Strategic Suicide: The Birth of the Modern American Drug War:
Coffee prices multiply approximately 3-fold from producer's wholesale
to retail. Heroin multiplies approximately 200-fold from its Prohibition-inflated
wholesale price to retail. Heroin now retails, by weight, for 10 times
the price of gold. That, of course, makes it the basis of military power
Military power is built on money, and, thanks to Prohibition, drug
trafficking is the most profitable business on the planet. As the State
Department itself puts it, in its end-of-year 1996 Enforcement Affairs
report, "In terms of weight and availability, there is currently no
commodity more lucrative than drugs. They are relatively cheap to produce
and offer enormous profit margins that allow the drug trade to generate
criminal revenues on a scale without historical precedent."
As anyone who has grown it knows, pot is as cheap and easy to grow
as corn or squash, and can be mass-produced for a few dollars a pound.
A legal pound of primo pot would retail for about $300. An illegal
pound of primo pot now retails for about $3000.
The U.N estimates the global drug trade in the early 1990's to be worth
400 billion untaxed dollars a year. In 1994 Apolinar Biaz-Callejas of
the Andean Commission of Jurists put it at $460 billion. That's about
one-tenth of all global commerce. The legal value of that trade would
be about a tenth of that.
Since military power is built on money, and since governments, or at
least relations between governments, are built on military power, the
structural effect of the artificial value has been to create, over the
decades, an unbreakable symbiosis between drug-dealing and covert military
intelligence. Each is the greatest strategic ally of the other. The
political effect has been the institutionalization of global industrial
fascism, death-squad genocide, wherever campesinos threaten to take
control of their own land. I speak of Burma, Guatemala, the Philippines,
Argentina, Mexico, Peru, Bolivia, Paraguay, Indonesia, Malaysia, Afghanistan,
Pakistan, Uruguay, Congo, Liberia, Nigeria - the list is endless.
According to the U.N. Drug Control Program, the biggest heroin and
cocaine trading institutions in the world are the Burmese, Pakistani,
Mexican, Peruvian and Colombian militaries - all armed and trained by
U.S. military intelligence - in the name of the anti-drug effort, of
course. Funny how all that effort never has any strategic effect.
The centers of power controlling the trade in these demanded global
commodities are the same centers of power disseminating the artificial
hysteria necessary for their continued criminalization. That keeps
the retail price a hundred times higher than the legal value and the
trade exclusively in the hands of the muscle.
Another name for the muscle is military intelligence.
The $500 billion dollar drug trade is run by allies we train and arm.
Batista was no more an aberration than Somoza, or Diem, or Ne Win, or
Chiang, or the Shah, or Marcos, or Salazar, or Papadopoulos, or Stroessner,
or Mobutu, or Amin, or Videla, or Noriega, or Cedras, or Samper, or
Salinas, or Suharto, or Fujimori.
The politic Clinton administration, on June 28, 1996, released the
report of its Intelligence Oversight Board: “The Army School of the
Americas . . . used improper instruction materials . . . certain passages
appeared to condone practices such as executions of guerrillas, extortion,
physical abuse, coercion, and false imprisonment.” As Clinton’s continued
support for the military fascists in Indonesia, Burma, Peru, Colombia,
etc. proves, that understatement was just a “partial hangout,” intelligence
damage control, not a basic policy shift.
Guatemala is the archetypal CIA-OPS operation, a real pattern-setter.
In October of 1944 a popular coup led by liberal young army officers
finished the brutal 14-year dictatorship of General Jorge Úbico.
The triumvirate that led the 1944 coup: Major Francisco Arana, Jorge
Toriello and Captain Jacobo Arbenz; Rafael Morales
In March, Dr. Juan Arévalo, an idealistic scholar, was elected president
with 85% of the vote. Arévalo's political hero was Franklin Roosevelt,
whose "four freedoms" - freedom of speech, freedom of religion, freedom
from want and freedom from fear - became the basis of his political
The 1951 elections saw Arévalo replaced by his Defense Minister, 41
year old Jacobo Arbenz, one of the engineers of the 1944 October Revolution
that brought electoral democracy to Guatemala. Arbenz was elected with
the votes of 63% of an electorate that now included literate women.
