Business is blooming
Myanmar = Asia's first narco-state
1.23.97 A.Davis & B.Hawke ASIAWEEK
In opium rich hills of Myanmar's northeast, the more things change the more they seem to stay the
same. Back in the early 1970s, Lo Hsing-han was a celebrated figure in the Asian drug trade.
From a fortified villa in the town of Lashio, the ethnic Chinese warlord ran a powerful govt backed
militia as well as convoys of opium from northern Shan state south to heroin refineries along the
Thai border. Across rugged Golden Triangle and as far south as Bangkok, Lo Hsing-han was a
name to reckon with. 25 years, it still is. … If anything, he's far more powerful, infinitely more
wealthy, and these days positively respectable politically. From a gracious home in Myanmar's
capital Yangon, Lo runs one of Myanmar's largest business conglomerates with interests in real
estate, manufacturing, export-import and construction that includes key infrastructure projects.
Serving as an ethnic affairs adviser to military junta chief Lt.-Gen. Khin Nyunt, his political
connections go straight to the top. … Heroin production is close to an all-time high, while
narco-profits flood the economy. … "Those guys were once beyond the reach of the central
authorities," says an anti-narcotics official. "Now they are right downtown."
… In 1989, the junta dropped a policy of confiscating bank deposits & foreign currency of
dubious origin. Instead it opted for a "whitening tax" on questionable repatriated funds levied first
at 40% and since reduced to 25%. Equally significant, in early 1993, de facto legalization of black-
market exchange rate took place and narco-funds previously held in Bangkok, Singapore and
Hong Kong flooded back into Myanmar. … Since late 1995, Kyone Yeom has established a
nationwide financial operation widely viewed as a thinly disguised money-laundering vehicle. The
scheme involves a subsidiary, the National Races Cooperative Society, offering a startling 7%
interest per month, or 84% per annum, on term deposits, … good in a country where finance
companies have no legal standing and where only banks are permitted to offer interest, currently
capped at 16% a year. But then as one Kyone Yeom employee cheerfully pointed out: "They're the
Wa! They can do anything they want."
… In 1992, Lo founded family flagship company Asia World with his Western-educated son,
Steven Law aka Htun Myint Naing as managing director. Since then, Asia World &
subsidiaries expanded from import-export & trading base into bus transport, housing &
hotel construction, a supermarket chain, manufacturing and major infrastructure projects, notably
Yangon port development and upgrading the highway between Mandalay and Muse on Chinese
border. … The Lo family has enduring connection with Singaporean business figures, and
Steven Law is a frequent visitor to the island republic. … In 1996, Steven was added to list of
those refused U.S. visas for suspected involvement in narcotics trafficking.
… another insurgent group, Kachin Defense Army, rules its own enclave in one of richest
opium-producing areas in the north. Armed with govt-issued "special permits," KDA trucks run
consignments of opium & refined heroin on behalf of Kokang Chinese producers to the border
of India's Manipur state, an export route now preferred to the increasingly risky Chinese border.
Heroin refineries also operate in the Indian border area. … After surrendering to govt in
January 1996, Khun Sa gave up jungle rigors for comfortable villa in Yangon, where he re-
invented himself as something more than a "liberation-fighter." Khun Sa is far from retired; in
opium country his armed loyalists still operate in his original Loi Maw fiefdom, as well as on the
Thai border. Khun Sa's 39-year-old second son, Sam Heung, now oversees operations near his
father's old Thai border base. …
"The regime feels it has the upper hand on the traffickers and can force them to use their money
for the good of the country," says a veteran Western narcotics official. … corruption-riddled
regime as able or willing to force well-entrenched narco-mafia to become respectable
businessmen is naive. … "They feel they have the generals in their pockets." … At unit
level, military complicity in both narcotics production & transport has been long-standing,
… junta is increasingly dependent on narco-dollars to keep a floundering economy above
water. …
CIA station chief betrays agent
4.12.01 Dan Russell burmanet2-
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IMF study pointed out Burma's foreign exchange reserves for 1991 through 1993 were only about
$300 million, but that the Burma Army purchased arms valued at $1.2 billion during the period.
