreover, the high command itself never really approved of the younger generation's unconventional approach and were unwilling to divert scarce funds from the regular units. Trinquier still complains that the high command never understood what he was trying to do, and says that they consistently refused to provide sufficient funds for his operations. (6) 

The solution was "Operation X," a clandestine narcotics traffic so secret that only high ranking French and Vietnamese officials even knew of its existence. The anti opium drive that began in 1946 received scant support from the "Indochina hands"; customs officials continued to purchase raw opium from the Meo, and the opium smoking dens, cosmetically renamed "detoxification clinics," continued to sell unlimited quantities of opium.' However, on September 3, 1948, the French high commissioner announced that each smoker had to register with the government, submit to a medical examination to ascertain the degree of his addiction, and then be weaned of the habit by having his dosage gradually reduced. (8) Statistically the program was a success. The customs service had bought sixty tons of raw opium from the Meo and Yao in 1943, but in 1951 they purchased almost nothing? (9) The "detoxification clinics" were closed and the hermetically sealed opium packets each addict purchased from the customs service contained a constantly dwindling amount of opium. (10) 

But the opium trade remained essentially unchanged. The only real differences were that the government, having abandoned opium as a source of revenue, now faced serious budgetary problems; and the French intelligence community, having secretly taken over the opium trade, had all theirs solved. The Opium Monopoly had gone underground to become "Operation X." 

Unlike the American CIA, which has its own independent administration and chain of command, French intelligence agencies have always been closely tied to the regular military hierarchy. The most important French intelligence agency, and the closest equivalent to the CIA, is the S.D.E.C.E (Service de Documentation Exterieure et du ContreEspionage). During the First Indochina War, its Southeast Asian representative, Colonel Maurice Belleux, supervised four separate S.D.E.C.E "services" operating inside the war zone-intelligence, decoding, counterespionage, and action (paramilitary operations). While S.D.E.C.E was allowed a great deal of autonomy in its pure intelligence work-spying, decoding, and counterespionage-the French high command assumed much of the responsibility for S.D.E.C.E's paramilitary Action Service. Thus, although Major Trinquier's hill tribe guerrilla organization, the Mixed Airborne Commando Group (M.A.C.G), was nominally subordinate to S.D.E.C.E's Action Service, in reality it reported to the Expeditionary Corps' high command. All of the other paramilitary units, including Captain Savani's Binh Xuyen river pirates, Catholics, and armed religious groups, reported to the 2eme Bureau, the military intelligence bureau of the French Expeditionary Corps. 

During its peak years from 1951 to 1954, Operation X was sanctioned on the highest levels by Colonel Belleux for S.D.E.C.E and Gen. Raoul Salan for the Expeditionary Corps. (11) Below them, Major Trinquier of M.A.C.G assured Operation X a steady supply of Meo opium by ordering his liaison officers serving with Meo commander Touby Lyfoung and Tai Federation leader Deo Van Long to buy opium at a competitive price. Among the various French paramilitary agencies, the work of the Mixed Airborne Command Group (M.A.C.G) was most inextricably interwoven with the opium trade, and not only in order to finance operations. For its field officers in Laos and Tonkin had soon realized that unless they provided a regular outlet for the local opium production, the prosperity and loyalty of their hill tribe allies would be undermined. 

Once the opium was collected after the annual spring harvest, Trinquier had the mountain guerrillas fly it to Cap Saint Jacques (Vungtau) near Saigon, where the Action Service school trained hill tribe mercenaries at a military base. There were no customs or police controls to interfere with or expose the illicit shipments here. From Cap Saint Jacques the opium was trucked the sixty miles into Saigon and turned over to the Binh Xuyen bandits, who were there serving as the city's local militia and managing its opium traffic, under the supervision of Capt. Antoine Savani of the 2eme Bureau. (12) 

The Binh Xuyen operated two major opium-boiling plants in Saigon (one near their headquarters at Cholon's Y-Bridge and the other near the National Assembly) to transform the raw poppy sap into a smokable form. The bandits distributed the prepared opium to dens and retail shops throughout Saigon and Cholon, some of which were owned by the Binh Xuyen (the others paid the gangsters a substantial share of their profits for protection). The Binh Xuyen divided its receipts with Trinquier's M.A.C.G and Savani's 2eme Bureau. (13) Any surplus opium the Binh Xuyen were unable to market was sold to local Chinese merchants for export to Hong Kong or else to the Corsican criminal syndicates in Saigon for shipment to Marseille. M.A.C.G deposited its portion in a secret account managed by the Action Service office in Saigon. When Touby Lyfoung or any other Meo tribal leader needed money, he flew to Saigon and personally drew money out of the caisse noire, or black box. (13) 

M.A.C.G had had its humble beginnings in 1950 following a visit to Indochina by the S.D.E.C.E deputy director, who decided to experiment with using hill tribe warriors as mountain mercenaries. Colonel Grail was appointed commander of the fledgling unit, twenty officers were assigned to work with hill tribes in the Central Highlands, and a special paramilitary training camp for hill tribes, the Action School, was established at Cap Saint Jacques. (14) However, the program remained experimental until December 1950, when Marshal Jean de Lattre de Tassigny was appointed commander in chief of the Expeditionary Corps. Realizing that the program had promise, General de Lattre transferred 140 to 150 officers to M.A.C.G, and appointed Maj. Roger Trinquier to command its operations in Laos and Tonkin. (15) Although Grail remained the nominal commander until 1953, it was Trinquier who developed most of MACG's innovative counterinsurgency tactics, forged most of the important tribal alliances, and organized much of the opium trade during his three years of service. (16) 

His program for organizing country guerrilla units in Tonkin and Laos established him as a leading international specialist in counterinsurgency warfare. He evolved a precise four point method for transforming any hill tribe area in Indochina from a scattering of mountain hamlets into a tightly disciplined, counter guerrilla infrastructure-a maquis. Since his theories also fascinated the CIA and later inspired American programs in Vietnam and Laos, they bear some examination. 

PRELIMINARY STAGE. A small group of carefully selected officers fly over hill tribe villages in a light aircraft to test the response of the inhabitants. If somebody shoots at the aircraft, the area is probably hostile, but if the tribesmen wave, then the area might have potential. [a 1951, for example, Major Trinquier organized the first maquis in Tonkin by repeatedly flying over Meo villages northwest of Lai Chan until he drew a response. When some of the Meo waved the French tricolor, he realized the area qualified for stage. (17) 

STAGE 1. Four or five M.A.C.G commandos were parachuted into the target area to recruit about fifty local tribesmen for counter guerrilla training at the Action School in Cap Saint Jacques, where up to three hundred guerrillas could be trained at a time. Trinquier later explained his criterion for selecting these first tribal cadres: 

They are doubtless more attracted by the benefits they can expect than by our country itself, but this attachment can be unflagging if we are resolved to accept it and are firm in our intentions and objectives. We know also that, in troubled periods, self-interest and ambition have always been powerful incentives for dynamic individuals who want to move out of their rut and get somewhere. (18) 

These ambitious mercenaries were given a forty-day commando course comprising airborne training, radio operation, demolition, small arms use, and counterintelligence. Afterward the group was broken up into four-man teams comprised of a combat commander, radio operator, and two intelligence officers. The teams were trained to operate independently of one another so that the maquis could survive were any of the teams captured. Stage I took two and a half months, and was budgeted at $3,000. 

STAGE 2. The original recruits returned to their home area with arms, radios, and money to set up the maquis. Through their friends and relatives, they began propagandizing the local population and gathering basic intelligence about Viet Minh activities in the area. Stage 2 was considered completed when the initial teams had managed to recruit a hundred more of their fellow tribesmen for training at Cap Saint Jacques. This stage usually took about two months and $6,000, with most of the increased expenses consisting of the relatively high salaries of these mercenary troops. 

STAGE 3 was by far the most complex and critical part of the entire process. The target area was transformed from an innocent scattering of mountain villages into a tightly controlled maquis. After the return of the final hundred cadres, any Viet Minh organizers in the area were assassinated, a tribal leader "representative of the ethnic and geographic group predominant in the zone" was selected, and arms were parachuted to the hill tribesmen. If the planning and organization had been properly carried out, the maquis would have up to three thousand armed tribesmen collecting intelligence, ferreting out Viet Minh cadres, and launching guerrilla assaults on nearby Viet Minh camps and supply lines. Moreover, the maquis was capable of running itself, with the selected tribal leader communicating regularly by radio with French liaison officers in Hanoi or Saigon to assure a steady supply of arms, ammunition, and money. 

While the overall success of this program proved its military value, the impact on the French officer corps revealed the dangers inherent in clandestine military operations that allow its leaders carte blanche to violate any or all military regulations and moral laws. The Algerian war, with its methodical torture of civilians, continued the inevitable brutalization of France's elite professional units. Afterward, while his comrades in arms were bombing buildings and assassinating government leaders in Paris in defiance of President de Gaulle's decision to withdraw from Algeria, Trinquier, who had directed the torture campaign during the battle for Algiers, flaunted international law by organizing Katanga's white mercenary army to fight a U.N. peace-keeping force during the 1961 Congo crisis. (19) Retiring to France to reflect, Trinquier advocated the adoption of "calculated acts of sabotage and terrorism, (20) and Systematic duplicity in international dealings as an integral part of national defense policy. (21) While at first glance it may seem incredible that the French military could have become involved in the Indochina narcotics traffic, in retrospect it can be understood as just another consequence of allowing men to do whatever seems expedient. 

Trinquier had developed three important counter guerrilla maquis for M.A.C.G in northeast Laos and Tonkin during 1950-1953: the Meo maquis in Laos under the command of Touby Lyfoung; the Tai maquis under Deo Van Long in northwestern Tonkin; and the Meo maquis east of the Red River in north central Tonkin. Since opium was the only significant economic resource in each of these three regions, M.A.C.G's opium purchasing policy was just as important as its military tactics in determining the effectiveness of highland counterinsurgency programs. Where M.A.C.G purchased the opium directly from the Meo and paid them a good price, they remained loyal to the French. But when the French used non-Meo highland minorities as brokers and did nothing to prevent the Meo from being cheated, the Meo tribesmen joined the Viet Minh-with disastrous consequences for the French. 

Unquestionably, the most successful M.A.C.G operation was the Meo maquis in Xieng Khouang Province, Laos, led by the French-educated Meo Touby Lyfoung. When the Expeditionary Corps assumed responsibility for the opium traffic on the Plain of Jars in 1949-1950, they appointed Touby their opium broker, as had the Opium Monopoly before them. (22) Major Trinquier did not need to use his four-stage plan when dealing with the Xieng Khoung Province Meo; soon after he took command in 1951, Touby came to Hanoi to offer to help initiate M.A.C.G commando operations among his Meo followers. Because there had been little Viet Minh activity near the Plain of Jars since 1946, both agreed to start slowly by sending a handful of recruits to the Action School for radio instruction. (23) Until the Geneva truce in 1954 the French military continued to pay Touby an excellent price for the Xieng Khouang opium harvest, thus assuring his followers' loyalty and providing him with sufficient funds to influence the course of Meo politics. This arrangement also made Touby extremely wealthy by Meo standards, In exchange for these favors, Touby remained the most loyal and active of the hill tribe commanders in Indochina. 

Touby proved his worth during the 1953-1954 Viet Minh offensive. In December 1952 the Viet Minh launched an offensive into the Tai country in northwestern Tonkin (North Vietnam), and were moving quickly toward the Laos-Vietnam border when they ran short of supplies and withdrew before crossing into Laos. (24) But since rumors persisted that the Viet Minh were going to drive for the Mekong the following spring, an emergency training camp was set up on the Plain of Jars and the first of some five hundred young Meo were flown to Cap Saint Jacques for a crash training program. Just as the program was getting underway, the Viet Minh and Pathet Lao (the Lao national liberation movement) launched a combined offensive across the border into Laos, capturing Sam Neua City on April 12, 1953. The Vietnam 316th People's Army Division, Pathet Lao irregulars, and local Meo partisans organized by Lo Faydang drove westward, capturing Xieng Khouang City two weeks later. But with Touby's Meo irregulars providing intelligence and covering their mountain flanks, French and Lao colonial troops used their tanks and artillery to good advantage on the flat Plain of Jars and held off the Pathet Lao-Viet Minh units. (25) 

In May the French Expeditionary Corps built a steel mat airfield on the plain and began airlifting in twelve thousand troops, some small tanks, and heavy engineering equipment. Under the supervision of Gen. Albert Sore, who arrived in June, the plain was soon transformed into a virtual fortress guarded by forty to fifty reinforced bunkers and blockhouses. Having used mountain minorities to crush rebellions in Morocco, Sore appreciated their importance and met with Touby soon after his arrival. After an aerial tour of the region with Touby and his M.A.C.G adviser, Sore sent out four columns escorted by Touby's partisans to sweep Xieng Khouang Province clean of any remaining enemy units. After this, Sore arranged with Touby and M.A.C.G that the Meo would provide intelligence and guard the mountain approaches while his regular units garrisoned the plain itself. The arrangement worked well, and Sore remembers meeting amicably on a regular basis with Touby and Lieut. Vang Pao, then company commander of a Meo irregular unit (and now commander of CIA mercenaries in Laos), to exchange intelligence and discuss paramilitary operations. He also recalls that Touby delivered substantial quantities of raw opium to M.A.C.G advisers for the regular DC-3 flights to Cap Saint Jacques, and feels that the French support of the Meo opium trade was a major factor in their military aggressiveness. As Sore put it, "The Meo were defending their own region, and of course by defending their region they were defending their opium." (26) 

Another outsider also witnessed the machinations of the covert Operation X. During a six-week investigative tour of Indochina during June/July 1953, Col. Edward 0. Lansdale of the American CIA discovered the existence of Operation X. Trying to put together a firsthand report of the Viet Minh invasion of Laos, Lansdale flew up to the Plain of Jars, where he learned that French officers had bought up the 1953 opium harvest, acting on orders from General Salan, commander in chief of the Expeditionary Corps. When Lansdale later found out that the opium had been flown to Saigon for sale and export, he complained to Washington that the French military was involved in the narcotics traffic and suggested that an investigation was in order. General Lansdale recalls that the response ran something like this: 

"Don't you have anything else to do? We don't want you to open up this keg of worms since it will be a major embarrassment to a friendly government. So drop your investigation." (27) 

By mid 1953, repeated Viet Minh offensives into northern Laos, like the spring assault on the Plain of Jars, had convinced the French high command that they were in imminent danger of losing all of northern Laos. To block future Viet Minh offensives, they proceeded to establish a fortified base, or "hedgehog," in a wide upland valley called Dien Bien Phu near the Laos-North Vietnam border. (28) In November the French air force and C.A.T (Civil Air Transport, later Air America) began airlifting sixteen thousand men into the valley, and French generals confidently predicted they would soon be able to seal the border. 

By March 1954, however, the Viet Minh had ringed Dien Bien Phu with well entrenched heavy artillery; within a month they had silenced the French counter batteries. Large-scale air evacuation was impossible, and the garrison was living on borrowed time. Realizing that an overland escape was their only solution, the French high command launched a number of relief columns from northern Laos to crack through the lines of entrapment and enable the defenders to break out. (29) Delayed by confusion in high command headquarters, the main relief column of 3,000 men did not set out until April 14. (30) As the relief column got underway, Colonel Trinquier, by now M.A.C.G commander, proposed a supplementary plan for setting up a large maquis, manned by Touby's irregulars, halfway between Dien Bien Phu and the Plain of Jars to aid any of the garrison who might break out. After overcoming the high command's doubts, Trinquier flew to the Plain of Jars with a large supply of silver bars. Half of Touby's 6,000 irregulars were given eight days of intensive training and dispatched for Muong Son, sixty miles to the north, on May 1. But although Trinquier managed to recruit yet another 1,500 Meo mercenaries elsewhere, his efforts proved futile. (31) Dien Bien Phu fell on May 8, and only a small number of the seventy-eight colonial troops who escaped were netted by Touby's maquis. (32) 

Unlike the Meo in Laos, the Meo in northwestern Tonkin, where Dien Bien Phu was located, had good cause to hate the French, and were instrumental in their defeat. Although in Laos Operation X had purchased raw opium directly from the Meo leaders, in northwestern Tonkin political considerations forced M.A.C.G officials to continue the earlier Opium Monopoly policy of using Tai leaders, particularly Deo Van Long, as their intermediaries with the Meo opium cultivators. By allowing the Tai feudal lords to force the Meo to sell their opium to Tai leaders at extremely low prices, they embittered the Meo toward the French even more and made them enthusiastic supporters of the Viet Minh. 