The problem with the brilliantly competent Arbenz was that he proceeded
to do everything Arévalo had so eloquently promised.
Arbenz nationalized nothing except some unused rural land. He
left all businesses in place, but set out to break the most destructive
monopolies, what he called "feudalism," by competing with them, creating
a "a national and independent capitalism."
He began the construction of a government-run hydroelectric facility
to compete with the Fruit-run monopoly and also initiated rural electrification
and telephone service. These were, of course, the same infrastructure
techniques that had been used to build the United States. Private enterprise
built none of our highways, public schools or harbors, and almost all
of our seminal railroads and hydroelectric facilities were publicly
Arbenz then challenged United Fruit's rural slave-labor system, which
dominated 90% of the country's 3 million people, 60% of them Indians,
and most of the rest mestizos, known as ladinos. The 1952 Agrarian Reform
Law aimed mostly at plantations larger than 670 acres, although fincas
of over 223 acres were vulnerable if more than a third of the land was
unused. Arbenz confiscated only unused arable land, distributing 1.5
million acres to 100,000 landless families, in 42 acre plots. Arbenz
himself, his extraordinary Salvadoran wife and his Foreign Minister,
lost thousands of acres.
Arbenz at his inauguration; Rafael Morales
Practicing sweat-equity free-enterprise, Arbenz immediately put the
confiscated land into production by providing government-run support
systems, as Roosevelt had done. He instituted no political repression
of any kind in a mixed economy that was, for the first time, beginning
to grow by leaps and bounds. United Fruit, Ike and the Dulles brothers
insisted that this constituted "Communism in the Caribbean" and "a Russian
toehold" in the hemisphere.
Guatemala, of course, had virtually no relations at all with Russia.
The Communist Party, in fact, had been the only party that remained
illegal under the idealistic libertarian Arévalo, who insisted that
communism was "contrary to human nature." Arbenz' Revolutionary Action
Party legalized the Guatemalan Workers Party in 1951, and it held 4
of 56 seats in Congress.
Arbenz used Arévalo's 1947 Labor Code, which was based on Roosevelt's
Wagner Act. It insisted on the right of plantation workers to unionize,
strike and bargain collectively. For the first time in Guatemalan history,
the campesinos had military protection. Arbenz established rural cooperatives,
public schools, public clinics, public buses and local cultural institutions.
Everything Arbenz did, in fact, conformed to John Kennedy's 1961 Alliance
for Progress model.
One of the designers of the Alliance for Progress, Kennedy's Special
Assistant Arthur Schlesinger, wrote in 1946: "All across Latin America
the ancient oligarchies - landholders, Church, and Army - are losing
their grip. There is a groundswell of inarticulate mass dissatisfaction
on the part of peons, Indians, miners, plantation workers, factory hands,
classes held down past all endurance and now approaching a state of
Like Arbenz, Schlesinger understood that the key to political stability
was economic, so he looked to the inclusive social democratic parties,
which built from the ground up. Kennedy would have given Arbenz all
the help he could, in order, as Schlesinger put it, "to check Peronismo
and Communism." The Dulles brothers, quite literally, chose Peronismo.
Since Arbenz was serious about land reform, he put committed Marxists,
whom he trusted not to sell out, in charge of administering the Agrarian
Reform program. But they were bound by the strictures of the law, and
the basis of that law was sweat-equity free-enterprise. The market that
the campesinos were encouraged to enter was just that, a free market.
Arbenz' Agrarian Reform Program was his idea of a rural Small Business
Administration. He was succeeding in rendering thousands of campesinos
economically independent, creating a genuinely nationalist, capitalist
alternative to corporate colonialism. What the U.S. proceeded to do,
however, convinced the 25 year-old Argentine doctor Ché Guevara, who
was part of this, and quite a few others, that militaristic communism
was indeed the only alternative to United Fruit.
