ATrue Crime Story

First time ever in print The full, unexpurgated story of the Du Pont kidnap case

Read, in their own words:

• How the kidnappers-members of the criminal Cult Awareness Network­ plotted to seduce, kidnap, drug, and, if necessary, kill du Pont heir Lewis du Pont Smith, to stop his association with political leader Lyndon LaRouche; then went scot-free in the same judicial system that condemned LaRouche to life in prison .

• How Ollie North's Vietnam tentmate, a Loudoun County Virginia deputy sheriff, was at the center of a near-miss assassination of LaRouche by sharpshooters during a 400-man $8.00 paramilitary raid. Shipping and handling: $3.50 for first book, .50 for each additional book.

Order today from the publisher: EIR News Service P.o. Box 17390 Washington, D.C. 20041-0390

or call Ben Franklin Booksellers (800) 453-4108 (703) 777-3661 fax (703) 777-8287 Founder and Contributing Editor: Lyndon H. LaRouche, Jr. Editorial Board: Melvin Klenetsky, Antony From theAssociate Editor Papert, Gerald Rose, Dennis Small, Edward Spannaus, Nancy Spannaus, Jeffrey Steinberg, Webster Tarpley, Carol White, Christopher White Senior Editor: Nora Hamerman W hat did Lyndon LaRouche really say on the subject of the Queen Associate Editor: Susan Welsh Managing Editors: John Sigerson, of England and the drug trade? For the past 18 years, asinine media Ronald Kokinda commentators have babbled that "LaRouche is a political extremist Science and Technology: Carol White who says Queen Elizabeth pushes drugs." To introduce this week's Special Projects: Mark Burdman Book Editor: Katherine Notley Special Report, it is useful to quote LaRouche's Dedication to the Advertising Director: Marsha Freeman first, 1978, edition of Dope, Inc.: Britain's Opium War Against the Circulation Manager: Stanley Ezrol U.S. The book, with its devastating proof of the role of the British INTELLIGENCE DIRECTORS: Agriculture: Marcia Merry free-traders in drug trafficking, quickly became a best-seller, and has Asia and Africa: Linda de Hoyos since gone through two more editions, plus translation into Spanish. Counterintelligence: Jeffrey Steinberg, Paul Goldstein LaRouche's words, written Oct. 18, 1978, are as true and important Economics: Christopher White now, as they were then: European Economics: William Engdahl Ibero-America: Robyn Quijano, Dennis Small "It is no exaggeration to sum up the situation thus: The only Law: Edward Spannaus proper comparison for today's British drug traffic into the U.S.A. Russia and Eastern Europe: Rachel Douglas, Konstantin George is the British monarchy's 19th-century Opium Wars against China. United States: Kathleen Klenetsky There is more than a parallel. The same HongShang and other banking INTERNATIONAL BUREAUS: interests that developed their wealth in the China opium trade are Bogota: Jose Restrepo Bonn: George Gregory, Rainer Apel involved in the financial side of the traffic against the U.S.A.-aided Buenos Aires: Gerardo Teran Caracas: David Ramonet by those leading elements of the Zionist Lobby which have controlled Copenhagen: Poul Rasmussen organized crime in the U.S.A. and the Caribbean since the early Houston: Harley Schlanger Lima: Sara Madueflo 1920s. Mexico City: Hugo LOpez Ochoa "This is a calculated form of political warfare against the U.S.A. Milan: Leonardo Servadio New Delhi: Susan Maitra by the British monarchy. Not only are the London-centered Canadian, Paris: Christine Bierre Hong Kong, Singapore, and British West Indies financial interests Rio de Janeiro: Silvia Palacios Stockholm: Michael Ericson involved in pulling tens of billions out of the U.S.A.-our biggest Washington, D.C.: William Jones source of balance-of-payments losses-but this is a precalculated Wiesbaden: Goran Haglund political warfare. The evil British intelligence executive-and head

EIR (ISSN 0273-6314) is published weekly (50 issues) of the Aristotle Society-Bertrand Russell proposed this use of drugs except for the second week of July, and the last week of December by EIR News Service Inc., 317 Pennsylvania as political subversion back during the 1920s. Among Russell's most Ave.. S.£., 2nd Floor. Washington, DC 20003. (202) 544-7010. For "ubscriptions: (703) 777-9451, prominent collaborators in this effort was Aldous Huxley, coordina­ European Headquarters: Executive Intelligence Review tor of the 1960s introduction of psychedelic substances to U.S. youth. Nachrichtenagentur GmbH, Postfach 2308, 0-65013 Wiesbaden, Otto von Guericke Ring 3, 0-65205 "The fight against illegal drugs and against the evil forces of Wiesbaden, Federal Republic of Germany Tel: (6122) 9160, Executive Directors: Anno Hellenbroich, 'decriminalization' is nothing less than a war against Britain, to the Michael Liebig In Denmark: EIR, Post Box 2613, 2100 Copenhagen 0E, purpose of saving our youth and our nation from the destruction the TeL 35-43 60 40 British monarchy has projected for us." In Mexico: EIR, Rio Tiber No. 87, 50 piso, Colonia Cuauhtemoc. Mexico, OF, CP 06500, Tel: 208-3016 y 533- The new material presented in this issue of EIR will provide the 26-43. Japan SUbscription sales: O.T.O. Research Corporation, basis for releasing a fourth edition of Dope, Inc., very soon. Takeuchi Bldg" 1-34-12 Takatanobaba, Shinjuku-Ku, Tokyo 160, Tel: (03) 3208-7821.

Copyright © 1996 EIR News Service. All rights reserved, Reproduction in whole or in part without permission strictly prohibited. Second-class postage paid at Washington D,C., and at an additional mailing offices. Domestic subscriptions: 3 months-$125, 6 months-$225, 1 year-$396, Single issue-$l0 Postmaster: Send all address changes to EIR, P.O, Box 17390, Washington, D,C. 20041-0390. •

IIillContents

£ 1&&

Interviews Economics Special Report

64 Faris Nanic 4 It's not the stock market, The new chief of staff of Bosnia's but the whole shebang President Izetbegovic, fonnerly Lyndon H. LaRouche, Jr. tells a spokesman for the Defense seminar in Washington, D.C. that Ministry, talks to EIR about the the wild swings in the stock market need to "ignite the engine of our indexes are a symptom of the reconstruction." underlying instability of the world banking system.

Book Reviews 6 Swedish conference: Win the war on drugs 10 Britain's 'Dope, Inc.; grows 72 Parody of J. Edgar in the Sweden has taken leadership in to $521 billion White House trying to make its nation drug-free, Dennis Small refu��s thedl!fellti sm but international collaboration is Unlimited Access: An FBI Agent which says the war on drugs can't essential to win the war. Inside the Clinton White House, by be won, and announces the Gary Aldrich. forthcoming new edition of Dope, 7 Currency Rates Inc., the battle manual to put the drug cartel out of business for good. Departments 8 Business Briefs 15 Cocaine: Production set for 80 Editorial a new takeoffstage Britain's war against Ireland. 19 Marijuana: a $150 billion chunk of Dope, Inc. production Photo and graphic credits: Cover, Alan Yue. Pages 10, 74, EIRNS/ Heroin: Britain's Opium Stuart Lewis. Pages 11-55 25 (graphics), EIRNS. Page 56, Wars-two centuries, and Virginia State Police. Page 64, going strong EIRNS/Christopher Lewis. 32 Synthetic drugs: Correction: On p. 28 of our last Pharmacological issue, Figure 1 should have 'revolution' sweeps included the size of the U.S. labor Europe, America force as of March 1996. The total labor force was 133.7 million, of The British oligarchy's which 34.7 million were employed 35 global drug money­ in productive occupations and infrastructure, and 98.9 million in laundering machine "overhead."

2.2 •

Volume 23, Number 30, July 26, 1996

7

International National

46 Russia and Eastern 58 Clinton pulls Samper's visa 70 President Clinton is back Europe: Dope, Inco's for abetting drug trade on the policy offensive newest 'growth market' Documentation: Speeches at the U. S. foreign policy initiatives since Center for Colombian Studies by the Lyons summit of the Group of 50 The Dope, Inco invasion of Armed Forces Commander Adm. Seven, suggest that the President is the Russian economy Holden Delgado and Army rejecting the bad advice of Commander Gen. Harold Bedoya campaign strategist Dick show how Colombian patriots are "Rasputin " Morris. Will he go the 53 How drugs can be wiped preparing to take back their country next step, and dump Morris out, totally from the drug armies. himself? An eradication strategy. 60 TransAfrica's Payne fields 73 House Republicans cover LaRouche's war on drugs: 57 anti-Sudan bill up Justice Department role a bibliography in Waco 62 The 'Ron Brown II' mission to Bosnia: a chance 75 Two cases show real to defeat the British corruption of DOJ U. S. Commerce Secretary Mickey Republican muckrakers aren't Kantor's trip to Sarajevo signals a looking into the railroading of John renewed American commitment to Demjanjuk and the assassination of rebuilding the Bosnian nation. Tscherim Soobzokov by the DO] What's needed is a new Marshall permanent bureaucracy. Plan. 76 Congressional Closeup 68 International Intelligence 78 National News �TIillEconomics

"...

It's not the stock market, but the whole shebang

by Anthony K. Wikrent

Speaking to an EIR seminar in Washington, D.C. on July should not focus on the stock market as such. One should look 17, Lyndon H. LaRouche, Jr., candidate for the Democratic at the stock market as a fever symptom of something else." Party's Presidential nomination, dismissed the reports of in­ cipient panic in the U.S. stock markets as "double-talk," and Financial turnover explodes pointed to the underlying instability ofthe entire world bank­ Indeed, when compared with other financial markets, the ing system as the cause for the wild swings in the stock mar­ stock market pales into insignificance, representing less than ket indexes. 1 % of all financial turnover. In 1990, for example, the total Addressing an audience of 125 political activists, legisla­ value of all stocks traded in all U.S. stock markets was $1.751 tors, diplomats, and trade unionists, LaRouche said: "This trillion. That was less than half the value of corporate debt whole nation is suffering with poverty, while idiots are bab­ traded, which was $3.972 trillion, or the amount of mortgage bling about prosperity. There's no prosperity, there's no re­ derivatives traded, which was $3.697 trillion. covery. This tremor on Wall Street, which is rumored to pull But these figures are still only pocket change compared down about a 1,000 points out of the Dow before it quits, is to the really big markets. The total nominal value of turnover only a symptom of what's going on. This whole shebang is in the futures markets in 1990 was $152.717 trillion. About going! There's nothing that can be done to save this system three-quarters of this was comprised of trading in financial in its present form. Cannot be done, nobody can do it. I can't futures; that is, futures contracts based on such things as U.S. do it; I wouldn't even try. Because it's evil: This system is governmentdebt securities, the value of various foreign cur­ killing people." rencies relative to the U.S. dollar, or indexes of different fi­ The questions put to LaRouche at the seminar were nancial contracts, such as the Standard and Poor's 500 stock prompted by worries that the five-year-oldbull market in U.S. index, or the J.P. Morgan index of developing country govern­ equities had finallycome to an end. By July 15, the Dow Jones ment debt. The actual amount of money that changed hands Industrials Average was down 7.4% from its peak of 5,511 in the futures markets is probably somewhere between 5% reached on May 22, 1996, with much of that 428 point loss and 10% of the nominal value, or $7.4-15 trillion. That is still coming in the last two and one-half weeks. There have been at least fivetimes larger than the stock market. two trading days so far this year, in which the Dow has lost The amount of trading in U.S. government debt reached over 2.5% of its value; the last time such a significant decline $26.085 trillion in 1990, or nearly 15 times more than the occurred in one day was in 1991. trading in the stock markets. Then, on July 16, the Dow went on a particularly wild Finally, the amount of trading in foreign currencies, esti­ ride, plunging over 120 points during lunch, then abruptly mated from Federal Reserve Studies conducted in 1989 and reversing course and rocketing back up to where it had been 1992, was around $36 trillion, or more than 20 times the total before, ending the day up 9 points. value of trading in U.S. stock markets. About half of foreign Asked for his evaluation of the lurches in the stock mar­ exchange trading is conducted in the "spot markets," where kets, LaRouche replied on July 18, "It's significant, but one actual currencies are traded for one another, while the other

4 Economics EIR July 26, 1996 , half is conducted in various forms of financial derivatives, Oligarchs react principally futures,options, and swaps. "So what is the breaking point of this bubble?" LaRouche

,. Thus, LaRouche emphasizes that "what is happening is asked. "The breaking point is when the cash shortage hits. not a 'stock market problem.' It's a problem of banking." And what is happening, as [IMF Managing Director Michel] Responding to a question at the seminar on July 17, LaRouche Camdessus said openly, on the eve of the G-7 conference explained that "there is a shortage of cash in the banking in Lyons, France, several weeks ago: We are looking at a system." The explosion of financialturnover, which increased banking crisis, not a bond crisis, not a stock market crisis, 285-fold, or 28,500%, from 1960 to 1990, "works on what is not a commodities market crisis. We are looking at a banking called financialleverage. That is, the paid-in amount is actu­ crisis." The point has been reached, LaRouche explained, ally only a small percent of the nominal value of the whole that "the banking system has not the means to finance a transaction. But if it goes bankrupt, you have to pay the full bubble, on whose existence the banking system itself has amount. So therefore, you have to keep paying in the small now become mortgaged. The French banking system, the amounts to stoke the fires, to keep the [bubble] from collaps­ German banking system, the British banking system, the ing. And if this collapses, believe me, nobody will ever figure American banking system, are all essentially doomed right it out. No one will ever settle the accounts. It cannot be done. now. And what you're seeing is the onset of a process where There are too many invisible, off-balance-sheet transactions that doom is inevitable." involved. And, also, there is a lot of drug trafficking going LaRouche pointed out that the world's oligarchs, cen­ on. Billions, tens of billions of dollars of drug trafficking, tered around the Club of the Isles apparatus of the British illegal weapons trafficking. Things people don't like to talk monarchy, know exactly what is occurring, and are franti­ about." cally grabbing control of all the physical assets they can lay their hands on. "Don't they know this is happening? Of Looting of the real economy course they know it's happening," LaRouche said. "Are they LaRouche then explained how this process of financial telling you about it? No, of course not. What are they doing speculation affects the real economy. "As the bubble gets about it?" bigger, the actual amount of cash, even though it's a smaller LaRouche observed that "for about 18 months or so, [the percent that is required, gets enormous. The cash has to be oligarchs] have been buying gold, platinum, getting the cen­ supplied, largely, by central banks, or through the leverage of tral banks to keep the price of gold down while they buy it up central banks. The cash comes from what? The cash comes in great quantities. Gold mines, platinum mines, all precious frompension funds,mutual funds, and so on, which loot their metals, silver. Food! International food trade: Over 50% is accounts, in order to engage in financial transactions. They controlled from London, through the internationalfood car­ squeeze rents, they squeeze taxes, they squeeze government tels. Strategic minerals: Guess who controls those? Who con­ accounts, everything is squeezed, everything is mortgaged up trols 50% approximately of the world's turnover? It's the the hilt, and looted; the piggy bank is broken and robbed, in London market, augmented by Hongkong, Singapore, and so order to get more cash to put in this racket. ... forth. Who controls the majority of the internationaltrade in "Where does the cash come from? Well, cash is money. natural gas and petroleum? Who has been buying up bankrupt The creation of money is a charge against the economy, a farms for a song? Who has been buying up every asset imagin­ charge against the government. So the economy has to be able, at the bottom price? These [oligarchs], who know the looted-grandmother has to be sold; grandfather has to have financial system is finished, who know the banking system is his operation cut, because the cash is needed. Grandfather probably going to go. What have they done? They have bought just has to die-we need that money, that cash, to keep the assets, control of the substances on which human life largely bubble going." depends, in order to attempt to control the world in the post­ The result, LaRouche said, "was inevitable. This kind of crash period." policy has caused an accelerating rate of collapse of the real "What we're in now is a convergence," LaRouche economy. Salaries are down. Look in Germany, look in Eu­ warned. All the talk about a stock market crisis, is "wishful rope. One firmafter the other, which are the famous firms of thinking by people who don't want to admit what the problem Europe, are collapsing, they're keeling over. Leading busi­ is. They're scared. You get some financial analyst, who's got nesses of the world, are collapsing or being gobbled up .... a little money tucked away in a bank someplace, and they Everything is being destroyed. Look at the water system in think that's going to be their future. And they're going to do Washington, D.C. [and its century-] old pipes-why aren't anything to get themselves, and you, to believe, that it's not they replaced? Didn't have the cash; had to put the cash in the the banking system, it's just a stock market, or bond market bubble. New York, other cities, the infrastructure is collaps­ aberration. They think they've got an insurance policy. ing. Look at the CSX, look at the train wrecks, look at the They've got nothing! Nobody has anything, except those ValuJet phenomenon. Everything is stripped to the bone and mighty powers that control these assets. And the question, is looted." a political question: Are you going to let them do it to you ?"

EIR July 26, 1996 Economics 5 Drug Policy Foundation and other exponents of drugJegal­ ization.

Research and preventive effortsbear fruit, At the conference, Dr. Bertha Madras, from Harvard Swedish conference: University and the New England Primate Center, reported that irrefutable medical proof is accumulating at American Win the war on drugs research facilities that will create the basis for a much more convincing public educational campaign about the danger­ by Karen Steinherz ous effects on the brain of the mis-named "soft drug" mari­ juana, as well as heroin and cocaine. Madras is also principal investigator for five research The strengths and weaknesses among "the best and the projects, some of which are funded by the U.S. National brightest" of anti-drug specialists were reflected at the First Institute on Drug Abuse (NIDA). Her effortswere vigorously International Conference on Research, TreatmentlPreven­ endorsed by Kent Auguston, associate director of the Center tion and Organized Crime, which took place on June 9- for Substance Abuse and Prevention of the U.S. government 14 in Hassela, Sweden. The 36 specialists addressing the in Rockville, Maryland. conference included scientists, health, criminal intelligence, Dr. George Ricaurte, a neurologist from Johns :Hopkins and money-laundering experts, parent activists, justice min­ University, demonstrated the effect of drugs on the brain, istry officials including from the United States, the U.S. emphasizing that there is no such thing as "responsible use." Federal Bureau of Investigation's Moscow legal attache, and Ricaurte spoke of his most recent clinical and pharmacologi­ representatives of law enforcement agencies of England and cal findings concerning the effects of the "designer drug" Ireland. The conference was sponsored by the Swedish Na­ Ecstasy, or MDMA, on the human brain. According to re­ tional Institute of Health and hosted by the Hassela Nor­ ports fromthe State Criminal Office of Baden-Wiirttemberg, dic Network. Germany, the Narcotics Police of Sweden, and the NIDA, the In 1969, in the midst of the "peace and love " era of the most prevalent drugs abused in those countries are "designer drug counterculture that was sweeping Sweden along with drugs" and hashish. Ecstasy has spread as the chief drug of the rest of Europe, the Swedish government began a nation­ the rave party or "techno" music movement in western Eu­ wide campaign for "a drug-free society." Thirty years later, rope, where this form of computer-generated dance sound Sweden is still not drug-free, but, in comparison with other is popular. countries in the West, it has the least drug abuse. Experimen­ Ricaurte stated that his research demonstrates that Ec­ tation with marijuana among teenagers is significantly lower stasy use creates axon depletion of serotonin in the cerebral there, for instance, than in the United States, Canada, or cortex, where cognition, the highest human mental function, England, and there are almost no new Swedish young people takes place. He is certain that "MDMA has been found to addicted to heroin. be considerably more neurotoxic to serotonin axons (the One reason for Sweden holding this conference, is that unbranched extensions of the neuron) in the primate brain international collaboration is critical in winning the war on than in the rat." drugs, anywhere. Sweden faces new inroads by the interna­ As Dr. Madras described in her speech, techniques like tional drug cartels, with Poland now a base to smuggle positron emission tomography (PET) scanning, to map brain amphetamines into Scandinavia, while the "borderless Eu­ activity while the subject thinks, looks, listen, speaks, writes, rope" of the European Union's Maastricht Treaty is making and sings, are also providing new insights which provide it easier for traffickersto bring drugs into Sweden. Sweden is the basis to educate people to the dangers of marijuana. encouraging alliances, in the hopes of spreading its example. Uniquely among European nations, Sweden has a cross­ Successful rehabilitation approaches party alliance against every form of drug legalization. Stock­ Hassela Nordic Network prevention expert Peterson holm serves as headquarters for European Cities Against reported that there are modalities in abstinence therapy and Drugs (ECAD), which was initiated by the former mayor counselling that can cure youthful addiction. Hassela rejects of Stockholm, Carl Cederschioeld, in 199 1. Conference host the term "addict" for its young patients, and optimistiCally Torgny Peterson is currently both director of ECAD and the refers to them as "students." Hassela Nordic Network therapeutic community for young Hassela has a success rate of upwards of 90% if the addicts, where the conference was held. "student" remains the full year and a half to two years in ECAD is a mechanism whereby mayors and cities the program, which culminates with some type of vocational against drugs can organize conferences and establish ties training. This nationwide network of "students" is trained in collaboration against the efforts of the well-heeled and counselled to reenter society as meaningful contributors

6 Economics EIR July 26, 1996 to the workforce, instead of being pumped full of more heroin, as heroin programs in Germany, Switzerland, and urr the Netherlands are currently doing. C ency Rates The unusual dedication of Sweden to its young "stu­ The dollar in deutschemarks dents" was also evidenced in the remarks at the conference New York late afternoonfixing of Ka: Westerberg, founder of Hassela Nordic Network in 1969, who stated that "every addict has the right to re-enter 1.80 society as a pilot ... or an engineer," a far cry from what liberalization advocates say: that both the addict himself and 1.70 the population have to tolerate this misery. Also addressing the conference was Andrea Muccioli of 1.60 the San Patrignano therapeutic community in Rimini, Italy, - one of the largest of its kind in the West. It has treated 1.50 = upwards of 2,300 addicts since 1978. Like Hassela Nordic Network communities, it is abstinence-based and believes 1.40 in restoring its patients to the ideals of hard work and respon­ 5/29 615 6112 6119 6/26 713 7110 7117 sibility. San Patrignano runs a cooperative which specializes The dollar in yen in metalworking, lithography, and farming. New York late afternoonfixing

Money laundering 140 Disappointingly, there was little discussion from the speakers on organized crime, about a coordinated strategy 130 to deal with the activities of the banking system, both on­ and offshore. � There was caution apparent in the speeches of dedicated 110 career civil servants who spoke on organized crime. These r- - speakers confinedthemselves to examples fromtheir personal 100 careers, or relied on anecdotes about their experiences. The 5/29 615 6112 6119 6126 713 7110 7117 speakers on this panel certainly have had much experience investigating the international drug cartels, but stated little The British pound in dollars about it. One speaker was Wilmer Parker III, the Assistant New York late afternoonfixing U. S. Attorney from Atlanta, Georgia, who was one of those 1.80 responsible for prosecuting the government's largest drug­ money-laundering case, Operation Polar Cap. The case 1.70 showed how the Colombian Medellin Cartel laundered in excess of $1 billion. 1.60 Another speaker was John Featherly from the U.S. Drug - Enforcement Administration office in London. Also repre­ 1.50 � senting the United States was Interpol General Counsel Charles Sapphos, who has helped to formulate international 1.40 laws against the use of precursor chemicals for illegal drug 5/29 615 6112 6119 6/26 713 7110 7117 production. The dollar in Swiss francs Yet the "public relations" content of these speakers' re­ New York late afternoonfixing marks seemed to reflectthe fact that law enforcement officials from the United States do not know exactly where they stand 1.60 in the drug fight.First, there is the "silly season" election-year politics. And, despite some partial victories over Colombia's 1.50 cocaine kingpins, despite some improvement in cleaning up some offshore centers in the Caribbean, law enforcement still 1.40 operates with one hand tied behind its back. There has been 1.30 no coordinated decision on the part of all governmentsto give ... - law enforcement the mandate to investigate and prosecute - - 1.20 money laundering ruthlessly-the key to a winning strategy 5/29 615 6112 6119 6126 713 7110 7117 in the battle against drug addiction.