When the Vietnamese revolution began in 1945 and the French position weakened throughout Indochina, the French decided to work through Deo Van Long, one of the few local leaders who had remained loyal, to restore their control over the strategically important Tai highlands in northwestern Tonkin. (33) In 1946 three highland provinces were separated from the rest of Tonkin and designated an autonomous Tai Federation, with Deo Van Long, who had only been the White Tai leader of Lai Chau Province, as president. Ruling by fiat, he proceeded to appoint his friends and relatives to every possible position of authority. (34) However, since there were only 25,000 White Tai in the federation as opposed to 100,000 Black Tai and 50,000 Meo, (35) his actions aroused bitter opposition. 

When political manipulations failed, Deo Van Long tried to put down the dissidence by military force, using two 850-man Tai battalions that had been armed and trained by the French. Although he drove many of the dissidents to take refuge in the forests, this was hardly a solution, since they made contact with the Viet Minh and thus became an even greater problem. (36) 

Moreover, French support for Deo Van Long's fiscal politics was a disaster for France's entire Indochina empire. The French set up the Tai Federation's first autonomous budget in 1947, based on the only marketable commodity-Meo opium. As one French colonel put it: 

"The Tai budgetary receipts are furnished exclusively by the Meo who pay half with their raw opium, and the other half, indirectly, through the Chinese who lose their opium smuggling profits in the [state] gaming halls."(37) 

Opium remained an important part of the Tai Federation budget until 1951, when a young adviser to the federation, Jean Jerusalemy, ordered it eliminated. Since official regulations prohibited opium smoking, Jerusalemy, a strict bureaucrat, did not understand how the Tai Federation could be selling opium to the government. 

So in 1951 opium disappeared from the official budget. Instead of selling it to the customs service, Deo Van Long sold it to M.A.C.G officers for Operation X. In the same year French military aircraft began making regular flights to Lai Chau to purchase raw opium from Deo Van Long and local Chinese merchants for shipment to Hanoi and Saigon.(38) 

With the exception of insignificant quantities produced by a few Tai villages, almost all of the opium purchased was grown by the fifty thousand Meo in the federation. During the Second World War and the immediate postwar years, they sold about 4.5 to 5.0 tons of raw opium annually to Deo Van Long's agents for the Opium Monopoly. Since the Monopoly paid only one-tenth of the Hanoi black market price, the Meo preferred to sell the greater part of their harvest to the higher-paying local Chinese smugglers. (39) During this time, Deo Van Long had no way to force the Meo to sell to his agents at the low official price. However, in 1949, now with three Tai guerrilla battalions, and with his retainers in government posts in all of the lowland trading centers, he was in a position to force the Meo to sell most of their crop to him, at gun point, if necessary. (40) Many of the Meo who had refused to sell at his low price became more cooperative when confronted with a squad of well-armed Tai guerrillas. And when he stopped dealing with the Opium Monopoly after 1950, there was no longer any official price guideline, and he was free to increase his own profits by reducing the already miserable price paid the Meo. 

While these methods may have made Deo Van Long a rich man by the end of the Indochina War (after the Geneva cease-fire he retired to a comfortable villa in France), they seriously damaged his relations with the Meo. When they observed his rise in 1945- 1946 as the autocrat of the Tai Federation, many joined the Viet Minh. (41) As Deo Van Long acquired more arms and power in the late 1940's and early 1950's, his rule became even more oppressive, and the Meo became even more willing to aid the Viet Minh. 

This account of the Tai Federation opium trade would be little more than an interesting footnote to the history of the Indochina Opium Monopoly were it not for the battle of Dien Bien Phu. Although an ideal base from a strategic viewpoint, the French command could not have chosen a more unfavorable battlefield. It was the first Black Tai area Deo Van Long had taken control of after World War II. His interest in it was understandable: Dien Bien Phu was the largest valley in the Tai Federation and in 1953 produced four thousand tons of rice, about 30 (42) percent of the Federation's production. Moreover, the Meo opium cultivators in the surrounding hills produced three-fifths of a ton of raw opium for the monopoly, or about 13 percent of the federation's legitimate sale. (43) But soon after tile first units were parachuted into Dien Bien Phu, experienced French officials in the Tai country began urging the high command to withdraw from the area. The young French adviser, Jean Jerusalemy, sent a long report to the high command warning them that if they remained at Dien Bien Phu defeat was only a matter of time. The Meo in the mountain area were extremely bitter toward Deo Van Long and the French for their handling of the opium crop, explained Jerusalemy, and the Black Tai living on the valley floor still resented the imposition of White Tai administrators.(44) 

Confident that the Viet Minh could not possibly transport sufficient heavy artillery through the rough mountain terrain, the French generals ignored these warnings. French and American artillery specialists filed reassuring firsthand reports that the "hedgehog" was impenetrable. When the artillery duel began in March 1954, French generals were shocked to find themselves outgunned; the Viet Minh had two hundred heavy artillery pieces with abundant ammunition, against the French garrison's twenty-eight heavy guns and insufficient ammunition. (45) An estimated eighty thousand Viet Minh porters had hauled this incredible firepower across the mountains, guided and assisted by enthusiastic Black Tai and Meo. Gen. Vo Nguyen Giap, the Viet Minh commander, recalls that "convoys of pack horses from the Meo highlands" were among the most determined of the porters who assisted this effort. (46) 

Meo hostility prevented French intelligence gathering and counterintelligence operations. It is doubtful that the Viet Minh would have chosen to attack Dien Bien Phu had they been convinced that the local population was firmly against them, since trained Meo commandos could easily have disrupted their supply lines, sabotaged their artillery, and perhaps given the French garrison accurate intelligence on their activities. As it was, Colonel Trinquier tried to infiltrate five MACG commando teams from Laos into the Dien Bien Phu area, but the effort was almost a complete failure. (47)Unfamiliar with the terrain and lacking contacts with the local population, the Laotian Meo were easily brushed aside by Viet Minh troops with local Meo guides. The pro-Viet Minh Meo enveloped a wide area surrounding the fortress, and all of Trinquier's teams were discovered before they even got close to the encircled garrison. The Viet Minh divisions overwhelmed the garrison on May 7-8, 1954. 

Less than twenty-four hours later, on May 8, 1954, Vietnamese, French, Russian, Chinese, British, and American delegates sat down together for the first time at Geneva, Switzerland, to discuss a peace settlement. The news from Dien Bien Phu had arrived that morning, and it was reflected in the grim faces of the Western delegates and the electric confidence of the Vietnamese. (48) The diplomats finally compromised on a peace agreement almost three months later: on July 20 an armistice was declared and the war was over. 

But to Col. Roger Trinquier a multilateral agreement signed by a host of great and small powers meant nothing-his war went on. Trinquier had forty thousand hill tribe mercenaries operating under the command of four hundred French officers by the end of July and was planning to take the war to the enemy by organizing a huge new maquis of up to ten thousand tribesmen in the Viet Minh heartland east of the Red River. (49) Now he was faced with a delicate problem: his mercenaries had no commissions, no official status, and were not covered by the cease-fire. The Geneva agreement prohibited overflights by the light aircraft Trinquier used to supply his mercenery units behind Viet Minh lines and thus created insurmountable logistics and liaison problems. (50) Although he was able to use some of the Red Cross flights to the prisoner-of-war camps in the Viet Minh-controlled highlands as a cover for arms and ammunition drops, this was only a stopgap measure. (51) In August, when Trinquier radioed his remaining MACG units in the Tai Federation to fight their way out into Laos, several thousand Tai retreated into Sam Neua and Xieng Khouang provinces, where they were picked up by Touby Lyfoung's Meo irregulars. But the vast majority stayed behind, and although some kept broadcasting appeals for arms, money, and food, by late August their radio batteries went dead, and they were never heard from again.

There was an ironic footnote to this last M.A.C.G operation. Soon after several thousand of the Tai Federation commandos arrived in Laos, Touby realized that it would take a good deal of money to resettle them permanently. Since the M.A.C.G secret account had netted almost $150,000 from the last winter's opium harvest, Touby went to the Saigon paramilitary office to make a personal appeal for resettlement funds. But the French officer on duty was embarrassed to report that an unknown M.A.C.G or S.D.E.C.E officer had stolen the money, and M.A.C.G's portion of Operation X was broke. "Trinquier told us to put the five million piasters in the account where it would be safe," Touby recalls with great amusement, "and then one of his officers stole it. What irony! What irony!". (52) 

When the French Expeditionary Corps began its rapid withdrawal from Indochina in 1955, M.A.C.G officers approached American military personnel and offered to turn over their entire paramilitary apparatus. CIA agent Lucien Conein was one of those contacted, and he passed the word along to Washington. But, "D.O.D [Department of Defense] responded that they wanted nothing to do with any French program" and the offer was refused. (53) But many in the Agency regretted the decision when the CIA sent Green Berets into Laos and Vietnam to organize hill tribe guerrillas several years later, and in 1962 American representatives visited Trinquier in Paris and offered him a high position as an adviser on mountain warfare in Indochina. But, fearing that the Americans would never give a French officer sufficient authority to accomplish anything, Trinquier refused. (54) 

Looking back on the machinations of Operation X from the vantage point of almost two decades, it seems remarkable that its secret was so well kept. Almost every news dispatch from Saigon that discussed the Binh Xuyen alluded to their involvement in the opium trade, but there was no mention of the French support for hill tribe opium dealings, and certainly no comprehension of the full scope of Operation X. Spared the screaming headlines, or even muted whispers, about their involvement in the narcotics traffic, neither S.D.E.C.E nor the French military were pressured into repudiating the narcotics traffic as a source of funding for covert operations. Apparently there was but one internal investigation of this secret opium trade, which only handed out a few reprimands, more for indiscretion than anything else, and Operation X continued undisturbed until the French withdrew from Indochina. 

The investigation began in 1952, when Vietnamese police seized almost a ton of raw opium from a M.A.C.G warehouse in Cap Saint Jacques. Colonel Belleux had initiated the seizure when three M.A.C.G officers filed an official report claiming that opium was being stored in the M.A.C.G warehouses for eventual sale. After the seizure confirmed their story, Belleux turned the matter over to Jean Letourneau, high commissioner for Indochina, who started a formal inquiry through the comptroller general for Overseas France. Although the inquiry uncovered a good deal of Operation X's organization, nothing was done. The inquiry did damage the reputation of M.A.C.G's commander, Colonel Grall, and Commander in Chief Salan. Grall was ousted from M.A.C.G and Trinquier was appointed as his successor in March 1953. (55) 

Following the investigation, Colonel Belleux suggested to his Paris headquarters that S.D.E.C.E and M.A.C.G should reduce the scope of their narcotics trafficking. If they continued to control the trade at all levels, the secret might get out, damaging France's international relations and providing the Viet Minh with excellent propaganda. Since the French had to continue buying opium from the Meo to retain their loyalty, Belleux suggested that it be diverted to Bangkok instead of being flown directly to Saigon and Hanoi. In Bangkok the opium would become, indistinguishable from much larger quantities being shipped out of Burma by the Nationalist Chinese Army, and thus the French involvement would be concealed. S.D.E.C.E Paris, however, told Belleux that he was a "troublemaker" and urged him to give up such ideas. The matter was dropped. (56) 

Apparently S.D.E.C.E and French military emerged from the Indochina War with narcotics trafficking as an accepted gambit in the espionage game. In November 1971, the U.S. Attorney for New Jersey caused an enormous controversy in both France and the United States when he indicted a high-ranking S.D.E.C.E officer, Col. Paul Fournier, for conspiracy to smuggle narcotics into the United States. Given the long history of S.D.E.C.E's official and unofficial involvement in the narcotics trade, shock and surprise seem to be unwarranted. Colonel Fournier had served with S.D.E.C.E in Vietnam during the First Indochina War at a time when the clandestine service was managing the narcotics traffic as a matter of policy. The current involvement of some S.D.E.C.E agents in Corsican heroin smuggling (see Chapter 2) would seem to indicate that S.D.E.C.E's acquaintance with the narcotics traffic has not ended. 

The Binh Xuyen: 

Order and Opium in Saigon 

While the history of S.D.E.C.E and M.A.C.G's direct involvement in the tribal opium trade provides an exotic chapter in the history of the narcotics traffic, the involvement of Saigon's Binh Xuyen river pirates was the product of a type of political relationship that has been repeated with alarming frequency over the last half-century-the alliance between governments and gangsters. Just as the relationship between the O.S.S and the Italian Mafia during World War II and the CIA-Corsican alliance in the early years of the cold war affected the resurrection of the European heroin trade, so the French 2eme Bureau's alliance with the Binh Xuyen allowed Saigon's opium commerce to survive and prosper during the First Indochina War. The 2eme Bureau was not an integral cog in the mechanics of the traffic as M.A.C.G had been in the mountains; it remained in the background providing overall political support, allowing the Binh Xuyen to take over the opium dens and establish their own opium references. By 1954 the Binh Xuyen controlled virtually all of Saigon's opium dens and dominated the distribution of prepared opium throughout Cochin China (the southern part of Vietnam). Since Cochin China had usually consumed over half of the monopoly's opium, and Saigon with its Chinese twin city, Cholon-had the highest density of smokers in the entire colony, (57) the 2eme Bureau's decision to turn the traffic over to the Binh Xuyen guaranteed the failure of the government's anti opium campaign and ensured the survival of mass opium addiction in Vietnam. 

The 2eme Bureau's pact with the Binh Xuyen was part of a larger French policy of using ethnic, religious, and political factions to deny territory to the Viet Minh. By supplying these splinter groups with arms and money, the French hoped to make them strong enough to make their localities into private fiefs, thereby neutralizing the region and freeing regular combat troops from garrison duty. But Saigon was not just another clump of rice paddies, it was France's "Pearl of the Orient," the richest, most important city in Indochina. In giving Saigon to the Binh Xuyen, block by block, over a six-year period, the French were not just building up another fiefdom, they were making these bandits the key to their hold on all of Cochin China. Hunted through the swamps as river pirates in the 1940's, by 1954 their military commander was director-general of the National Police and their great chief, the illiterate Bay Vien, was nominated as prime minister of Vietnam. The robbers had become the cops, the gangsters the government. 

The Binh Xuyen river pirates first emerged in the early 1920's in the marshes and canals along the southern fringes of Saigon-Cholon. They were a loosely organized coalition of pirate gangs, about two hundred to three hundred strong. Armed with old rifles, clubs, and knives, and schooled in Sino-Vietnamese boxing, they extorted protection money from the sampans and junks that traveled the canals on their way to the Cholon docks. Occasionally they sortied into Cholon to kidnap, rob, or shake down a wealthy Chinese merchant. If too sorely pressed by the police or the colonial militia, they could retreat through the streams and canals south of Saigon deep into the impenetrable Rung Sat Swamp at the mouth of the Saigon River, where their reputations as popular heroes among the inhabitants, as well as the maze of mangrove swamps, rendered them invulnerable to capture. (58) If the Binh Xuyen pirates were the Robin Hoods of Vietnam, then the Rung Sat ("Forest of the Assassins") was their Sherwood Forest. 

Their popular image was not entirely undeserved, for there is evidence that many of the early outlaws were ordinary contract laborers who had fled from the rubber plantations that sprang up on the northern edge of the Rung Sat during the rubber boom of the 1920's. Insufficient food and brutal work schedules with beatings and torture made most of the plantations little better than slave labor camps; many had an annual death rate higher than 20 percent. (59) 

But the majority of those who joined the Binh Xuyen were just ordinary Cholon street toughs, and the career of Le Van Vien ("Bay" Vien) was rather more typical. Born in 1904 on the outskirts of Cholon, Bay Vien found himself alone, uneducated and in need of a job after an inheritance dispute cost him his birthright at age seventeen. He soon fell under the influence of a small-time gangster who found him employment as a chauffeur and introduced him to the leaders of the Cholon underworld. (60) As he established his underworld reputation, Bay Vien was invited to meetings at the house of the underworld kingpin, Duong Van Duong ("Ba" Duong), in the hamlet of Binh Xuyen (which later lent its name to the group), just south of Cholon. 