… Horn's reports were intercepted by Embassy Chargé d'Affaires Franklin Huddle, who
insisted that Horn change the report's conclusions. Horn had insisted, as had Prince Lu, that
political protection combined with subsidized crop substitution, rather than coercion, was the way
to wean the Wa from opium. This, of course, threatened SLORC control of Wa territory. Huddle
& his CIA operatives also bugged Horn's phone. Huddle quoted Horn's private phone
conversations with his DEA superiors back in Washington verbatim in his State Dept
communications.
… 9.12.96 class action lawsuit in DC's Federal District Court, alleging the CIA, the National
Security Agency and the State Dept illegally surveilled him and the numerous other DEA agents
who joined him in the suit. Obviously political control of the DEA, to some extent, is at
stake in this groundbreaking lawsuit. Horn's response to my request for more information
underscores that:
"I would like to help you … However, I have been put under threat of prosecution if I reveal
classified information. My attorney & I take that threat seriously. The concerned agencies
have interpreted 'classified information' in the broadest possible sense. Moreover, the CIA has
lobbed 'scud missiles' filled with accusations about me to DEA. This, in turn, has resulted in an
OPR (Office of Professional Responsibility) investigation that has lasted for nearly FOUR years.
And finally, ALL information that I distribute concerning this matter is now routed through the Court
Security Officer (under the Justice Dept) before I circulate it. The Court Security Officer then
arranges for the other agencies, ie., the CIA, NSA and DOS to 'suggest' changes. The changes
that I have made concern ONLY classification matters, not facts or substance. Beyond all of this,
DEA MUST approve my public comments and all my contacts with the media."
Nasty Job for Task Force 399
4.19.00 R. Tasker & B. Lintner Far East Economic Rvw
BANGKOK & CHIANG MAI U.S. Special Forces are about to join
Thailand's war on drugs from Burma; tense border & geopolitical pressures complicate their
mission. They're not related but the timing may be a bad portent. As Beijing & Washington
wrangle over a U.S. spy plane, U.S. troops are starting to move into northern Thailand relatively
close to the Chinese border. The vast majority are preparing for the annual Thai-U.S. Cobra Gold
military exercises in May. But some U.S. Special Forces in the same area are more stealthily
joining what will be known as Task Force 399. Some 5,000 U.S. troops will come to Thailand to
take part in Cobra Gold, the biggest joint U.S. military exercise in Asia this year and a handful will
stay to join the war on drugs. The U.S. military has mounted low-level military training missions in
Thailand under a programme called Baker Torch for several years. But the new, more secretive
Task Force 399 involvement will be its most important in the kingdom.
The task force's goal is to stem an enormous flow of drugs, particularly methamphetamines,
smuggled from Burma into Thailand. About 20 U.S. soldiers from the 1st Special Forces Group
serving as instructors will join 100 Thai Special Forces men, two infantry companies of about 100
men each and 100 Border Patrol Police to make up the task force, according to senior Thai &
foreign security officials. Once in place, the U.S. Special Forces will be nearly 200 kilometres by
road from the Chinese border. The U.S. instructors will officially start operating with the 3rd Army
in May and join the task force in October. The cross-border flood of methamphetamines, mainly
from laboratories in areas controlled by the Wa ethnic minority in Burma's Shan state, has
reached a crisis point for the Thais. Up to 800 million tablets are expected to inundate Thailand
this year. Concern at how fast this is undermining society in an old U.S. ally prompted the
Americans to act, says a Western diplomat.
15,000-strong United Wa State Army, which is aligned with Rangoon, is accused by Thai anti-
narcotics agencies of being the chief maker of the methamphetamine tablets. At the same time,
tension is high on the Thai-Burmese border following a clash near the border town of Mae Sai in
February in which dozens of Burmese troops were killed. As one Bangkok-based foreign
intelligence official says, the mission for the United States is "a high-risk game, given fragile Thai-
Burma relations on the border." It is also a gamble given similar, but much larger and still growing,
U.S. military involvement to stamp out drugs production in Colombia. Critics in the U.S. Congress
are warning the U.S. could be sucked into a bloody civil war there if U.S. troops are gradually
drawn into battle with narco-guerrillas.