EIR July 26, 1996 Economics 7 we Business Briefs

Economic Policy understandable, and we are already taking in a region plagued by instability ahd we the necessary preventive measures. I mean, cannot have a rich country in a region of China's President seeks we have been working to gradually reduce poverty. " return rates, limit borrowing only to refi­ Velayati stressed the importance of 'new economic order' nancing. " swap transactions with oil-producing coun­ As to a banking crisis, Livshits said, "I tries, whereby they supply Iran, and Chinese President Jiang Zemin called for a do not think that such a reality exists. We "Iranian crude is exported from Kharg'Is­ new world economic order, in speeches in hope that the Central Bank is monitoring land to consuming markets in the name of Ethiopia and Kazahkstan. On May 13, he the situation and by means of preventive these countries. " These arrangements can told the Organization of African Unity, measures will nip the danger in the bud. " save the newly independent states costs of meeting in Addis Abeba, Ethiopia, that Livshits called himself "an ardent cham­ pipelines, in the initial phases of develop­ China and Africa must look toward the fu­ pion " of opening the Russian government ment, earning them financial resources ture, the China Daily reported. China and bond market to foreign investors. which can then be invested in their eco­ Africa should join hands to establish at an Given the low level of tax collection nomic development. Similar cooperative early date, a just and equitable new interna­ and his plan to issue state credit only for schemes involve transporting Turkmenis­ tional political and economic order, based on refinancing, he was understandably vague tan's natural gas to Europe via Itan; using the "fiveprinciples of peaceful coexistence, " about making good on promises to wage­ it in northern Iran at the Neka Power Plant; to advance world peace, development, and earners and pensioners. He said that the Iran's participation in the Azerbaijani Shah progress. situation with pensions was "much worse " Deniz Oil Consortium; transmission of Ira­ Jiang said, "China steadfastly supports than with wages. The state pension fund has nian natural gas to Nakhichevan and Arme­ African countries in their efforts for eco­ a deficit of 7 trillion rubles ($1.4 billion). nia, thence to Georgia and Ukririne; and nomic development, and will continue to He suggested that persons born in 1917-21 swaps of Khazakhstan oil. provide, within its own means, government might begin to be compensated for their assistance to them with no strings attached. " savings account losses (wiped out by infla­ On July 5, in Alma Ata, Kazahkstan, tion, during the first year of "reform ") by Jiang called for immediate moves to change the end of this year. Such people are now France "the unjust and inequitable international 18 to 22 years older than the average life economic order. " He said that developed expectancy for men in Russia. countries must do away with trade protec­ 'Marshall Plan' urged tionism targetted against developing coun­ to relaunch economy tries and discriminatory trade policies. He stressed "South-to-South cooperation. " CentralAsia The Republic and Liberty group in the China is open to both developing and devel­ French National Assembly made public on oped countries, and is ready to increase co­ Iran's minister outlines June 19, an excellent proposal to relaunch operation with developing countries, includ­ the French economy. This group is com­ ing in Central Asia, "to promote common development policy posed of conservative politicians such as development and prosperity. " Jean Royer, the former mayor of Tours, and Iranian Foreign Minister Ali Akbar Velayati others from the left-wing camp of Jean­ outlined his government's policy for re­ Pierre Chevenement. The proposal was pre­ gional cooperation in Central Asia and the sented by Royer as a way to halt the huge Russia Caucasus, at the Crans Montana Forum, drop in investments in the productive econ­ held in Switzerland June 20-23. He dis­ omy, which fell from 1,067 billion francs A financial crisis cussed this in the context of "the outstand­ (roughly $215 billion) in 1991 to FF 733 bil­ ing undertaking ... the Silk Road Revival lion in 1994. Industrial investment alone, the looms, Livshits admits project. " "With actual realization of this leading edge of productive investment, project, Iran took a great leap forward in dropped from FF 223 billion to FF 175 At a July 9 press conference, Russian Presi­ opening a new window to the outside world billion. dent Boris Yeltsin's aide for economic mat­ for Central Asia and the Caucusus,"he said. "Only the state, " stated Royer, quoting a ters, Aleksandr Livshits, was asked whether The principles underlying this policy, Grenoble economics professor, "can launch "a major financialcrisis " wouid engulf Rus­ he said, are "I) national security is an in­ an investment policy which is up to par with sia this autumn. Livshits had no assurances separable part of regional peace, stability, the situation. " He cited the U. S. New Deal, to offer, replying, "We have always kept and security; 2) national security is an in­ the postwar Marshall Plan, and de Gaulle's such a possibility in mind, and we do so separable part of regional development; and infrastructureinvestment plans, as examples now, too. The governmentsecurities market 3) national development is an inseparable to follow. "From 1932 to 1939," he said, is indeed extremely sensitive.... The situa­ part of regional development. ...We know "Roosevelt, who had to face an enormous tion that we may face in the fall is quite well that we cannot have a peacefulcountry crisis-unemployment totalling 17 million

8 Economics EIR July 26, 1996 Briefly

CANADA signed an agreement to supply two 700-megawatt, heavy­ water nuclear reactors for the Qinshan U.S. workers-had launched a great-proj­ Our aim, said Romay, is simply to "put plant, near Shanghai, China, Xinhua ects plan in three steps, among them the Ten­ a ceiling on what will be allowedto increase news agency reported July 14. "This nessee Valley Authority, for instance, creat­ by only I % a year. Pay raises for public is the key agreement, finalizing the ing a fund for projects of several billion health officials will be limited to 1.5%; pay price, terms and financialconditions," dollars." for these officials is 60% of the ministry's a Canadian diplomat said. The plan calls for strengthening produc­ total budget. The government also decided tive investments through low-interest, long­ not to introduce the "dissuasive" method FRANCE'S economics minister, term credit (10- to 45-year credit at 2%) for: used in France to lower health care costs, by on July 12, announced measures to small firms, key sectors of which, such as which those insured with the public health reduce the tax burden on international machine tools, paper, and furniture, are in service must bear 30% of all medical costs banks and financial institutions based bad shape; soft infrastructure, such as hospi­ themselves. in France, and on their expatriates tals and schools; and heavy infrastructure, working in France. According to of­ including dams, canals, and completion of ficial statistics published the same 3,500 kilometers of high-speed rail lines. It day, salaries in France have fallen by calls for the Bank of France to provide 0.4% over the past 12 months after FF 500 billion over fiveyears, through a spe­ 'Free Trade' adjustment for inflation. cial facility that already exists in the Trea­ sury, to finance the program. Asian 'tiger' economies JORDANIAN Supply Minister Munir Sobar announced June 30, that run into export slump the price rises for bread (over 300%) scheduled for July 15 would not be Spain Member-nations of the Association of implemented, because of social pro­ Southeast Asian Nations (ASEAN) suffered tests, the July 1 Jordan Times re­ Anti-privatization a sharp slowdown in export growth in the ported. The increase is a demand of first four months of 1996, as the would-be the International Monetary Fund. platfonn drafted "tiger" economies are losing their "competi­ tive edge" to cheaper labor markets in China, THE NAMIBIAN Agricultural A coalition opposed to the government's India, Vietnam, and Burma, the July 13 In­ Union is seeking internationalhelp to plan to privatize public health services, has ternationalHerald Tribune reported. Singa­ address the financial problems of the stalled such plans. The newly formed group pore and Malaysia have been particularly country's agricultural sector, the July includes the Communist and Socialist trade hard hit by a slump in the world electronics 10 South African Mail and Guardian unions, and groups such as the Association market, in which they had concentrated sub­ reported. The NAU said that few to Defend Public Health Care, Spanish Con­ stantial manpower and resources. Hewlett commercial farmers would survive federation of Parents of Schoolchildren, and Packard announced July 10 that it will close without subsidizing interest rates. the State Confederation of Consumers. Their its disk-drive manufacturing facility in Pe­ The number of beef cattle has de­ platform says that the government's recent nang, Malaysia's "Silicon Valley," while clined by 56%, from 2 million in decree introducing "new forms of manage­ Singapore "restructured" more than 7,000 1955, to 870,000 in 1995. ment" to rule the public hospitals, is in fact jobs in 1995. a pretext for cutting off public financingand Thailand is the hardest hit, with a $6.4 AMSCHEL ROTHSCHILD, heir turning private insurance firms into the real billion increase in its foreign trade deficitin apparent of the London merchant bosses of the system. the last two years. Bangkok is feeling the bank, reportedly committed suicide Government fear of a strike wave like pinch of its too-small and less-skilled work­ on July 8. Amschel was the second that in France in December 1996 prompted force, and serious transport and infrastruc­ son of the late Lord Victor Roth­ Health Minister Romay Beccaria to say that ture bottlenecks. Chulalongkorn University schild, and is a half-brother to Lord state financing of hospitals would continue, recently reported that the illegal economy, Jacob Rothschild. Friends told the and that there is no intention of privatizing led by prostitution and gambling, is consum­ media that he was not depressed. the service. His remarks were greeted with ing manpower and development resources at skepticism by all political tendencies, El a rate greater than the annual budget of the MILK production in the 22 top milk Pals reported on July 9. Cuts, he said, will country. producing U.S. states (which account be borneby "the laboratories, the pharma­ The challenge, the paper said, is to for 86% of U.S. milk produced) de­ cies and the public health bureaucrats." "climb the ladder of industrialization by up­ clined 0.3% in the firstquarter, com­ When the new governmentfirst saidinvest­ grading skills and attracting increased in­ pared to 1995, the InternationalDairy ment in hospital infrastructure would be vestment in manufacturing plants." How­ Foods Association reported on June stopped, they were told that the public hospi­ ever, ASEAN's targets are for full trade 13. Skyrocketing feed-com prices tals are "falling to bits" and that the "high liberalization and tariff reduction by 2003, have forced a 0.83% cut in herd size. technology" was high-decades ago. which will worsen the situation.

EIR July 26, 1996 Economics 9 �III& Special Report

Britain's 'Dope, Inc.' grows to $521 billion by Dennis Small

e war on drugs can be won. T;There is no need to raise the white flag of surrender and f f \ i tolerate legalization. There is no reason to accept yet another It is demonstrably generation of American youth being I' turned into blank-stared, lost souls. the case that We don't have to watch any more powerful Third World nations sink into the slavery of drug-producing dic­ oligarchical tatorships. And we need not, and fmancial interests, must not, allow the world financial system to remain addicted to-and centered in Great governed by-blood money from the Britain, run the drug trade, just as a heroin addict is hooked on smack. drug trade today, The apparatus which runs the international drug trade-or Dope, from the top Inc., as Lyndon LaRouche and asso­ down, as they ciates have called it for nearly two decades-is an entity which can be have for centuries, known, profiled for weaknesses, pub­ almost as if it licly identified, and destroyed by con­ certed action carried out by cooperat­ were a single, ing sovereign nations. multinational That is the single, most important conclusion to be drawn from .the firm. detailed information and analysis pre­ sented in the pages that follow.

Does the Queen run drugs? Shown here is the cover graphic to Who is behind Dope, Inc.? Does Dope, Inc.: Britain's Opium War against the Qu een of England really run the United States, the book drugs, as people often ask LaRouche which exposed the British • in shocked disbelief? No more than Crown forces behind the Adolf Hitler kj\led millions of inno­ drug trade. cent people. Neither of the two com-

10 Special Report EIR July 26, 1996 mitted the crime personally, with their own money, and the entire speCUlative system FIGURE 1 hands-at least, not as far as can be proven. will implode, more or less overnight. But, in both cases, it is their policies, their It is this, above all, which is the driving Total value of world drug intentional policies, which fit the force behind the British sponsorship of drug sales, 1985 and 1995 Nuremberg Tribunal's criteria of "knew or trafficking, and their use of supranational billions $ should have known" what the deadly conse­ institutions such as the International $521 quences of their actions would be, which are Monetary Fund and the United Nations, to $500 responsible for massive crimes against impose economic policies which promote humanity. the drug trade. $132 In the case of drugs, it is demonstrably 400 Dope, Inc. doubled in the case that powerful oligarchical financial a decade interests, centered in Great Britain, run the trade today, from the top down, as they have The yearly "take" from illegal narcotics 300 for centuries, almost as if it were a single, can be conservatively estimated at $521 bil­ $259 multinational firm-thus the sobriquet, lion in 1995, a 10 I % increase over the $259 $48 200 "Dope, Inc." As we document below: billion of a decade earlier (see Figure 1).

• The British Commonwealth and other The sales revenues come from four principal countries under the British imperial thumb drug categories: 100 account for 94% of all licit and illicit opium Heroin, which quadrupled from $30 bil­ production in the world today, which is the lion in 1985, to $122 billion in 1995, has source of deadly heroin. Historically, opium over 5 million addicts worldwide, most of has been the British drug par excellence. whom are located, not in the United States o 1985 1995 • In Colombia, the linchpin country in or Europe, but in the producer nations (for the world cocaine trade, the narco-dictator­ example, Pakistan), where 70% of world ' Synthetics • Marijuana' ship of Ernesto Samper is being buttressed heroin consumption occurs. Cocaine Heroin in power, against the Clinton administra­ Marijuana, still the "drug of prefer­ • tion's escalating pressure, by the British ence" in the United States, where over 10 • including hashish.

House of Lords, whose members describe million people use it yearly, has more than Sources: NNICC; INCSR; DEA; UN; OFECOD, Peru; Samper's Colombia as a "model democra­ doubled, from $79 billion in 1985, to $163 PGR, Mexico; ANF, Pakistan; NALA; Abt Associates; NORML; EIR. cy." And British government officials, such billion in 1995. Marijuana has been, and as Trade Minister Richard Needham, rub it remains, the "gateway" drug, which has in by snootily commenting to the media in introduced an estimated 72 million tively steady over this period, grew from Colombia on the subject of U.S. concern Americans into experimenting with illegal $102 billion in 1985, to $104 billion in over drugs: "That is their problem." drugs. 1995. This is because the physical output of

• Belize, the British Commonwealth Cocaine, whose dollar value was rela- the drug grew significantly over the decade nation which borders on Mexico, plays a critical role in the transshipment of Colombian cocaine up through Mexico into FIGURE 2 the United States. The narco-terrorist Total value of world drug sales Zapatista National Liberation Army in the billions $ adjacent Mexican state of Chiapas, was manufactured by British intelligence to aid $600 in this and related projects. $521 • Most significant of all, the British 500 directly control an estimated 52% of all dirty-money-Iaundering operations global­ Synthetics 400 ly-which is the actually the controlling force behind the international drug trade, as we show in the pages that follow. 300 Those yearly proceeds from the drug trade, totalling an estimated $521 billion in 200 $189 1995, are supplemented by some $200 bil­ lion from tax evasion, $125 billion from 100 flight capital, $100 billion from illegal gam­ bling and prostitution, $100 billion from contraband commodities, and $70 billion o from the illegal weapons trade, to add up to 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 a trillion-dollar-per-year flow of dirty • including hashish. money. This is the crucial margin keeping Sources: NNICC; INCSR; DEA; UN; OFECOD, Peru; PGR, Mexico; ANF, Pakistan; NAtA; Abt Associates; the global speculative bubble afloat-all $75 NORML; EIR. trillion of it. Cut off that flow of laundered

EIR July 26, 1996 Special Report 11 •

(by about 104%), but this was nearly offset However, it would be a serious mistake to Fi rst, the data used in this study, and by an equivalent drop in the average price conclude from this that the drug problem is reflected in the graphs, do not include infor­ per gram of cocaine on the streets of both somehow leveling off. Rather, what is going mation on Russia, or other states of the for­ the United States and Europe. on is a period of relative consolidation, mer Soviet Union or of the East bloc. The Synthetic drugs, such as methamphet­ preparatory to a new take-off stage in pro­ reason is that data on this area are simply not amines, PCP, and LSD, also grew sharply, duction, consumption, and the value of total available, neither publicly available, nor, from $48 billion in 1985, to $132 billion in sales-a trend which is already visible in the according to high-level law-enforcement 1995, a near tripling in the lO-year inter­ figures for the last two years. In other words, sources, even privately available to the U.S. val. what we are seeing is a classic "S-shaped" government. And yet, it is universally Although the dollar value of the drug function, whose stage of relatively slower acknowledged that, since 1989-91 especial­ trade doubled over the last decade, Figure 2 growth has already ended, as the curve ly, there has been an explosion of drug con­ indicates that this wasn't an even process: It accelerates back upwards. sumption and production in the region, most grew more rapidly in the first half of the There are two principal reasons for this notably in the former Soviet republics of decade than it did in the second half. conclusion. Central Asia. In fact, this has been Dope,

conservative side. The single most comprehensive, and EIR's methodology consistent time series for much of this data is provided by the U.S. government's and assumptions National Narcotics Intelligence Consumers Committee (NNlCC), a multi-agency task force which includes ' the Drug Over the past two decades, EIR has conduct­ Office of National Drug Control Policy Enforcement Administration (which chairs ed a number of in-depth investigations of the (ONDCP), entitled "What America's Users the group), the Federal Bureau of size of the international drug trade. Although Spend on Illegal Drugs, 1988-1993," "drug Investigation, the Department of the the current study is by far the most detailed users often misrepresent their drug use Treasury, the U.S. Customs Service, the and systematic to date, each of these has when interviewed. . . . Those who are U.S. Coast Guard, the Department of State, addressed the matter from the same vantage reached probably have an incentive to mis­ the Department of Defense, the Internal point: that Dope, Inc. functions like a single, represent their consumption." No amount Revenue Service, the Central Intelligence unified, multinational corporation, whose of sophisticated mathematics and complex Agency, the National Institute on Drug various production, processing, transporta­ regression analyses can make up for flawed Abuse, the Immigration and Naturalization tion, distribution, sales, consumption, and assumptions and methodology: It only Service, and the Office of National Drug money-laundering phases are centrally coor­ makes the problem worse by convincing Control Policy. dinated to a single purpose. the gullible layman that it is somehow "sci­ The NNICC produces an annual report We therefore discard as misleading, and entific." which presents a range of probable hectares inaccurate, all "demand-" or consumption­ And what of the rest of the world out­ under cultivation for each of the major drug based approaches, whose implicit assump­ side the United States, where even less is crops: coca, marijuana, and opium. These tion is that the "aggregate demand" for known about consumption, and such sur­ estimates come from aerial surveys, on-site drugs by a collection of autonomous indi­ veys are non-existent? What of the millions inspections, country reports, and other data. viduals, "causes" drugs to be produced, of unsurveyed heroin "consumers" in They then multiply their area figures by presumably by a collection of equally Pakistan, Afghanistan, or Thailand? How estimated yields per hectare, which pro­ autonomous producers who only associate are we to judge Dope, Inc.'s role in such vides an estimated range of output in ton­ after-the-fact into various criminal cartels. areas of the world? nage. In most cases, EIR has used the high� In this view, money laundering is merely By its very illegal nature, Dope, Inc.'s er value of the range under consideration, an epiphenomenon, and drug bankers are size and activities are not directly reported. since it seems most Hkely that some of the only the occasional bad apples who are However, one can obtain a far more accu­ drug crop escapes detection. In specific corrupted by the producer cartels. rate-if still not precise-reading, by ana­ cases where other data were available for Even the most thorough of such "con­ lyzing the physical economy of the drug cross-checking, the higher figures were in sumption" -driven approaches inherently production process, and estimating what fact borne out as the more accurate. Also, underestimate the actual scope of the drug the annual value of the total physical output where official data weresubsequently mod­ problem, and vastly so, probably by a full of the drugs would be,were they fully mar­ ified by new estimates for either area culti­ order of magnitude. For example, the keted at retail street prices. In using this vated or yields, the modifications almost National Household Survey on Drug Abuse approach, EIR has made use of official data always increased the earlier estimates. (NHSDA), the most comprehensive survey provided by numerous governments, as In some cases, additional physical pro­ of drug use in the United States, depends verified and corrected by direct EIR con­ duction data were obtained from the year­ on responses to surveys from purported sultation with knowledgeable sources in ly In ternational Na rcotics Control drug users. But, as the private consultants various drug-producing countries. We are Strategy Report (INCSR), published by Abt Associates admit, in their extensive convinced that our global findings about the U.S. State Department, which has 1995 study prepared for the White House the dimensions of Dope, Inc. err on the more detailed country studies than the

