The Strength of the Wolf (75 page)

Meanwhile, Thai and Vietnamese officials were buying opium at Houei Sai, as were Corsicans and CIA renegades working for Air America and yet another CIA airline, Continental Air, which had a State Department contract to fly food and supplies to the Yao in Houei Sai. Also involved was Prime Minister Souvanna Phouma's son, Panya, who built a Pepsi-Cola bottling plant in Vientiane, Laos, with US State Department support. Better than the real thing, the plant served both as a cover for buying the chemical precursors necessary for converting opium into heroin and as a money laundry for Vang Pao's profits.
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The FBN began documenting the CIA and Vietnamese drug smuggling conspiracy on 13 July 1966, when US Army Major Lee Waring introduced Al Habib to Tran Ngor An, a Military Security Service (MSS) agent assigned to the Vietnamese Embassy in Bangkok. Tran told Habib that one of his agents had penetrated a Viet Cong smuggling ring in Bangkok. Americans were the recipients in Saigon, and the Americans were sending the opium to Hong Kong to be refined into heroin. Tran then asked Habib to arrange for the US Air Force to ship 250 kilograms of opium to Saigon, in a controlled delivery, so the Vietnamese could bust the culprits there. Although Tran would not identify his agent, or say where the opium was stashed, or provide the names and addresses of the recipients, he did grant Habib permission to accompany the shipment to Saigon – so Habib naively went ahead with the deal. On 5 August, he obtained the approval of the CIA station chief in Bangkok, Robert Jantzen, and of Major General Joseph Stilwell, the ranking US military commander in Thailand.
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Then things got weird. Habib traveled to Saigon to meet General Loan's assistant for foreign affairs, Nguyen Thanh Tung. At their meeting, Tung told Habib that Tran's original plan had been changed, and that General Loan now wanted the 250 kilograms of opium to be delivered to the American receivers without an arrest being made. Tung justified this change in plan by explaining that the MSS agent in Thailand had irrefutable information that the VC were planning a second, larger shipment, consisting of two tons of opium. Tung reasoned that if the first shipment were allowed to pass freely, the MSS would be able to identify everyone in the VC's opium smuggling network in Thailand, Malaya, and Laos. They could then make a more valuable seizure and arrest all of the enemy agents, as well as the Americans.

On 11 August, Habib presented the plan to William F. Porter, the deputy US ambassador in Saigon. Porter adamantly refused to go along with it. He didn't trust Loan, and “was apprehensive of a set-up by the Vietnamese which could possibly involve blackmail.”
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Referring to the Hobbs case, Porter rhetorically asked Habib what it would be like if the Vietnamese seized 250 kilograms of opium on a US Air Force plane. On the other hand, Porter wanted to know what the Vietnamese were plotting, so he directed Habib to proceed with the plan, but to delay the operation by telling Tran that there was a problem getting the plane. Porter also instructed Habib to introduce an undercover CIA agent into the investigation – at which point the case began to unravel.

Upon arriving back in Bangkok, Habib was introduced by Tran to Le Dinh Tam, the second secretary at the Vietnamese Embassy in Bangkok. Tam handled the logistical aspect of the Vietnamese smuggling operation in Thailand, and at a meeting on 16 August, Tam threatened to cancel the 250-kilogram shipment unless Habib immediately supplied the US Air Force plane. When Habib refused, Tam flew to Saigon to confer with Tung, and when he returned on 2 September, he told Habib that the MSS had transported the shipment by boat to Saigon, delivered it to the recipients, and, with Vietnamese Customs, seized the opium and arrested two suspects. Tam then surprised Habib by revealing that he was in possession of the additional two tons of opium, which he had obtained in Houei Sai. He insisted that the Americans transport that immense shipment immediately, as a sign of good faith, or else the Vietnamese would do it themselves.

Confounded and amazed at Tam's audacity, Habib traveled to Saigon and – after checking with Vietnamese Customs and its American advisors – found no evidence of any drug seizures or arrests. Suspecting foul play, he approached the CIA and, at an 8 September meeting with someone named Lucid (perhaps Lucien?), he was told that Ambassador Henry Cabot Lodge would not allow him to continue with his investigation. Habib returned to Bangkok, and Tam proceeded to deliver the two tons of opium to waiting Americans in Saigon.