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How junta protects Mr. Heroin
Links between Burma drug barons & repressive regime that trumpets tough anti-drugs
policy
4.8.01 John Sweeney THE OBSERVER
… Burma's godfather of heroin, Lo Hsing Han … receives protection from the
Burmese junta which proclaims it is cracking down on heroin and his Singapore money-laundering
operation. Lo & his American-educated son, Steven Law, also known as Htun Myint
Naing, come & go freely between the island state and Burma, running their Asia World
combine upmarket front for one of the world's biggest heroin rackets. Business is about to get
even better. The decision that opium-farming in Afghanistan is 'un-Islamic' has led to a cut in
opium growing from 200,000 acres in the two key provinces to just 25. Burma 'China White' heroin
will fill drop in supply of 'Afghan Brown'.
… Lo's protectors, Burmese generals who run the State Peace & Development Council
(popularly known by former title, Slorc), play very rough with anyone who gets in the way of Heroin
Inc. When prince of the Wa people Saw Lu, opposed to the heroin trade, informed the U.S. DEA
about drug trafficking activities of regional army intelligence chief Major Than Aye, word got back
to the junta. According to a DEA report, Saw Lu was held upside down for 56 days with an electric
lead attached to his penis. His torturers poured urine on his face; he was beaten with chains; his
captors tormented him by throwing him down next to an empty, freshly dug grave. Saw Lu's life
was spared. Others have not been so lucky. The heroin shipment Saw Lu reported to the DEA was
destined for Lo. Major Than Aye supervised the torture. For his diligence he was promoted to a
high position in Slorc.
Lo has made so many millions from heroin that he built & runs Rangoon's main port. 2 years
ago Australian police seized a ship carrying almost half a ton of heroin originating in Burma. a
huge find, enough to give every man, woman and child in Australia a hit of heroin. The street price
of heroin in Sydney did not change by a cent. The plainest evidence of the closeness between
Slorc and Lo's heroin empire emerged at the 1995 wedding of his son, Steven Law, to
Singaporean businesswoman Cecilia Ng. Guest of honour was Hotels & Tourism Minister
Lt.Gen Kyaw Ba, accompanied by 3 other Slorc generals & 4 Cabinet Ministers.
Law is Asia World Co. Ltd managing dir. Started in 1992, it reports 'authorised capital' to be about
$40 million. It put estimated $200m into construction projects around Rangoon. Asia World is
running a joint venture with Slorc, building & running the main new port in Rangoon that
handles 90% of Burma's exports. Asia World also runs a supermarket chain, Burma's biggest
bus company ( good cover to ship product ) and a plastic bag factory. To make plastic bags, Lo
imports large quantities of acetic anhydride. The other use of acetic anhydride is the manufacture
of heroin.
Millions laundered in Singapore from plush office suite on Shenton House 10th floor in heart of
Singapore's business district. Singapore company registry lists 2 companies run by Law, neither
called Asia World. But the giveaway is a large display sign in Shenton House front office depicting
globe with letters A & W. In past 10 years Singapore has executed at least 100 drug
traffickers for possession of small amounts of heroin, according to Amnesty International but lets
at least one Mr Big scot-free.
… According to Benjamin Min, Lu continued to work on opium eradication although warned
during his torture to terminate any relationship with the D.E.A. In 1993, Lu gave D.E.A. special
agent Richard Horn a document titled "The Bondage of Opium: The Agony of the Wa People, a
Proposal and Plea." In his plea, Lu outlined specific steps needed to promote opium
eradication among the Wa farmers, who provide 80% of Burma's opium crop. The Wa, an
ethnic minority of 1 million, live in a remote area of Burma's Shan State where there are no roads,
no educational system, no medical clinics and electricity for less than 10% of families. Even
though Wa farmers grow one of most sought-after crops, they remain among world's poorest
peoples. Lu knew any hope of change had to include a serious plan for crop substitution. "Like the
heroin addicts that result from the opium, we too are in bondage. We are searching for help to
break that bondage," he wrote in his proposal to the D.E.A.
Communications between D.E.A.'s Rangoon office & higher officials in Washington reveal
agent Horn had every intention of working with the Wa people to implement Lu's proposal. But for
reasons that remain unclear, C.I.A. & State Dept had other ideas. D.E.A. Sensitive e-mails
state that former C.I.A. chief of station Arthur Brown "destroyed this project in one swift move."