The early history of the Binh Xuyen was an interminable cycle of kidnapping, piracy, pursuit, and occasionally imprisonment until late in World War II, when Japanese military intelligence, the Kempeitai, began dabbling in Vietnamese politics. During 1943-1944 many individual gang leaders managed to ingratiate themselves with the Japanese army, then administering Saigon jointly with the Vichy French. Thanks to Japanese protection, many gangsters were able to come out of hiding and find legitimate employment; Ba Duong, for example, became a labor broker for the Japanese, and under their protection carried out some of Saigon's most spectacular wartime robberies. Other leaders joined Japanese-sponsored political groups, where they became involved in politics for the first time. (61) Many of the Binh Xuyen bandits had already taken a crash course in Vietnamese nationalist politics while imprisoned on Con Son (Puolo Condore) island. Finding themselves sharing cells with embittered political prisoners, they participated, out of boredom if nothing else, in their heated political debates. Bay Vien himself escaped from Con Son in early 1945, and returned to Saigon politicized and embittered toward French colonialism. (62) 

On March 9, 1945, the fortunes of the Binh Xuyen improved further when the Japanese army became wary of growing anti-Fascist sentiments among their French military and civilian collaborators and launched a lightning preemptive coup. Within a few hours all French police, soldiers, and civil servants were behind bars, leaving those Vietnamese political groups favored by the Japanese free to organize openly for the first time. Some Binh Xuyen gangsters were given amnesty; others, like Bay Vien, were hired by the newly established Vietnamese government as police agents. Eager for the intelligence, money, and men the Binh Xuyen could provide, almost every political faction courted the organization vigorously. Rejecting overtures by conservatives and Trotskyites, the Binh Xuyen made a decision of considerable importance -they chose the Viet Minh as their allies. 

While this decision would have been of little consequence in Tonkin or central Vietnam, where the Communist-dominated Viet Minh was strong enough to stand alone, in Cochin China the Binh Xuyen support was crucial. After launching an abortive revolt in 1940, the Cochin division of the Indochina Communist party had been weakened by mass arrests and executions.(63) When the party began rebuilding at the end of World War II it was already outstripped by more conservative nationalist groups, particularly politico religious groups such as the Hoa Hao and Cao Dai. In August 1945 the head of the Viet Minh in Cochin China, Tran Van Giau, convinced Bay Vien to persuade Ba Duong and the other chiefs to align with the Viet Minh. (64) When the Viet Minh called a mass demonstration on August 25 to celebrate their installation as the new nationalist government, fifteen well-armed, bare-chested bandits carrying a large banner declaring "Binh Xuyen Assassination Committee" joined the tens of thousands of demonstrators who marched jubilantly through downtown Saigon for over nine hours. (65) For almost a month the Viet Minh ran the city, managing its public utilities and patrolling the streets, until late September, when arriving British and French troops took charge. 

World War II had come to an abrupt end on August 15, when the Japanese surrendered to the Allies in the wake of atomic attacks on Hiroshima and Nagasaki. Allied commanders had been preparing for a long, bloody invasion of the Japanese home islands, and were suddenly faced with the enormous problems of disarming thousands of Japanese troops scattered across East and Southeast Asia. On September 12 some 1,400 Indian Gurkhas and a company of French infantry under the command of British General Douglas D. Gracey were airlifted to Saigon from Burma. Although he was under strict orders to stay out of politics, General Gracey, an arch colonialist, intervened decisively on the side of the French. When a Viet Minh welcoming committee paid a courtesy call he made no effort to conceal his prejudices. "They came to see me and said 'welcome' and all that sort of thing," he later reported. "It was an unpleasant situation and I promptly kicked them out." (66) Ten days later the British secretly rearmed some fifteen hundred French troops, who promptly executed a coup, reoccupying the city's main public buildings. Backed by Japanese and Indian troops, the French cleared the Viet Minh out of downtown Saigon and began a house-to house search for nationalist leaders. And with the arrival of French troop ships from Marseilles several weeks later, France's reconquest of Indochina began in earnest. (67)

Fearing further reprisals, the Viet Minh withdrew to the west of Saigon, leaving Bay Vien as military commander of Saigon-Cholon.(68) Since at that time the Binh Xuyen consisted of less than a hundred men, the Viet Minh suggested that they merge forces with the citywide nationalist youth movement, the Avant-Garde Youth. (69) After meeting with Bay Vien, one of the Avant-Garde's Saigon leaders, the future police chief Lai Van Sang, agreed that the merger made sense: his two thousand men lacked arms and money, while the wealthy Binh Xuyen lacked rank and file. (70) It was a peculiar alliance; Saigon's toughest criminals were now commanding idealistic young students and intelligentsia. As British and French troops reoccupied downtown Saigon, the Binh XuYen took up defensive positions along the southern and western edges of the city. Beginning on October 25, French thrusts into the suburbs smashed through their lines and began driving them back into the Rung Sat Swamp. (71) Ba Duong led the amphibious retreat of thousands of Binh Xuyen troops, Avant-Garde Youth, and Japanese deserters deep into the Rung Sat's watery maze. However, they left behind a network of clandestine cells known as "action committees" (formerly "assassination committees") totaling some 250 men. 

While Binh Xuyen waterborne guerrillas harassed the canals, the action committees effectively provided intelligence, extorted money, and unleashed political terror. Merchants paid the action committees regular fees for a guarantee of their personal safety, while the famous casino, the Grand Monde, paid $2,600 a day as insurance that Binh Xuyen terrorists would not toss a grenade into its gaming halls. (72) These contributions, along with arms supplies, enabled the Binh Xuyen to expand their forces to seven full regiments totaling ten thousand men, the largest Viet Minh force in Cochin China. (73) In 1947, when the Viet Minh decided to launch a wave of terror against French colonists, the Binh Xuyen action committees played a major role in the bombings, knifings, and assaults that punctuated the daily life of Saigon-Cholon . (74) 

But despite their important contributions to the revolutionary movement, the Binh Xuyen marriage to the Viet Minh was doomed from the very start. It was not sophisticated ideological disputes that divided them, but rather more mundane squabbling over behavior, discipline, and territory. Relations between Binh Xuyen gangs had always been managed on the principle of mutual respect for each chief's autonomous territory. In  contrast, the Viet Minh were attempting to build a mass revolution based on popular participation. Confidence in the movement was a must, and the excesses of any unit commander had to be quickly punished before they could alienate the people and destroy the revolution. On the one hand the brash, impulsive bandit, on the other the disciplined party cadre-a clash was inevitable.

A confrontation came in early 1946 when accusations of murder, extortion and wanton violence against a minor Binh Xuyen chieftain forced the Viet Minh commander, Nguyen Binh, to convene a military tribunal. In the midst of the heated argument between the Binh Xuyen leader Ba Duong and Nguyen Binh, the accused grabbed the Viet Minh commander's pistol and shot himself in the head. Blaming the Viet Minh for his friend's suicide, Ba Duong began building a movement to oust Nguyen Binh, but was strafed and killed by a French aircraft a few weeks later, well before his plans had matured. (75) 

Shortly after Ba Duong's death in February 1946, the Binh Xuyen held a mass rally in the heart of the Rung Sat to mourn their fallen leader and elect Bay Vien as his successor. Although Bay Vien had worked closely with the Viet Minh, he was now much more ambitious than patriotic. Bored with being king of the mangrove swamps, Bay Vien and his advisers devised three stratagems for catapulting him to greater heights: they ordered assassination committees to fix their sights on Nguyen Binh; (76) they began working with the Hoa Hao religious group to forge an anti-French, anti-Viet Minh coalition; (77) and they initiated negotiations with the French 2eme Bureau for some territory in Saigon. 

The Viet Minh remained relatively tolerant of Bay Vien's machinations until March 1948, when he sent his top advisers to Saigon to negotiate a secret alliance with Captain Savani of the 2eme Bureau. (78) Concealing their knowledge of Bay Vien's betrayal, the Viet Minh invited him to attend a special convocation at their camp in the Plain of Reeds on May 19, Ho Chi Minh's birthday. Realizing that this was a trap, Bay Vien strutted into the meeting surrounded by two hundred of his toughest gangsters. But while he allowed himself the luxury of denouncing Nguyen Binh to his face, the Viet Minh were stealing the Rung Sat. Viet Minh cadres who had infiltrated the Binh Xuyen months before called a mass meeting and exposed Bay Vien's negotiations with the French. The shocked nationalistic students and youths launched a coup on May 28; Bay Vien's supporters were arrested, unreliable units were disarmed and the Rung Sat refuge was turned over to the Viet Minh. Back on the Plain of Reeds, Bay Vien sensed an ugly change of temper in the convocations, massed his bodyguards, and fled toward the Rung Sat pursued by Viet Minh troops. (79) En route he learned that his refuge was lost and changed direction, arriving on the outskirts of Saigon on June 10. Hounded by pursuing VietMinh columns, and aware that return to the Rung Sat was impossible, Bay Vien found himself on the road to Saigon. 

Unwilling to join with the French openly and be labeled a collaborator, Bay Vien hid in the marshes south of Saigon for several days until 2eme Bureau agents finally located him. Bay Vien may have lost the Rung Sat, but his covert action committees remained a potent force in Saigon-Cholon and made him invaluable to the French. Captain Savani (who had been nicknamed "the Corsican bandit" by French officers) visited the Binh Xuyen leader  in his hideout and argued, "Bay Vien, there's no other way out. You have only a few hours of life left if you don't sign With us." (80) The captain's logic was irrefutable; on June 16 a French staff car drove Bay Vien to Saigon, where he signed a prepared declaration denouncing the Communists as traitors and avowing his loyalty to the present emperor, Bao Dai. (81) Shortly afterward, the French government announced that it "had decided to confide the police and maintenance of order to the Binh Xuyen troops in a zone where they are used to operating" and assigned them a small piece of territory along the southern edge of Cholon (82) 

In exchange for this concession, eight hundred gangsters who had rallied to Bay Vien from the Rung Sat, together with the covert action committees, assisted the French in a massive and enormously successful sweep through the twin cities in search of Viet Minh cadres, cells, and agents. As Bay Vien's chief political adviser, Lai Huu Tai, explained, "Since we had spent time in the maquis and fought there, we also knew how to organize the counter maquis. "(83) 

But once the operation was finished, Bay Vien, afraid of being damned as a collaborator, retired to his slender turf and refused to budge. The Binh Xuyen refused to set foot on any territory not ceded to them and labeled an independent "nationalist zone." In order to avail themselves of the Binh Xuyen's unique abilities as an urban counterintelligence and security force, the French were obliged to turn over Saigon-Cholon block by block. By April 1954 the Binh Xuyen military commander, Lai Van Sang, was director-general of police, and the Binh Xuyen controlled the capital region and the sixty-mile strip between Saigon and Cap Saint Jacques. Since the Binh Xuyen's pacification technique required vast amounts of money to bribe thousands of informers, the French allowed them carte blanche to plunder the city. In giving the Binh Xuyen this economic and political control over Saigon, the French were not only eradicating the Viet Minh, but creating a political counterweight to Vietnamese nationalist parties gaining power as a result of growing American pressure for political and military Vietnamization. (84) By 1954 the illiterate, bull necked Bay Vien had become the richest man in Saigon and the key to the French presence in Cochin China. Through the Binh Xuyen, the French 2eme Bureau countered the growing power of the nationalist parties, kept Viet Minh terrorists off the streets, and battled the American CIA for control of South Vietnam. Since the key to the Binh Xuyen's power was money, and quite a lot of it, their economic evolution bears examination. 

The Binh Xuyen's financial hold over Saigon was similar in many respects to that of American organized crime in New York City. The Saigon gangsters used their power over the streets to collect protection money and to control the transportation industry, gambling, prostitution, and narcotics. But while American gangsters prefer to maintain a low profile, the Binh Xuyen flaunted their power: their green-bereted soldiers strutted down the streets, opium dens and gambling casinos operated openly, and a government minister actually presided at the dedication of the Hall of Mirrors, the largest brothel in Asia. 

Probably the most important Binh Xuyen economic asset was the gambling and lottery concession controlled through two sprawling casinos -the Grand Monde in Cholon and the Cloche d'Or in Saigon-which were operated by the highest bidder for the annually awarded franchise. the Grand Monde had been opened in 1946 at the insistence of the governor-general of Indochina, Adm. Thierry d'Argenlieu, in order to finance the colonial government of Cochin China. (85) The franchise was initially leased to a Macao Chinese gambling syndicate, which made payoffs to all of Saigon's competing political forces-the Binh Xuyen, Emperor Bao Dai, prominent cabinet ministers, and even the Viet Minh. In early 1950 Bay Vien suggested to Capt. Antoine Savani that payments to the Viet Minh could be ended if he were awarded the franchise. (86) The French agreed, and Bay Vien's political adviser, Lai Huu Tai (Lai Van Sang's brother), met with Emperor Bao Dai and promised him strong economic and political support if he agreed to support the measure. But when Bao Dai made the proposal to President Huu and the governor of Cochin, they refused their consent, since both of them received stipends from the Macao Chinese. However, the Binh Xuyen broke the deadlock in their own inimitable fashion: they advised the Chinese franchise holders that the Binh Xuyen police would no longer protect the casinos from Viet Minh terrorists (87) kidnapped the head of the Macao syndicate, (88) and, finally, pledged to continue everybody's stipends. After agreeing to pay the government a $200,000 deposit and $20,000 a day, the Binh Xuyen were awarded the franchise on December 31, 1950. (89) Despite these heavy expenses, the award of the franchise was an enormous economic coup; shortly before the Grand Monde was shut down by a new regime in 1955, knowledgeable French observers estimated that it was the most profitable casino in Asia, and perhaps in the world. (90) 

Sometime after 1950 the French military awarded the Binh Xuyen another lucrative colonial asset, Saigon's opium commerce. The Binh Xuyen started processing M.A.C.G's raw Meo opium and distributing prepared smokers' opium to hundreds of dens scattered throughout the twin cities. (91) They paid a fixed percentage of their profits to Emperor Bao Dai, the French 2eme Bureau, and the M.A.C.G commandos. The CIA's Colonel Lansdale later reported that: 

"The Binh Xuyen were participating in one of the world's major arteries of the dope traffic, helping move the prize opium crops out of Laos and South China. The profits were so huge that Bao Dai's tiny cut was ample to keep him in yachts, villas, and other comforts in France." (92) 

The final Binh Xuyen aset was prostitution. They owned and operated a wide variety of brothels, all the way from small, intimate villas staffed with attractive young women for generals and diplomats down to the Hall of Mirrors, whose twelve hundred inmates and assembly line techniques made it one of the largest and most profitable in Asia. (93) The brothels not only provided income, they also yielded a steady flow of political and military intelligence. 

In reviewing Bay Vien's economic activities in 1954, (94) the French 2eme Bureau concluded: 

"In summary, the total of the economic potential built up by General Le Van (Bay) Vien has succeeded in following exactly the rules of horizontal and vertical monopolization so dear to American consortiums." (95) 

"Bay Vien's control over Saigon-Cholon had enabled him to build "a multi-faceted business enterprise whose economic potential constitutes ... one of the most solid economic forces in South Vietnam." (96) 

After having allowed the Binh Xuyen to develop this financial empire, the 2eme Bureau witnessed its liquidation during the desperate struggle it waged with the CIA for control of Saiaon and South Vietnam. Between April 28 and May 3, 1955, the Binh Xuyen and the Vietnamese army (ARVN) fought a savage house-to-house battle for control of Saigon-Cholon. More troops were involved in this battle than in the Tet offensive of 1968, and the fighting was almost as destructive. (97) In the six days of fighting five hundred persons were killed, two thousand wounded, and twenty thousand left homeless. (98) Soldiers completely disregarded civilians and leveled whole neighborhoods with artillery, mortars, and heavy machine guns. 

And when it was all over the Binh Xuyen had been driven back into the Rung Sat and Prime Minister Ngo Dinh Diem was master of Saigon. 

This battle had been a war by proxy; the Binh Xuyen and Diem's A.R.V.N were stand-ins, mere pawns, in a power struggle between the French 2eme Bureau and the American CIA. Although there were longstanding tactical disagreements between the French and Americans, at the ambassadorial and governmental levels, there was an atmosphere of friendliness and flexibility that was not to be found in their respective intelligence agencies. 

Prior to the French debacle at Dien Bien Phu the two governments had cooperated with a minimum of visible friction in Indochina. During the early 1950's the United States paid 78 percent of the cost for maintaining the French Expeditionary Corps and hundreds of American advisers served with French units. After Dien Bien Phu and Geneva, however, the partnership began to crumble. 