12 Special Report EIR July 26, 1996 lnc.'s principal "growth market" over the times greater than what was reported for The second consideration behind our "S­ last five years. When data finally do become 1988. Actual output didn't grow that much shaped" curve hypothesis, has to do with available as to what has been happening in one year. What happened is that systemat­ Dope, Inc. 's deliberate pricing policies. over thi�·period, there is no question but that ic surveillance fl ights were conducted for If ever there were any doubts about the the total& for 1990-95 will have to be adjust­ the first time during that year, and Mexican cartel-like nature of Dope, Inc., the next ed upwaJids accordingly. If unchecked, it fur­ and foreign law-enforcement agencies dis­ three figures should put them to rest. When thermor!; portends an ominous, exponential covered that they had been sitting on a cocaine (and especially crack cocaine) was leap over the next few years in all drug­ mountain of marijuana, undetected and out first introduced into the U.S. market, its related parameters in this strategically criti­ of contro!. price was so high ($640 per pure gram in cal region .. The world will shortly discover some­ 1977) that there was not much of a market There is a precedent, on a far smaller thing similar regarding Russia and other for­ for the drug. Dope, Inc. then employed a scale, for this type of phenomenon. In 1989, mer Soviet countries: The problem there is classical marketing technique, taken from a official marijuana production figures for already probably an order of magnitude Harvard Business School manual: They Mexico were announced that were twelve greater than anyone has dared to imagine. deliberately slashed the price of their "prod-

NNICC annual report. example, is significantly different in these 33% in 1985, dropping to 20% in 1995, If one starts with such figures for total three markets (local, United States, and based on DEA and National Organization potential qop output, based on the amount Europe). for the Reform of Marijuana Laws sown or cljltivated, one must then subtract With this determined, the amount avail­ (NORML) information; U.S. sinsemilla the amount eradicated before the crop is able for sale in each market was multiplied equals 25% of the total crop in 1983, rising even harve$ted. In the case of marijuana, by the respective average retail street sale to 40% in 1995; Mexico production and this is quite substantial; with coca and price for each drug (taking into account eradication as per INCSR, NNICC, and the opium, less so. This leaves the total amount variations in purity from yearto year). This Office of the Attorney General (PGR) of harvested, or the total production of the raw then yielded the total value of potential Mexico, with the exception of the period FJlIlJerial of th� drug in question. Then, sales of that drug per market, which was prior to 1989 (see text of article on marijua­ standard conversion ratios are applied for reaggregated to give world totals. na for detailed explanation); all other coun­ the !J:espective refining processes, taking U. S. retail prices for marij uana, tries' production and eradication as per into account variations both over time, and cocaine, and heroin were obtained and NNICC and INCSR; on hashish, quantities from one country to the next. For example, - cross-checked among various sources, as per NNICC and the National Alliance of 10 kilograms of opium yield 1 kilogram of including NNICC (using the median value Lebanese Americans (NALA) for Lebanon, refined pure heroin-pretty much across of the range they report), Abt Associates, with retail price assumed equal to that for the board. In the case of cocaine, back in and others. It should be noted that price and sinsemilla marijuana in the same year. the mid- 1980s, it took about 500kilograms purity information are the only data gener­ Heroin: production and eradication data of coca leaves to pro<;luce 1 kilo of pure ated by the methods of street samples and as per NNICC (median value) and INCSR; cocain.e HCI; whereas in the 1990s, the surveys, which are relatively reliable. percentage of total opium that is converted to productivity improved, and it now requires In the case of Europe, no similar time heroin is based on INCSR and other country only 333 kilos of leaves to produce a kilo series currently exists for any of these sources, including NALA and Pakistan's of coyaine, according to official estimates. drugs. EJR developed the first such pub­ Anti-Narcotics Force (ANF)(in Burma, 20% In this way, we generate a time series of lished series of which we are aware, based in 1980, rising to 70% in 1995; Laos 50% in the physical amount of output of each of on partial data for a half-dozen European 1980, rising to 80% in 1995; Thailand 100%; the refined drugs. From that amount, one countries, made available in various United China 50%; Afghanistan and Iran, 50% in must subtract the amount lost to seizures Nations study documents. Other empirical 1 980, rising to 85% in 1995; Pakistan 70% worldwide, which leaves a net amount studies of purity levels of drugs sold in in 1980, rising to 100% in 1995; Lebanon which is potentially available for sale. We Europe were then applied, to develop a sin­ 100%; India 10% in 1980, rising to 50% in say "potentially," because there is no way gle series for the estimated price per pure 1995; and Mexico, Colombia, and of determining whether the entirety of this gram of cocaine and heroin. Those findings Guatemala 100%); local or regional con­ amount is actually sold in a given year, or are presented in the graphics that follow. sumption of heroin as per INCSR, UN, and whether some of it is lost to spoilage, or is More specific assumptions and estima­ country sources; of total Southeast Asia stockpiled for use in subsequent years. But tions employed in the calculations are as exports, assume 75% shipped to the United as a trend, it is the best available indicator follows: States, and 25% shipped to Europe; of Dope, Inc.'s marketing process. Cocaine: quantities of production as per Southwest Asia exports 25% to the United EJR then determined, in broad terms, NNICC, and Peru's Executive Office of States, and 75% to Europe; lbero-America how much of the total net production was Drug Control (OFECOD); U.S. sales prices exports 100% to the United States; prices in coQsumed locally in the producer countries, 1977-80 from NNICC, 1981-95 from Abt the United States and Europe as explained and,how much was exported, differentiat­ Associates. above; local price of heroin assumed to be ing tbe share which went to each of the Marijuana: U.S. eradication as per 10% of the current Europeanprice. majQr export markets (the United States Drug Enforcement Administration (DEA) Synthetic drugs: this is fully explained and Europe). This breakdown is necessary, data, and quantities of production were in the article below on synthetics. becaustl the price of cocaine and heroin, for estimated based on an eradication ratio of -Dennis Small

EIR July 26, 1996 Special Report 13 from 85 tons in 1977, to 560 tons in 1995 tons to 933 tons (a factor of more than 10). FIGURE 3 (see Figure3). Cocaine: price vs. Furthermore, world cocaine production is The identical marketing strategy was now set for another quantity produced, take-off stage after a few repeated for Europe a few years later, with years of relative stagnation, as we document U.S.A. and Europe equal success. The European street-sale in the section on cocaine below. $ per pure gram tons price of cocaine has closely followed the It should be noted that Dope, Inc. has U.S. trajectory down, with a phase differ­ engaged in similar marketing tactics for $700 700 ence of a few years: It dropped from $493 heroin: From 1980 to 1995, the u.k price per pure gram in 1983, to $180 today. Not per pure gram was cut by more than half and 600 600 surprisingly, the quantity shipped for sale in the European price by two-thirds, while pro­ Europe rose too, from next to nothing in duction rose sixfold. 500 500 1979, up to 373 tons in 1995. In fact, as A war-winning strategy Figure 4 shows, Europe's estimated share of 400 400 world cocaine sales has been steadily rising, The LaRouche movement has been at and today stands at about 40% of the world war with Dope, Inc., and its British spon­ 300 300 total. This parameter also does not take into sors, for nearly two decades. The first salvo consideration the opening up of the eastern was our 1978 publication of the best-seller 200 200 European market, which will further shift Dope, Inc. : Britain s Opium Wa r Against the the proportion in the years immediately United States. That was followed by the 100 10 ahead. founding of the National Anti-Drug Back in 1990, EIR had already warned of Coalition and its magazine Wa r on Drugs; 0 o exactly this danger, in a feature story on the by numerous exposes and feature stories in 77 79 81 83 85 87 89 91 93 95 drug trade. "Dope, Inc. is now engaged in a EIR; by two additional English-language - Europe price - U.S. price vast expansion of its markets in Europe and editions of Dope, Inc.; and by a Spanish-lan­ Japan, which, if not checked, will do to their guage edition, called Narcotr6.jico, SA, - Europe quantity - U.S. quantity youth, their cities, and their economies what which was so provocati ve to the drug Sources: NNICC; UN; OFECOD. Peru; Abt has already been done to ours in America," bankers that it was banned in Venezuela Associates; EIR. we forecast. (and almost banned in Peru). If one looks at the global pattern, as We take this opportunity, of the publica­ uct" in order to increase the volume of pur­ reflected in Figure 5, one sees how success­ tion of this EIR Special Report, to announce chases. It worked for Henry Ford's "Model ful Dope, Inc. 's strategy has been: World that EIR will be releasing a new, updated edi­ T," and it worked for Dope, Inc. As the U.S. cocaine prices dropped from $640 per pure tion of the book Dope, Inc., in both English price was reduced down to $135 per pure grarn to $150 per pure gram between 1977 and Spanish editions, in the next few months. gram in 1995, the quantity of cocaine and 1995 (a decline by a factor of 4.3), while We intend it as a battle manual to put Dope, shipped to the United States for sale, shot up the quantity produced skyrocketed from 90 Inc. out of business, once and for all.

FIGURE 4 FIGURE S Cocaine: share of world sales, Europe vs. U.S.A. Cocaine: world price vs. % of total quantity shipped quantity produced 100% $ per pure gram tons $1 ,100 1,100 1,000 80% 900 800 800 60% 700 600 500 500 40% 400 400 300 300 20% 200 ' 100 90 0 0 0% •••• 77 79 81 83 85 87 89 91 93 95 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95

- Price -- Quanity • Europe � U.S.A. Sources: NNICC; UN; OFECOD. Peru; Abt Associates; EIR. Sources: UN; Abt Associates; EIR.

14 Special Report Em July 26, 1996 Cucaille students. Similarly, the NNICC annual sur­ vey for 1994 reports: "Survey results for 8th and 10th graders indicated an increase in all cocaine use categories from 1993 to 1994." Production set for So, is cocaine consumption falling or rising? Or, is it falling rapidly among adults, while rising swiftly among adolescents? a new takeoff stage The actual picture of the U.S. and the world cocaine market is better approached by Dennis Small from the opposite direction: by looking at what Dope, Inc. is physically producing for market, in order to generate its gigantic is the foolishness of the stan­ hopefully that "cocaine use has fallen 30% in flows of hot money. Consumption levels are dard0'where demand-driven analysis of the the last threeyears alone." a result of that orchestrated offensive, not its drug trade more evident, than in the The data for these conclusions were cause. From that standpoint, it is evident that Ncase of cocaine. The typical official argument drawn principally from surveys of house­ the supply of cocaine has continued to grow, goes like-this: U.S. "demand" for cocaine has holds and of prison populations, where drug as has its availability in both the United been dropping-for reasons undefined­ "consumers" are questioned about their States and Europe. since about 1989-90, and as a result, hard­ habits. Reliable information? Hardly. Cocaine production: core users supposedly fell from 2.6 million Not surprisingly, such surveys also pro­ to an as-shaped' curve 2.1 million. during 1989-93, while occasional duce internally contradictory evidence. For users declined from 6.5 million to 4.1 million example, the same White House report Cocaine hydrochloride, commonly during the Same period. The White. House's which talks about an overall 30% drop in called cocaine, is produced from coca own showpiece publication, The National cocaine consumption, also reports a 1995 leaves. Coca plants are grown in significant Drug Control Strategy: 1996, announced increase of cocaine use among high school quantities in only three countries in the

BRAZIL

BRAZIL

I Will Coca cultivation I

I!IM Coca CUltivation

EIR July 26, 1996 SpecialReport 15 FIGURE 6 FIGURE 7 Cocaine: quantity produced Cocaine: value of production vs. tons potential sales

1,200 billions $ $250 1,000 200 800 . 150 600

100 400

50 200

o o 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95

_ Production --' Potential sales Peru III Bolivia III Colombia Sources: NNICC; DEA; UN; OFECOD, Peru; Abt Associates; EtR. Sources: NNICC; OFECOD, Peru; EtR.

world: Colombia, Bolivia, and Peru, all in originates in Peru, with sIpaller shares Court, for complicity with the subversives. the Andean region of Ibero-America. The coming from Bolivia and Colombia. These And then, in September, his government coca leaves are then converted into cocaine figures should not be misunderstood to captured the notorious Abimael Guzman, the paste, and from there into pure cocaine, imply a lesser role for Colombia in the head of Shining Path, and quickJy sentenced with the use of a variety of easily acquired overall cocaine trade: They simply indicate him to life in prison. From that point on, a chemicals, such as ether and acetone. that its local production of coca leaves is series of further devastating blows was Although these are legal chemicals that less than that of Peru and Bolivia, while it delivered to the entire narco-terrorist appara­ have valid industrial uses, they are obtained plays a larger role in downstream process­ tus across the country. illegally by the drug traffickers in large ing. At no point did the Fujimori government quantities, principally from the United As is evident from Figure 6, the sharp explicitly target the drug trade. But Shining States, western Europe, and also Brazil. decline in 1993, of almost 20% of total pro­ Path's main rural base of operation is the As Maps 1 and 2 show, there has been a duction, can be attributed totally to Peru-in coca-producillg Upper Huallaga Valley, and significant increase in the area under coca fact, Colombia and Bolivia's output contin­ the terrorists are so thoroughly integrated cultivation in the Andean region, between ued to rise throughout the I 990s. What hap­ with the Dope, Inc. apparatus, that their sup­ 1985 and 1995. Most of the coca is grown in pened in Peru is of the greatest political sig­ pression led to a serious disruption of the Peru, while most of the processing laborato­ nificance. First, there was an apparently drug trade. ries are located in Colombia. (More recently, "natural disaster" which struck the coca Dope, Inc., however, reacted swiftly, and laboratories have also been established in plantations, especially in the Upper Huallaga moved to shift significant amounts of coca the Amazon region of Brazil.) However, Valley, the heart of the producing region. As growing to other river valleys in Peru. By Dope, Inc. has woven an elaborate logistical a result of overcultivation and monoculture 1994, that diversification had led to an addi­ interconnection throughout the region, in growing patterns, soil depletion began to set tional half-dozen river valleys joining the which tens, if not hundreds, of illegal in around 1991, as did the deadly fusiarum Upper Huallaga as major coca growing cocaine flights occur daily, transporting oxyporum fungus. regions. According to informed Peruvian drugs, chemicals, and dirty money back and The second factor is referred to sources consulted by EIR, the 1994 area forth among the different production and euphemistically by the NNICC as "tumul­ under cultivation, by valley, was as follows: processing sites. tuous" political conditions in the region, and Upper Huallaga 28,900 hectares Figure 6 shows total world production as "the cumulative impact of counternar­ Aguaytfa 21,400 hectares of refinedcocaine from 1980 to 1995, which cotics efforts of all types in the Huallaga Apurfmac 17,000 hectares rose from 166 metric tons to 933 metric tons Valley," in the words of the U.S. State Cuzco 9,900 hectares over this period-a nearly sixfold increase. Department. What actually happened is that, Central Huallaga 8,500 hectares On an annualized basis, production has been over the course of 1992, the Fujimori gov­ Lower Huallaga 7,500 hectares rising at an average 12.2% per year. Over ernment in Peru launched an all-out war Ucayali 2,000 hectares the last fiveyears, that rate of growth slowed against Shining Path and other narco-terror­ Others 13,400 hectares down, largely as a result of the steep drop in ists in the country. In April of that year, In the Aguaytfa and Aprufmac valleys, production which occurred in 1993. President Alberto Fujimori summarily shut the area planted to coca grew by 20% in Over 60% of the total quantity of coca down the country's Congress and Supreme 1994 alone, according to informed Peruvian

16 Special Report EIR July 26, 1996 MAF,' 3 Cocaine-trafficking routes

CANADA ,

...... r------, .. Major cocaine producers .... Colombia (9%)

m Major producing countries Primary routes Secondary routes

1995=933 tons

Sources:NNICC; DEA; PGR, Mexico; OFECOD, Peru; EIR.

sources. But it takes a couple of years for a coca cultivation in Peru, there are an esti­ eradicated in Colombia and Bolivia, and coca plant to mature and produce viable mated additional 100- 1 50,000 hectares that none at all in Peru (see article on eradica­ leaves for cocaine production, so the new are part of Dope, Inc. 's holdings, but which tion, p. 53). production sites could not immediately in any given cycle are either fallow (in­ Since the price of cocaine in both major make up for the drop in output caused by the between cropping) or under preparation for consumer markets, the United States and Upper Huallaga problems. future planting. Europe, has been steadily dropping over the However, as the new areas have come on It is therefore probable that the relative last 15 years (as we noted at the outset of line, total Peruvian coca production began to stagnation of total cocaine production of this report), the total dollar value of the out­ rise again in 1994 and 1995, with ominous the early 1990s, will not continue as a put did not rise as rapidly as the physical implications for the future. In fact, Peruvian trend. Rather, it appears to be a momentary production. As Figure 7 shows, the total experts consulted by EIR note that the leveling off in what will actually turn out value of production rose from$76 billion in demonstrated ability to diversify quickly to to be an "S-shaped curve" which has just 1980 to $140 billion in 1995, i.e., it "only" new areas, means that Peru may well begun its second ascent stage. Nor can doubled, as compared to the sixfold increase become a super-producer of coca and poppy. much be expected in the short term from in the volume of cocaine output during that The same experts also report that, in addi­ coca eradication in any of the three pro­ time frame. tion to the 130,000 hectares under active ducer countries: Only trivial amounts are Dope, Inc., however, did not realize that

EIR July 26, 1996 SpecialReport 17 MAP 4 The Colombia-Mexico cocaine corridor

UNITED STAT ES

MEXICO

\

<> D

• Sites of cocaine drops Air routes Land routes Sea routes

Sources: PGR, Mexico; Unnorm Statistical System for Orug Control, OAS. full amount in street sales, because a signifi­ Colombia, and much of that, perhaps as have increasingly developed alternate cant amount of cocaine was seized on its much as 70%, is transshipped through routes, including using the Amazon and way to market. In 1980, this only amounted Mexico (see Map 3). other rivers to ship into Brazil, and from to about $3 billion worth, but by 1995, a Most of the cocaine crosses into the there, abroad. Similarly, Peruvian and full 26% of total production was seized, United States in southern California, Colombian Pacific Coast ports are being whose sales value would have been an addi­ Arizona, Texas, and southern Florida, and used for maritime shipments to the United tional $36 billion. So, the value of all poten­ then proceeds to the four main distribution States and, to a lesser extent, to Asia. tial cocaine sales worldwide-i.e., the total centers: Los Angeles, Houston, Miami, and (Cocaine is still not a particularly popular revenue that would accrue to Dope, Inc., if New York City. These cities in tum serve as drug in most of Asia, where it is considered they were to sell their total available the consolidation centers for the proceeds too "Western," as compared to the more cocaine production at street retail prices­ from the drug sales. Another frequent entry familiar opium and heroin.) came in at $104 billion in 1995. In 1980, point into the United States is the island of Most amazingly, there have also been the value of all potential sales was $73 bil­ Puerto Rico. cases of the use of both manned and lion. Over the last couple of years, the blows unmanned submarines to ship large quanti­ delivered to the Cali Cartel, combined with ties of drugs across the Caribbean, to wait­ Trafficking routes surveillance and interdiction cooperation ing speed boats, known as "go fast boats," Despite the rising share of total cocaine between the United States and the Peruvian just outside U.S. territorial waters. production that is now being shipped to governments, have disrupted the Peru­ In both maritime and air shipments Europe, the United States still consumes Colombia air bridge used by the traffickers directly to the United States, traffickers fre­ about 60% of the world total. Nearly all to get coca paste to processing laboratories quently conceal large quantities of cocaine the refined cocaine entering the United in Colombia, before shipment on to the in legitimate containerized cargo. States comes from the Cal i Cartel in United States and Europe. The traffickers Shipments from South America to

