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The Horn Case: The DEA and CIA sell out the Wa peopl

People of the Opiate

Burma's dictatorship of drugs.

By Dennis Bernstein and Leslie Kean

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

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

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

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

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

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

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

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

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

Dirty Laundry

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

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

This booming heroin trade has sent a flood of narco-dollars into
Rangoon. "All normal economic activities, if you can call anything in
Burma normal, are instruments of drug money laundering," says Fran=E7ois
Casanier, research analyst with Geopolitical Drugwatch in Paris. "And
no drug operation in Burma can be run without the SLORC." A March 1996
Narcotics Report on Burma by the State Department points out that the
country's "underdeveloped banking system and lack of enforcement
against money laundering have created a business and investment
environment conducive to the use of drug-related proceeds in
legitimate commerce." A study by the International Monetary Fund cites
large expenditures unaccounted for by the Burmese government: Despite
the fact that Burma's foreign exchange reserves for 1991 through 1993
were only approximately $300 million, the SLORC purchased arms valued
at $1.2 billion during the period.

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

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

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

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

Father and Son: A Drug Legacy

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

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

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

'Our Own Blood Brethren'

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

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

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

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

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

Along with Lo Hsing Han and Khun Sa, other ethnic drug traffickers
have also benefited from good relationships with the Rangoon junta,
according to this spring's State Department Narcotics Report.
Following a list of the names of eight top traffickers from the Shan,
Kachin and Wa areas, the report points out that the SLORC has given
these individuals "significant political legitimacy" by referring to
them as "leaders of national races." Several of them have even been
handpicked to help write the nation's new Constitution. It is hardly
surprising that the SLORC refused a U.S. offer of $2 million to
extradite Khun Sa to stand trial here. (Khun Sa was indicted in a U.S.
federal court in December 1989 on charges of smuggling more than $350
million worth of heroin into the United States between 1986 and 1988.)

Heroin, Vegetables and Cigarettes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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