Cooking the Books: The Federal Bureau of Narcotics, the China Lobby and Cold War Propaganda, 1950-1962 [Asia-Pacific Journal / Sweet & Sour Socialism Essential Archives]

The Asia-Pacific Journal, Vol. 11, Issue 37, No. 1, September 14, 2013.

Jonathan Marshall

As influential contributors to national policy, intelligence professionals inevitably face strong political and bureaucratic pressures to shape their assessments to fit official or factional policy. In the modern era, such pressures have contributed to costly, even disastrous, escalations of the Vietnam War, the arms race, and, most notoriously, Washington’s conflict with Saddam Hussein’s Iraq.2

Intelligence on the international narcotics menace has been particularly subject to such pressures ever since U.S. leaders vowed to wage “war” on the illicit drug trade more than a half century ago.3 In recent years, influential interest groups and policy makers have leveled epithets like “narco-terrorism” and “narco-communism” against targets such as Cuba, Nicaragua, Iran, Panama, Syria, the Taliban, and Venezuela to justify harsh policies ranging from economic sanctions to armed invasion, while ignoring or downplaying evidence implicating U.S. allies (the Nicaraguan Contras, the Afghan mujahedeen and Karzai administration, the Colombian military, and so forth).4 Given the stakes, critical scrutiny of such claims, and rigorous attention to de-politicizing intelligence on international narcotics matters, may be as vital to preventing foreign policy disasters as is ensuring sound intelligence on more traditional matters of national security.

To shed historical light on the dangers of turning international drug enforcement into a political weapon, this paper re-examines a classic case of alleged manipulation of narcotics intelligence: the vilification of Communist China by U.S. Commissioner of Narcotics Harry J. Anslinger at the height of the Cold War. His inflammatory rhetoric denouncing the People’s Republic of China (PRC) as an evil purveyor of narcotics went largely unchallenged in the Western media during the 1950s and early 1960s, when Anslinger acted as America’s leading drug enforcement official and its official representative to the United Nations Commission on Narcotic Drugs (CND). As we shall see, his charges strongly reinforced Washington’s case for diplomatic isolation of China, including its exclusion from the United Nations.

In 1971, as relations between Washington and Beijing began to thaw, the official U.S. line on China’s responsibility for drug trafficking abruptly reversed. At about the same time, a young scholar named Alfred McCoy published an authoritative volume on the modern history of the international heroin trade, contesting Anslinger’s claims and pinning blame for much of the traffic on U.S. military allies in Southeast Asia.5 Since then a number of historians have endorsed McCoy’s conclusions and characterized Anslinger’s conduct as the work of a master bureaucrat (or ideologue) bent on augmenting his agency’s prestige and power by inflating Cold War stereotypes of the PRC.6

This paper reexamines and extends their work by asking the question made famous by Tennessee Sen. Howard Baker during the Watergate hearings: What did he know, and when did he know it? As Kevin F. Ryan has observed, “it is unclear how much the FBN actually knew about [China’s involvement in] the international narcotics trade (and how much was simply convenient rhetoric) . . .”7 McCoy and most subsequent historians have relied on ex post rejections of Anslinger’s claims by U.S. and foreign law enforcement officials in the aftermath of the opening to China. But can we be sure Anslinger had no evidence to support his charges? If so, did Anslinger simply invent his claims, or did other interested parties feed him misleading or false information? And, equally important, what did Anslinger know but choose to ignore about drug trafficking by American allies, including those covertly backed by the Central Intelligence Agency?