France resigned herself to granting full independence to her former colony, and agreed at Geneva to withdraw from the northern half of the country and hold an all-Vietnam referendum in 1956,an election the Viet Minh were sure to win-to determine who would rule the unified nation. Under the guidance of Premier Mendes-France, France planned "a precedent-setting experiment in coexistence"; she would grant the Viet Minh full control over Vietnam by adhering strictly to the Geneva Accords, and then work closely with Ho Chi Minh "to preserve French cultural influence and salvage French capital." (99) Needless to say, the French premier's plans did not sit well in a U.S. State Department operating on Secretary John Foster Dulles' anti-Communist first principles. Fundamental policy disagreements began to develop between Washington and Paris, though there was no open conflict. 

The Pentagon Papers have summarized the points of disagreement between Washington and Paris rather neatly. All the foregoing tension resolved to two central issues between the United States and France. The first was the question of how and by whom Vietnam's armed forces were to be trained. The second, and more far reaching, was whether Ngo Dinh Diem was to remain at the head of Vietnam's government or whether he was to be replaced by another nationalist leader more sympathetic to Bao Dai and France. (100) 

The first question was resolved soon after Special Ambassador Gen. J. Lawton Collins arrived in Vietnam on November 8, 1954. The Americans were already supplying most of A.R.V.N's aid, and French High Commissioner Gen. Paul Ely readily agreed to turn the training over to the Americans. 

The second question-whether Diem should continue as premier provoked the CIA-2eme Bureau war of April 1955. Diem was a political unknown who had acceded to the premiership largely because Washington was convinced that his strong anti-Communist, anti-French beliefs best suited American interests. But the immediate problem for Diem and the Americans was control of Saigon. If Diem were to be of any use to the Americans in blocking the unification of Vietnam, he would have to wrest control of the streets from the Binh Xuyen. For whoever controlled the streets controlled Saigon, and whoever controlled Saigon held the key to Vietnam's rice-rich Mekong Delta. 

While the French and American governments politely disavowed any self-interest and tried to make even their most partisan suggestions seem a pragmatic response to the changing situation in Saigon, both gave their intelligence agencies a free hand to see if Saigon's reality could be molded in their favor. Behind the smiles on the diplomatic front, Colonel Lansdale, of the CIA, and the French 2eme Bureau, particularly Captain Savani, engaged in a savage clandestine battle for Saigon. 

In the movie version of Graham Greene's novel on this period, The Quiet American, Colonel Lansdale was played by the World War II combat hero, Audie Murphy. Murphy's previous roles as the typical American hero in dozens of black hat-white hat westerns enabled him accurately to project the evangelistic anti-Communism so characteristic of Lansdale. What Murphy did not portray was Lansdale's mastery of the CIA's repertoire of "dirty tricks" to achieve limited political ends. When Lansdale arrived in Saigon in May 1954 he was fresh from engineering President Ramon Magsaysay's successful counterinsurgency campaign against the Philippine Communist party. As the prophet of a new counterinsurgency doctrine and representative of a wealthy government, Lansdale was a formidable opponent. 

In seeking to depose Bay Vien, Colonel Lansdale was not just challenging the 2eme Bureau, he was taking on Saigon's Corsican community,Corsican businessmen, Corsican colonists, and the Corsican underworld. From the late nineteenth century onward, Corsicans had dominated the Indochina civil service. (101) At the end of World War II, Corsican resistance fighters, some of them gangsters, had joined the regular army and come to Indochina with the Expeditionary Corps. Many remained in Saigon after their enlistment to go into legitimate business or to reap profits from the black market and smuggling that flourished under wartime conditions. Those with strong underworld connections in Marseilles were able to engage in currency smuggling between the two ports. The Marseilles gangster Barthelemy Guerini worked closely with contacts in Indochina to smuggle Swiss gold to Asia immediately after World War II. (102) Moreover, Corsican gangsters close to Corsican officers in Saigon's 2eme Bureau purchased surplus opium and shipped it to Marseilles, where it made a small contribution to the city's growing heroin industry. (103)

The unchallenged leader of Saigon's Corsican underworld was the eminently respectable Mathieu Franchini. Owner of the exclusive Continental Palace Hotel, Franchini made a fortune playing the piastergold circuit between Saigon and Marseilles during the First Indochina War. (104) He became the Binh Xuyen's investment counselor and managed a good deal of their opium and gambling profits. When Bay Vien's fortune reached monumental proportions, Franchini sent him to Paris where "new found Corsican friends gave him good advice about investing his surplus millions." (105) And according to reliable Vietnamese sources, it was Franchini who controlled most of Saigon's opium exports to Marseilles. Neither he nor his associates could view with equanimity the prospect of an American takeover. 

Many people within the 2eme Bureau had worked as much as eight years building up sect armies like the Binh Xuyen; many Corsicans outside the military had businesses, positions, rackets, and power that would be threatened by a decline in French influence. While they certainly did not share Premier MendesFrance's ideas of cooperation with the Viet Minh, they were even more hostile to the idea of turning things over to the Americans. 

When Lansdale arrived in Saigon in May 1954 he faced the task of building an alternative to the mosaic of religious armies and criminal gangs that had ruled South Vietnam in the latter years of the war. Ngo Dinh Diem's appointment as premier in July gave Lansdale the lever he needed. Handpicked by the Americans, Diem was strongly anti-French and uncompromisingly anti-Communist. However, he had spent most of the last decade in exile and had few political supporters and almost no armed forces. Premier in name only, Diem controlled only the few blocks of downtown Saigon surrounding the presidential palace. The French and their clients-A.R.V.N, the Binh Xuyen, and the armed religious sects, Cao Dai and Hoa Hao-could easily mount an anti-Diem coup if he threatened their interests. Lansdale proceeded to fragment his opposition's solid front and to build Diem an effective military apparatus. French control over the army was broken and Col. Duong Van Minh ("Big Minh"), an American sympathizer, was recruited to lead the attacks on the Binh Xuyen. By manipulating payments to the armed religious sects, Lansdale was able to neutralize most of them, leaving the Binh Xuyen as the only French pawn. The Binh Xuyen financed themselves largely from their vice rackets, and their loyalty could not be manipulated through financial pressures. But, deserted by A.R.V.N and the religious sects, the Binh Xuyen were soon crushed. 

Lansdale's victory did not come easily. Soon after he arrived he began sizing up his opponent's financial and military strength. Knowing something of the opium trade's importance as a source of income for French clandestine services, he now begin to look more closely at Operation X with the help of a respected Cholon Chinese banker. But the banker was abruptly murdered and Lansdale dropped the inquiry. There was reason to believe that the banker had gotten too close to the Corsicans; involved, and they killed him to prevent the information from getting any further. (106) 

An attempted anti-Diem coup in late 1954 led to Lansdale's replacing the palace guard. After the Embassy approved secret funding (later estimated at $2 million), Lansdale convinced a Cao Dai dissident named Trinh Minh The to offer his maquis near the Cambodian border as a refuge in case Diem was ever forced to flee Saigon. (107) When the impending crisis between the French and the Americans threatened Diem's security in the capital, The moved his forces into the city as a permanent security force in February 1955 and paraded 2,500 of his barefoot soldiers through downtown Saigon to demonstrate his loyalty to the premier. (108) The 2eme Bureau was outraged at Lansdale's support for The Practicing what Lansdale jocularly referred to as the "unorthodox doctrine of zapping a commander," (109)The had murdered French General Chanson in 1951 and had further incensed the French when he blew up a car in 1953 in downtown Saigon, killing a number of passersby. 2eme Bureau officers personally visited Lansdale to warn him that they would kill TM, and they "usually added the pious hope that I would be standing next to him when he was gunned down." (110) 

On February 11, 1955, the French army abdicated its financial controls and training responsibilities for A.R.V.N to the United States, losing not only the A.R.V.N but control of the Hoa Hao and Cao Dai religious sects as well, Approximately 20,000 of them had served as supplementary forces to the French and Vietnamese army, (111) and had been paid directly by the 2eme Bureau. Now, with their stipends cut and their numbers reduced, they were to be integrated into A.R.V.N, where they would be controlled by Diem and his American advisers. 

Lansdale was given $8.6 million to pay back salaries and "bonuses" to sect commanders who cooperated in "integrating" into the A.R.V.N. (112) Needless to say, this aroused enormous hostility on the part of the French. When Lansdale met with General Gambiez of the French army to discuss the sect problem, the tensions were obvious: 

"We sat at a small table in his office.... A huge Alsatian dog crouched under it. Gambiez informed me that at one word from him, the dog would attack me, being a trained killer. I asked Gambiez to please note that my hands were in my pockets as I sat at the table; I had a small 25 automatic pointing at his stomach which would tickle him fatally. Gambiez called off his dog and I put my hands on the table. We found we could work together." (113) 

By February the 2eme Bureau realized that they were gradually losing to Lansdale's team, so they tried to discredit him as an irresponsible adventurer in the eyes of his own government by convening an unprecedented secret agents' tribunal. But the session was unsuccessful, and the 2eme Bureau officers were humiliated; their animosity toward Lansdale was, no doubt, intensified. (114)

But the French were not yet defeated, and late in February they mounted a successful counteroffensive. When Diem refused to meet the sects' demands for financial support and integration into A.R.V.N, the French seized the opportunity and brought all the sect leaders together in Tay Ninh on February 22, where they formed the United Front and agreed to work for Diem's overthrow. Money was to be provided by the Binh Xuyen. When a month of fruitless negotiations failed to wring any concessions from Diem, the United Front sent a five-day ultimatum to Diem demanding economic and political reforms. (115) Suddenly the lethargic quadrille of political intrigue was over and the time for confrontation was at hand. 

Lansdale was now working feverishly to break up the United Front and was meeting with Diem regularly. (116) With the help of the CIA station chief, Lansdale put together a special team to tackle the Binh Xuyen, the financial linchpin of the United Front. Lansdale recruited a former Saigon police chief named Mai Huu Xuan, who had formed the Military Security Service (M.S.S) with two hundred to three hundred of his best detectives when the Binh Xuyen took over the police force in 1954. Embittered by four years of losing to the Binh Xuyen, the M.S.S began a year-long battle with the Binh Xuyen's action committees. Many of these covert cells had been eliminated by April 1955, a factor that Xuan feels was critical in the Binh Xuyen's defeat. (117) Another of Lansdale's recruits was Col. Duong Van Minh, the commander for Saigon-Cholon. Lansdale made ample discretionary funds available to Minh, whom he incorporated in his plans to assault the Binh Xuyen. (118) 

The fighting began on March 28 when a pro-Diem paratroop company attacked the Binh Xuyen-occupied police headquarters. The Binh Xuyen counterattacked the following night and began with a mortar attack on the presidential palace at midnight. When French tanks rolled into the city several hours later to impose a cease-fire agreed to by the United States, Lansdale protested bitterly to Ambassador Collins, "explaining that only the Binh Xuyen would gain by a cease fire." (119) 

For almost a month French tanks and troops kept the Binh Xuyen and A.R.V.N apart. Then on April 27 Ambassador Collins met with Secretary of State Dulles in Washington and told him that Diem's obstinacy was the reason for the violent confrontation in Saigon. Dismayed, Dulles cabled Saigon that the U.S. was no longer supporting Diem. (120) A few hours after this telegram arrived, Diem's troops attacked Binh Xuyen units, and drove them out of downtown Saigon into neighboring Cholon. Elated by Diem's easy victory, Dulles cabled Saigon his full support for Diem. The Embassy burned his earlier telegram. (121) 

During the fighting of April 28 Lansdale remained in constant communication with the presidential palace, while his rival, Captain Savani, moved into the Binh Xuyen headquarters at the Y Bridge in Cholon, where he took command of the bandit battalions and assigned his officers to accompany Binh Xuyen troops in the house-to-house fighting. (122) The Binh Xuyen radio offered a reward to anyone who could bring Lansdale to their headquarters where, Bay Vien promised, his stomach would be cut open and his entrails stuffed with mud.(123)

On May 2 the fighting resumed as A.R.V.N units penetrated Cholon, leveling whole city blocks and pushing the Binh Xuyen steadily backward. Softened by years of corruption, the Binh Xuyen bandits were no longer the tough guerrillas of a decade before. Within a week most of them had retreated back into the depths of the Rung Sat Swamp. 

Although the war between Diem and Bay Vien was over, the struggle between Lansdale and the Corsicans was not quite finished. True to the Corsican tradition, the defeated French launched a vendetta against the entire American community. As Lansdale describes it: 

A group of soreheads among the French in Saigon undertook a spiteful terror campaign against American residents. Grenades were tossed at night into the yards of houses where Americans lived. American owned automobiles were blown up or booby-trapped. French security officials blandly informed nervous American officials that the terrorist activity was the work of the Viet Minh. (124) 

A sniper put a bullet through Lansdale's car window as he was driving through Saigon, a Frenchman who resembled him was machine-gunned to death in front of Lansdale's house by a passing car. When Lansdale was finally able to determine who the ringleaders were (many of them were intelligence officers), grenades started going off in front of their houses in the evenings. (125) 

During his May 8-11, 1955, meeting with French Premier Edgar Faure in Paris, Dulles asserted his continuing support for Diem, and both agreed that France and the United States would pursue independent policies in Indochina. The partnership was over; France would leave, and the United States would remain in Vietnam in order to back Diem. (126) 

Diem's victory brought about a three-year respite in large-scale opium trafficking in Vietnam. Without the Binh Xuyen and Operation X managing the trade, bulk smuggling operations from Laos came to an end and distribution in Saigon of whatever opium was available became the province of petty criminals. Observers also noticed a steady decline in the number of opium dens operating in the capital region. But although American press correspondents described the Binh XuyenDiem conflict as a morality play-a clash between the honest, moral Premier Diem and corrupt, dope-dealing "super bandits"-the Binh Xuyen were only a superficial manifestation of a deeper problem, and their eviction from Saigon produced little substantive change. (127) 

For over eighty years French colonialism had interwoven the vice trades with the basic fabric of the Vietnamese economy by using them as legitimate sources of government tax revenue. During the late 1940's the French simply transferred them from the legitimate economy to the underworld, where they have remained a tempting source of revenue for political organizations ever since. By exploiting the rackets for the French, the Binh Xuyen had developed the only effective method ever devised for countering urban guerrilla warfare in Saigon. Their formula was a combination of crime and counterinsurgency: control over the municipal police allowed systematic exploitation of the vice trade; the rackets generated large sums of ready cash; and money bought an effective network of spies, informants, and assassins. 

The system worked so well for the Binh Xuyen that in 1952 Viet Minh cadres reported that their activities in Saigon had come to a virtual standstill because the bandits had either bought off or killed most of their effective organizers. (128) When the Diem administration was faced with large-scale insurgency in 1958 it reverted to the Binh Xuyen formula, and government clandestine services revived the opium trade with Laos to finance counterinsurgency operations. Faced with similar problems in 1965. Premier Ky's adviser, General Loan, would use the same methods. (129)

Secret War in Burma: The K.M.T 

While the work of French clandestine services in Indochina enabled the opium trade to survive a government repression campaign, some CIA activities in Burma helped transform the Shan States from a relatively minor poppy cultivating area into the largest opium-growing region in the world. The precipitous collapse of the Nationalist Chinese (Kuomintang, or K.M.T) government in 1949 convinced the Truman administration that it had to stem "the southward flow of communism" into Southeast Asia. In 1950 the Defense Department extended military aid to the French in Indochina. In that same year, the CIA began regrouping those remnants of the defeated Kuomintang army in the Burmese Shan States for a projected invasion of southern China. Although the K.M.T army was to fail in its military operations, it succeeded in monopolizing and expanding the Shan States' opium trade. 

The K.M.T shipped bountiful harvests to northern Thailand, where they were sold to General Phao Sriyanonda of the Thai police, a C.I.A client. The C.I.A had promoted the Phao-K.M.T partnership in order to provide a secure rear area for the K.M.T, but this alliance soon became a critical factor in the growth of Southeast Asia's narcotics traffic. 