As a result of Habib's investigation, the CIA was forced to conduct a perfunctory investigation of Loan's activities, after which he was cleared of any wrongdoing. The reason for this was quite simple: Loan provided personal security to CIA officers in Saigon. That's right. Just as Lansdale had forged a truce with the Corsicans to protect himself, CIA officers protected the GVN's official drug ring because their lives depended on it. The situation hadn't changed since 1955, when Lansdale kicked the French out of Saigon and installed the Ngo regime. McCoy quotes Conein as saying that, after the Ngos were assassinated in November 1963, “the same professionals who organized corruption for them were still in charge of police and intelligence. Loan simply passed the word among these guys and put the old [drug smuggling] system back together again.”
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Within this system, Nguyen Thanh Tung, alias Mai Den, was Loan's narcotics manager. Tung had learned the ropes while serving in Dr. Tuyen's secret drug smuggling secret service, and he had gone to work for Loan after the 1963
coup d'état
. To help conceal Tung's activities, Loan appointed
him chief of the Central Intelligence Office's Foreign Intelligence Branch in early 1966, right after Habib discovered the Bangkok operation. Created by the CIA in 1961, the CIO was the GVN's equivalent of the CIA, and CIO officials worked within all the political, security, and military branches of the GVN. In this way, with the support of the CIA, Tung “used his CIO agents to weave a net of drug contacts across the Golden Triangle.”
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McCoy's assertions about Tung are qualified by Colonel Tulius Acampora, the US Army counterintelligence officer who for six years had conducted joint CIA/FBN drug smuggling cases with his friend, Hank Manfredi, in Rome. In mid-1966, Acampora was reassigned to Saigon as General Loan's CIA advisor on security matters. Acampora maintained this counterpart relationship with Loan throughout the war, and formed a close friendship with him as well. He came to know many of Loan's deepest secrets, and he says that Loan was not aware of everything that Tung did. Acampora describes Tung as “a former Binh Xuyen gangster and hatchet man for the Kuomintang who was appointed over Loan's objections.”

This is not to suggest that Tung had snookered Loan. The two men had reached an unspoken accommodation. In the same way Mafiosi bring out the voters and otherwise serve politicians in America, Tung was granted free passage in order to serve his patrons. For example, it was Tung's goon squad that quelled the Buddhist riots in Hue in the mid-1960s, thus sparing the regular Army unit commanders from suffering any political backlash. Tung's thugs also tried to offset the political influence the CIA exercised through its unilateral recruitment of Ky's political enemies, including labor leaders, Buddhist monks, and private businessmen.

A sophisticated man who enjoyed his Courvoisier and Gaulloises, Loan did not ask Tung how he financed his goon squad. Nor did he presume to challenge the prerogatives of the Kuomintang Chinese, French landowners, or Corsican gangsters who provided him with similar services. For example, the owner of the Continental Hotel, Monsieur Franchini, had wired the most elegant rooms so that Loan's agents could conduct the same sort of MKULTRA sexual blackmail schemes that the CIA used to bring politicians into line in America. Only in this case, the people being blackmailed were the Americans in charge of administering the war in Vietnam.

As American participation in the war escalated through 1966, Laos became the critical flanking operation. Of particular concern was the Ho Chi Minh
Trail, which wiggled through Laos into Cambodia, and enabled the North Vietnamese Army to supply the Viet Cong. Interdicting the Ho Chi Minh Trail was necessary to winning the war, but Laos was a neutral country, so the quiet Americans relied on extra-legal methods: bombing the trail to smithereens was the job of the CIA-managed 56th Air Commando Wing in Thailand, while the task of interdicting troop movement along the Trail fell to the CIA's secret army of hill tribesmen, stationed in strategic outposts along the so-called Laotian Corridor.

Chief among these outposts was Pakse, a city of 8,000 on the western edge of the Bolovens Plateau in a southern province ruled by Prince Boun Oum Champassak, an advisor to the Laotian Opium Administration. The CIA base chief at Pakse, where opium was sold openly on the streets, was David Morales. A former station chief in Havana, and a former member of Lansdale's Operation Mongoose, Morales (aka Poncho) facilitated the opium trade in Pakse for the local Laotian police and military commanders, in coordination with Air America.