18 Special Report Em July 26, 1996 Europe also go both by air and by sea­ Mari"u ana although air cargo predominates. Spain, because of its historical and language ties to Thero-America, continues to be a major stag­ ing ground and transshipment center for A $150 billion chunk drugs sent throughout Europe. Another major route goes directly from Surinam, a former Dutch colony in South America, to of Dope, Inc. production the old "mother country," the Netherlands, which is an important drug consumption and by Valerie Rush and Joyce Fredman distributionhaven for all of Europe. Increasingly, cocaine is also being shipped into Russia and the other countries he number-one drug of preference in to ship (unlike cocaine and heroin, for exam­ of the former Soviet Union, as Dope, Inc. the United States is still marijuana, pie), it is more cost-effective and less risky to rapidly develops these new markets (see p. and official government surveys either grow it domestically or to transport the 46). Tindicate that themajor decline in consump­ drug to theU.S. market from nearby sources. Map 4 presents a "close-up" of the tion over the previous decade and a half has After the United States, Colombia and Colombia-Mexico cocaine corridor, through now been reversed, and that consumption is Mexico together account for another 45% of which most of the drug passes on its way to again on the rise, especially among school­ total world production. Colombian cultiva­ the United States. A tightly knit infrastruc­ age children. Law enforcement officials .are tion, which, by 1990, had been nearly elimi­ ture of narcotics trafficking now links the particularly concerned over what they call a nated altogether through eradication by two countries, which is also expressed in the "gateway effect," by which this age group is glysophate, began to climb again in 1991-92, form of close working relations between the introduced to other, still more deadly drugs. when eradication was abandoned, had a dra­ Colombian and Mexican drug cartels. That is, by crossing over into illegality matic resurgence in 1993, and has been Historically, the Colombian mafia used through use of a banned substance, these steadily climbing ever since, surpassing even twin-engine general aviation aircraft to children become increasingly vulnerable to Mexican productionin the last yearor two. transport cocaine from Colombia, up the physical, psychological, and financial As Map 6 shows, the bulk of Colombian through Central America (often with a stop addiction of the narcoticsnetherworld. cultivation is concentrated in the northern in Guatemala), and on into Mexico. In What is this so-called "recreational drug," Sierra Nevada region, and in the Serrania de recent years, however, they have increasing­ which its pushers would have us legalize, Perija in thenortheast, a nO:man's-landdomi­ ly turnedto jet cargo, passenger aircraft, and putting it in thesame category as alcohol and nated by narco-terrorist bands along the even full-size commercial jets loaded with tobacco? Marijuana is the flowering tops and Colombian-Venezuelan border. Current esti­ cocaine, which are landed on remote clan­ leaves of the CafllUlbis sativa L plant, which mates are that at least 5,000 hectares are destine airfields in Mexico, and then simply are gathered, dried, and smoked in a pipe or under marijuana cultivation, with a potential discarded. cigarette, or in combination with tobacco or yield of 4,133 metric tons annually. Another relatively recent innovation of other drugs. Boththe plant, and the psychoac­ Because of the consolidation of financial Dope, Inc. is the extensive use of air-drops tive chemical delta-9-tetrahydrocannabinol and political poWer by the cocaine cartels in of large, sealed packages of cocaine into the (THC) found most densely in its flowering Colombia during the past decade, marijuana waters surrounding Mexico. Here again, tops, are considered "controlled substances," trafficking is no longer an independent affair. waiting "go fast boats" pick up the cargo that is, their consumption is illegal. Two other Combined shipments of Colombian marijuana and take it ashore, where it is transported by substances are derived from the cannabis and cocaine are now making their way north­ land up to the border with the United States. plant, hashish andhashish oil, which contain a ward to Mexico, by boat and air, through both Note the two areas of greatest density of higher THC content than marijuana, but Pacific and Caribbean routes, andthence across such air drops: which do not have a significantU.S. market. the border into the United States. Although • the Gulf of Mexico coast off the most of Colombia's marijuana heads north to WorkI Isthmus of Tehuantepec, where most of production Mexico, the United States, and Canada, multi­ Mexico's offshore oil platforms arelocated, Although cannabis is grown around the ton shipments have also been seized inwestern andwhere there is consequently a significant globe, from South America to Asia, from the Europe in recent years, enteringlargely through amount of related onshore ground trans­ Middle East to Africa, the United States has Germany and the Netherlands. portation, construction, and so forth; and become in the past decade the single largest In Mexico, marijuana cultivation is largely • the Caribbean coast off the Yu catan grower of marijuana in the world, contribut­ concentrated in the western states of Sinaloa, Peninsula and the nation of Belize, a mem­ ing an estimated 34% to total world produc­ Nayarit, Michoacan, Sonora, Jalisco, Oaxaca, ber of the British Commonwealth which tion in 1995 (see below). and Durango. Mexico's so-called "golden tri­ plays a crucial role in coordinating both The bulk of marijuana consumed in the angle" of marijuana (and poppy) cultivation drugs and terrorism in southern Mexico. United States is also produceddomestically. As extends from Badiraguato in Sinaloa, to This cocaine is then transported overland of 1995, EIR estimates thatat least 50% of all Tomazula in Durango, to Guadalupe Y Calvo, through southern Mexico, in particular marijuana consumed in the United States was in Chihuahua (see map). Although the bulk of through the state of Chiapas where the domesticallygrown, with the rest coming from Mexican marijuana is of commercial grade, British-sponsored Zapatista narco-terrorists Mexico, or through Mexico from points further the more potent sinsemilla has been on the are active, and northwards to the United south, primarily Colombia (see Map 5). increase here, too, since 1992. It is estimated States. Because marijuanais a relatively bulky product that Mexico currently has neady 7;000

EIR July 26, 1996 SpecialReport 19 MAP S Marijuana. and hashish.trafficking routes

(from the Philippines) (to U.S.) . ."

Major producing areas tEl Marijuana II!i Hashish

1995=17,450 tons

Sources: NNICC; INCSR; DEA; NORML; PGR. Mexico; EIR.

hectares under cultivation, with a potential gle year, but only that new technologies were The precipitous drop in Thero-American annual yield of 3,650 metric tons. Apart from applied to detection and that new methodolo­ marijuana production after 1989 stems from a what is domestical ly consumed, most of gies of calculation were introduced. But they combination of adverse climate conditions Mexican marijuana is smuggled into the have not altered their own earlier discredited and aggressive eradication, principally in United States, largely via overland routes. figures to reflectthese changes. Mexico, in the aftermath of the new findings. As shown in Figure 8, combined lbero­ EIR has done so, on the following basis. Other producers in Ibero-America American production (largely Mexico and What occurred is that systematic aerial sur­ include Jamaica (206 metric tons annually), Colombia) accounts for an estimated 9,700 veillance over Mexico was conducted for the Paraguay (2-2,500 metric tons annually), metric tons, out of a world total of 17,450. first time in 1989, as a result of agreements and Brazil. Most of Jamaica's production The United States accounts for about 6,000 reached between the Mexican government goes to the United States via Florida and the tons, and Southeast Asia another 1,750 tons. and the DEA. They discovered that they were East Coast. Although Brazilian production The informed reader may recognize that sitting on a virtual mountain of marijuana, levels are substantial, no offical estimates of the total Ibero-American production during and significantlyrevised Mexican production hectareage or tonnage currently exist. 1980-88 is far higher than theofficial statistics estimates upward. Those overflights yielded Brazilian marijuana exports are minimal; the reported by either the Mexican governmentor new information on the average size of fields bulk of production is consumed domestical­ the U.S. Drug Enforcement Administration under cultivation, as well as a new method ly. Paraguayan marijuana is also intended (DEA), both of which report a dramatic 12- for calculating production. So, the dramatic for domestic consumption, or for the market fo ld leap in the number of hectares of marijua­ peak in 1988-89 of quantity produced repre­ in neighboring Brazil and Argentina. na harvested in Mexico in 1989, purportedly sents these revised production estimates. But In Southeast Asia, the major marijuana jumping from 4,500 hectares to 53,900 the fact is, that Mexican production through­ producers are Thailand and Laos, and hectares in that one year (see Figure 9). The out the previous period was probably closer, Cambodia to a lesser degree. Much of the official sources admit that this does not reflect and rising, to that level all along, and had just area's trade appears to be under the control of an actual increase of that magnitude in a sin- never been adequately detected. Thailand-based traffickers, who ship to

20 Special Report EIR July 26, 1996 Europe via Italy, as well as to Australia, grown in South Africaare largelyconsumed of the world's hashish supply comes from Hongkong, Singapore, and the Philippines. domestically, while Kenya is both a marijua­ North Africaand the Middle East. The Philippines is also a major producer and na grower and exporter, and a transshipment According to the National Narcotics exporter of marijuana, as well as transship­ route for hashish from Pakistan. Intelligence Consumers Committee ment point. It exports mainly to Japan, Figure 10 shows the reductions from total (NNICC), world hashish production in 1993 Taiwan, and Australia. New reports that the marijuanacultivated worldwide, dueto eradica­ (thelast year reported) was 1,150 metric tons, Philippines has risen to become the second- or tion and seizures, leaving a net available and EIR estimates that the figure for 1995 is third-largest marijuana producer in the world amount for sale ofnearly 13,000 tons. Thisis equivalent. This amount has a potential sales have not yet been confirmed. almost a 50% drop fromthe 25,800 tons avail­ value of about $22 billion. The main produc­ Nigeria is a grower of low-grade able a decade earlier in 1985. The value of the ing countries, in order of importance, are cannabis, often smuggling it into Europe via potential sales, however, did not decline simi­ Lebanon, Afghanistan, Pakistan, and Dutch ports and, increasingly, into eastern larly, because of the rising price of the drug. Morocco, which service the Mideastern, Europe. Nigerian smuggling networks have Thus, we see in Figure 11 that the value of European,and Canadian markets (hashish has constituted themselves as major traffickers potential sales haszoomed from $21 billion in never been popular in the United States). not only of marijuana, but of heroin and 1980, to$141 billion in 1995 (even after losing Egypt is one of the countries in theproducing cocaine, as well. A recent raid in Bogota, the $39 billionto seizures), a seven-foldincrease. regions which is most aftlictedwith the drug. capital city of Colombia, led to the arrests of Lebanon is the world's primary grower Hashish more than a score of Nigerians and other and processor, with cultivation centered in West Africans, all part of a Nigerian-run Although the Philippines converts a cer­ the northern Bekaa Valley, where the Syrian smuggling network which was preparing to tain percentage of its cannabis crop to Army has introduced large-scale and sophis­ transport cocaine out of the country in their hashish and hashish oil, destined for ticated farming techniques. The area also stomachs. Substantial amounts of marijuana Australia, Canada, and Europe, the majority has been a major producer of opium. Almost

EIR July 26, 1996 SpecialReport 21 FIGURE 8 FIGURE 10 Marijuana: quantity produced Marijuana: eradication and seizures thousands of tons thousands of tons

50 70

60 40 50

30 40

30 20 20

10 10

o 86 87 88 89 90 91 92 93 94 95 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 , Eradication" • Seizures • Net available Ibero-America • Southeast Asia • U.S.A.

• Colombia, Mexico, and U.S.A.

Sources: NNICC; INCSR; DEA; NORML; PGR, Mexico; EIR. Sources: NNICC; INCSR; DEA; NORML; PGR, Mexico; EIR.

all of the cannabis grown in Lebanon is con­ Lebanese hashish and heroin proceeds (in part African and European countries. Over the last verted to hashish. According to a 1994 based on refining Central Asian opium) have year, Moroccan producing and trafficking report of the NNICC, "Most of the cannabis­ accounted for a significant amount of Syria's organizations have been hit with a series of growing region in Lebanon remained under income. Most Lebanese-produced hashish is huge seizures and arrests, indicating that its Syrian Army control." shipped through Syria, on its way to Europe, role as a supplier of Europe may soon decline. Although Lebanese hashish production is Canada, and the Arabian peninsula. Pakistan and Afghanistan are significant an ancient practice, it underwent massive Morocco is another cannabis grower, and producers of hashish. While a substantial expansion following Syria's 1977 invasion while an estimated 15-40% is used domestical­ amount of their hashish goes to Canada and and occupation of Lebanon, in the midst of ly, the rest is converted to hashish for export western Europe, a growing percentage is mak­ the Lebanese civil war. Since that time, through the Iberian Peninsula to other North ing its way into Russia and eastern Europe. Reports of significant marijuana cultivation and export from the states of Turkmenistan, FIGURE 9 Marijuana in Mexico: the official version Uzbekistan, Kyrgyzstan, Tajikistan, and Kazakhstan cannot be confirmed, due to a thousands of hectares lack of data from or on these areas. 75 The Dope, Inc. trafficking network used to transport heroin from the Golden Crescent, also is used to traffic in hashish. 60 As with heroin, the land route proceeds through Iran and Turkey, reaching western Europe via the Balkans. 45 Made in the U.S.A.

The fact that the United States is both the 30 largest consumer and largest producer of a drug that has been proven to be of the utmost danger to its population, is a shock­ 15 ing reality that needs to be understood by the American citizenry. Besides the social and economic consequences, it immediately 86 87 88 89 90 91 92 93 94 95 shatters the myth that all U.S. drugs are imported from drug-producing nations in the • Eradicated • Harvested Third World, which are "the cause of the

Sources: NNICC; INCSR; PGR, Mexico. whole problem." It shows, instead, that Dope, Inc. is an integrated world cartel

22 SpecialReport EIR July 26, 1996 that in 1994, some 50% more 12-17-year­ olds went to the emergency room for smok­ ing pot than in 1993. As noted, most ofthe mari juanaconsumed in the United States is produced at horne. In recentyears, U.S. production has undergone a virtual revolution. Although there are no offi­ cial numbers on production, different esti­ mates can be made based on the figures for marijuana eradication, which are available from the DEA. Not surprisingly, thereis a dis­ parity in the approach, depending on the source. The DEA, for example, estimates that what is eradicated accounts for 50% of what is planted. The National Organization for the Reform of Marijuana Laws (NORML) and the Drug Policy Foundation on the other hand, representing the pro-pot lobby, say it is much more likely to be only 15% of the total. EIR believes the truth lies somewhere between thesetwo extremes, perhapsat aboutone-third of the total crop. Everyone concedes, however, that it is which simultaneously controls the produc­ high school (16.9% versus 28.2%)." America's number-one cash crop. Even con­ tion, distribution, consumption, and money­ And the White House's Office of servative estimates put it undisputedly in laundering phases of the total drug cycle. National Drug Control Policy's latest first place. For example, take the value of Marijuana is today the laIEest cash crop of "Marijuana Situation Assessment" study the top six legal crops for 1992, according to the United States, whose potential street sale reports "alarming indicators that marijuana the U.S. Department of Agriculture: value in 1995 was an estimated $77 billion. is increasing in popularity, particularly Corn $17.8 billion Less than one year ago, the National among teenagers." Even worse, "the mari­ Soybeans $10.8 billion Household Survey on Drug Abuse released juana is at least 10 times more potent than it Hay $10.5 billion their 1994 results, and announced that drug was 10 years ago." Wheat $ 8.1 billion use has increased markedly among the The potency of marijuana is determined Cotton $ 4.0 billion nation's youth, particularly the consumption by its percentage content of THC, the main Tobacco $ 3.1 billion of marijuana. For example, according to the psychoactive chemical it contains. There are report (which probably significantly under­ two kinds of marijuana grown in the United estimates consumption), in an average States, commercial grade and sinsemilla month in 1994, some 13 million Americans (seedless), of which the latter has substan­ used illicit drugs. Of these, 10 million used tially higher THC content, and today sup­ marijuana, making it by far the most com­ plies over one-third of the domestic market, monly used illicit drug. Even worse, up from about 20-25% in the early 1980s. between 1992 and 1994, the reported rate of The THC content of bothkinds has been marijuana use among youths 12-17 years old rising significantly over the years, thanks to nearly doubled, from about 14% to 22% of genetic manipulation. This partially accounts the total age-group population. for the significant increase in the street price Other studies report similar findings. In of marijuana (Figure 12). Although commer­ its most recent annual survey (November cial grade marijuana prices have been rela­ 1995), the National Parents' Resource tively steady since 1991, the cost of sinsemil­ Institute for Drug Education reported signif­ la has continued to rise from 1980 onwards, icant increases in marijuana use by students and is currently selling in the United States in grades 6 through 12, and jumps in cocaine for an average of $550 perounce. and hallucinogen use by students in grades 9 Pot is not only more potent today; aver­ through 12. "As in recent years, marijuana age doses are also rising. One study by use increased more dramatically than any Monika Guttman pointed out, "Kids today drug in the study. One-third of high school smoke laIEer amounts than their elders did, seniors (33%) smoked marijuana in the past thanks to innovations such as 'blunts': short year, and one-fifth (21%) smoked monthly. cigars hollowed out and restuffed with pot Since the 1990-91 school year, annual or a pot and tobacco mix. Marijuana is now reported use of marijuana in junior high often laced with other drugs, as in 'primos' school (grades 6 through 8) has risen III % (with cocaine) and 'illies' (with formalde­ (from 4.5% to 9.5%) and has risen 67% in hyde)." The result of such concoctions is

EIR July 26, 1996 SpecialReport 23 Marijuana estimates for the same year, The growing business has made asignificant ant species that had been cultivated for cen­ range from $20.9 billion(NORML), to $28 bil­ shift indoors, not simply to escape detection, turies in Afghanistan by hashish producers. lion (DEA), to $76 billion(EI R). but to allow more sophisticated growing "Cannabis indica looks quite unlike the Map 7 shows the top ten pot-producing techniques. This allows growers to adjust familiar marijuana plant: It rarely grows states in the United States, according to the amount, intensity, and wavelength of the taller than 4or5 feet (as compared to 15 feet NORML. Many of these are states one nor­ light the plant receives; use computer-con­ for some sativas) and its deep bluish-green mally thinks of as agricultural giants. And trolled irrigation; and adjust the nutrients the leaves are rounded, rather than pointed. But yet, in Kentucky, in 1992 the marijuanacrop roots receive. Ceramic heaters are used to the great advantage of Cannabis indica was was worth about $2.280 billion (NORML), warm the roots, and sodium lamps give that it allowed growers in all 50 states to cul­ while tobacco brought in only $955 million, them light for extended hours. ti vate sinsemilla for the firsttime." hay $375 million, com $312 million, and Moving indoors has encouraged not only Pollan wrote that, at first, the new plants soybeans $209 million. these advanced cultivation strategies, and were grown as purebreds. "But enterprising When the Cannabis Cup, a convention permitted year-round growing, but has also growers soon discovered that by crossing and festival for marijuana growers spon­ permitted an overall shift to the cultivation the new variety withCannabis sativa, it was sored by High Times magazine, took place of sinsemilla marijuana, the unpollinated possible to produce hybrids that combined last November in Amsterdam, Michael female plant. JournalistPollan explains: the most desirable traits of both plants while Pollan, writing for the New Yo rk Ti mes, "At the beginning, American growers playing down their worst. The smoother noted: "Marijuana growing in America had were familiar withonly one kind of marijua­ taste and whatI often heard described as the evolved from a hobby of aging hippies into na: Cannabis sativa, an equatorial strain that 'clear, bell-like high' of a sativa, for exam­ a burgeoning high-tech industry with earn­ can't withstand frost and won't reliably ple, could be combined with the hardiness, ings that areestimated at $32 billion a year." flowernorth of the 30th parallel. Eager to small stature and higher potency of an indi­ How is it possible that a criminal enter­ expand the range of domestic production, ca. In a flurry of breeding work performed prise of this magnitude thrives across the growers began searching for a variety that around 1980, most of it by amateurs work­ United States today? A cross-gridding of law might flourish and flower farther north, and ing on the We st Coast, the modem American

enforcement reports and sources from pro­ by the second half of the decade, it had been marijuana plant- Cannab is sativa x drug interests shows the following picture. found: Cannabis indica, a stout, frost-toler- indica-was born."

24 SpecialReport EIR July 26, 1996 of the nation-state today. Dope, Inc. is not Heroin merely a commercial enterprise, but com­ prises the very center of British imperial strategy of re-creating its old empire in a new form. To do that, the British empire Britain's Opium Wars: two must destroy powerful institutions and entire societies throughout the world. Opium and centuries, and going strong heroin are among the poisons used to that end. by Joseph Brewda Opium is a narcotic drug prepared from the juice of the unripened seed pod of the opium poppy, a flowering plant indigenous ope, Inc. came into being as global sion in the twentieth century. Because of tills to southern Europe and western Asia, but opium vendor in the nineteenth cen­ global infrastructure, Dope, Inc. not only now cultivated throughout the world. It is tury. Prior to that time, narcotic use controls world narcotics trafficking, but usually consumed through smoking or eat­ Dwas widespread, but there was no single weapons trafficking, currency smuggling, ing. Morphine and heroin are extracted and global organization guiding its distribution money laundering, and related criminal refined from its juice, and are consumed internationally. The banking, planning, mar­ enterprises. either by smoking, or through hypodermic keting, and smuggling network that came The use of opium to destroy China in the injection. The use of opium as a powerful into being then, in order to destroy China, nineteenth century, is the model that Britain painkiller was known in the ancient world, provided the basis for Dope, Inc.'s expan- is following in its war against the institution and is referenced in Greek medical texts as

MAP S Heroin-trafficking routes

• Major producing areas

1995=4,467 tons

Sources: NNICC; EIR.