With C.I.A support, the K.M.T remained in Burma until 1961, when a Burmese army offensive drove them into Laos and Thailand. By this time, however, the Kuomintang had already used their control over the tribal populations to expand Shan State opium production by almost 1,000 percent-from less than 40 tons after World War II to an estimated three hundred to four hundred tons by 1962. (130) From bases in northern Thailand the K.M.T have continued to send huge mule caravans into the Shan States to bring out the opium harvest. Today, over twenty years after the CIA first began supporting K.M.T troops in the Golden Triangle region, these K.M.T caravans control almost a third of the world's total illicit opium supply and have a growing share of Southeast Asia's thriving heroin business. (131) 

As Mao's revolutionary army pushed into South China in late 1949, Generalissimo Chiang Kai-shek and his Kuomintang regime planned to make craggy Yunnan Province their last bastion. However, the warlord of Yunnan Province, Gen. Lu Han, harbored bitter grievances against Chiang. At the end of World War II Lu Han had been ordered to occupy northern Indochina for the Allies while British forces moved into the southern sector. Eager for plunder, Lu Han sent his ragged divisions into Tonkin, where they ravaged the countryside like a plague of locusts. To satiate Lu Han's greed and win his tolerance for the Nationalist movement, Premier Ho Chi Minh organized a "Gold Week" from September 16 to 23, 1945. Viet Minh cadres scoured every village, collecting rings, earrings, and coins from patriotic peasants. When Lu Han stepped off the plane at Hanoi airport on September 18, Ho Chi Minh presented him with a solid gold opium pipe. (132) During Lu Han's absence, Chiang sent two of his divisions to occupy Yunnan. When the Chinese withdrew from Indochina in early June 1946, Chiang ordered Lu Han's best troops to their death on the northern front against the Chinese Communists, reducing the warlord to the status of guarded puppet inside his own fiefdom. (133) (Incidentally, not all of the K.M.T troops withdrew in early June. The Ninety-third Independent Division delayed its departure from Laos for several weeks to finish collecting the Meo opium harvest. (134) 

And so, when the People's Liberation Army entered Yunnan in December 1949, Lu Han armed the population, who drove Chiang's troops out of the cities, and threw the province open to the advancing revolutionary armies. (135) Nationalist Chinese stragglers began crossing into Burma in late 1949, and in January 1950 remnants of the Ninety third Division, Twenty-sixth Army, and Gen. Li Mi's Eighth Army arrived in Burma. Five thousand of Gen. Li Mi's troops who crossed into Indochina instead of Burma were quickly disarmed by the French and interned on Phu Quoc Island in the Gulf of Thailand until they were repatriated to Taiwan in June 1953. (136) 

However, the Burmese army was less successful than the French in dealing with the Chinese. By March 1950 some fifteen hundred K.M.T troops had crossed the border and were occupying territory between Kengtung City and Tachilek. In June the Burmese army commander for Kengtung State demanded that the K.M.T either surrender or leave Burma immediately. When Gen. Li Mi refused, the Burmese army launched a drive from Kengtung City, and captured Tachilek in a matter of weeks. Two hundred of Li Mi's troops fled to Laos and were interned, but the remainder retreated to Mong Hsat, about forty miles west of Tachilek and fifteen miles from the Thai border. (137) Since the Burmese army had been tied down for three years in central Burma battling four major rebellions, its Kengtung contingent was too weak to pursue the K.M.T through the mountains to Mong Hsat But it seemed only a matter of months until the Burmese troops would become available for the final assault on the weakened K.M.T forces. 

At this point the CIA entered the lists on the side of the K.MT., drastically altering the balance of power. The Truman administration, ambivalent toward the conflict in Southeast Asia since it took office in 1945, was shocked into action by the sudden collapse of Chiang Kai-shek's Kuomintang regime. All the government agencies scrambled to devise policies "to block further Communist expansion in Asia, (138) and in April 1950 the Joint Chiefs of Staff (J.C.S) advised the Secretary of Defense that, "Resolution of the situation facing Southeast Asia would ... be facilitated if prompt and continuing measures were undertaken to reduce the pressure from Communist China. in this connection, the Joint Chiefs of Staff have noted the evidences of renewed vitality and apparent in creased effectiveness of the Chinese Nationalist forces." (139) 

They went on to suggest the implementation of "a program of special covert operations designed to interfere with Communist activities in Southeast Asia..." (140) The exact details of the "special covert operations" planned for Burma were not spelled out in the J.C.S memo or any of the other Pentagon Papers because it was one of the most heavily classified operations ever undertaken by the CIA: the U.S. ambassador to Burma was not told; top ranking officials in the State Department were kept in the dark; and it was even hidden from the CIA's own deputy director for intelligence. (141) 

From what can be gleaned from available documents and the events themselves, it seems that the Truman administration feared that Mao was bent on the conquest of Southeast Asia, and would continually probe at China's southern frontier for an opening for his "invading hordes." Although the Truman administration was confident that Indochina could be held against a frontal assault, there was concern that Burma might be the hole in the anti-Communist dike. Couldn't Mao make an end run through Burma, sweep across Thailand, and attack Indochina from the rear? (142) The apparent solution was to arm the K.M.T remnants in Burma and use them to make the Burma-China borderlands-from Tibet to Thailand-an impenetrable barrier. 

The first signs of direct C.I.A aid to 'the K.M.T appeared in early 1951, when Burmese intelligence officers reported that unmarked C-46 and C-47 transport aircraft were making at least five parachute drops a week to K.M.T forces in Mong Hsat. (143) With its new supplies the K.M.T underwent a period of vigorous expansion and reorganization. Training bases staffed with instructors flown in from Taiwan were constructed near Mong Hsat, K.M.T agents scoured the Kokang and Wa states along the Burma-China border for scattered K.M.T survivors, and Gen. Li Mi's force burgeoned to four thousand men. (144) In April 1950 Li Mi led the bulk of his force up the Salween River to Mong Mao in the Wa States, where they established a base camp near the China border. As more stragglers were rounded up, a new base camp was opened at Mong Yang; soon unmarked C-47's were seen making air drops in the area. When Li Mi recruited three hundred troops from Kokang State under the command of the sawbwa's younger sister, Olive Yang, more arms were again dropped to the K.M.T camp. (145) 

In April 1951 the attempted reconquest of Yunnan began when the 2,000 K.M.T soldiers of the Yunnan Province Anti-Communist National Salvation Army based at Mong Mao crossed the border into China. Accompanied by C.I.A advisers and supplied by regular airdrops from unmarked C-47's, K.M.T troops moved northward in two columns, capturing Kengma without resistance. However, as they advanced north of Kengma, the People's Liberation Army (P.L.A) counterattacked. The K.M.T suffered huge casualties, and several of their CIA advisers were killed. (146) Li Mi and his Salvation Army fled back to Burma, after less than a week in China. Undeterred by this crushing defeat, however, the General dispatched his two thousand man contingent at Mong Yang into southern Yunnan; they too were quickly overwhelmed and driven back into Burma. (147) 

Rather than abandoning this doomed adventure, the CIA redoubled its efforts. Late in 1951 the K.M.T reopened the old World War II landing strip at Mong Hsat so that it could handle the large two- and four engine aircraft flying in directly from Taiwan or Bangkok. (148) In November Li Mi flew off to Taiwan for an extended vacation and returned three months later at the head of a C.A.T (Civil Air Transport, later Air America) airlift, which flew seven hundred regular K.M.T soldiers from Taiwan to Mong Hsat. (149) Burmese intelligence reported that the unmarked C-47's began a regular shuttle service, with two flights a week direct from Taiwan. A mysterious Bangkok-based American company named Sea Supply Corporation began forwarding enormous quantities of U.S. arms to Mong Hsat. (150) Burmese Military Intelligence observed that the K.M.T began sporting brand-new American M-1's, .50 caliber machine guns, bazookas, mortars, and antiaircraft artillery. (151) With these lavish supplies the K.M.T press-ganged eight thousand soldiers from the hardy local hill tribes and soon tripled their forces to twelve thousand men. (152) 

While preparing for the Yunnan invasion, the K.M.T had concentrated their forces in a long, narrow strip of territory parallel to the China border. Since Yunnan's illicit opium production continued until about 1955, the K.M.T were in a position to monopolize almost all of the province's smuggled exports. The Burmese government reported that, "off and on these K.M.T guerrillas attacked petty traders plying across the border routes . . . . (153) 

After a year-long buildup, Gen. Li Mi launched his final bid to reconquer Yunnan Province. In August 1952, 2,100 K.M.T troops from Mong Yang invaded China and penetrated about sixty miles before the Chinese army drove them back into Burma. (154) There would be no more invasions. While Gen. Li Mi and his American advisers had not really expected to overrun the vast stretches of Yunnan Province with an army of twelve thousand men, they had been confident that once the K.M.T set foot in China, the "enslaved masses" would rise up against Mao and flock to Chiang Kai-shek's banner. After three attempts had conspicuously failed to arouse the populace, Gen. Li Mi abandoned the idea of conquering China and resigned himself to holding the line in Burma. The K.M.T stopped concentrating their forces in a few bases on the China border and troops spread out to occupy as much territory as possible. With the Burmese army still preoccupied with insurgency in other parts of Burma, the K.M.T soon became the only effective government in all the Shan States' territories between the Salween River and the China border (Kokang, Wa, and Kengtung states). These territories were also Burma's major opium-producing region, and the shift in K.M.T tactics allowed them to increase their control over the region's opium traffic. The Burmese government reported: 

The K.M.T's took over the control and administration of circles (districts) and village tracts. They started opening up revenue collection centers, and local people were being subjected to pay gate-fees and ferry fees, in entering their occupied area. Customs duties were also levied on all commodities brought into their territories for trade. The taxes were collected in kind as well as money. . . . By means of threat and coercion, these K.M.T aggressors forced the local inhabitants to comply with their demands. (155) 

The K.M.T occupation centralized the marketing structure, using hundreds of petty opium traders, who combed the Shan highlands. The K.M.T also required that every hill tribe farmer pay an annual opium tax. One American missionary to the Lahu tribesmen of Kengtung State, Rev. Paul Lewis, recalls that the K.M.T tax produced a dramatic rise in the amount of opium grown in the highland villages he visited. Tribes had very little choice in the matter, and he can still remember, only too vividly, the agony of the Lahu who were tortured by the K.M.T for failing to comply with their regulations. (156) Moreover, many Chinese soldiers married Lahu tribeswomen; these marriages reinforced K.M.T control over the highlands and made it easier for them to secure opium and recruits. Through their personal contact in mountain villages, their powerful army, and their control over the opium-growing regions, the K.M.T were in an ideal position to force an expansion of the Shan States' opium production when Yunnan's illicit production began to disappear in the early 1950's. 

Almost all the K.M.T opium was sent south to Thailand, either by mule train or aircraft. Soon after their arrival in Burma, the K.M.T formed a mountain transport unit, recruiting local mule drivers and their animals.(157) Since most of their munitions and supplies were hauled overland from Thailand, the K.M.T mule caravans found it convenient to haul opium on the outgoing trip from Mong Hsat and soon developed a regular caravan trade with Thailand. Burmese military sources claimed that much of the K.M.T opium was flown from Mong Hsat in "unmarked" C-47's flying to Thailand and Taiwan. (158) In any case, once the K.M.T opium left Mong Hsat it was usually shipped to Chiangmai, where a K.M.T colonel maintained a liaison office with the Nationalist Chinese consulate and with local Thai authorities. Posing as ordinary Chinese merchants, the colonel and his staff used raw opium to pay for the munitions, food, and clothing that arrived from Bangkok at the Chiangmai railhead. Once the materiel was paid for, it was this colonel's responsibility to forward it to Mong Hsat. (159) Usually the K.M.T dealt with the commander of the Thai police, General Phao, who shipped the opium from Chiangmai to Bangkok for both local consumption and export. (160) 

While the three C.I.A-sponsored invasions of Yunnan at least represented a feebly conceived anti-Communist policy, the next move defied all logic. With what appeared to be C.I.A support, the K.M.T began a full-scale invasion of eastern Burma. In late 1952, thousands of K.M.T mercenaries forded the Salween River and began a well-orchestrated advance. The Burmese government claimed that this was the beginning of an attempt to conquer the entire country. But in March 1953 the Burmese fielded three crack brigades and quickly drove them back across the Salween. (Interestingly, after a skirmish with the K.M.T at the Wan Hsa La ferry, Burmese soldiers discovered the bodies of three white men who bore no identification other than some personal letters with Washington and New York addresses.) 161 

As a result of the invasion, Burma charged the Chinese Nationalist government with unprovoked aggression before the United Nations in March 1953. While the K.M.T troops had previously been only a bother ,a minor distraction in the distant hills,they now posed a serious threat to the survival of the Union of Burma. Despite the United States' best efforts to sidetrack the issue and Taiwan's denial of any responsibility for Gen. Li Mi, the Burmese produced reams of photos, captured documents, and testimony convincing enough to win a vote of censure for Taiwan. By now the issue had become such a source of international embarrassment for the United States that she used her influence to convene a Four-Nation Military Commission (Burma, the United States, Taiwan, and Thailand) on the problem in Bangkok on May 22. Although all four powers agreed to complete K.M.T withdrawal from Burma after only a month of negotiations, the K.M.T guerrillas refused to cooperate and talks dragged on through the summer. Only after Burma again took the issue to the United Nations in September did the Taiwan negotiators in Bangkok stop quibbling and agree to the withdrawal of two thousand K.M.T troops: the evacuees would march to the Burma/Thailand border, be trucked to Chiangrai, Thailand, and flown to Taiwan by General Chennault's CAT. 

However, the Burmese were suspicious of the arrangements from the very beginning, and when representatives of the Four-Nation Military Commission arrived in northern Thailand to observe the withdrawal, Thai police commander Phao refused to allow the Burmese delegation to accompany the others to the staging areas. (162) The next problem arose when the first batch of fifty soldiers emerged from the jungle carrying a 9' X 15' portrait of Chiang Kai-shek instead of their guns, thus completely discrediting the withdrawal. U.S. Ambassador to Thailand Gen. William Donovan cabled the U.S. Embassy in Taiwan, demanding that the K.M.T be ordered to bring out their weapons. On November 9 the U.S. ambassador to Taiwan, Karl L. Rankin, replied that if the United States did not ease its pressure Chiang threatened to expose C.I.A support of the K.M.T in Burma. Donovan cabled back that the "Chicoms" and Soviets already knew about the C.I.A operations and kept up his pressure. When the K.M.T withdrawal was later resumed, the soldiers carried rusting museum pieces as their arms. (163) 

The Burmese observers, now allowed into the staging areas, frequently protested that many of the supposed Chinese looked more like Lahus or Shans. Although other observers ridiculed these accusations, the Burmese were correct, Among the 1,925 "soldiers" evacuated in November-December 1953, there were large numbers of boys, Shans, and Lahus. (164) Today there are an estimated three hundred Lahu tribesmen still living on Taiwan who were evacuated during this period. Although some were recruited by the promise of jobs as generals or jet pilots, most were simply press-ganged from their villages on a quota basis, given Chinese names, dressed in K.M.T uniforms, and shipped off to Taiwan. Many husbands and wives have been separated for seventeen years, and some of the families have moved to Thailand to await the return of their sons or husbands. So far only two men have come back.(165) 

Frustrated with their attempts to remove the K.M.T through international negotiations, in March 1954 Burma launched its largest military operation against the K.M.T. After the Burmese air force bombarded Mong Hsat for two days, (166) the army captured the K.M.T headquarters and drove its two thousand defenders south toward the Thai border. (167) Negotiations were reopened in Bangkok, and during the next two months CAT flew another forty-five hundred K.M.T troops to Taiwan. On May 30, 1954, Gen. Li Mi announced the dissolution of the Yunnan Province Anti-Communist National Salvation Army. (168) However, there were still six thousand K.M.T troops left in Burma. Fighting began again a month later, and continued sporadically for the next seven years. 