Arbenz seized nearly 400,000 of United Fruit's 550,000 acres, all unused,
and all originally seized from the Indians. He compensated United Fruit
in government bonds based on the company's own radically deflated 1952
book value, which the company had used to lower its already miniscule
land taxes. The company was enraged, and the company was led by Sam
"the Banana Man" Zemurray, one of the craftiest and most dangerous fighters
ever to rise from the streets of New Orleans.
Zemurray's team included not only his Mafia partners on the New Orleans
docks, led by the deadly Carlos Marcello, but the Boston Brahmin Thomas
Cabot, for a short while a president of United Fruit. Thomas Cabot was
the brother of John Moors Cabot, the Assistant Secretary of State for
Inter-American Affairs. Another major Fruit stockholder was Senator
Henry Cabot Lodge, who violently denounced Arévalo's unionism from the
Senate floor in 1949.
Both Secretary of State John Foster Dulles and his brother Allen Dulles,
CIA Director since 1953, were major Fruit stockholders. Through their
law firm, Sullivan and Cromwell, they had helped arrange, through Schroeder
Banking, the 1936 United Fruit takeover of Guatemala's rail system,
the International Railways of Central America.
Allen Dulles was a director of the British-based Schroeder Banking
Ltd, which he had turned into a key conduit of CIA funds. United Fruit
was, therefore, a de facto CIA proprietary. When the Dulles brothers
engineered the destruction of the Mossadegh government in Iran in 1953,
the largest corporate beneficiary was the de-nationalized Anglo-Iranian
Oil Company, largely controlled by Schroeder Banking. Like Arévalo,
Mossadegh had in fact refused to legalize the Communist (Tudeh) Party.
Mossadegh's threat was economic nationalism, not the communism the Dulles
brothers had falsely accused him of. Like Arbenz, Mossadegh was a liberal
democrat replaced by a murderous fascist dope peddler. The results,
as we have seen, have not been happy.
Peron's Argentina, Stroessner's Paraguay and Papadopoulos' Greece became
major drug entrepôts thanks to cooperating German, British, French and
American secret services. During the 1947 civil war in Greece between
the popular leftist coalition that had defeated the Nazis and the British-backed
Royalists, the U.S., using Gehlen's agents, backed IDEA, the Holy Bond
of Greek Officers. These were the fascist elements in the professional
army that had fought with the Nazis during the war. With enough American
matériel for 15,000 men, Colonel Papadopoulos, a Nazi war criminal,
was able to take control of Greek intelligence, the KYP, and thereby
control the Greek military. In 1967, Papadopoulos took direct control
of Greece in a bloody coup that initiated a period of death squad assassinations
for which Greek democrats have yet to forgive the U.S.
Aside from the "Peronist" Dulles brothers and the high command in the
State Department, Zemurray's United Fruit team included "Tommy the Cork"
Corcoran, one of Roosevelt's original brain trusters. Corcoran represented
the Teamster insurance company, U. S. Life, Chiang Kai-shek's brother-in-law,
and the CIA's proprietary airline, Civil Air Transport, which serviced
the Kuomintang opium armies in Burma.
The KMT's main Bangkok connection, General Phao, the commander of the
Thai police who coordinated CAT air traffic with the KMT, was also the
commander of the Thai government's relationship with the CIA. Explained
KMT Gen. Tuan Shi-wen, "To fight you must have an army, and an army
must have guns, and to buy guns you must have money. In these mountains,
the only money is opium." According to Professor McCoy, to whom Gen.
Tuan was speaking, the first snow-white #4 heroin lab was opened by
KMT-affiliated Hong Kong chemists on the Thai-Burma border in the late
60's. The KMT are also known, fittingly, as the "White Chinese."
The KMT's lawyer, "Tommy the Cork" Corcoran, was also United Fruit's
lawyer. Corcoran was intimate with the entire leadership of the CIA,
which he had helped to organize, and which was, in any case, extremely
sympathetic to United Fruit. Walter Bedell Smith, Gen. Eisenhower's
wartime chief of staff and Truman's CIA director, was now John Foster
Dulles' Undersecretary of State. In 1953 he had asked Corcoran for the
presidency of United Fruit, and in 1955 was named to its board of directors.