EIR July 26, 1996 Special Report 25 of heroin requires training and equipment, and a considerable amount of the chemical acetic anhydride-making Southeast Asia the world's largest consumer of an industrial chemical whose only legitimate use is in photography. The first OpiumWars

The use of opium as a means of social control is as old as its use as a pain killer. In the ancient Near East, pagan cults regularly intoxicated their devotees with opium, hashish, and various powerful psychedelics, to ensure that they remained under total con­ trol. Pagan priests also used opium and other drugs to enfeeble, corrupt, and control the ruling aristocratic families. However, the use of opium to destroy entire societies on a mass scale, was flrst introduced by the British in the nineteenth century. British use of opium against China then, remains the model for what it is doing with narcotics worldwide, today. In 1842-44, and then in 1856-60, Britain fought two Opium Wars to force the Chinese government to lift its ban on the sale and use of opium within its territory. The second war was fought because the British were not sat­ isfled by the concessions won by the flrst. In the interim, Britain organized the Taiping rebellion in southern China toforce the gov­ ernment to accept the trade, which killed 20- 30 million people directly, and an estimated 70 million indirectly. As a result of its defeat in these wars, a prostrate China capitulated to British demands, and signed a series of peace treaties which made opium legal, and gave Britain the exclusive monopoly on its sale. Despite continuing efforts by the Chinese government to discourage its use, British traders floodedthe country with the poison. By 1850, Britain was exporting 3,210 metric tons of opium to China, then produced in British India, capable of feeding the habit of millions of users. By 1880, this reached early as the flrst century B.C. The drug had new wonder drug was a powerful non­ 5,880 tons. valid use when other, safer anesthetics were addictive cure for various adult and infant Britain also compelled China to open unknown. But its abuse as a narcotic also ailments. It spread throughout the United up its interior to opium poppy cultivation. dates back to that time. States and western Europe as a patent-med­ This was not done for commercial rea­ Morphine, the active ingredient in the icine, and was touted as a general cure-all sons, but to further the breakdown of poppy juice, was first identified in 1805, for the old and young alike, capable of cur­ Chinese society. By 1900, opium poppy and the German pharmaceutical house ing everything from the common cold to was cultivated in every Chinese province, Merck and Company soon began produc­ aging. in some regions diverting vast peasant ing it as an anesthetic. In 1874, an Cocaine was also developed and promot­ populations and lands to its cultivation. Englishman, C.R. Wright, first synthesized ed as a wonder drug by the same phamaceu­ Terrible famine was the foreseeable, and its more potent form, diacetylmorphine tical houses. But unlike opium and mor­ desired, result. By 1900, China's addict (heroin). The German pharmaceutical phine, heroin and cocaine never had any population had risen to 13.5 million out of house of Bayer and Company began mass legitimate medical use. a total population of 400 million. Its production of the drug in 1896, under the The extraction of morphine from poppy domestic production for internal use was patented trade name of "heroin." It said the juice is uncomplicated. But the manufacture 22,600 tons. By comparison, opium pro-

26 SpecialReport EIR July 26, 1996 duction in the entire Southeast Asia's Golden Triangle in 1995, was "only" MAP 10 2,560 tons-about one-tenth of what Opium and heroin traffl,wI19, "m the · 'QQldtm·Cresoeftt' China was consuming in 1900. Through this decades-long subversive

campaign, China was made a de facto RUSSIA British colony. Massive opium cultivation in British India to supply the Chinese market, also served British interests there as well. There, too, society was ravaged by famine, and there were related effects of massive poppy cultivation, including local use of the drug. In the 1860s, Britain greatly expanded small-scale opium cultivation in the Iranian and Ottoman Turkish empires, to meet the needs of its Chinese market. This opium was also exported to western Europe, to ser­ vice Britain's growing market there, as well as feed its own developing addict popula­ tion. The explosive growth of opium use in RAN the nineteenth century, led to increasing efforts to ban the drug, particularly as it spread into Europe and the United States. In 1909, the British Empire reluctantly agreed to U.S. pressure to outlaw opium cultivation and sale. Then, as now, nar­ cotics revenues comprised a major part of the profits of its banking system. But despite this legal ban, Britain continued the export of opiates. As late as 1927, opium was the largest source of official Crown revenue in all of Britain's Asian colonies; it was thenprimari­ Sources: INCSR; UNInIBmationai NarcoticsC OIIt!OIBoard; E1R. ly sold to her own colonial subjects to keep them subdued. Of the official Straights set­ tlements (Singapore) revenue that year, 37% ficking routes bringing this opium, in the be explained by either suitable climate con­ came from opium trade. At its high point, form of heroin, to the externalmarket. ditions, or an ancient tradition of cultivation 60% of Malaya's revenues came from taxes These three producing regions are the of the plant, but is a deliberate result of on the opium monopoly. Golden Triangle region of Southeast Asia, British imperial policy, which systematically And under the British claim that mor­ which produces 57% of total world opium introduced opium production throughout the phine is still legitimately needed as a output, and 51% of its refined heroin; the entire area. By placing opium production painkiller, opium poppy cultivation still is Golden Crescent region of Southwest Asia, there, Britain has situated itself to launch legal in many British Commonwealth which produces 40% of world opium and broad destabilizations of Asia, and to break countries, such as Australia and India, and 46% of world heroin; and Ibero-America, up any efforts to develop the interior of the is produced there under government which produces about 3% of world opium Asian landmass. It is now particularlytarget­ license. Opium is the only important nar­ and a like shareof world heroin. The Golden ting China and Russia, and opium is one of cotic which remains legal under this Triangle and Golden Crescent are entirely a the means through which it is doing it. guise. creation of the British Empire. Map 9 shows theGolden Triangleregion, As the map indicates, the broad band the world's largest opium plantation, andthe Britain's cuwent opium war stretching from the Balkans in southern source of about three-quarters of the heroin A review of the sites of opium poppy Europe, into Central Asia via Turkey and found on the streets of the United States. The cultivation and heroin manufacture, traffick­ Iran, and on to Southeast Asia via northern major producing area is Burma, with smaller ing routes, and the populations targetted for India, is the world's primary production and amounts produced in Laos, and across the addiction, corroborates other evidence transshipment zone for the drug.There is not border in China and Thailand. Most of this showing that Britain is currently engaged in one country in that area, which the British opium is refined into heroin. Thailand is the another opium war, this time against the sometimes term the "Arc of Crisis," which primary refiner of the drug and the main entire world. is not deeply involved in heroin production transshipment point for heroin sent to Europe Map 8 shows the world's three opium or trafficking. and the United States. China is another poppy production regions, and the main traf- This is not an accidental feature that can importantroute towestern markets.

EIR July 26, 1996 SpecialReport 27 narcotics cultivation is done by minority MAP 11 tribes, in border regions, which largely oper­ Heroin trafficking: the Balkan l"Outes ate outside the control of any of the govern­ ments concerned. An increasing, unknbwn, but large amount of poppy is also cultivated in former Soviet Central Asia, which is also being used as a route for Afghan opium des­ tined for the We st. Iran is also a producer, especially since the rise of the ayatollahs, and is on the main land route to the European market. Commercial-scale Southwest Asian pro­ duction began in the nineteenth century, to supply opium for the Chinese market. In the aftermath of World War II, the Anglo­ American-reorganized Italian Mafia used the region to supply opium for the European and U.S. heroin markets. As recently as 1979, there was almost no heroin refining in the region. Except for Iran, there were no heroin addicts anywhere in the area, including nearby India. The opium produced there was almost entirely refinedin Turkey and Lebanon, and destined for Westernmarkets. But the overthrow of the Shah of Iran that year, and the Soviet invasion of Afghanistan, soon transformed the region TURKEY into the world's major opium plantation and heroin refinery. Afghan mujahideen, trained and equipped by We stern secret services to fight a war against Soviet troops, were also instructed to grow opium to finance their needs. Afghanistan produced very little - New route opium before the war. It is now the world's ...... Old routes second largest producer. The collapse of the Soviet Union has drastically worsened this problem. Opium Sources; NNICC; EIR. cultivation is now spreading rapidly throughout former Soviet Central Asia, to This entire production region is in a market. Both powers continued cultivation provide revenue for desperately poor, newly rugged cross-border area, inhabited by there in the twentieth century, in part to fund independent states, who are encouraged by minority backward tribes, which have never their intelligence operations, which remain international agencies to produce the drug. been fully controlled by their respective dependent on narco-proceeds. During the Clan wars fought over the control of opium governments. Northern Burma has been in Vietnam War, Britain and Maoist China dra­ production and trade in Central Asia and in revolt against its central government, since matically expanded cultivation in the region, the Caucasus, are convulsing the entire independence. The Shan, Wa, and other to supply, and demoralize, nearby American region. minority tribes, which produce almost all of troops. Behind these developments stands Burma's opium, were patronized by the More recently, China itself has become a Dope, Inc., which oversaw the expansion of British during the colonial period, and sus­ primary target of the dope trade, as in the the Golden Triangle during the Vietnam tained by them in their revolt since that nineteenth century. Heroin and opium use War, and the creation of the Golden time. The same minority peoples live on the there has skyrocketed, particularly along Crescent during the Afghan War. Now, the other side of the porous border, in China. southern transport routes to the Chinese former Soviet Union is targetted for the (The area depicted as under cultivation in coast. same treatment. China is approximate, due to lack of reliable Map 10 shows the Golden Crescent War is not unfavorable to the cultiva­ data.) region, the source of about two-thirds of the tion, refinement, and trafficking of nar­ Contrary to claims one often finds in the heroin found on the streets of western cotics, by any means. Map 11 shows the western media, opium is not indigenous to Europe. Most of the poppy is cultivated in "Balkan routes," through which most of the region, but was introduced there at the Afghanistan, and refined and transported the heroin destined for western Europe end of the nineteenth century by the British through Pakistan to the coast, for shipment passes. Heroin and hashish trafficking and French empires, to supply their Chinese to Europe. As in the case of Southeast Asia, played an important part in the pre-war

28 SpecialReport EIR July 26, 1996 world is converted into heroin. In 1980, hF1GURE 13, about 40% of the total crop was refined into IIUcit opium: quantity produced heroin, but that proportion has been steadily dons , increasing over time, as the far more danger­ ous heroin has increasingly become the drug 5,000 of choice of former opium addicts in the producing regions. By 1995, a full 75% of the crop was converted to heroin, both for local consumption and export. Dope, Inc.'s total revenue from potential sales of heroin increased nearly fivefold in 1980-89, rising from $27.5 billion to $127.4 billion (see Figure 14), and has fluctuated around that high-point since. Of this rev­ enue, over 90% comes from the lucrative western European and U.S. markets, despite the fact that the majority of the heroin, by quantity, is consumed in the producing regions themselves, but at far lower prices 90 91 92 93 94 95 than in Europe or the United States (see 81 82 83 84 85 86 87 88 89 below). Relatively little of world heroin sup­ • Ibero-America • Southwest Asia" • Southeast Asia plies is seized, unlike cocaine and marijua­ na. The eradication of the poppy plant by • Including India. government authorities is virtually nonexis­ Sources: NNICC; INCSR; ANF, Pakistan; NALA; EIR. tent. Dope, Inc. has the same marketing strat­ economy of Yu goslavia, providing an and that it is using the drug to systematically egy for heroin that it has for cocaine: slash important source of income for the destroy targetted states. Figure 13 shows prices to increase sales, and total profits. Serbian-dominated military. The trade con­ that illicit opium production has been steadi­ Dope, Inc. cut the price of heroin in the U.S. tinues there, in fact aided by the war, pro­ ly rising over recent years, from 1,29 1 met­ and western European market over 1980-95, viding income for Serbian fascist militias, ric tons in 1980, to 4,467 metric tons in by about one-half and two-thirds, respective­ as well as militias and criminal gangs out­ 1995. (Poor crop years reported for Burma ly (see Figure 15). This bargain-basement side the control of the Croatian and in the earlier period skew the comparative strategy paid off. The total quantity pro­ Bosnian governments. And, as in the case production of Southwest and Southeast duced for sale increased almost sevenfold in of Afghanistan, international agencies have Asia.) That is a growth of 346%, or 8.6% the same period, from 49 tons in 1980, to descended on the region, encouraging all per annum. 331 tons in 1995. sides to cultivate narcotics in order to buy Not all of the opium produced in the But illicit opium and heroin is only part arms. A new route, via Romania and Hungary, supplementing the old Balkan route, has also been added. FIGURE 14 Although Thero-American cultivation of Heroin: value of production vs. potential sales opium is small by comparison with billions $ Southwest and Southeast Asia, it takes on relatively greater significance because it is $200 converted, in its entirety, into heroin for export to the United States. Mexico has his­ torically been the principal producer in the region, but Colombia has become a major factor in just the last 3-4 years, and now pro­ duces more than Mexico. This is a cause for great concern in law enforcement circles, because the Colombian cocaine cartels are logistically, politically, and militarily well equipped to handle a huge increase of heroin trafficking. o What the numbers show 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 EIR 's review of statistics compiled by - Production -' - Potential sales several governments and other agencies, show that the British Empire remains the Sources: NNICC; INCSR; UN; Abt Associates; ANF, Pakistan;NALA; EIR. world's major opium and heroin producer,

EIR July 26, 1996 Special Report 29 story, as Figure 17 indicates. The Crown colony of Australia is the world's largestpro­ ducer of licit opium. India, the former jewel of the British Empire, ranks second. British­ dominated Turkey ranks third. Non-producing countries involved in trafficking are almost entirely former British, French, and Dutch colonies. For example, Nigeria, now high on the British hit-list, is a major transshipment point. Canada is on the primary route into the United States. Who is targetted It may shock the reader to learn that the vast majority of heroin users in the world are in the producer regions themselves, and the numbers (as conservatively estimated by the governments concerned, the UN, and the U.S. government) are staggering. In 1996, the government of Pakistan, for example, reported that it had 1.5 million heroin addicts and an equal number of opium addicts, constituting over 2% of its 125 millionpopulation-the highest addic­ tion rate in the world. Before the Anglo­ Americans created the Afghan mujahideen of the story. There is also licit opium pro­ in countries that were not under British rule. in 1979, there was no heroin addiction in duction, supervised by pharmaceutical And, in all these cases, opium cultivation Pakistan at all. By comparison, the United houses, for manufacture of morphine as a was introduced by Britain to supply its States, with a population of 255 million, has prescribed painkiller. As Figure 16 shows, Chinese market. 816,000heroin users. licit production has remained steady from With the partial exception of Burma, all Similarly, Thailand, which refines most 1980 to 1995. Although shrinking as a pro­ these countries remain British dominated to of the opium produced in Southeast Asia, portion of total opium production, licit out­ thisday. has 340,000 heroin addicts-largely as a by­ put remains vast. Diversion of licit stocks The case of licit production tells the same product of the entertainment it provided to to illegal use is a major problem. According to Indian government estimates, �"t 0" : "x' 10-30% of its yearly licit production of 740 ', FkWf\E:1.f·· ' . . . . tons of opium, is siphoned off for illegal Jt 1f�;,. "'oIJ. �lictlon, __=. 'Ic . . . ' . use-equivalent to the entire illegal crop in . . . . ' . . Laos. ::�jtj:::,f,j�',.' ' · . l •.'. ' .• ...• : .• '" : ; , '.'" A review of the role of former British colonies, or their satraps, in the production of opium, shows a fact that is never reported in the establishment media, which continues to cover up for the British role in the drug trade. Figures 17 and 18, along with the pie chart on Map 8, show that current or former members of the British Empire and Commonwealth, together with countries under its domination, produce virtually all of the world's licit and illicit opium. Burma and Pakistan, former jewels of the British Raj , produce 55% of the world's illegal opium (with India producing another 3%). Afghanistan and Iran, both former British imperial dependents, produce anoth­ er 35%. The former French colony of Laos produces 4% of the total. Only 3% of the world's illegal opium production takes place

30 Special Report EIR July 26, 19% U.S. troops during the Vietnam War. India FIGURE 17 has an estimated 1 million heroin addicts, Licit opium: the major producing countries and another 4.5 million opium addicts. There was also no significant heroin addic­ 1995=2,520tons tion in India before the Afghan War. Thus, Other (5%) out of perhaps 5 million heroin users world­ wide, less than a million are in the United States, and perhaps an equivalent number in France (1 Europe. This is reflected in the consumption fig­ ures as such. Out of the 331 metric tons of heroin produced worldwide in 1995, an estimated 83 tons were exported to the Turkey (12%) United States, 51 tons were exported to western Europe, and 197 tons remained in the producing regions of Southwest and Southeast Asia to feed their own addicts, who usually consume lower grade No. 3 heroin, mainly for smoking, as distinct from the No. 4 heroin for export, which is Source: UN. usually injected. In other words, 60% of the world's total heroin production in 1995 was consumed in FIGURE 18 the Southeast and Southwest Asia producing British domination of world opium production, 1995 regions themselves. (Relatively little heroin is consumed in Ibero-America.) This was Total illicit, 4,467 tons not a one-year anomaly. In fact, over the Total licit, 2,520 tons entire decade from 1985 to 1995, about 70% of all world heroin was consumed in the producing regions. While the revenue Dope, Inc. earns through this use is comparatively small ($7 billion in 1995) because of the vast difference in price, the devasting effects on the societies concerned are enormous. Table 1 shows the disposition of world heroin production in 1995, from its source in Southeast Asia, -Southwest Asia, and fbero­ America. Of the 168 tons of heroin pro­ duced in Southeast Asia, an estimated 86 tons were consumed regionally, and the rest was exported to the United States and • British Commonwealth; former British colonies and satrapies; and Br�lsh-aligned former French colonies. Europe. Of the 151 tons produced in Southwest Asia, about 111 were consumed Sources: NNICC; INCSR; UN; NALA; £IR. in the region. In the case of !bero-America, virtually all the 12 tons produced were Cl1'C--C" exported-to the United States. Of the total TABLE 1 83 tons of heroin exported to the United Disposition of world heroin prOduction, 1995 States from different sources, about 17 tons (tons) were seized, leaving 66 tons for sale (most Destination originating in Southeast Asia). Europe, simi- . Local Exported Exported larly, had 43 tons available for sale after Source consumption to U.S. to Europe Total seizures, and most of the supply came from Southeast Asia 86 61 21 168 Southwest Asia. Southwest Asia 111 10 30 151 This table shows that the common media Ibero-America 0 12 0 12 I and government distinction between produc­ ing and consuming regions is ultimately World production 197 83 51 331 misleading, in some cases deliberately so. It Seizures 0 -17 -8 -25 also leaves no doubt that a new opium war, Net consumption 197 66 43 306 directed against the same general region as , the nineteenth-century Opium War, is now Sources: NNICC; INCSR; UN; NALA; EfR. in progress.

EIR July 26, 1996 Special Report 31 Synthetic Drugs trolled substance analogs," more popularly known as "designer drugs." The deeper crisis Pharmacological 'revolution' The tremendous recent increase in Ecstasy abuse in the United States and Europe provides an alarming window into sweeps Europe, America the deeper cultural crisis that the synthetic drug explosion signals. by Jeffrey Steinberg The May 13, 1996 issue of the New Federalist newspaper featured an article by Carol Greene, "Techno-Music Will Destroy ' ere will be in the next generation plies of the stimulant in history. Multi-drug Your Brain," exposing computer-generated �or so a pharmacological method of cartels, in Mexico and Colombia, are now techno-music as the latest, most mind-dead­ making people love their servitude emerging as major suppliers of methamphet­ ening, and fastest-growing aberration of the and producing dictatorship without tears, so amine to the U.S. market (according to the drug-rock counterculture. Greene wrote: to speak. Producing a kind of painless con­ DEA, the Cali and Medellin cartels have, for "In Germany alone, approximately 2 mil­ centration camp for entire societies, so that over a decade, been major suppliers of lion sadly bored and under-stimulated people will in fact have their liberties taken Qualudes, a depressant, to the U.S. black members of the middle-class, mostIy stu­ away from them but will rather enjoy it, market). dents, sales personnel, administrative work­ because they will be distracted from any Inside the United States, the growing ers, and computer specialists, are members desire to rebel-by propaganda, or brain­ involvement of the major international of the 'rave society.' Entertainment special­ washing, or brainwashing enhanced by phar­ drug cartels in the meth trade has meant ists in Germany estimate that 56% of the macological methods. And this seems to be that methamphetamine distribution is above go to a techno party once a week and the final revolution." being increasingly dominated by the same some 22 % even go more than twice a -froma 1961 lecture by Aldous Huxley, apparatus that trafficks in cocaine, heroin, week." The overwhelming majority of at the California School of Medicine in and marijuana, and has vast smuggling, "ravers" use Ecstasy (MDMA) to throw San Francisco, sponsored by the U.S. distribution, and money-laundering capa­ themselves into a trance-like, but energized Information Service's Voice of bilities. DEA sources tell EIR that, this state, as they spend hours at the techno America year, the California Highway Patrol has clubs, dancing in all-night, and sometimes made seizures of pure methamphetamine weekend-long, dance marathons, to com­ In February 1996, the U.S. Drug that are larger than any recent cocaine puter-generated, repetitive noise, playing at Enforcement Administration convened an seizures. 85-120 decibels. emergency summit of law enforcement Buttressing the evidence of the recent The techno "revolution," like the earlier officials from across the country, to chart emergence of the Ibero-American multi­ "Beatie-mania," began in Britain in the early out a response to an epidemic-proportion drug cartels in the U.S. methamphetamine 1980s, and has now spread across Europe jump in illicit methamphetamine ("meth") trade, is the following data, from the and the United States. The Berlin Love use in the United States. Two months later, Strategy document: In 1992, federal agents Parade in May 1995, a weekend "rave-fest," the DEA released a Na tional Meth­ seized a total of 6.5 kilos of meth at the drew an estimated 350,000 participants, amphetamine Strategy, which candidly U.S.-Mexican border. The following year, courtesy, in part, of a massive advertising admitted: "Trafficking of a highly potent 306 kilos were seized, and in 1994, 682 campaign, subsidized by Marlboro and form of methamphetamine has been on the kilos were confiscated. Camel cigarettes, and Addidas sneakers. The rise in the United States over the past few But, the picture presented in the Berlin event dwarfed Woodstock, by com­ years, and abuse continues to devastate Strategy, although alarming, represents just parison. German authorities estimate that a many communities. Although still more the tip of the iceberg. Meth is but one of a half-million German youths participate in common in western areas of the country, growing number of illegal synthetic drugs rave sessions every weekend. methamphetamine traffickingand abuse are flooding the American and world markets. The rapid expansion of designer drugs, of no longer confined to any one region: The National Drug Control Strategy: 1996, which Ecstasy is but one currently leading Methamphetamine is spreading eastward. produced by the White House, acknowl­ example, offers another crucial look into the The production and trafficking structures edges that LSD and stimulant use by 8th, future of Dope, Inc. In 1987, Dr. Joseph D. now in place, if left unchecked, pose the 10th, and 12th graders has increased by Douglass, Jr. and Neil C. Livingstone co­ risk that the nation as a whole will experi­ 82% and 37%, respectively, in the first half authored a book called America the Vu l­ ence very serious levels of methampheta­ of the 1990s. And, the National Narcotics nerable: The Threat of Chemical/Biological mine abuse." Intelligence Consumers Committee Wa ifare. They wrote: The Strategy noted with alarm, that, (NNICC) annual report has, for several "One of the newer complications con­ since 1993, large quantities of meth have years, catalogued growing abuse of PCP fronting both civil and military authorities is been flooding the United States from (Phencyclidine), a powerful hallucinogen; the spread of 'designer drugs,' high-tech Mexico. In March 1996, U.S. and Mexican MDMA (a.k.a. "Ecstasy"), a combination heroin substitutes. These drugs are synthet­ anti-drug authorities captured a large and of methamphetamine and MDA (a strong ics designed to mimic heroin-hence the sophisticated meth lab in the Yu catan hallucinogen); Methcathinone ("Cat"), a name designer drugs. The drugs are exceed­ Peninsula, and seized one of the largest sup- stimulant; and a growing number of "con- ingly potent. The newest ones are up to four

32 SpecialReport EIR July 26, 1996 thousand times more potent than heroin, concentrations of a few parts per billion. drugs are far more difficult to track. and because they are new, they are not ille­ The drugs are astronomically more prof­ Through Landsat satellite photo-analysis, gal. When one drug is identified and itable than heroin. This explains why the low-altitude aerial reconnaissance, and declared illegal, less than a month goes by supply of these designer drugs can be ground surveillance, drug-enforcement before a new, modified-and legal-variant expected to expand. An investment of agencies can develop reliable estimates of or analogue surfaces to take its place. And $2,000 translates into a street value of over the gross amount of opium poppy, coca the process continues. The first fentanyl $1 billion." plants, and marijuana plants under cultiva­ analogue, alpha-methyl-fentanyl, appeared The DEA does acknowledge that some tion at any given time. Synthetic drugs, in 1979 in Orange County, California. Since of the flow of synthetic drugs onto the black especially the newer designer drugs, cannot 1981, DEA laboratories have identified market comes directly from large pharma­ be tracked as easily, because they are manu­ seven more fentanyl analogues. Authorities ceutical houses that are wittingly involved in factured from chemicals that are, for the in California now estimate that 20% of the illegal trade. President Clinton has taken most part, easily obtainable on the commer­ heroin addicts are using the fentanyl ana­ up this problem, in at least one, most egre­ cial market. This is precisely why many law logues. gious case. On Oct. 21, 1995, he signed enforcement specialists agree with "One of the authorities in the field, Dr. Executive Order 12978, entitled "Blocking Douglass and Livingstone, when they assert Gary Henderson (a pharmacologist and Assets and Prohibiting Transactions With that designer drugs are "the wave of the toxicologist at the University of California, Significant Narcotics Traffickers," which future." Davis), believes that a world-class medici­ named a dozen Colombian pharmaceutical The DEA has developed a number of nal chemist has been responsible for the manufacturers and distributors as fronts for techniques for measuringthe volume of syn­ many analogues of fentanyl that have the Cali Cartel, and banned any American thetic drug abuse: appeared. . . . The drugs are very pure, companies or citizens from doing business • They keep track of the number of and the doses are very uniform .. ..The with them. underground synthetic drug laboratories, quality is comparable to what one might The DEA acknowledges that large "legit­ which are busted each year; expect if the source were a pharmaceutical imate" pharmaceutical manufacturers in • Through the Drug Abuse Warning plant rather than a clandestine basement lab­ western Europe, China, and Brazil are now Network (DAWN) system, they receive data oratory." supplying drug cartels with synthetic drugs. from every hospital emergency room in the Douglass and Livingstone then warned: in growing volumes. Here, the evidence United States, indicating the number of "Because the designer drugs are so potent, shows, again, that Dope, Inc. is a top-down patients who come in with traces of synthet­ tracking the substances down is exceeding­ structure. ic drugs in their bloodstream, and the num­ ly difficult and getting worse. A two-hun­ ber of patients who die of synthetic drug A unique challenge dred gram batch of fentanyl (less than a overdoses; half a pound) represents a lifetime supply For years, official U.S. government sta­ • The Justice Department and the FBI of two hundred million doses. This potency tistics on the use of illegal synthetic drugs try to maintain parallel data on all people also greatly magnifies the difficulty of have grossly underestimated the size of the who are arrested and tested for drugs; detecting evidence of use in the blood­ traffic. There are understandable reasons for • The DEA also keeps track of the vol­ stream or urine. Extremely sensitive labora­ these errors. ume of synthetic drugs seized each year; tory techniques are required to detect such Unlike cocaine, heroin, and marijuana, • The National Household Survey on drugs-techniques capable of detecting which are all cultivated drugs, synthetic Drug Abuse (NHSDA) questions a sample

Frenzied youth in Germany, many high on the drug Ecstasy, dance to computer-generated ''techno'' music, the latest aberration of the rock-drug counterculture.