According to McCoy, Pakse was the site of the biggest South Vietnamese opium-smuggling operation, managed jointly by Laotian officials working with Nguyen Cao Ky's elder sister, Mrs. Nguyen Thi Li; KMT financier Huu Tim Heng; Loan's spymaster Mai Den; and Major Pham Phung Tien, Ky's successor as commander of South Vietnam's CIA trained and equipped First Transport Group.
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The CIA knew all about this operation too, but it looked the other way, because the American military's ability to bomb the Ho Chi Minh Trail depended on the Laotian and South Vietnamese air forces, which were based in places like Pakse. That's why, in 1966, the CIA launched Operation Palace Dog in concert with the US Air Force. The stated purpose was to train Laotian and South Vietnamese pilots, but its secret mission was to provide security for the joint Laotian/Vietnamese drug-smuggling operation. It may also have been the conduit by which the CIA flew narcotics directly to the United States. Palace Dog aircraft were used to fly medicines from the World Medical Relief warehouse in Detroit to Vang Pao's secret army at Long Tieng. It's not hard to imagine what came back to Detroit in Palace Dog planes, and by 1967 the military and the US Customs service were conducting secret investigations of both Palace Dog and Air America.

“It was getting bad,” recalls senior Customs official Dave Ellis, who was then making regular trips to Vietnam. “It was an ugly war, so the CIA looked away from Air America and Continental Airlines. But as the war started escalating, they started getting apprehensive.”

As world attention focused ever more closely on America's conduct in the Vietnam War, the CIA's need to conceal its major role in the regional drug trade became a top priority. The climactic point came in June 1967, when Burmese warlord Khun Sa decided to sell sixteen tons of opium in Houei Sai. Construing this as a challenge to their precious monopoly over supply, the Kuomintang generals mobilized their forces in Burma and marched across the border into Laos. Apprised of the situation, CIA station chief Ted Shackley in Vientiane informed Pat Landry, chief of the CIA's major support base in Udorn, Thailand. Landry ordered Air Force Major Richard Secord to send a squadron of T-28s to the rescue. Within hours, the battle had ended with both Khun Sa and the Kuomintang in full retreat, and the Laotians in total control.
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However, the widely reported Opium War had put a dent in the CIA's armor and, in greater need than ever of a failsafe security system, it took one last drastic step and formed a special unit to provide security for its opium-smuggling operation. This unit was modeled on the CIA's infamous Phoenix Program, which targeted the civilian leaders of the Vietnamese insurgency for assassination. As a former CIA agent explains, “This was not part of the Phoenix pacification Program,” which used death squads and a network of secret interrogation centers to neutralize its enemies in Vietnam. “This facet of Phoenix was strictly compartmented.”

Oddly enough, Robin Moore, author of
The French Connection
, predicted the advent of this special drug smuggling security unit in his novel
The Country Team
. Written in 1966 and set in mythic Mituyan (a country resembling Thailand), the novel features a character called Mike Forrester. A privateer, Forrester had been chased out of Cuba in 1959, had recouped his losses, and then purchased a rubber plantation in Mituyan. As the book develops, the CIA asks Forrester to buy up the local poppy crop before the Mituyan Communists (MitComs) can get to it and sell it to American Mafiosi. Angry because his workers are being extorted by the evil MitComs, and afraid that he might be kicked out of yet another easily exploitable nation, Forrester takes the job.

The CIA tells Forrester that it will sell the opium crop to American pharmaceutical companies, and that he can have half of the profits to keep his machine “oiled.”
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The machine consists of spies who will identify and then kill the Chinese Communists and their MitCom cronies. Forrester
then arranges to buy the harvest from a tribal chief who resembles the real one in Houei Sai. He brings along a CIA-supplied press to squeeze the opium into bricks, and when the deal is consummated, the vengeful MitComs, as anticipated, descend on his plantation and into the CIA's trap. Waiting for the MitComs is a Phoenix assassination team managed by a CIA officer named Scott working undercover for the US Information Service. When Scott (a character seemingly based on the aforementioned Frank Scotton) meets Forrester, he produces a deck of cards. Each card is black “with a hideous white eye in the center.” As Scott explains, the US Information Service printed 20,000 such cards in South Vietnam: “When we discovered who the Communist agents in a city or village were, we assassinated them and put this eye on the body.” Scott then deploys his Phoenix team on Forrester's plantation, to ambush the MitCom drug dealers.
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