New evidence, including recently declassified files of the Federal Bureau of Narcotics and Central Intelligence Agency, along with overlooked public materials from that period, sheds important new light on the state of Anslinger’s knowledge and probable motives. The records, unavailable to or unused by previous historians, provide strong new confirmation of Anslinger’s manipulation of intelligence to serve both his agency’s bureaucratic interests and a militantly anti-Communist foreign policy agenda at the expense of genuine narcotics enforcement. They leave open the possibility that Chinese traffickers continued to smuggle opiates out of the mainland into the 1950s, but do not challenge what is widely accepted today about the communist government’s attempt to suppress cultivation and trafficking…

— Anslinger’s Questionable Sources: the SCAP Connection —

…In reassessing the credibility of Anslinger’s claims, one of the most striking facts to note is that Anslinger had no full-time agents stationed in the Far East until 1962.37 (The U.S. Customs service had jurisdiction over narcotics investigations in the region, with offices in Hong Kong and Japan.)38 He thus depended heavily on agents of friendly governments — and particularly on partisan intelligence sources connected with U.S. occupation forces in Japan (SCAP) and Nationalist China.

Anslinger acknowledged that SCAP intelligence provided among “the first reports we received about the Communist narcotic smuggling in the Far East.”39 He made a SCAP account of heroin trafficking in Japan the centerpiece of his first all-out assault against Communist China before the CND in May 1952.40 The report declared that “Investigations, arrests, and seizures in Japan during 1951 proved conclusively that communists are smuggling heroin from China to Japan, and are using the proceeds from the sale thereof to finance party activities and to obtain strategic materials for China.” In support of that strong claim, it [among other allegations] cited one seizure of heroin that carried the seals of a pharmaceutical laboratory in northern China. But more than a half dozen other cases cited in the document simply involved heroin smuggled into Japan from Hong Kong — typically by Chinese from Taiwan (“Formosans”). Evidently, for Anslinger, heroin carried from British-controlled Hong Kong by smugglers from Nationalist-controlled Taiwan was proof of a Communist conspiracy…

…neither SCAP intelligence nor its sources could ever be considered “reliable,” except politically…42

–Anslinger and the China Lobby–

Many of Anslinger’s detailed allegations about large opium-growing regions in China, heroin laboratories in Chinese cities, and smuggling directives by Chinese government agencies originated from Nationalist China, whose representative to the CND issued grandiose allegations against the mainland’s new Communist masters.55 In 1951 Nationalist China provided the CND laboratory with its only “authenticated” samples of opium from the mainland. These samples were in turn used to implicate the PRC whenever the lab found a chemical match with opium seized by a member nation, including the United States. This stunning conflict of interest — perhaps fraud is not too strong a word — was uncovered only in 1963 following an inquiry by the Polish representative to the CND.56

Anslinger’s uncritical reliance on intelligence from Nationalist China was all the more irresponsible because he knew all about that regime’s own sordid history of profiting from the drug trade. Throughout much of the 1930s, a senior Treasury agent based in China sent Anslinger voluminous, detailed reports implicating senior government officials in opium trafficking. Indeed, history Chiang Kai-shek rise to power was smoothed by the muscle and financial support of China’s most infamous criminal syndicate, the Green Gang.57

In the 1950s, Anslinger collaborated closely with the “China Lobby,” a network of Nationalist Chinese officials and American supporters who sought to maintain high levels of aid to Taiwan while denying diplomatic recognition to the PRC…

…Anslinger helped the China Lobby in another key respect — by delegitimizing serious charges that some of its own personnel were tainted by the illegal drug trade. In 1960, Anslinger helped the Taiwan regime suppress publication of the first scholarly study of the China Lobby, because it contained the sensational claim:

There is . . . considerable evidence that a number of [Nationalist] Chinese officials engaged in the illegal smuggling of narcotics into the United States with the full knowledge and connivance of the Nationalist Chinese Government. The evidence indicates that several prominent Americans have participated in and profited from these transactions. It indicates further that the narcotics business has been an important factor in the activities and permutations of the China Lobby…61

–The FBI, Customs and CIA v. Anslinger–

Most Americans were in no position to question Anslinger’s assertions about China. Out of public view, however, many official experts in the U.S. and allied governments rejected his claims—including some in his own bureau.