EIR July 26, 1996 SpecialReport 33 obtain any reliable production data, and, along the U.S.-Mexico border during the ·FI(ElIJRS 1� therefore, relied exclusively on the NHSDA­ 1990s were also available, courtesy of the .,_.tic d"-gs: . va lue of derived consumption statistics, the figures National Methamphetamine Strategy. sal.. were grossly underestimated. Thus, for Based on these statistics, EIR developed biIlJeIlt$ $ example, in 1993, Abt estimated that the an index which suggested a pattern of total dollar value of all "Other Drugs" (i.e., growth in the illegal synthetic drug trade. not cocaine, heroin, or marijuana) in the The figures for 1991-95 were derived, via United States that year was $1.8 billion. The that indexing method, from the more precise EIR estimate for 1993 was $46 billion! annual figures covering the period from Even though the National Household 1977 to 1990. While there is an element of Survey is notorious for understating the drug scientific guesswork in the post-1990 data, abuse problem, it does present a stark "best and, therefore, a possibility of greater mar­ case" picture when it comes to the estimates gin of error, there is no doubt that the years of the number of Americans who are hooked 1992-95, as described by the DEA and other on synthetic drugs. According to NHSDA law enforcement sources, have been a period figures for 1988-93, in each of those years, of geometric expansion of the illegal syn­ well over 2 million Americans used thetic drug trade in the United States and in inhalants (usually, black market pharmaceu­ western and eastern Europe. The numbers ticals), 2.5 million used hallucinogens, and generated by the EIR method are commen­ over 3 million used stimulants and tranquil­ surate with the rates of growth described Izers. qualitatively in such locations as the DEA's April 1996 National Methamphetamine Our method Strategy and the Na tional Drug Control EIR researchers reviewed virtually every Strategy: J996. available DEA and NNICC study from 1977 The tremendous growth in the synthetic to 1995, to develop a more reliable approxi­ drug market in the United States has, of Americans about their use of illegal mation of the synthetic drug trade. During according to DEA and other law enforce­ drugs; 1977-80, the NNICC studies provided pre­ ment sources, been paralleled in both west­

• And, through undercover operations, cise dollarestimates for domestic synthetics. ern and eastern Europe (including Russia). the DEA, in conjunction with other law From 1981-84, the NNICC studies pub­ The DEA reports that the distribution of enforcement agencies, maintains generally lished annual data on the number of doses synthetic drugs is usually concentrated in up-to-date and reliable data on the wholesale ("d.u.") of synthetic drugs consumed by the areas where there are laboratories pro­ and retail prices of every illegal drug, Americans. By multiplying the number of ducing the illegal products. Europe is wide­ including all the major synthetics. d.u.'s by $5 (the average retail cost per dose ly identified as an area where there are con­ In the spring of 1995, the White House of synthetic drugs, according to the DEA), centrations of underground synthetic drug Office of National Drug Control Policy EIR was able to come up with an estimated labs, including in such Central European published a report, "What America's Users dollar value for illegal synthetic drugs, for states as the Czech Republic and Poland. Spend on Illegal Drugs, 1988-1993." The the 1981-84 period. The tremendous growth of Ecstasy use all study was prepared by Abt Associates, The 1987 NNICC study reported that across Europe further bears out this assess­ Inc., a Cambridge, Massachusetts research synthetic drug abuse that year was equal to ment. outfitthat has done illicit-drug research for the 1980 figures, and had increased by 30% For the purposes of this study, given the the federal government for years. The Abt from 1986. This made it possible to estimate prevalence of illegal synthetic drugs on the study developed data on heroin, cocaine, the figures from 1985-87. European markets, EJR estimates that the and marijuana abuse, using two distinctly From 1987-90, theDEA released figures U.S. totals represent half the world con­ different methods of analysis. They gener­ on the total number of doses of synthetic sumption of illegal syntheticdrugs. ated figures based on production data, and drugs seized in the United States. By The meteoric rise in synthetic drug sales figures based on consumption data. The reviewing the percentages of cocaine, mari­ since 1990 (see Figure 19, which shows a consumption data invariably relied on the juana, and heroin seized during the same jump from $70 billion in global sales in highly dubious Household Survey. (Abt, to period, EIR was able to estimate that the 1990, to $132 billion in 1995) correlates its credit, admitted this problem in the volume of synthetic drugs seized was with another critical finding of this EJR report: "We do note . . . that the NHSDA approximately 20% of the total illicit trade. study. In recent years, larger and larger per­ undoubtedly misses some users, and those Thus, estimates on the size of the synthetic centages of the total opium crop are being who are reached probably have an in­ drugtrade for the period from 1987-90 were produced for local consumption in the coun­ centive to misrepresent their consump­ generated. try of production, rather than for the tion.") For many of those years, and for 1990- American and European markets. This is In the case of cocaine, Abt's production­ 95, the DEA also published data on the greatly expanding the overall addict popula­ based data were in the same general ballpark number of kilograms of synthetic drugs tion worldwide. And, increasingly, synthetic as the EIR survey. (The consumption-based seized, the number of laboratories busted, drugs are supplementing, and, in some estimates were significantly lower than and the number of emergency room cases cases, replacing cocaine, heroin, and mari­ EIR 's, across the board.) But in the case of reported in the DAWN survey. Specificdata juana as the "drugs of choice" for so-called synthetic drugs, where Abt was unable to on the amount of methamphetamine seized advanced sector users.

34 SpecialReport EIR July26, 1996 FIGURE 20 The 'black' economy is flourishing: $1.095 The British oligarchy's global trillion per year billions $ drug money-launderingmachine $1,095 $70 - illegal weapons by Richard Freeman contraband commodities illegal gambling and prostitution he recent case of the international The answer is straightforward: No author­ money-laundering maneuvers of ities have seriously gone after the real enemy. flight capital Mexican political figure Raul Salinas The people responsible for setting and enforc­ deT Gortari, has put a spotlight on the issue of ing anti-money-laundering policy, in particu­ money laundering. Salinas's case involves the lar in the advanced sector, will pursue investi­ tax evasion laundering of at least $84 million of illicit gations up to a point, sometimes collaring fu nds (maybe as high as $600 million), into lower- and middle-level money-launderers. Swiss and London bank accounts and But they pull back at the idea of putting in jail Cayman Islands shell corporations, through the bankers and political figures "above sus­ the services of a senior officer of Citibank. picion." These are the people who run the The 1989-93 laundering of Salinas's illicit trade and make it possible. Illegal narcotics funds, which reportedly included some To be precise, this is the Anglo-Dutch­ received from drug-traffickers, such as Swiss financier oligarchy, and the offshore Mexico's Gulf Cartel drug lord Juan Garda banks based in the "former" British and Abrego, was accomplished with the knowl­ Dutch colonial empires. The royal Privy edge and approval of top echelons of Council officially rules in most of the British Citibank, as well as the U.S. Federal Reserve territories and "former" colonies. If one Board of Governors, potentially including includes such postage-stamp countries as Fed Chairman Alan Greenspan. Liechtenstein and Luxembourg, as well as the Source: EIR. This is merely one example out of per­ British-controlled elements of the American, haps 50 that happen every week, but go unre­ French, and German banking systems, such ported. It has a long history. During the 1980s as J.P. Morgan and Edmond Safra's Republic investment is not the electronic entries of and early 1990s, Colombia's Medellin drug National Bank, one has almost the entirety of derivatives trading, but what it steals fromthe cartel overran the world with tens of billions the world's money-laundering apparatus. This population. Drug and criminal profits are of dollars worth of cocaine per year. The car­ comprises approximately 40 key commercial among the principal sources of these-along tel had a desperate need to launder its cash, banks, and 20 investment banks, including with looting of Third World nations and the which itself weighed several tons. According English Queen Elizabeth II's personal bank, advanced sector. The British will do every­ to Rachel Ehrenfeld, in the book Evil Money, Coutts, which is an estimable force in the thing to protect the narco-money-Iaundering the U.S. "institutions used by members of the Channel Islands, as well as the Bahamas and trade at all costs. Medellfn drug cartel [for laundering] includ­ Cayman Islands. Figure 20 shows the estimated total ed Chemical Bank, Continental Bank The Anglo-Dutch-Swiss fi nancier oli­ amount of laundered money for 1995. The International, Morgan Guaranty Trust, garchy, and their satraps in the British drug money component of about $500bill ion Security Trust International Bank and Commonwealth, which total nexus we will is computed by methods discussed elsewhere Republic Bank, New York." Among the inter­ call the "extended British Commonwealth in this study. However, the actual figure may national banks identified were Banco de empire apparatus," not only runs this criminal be significantly larger. Author James Adams, Santander of Madrid, Spain and Miami; money laundering today, but has run it for an authority on drugs, with sources in British Union Bank of Switzerland in New York, two centuries, going back to the British intelligence, stated in the Nov. 15, 1995 Toronto, and California; and L10yds Bank Opium Wars against China and before. London Times, "Last year [1994], $400 bil­ Internationalof the Bahamas. lion of illegal drug money was laundered in Hooked on drugs How is it possible that over the past quar­ America, of which $320 billion came from ter-century, since August 1971, the interna­ The profits and level of cash flow from the Colombia cartels." If $400 billion is the tional narcotics and criminal money-launder­ money laundering are huge: It is the biggest figure for America alone, then EIR 's estimate ing trade has survived and prospered? Why private cash flow in the world. For this rea­ of $500 billion as a world figure is extremely do the names of the world's biggest, most son, the banks are more addicted to this conservative. powerful, and most prestigious banks, with narco-money stream than is the heroinjunkie Our figure of all other criminally laun­ "impeccable credentials," show up in this to his fix. The banks could not give up this dered money, of $595 billion, is also conserv­ trade, year after year? Why are the seemingly money without collapsing. The world bank­ atively estimated. It encompasses such items best efforts of law enforcement unable to stop ing system is utterly bankrupt, and the only as contraband of otherwise legal commodities them? real income stream it earns on its loans and (gold, gems, strategic metals, food, oil); ille-

EIR July 26, 1996 Special Report 35 gal weapons; flight capital; tax evasion; ille­ organized crime chieftain Meyer Lansky was gal gambling and prostitution. Official figures one of the masterminds of the trade. FIGURE 21 for these areas do not exist; EIR consulted In August 1971, a turning point was World derivatives law enforcement officials and experts in each reached. U.S. President Richard Nixon took outstanding field. For each item, EIR chose the smallest the dollar offthe gold standard, and the float­ trillions $ reasonable estimate. The total trade of all ing exchange-rate system was introduced. $80 criminal money is a staggering $1.095 trillion The volume of Euro-dollars-hot dollars and per year. In 1995, world merchandise and other currencies outside their country of ori­ 70 commercial services exports were $5.4 tril­ gin--exploded, helped by the petro-dollar lion. Thus, the criminal money-laundering recycling after 1973-74. From a few billions 60 trade of $1.1 trillion, is equivalent to one-fifth in the 1960s, the Euro-dollar market zoomed of world exports of all merchandise and ser­ to above $1 trillion by the 1980s. 50 vices. (The $l.l trillion may include some Once U.S. Federal Reserve Board double-counting: for example, laundered Chairman Paul Volcker sent interest rates into 40 money from a drug sale may be used to buy the stratosphere in October 1979, and the illegal weapons for terrorists. But because U.S. banking system was deregulated in 30 EIR began with very low estimates of the dif­ 1982, two conditions prevailed, both part of fe rentcomponents of the laundering trade, we Britain's "post-industrial society" policy. 20 believe the $1.1 trillion figure to be in the First, manufacturing, agriculture, and infra­ right ballpark.) structure production collapsed. On a per-capi­ 10 The financier oligarchy's take on the ta and per-household basis, the market basket money laundering is immense. When all of physical goods in the United States has o forms of fees, bribes, money earned by use of collapsed by 40% since 1967 (see EIR, Jan. I, 86 87 88 89 90 91 92 93 94 95 the funds, etc. are considered, the profit rate 1996). can reach between 10% and 15% of the over­ Second, speculative markets, from junk Sources: Federal Deposit Insurance Corp.; Bank for International Settlements, Basel Committee on all haul. Thus, the rate of financial return bonds, collateralized mortgage obligations Banking Supervision;Technical Committee of the alone on this $1.1 trillion can be between and derivatives, to drugs, increasingly came Intemational Organization of Securities Commissions (IOSCO); EIR. $100and $150 billion a year. to determine the geometry of the world econ­ omy. The more the physical economy col­ Origins of the problem lapsed, the more the speculative flows,which shore banking centers, representing legitimate The drug trade's dirty money laundering were growing at a hyperbolic rate, dominat­ business. But this appears to be the minority. has been around for millennia. By the 1700s, ed. And within this arrangement, drugs and The narco and speculative markets are inter­ the Middle Eastem portion of the drug trade criminal activity, by design, came to rule the mingled into one: It is now nearly impossible was centered in Aleppo, Syria, and the Asian speculative markets. It is not an accident, that to separate one from the other. portion was run by the Dutch and then the the leading derivatives-trading centers are Take the high-flying derivatives markets, British monarchies, through their East India also the leading drug-money-Iaundering cen­ the biggest speculative cancer in the world. Companies. During the 1950s and 1960s, ters. There are some legitimate funds in off- The derivatives trade has exploded from $1 trillion in derivatives outstandings in 1987, to $75 trilJjon by 1995 (Figure 21). The nation­ FIGURE 22 al banking systems that hold these derivatives Derivatives exposure, by country are shown in Figure 22, although it should be noted, that many of these national banking 1994=$63 trillion systems hold these derivatives not simply in Other (5%) their own countries, but in markets such as Hongkong, Singapore, and the Channel Islands. The paper profits on the derivatives are large, but they are only electronic entries in cyberspace. In reality, drug money, sucked Switzerland (8%) from the consumption of the addicted popula­ tion, is propping them up (Figure23). The drug trade not only gobbled up the speculative markets, but it started gobbling up Great Britain (11%) the physical economy, turning over trillions of dollars of assets to the British narco­ bankers. The corporate takeovers binge of the 1980s and 1990s was fm anced in significant measure by drug revenues. Further, the drug mob opened gambling casinos (legal gam­ bling revenues in America in 1994 totalled Sources: Bank for International Settlements, Basel Committee on Banking Supervision;Technical Committee of International Organization of Securities Commissions. $407 billion, larger than the auto market), houses of prostitution, and more speculative

36 Special Report EIR July 26, 1996 markets. The economy was criminalized and FIGURE 23 United States, that means employing "mules" destroyed. Drug and other laundered or "smurfs" to make bank deposits in amounts of, usually, no more than $5,000 to Three steps in money money flows are keeping the $7,000, so as not to arouse suspicion. To laundering derivatives bubble afloat launder $1 million per week that way, would There are three steps in the process of require smurfs to make about 200 deposits turning criminal money into "clean" money: per week, within the same area, at multiple 1. The street-level drug dealer must enter banks. This requires a lot of work, and raises the dirty money into the banking system; the possibility of detection. However, perhaps 2. The money-laundering machine will between $50 and $75 billion annually is laun­ transport it through several locations, perhaps dered this way. registering it along the way in a trust, with The evidence of this is clear. The Federal only a nominee name of a trust officer, per­ Reserve Board of Governors in Washington, haps in the Bahamas, indicating who owns D.C. keeps tabs on those Federal Reserve the instrument. The trust gives the beneficial banking regions that tum back to the Fed owner-the real owner-anonymity. If the "excess cash," because it exceeds the cash money is then moved through 6-9 jurisdic­ needs of the region. In 1995, according to tions, each with bank secrecy, a process Federal Reserve statistics, the regions report­ called "layering," it could take law enforce­ ing the largest "physical cash surpluses" and ment 6- 12 months to plow through each juris­ turning these back over to the Fed were: Los diction-such as going to courts to obtain Angeles, $13.6 billion; Miami, $7.1 billion; warrants to search bank accounts-by which San Antonio, $3.0 billion; Jacksonville, $2.5 time, the statute of limitations on the crime billion; and San Francisco, $1.4 billion. These could expire. This presupposes that the law are the cities with the highest street-level drug $1 .1 trillion enforcement agency can even trace the money laundering. in annual drug money after the second or third level of layer­ and other Gambling casinos are also a vehicle for ing; laundered laundering. The drug money-launderer buys 3. The money is finally lodged in an money chits with dirty money, waits a suitable period investment or a secret, numbered account, of time, and cashes them in for "clean" with the capability of moving it out at light­ money. Since casinos in places like Las Vegas ning speed, if necessary. and Atlantic City are often run by Anti­ We shall look first at the street level of Defamation League-linked organized crime getting the money into the banking system. Switzerland, the Cayman Islands, and elements, the casinos are compliant, and Second, we shall examine the ways in which Mexico, that do not even have a CTR report­ many take a cut of 1-5% for the service. In the Anglo-Dutch-Swiss financier oligarchy ing requirement or penalty provisions for lack January 1996, the General Accounting Office moves this money many times around the of enforcement. of the U.S. Congress published a study, globe, reaping as much as a 10-15% profit on Entering the street-level drug money into "Money-Laundering: Rapid Growth of the operation. This will demonstrate the the banking system is a bigger hurdle than it Casinos Makes Them Vulnerable," that extent of British control. Third, we shall look might initially appear. Take a hypothetical shows the danger. It points out that between at how the laundered money is brought back drug deal in the United States. Five kilograms 1984 and 1994, the dollar amount wagered in "on shore," and where it is invested. A case of heroin (11 pounds) retails for $6.5 million. gambling casinos in America increased near­ study of the Bahamas will be examined. But, $6.5 million in $20 bills weighs 370.5 ly fourfold, from $117 billion to $407 billion. kilograms or 812.5 pounds. The weight of the In this time period, nearly 60 riverboat gam­ Street-level money money is 75 times the weight of the drug bling operations were opened. This increased laundering smuggled in; $100billion in laundered drug the number of facilities and dollar flows Since 1970, the United States has required money, in denominations of $20 bills, weighs available for the drug money-launderer. all banks to file reports on all cash deposits of 12.5 million pounds. If it was difficultgetting While gambling casinos are required to file $10,000 or more--called cash transaction the drug smuggled into a country, think of CTR reports for cash transactions of greater reports (CTRs)-and in 1986, the passage of how difficultit will be to smuggle the cash! than $10,000, there are ways around that. the Bank Secrecy Act put a penalty on banks The drug dealer has two options. He will Moreover, Nevada, the gambling capital of that failed to properly and honestly file CTRs. either launder the drug money revenues America, does not participate in the federal The CTRs are filed with the Internal Revenue inside the banking system of the country in CTR reporting requirement of the Bank Service, and are made available to law which the sale was made, or ship a sizable Secrecy Act (although Nevada has its own enforcement agencies that demonstrate a need portion of the cash outside the country of localized CTR reporting requirement). to consult them. This is to create a barrier to sale, using the same smuggling network Prostitution is also legal in Nevada. drug money laundering. It is a useful and infrastructure he used to smuggle the drugs A third means of laundering is to use well-intended step, but even if honestly in, but in reverse. money-wiring services, such as We stern adhered to (and there are many loopholes), it Consider some examples of the first Union, and check-cashing parlors, which do is simply inadequate as a deterrent against instance. Laundering the money in the coun­ have to file CTR reports, but employ 15,000 money laundering. However, there are many try where the sale was made, means taking employees, who are not carefully screened. In countries, starting with Great Britain, Canada, some of the money to the banks; in the both money-wiring and check-cashing ser-

EIR July 26, 1996 SpecialReport 37 Map 12 How drug money is laundered: a hypothetical case

UNITED STATES

$100 million drug shipment money shipm�nt

" .