According to the e-mails, Brown delivered an early version of the Wa proposal signed by Lu to
SLORC military intelligence officer Col. Kyaw Thein. When Thein threatened to pick up Lu once
more and teach him a lesson in respect, Horn was able to intervene temporarily. In Horn's view,
the C.I.A. destroyed a unique opportunity for a dramatic drug eradication program in the poppy
fields of the world's biggest heroin producer. (Horn, now a D.E.A. group supervisor in New
Orleans, is suing the C.I.A., claiming it illegally surveilled his residence in Rangoon to gain
information about his plans, which the C.I.A. went on to foil.)
In Sept. 1993, Horn was forced out of the country by the State Dept under pressure from the C.I.A.
The plans of the Wa prince & his chief deputy, Benjamin Min, were crushed. A year later, Min
risked his life to take the Wa Proposal & Plea to policy-makers in Washington. Before he left,
the SLORC hatched a series of unsuccessful assassination plots. In his sworn testimony to the
INS, which won him U.S. asylum , Min states, "Their aim was to assassinate the Wa leaders,
specifically U Saw Lu and myself as his chief deputy."
… Burma is by far the largest exporter in the region, providing more than 50% of world's
supply. … Burma's national company Myanmar Oil & Gas Enterprise (MOGE) was "the
main channel for laundering revenues of heroin produced & exported under control of
Burmese army." In a business deal signed with the French oil giant Total in 1992, and
later joined by Unocal, MOGE received
$15 million payment. "Despite the fact that MOGE has no assets besides limited installments of
foreign partners and makes no profit, and that the Burmese state never had the capacity to
allocate any currency credit to MOGE, the Singapore bank accounts of this company have seen
the transfer of hundreds of millions of US dollars," Bertil Lintner, noted authority on
Burma's drug trade,
… Along with Lo Hsing Han & Khun Sa, other ethnic drug traffickers have also
benefited from good relationships with the Rangoon junta, according to this spring's State Dept
Narcotics Report. Following a list of the names of 8 top traffickers from the Shan, Kachin and Wa
areas, the report points out SLORC has given these individuals "significant political legitimacy" by
referring to them as "leaders of national races." Several of them handpicked to help write the
nation's new Constitution. SLORC refused a U.S. offer of $2 million to extradite Khun Sa to stand
trial here. (Khun Sa was indicted in U.S. federal court Dec. 1989 on charges of smuggling more
than $350 million worth of heroin into U.S. between 1986 & 1988.) … monthly, per-acre
extortion forces villagers to continue farming opium simply to be able to meet the tax quota,
thereby keeping them dependent on the cash crop. If villagers do not deliver, their livestock is
confiscated, family members are held for ransom or they are taken away as forced labor on infrastructure
projects. The less lucky ones, usually the village headmen, are arrested & tortured.
"The reason the Burmese say not to grow rice is that if you grow rice you have to give some to the
rebel groups & others, and you have to get your rice milled," he said. "So they say just grow
opium and you can easily get money & buy your rice. The military will buy the opium." All over
Burma, rural communities are succumbing to the supplies of cheap heroin distributed unchecked
in their villages. … Reports the Shan Herald Agency for News. "Amphetamines & heroin
are bought & sold like vegetables from roadside peddlers."
… "Only since 1988 SLORC takeover have chemicals needed to refine the purest grades of
heroin become available in Burma's most remote areas," states a drug eradication proposal
presented by the people of Wa State to the Intl Conference on Drugs in Portugal in March. …
jade mines of remote Kachin State. Managers of the SLORC-owned mines, some in joint ventures
with Chinese businessmen, give workers option of receiving compensation in hard drugs rather
than cash. " … heroin is cultural genocide for eliminating large portions of a volatile minority
that has strong sentiments against the govt," stated a U.S. human rights investigator who
managed to penetrate restricted areas. Michael Jala Maran, exec. dir. Pan Kachin Development
Society, … Needle sharing, proliferation of brothels, dearth of public education and virtually
no medical care created an explosion in AIDS cases, & highest H.I.V. infection rates in China
& India lie right at their Burma border. …
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