Gen. Robert Cutler, chairman of the National Security Council, already
sat on the United Fruit board. Robert Hill, ambassador to Costa Rica,
got to the UF board in 1960. Hill was connected to Grace Shipping, another
CIA friend heavily invested in Guatemala.
Sam "the Banana Man" Zemurray's team also included Edward Bernays,
the formidable "father of public relations," who filled the American
media with phony reportage about "communism in Guatemala." The right-wing
John Clements, a Hearst vice-president with his own major magazines
and PR firm, did the same. Once the "demographics" had been taken care
of, Eisenhower and the Dulles brothers had the support of every Democrat
in Congress. With Nicaragua's Somoza, the Dominican Republic's Trujillo
and Cuba's Batista champing at the bit, Operation Success began in early
June of 1954.
With control of the air, the sea and all the neighboring countries,
Allen Dulles' CIA had no trouble overwhelming Jacobo Arbenz with a military
and propaganda campaign coordinated from both inside and outside the
country. Aerial bombardment of the presidential palace was combined
with a mercenary ground force of about 180 men, led by Guatemalan Col.
Castillo Armas, the size and popularity of which was wildly exaggerated
by well placed Radio Liberty transmitters.
In 1957 the intrepid Mafia point-man and Batista operative, Johnny
Rosselli, made another trip to Guatemala City, as he had done many times
throughout 1956. This time the trip was in reaction to Castillo's jailing
of his partner, casino operator Ted Lewin. Castillo was promptly gunned
down, and Col. Enrique Trinidad Oliva, Johnny Rosselli's gambling and
narcotics partner, became the new head of Guatemala's secret police.
Col. Trinidad Oliva was also the key CIA contact in the Guatemalan
government, working under his half-brother, the defense minister. Trinidad
Oliva coordinated all "foreign aid" coming through the CIA conduit ICA,
the International Cooperation Administration, the forerunner of the
Agency for International Development, AID.
Rosselli and Trinidad then helped the murderous old Gen. Miguel Ydígoras
Fuentes, one of Úbico's assassins with close ties to mob partner Trujillo,
to become head of state. Mario Sandoval Alarcón. "the father of Latin
America's death squads," organized the right-wing of Castillo's party
into the National Liberation Movement and hired himself out to Trinidad
The same year that Johnny Rosselli helped the CIA engineer the change
in the Guatemalan government, he was asked by his Syndicate associates
to put together Giancana in Chicago, Costello in New York, Lansky in
Miami, and Marcello in New Orleans for the huge $50 million Tropicana
construction project in Las Vegas. According to Fred Black, a political
fixer who was close to Rosselli, Bobby Baker and Lyndon Johnson, Rosselli's
influence was such that he gave orders to the Dorfmans, who controlled
the Teamsters' huge Central States Pension Fund. During the 50's and
60's, it was Johnny Rosselli who "set up protection" in Las Vegas.
Throughout 1956 and 57 Rosselli travelled back and forth from Mexico
City, the planning center for all CIA operations in Latin America, and
Guatemala City. An experienced ICA operative noted that "John had access
to everyone and everything that was going on there. He had an open door
at the embassy in Guatemala, and in Costa Rica. He was in there plenty
of times. I know because I saw him. He supplied information to the government,
and had a hand in a lot of the intrigues that were going on."
This means, operationally, that Johnny Rosselli's interests became
the CIA's interests. "Throughout Latin America," notes Frank McNeil,
a junior political officer in the Guatemalan Embassy in 1960, "there
were two American governments - one intelligence and one official."
McNeil's boss, Ambassador John Muccio, learned of the Bay of Pigs invasion
force being trained in Guatemala only after the story broke in The
New York Times. As John Kennedy found out to his chagrin, Rosselli,
his Syndicate and Batistiano allies, had more operational clout than
the State Department.