" , "

vices; ,there have been widespread instances York City-based consumer electronics store, two passengers of a private jet, flying $5.9 of falsification of ,records to pennit launder" was publicly traded on an American stock million out of the country. Today, that is small ing .. exchange. However, the store was involved in potatoes, compared to what some planes " ..In addition, money-launderers. use retail a number of criminal enterprises, and its prin­ carry: $50 million or more. businesses with high ,cash turnover, whose cipal owner and founder, Eddie Antar, fled to The 1993 passage of the North American sizable weekly deposit levels are not expected Israel, after siphoning off more than $74 mil­ Free Trade Agreement (NAFTA) has facilitat­ to arouse suspicion at their banks. One exam­ lion. He was arrested and is now in jail, ed money smuggling across the U.S.-Mexico ple is the La Mina network in California, though $10 million is unaccounted for. border, by easing border-crossing restrictions. where gold coin and metal-plating firms in In the second option, the street-level drug A Dec. 3, 1995 Houston Chronicle article, the 30-block Hill Street gold district of Los money is physically shipped out of the coun­ "Houston Aw ash in Money Laundering: Angeles, working with the gold district of try where the drugs were sold. The drug-pro­ Authorities Only Dent Export of Drug New York City, laundered $1.3 billion in Cali ducing network itself will either do this, or Profits," reported that "U.S. officials admit Cartel drug money between 1987 and 1990, hire others to do it for a fee, often at 5-10% of that only about one of every 10 vehicles and But any and all sorts of stores will be used. the selling price of the drugs. In the United one of every 30 commercial trucks entering On May 14 of this year, a shocking devel­ States, Colombian drug cartels often use the United States are inspected, Even fe wer opment occurred on this front. Citing the Mexican smuggling networks to bring the vehicles leaving the country are inspected." need to reduce bank paper work, the U.S. drugs in and the money out. Send 30 trucks across the border to Mexico Treasury Department lifted the requirement Planes, speed boats, and even submarines, with cash, and on average, one is stopped. that banks must file CTRs for all business which make drug drops to a country, are now This is 3% of total volume, an acceptable loss deposits of $10,000 or more. The new ruling, employed to ferry the cash supply out. to the drug money trafficker. which is for a trial period, but is expected to Smurfs are hired, at $2,000-5,000 a day, So-called giro houses, which wire money go into effect permanently in the fall, states to carry the drug money onto airliners, or in across the border into Mexico, are another that any business whose stock is publicly the bodies or tires of their cars. Several years option. These are used extensively for legiti­ traded on any American stock exchange is ago, federal agents caught Maria Lilia Rojas mate remittances by immigrant laborers in exempt from a CTR filing. carrying out of the United States $1.43 mil­ the United States. Naturally, these girohouses , This is remarkabl�, because to , take one lion in six "Monopoly" boxes. In February are located near the border, in states such as e�ample, the stock, of Crazy Eddie's, a New 1986, officials in Texas arrested the pilot and Texas. But they are .also used to launder dirty

38 Special Report . EIR July 26, 1996 money. For example, a launderer enters the businessmen swap their pesos (orother Ibero­ The Mexican bank can send the money to giro and presents the giro operator with dirty American currencies) for dollars at an New York, eitherby bankor draft wire trans­ cash. The money is wired to a Mexican bank. exchange rate that avoids the official fer. It wires the money to an account at either The launderer, or his associate, picks up clean exchange rate, and avoids taxes. The busi­ a Mexican bank ora U.S. bank in New York. cash at the giro 's correspondent bank in nessmen take the risk that they are getting Usually, the money is not directly wired, but Mexico. The Houston Chronicle reported, "In dirty dollars. The money-launderer has gotten is settled through interbank accounts. This all . . . Houston giro. houses may have laun­ rid of his dollars and now has pesos. He means that the Mexican bank that is wiring dered up to $250 million, most of it on behalf transports the pesos he has acquired to the funds, will have already deposited $50 of the CaliCartel." Colombia, for example, exchanging them million, earnedfrom a legitimate business On March 4 of this year, Rayburn Hess, therefor clean dollars. deal, at New Yo rk Bank A. When the $50 officerof the U.S. State Department's Bureau 2. Next, there is a fake invoicing scheme: million in laundered money is wired to New for International Narcotics and Law "A South American clothing manufacturer York Bank A, it then debits this $50 million Enforcement Affairs, delivered a speech in working with Cali obtains a permit [in his from the Mexican bank's account held with Panama that presented a "hypothetical" country] to export $25 million worth of suits it. It gives the money to the money-launderer money-laundering example based on real-life to New York" (or Miami, as represented in on whose behalf the $50 million was wire­ composite pieces of the money-laundering Map 12). The clothing manufacturer exports, transferred. The money-launderer now has a operations. We will use Hess's speech for however, only $6 million worth of clothing. clean $50 million sitting in a bank in New pedagogical purposes. The example is That clothing is unloaded in the Aruba free­ York. schematically represented in Map 12. trade zone, and secretly shipped back to The process is aided by the fact that Hess stated, "Assume that the Cali Cartel Colombia, where it is sold through the under­ Mexican banks practice banking secrecy, is moving $100million over the ratherporous ground economy. The crates which held the which protects the identity of the person who border from the United States to Mexico and clothing arethen filled with some fake mater­ wiredthe money. operating on a 75% profit margin (earnings ial, and the clothing "manufacturer's agent The above example conceming money­ minus cost) .. ..Cali wants to [receive] $85- picks up $20 million in drug proceeds in New laundering in Mexico, raises a serious ques­ 90 million in total." It is willing to pay $10- York and returns it to Colombia, covered by tion about the Mexican banking system. 15 million to those who help it move its drug an export license." Under the NAFTA agreement, Section XIII, money. 3. The remaining $50 million of drug Financial Accords, the Mexican banking sys­ Hess presented the case of laundering the money is smuggled by various routes tem was further deregulated. Foreign banks, $100million in three steps, in amounts of $25 described above, across the U.S. border into which, with the exception of America's million, $25 million, and $50 million: Mexico. The money is then deposited. by var­ Citibank, had been banned fromentering the 1. The launderers "will sell $25 million on ious money-laundering tricks, into one or Mexican domestic banking system, are now the gray market" This is an underground for­ several Mexican banks, which are more per­ allowed in. Since 1995, two Canadian banks eign exchange market, where Ibero-American meable than U.S. banks to laundered funds. have been in the process of acquiring

EIR July 26, 1996 SpecialReport 39 Mexican banks: The Bank of Montreal has many times largerthan cashdeposits. trillion. A few studies have attempted to find bought 16% of Bancomer, Mexico's second According to a top Federal Reserve out the volume of laundered money that largest bank, with an option to increase its enforcement officer, a U.S. bank receiving a moves throughthe wire transfer process.The share to 55%; and the Bank of Nova Scotia wire transfer is required to keep an internal resultsare inconclusive and even flawed. But has announced it will purchase 55% of the record, listing only the name and address of were the amount only two-tenthsof 1 % of the assets of Banco Inverlat, Mexico's fourth the wire-sender and the name of the sending total--and that could be very possible, mean­ largest. These Canadian banks are experts, on bank. Since Mexico has bank secrecy, the ing that one in every 500transfers is criminal­ behalf of the British, in money laundering. receiving U.S. bank may only receive the ly tainted-that would amount to $620 billion The Hongkong and Shanghai Banking Corp. name of a dummy corporation, which is reg­ per year. is also sniffing around for corporations and istered as a trust, say, inthe Bahamas. British control banks to buy. This will make the Mexican We begin to see how easy money launder­ bankingsystem even moreof a laundromat. ing is, once the drug money has entered into Once the street-level drug money has Hess's example also reveals a second the system. Wire transfers are a principal entered the banking system, the higher-level deadly feature: the ease with which drug means for banks to settle accounts, or for laundering takes over. It moves the dirty money can be laundered. This shows the glar­ businesses to move funds. The New York funds through six to nine jurisdictions, per­ ing weakness of an anti-money-laundering City-based Clearing House Interbank haps registering it along the way in a trust, approach that simply relies on cash transac­ Payments System (CHIPS) electronically with only a nominee name of a trust officer tion reports, suspicious activity reports transfers funds and settles transactions in U.S. attached to the instrument, disguising the real (SAAs), or the current U.S. anti-money-laun­ dollars for all the major banks that trade owner, making it very difficult for law dering strictures. So while a U.S. bank has to through New York City. One hundred and six enforcement authorities to track down the file a cash transaction report for a deposit of of the world's biggest banks are members of dirty money and the perpetrators. $10,000 or more, it is not required to file a CHIPS and avail themselves of this facility. The British are masters of this, and run CTR for wire transfers between domestic In 1980, CHIPS transferred $37 trillion; but the system. The proofis incontrovertible and, e U.S. banks, or a U.S. bank and a foreign by 1995, the per annum level of funds trans­ for the most part, out in th open forthe will­ bank,even thoughwire transfers typicallyare ferred by CHIPS reached a whopping $310 ing investigator or law-enforcement official

40 SpecialReport EIR July 26, 1996 to find. Today, the problem is that many law­ nothing about history. includes: the British clearing banks Standard enforcement figures could uncover the modus The actual command and control over Chartered, Lloyds, and Barclay; private British operandi of the money-laundering network; world money laundering today resides in banks such as Coutts and Rothschilds; the but it is run by the Britisholigarchy, and once Great Britain (Figure 24). A large chunk of Canadian clearing banks, led by Scotia Bank the investigators find it is the British, they today's offshore laundering centers are offi­ (formerly Bank of Nova Scotia), Bank of would have to take them on politically. Most ciallygoverned by Britain's Queen Elizabeth Montreal, Toronto Dominion, and the flee in terror and deny what they have seen. II as their head of state and sovereign. CanadianImperial Bank of Commerce;big the The reader should take a map of the Officially, the Queen's Privy Council is the three Swiss banks, Credit Suisse, Swiss Bank world, and trace out all the key locations ultimate legal authority in a legal system that Corp., and Union Bank of Switzerland; some where theslave trade was run over 200 years pennits bank secrecy andminimal regulation, of the exclusive Swiss private banks, such as ago. Most of them turn out to be part of the andis governed by British law. Or else, these Banque Pictet and Lombard Odier; the Dutch old British and Dutch empires. Now, mark all countries are ruled by allied Dutch-Swiss net­ banks ING-Barings and ABN-Amro; the the places where smuggling and piracy pre­ works. It is not an exaggeration to say that British-controlled American banks Citibank, dominated. Next, find the points of produc­ nothing significant occurs in these money­ Morgan,and the Republic National Bank. tion and shipping routes of the 1700s and laundering dives without the Privy Council's Then, there is a special institution, the 1800s drug trade, and the financial centers approval. Ifthe Privy Council wanted to shut linchpin of the drug money laundering, the which serviced them. Now, step back: The down money laundering, it could; it set it up $350 billion-in-assets Hongkong and map will look strikingly similar to Map 13, in the first place. The same holds for the Shanghai Banking Corp. The HongShang, as which shows the key offshore financial cen­ Queen herself. it is called, was formed in the n;riddle of the ters of the 1990s. Map 14 shows the In addition, while sometimes money laun­ last century, specifically to finance Britain's Caribbean region, the British-Dutch lake dering goes through small, obscure banks, opium trade with China. The HongShang is where so many offshore centers and/or tax most of it goes through the extended British still the primary bank of issue for the British havens predominate. Commonwealth network of 40 commercial Crown colony and money-laundering center This is no coincidence. The British and banks and 20 investment banks. The drug­ of Hongkong. But the HongShang also spans Dutch simply took these criminal haunts, and money flow is so large, thatno smaller enti­ the globe, owning the powerful Midlands the old criminal infrastructure and civil ties could handle it, and consistently hide it. Bank in England; the Bank of the Middle administration, slapped on a fresh coat of This requires financial sophistication and East; Marine Midland bank in the United paint, and put a sign on the door reading, tremendous politicalpull. States; Mocatta Metals (through Midlands "Offshore Financial Center." Most investiga­ The list of major banks to be investigated bank), one of the five banks that sets the tors take them at their word, as if they knew for possible drug- and hot-money laundering, world gold fix. It is active in the Caribbean.

EIR July 26, 1996 SpecialReport 41 With its headquarters moved to London, it still possesses markers of its past: On its board are the Swire, Keswick, and other old­ line families, which ran the China opium trade during the last century. The banks' direct financial profit on laun­ dering $1.1 trillion in drug and criminal pro­ ceeds per annum, is up to 10-15% of the vol­ ume of money that enters the banking system. (This is a� ide from any profits made in other phases of the drug trade). To illustrate the point: Suppose that a $100million deposit is made by a drug lord at one of the hundreds of offshore banks in·the Bahamas. The bank, in tum, can charge a standard banking service fee, which can range betWeen 1 % and 3%, de­ pendingon what services are billed. Next, the hank has $100million to lend. According to the June 7, i996 Financial TImes, in the Ba­ hainas, "the spread between typical borrowing and lending tates, currently stand[s] at more than 9%." Thatis, the bankmakes a 9% profit on the money. The bank can lend to anyone, but frequently, it lends back money, above­ board, to the druglord who deposited the mon­ ey in the first place. The loan gets the money "onshore"for the drug lord.As part ofthe pre­ arranged money-laundering scheme, the drug lord is willing to pay the 9% interest rate spread as compensation to the bank. Finally, the·bank can also collect, on top of allthis, out­ riiht bribes, which canrange between 2% and money-usually the foreign money that was ture andaccumulate each year,and the catego­ 5% of the proceeds. Total of all fees and char­ deposited in the ·bank-to someone abroad, ry of "bank foreign asset" would fall by more ges (assuming thatthe bank's spread on money that is classified as it "bank's foreign asset." thanhalf, andup to 95% in some places. is hot normal1y as highas 9%): 10-15%. Since foreign liabilities and foreign assets EIR chose 14 financial centers toexamine In March 1996, theU.S. State Department's almost match, for most bankingsystems, one (Thble 2), out of about 62. These 14 have the Bureau for International Narcotics and Law can talk about one or the other, to indicate the largest masses of funds, and statistical infor­ Enforcement Affairs released its "International trendof both. mation is available on them, whereas for sev­ Control Strategy Report," which classified 201 We will lookat bank foreign assets, but we eral offshore centers, only scanty statistics are nations and territories by the degree of money­ caution, this is not all the hot money in the available. The table lists the "bank foreign laundering in that country. The report listed as banking system, because if a British money­ assets" of these 14 money-laundering centers. either "high" or "medium-high"-the highest launderer, for example, deposits money in the The British-Dutch-Swiss pedigreeis apparent. two ratings-the following countries and pos­ British banking system, that is considered a The next-to-the-last line in this table sessions: Aruba, Antigua, Canada, Cayman domestic deposit, but it is still laundered drug ("SUbtotal") tells quite a story. The level of Islands, Cyprus, Hongkong, Israel, money. Thus, the volume of the laundered foreignassets of deposit-taking banks in these Liechtenstein, Luxembourg, the Netherlands, drug and criminal proceeds in thebanking sys­ 14, predominantly"offshore," centers, rocket­ the Netherlands Antilles, Singapore, tem is bigger than that discussed below, ed from $263 billion in 1974 to $3.937 tril­ Switzerland, the United Arab Emirates, the although more than halfof all drug money is lion in 1994. This is a stunning 1,400% United Kingdom, andthe United States. held in banks abroad. On the other hand, not increase in just 20 years. It demonstrates the the money in foreign bank accounts is ille­ velocity of the money-laundering network's Money-laundering havens all gal; these foreign accounts include legitimate growth. For 14 economies, only one of which There are two ways that the laundered business funds deposited and/or lent abroad. has a population of more than 20 million, to drug money will be held offshore: either as a But for the countries listed below, the amount control nearly $4 trillion in bank foreign deposit at a bank, or invested in one of the of foreign assets is anywhere from 10 to 50 assets, gives them huge leverage over the myriad of offshore investment instruments, times more than is needed by their domestic world economy. In most of these places, the such as trusts,mutual funds,and international economies. What does apostage-stamp econo­ level of bank domestic assets is virtually non­ busine�s corporations. my need with a few hundred billion dollars of existent. Compare the next-to-the-Iast line to When money is deposited in a country's funds? Ye s, some of these haunt� can help one the last line, which shows total world bank banking system by someone who is not a escape taxation. But take away the $1.1 trillion foreign assets. In 1995, the 14 financial cen­ national of that country, that is classified as a per annum drug and criminal money trade, a ters held 52% of the world's total bank for­ "bank's foreign deposit." When a bank lends portion of which these banking systems cap- eign assets. These 14 countries represent less

42 SpecialReport EIR July 26, 1996 than 2% of the world's population. the British banking establishment doesn't A second look at Table 2 reveals some­ A country breakdown shows: thinkthat that is a civilized practice. It would­ thing else: the high degree of domination that Cayman Islands-population: 34,000; n't be "cricket" for the money-laundering these 14 financial centers exercise over the bank foreign assets: $4 10 billion trade, so such CTR reporting is not required. bank foreign assets in the regions in which Switzerland-population: 7 million; bank All the British require is the fi ling of they are located. (This article follows the foreign assets: $464billion Suspicious Activity Reports-which the classification procedure of the International Bahamas-population: 270,000; bank American banking system requires also. In Monetary Fund, from which these statistics foreign assets: $170 billion 1994, British banks filed a grand total of are taken, and classified both the United Luxembour,g-population: 390,000; bank 13,000 SARs. In contrast, in 1994, American States and Japan as industrial nations, rather foreign assets: $390billion banks filed 8 million CTRs. than placing them in their respective regions). Then, there is Britain, the self-avowed And while the British banking system Table 2 shows that just two British-run off­ speculative capital of the world. With a popu­ proper does not formally have bank secrecy shore financial centers, Hongkong and lation of 58 million, Britain holds bank for­ (however, just try to penetrate the gnomes of Singapore, control 92% of the bank foreign eign assets of $1.160trillion, or 15% of the Lombard Street!), if strict bank secrecy is assets of Asia (minus Japan); three British­ world's total. Britain holds more bank foreign needed, the funds can first pass through any influenced fm ancial centers, Bahrain, United assets than the United States and Germany one of 10 British dependencies, ruled by the Arab Emirates, and Israel, control 61 % of the combined, despite the fa ct that their com­ Queen, which do have bank secrecy, includ­ bank foreign assets of the Middle East; and bined economy is seven times bigger than ing the Cayman Islands, the British Virgin three Anglo-Dutch-owned offshore financial Britain s, and that their combined exports are Islands, and the Channel Islands, which are centers, the Bahamas, Cayman Islands, and five times greater than Britain s. off the coast of France, or the Isle of Man, the Netherlands Antilles, control 91% of the What does Britain need all that laundered which is offthe coast of England. bank foreign assets of the We stern money for? Answer: to maintain its position as Meanwhile, for continental money launder­ Hemisphere (minus theUnited States). the speculative financial capital of the world. ing, there is the impregnable Swiss banking These offshore financial centers are strategi­ The British banking system is bankrupt several system, with $464 billion in bank foreign cally located amid the Asian, Middle Eastern, times over. But with these laundered funds, it deposits. Switzerland enacted bank secrecy and lbero-American drug trades and money can preserve its share of world financial laws in 1934, largely to help protect money flows. Map 14 shows that theoffshore centers tumover-and related political muscle. To wit: launderedfrom France. But it was quickly used aremidway between the drug-producing region It underwrites 64% of all trading in equities in during World War n to hide Nazi assets and of Colombia, Peru, and Bolivia, and the largest markets foreign to those equities' domicile; assistthe Nazi war machine. DuringWorld War consuming market, the United States. 45% of all international cross-border mergers n, Swiss banks furnished 90% of Germany's Table 3 reports the dollar amount of all and acquisitions; 75% of all debt borrowed in foreign exchange requirements, without which assets-notjust bankingts-of asse the leading markets foreign to borrowers' domicile; 35% the Nazi regime could not have bought any­ money-laundering centers. This consists of the of all currencies swaps; it earns 50% of all thing abroad. In 1943, Nazi Minister of assets of banks, trusts, mutual funds, captive shipbrokering commissions, andso forth. Economics Walter Funkdeclared publicly that insurance companies, and offshore shipping. In Unlike the American banking system, his government could not afford even a two­ 1995, the total of all offshore financial center where the banks are required to file CTRs, month breakin theSwiss financial connection. assets stood at $5 trillion, compared to $1.5 The Swiss bank secrecy code states that trillion at the end of 1989. This is a stupendous bankers, lawyers, and others cannot divulge growth of $3.5 trillion in six years, or an asset information about their clients' numbered build-up of $550 billion per year. financial accounts. The penalty for violation The biggest source of tax haven offshore is both jail time and a fm e. Also, convenient­ financial assets consists of trusts, which, as of ly, tax evasion, and securities and foreign 1995, held approximately $2 trillion in assets. exchange violations are considered fiscal or These trusts allow a money-launderer to administrative offenses in Switzerland, not transfer legal title of possessions to a holding crimes. Therefore, Swiss authorities usually company or some such instrument that pro­ refuse legal assistance to countries trying to vides anonymity, disguising who controls the prosecuteviolators of laws in these areas who possession. The areas in which these trusts have parked their money in Switzerland. This are incorporated have little or no taxation, and paradigm has been emulated by the offshore little or no financial or corporate regulation; financial centers. virtually any criminal, backed by a credit ref­ Nonetheless, the Swiss gnomes have erence provided to him by a banker, can developed a reputation-largely created and incorporate his dirty holdings into a trust.* promoted by themselves-for financial con­ The popularity of such trusts is attested to servatism and uprightness. This is nonsense: The Swiss are wild speculators; per capita, * Whereas in Table 2, the level for offshore bank Switzerland has 10 times the dollar deriva­ foreign assets is $3.9 trillion, the level usedfor off­ shore bank foreign assets Table is approximate­ tives levels of the United States, making it the in 3 ly trillion. It appears that the latter only uses net highest in the world. The Swiss Banking $1 foreign assets, i.e., foreign assets minus foreign lia­ Commission is not even allowed to regulate bilities. Were the $3.9 trillion level employed in Swiss banks, only the auditing firms are, Table 3, then total foreign assets of all kinds would which the Swiss banks hire and pay for. becloser to $7 trillion.