The British Foreign Office, for example, dismissed his sources, which included Nationalist Chinese press accounts and claims by arrested traffickers in Japan, as “very dubious.” British Home Office official John Henry Walker privately derided Anslinger’s “annual onslaughts on Red China” as largely unsubstantiated and speculated that Anslinger sought to grab headlines because he was “under pressure in Washington and having to fight to keep his job…”70

–What the FBN Knew about the CIA and the Golden Triangle Drug Trade–

[I’ve excerpted this particularly sensational section which is quite long, but highly recommend reading it in its entirely – Zuo Shou]

It is notable that the single biggest redaction from the 1956 CIA study, when it was quietly declassified several decades later, concerns Thailand. For it was the CIA’s assets in Thailand who bore more responsibility than any other group in the “Golden Triangle” for the resurgence of the opium trade after the Communist victory in China in 1949. It is thus critical to explore what Anslinger must have known but chose not to disclose about the CIA’s drug-trafficking allies in the region.

Several excellent studies of the Golden Triangle in the 1950s provide rich background — without necessarily answering the question of what Anslinger knew.79 In brief, by January 1950, the People’s Liberation Army had driven thousands of Chinese Nationalist soldiers from the Eighth and Twenty-Sixth armies out of Yunnan province into Burma and French Indochina. In northeast Burma, more than 10,000 men under the command of General Li Mi found sanctuary in the wild hill country settled by minority peoples, many of whom cultivated opium as a traditional cash crop. Having themselves profited from opium for many years in Yunnan, the KMT forces — named for the Kuomintang party that ruled Nationalist China — began trafficking once again from Burma, both to make ends meet and to finance their schemes to reconquer China.

Washington’s interest in using Li Mi’s forces to contain the Chinese Communists soared after the start of the Korean War. By direction from President Truman in December 1950, the CIA secretly began supplying the KMT by air and with ground caravans through Thailand.80 Security was provided by the CIA-backed Thai national police, who in turn were eager to market the KMT’s opium to the legal Thai national opium monopoly and to international traffickers.

After several hapless forays by the KMT into southern China in 1951 and early 1952, Washington gave up serious hope of using them to roll back Communism in China. Meanwhile, as the CIA’s “covert” mission became widely known, U.S. relations with Burma worsened and Washington grew alarmed at the possibility of a retaliatory invasion by Communist China.81 The United States tried in vain to persuade the KMT forces to decamp for Taiwan, but the Chinese insisted on staying put — and in the words of one U.S. ambassador, “continuing nefarious operations in Burma and Thailand including opium smuggling racket.”82 Tabling preparations for war, they focused instead on building a drug empire that helped boost the region’s opium exports from an estimated 40 tons before World War II to more than three hundred tons by 1962.

Washington’s role in this trade was much more than incidental.83 As U.S. officials understood early on,84 the Thai national police, under the ruthless and brutal General Phao Sriyanon, “had become the largest opium-trafficking syndicate in Thailand,” in McCoy’s words. He adds:

CIA support for Phao and the KMT seems to have sparked . . . a ‘takeoff’ in the Burma-Thailand opium trade during the 1950s: 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 [Burma’s] Shan States encountered smugglers with the discipline, technology, and ruthlessness of the KMT. 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 . . .85

The Golden Triangle would remain the world’s largest exporter of opiates until supplanted in the 1980s by a new set of CIA allies in South Asia, the Afghan mujahedeen and Pakistani military intelligence.86

All of this was top secret—so much so that the very existence of the operation to support the KMT guerrillas was kept from the CIA’s deputy director for intelligence, most or all top State Department officials, and the U.S. ambassadors to Burma and Thailand.87 The CIA went to especially great lengths to hush up the drug-related murder of one agent and widespread opium trafficking under its auspices.88 So is it fair in retrospect to hold Anslinger responsible for ignoring or underplaying the U.S.-Thailand drug connection?

Washington’s lies fooled no one on the scene and could not have fooled Anslinger. A review of the often-overlooked public record shows that Anslinger must have known more than to sound the alarm about the emergence of the KMT and its U.S.-supported Thai allies as one of the world’s largest narcotics-trafficking syndicates. Ignorance was simply not a credible excuse.