While the continuing struggle faded from American headlines, in June 1955 the Rangoon reported that six hundred K.M.T troops had been smuggled into the Shan States from Taiwan. (169) A new commander was appointed, and a headquarters complex was opened up at Mong Pa Liao near the Mekong River.(170) The K.M.T continued to rule the hill tribes with an iron hand. In 1957 an American missionary reported: 

"For many years there have been large numbers of Chinese Nationalist troops in the area demanding food and money from the people. The areas in which these troops operate are getting poorer and poorer and some villages are finding it necessary to flee." (171) 

Not only did the K.M.T continue to demand opium from the tribes, but they upgraded their role in the narcotics trade as well. When the Burmese army captured their camp at Wanton in May 1959, they discovered three morphine base refineries operating near a usable airstrip. (172) 

Although forgotten by the international press, the K.M.T guerrilla operations continued to create problems for both the Burmese and Chinese governments. When delegations from the Union of Burma and the People's Republic of China met to resolve a border dispute in the summer of 1960, they also concluded a secret agreement for combined operations against the K.M.T base at Mong Pa Liao. (173) This base, with a runway capable of handling the largest transport aircraft, was defended by some ten thousand K.M.T troops entrenched in an elaborate fortifications complex. After weeks of heavy fighting, five thousand Burmese troops and three full People's Liberation Army divisions, totaling 20,000 men, (174) finally overwhelmed the fortress on January 26, 1961. (175) While many of their hill tribe recruits fled into the mountains, the crack K.M.T units retreated across the Mekong River into northwestern Laos. Burmese officers were outraged to discover American arms of recent manufacture and five tons of ammunition bearing distinctive red, white, and blue labels. (176) In Rangoon 10,000 angry demonstrators marched in front of the U.S. Embassy, and Burma sent a note of protest to the United Nations saying that "large quantities of modern military equipment, mainly of American origin, have been captured by Burmese forces." (177) 

State Department officials in Washington disclaimed any responsibility for the arms and promised appropriate action against Taiwan if investigation showed that its military aid shipments had been diverted to Burma. (178) Another round of airlifts to Taiwan began. On April 5 Taiwan announced the end of the flights, declaring that forty-two hundred soldiers had been repatriated. (179) Six days later Taiwan joined the State Department in disavowing any responsibility for the six thousand remaining troops. (180) However, within months the C.I.A began hiring these disowned K.M.T remnants as mercenaries for its secret operations in northwestern Laos. (181)

At first glance the history of the K.M.T's involvement in the Burmese opium trade seems to be just another case of a C.I.A client taking advantage of the agency's political protection to enrich itself from the narcotics trade. But upon closer examination, the C.I.A appears to be much more seriously compromised in this affair. The C.I.A fostered the growth of the Yunnan Province Anti-Communist National Salvation Army in the borderlands of northeastern Burma,a potentially rich opium-growing region. There is no question of C.I.A ignorance or naivete, for as early as 1952 The New York Times and other major American newspapers published detailed accounts of the K.M.T's role in the narcotics trade. (182) But most disturbing of all is the coincidence that the K.M.T's Bangkok connection, the commander of the Thai police, General Phao, was the CIA's man in Thailand.

Thailand's Opium: The Fruits of Victory 

Government corruption is not just a problem in Thailand, it is a way of life. Like every bureaucracy, the Thai government has elaborate organizational charts marking out neatly delineated areas of authority. To the uninformed observer it seems to function as any other meritocracy, with university graduates occupying government posts, careers advancing step by step, and proposals moving up and down the hierarchy in a more or less orderly fashion. But all of these charts and procedures are a facade, behind which operate powerful military cliques whose driving ambition is to expropriate enough money, power, and patronage to become a government within the government. These cliques are not ideological factions, but groups of plotters united by greed and ambition. 

A clique usually has its beginnings in some branch of the military service, where a hard core of friends and relatives begin to recruit supporters from the ranks of their brother officers. Since official salaries have always been notoriously inadequate for the basic needs, not to mention the delusions, of the average officer, each rising faction must find itself a supplementary source of income. (183) While graft within the military itself provides a certain amount of money, all cliques are eventually forced to extend their tentacles into the civilian sector. A clique usually concentrates on taking over a single government ministry or monopolizing one kind of business, such as the rice trade or the lumber industry. By the time a clique matures it has a disciplined pyramid of corruption. At the bottom, minor functionaries engage in extortion or graft, passing the money up the ladder, where leaders skim off vast sums for themselves and divide the remainder among the loyal membership. Clique members may steal from the official government, but they usually do not dare steal from the clique itself; the amount of clique money they receive is rigidly controlled. When a clique grows strong enough to make a bid for national power, it is inevitably forced to confront another military faction. Such confrontations account for nearly all the coups and counter coups that have determined the course of Thai politics ever since the military reduced the king to figurehead status in 1932. 

From 1947 to 1957 Thai politics was dominated by an intense rivalry between two powerful cliques: one led by Gen. Phao Sriyanonda[L], who resembled a cherub with a Cheshire cat smile, and the other by Marshal Sarit Thanarat.[R] Both were catapulted upward by the November 1947 coup, which restored Thailand's wartime leader, Marshal Phibun Songkhram, to power. Too weak to execute the coup himself, Marshal Phibun had recruited two powerful army cliques. One of these was composed mainly of ambitious young army officers led by Sarit; the other was led by the commander in chief of the army, General Phin, and sparked by his aggressive son-in-law, Col. Phao Sriyanonda. (184) Soon after the triumvirate took power, the two army cliciues began to argue over division of the spoils. Military power was divided without too much rancor when Phao became deputy director-general of the National Police. (Phao became director-general in 1951, and his forty thousand police officers were adequate insurance against Sarit's control over the forty-five thousand-man army. (185) And many of the bureaucratic and commercial spoils were divided with equal harmony. However, an exceptionally bitter struggle developed over control of the opium traffic. 

The illicit opium trade had only recently emerged as one of the country's most important economic assets. Its sudden economic significance may have served to upset the delicate balance of power between the Phao and Sarit cliques. Although the Opium Monopoly had thrived for almost a hundred years, by the time of the 1947 coup the high cost of imported opium and reasonably strict government controls made it an unexceptional source of graft. However, the rapid decline in foreign opium imports and the growth of local production in the late 1940's and early 1950's suddenly made the opium trade worth fighting over. 

At the first United Nations narcotics conference in 1946, Thailand was criticized for being the only country in Southeast Asia still operating a legal government monopoly. (186) Far more threatening than the criticism, however, was the general agreement that all non-medical opium exports should be ended as soon as-possible. Iran had already passed a temporary ban on opium production in April 1946, (187) and although the Thai royal monopoly was able to import sufficient quantities for its customers in 1947, the future of foreign imports was not too promising. (188) Also, smuggled supplies from China were trickling to an end as the People's Republic proceeded in its successful opium eradication campaign. To meet their projected needs for raw opium, the Thai government authorized poppy cultivation in the northern hills for the first time in 1947. The edict attracted a growing number of Meo into Thailand's opium-growing regions and promoted a dramatic increase in Thai opium production. (189) But these gains in local production were soon dwarfed by the much more substantial increases in the Burmese Shan States. As Iranian and Chinese opium gradually disappeared in the early 1950's, the K.M.T filled the void by forcing an expansion of production in the Shan States they occupied. Since the K.M.T were at war with the Burmese and received their U.S. supplies from Thailand, Bangkok became a natural entrepot for their opium. By 1949 most of the Thai monopoly's opium was from Southeast Asia. (190) and in 1954 British customs in Singapore stated that Bangkok had become the major center for international opium trafficking in Southeast Asia. (191) The traffic became so lucrative that Thailand quietly abandoned the anti-opium campaign announced in 1948 (all opium smoking was to have ended by 1953). (192)

The "opium war" between Phao and Sarit was a hidden one, with almost all the battles concealed by a cloak of official secrecy. The most comical exception occurred in 1950 as one of General Sarit's army convoys approached the railhead at Lampang in northern Thailand with a load of opium. Phao's police surrounded the convoy and demanded that the army surrender the opium since anti-narcotics work was the exclusive responsibility of the police. When the army refused and threatened to shoot its way through to the railway, the police brought up heavy machine guns and dug in for a fire-fight. A nervous standoff continued for two days until Phao and Sarit themselves arrived in Lampang, took possession of the opium, and escorted it jointly to Bangkok, where it quietly disappeared. (193) 

In the underground struggle for the opium trade, General Phao slowly gained the upper hand. While the clandestine nature of this "opium war" makes it difficult to reconstruct the precise ingredients in Phao's victory, the critical importance of CIA support cannot be underestimated. In 1951 a CIA front organization, Sea Supply Corporation, began delivering lavish quantities of naval vessels, arms, armored vehicles, and aircraft to General Phao's police force. (194) With these supplies Phao was able to establish a police air force, a maritime police, a police armored division, and a police paratroop unit. General Sarit's American military advisers repeatedly refused to grant his army the large amounts of modem equipment that Sea Supply Corporation gave Phao's police. (195) Since Sea Supply shipments to K.M.T troops in Burma were protected by the Thai police, Phao's alliance with the CIA also gave him extensive K.M.T contacts, through which he was able to build a virtual monopoly on Burmese opium exports. Phao's new economic and military strength quickly tipped the balance of political power in his favor; in a December 1951 cabinet shuffle his clique captured five cabinet slots, while Sarit's faction got only one. (196) Within a year Sarit's rival had taken control of the government and Phao was recognized as the most powerful man in Thailand. 

Phao used his new political power to further strengthen his financial base. He took over the vice rackets, expropriated the profitable Bangkok slaughterhouse, rigged the gold exchange, collected protection money from Bangkok's wealthiest Chinese businessmen, and forced them to appoint him to the boards of over twenty corporations. The man whom C. L. Sulzberger of The New York Times called "a superlative crook" (197) and whom a respected Thai diplomat hailed as the "worst man in the whole history of modem Thailand" (198) became the C.I.A's most important Thai client. Phao became Thailand's most ardent anti-Communist, and it appears that his major task was to support K.M.T political aims in Thailand and its guerrilla units in Burma. Phao protected K.M.T supply shipments, marketed their opium, and provided such miscellaneous services as preventing Burmese observers from going to the staging areas during the November-December 1953 airlifts of supposed K.M.T soldiers to Taiwan. 

In political terms, however, Phao's attempts to generate support for the Kuomintang among Thailand's overseas Chinese community, the richest in Asia, was probably more important. Until 1948 the K.M.T had been more popular than Mao's Communists among Thailand's Chinese, and had received liberal financial contributions. As Mao's revolution moved toward victory during 1948-1949, Chinese sentiment shifted decisively in favor of the Communists. (200) 

But after the Phibun government allied itself with the United States in 1950, it took a harder line, generally urging the Chinese to remain neutral about politics in their mother country. In contrast, General Phao began a campaign to steer the Chinese community back to an active pro-K.M.T position. Phao's efforts were a part of a larger C.I.A effort to combat the growing popularity of the People's Republic among the wealthy, influential overseas Chinese community throughout Southeast Asia. The details of this program were spelled out in a 1954 U.S. National Security Council position paper, which suggested: 

"Continue activities and operations designed to encourage the overseas Chinese communities in Southeast Asia: 

(a) to organize and activate anti-communist groups and activities within their own communities; 

(b) to resist the effects of parallel pro-communist groups and activities; 

(c) generally, to increase their orientation toward the free world; and, 

(d) consistent with their obligations and primary allegiance to their local governments, to extend sympathy and support to the Chinese Nationalist Government as the symbol of Chinese political resistance and as a link in the defense against communist expansion in Asia." (201) 

These pressures resulted in a superficial shift to the right among Thailand's Chinese. However, since their support for the K.M.T was totally dependent on police intimidation, when Phao was weakened by political difficulties in 1955 pro K.M.T activity began to collapse. (202) 

By 1955 Phao's National Police Force had become the largest opium trafficking syndicate in Thailand, and was intimately involved in every phase of the narcotics traffic; the level of corruption was remarkable even by Thai standards. If the smuggled opium was destined for export, police border guards escorted the K.M.T caravans from the Thailand/Burma border to police warehouses in Chiangmai. From there police guards brought it to Bangkok by train or police aircraft. Then it was loaded onto civilian coastal vessels and escorted by the maritime police to a mid-ocean rendezvous with freighters bound for Singapore or Hong Kong, (203) However, if the opium was needed for the government Opium Monopoly, theatrical considerations came to the fore, with police border patrols staging elaborate shoot-outs with the K.M.T smugglers near the Burma/Thailand frontier. Invariably the K.M.T guerrillas would drop the opium and flee, while the police heroes brought the opium to Bangkok and collected a reward worth one eighth the retail value. (204) The opium subsequently disappeared. Phao himself delighted in posing as the leader in the crusade against opium smuggling, (205) and often made hurried, dramatic departures to the northern frontier, where he personally led his men in these desperate gun battles with the ruthless smugglers of slow death. (206)

Opium profits may have helped build General Phao's political empire, but an opium scandal contributed to its downfall. It began as another of Phao's carefully staged opium seizures. During the night of July 9, 1955, a squad of border police crouched in the underbrush at the Mesai River, watching K.M.T soldiers ferrying twenty tons of opium from Burma into Thailand. (207) When the last bundles were unloaded early the next morning the Thai police burst from the jungle and rushed the smugglers. Miraculously, the K.M.T soldiers again escaped unharmed. The triumphant police escorted the opium to Bangkok, where General Phao congratulated them for their good work. But for some reason, perhaps it was the huge size of the haul, Phao became overanxious. He immediately signed a request for a reward of $1,200,000 and forwarded it to the Ministry of Finance. Then he rushed across town to the Finance Ministry and, as deputy minister of finance, signed the check. Next, or so he claimed, Phao visited the mysterious "informer" and delivered the money personally. (208) On July 14 General Phao told the press that the unnamed informant had fled the country with his money in fear of his life, and therefore was not available for comment, He also said that most of the twenty tons would be thrown into the sea, though some would be sold to pharmaceutical companies to pay for the reward. (209) Even to the corruption hardened Thai newsmen, the story seemed too specious to withstand any scrutiny. 

Prime Minister Phibun was the first to attack Phao, commenting to the press that the high opium rewards seemed to be encouraging the smuggling traffic. More pointedly he asked why the final reward was so much higher than the one first announced.(210)The police explained that, since they had not had a chance to weigh the opium, they just estimated the reward, and their estimate was too low. Since it was common knowledge that the law prescribed no payments until after weighing, the press jumped on this hapless explanation and proceeded to crucify Phao with it. (211) In August Phao was relieved of his position in the Finance Ministry (212) and left on a tour of Japan and the United States. During his absence, Prime Minister Phibun released the press from police censorship, assumed veto power over all police paramilitary activities, and ordered the police to give up their business positions or quit the force. (213) 

Phao returned in late September and delivered a public apology before the National Assembly, swearing that the police were in no way implicated in the twenty-ton opium scandal. (214) But public opinion was decidedly skeptical, and the unleashed press began a long series of exposes on police corruption. General Sarit was particularly bitter toward Phao, and newspapers friendly to his clique began attacking Phao's relationship with the CIA, accusing him of being an American puppet. In November 1956 Phibun made Thailand's break with Phao's pro-K.M.T police official when he said at a press conference, "The Kuomintang causes too much trouble; they trade in opium and cause Thailand to be blamed in the United Nations." (215) Some of the press were even bold enough to accuse the CIA's Sea Supply Corporation of being involved in Phao's opium trafficking. (216)As Sarit's fortunes rose, Phao's influence deteriorated so seriously that he felt compelled to try to use the February 1957 elections for a popular comeback. With his profits from the opium trade and other rackets, he organized a political party and began a public speaking campaign. His police issued immunity cards to Bangkok gangsters, and paid them to break up opposition rallies and to beat up unfriendly candidates. In the 1957 balloting Phao's thugs perpetrated an enormous amount of electoral fraud; both during and after the campaign the Bangkok press attacked the police for "hooliganism," opium smuggling, and extortion. (217) Phao did well enough in the elections to be appointed minister of the interior in the succeeding cabinet. But this did him little good, for Sarit was preparing a coup. 