As early as May 1950, the New York Times reported on the presence in Northeast Burma of “an aggregation of refugee Nationalist troops” who “operate pretty much as a law unto themselves” and “have been engaging extensively in opium dealing.” The story noted that the United States planned to open a consulate “at the little northern Thailand city of Chiangmai to watch American interests in an area of increasing importance in Southeast Asia,” a tip that U.S. authorities were in touch with the KMT.89

Less than two years later, the respected London Observer accused “certain Americans” of joining Thai officials and KMT officers in “making large profits” from the “guns for opium trade.” The story pointed to the large quantities of American-made weapons and ammunition flown to General Li Mi “from a certain trading company in Bangkok in which Americans have an interest.” (As we will see, that was a reference to the CIA’s Sea Supply Company.) Amazingly, the American embassy in Bangkok confirmed the allegation. “It cannot be denied that we are in the opium trade,” one U.S. diplomat told the reporter.90 In case Anslinger missed the story, the Washington Post made it the subject of an editorial: “It is somewhat startling to read the allegation that in supporting the Chinese Nationalist effort in northeastern Burma to harass the Chinese Communists, Americans have gone into the opium business!…”91

…Anslinger could hardly deny the obvious any more. The narcotics commissioner now acknowledged publicly that, “More opium moves to and around Chiengrai in northern Thailand than any other place in the world in illicit traffic.” But he still blamed Red China, choosing not to draw attention to the pro-American parties responsible for bringing the drugs to the world market.101 “By an accident of history,” wrote one journalist friendly with Anslinger who nonetheless appreciated the irony, “the middlemen between Yunnan and Thailand are anticommunist Chinese. . . . They grow opium and add it to the supplies they get from China and neighboring tribal villages of Laos and Burma…”102

–Conclusion–

Anslinger’s sweeping rhetoric against “Red China” today strikes most historians—rightly so—as an anachronistic product of the McCarthy era. But the long litany of arrests, interrogation reports and statistics that Anslinger cited to back up his claims sounded authoritative and proved persuasive to Westerners all through the 1950s and into the 1960s…

…Anslinger, however, went far beyond…limited claims [of PRC involvement in illegal narcotics trade] to condemn the Beijing regime as a uniquely grand and evil purveyor of narcotics. Such strong charges demanded equally strong evidence. Anslinger never provided it and almost certainly never had it. With the opening of FBN records, we now know that its Communist China files hold no credible reports implicating the Maoist regime in drug smuggling. Furthermore, other U.S. and British officials privately called Anslinger on the matter at the time, savaging the credibility of his sources. The CIA’s definitive study of the question in 1956 demonstrates that Anslinger pushed his incendiary charges at the United Nations and in the media despite clear intelligence to the contrary. At the same time, Anslinger ignored or downplayed readily available public and private evidence that America’s allies — and its own officials — were contributing far more than Communist China to the growth of the Far East drug trade and the expansion of the world heroin market.

Clearly, the FBN chief chose to put anti-communism, national security [sic], and bureaucratic self-interest ahead of his agency’s declared mission. These disparate values meshed seamlessly. By serving up a steady supply of lurid claims to feed the propaganda mills of professional Cold Warriors and China Lobbyists, Anslinger bought protection against budget cuts, premature retirement, loss of authority to rival agencies, and any weakening of the nation’s drug laws. Today one must agree with the British Home Office official who concluded disparagingly in 1954 that Anslinger had “strong motives for emphasizing the responsibilities of other countries for illicit traffic in the United States and for attributing this traffic to Communist sources.”129 Anslinger’s deplorable record should remind us today of the need for critical scrutiny of claims related to drug trafficking to avoid letting our own era’s propaganda warriors generate fear and revulsion to escalate international conflicts.

Excerpted; full article (with notes) link: http://japanfocus.org/-Jonathan-Marshall/3997?utm_source=September+16%2C+2013&utm_campaign=China%27s+Connectivity+Revolution&utm_medium=email

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