On September 16, 1957, tanks and infantry from Sarit's old First Division moved into Bangkok's traditional coup positions. Phao flew off to his numbered bank accounts in Switzerland and Prime Minister Phibun fled to Japan. Sarit moved cautiously to reinforce his position. He allowed a divisive cabinet composed of competing military factions and anti-American liberals to take office, maintaining his control over the military by appointing a loyal follower, Gen. Thanom Kitikhachorn, as minister of defense. Next, Sarit broke the power of the police force. Police armored and paratroop units were disbanded and their equipment turned over to the army, (218) and all of the CIA agents attached to Phao's police force were thrown out of the country. (219) Sarit's long-time follower, Gen. Praphas Charusathien, was made minister of the interior. Loyal army officers were assigned key police positions, where they used an investigation of the opium trade to purge Phao's clique. For example, when police and military units seized six tons of raw opium on the northern frontier in November, they captured five Thai policemen as well. In Bangkok, the new director-general of police, Gen. S. Swai Saenyakorn, explained that five or six gangs that controlled smuggling in the north operated "with police influence behind their backs," and that these arrests were part of a larger campaign to fire or transfer all those involved. (220) General Swai's words took on added meaning when Police Brigadier Gen. Thom Chitvimol was removed from the force and indicted for his involvement in the six-ton opium case. (221) 

New elections in December legitimized the anti-Phao coup, and on January 1, 1958, Thanom became prime minister. However, liberals in the cabinet were chafing under Sarit's tight reign, and they began organizing several hundred dissatisfied younger military officers for another coup. But Sarit reorganized his clique into an association known as the Revolutionary Group, and on October 20, 1958, seized power with a bloodless coup. (222) The Revolutionary Group proceeded to rule openly. Now that the police had been rendered ineffectual as a power base, Sarit's only major worry was the possibility of a counter coup by the younger colonels and lieutenant colonels whose loyalty to the regime was in doubt. These fears dominated the endless post coup sessions of the Revolutionary Group, and discussions continued for hours as Sarit and his fellow generals grappled for a solution. They agreed that a coup could be prevented if they recruited the majority of the colonels into their faction by paying them large initial bonuses and regular supplemental salaries. But the Revolutionary Group faced the immediate problem of rapidly assembling millions of baht for the large initial bonuses. Obviously, the fastest way to amass this amount of money was to reorganize General Phao's opium trade. 

The Revolutionary Group dispatched army and air force officers to Hong Kong and Singapore to arrange large opium deals; police and military officers were sent into northern Thailand to alert mountain traders that there would be a market for all they could buy. As the 1959 spring opium harvest came to an end, the army staged its annual dry-season war games in the north to maximize opium collection. Every available aircraft, truck, and automobile was pressed into service, and the hills of northern Thailand and Burma were picked clean. Soon after the opium had been shipped from Bangkok to prearranged foreign buyers and the flickering flames of the counter coup doused with the opium money, the Revolutionary Group met to discuss whether they should continue to finance their political work with opium profits. Sarit was in favor of the idea, and was not particularly concerned about international opinion. General Praphas, who helped manage the trade for Sarit, agreed with his leader. While most of the group was indifferent, Generals Thanom and Swai were concerned about possible severe international repercussions, General Swai was particularly persuasive, since he was respected by Sarit, who addressed him with the Thai honorific "elder brother." (In contrast, Sarit called the sycophantic Praphas "Porky.") Finally Sarit was persuaded by Swai, and he decreed that the police and military would no longer function as a link between Burma's poppy fields and the ocean-going smugglers on Thailand's southern coast. However, no attempt would be made to stop the enormous transit traffic or punish those who discreetly accepted bribes from Chinese syndicates who inherited the traffic. Although the traffic continued, it was much less profitable for the authorities. In 1959 Sarit's government passed the Harmful Habit-Forming Drugs Act, which read: 

Whoever grows, produces, imports or exports or orders the import or export by any means whatsoever of any type of harmful habit-forming drug in violation of this act shall be liable to a term of imprisonment of six months to ten years and a fine equal to ten times the value of such drug but not less than 3,000 baht. (223) 

While the laws signaled a crackdown on opium smoking and served to drive the addict population to heroin, it has in no way affected the other aspects of the drug trade; Bangkok remains a major Asian opium capital. Little has changed since General Phao's heyday: today, rather than being directly involved, high ranking government leaders are content to accept generous retainers from powerful Bangkok-based Chinese syndicates that have taken full responsibility for managing the traffic. 

There can be little doubt that CIA support was an invaluable asset to General Phao in managing the opium traffic. The agency supplied the aircraft, motor vehicles, and naval vessels that gave Phao the logistic capability to move opium from the poppy fields to the sea-lanes. And his role in protecting Sea Supply's shipments to the K.M.T no doubt gave Phao a considerable advantage in establishing himself as the exclusive exporter of K.M.T opium. 

Given its even greater involvement in the K.M.T's Shan States opium commerce, how do we evaluate the CIA's role in the evolution of large-scale opium trafficking in the Burma/Thailand region? Under the Kennedy administration presidential adviser Wait W. Rostow popularized a doctrine of economic development that preached that a stagnant, underdeveloped economy could be jarred into a period of rapid growth, an economic "takeoff," by a massive injection of foreign aid and capital, which could then be withdrawn as the economy coasted into a period of self-sustained growth. (224) CIA support for Phao and the K.M.T seems to have sparked such a "takeoff" in the Burma/Thailand opium trade during the 1950's: modern aircraft replaced mules, naval vessels replaced sampans, and well-trained military organizations expropriated the traffic from. bands of illiterate mountain traders. 

Never before had the Shan States encountered smugglers with the discipline, technology, and ruthlessness of the K.M.T. Under General Phao's leadership Thailand had changed from an opium-consuming nation to the world's most important opium distribution center. The Golden Triangle's opium production approached its present scale; Burma's total harvest had increased from less than forty tons (225) just before World War II to three hundred to four hundred tons in 1962 (226), while Thailand's expanded at an even greater rate, from 7 tons (227) to over one hundred tons. (228) In a 1970 report the U.S. Bureau of Narcotics concluded: 

By the end of the 1950's, Burma, Laos, and Thailand together had become a massive producer, and the source of more than half the world's present illicit supply of 1,250 to 1,400 tons annually. Moreover, with this increase in output the region of the Far East and Southeast Asia quickly became self-sufficient in opium. (229) 

But was this increase in opium production the result of a conscious decision by the C.I.A to support its allies, Phao and the K.M.T, through the narcotics traffic? Was this the C.I.A's "Operation X"? There can be no doubt that the C.I.A knew its allies were heavily involved in the traffic; headlines made it known to the whole world, and Phao was responsible for Thailand's censure by the U.N.'s Commission on Narcotic Drugs. Certainly the C.I.A did nothing to halt the trade or to prevent its aid from being abused. But whether the C.I.A actively organized the traffic is something only the Agency itself can answer. In any case, by the early 1960's the Golden Triangle had become the largest single opium-growing region in the world-a vast reservoir able to supply America's lucrative markets should any difficulties arise in the Mediterranean heroin complex. The Golden Triangle had surplus opium; it had well-protected, disciplined syndicates; with the right set of circumstances it could easily become America's major heroin supplier. And those circumstances were soon to develop. 

Next
 South Vietnam: Narcotics in the Nation's Service

notes
4 Cold War Opium Boom 
1. U.S. Bureau of Narcotics and Dangerous Drugs, "The World Opium Situation," (Washington, D.C., 1970), p. 29. 
2. John O'Kearney, "Thai Becomes Opium Center for SE Asia," in The New York Daily News, February 13, 1955. 
3. Gen. Vo Nguyen Giap, Peoples' War Peoples' Army (Hanoi: Foreign Languages Publishing House, 1961), p. 79. 
4. Lieutenant Colonel Grimaldi, Inspecteur des Forces suppl6tives, Inspection des Forces Suppl6tives du Sud Vietnam, Notions de Case sur les Forces suppl&ives du Sud Vietnam (S.P.50.295, May 15, 1954), p. 7. 
5. Interview with Col. Roger Trinquier, Paris, France, March 25, 1971. 
6. Ibid. 
7. United Nations, Economic and Social Council, Commission on Narcotic Drugs, Summary of the Fourth Meeting (E/C.S.7/25), November 29, 1946, p. 4. 
8. United Nations, Economic and Social Council, Commission on Narcotic Drugs, Abolition of Opium Smoking (E/CN.7/244), November 17,1952,p.34. 
9. Ibid., p. 36. In 1952 French customs purchased absolutely no opium in Indochina (United Nations, Economic and Social Council, Abolition of Opium Smoking, add. 2, "Laos Report for the Year 1952," March 12, 1953, p. 4). 
10. Ibid., p. 18. 
11. Interview with Col. Roger Trinquier, Paris, France, March 25, 1971. A number of high-ranking Vietnamese officials have also confirmed the existence of Operation X, including Col. Tran Dinh Lan, former director of military intelligence for the chief of staff of the Vietnamese Army (interview, Paris, France, March 18, 1971), and Mr. Nghiem Van Tri, former Minister of Defense (interview, Paris, France, March 30, 1971). One former CIA agent reports that it was General Salan who first organized Operation X in the late 1940s (interview with Lt. Col. Lucien Conein, McLean, Virginia, June 18, 1971). 
12. Interview with Gen. Mai Huu Xuan, Saigon, Vietnam, July 19, 1971. 
13. Interview with Gen. Maurice Belleux, Paris, France, March 23, 1971. 
14. Interview with Touby Lyfoung, Vientiane, Laos, September 1, 1971.
15. Interview with Gen. Maurice Belleux, Paris, France, March 23, 1971. 
16. Bernard B. Fall, "Portrait of the 'Centurion,' " in Roger Trinquier, Modern Warfare (New York: Frederick A. Praeger, 1964), p. xiii. 
17. Interview with Col. Roger Trinquier, Paris, France, March 23, 1971. (Colonel Trinquier read from a training manual he prepared for MACG officers during the First Indochina War. All of the following material on his four-stage method is based on this manual.) 
18. Trinquier, Modern Warfare, p. 105. 
19. For Trinquier's account of his role in the Katanga revolt see Colonel Trinquier, Jacques Duchemin, and Jadques Le Bailley, Notre Guerre an Katanga (Paris: Editions de la Pens6e Moderne, 1963); Fall, "Portrait of a 'Centurion,' " p. xv. 
20. Trinquier, Modern Warfare, p. 109. 
21. Ibid., p. I 11. 22. Interview with Touby Lyfoung, Vientiane, Laos, September 1, 1971. 
23. Interview with Col. Roger Trinquier, Paris, France, March 25, 197 1. 
24. Donald Lancaster, The Emancipation of French Indochina (New York: Oxford University Press, 1961), p. 257. 
25. Bernard B. Fall, Anatomy of a Crisis (Garden City, N.Y.: Doubleday & Company, 1969), pp. 49-52. 
26. Interview with Gen. Albert Sore, Biarritz, France, April 7, 1971. 
27. Interview with Gen. Edward G. Lansdale, Alexandria, Virginia, June 17, 1971. 
28. Bernard B. Fall, Hell in a Very Small Place (Philadelphia: J. B. Lippincott, 1967), pp. 33-37. 
29. Interview with Colonel Then, Versailles, France, April 2, 1971. 
30. Bernard B. Fall, Hell in a Very Small Place, pp. 318-320. 
31. Interview with Col. Roger Trinquier, Paris, France, March 25, 1971. Jules Roy says that on May 4th the Dien Bien Phu defenders learned that, "Colonel Trinquier, thanks to a fund in the form of bars of silver, had just recruited fifteen hundred Meos and was beginning to come upcountry with them from the Plain of Jarres toward Muong Son, about sixty miles south of Dienbienphu as the crow flies" (Jules Roy, The Battle of Dienbienphu [New York: Harper & Row, 1965), p. 261). 
32. Fall, Hell in a Very Small Place, p. 442. 
33. Interview with Jean Jerusalemy, Paris, France, April 2, 1971. 
34. John T. McAlister, "Mountain Minorities and the Viet Minh," in Peter Kunstadter, ed., Southeast Asian Tribes, Minorities, and Nations (Princeton, N.J.: Princeton University Press, 1967), pp. 812, 825-826. 
35. Jean Jerusalemy, "Monographie sur le Pays Tai," mimeographed (n.d.), P. 18. 17 
36. McAlister, "Moutain Minorities and the Viet Minh," pp. 813-814. 
37. Jerusalemy, "Monographic sur le Pays Tai," p. 79. 
38. Interview with Jean Jerusalemy, Paris, France, April 2, 1971. 
39. Jerusalemy, "Monographie sur le Pays Tai," pp. 29-30, 
40. Interview with Jean Jerusalemy, Paris, France, April 2, 1971. For background on opium and the Meo in the Tai highlands, see McAlister, "Mountain Minorities and the Viet Minh," pp. 817-820. 
41. McAlister, "Mountain Minorities and the Viet Minh," pp. 823-824.
42. Ibid., p. 825. 
43. Jerusalemy, "Monographic sur le Pays Tai," p. 29. 
44. Interview with Jean Jerusalemy, Paris, France, April 2, 1971. 
45. McAlister, "Mountain Minorities and the Viet Minh," p. 830. 
46. Giap, Peoples' War Peoples' Army, p. 183. 
47. Fall, Hell in a Very Small Place, pp. 320-321. 
48. Philippe Devillers and Jean Lacouture, End of a War (New York: Frederick A. Praeger, 1969), pp. 151- 152. 
49. Interview with Col. Roger Trinquier, Paris, France, March 25, 1971. 
50. Interview with Gen. Maurice Belleux, Paris France, March 23, 1971. 
51. Conversation with Commandant D6sir6, Paris, France, March 31, 1971. 
52. Interview with Touby Lyfoung, Vientiane, Laos, September 1, 1971. 
53. Interview with Lt. Col. Lucien Conein, McLean, Virginia, June 18, 1971. 
54. Interview with Col. Roger Trinquier, Paris, France, March 25, 1971. 
55. Interview with Gen. Maurice Belleux, Paris, France, March 23, 1971. This is Gen. Belleux's version of the incident; a French author has a simpler account: "For opium it was exactly the same. The MACG aircraft made millions of piasters transporting the merchandise, and each level took its cut of this traffic, often in good faith. Until the day when, at a base, an ingenuous officer noticed the transfer of mysterious trunks from one DC-3 to another, which was none other than that of the commander in chief. Shocked, he reported it to his superiors. Then, by chance, the Vietnamese Police (who were hardly a model of virtue) made a raid on a Saigon warehouse where there were stockpiles of hundreds of kilos of opium. "This was the beginning of a shadowy and sordid affair in which everybody attacked and defended himself over the extent to which he was hostile or favorable to the conduct of the 'dirty war' " (Claude Paillat, Dossier secrete de l7ndochine [Paris: Les Presses de la Cit6, 19641, p. 340). 
56. Ibid. 
57. In 1929, for example, out of 71.7 tons of opium sold by the Indochina Opium R6gie, 38.0 tons were consumed in Cochin China (Exposition coloniale internationale, Paris 1931, Indochine franqaise, Section g6n&ale, Administration des Douanes et Roigies en Indochine (Hanoi: Imprimerie d'Extr8me Orient, 1930], pp. 6t62). 
58. Chef de Bataillon A. M. Savani, "Notes sur les Binh Xuyen," mimeographed (December 1945), pp. 4-5. 
59. Ngo Vinh Long, "The Colonized Peasants of Viet-Nam: 1900-1945," (1970), p. 78. 
60. Savani, "Notes sur les Binh Xuyen," pp. 22-25. 
61. Ibid., pp. 6-8. 
62. Interview with Lai Van Sang, Paris, France, March 22, 1971. (Lai Van Sang was Binh Xuyen military counselor and head of the National Police, 1954-1955.) 
63. Huynh Kim Khanh, "Background of the Vietnamese August Revolution," The Journal of Asia Studies 25, no. 4 (August 1971), 771-772. 
64. Savani, "Notes sur les Binh Xuyen," pp. 13-14. 
65. Ibid., p. 16. 
66. Bernard B. Fall, The Two Vietnams (New York: Frederick A. Praeger, 1967), pp. 64-65. 
67. Ellen J. Hammer, The Struggle for Indochina, 1940-1955 (Stanford, Calif.: Stanford University Press, 1967), pp. 113-119; Jean Julien Fonde, Traitez a tout Prix (Paris: Robert Laffont, 1971 ), pp. 18-22. 
68. Savani, "Notes sur les Binh Xuyen," p. 17. 
69. The Avant-Garde Youth Movement had been started by GovernorGeneral Decoux to channel the enthusiasms of Vietnamese youth in a pro-French direction, and by 1945 it was one of the most powerful political groups in Saigon, with a cell in each city ward. By this time its tone was strongly anticolonialist, and its director, Dr. Pham Ngoc Thach, was a secret member of the Viet Minh (Philippe Devillers, Histoire de Vietnam de 1940 d 1952 [Paris: Editions du Seuil, 19521, pp.140-141). 
70. Interview with Lai Van Sang, Paris, France, March 22, 1971. 
71. Hammer, The Struggle for Indochina, 1940-1955, p. 120. 
72. Savani, "Notes sur les Binh Xuyen," p. 44. 
73. Interview with Lai Van Sang, Paris, France, March 22, 1971. 
74. Interview with Gen. Maurice Belleux, Paris, France, March 23, 1971. 
75. Savani, "Notes sur les Binh Xuyen," pp. 35-36. 
76. Ibid., pp. 70-71. 
77. Antoine Savani, "Notes sur le Phat Giao Hoa Hao," mimeographed (n.d.), pp. 30-33. 
78. Savani, "Notes sur les Binh Xuyen," pp. 103-104. 
79. Ibid., pp. 110-111. 
80. Lucien Bodard, The Quicksand War: Prelude to Vietnam (Boston:Little, Brown and Co., 1967), p. 114; Jean Julien Fonde, Traitez a tout Prix, p. 32. 
81. Savani, "Notes sur les Binh Xuyen," pp. 118-119. 
82. Ibid., pp. 121-122. 
83. Interview with Lai Huu Tai, Paris, France, March 28, 1971. 
84. Interview with President Nguyen Van Tam, Paris, France, March 1971. 
85. Lancaster, The Emancipation of French Indochina, p. 164. 
86. Interview with Lai Van Sang, Paris, France, March 22, 1971; Lucien Bodard, L'Humiliation (Paris: Gallimard, 1965), p. 120. 
87. F.T.S.V. 2enlo Bureau, "Les Binh Xuyen," carbon typescript (1 531954), p. 17. 
88. Bodard, The Quicksand War: Prelude to Vietnam, p. 110. 
89. F.T.S.V. 2-11e Bureau, "Les Binh Xuyen," p. 18. 
90. Lancaster, The Emancipation of French Indochina, p, 379. 
91. In reference to the Binh Xuyen's involvement in the opium trade the 2-1- Bureau commented, "Naturally all of the clandestine traffics, the most interesting by definition, are not forgotten and cover a wide range including arms, opium, and contraband of all forms as well as other unsavory activities" (F.T.S.V. 2eme Bureau, "Les Binh Xuyen," p. 16). 
92. Edward G. Lansdale, Subject: The Cao Dai, To Ambassador Bunker and members, U.S. Mission Council, (May 1968), p. 17. 
93. Denis Warner, The Last Confucian (London: Angus & Robertson, 1964), p. 17. 
94. The French had few illusions about Bay Vien, and in a 1954 report said, "The thundering success of this former resident of Puolo Condore [Con Son Prison Island] should not be surprising if one considers that he has preserved intact from his tumultuous past certain methods which are closer to those of the celebrated bands of the heroic epoch of Chicago than to ordinary commercial transactions." (F.T.S.V. 2"It' Bureau, "Les Binh Xuyen," p. 15.) 
95. F.T.S.V. 2-111 Bureau, "Les Binh Xuyen," p. 17. 
96. Ibid., p. 15. 
97. Lansdale, memo to Ambassador Bunker et al., May 1968, p. 17. 
98. Lancaster, The Emancipation of French Indochina, pp. 187-188. 
99. The Pentagon Papers, Senator Gravel Edition, vol. I (Boston: The Beacon Press, 1971 ), pp. 180-18 1. 
100. Ibid., p. 182. Although U.S. support for Diem remained an open question on the diplomatic level, the CIA gave him its unqualified support from the very beginning of his tenure as Prime Minister. According to a State Department official, "the Central Intelligence Agency was given the mission of helping Diem" in June 1954 and Colonel Lansdale was sent to Saigon to carry out this mission. (Chester L. Cooper, The Lost Crusade [New York: Dodd, Mead & Company, 1970], p. 129.) 
101. Pierre Brocheux, "L'Economie et la Soci6t6 dans L'Ouest de la Cochinchine pendant la Periode coloniale ( 1890-1940) " (Ph.D. thesis, University of Paris, 1969), p. 298. 
102. Eug&ne Saccomano, Bandits a Marseille (Paris: Julliard, 1968), p. 44. 
103. In 1958 a U.S. narcotics agent told a Senate subcommittee, "When French Indochina existed, there were quantities of opium that were shipped to the labs . . . around Marseille, France, to the Corsican underworld there, and then transshipped to the United States" (U.S. Congress, Senate Select Committee on Improper Activities in the Labor Management Field, Hearings, 85th Cong., 2nd sess., 1959, p. 1225, cited in Earth, March 1972, pp. 93-94). 
104. Bodard, L'Humiliation, pp. 80-81. 
105. Bodard, The Quicksand War: Prelude to Vietnam, pp. 121, 124. 
106. Interview with Gen. Edward G. Lansdale, Alexandria, Virginia, June 17, 1971. 
107. Bernard B. Fall, The Two Vietnams (New York: Frederick A. Praeger, 1967), pp. 245-246; The New York Times, The Pentagon Papers (New York: Quadrangle Books, 1971 ), p. 60. 
108. Lansdale, memo to Ambassador Bunker et al., May 1968, p. 14. 
109. Ibid., p. 2. 
110. Ibid., p. 11. 
111. Grimaldi, Notions de Case sur les Forces suppl&ives du Sud Vietnam, p. 24. 112. Fall, The Two Vietnams, pp. 245-246. 
113. Lansdale, memo to Ambassador Bunker et al., May 1968, pp. 15-16. 
114. Interview with Gen. Edward G. Lansdale, Alexandria, Virginia, June 17, 1971; Edward G. Lansdale, In the Midst of Wars (New York: Harper & Row, 1972), pp. 221-224. 
115. Lansdale, In the Midst of Wars, pp. 245-247; The Pentagon Papers, Senator Gravel Edition, vol. 1, p. 230. 
116. The New York Times, The Pentagon Papers, p. 21. 
117. Interview with Gen. Mai Huu Xuan, Saigon, Vietnam, July 19, 1971. 
118. Lansdale, In the Midst of Wars, p. 270. 
119. The Pentagon Papers, Senator Gravel Edition, vol. 1, p. 231. 
120. Ibid., p. 233. 
121. The New York Times, The Pentagon Papers, p. 22. 
122. Interview with Lt. Col. Lucien Conein, McLean, Virginia, June 18, 1971. 
123. Lansdale, memo to Ambassador Bunker et al., May 1968, p. 17. 
124. Lansdale, In the Midst of Wars, pp. 316-317. 
125. Ibid., p. 318. 
126. The Pentagon Papers, Senator Gravel Edition, vol. 1, pp. 238-239. 
127. The New York Times, March 28, 1955, p. 26. 
128. Savani, "Notes sur les Binh Xuyen," p. 198. 
129. See Chapter 5. 
130. The New York Times, September 17, 1963, p. 45. 
131. Interview with William Young, Chiangmai, Thailand, September 8, 1971; The New York Times, August 11, 1971, p. 1. 
132. John T. McAlister, Vietnam: The Origins of the Revolution (New York: Alfred A. Knopf, 1969), pp. 235, 242. 
133. Bodard, The Quicksand War, p. 12; for a detailed analysis of Yunnan politics during this period, see A. Doak Barnett, China on the Eve of Communist Takeover (New York: Frederick A. Praeger, 1963), 282-295. 
134. Lancaster, The Emancipation of French Idonchina, p. 150. 
135. The New York Times, July 28, 1951, p. 3; Bodard, The Quicksand War, pp.162-163. 
136. Lancaster, The Emancipation of French Indochina, p. 203. 
137. Government of the Union of Burma, The Ministry of Information, Kuomintang Aggression Against Burma (Rangoon: 1953), p. 8. 
138. The New York Times, The Pentagon Papers, p. 10. 
139. Joint Chiefs of Staff, "Memorandum for the Secretary of Defense," April 10, 1950, in The Pentagon Papers, Senator Gravel Edition, vol. 1, p. 366. 
140. Ibid. 
141. David Wise and Thomas B. Ross, The Invisible Government (New York: Random House, 1964), pp. 130-131. 
142. NSC Staff Study, "United States Objectives and Courses of Action with Respect to Communist Aggression in Southeast Asia," February 13, 1952, in The Pentagon Papers, Senator Gravel Edition, vol. I, p. 377. 143. The Ministry of Information, Kuomintang Aggression Against Burma, P. 15. 
144. Ibid., p. 35. 145. Ibid., pp. 13-15. 
146. Joseph and Stewart Alsop, Nippon Times (March 23, 1953), quoted in The Ministry of Information, Kuomintang Aggression Against Burma, p. 120. 
147. The Ministry of Information, Kuomintang Aggression Against Burma, pp. 13-14. 
148. Ibid., p. 16. 
149. Ibid., p. 13; Peter Dale Scott, "Air America: Flying the U.S. into Laos," in Nina S. Adams and Alfred W. McCoy, eds., Laos: War and Revolution (New York: Harper & Row, 1970), pp. 306-307. 
150. Wise and Ross, The Invisible Government, p. 131. 
151. The Ministry of Information, Kuomintang Aggression Against Bur a, pp. 40-41. 
152. Interview with Rev. Paul Lewis, Chiangmai, Thailand, September 7, 1971. 
153. The Ministry of Information, Kuomintang Aggression Against Burma, p. 15. Smuggling across the Chinese border became increasingly difficult after the defeat of the Nationalist government. After interviewing Chinese Muslim exiles in Rangoon in June and July 1962, an Israeli scholar reported, "The frontier, which had never been clearly marked or demarcated, was closed and strictly guarded after 1950 when the Government of Communist China established its authority in these regions. Until then the Panthays [Chinese Muslims] had been able to move freely and easily between Yunnan and Burma" (Moshe Yegar, "The Panthay (Chinese Muslims) of Burma and Yunnan," Journal of Southeast Asian History 7, no. I [March 1966], 82). 
154. The Ministry of Information, Kuomintang Aggression Against Burma, p. 14. 
155. Ibid., p. 16. 
156. Interview with Rev. Paul Lewis, Chiangmai, Thailand, September 7, 1971. 
157. The Ministry of Information, Kuomintang Aggression Against Burma, p. 12. 
158. Ibid., p. 15. 
159. The New York Times, March 9, 1952, p. 8. 
160. Wise and Ross, The Invisible Government, pp. 132-133. 
161. Hugh Tinker, The Union of Burma (London: Oxford University Press, 1957), p. 53.
162. Wise and Ross, The Invisible Government, pp. 132-133. 
163. Interview with William vanden Heuvel, New York City, June 21, 1971. (William vanden Heuvel was executive assistant to Ambassador Donovan and had noted this incident in his personal journal.) 
164. Tinkei, The Union of Burma, pp. 53-54. 
165. Interview with Rev. Paul Lewis, Chiangmai, Thailand, September 7, 1971. (Reverend Lewis acts as a mailman for many of these separated Lahu families and receives two or three letters a week from Taiwan.) 
166. The Nation (Rangoon), March 19, 1954, p. 1. 
167. Ibid., March 21, 1954, p. 1. 
168. The New York Times, May 31, 1954, p. 2. 
169. Tinker, The Union of Burma, p. 55. 
170. Interview with Col. Chen Mo Su, Chiang Khong, Thailand, September 10, 1971. (Colonel Chen is KMT commander at Chiang Khong.) 
171. Elaine T. Lewis, "The Hill Peoples of Kengtung State," Practical Anthropology 4, no. 6 (NovemberDecember 1957), 226. 
172. The New York Times, May 19, 1959, p. 6. 
173. Time, February 10, 1961, p. 22. 
174. Interview with Colonel Chen Mo Su, Chiang Khong, Thailand, September 10, 1971. 
175. The Guardian (Rangoon), January 30, 1961, p. 1. 
176. Wise and Ross, The Invisible Government, p. 134. 
177. The New York Times, February 23, 1961, p. 3. 
178. Ibid., February 18, 1961, p. 1; ibid., March 3, 1961, p. 1. 
179. Ibid., April 6, 1961, p. 8. 
180. Ibid., April 12, 1961, p. 20. 
181. Interview with William Young, Chiangmai, Thailand, September 8, 1971. 
182. The New York Times, March 9, 1952, p. 8. 
183. Fred W. Riggs, Thailand: The Modernization of a Bureaucratic Polity (Honolulu: East-West Center Pfess, 1966), pp. 242-245. 
184. Ibid., p. 236. 
185. The New York Times, July 23, 1951, p. 2. 
186. United Nations, Economic and Social Council, Summary of the Fourth Meeting, p. 4. 
187. United Nations, Economic and Social Council, Commission on Narcotic Drugs, Agenda of the Ninth Meeting (E/C.S.7/27), December 3, 1946, pp. 6-9. 
188. Far Eastern Economic Review, November 23, 1950, p. 625. 
189. Paul T. Cohen, "Hill Trading in the Mountain Ranges of Northern Thailand" (1968), p. 4. 
190. Darrell Berrigan, "They Smuggle Dope by the Ton," The Saturday Evening Post, May 5, 1956, p. 157. 
191. New York Daily News, February 13, 1955. 
192. The New York Times, November 7, 1948, p. 30. 
193. Berrigan, "They Smuggle Dope by the Ton," pp. 157-158. 
194. Warner, The Last Confucian, p. 284. 
195. Ibid; The New York Times, September 20, 1957, p. 7. 196. Riggs, Thailand: The Modernization of a Bureaucratic Polity, p. 239. 
197. The New York Times, November 6, 1957, p. 34. 
198. Warner, The Last Confucian, p. 282. 
199. G. William Skinner, Chinese Society in Thailand: An Analytical History (Ithaca, N.Y.: Cornell University Press, 1957), p. 325. 
200. Ibid., p. 326. 
201. U.S., National Security Council, "Statement of Policy by the National Security Council on United States Objectives and Courses of Action with Respect to Southeast Asia," in The Pentagon Papers, Senator Gravel Edition, vol. 1, p. 438. 
202. Skinner, Chinese Society in Thailand: An Analytical History, pp. 328, 330,335,340-343. 
203. Wendell Blanchard, Thailand, Its People, Its Society, Its Culture (N w Haven, Conn.: Human Relations Area Files Press, 1958), p. 198. 
204. For examples of such incidents, see Bangkok Post, March 11, 1955, and July 14, 1955. 
205. For some of Phao's public statements see Bangkok Post, February 10, 1950, February 20, 1950. 
206. ]bid., December 3, 1953, December 4, 1953. 
207. Ibid., July 14, 1955. 
208. Berrigan, "They Smuggle Dope by the Ton," pp. 42, 156. 
209. Bangkok Post, July 15, 1955. 
210. ]bid., July 29, 1955. 
211. Berrigan, "They Smuggle Dope by the Ton," p. 156. 
212. The New York Times, August 25, 1955, p. 3. 
213. ]bid., September 4, 1955, p. 5. 
214. Bangkok Post, September 21, 1955. 
215. Skinner, Chinese Society in Thailand: An Analytical History, p. 343. 
216. Warner, The Last Confucian, p. 286. 
217. Blanchard, Thailand, Its People, Its Society, Its Culture, p. 199. 
218. The New York Times, September 20, 1957, p. 7. 
219. Interview with William Young, Chiangmai, Thailand, September 14, 1971. 
220. Bangkok World, November 17, 1957. 
221. Bangkok Post, February 10, 1958. 
222. Warner, The Last Confucian, pp. 289-291. 
223. Cohen, "Hill Trading in the Mountain Ranges of Northern Thailand," P. 11. 
224. W. W. Rostow, The Stages of Economic Growth (New York: Cambridge University Press, 1968), pp. 6-9. Hla Myint, The Econorm . cs of the Developing Countries (New York: Frederick A. Praeger, 1964), pp. 14-16. 
225. League of Nations, Advisory Committee on the Traffic in Opium and Other Dangerous Drugs, Annual Reports on the Traffic in Opium and Other Dangerous Drugs for the Year 1939, p. 42. 
226. The New York Times, September 17, 1963, p. 45. 
227. League of Nations, Advisory Committee on the Traffic in Opium and Other Dangerous Drugs, Minutes of the First Session (May 24-June 7, 1923), p. 187. Anthropological research has shown that there was no substantial increase in Thai opium production until 1947 (Cohen, "Hill Trading in the Mountain Ranges of Northern Thailand," pp. 1-2). 
228. In 1967 a U.N. survey team estimated Thailand's opium production at 145 tons. Since most of the expansion in production had taken place during the 1950s, an estimate of over one hundred tons for the early 1960s is believed to be a conservative one (Report of the United Nations Survey Team on the Economic and Social Needs of the Opium Producing Areas in Thailand [Bangkok: Government House Printing Office, 19671, p. 59). 
229. U.S. Bureau of Narcotics and Dangerous Drugs, "The World Opium Situation," p. 29.