EIR July 26, 1996 Special. Report 43 by the fact that the tiny British territory its February 1990 bankruptcy, Drexel and its While the ostensible target of the investiga­ islands of Nevis and St. Kitts, withbut 10,000 allies laundered hundreds of billions of dollars tion is Salinas, it appears that Citibank is in people, have 60,000 incorporated offshore of drug money and other hot money, using it the investigative sights as well. companies, many of themoffshore trusts. to take over and asset-stripAmerican industry. EIR covered the case in depth in our In many cases, these trusts invest in off­ A good portion of corporate takeovers issue of June 7, 1996 ("Money-Laundering shore or onshore instruments, bringing a and stock market activity-foreign and Scandal Could Rock Citibank, Fed"). But an fairly high rate of return, many in the domestic-takes place today with drug and illustrative piece of the Citibank story United States, Europe or, Asia. Thus, the criminal money, replicating the vehicle proves conclusively the bankers' witting role money-launderer is able to preserve his ill­ forms and practices of the lOS and Drexel, in directing money laundering. gotten gain and enlarge it. even though those two particular firms are According to published reports, between defunct. Indeed, a survey of the major equity Bringing the money onshore 1989 and 1993, the person who moved at and bond markets of the world, particularly least $100 million of Raul Salinas's illicit A good portion of the money that is the highly touted "emerging market" stock money-and perhaps much more-into deposited offshore, is brought back onshore in and bond markets of the former communist bank accounts in Switzerland, London, and the form of a loan, which is what a "bank for­ bloc and the developing sector, would show the Cayman Islands, using false names, was " eign asset is. The commercial real estate mar­ a heavy use of drug and dirty money. Amelia Grovas Elliot, the head of the kets in New York, Hongkong, London, Paris, This is equally true of the $75 trillion Mexico team of Citibank's Private Bank Frankfurt, and Moscow are perfect vehicles worldwide derivatives market. Brian ($80 billion in assets). Elliot was Salinas's for such loans, since it is widely expected that Bosworth-Davies, a London-based expert on personal banker. She had headed the Mexico the purchase of an expensive building will money laundering, who used to investigate team since 1983, and is a 27-year veteran of involve borrowed money. Worldwide strato­ derivatives fraud for Britain's Scotland Yard, Citicorp. spheric real estate prices, reflect the effect of told EIR on March 1 that huge sums of drug At a May 12, 1994 drug trial, Elliot testi­ drug money in these markets. money and other illicit funds are laundered fied as a star prosecution witness, on how a Thepoint for the drug-money-launderer in through the derivatives market. He described supposedly "clean" bank, Citibank, then buying and selling office buildings, is either to one transaction used to launder money, which, America's largest bank, administers banking own the property, or to get the money onshore. he said, "we encountered so many times, it operations in Mexico. During her testimony, Let us say that real estate investor A, who is became monotonous." A money-launderer Elliot asserted that she does not act alone at partof the drug cartel, borrows $250 million of would set up two companies, one based, say, Citibank, and defined a chain of command. laundered money from a Canadian bank, to in the Channel Islands of Jersey and the other She described how Citibank's Private Bank buy a commercialoffice building in Manhattan in Guernsey. The Jersey company would open accepts customers who usually have a start­ for $250 million. The building may have pre­ a trading account with one commodity broker; ing net worth of $5 million, and that the viously sold for $225 million, so the drug­ the Guernsey company would open a trading Citibank private banker "knows you [the tainted real estate investor dealer helps bid up account with another commodity broker. "The customer], knows who you are, knows your the price. The investor holds the building for a Jersey company would take a long position family ...recogn ize[s] your voice." Elliot certain periodof time, and then sells it, perhaps [bettingthe price would rise] in a futures con­ was then asked to describe the long vetting for $260 million. He now has a $10 million tract, in, say, September soy beans. The process, including approval from higher-ups, profit,but, far more important,he has someone Guernsey company would take a short posi­ that Citibank engages in, before it accepts a else's $260 million in clean money. tion [bettingthe price would fall] for the same large deposit from a customer. This is the The real estate properties, like hotels on amount for the same contract." "know your client" policy. In response to a Boardwalk in the "Monopoly" game, are a Whichever company loses, pays for the question about this, Elliot stated: means to an ulterior end. Purchasing real lose-out of its laundered drug money pool. "The 'know your client,' at least in our estate is so popular, that the bidding process, The winner takesits profits out of the market bank, is part of the culture. It's part of the through the use of drug money, has helped to in clean dollars (the two commodity brokers way you do things. It's part of the way you drive real estate prices upward. are not trading with each other, but with the conduct yourself. If you come in with a A second way of getting the money general market). On balance, the transaction prospect and/or name of a prospect, you will onshore is to plow themoney into the invest­ is a wash: The money-launderer is not trying be sure to be asked, 'Who is this person, ment market. Many offshoreinvestment trusts to make money on the deal, but to get dirty what do they do, who introduced them to are vehicles to purchase stocks, bonds, etc. money into the market, and clean money out. you?' by at least three or fo ur people higher This has an established criminal history. More dirty money is laundered through than you are. It's just the way it is" (empha­ During the 196Os, money from the drug- and the derivatives marketthan through gambling sis added). dirty-money trade was laundered through the casinos. This Bosworth-Davies stated, "On A Citibank spokesman told EIR on May Geneva-based, Rothschild-run Investors the derivatives markets, if you trade a small 10 who the "three or four higher people" in Overseas Services (lOS) of Bernie Cornfeld amount, say $10,000 or something like that, Citibank's chain of command would be, who and Robert Ve sco. Some of this money was then you might be suspect. But trades of would have to approve Elliot's decision to the "skim money" from the gambling and many millions of dollars-that'sthe norm." move Raul Salinas's tens of millions of dol­ drug operations of Meyer Lansky, the finan­ lars around the world. These would include The Salinas-Citibank case cial godfather of organized crime. By the early Citibank Chairman John Reed. Further, dur­ 1970s, the offshore infrastructure of lOS was The U.S. Justice Department and at least ing part of the time that Citibank was laun­ brought onshore and folded into the one grand jury are investigating Raul Salinas dering Salinas's money, Citibank, which had Rothschild-Morgan-run Drexel Burnham de Gortari's movement of illicit funds blown out in 1991, was under effective Lambert. During the 1970s and 1980s, until through Citibank to hiding places overseas. Federal Reserve Baord receivership, and was

44 Special Report EIR July 26, 1996 being held up by a Fed life support system. Citibank Private Bank customers, with net oligarchy, and the British Commonwealth Fed supervisors were all over Citibank. Top worths of $5 million or more, such as Raul political establishment, who run drug- and echelons of the U.S. Federal Reserve Board, Salinas. By simply qualifying to be a pre­ criminal-money-laundering as a worldwide including potentially up to Chairman Alan ferred client of Citibank's Private Bank (or integrated enterprise and one of the most Greenspan, would have seen the paperwork any other bank's preferred client club), a profitable businesses on earth. trail of the Salinas money, under whatever bank customer can escape such scrutiny, if The chairmen and board members of the name it was being moved. his banker applies for an exemption because financial institutions that launder money, The Salinas-Citibank-Fed case illustrates the customer in question is so "valued." have never gone to jail in any major drug­ the shortcomings in the current fight against The second flaw is methodological . money-laundering case in the last 30 years. money laundering. The basic U.S. anti­ Money laundering thrives because the entire They always claim, ingenuously, "I didn't money-laundering approach suffers from banking system, under British control, is know this was going on at my bank." In two glaring flaws: hooked on $l.l trillion in annual drug and most cases, they never even have to set foot First, there are numerous loopholes. Just criminal money flows; it depends on this for in a courtroom. take the CTR reporting requirement. This is its very survival. Put some of these top bankers and the waived I) for all wire transfers; 2) for all To succeed in the fight against money British financier oligarchy in jail for 30 cash deposits of $10,000 or more made by laundering, start at the top. Go afterthe John years. Watch the drug-money-Iaundering businesses whose stock is publicly traded on Reeds, Alan Greenspans, and the controlling trade start to shrivel; watch the drug-traffick­ any American stock exchange; and 3) for layers of the Anglo-Dutch-Swiss financier ing trade collapse.

dominate the Bahamian banking scene, hid­ ing behind Bahamian bank secrecy and lax The drug-laundering Canadian bankinglaws to shelter drug mon­ of Bahamas ey. In the Dec. 24, 1985 Montreal Gazette, in haven the an article entitled, "How Canadian Banks Are Used to 'Launder' Narcotics Millions," The 300-year criminal history of the tion, and the Financial Tune s admitsthat the William Marsden wrote that drug money is Bahamas unites all the different strands of drug flow is increasing, now thatU.S. radars "hauled to Canadian banks [in Nassau, money laundering and the drug trade,reveal­ to monitor drug trafficking were recently Bahamas] in huge stacks of small bills­ ing how the British orchestrate that trade. Its taken down in Grand Bahamas,Exuma, and sometimes millions of dollars at once­ story could be repeated for each of the other Great Inagua, in a cost-saving measure. stuffed into suitcases, dume bags, paperbag s exotic offshore Britishfinancial centers. This is partof the Bahamas' historic pr0- and boxes by narcoticssmugglers. . . . In 1973, the Bahamas was granted nomi­ file. During theAmerican Revolutionary War "Trusted drivers and security guards nal independence. But even though the coun­ (1775-83) and the War of 1812, when Britain ensure that their cash gets into the banks tryelects a prime minister,Queen Elizabeth II invaded America, the British used their safely. And once the money is deposited, is the head of state of the islands, and the colony of the Bahamas as a base for naval laws that forbid Bahamian bankers to dis­ " Queen'sPrivy Council's "say so isfinal in all assaults on the United States. Because of closebank recordsensure that it's safe from legalmatters. population The is impoverished, this, in 1776, the American revolutionaries investigation by foreign narcotics and tax while banking and tourism constitute a huge occupied the Bahamas. After the Revo­ agents .. .. portionof theBahamas' fragile economy. lutionary War, Tory sympathizers fled to the "Canadian banks, which handle 80% of The Bahamas has a dual function: It is Bahamas, and became part of the establish­ banking business in the Bahamas, have both a drop spottransshipment and point for ment. Duringthe British-backed Confederate becomekey instruments in 'laundering'illicit drugs, and a drug-money-laundering center. uprising of the American Civil War, the money-giving it a clean history-for The Bahamas is an archipelago of 700 British used the Bahamas as a base to run smugglers hiding hundreds of millions of islands, of which the closestis 50 milesaway shipsthrough the North's shipping blockade dollars from U.S. and Canadian narcotics fromFlorida. against the South. A successful blockade­ agents. Since only 40 of the 700 islands are pop­ running voyagecould earn $300,000. "By taking these huge cash deposits, ulated, the others make perfect drop points During WorldWar II, the pro-Nazi Duke which is not illegal, the Canadian banksare for drugs. During the 1980s, according to of Wm dsor was exiled to the Bahamas, but facilitating criminal activity. . . . U.S. Drug Enforcement Administration was placed in the very important post of "In the past four years, Bank of Nova reports, up to 75% of the drugsthat reached Bahamian governor general. During this Scotia twice stonewalled U.S. investigations the United States from Ibero-America went time, the duke used Axel Wennergren, the by refusing to hand over bank records of throughthe Bahamas first.American authori­ Swedish eugenicist and Nazi agent, to laun­ drug smugglers to a [U.S.] grand jury. The ties, fearful of the drug flow into the United der money to Mexico. During the 196Os, bank finally yielded after paying nearly $2 States, forced the Bahamas to take measures organized crime godfather Meyer Lansky million in fines." to cut back the drug flow. The June 7, 1996 built the Resorts International casino on Under U.S. pressure, the Bahamian London Financial Ti mes reported, "It is Paradise Island in the Bahamas, which banking system has made changes in its guessed that no more than 10-15% of illegal served as an international money-laundering money acceptance practices, but duringthe drugs shipments to the U.S. now go through center. past decade, the volume of laundered drug the islands." That may be an underestima- The money-laundering Canadian banks money has gone up.-RichardFreeman

EIR July 26, 1996 Special Report 45 Russia and Eastern Europe May 1992, the newspaper Nezavisimaya Gazeta reported on an explosion of drug addiction: "According to the latest expert estimates, 5.5 to 7.5 million people regularly use narcotics in the territory of the former Dope, Inc.'s newest U.S.S.R. At the beginning of 1991, this fig­ ure was only 1.5 million. Specialists believe that the process of headlong narcoticization 'growth market' of the country will continue for the next five to seven years." The International by Linda de Hoyos Association for Combatting Drug Addiction and the Narcotics Trade estimates that there are 6 million drug addicts in Russia-4% of ere are no official figures showing more than 90 tons of illicit drugs in the sin­ the population-and that 20 million have mthe extent of narcoticscultivation and gle year of 1995! As an overpopulation of tried drugs at least once. They expect the production in the countries that for­ vermin forces significant of their numbers number to double within the next four years. merly composed the Union of Soviet out into the daylight, so the superabundance Official Russian reports state that drug con­ Socialist Republics and its Warsaw Pact of drugs in the Russian economy has netted sumption has been increasing at a rate of allies. However, there is no doubt that since seizures of huge amounts of drugs. Giving 50% per year, since 1989. 1989 and the fall of the Berlin Wall, Dope, an idea of Dope, Inc.'s expansion, the The streets are virtually flooded with the Inc. has vastly increased its production amount of drugs confiscated has tripled in stuff, in the same way as the inner-city ghet­ capacities and consumption market in these the last three years. Seizures in other NIS to residents of the United States suddenly countries. The flooding of these countries countries point to the same phenemomen: found their streets awash with heroin in the with easy drugs, the mushrooming of "crimi­ • In Georgia, 2.5 tons of marijuana were late 1950s. Nezavisimaya Gazeta further nal gangs" and mafias, the jump in drug­ seized in 1995, and 12,000 poppy plants. reported that, "while, earlier, a 'new' drug related crime, and seizures of tons of nar­ • In Kyrgyzstan, I ton of opium was would appear on the Soviet 'market' every cotics, with a street value in the billions, in a seized in 1995. five to ten years, in the capital alone," dur­

single year, paint the picture. • In Armenia, 17 tons of cannabis and ing the first three months of 1992, "three Dope, Inc. has waged a new opium war opium were destroyed in 1995. new powerful stimulants had arrived,"

against the Newly Independent States (NIS) • Moldovan authorities say they confis­ including cocaine from South America, and Russia, comparable to the first opium cated 2 tons of illegal narcotics last year. which has become the drug of "fashion" wars against China. It would be mistaken, • In Ukraine, more than 23 tons of ille­ among Russia's youth elites. however, to attribute the near takeover of gal narcotics were seized in the first six It is noteworthy that the Russian eastern European, Russian, and Central months of 1995 alone. In 1994, police Ministry of Internal Affairs, which had a fig­ Asian economies by Dope, Inc., and its grabbed one haul of 3.5 tons of narcotics at ure of 1.5 million regular drug users in 1993, higher-level controllers, to the fall of com­ the Russia-Ukraine border, as Ukraine has estimated that 70% of those users were munism. The floodgates were opened by not only become a maj or transshipment under 30 years of age, and 8.5% of those British Prime Minister Margaret Thatcher point for Golden Crescent drugs into users were under-age children. Drug addic­ and U.S. President George Bush. The Europe, but also a drug producer itself. tion is especially strong in the cities and International Monetary Fund supplied the • In Uzbekistan, in 1994, two major industrial centers. economic "gunboats" that forced open the shipments of marijuana, each weighing in at The skyrocketing of drug use in Russia is former Soviet economy to the drug trade. 15 tons, were interdicted. The shipments matched by that in other countries, particu­ While putting the popUlations into penury, were on their way to Turkey and the larly eastern Europe. The Bratislava-West the International Monetary Fund's (lMF) Netherlands, from their origin in Slovakian region of the Slovak Republic, for free-trade regimen, imposed on Russia, gave Afghanistan and Pakistan. instance, reported a more than tenfold Dope, Inc. and its local offspring a field-day. The seizures are the tip of the iceberg of increase of heroin addicts referred for treat­ The process is similar to that which has the actual dope flow through the NIS. This ment from 1992 to 1994, according to the taken place in Nigeria. The emergence of flow includes 1) the domestic distribution of State Department report. Whatever the offi­ Nigerians in the international drug circuit as narcotics grown there or synthetic drugs pro­ cially reported figure, it is generally couriers, and of Nigeria as a transshipment duced there; 2) the flow of domestically acknowledged that the actual number of reg­ point for drugs, coincides precisely with the grown narcotics out of the NIS states to ular drug users is ten times the official imposition in 1986 on Nigeria of an IMF other points-notably western Europe and count, and all sources agree on growth rates "structural adjustment program" that the United States; and 3) the opening up of of addiction in the range of 33-50% per year. reduced Nigerians' per capita living standard Russia, Central Asia, and eastern Europe as Drug-related crimes are increasing at . by 75% in eight years! a major drug transshipment nexus. even greater rates: According to the wire Britain's opium war on Russia may ulti­ service Novosti on Nov. 20, 1994, the To ns of it mately have the same annihilating effect on Russian Internal Affairs Ministry reported According to the U.S. State De­ the popUlation as London's opium war that drug-related crime had risen 60% in the partment's International Na rcotics Control against China in the nineteenth century. first nine months of 1994, over 1993. Strategy Report of March 1996, law Although, officially, the figure for drug In Russia, the newspaper Ve cherny enforcement authorities in Russia seized users in Russia is 1-1.5 million, as early as Petersburg claims for that city the title of the

46 SpecialReport EIR July 26, 1996 RUSSIA

Thefo rmerSoviet Union is Dope Inc. 's most promising growth market. Narcotics consumption rates are rapidly climbing. Cheap domestic marijuana, synthetic drugs, and opium derivates, are available fo r export to the West.

1. The Central Asian republics are being taken over by the Golden Crescent narco-economy, and are now used for both narcotics production and transshipment.

2. The Baltic portsare used to smuggle narcotics from Central Asia, and raw materials from throughout Russia. 3. The Balkan route is used to smuggle everything from Cigarettes to narcotics and weapons.

4. The Cyprus banking system is central to Russian capital flight, the laundering of narco-dollars, the use of these narco­ dollars to buy Russian privatized assets, and the looting of Russia's raw materials.

5. The City of London and the London Metal Exchange are the centers for the looting of Russia's raw materials, and the use of the commodities trade for narcotics money-laundering.

EIR July 26, 1996 SpecialReport 47 "northerncapital of the drug trade," since, as Golden Crescent, back out through Russia ship Maersk Euroquinto. Reportedly, the stated in an article on April 1, 1994, "its into easternand western Europe, and the flow container had been loaded in Rotterdam in a location is convenient for the transitof drugs of drugs from the We stern Hemisphere into legitimate shipment of ginger. The marijua­ from Asia to Scandinavian countries and the and then out of Russia and eastern Europe, na shipment was intended for transshipment Baltic states." shows a fully integrated trade, using any through Poland to westernEurope. The city's function in Dope, Inc., has criminal gang as the feet on the street. There Heroin is also being moved on the roads. taken its toll on the city's populace. The is one international drug cartel directing the Polish police authorities, according to the August 1995 Zakonnost carried an article by overall flow, market delivery, and price. Its DEA, say that Nigerians, Turks, Indians, and A. Stukanov, head of the Criminal Forensics engine is the biggest profiteers of Dope, Inc., Pakistanis recruit Polish couriers to transport Directorate, stating that "the total number of the money-launderers and the controlling heroin from the Golden Crescent and enterprises involved in narcotics distribution banks that areraking in the money. Golden Triangle to points west. in St. Petersburg almost doubled in 1994. The St. Petersburg bust is but one case Lastly, Poland is itself a major producer More than 1,000 criminals were sentenced, exposing the cross-directionality of the drug of amphetamines for consumption in in 75% of them for illegal manufacture, acqui­ flows, into eastern Europe and Russia, for western Europe. According to the DEA, sition, or possession of narcotics with intent transshipment back out to western Europe. Poland ranks second only to the Netherlands to sell. . . . Among the people convicted in The newly independent Baltic states are in the illicit production of amphetamines for 1994 of the production, sale, and theft of playing a key role in this routing. One the overall European drug market. But this drugs, and establishment of drug haunts . cocaine route travels through Lithuania, is not necessarily a rivalry, but coopera­ 84% are criminals under age 30." according to the State Department report. tion-Swedish authorities have determined Cocaine is smuggled from Germany through The Eastern nexus that most of the amphetamines consumed in Lithuania to Russia; the cocaine also flows that country are produced in the Since at least 1992, the criminal gangs in in the opposite direction. Cocaine is also Netherlands, and smuggled into Sweden Russia have been operating in cooperation being smuggled into eastern Europe via air­ through Poland (see article, p. 6). with the international cartel operators, repre­ ports in Bulgaria, the Bulgarian criminal Poland assumed its key role as the sta­ sented, for instance, by the Cali Cartel. In gangs being more directly allied to the tionhouse for European drug routes after the 1992, Cali Cartel mobsters came to Russia Italian Mafias, which in turn, cooperate fully launching of the Balkan war. Its services to to meet with their criminal counterparts. with the South American cartels. The Czech Dope, Inc. have not left the Polish people Business started immediately, rising to such Republic has also become a depot for trans­ unscathed. Officially, there are 40,000 drug levels that in 1993, in St. Petersburg, police port of cocaine into western Europe. addicts in Poland. One-third of its intra­ seized 1 ton of cocaine originating in The Baltic states are also being used for venous drug addicts are HIV-positive. But Colombia. According to an official of the transshipment into western Europe from as Poles don't consume the high-priced drugs Russian Ministry of Internal Affairs, the far away as the Golden Triangle. Estonian arriving in their ports and airports. Most shipment had come from South America to drug couriers have been arrested in addicts consume processed poppy seeds Finland by sea, and then was taken to St. Thailand. Opium and hashish cargoes are with a high opium content, grown in Petersburg by road, where it was seized. The often transferred to Estonian ships bound for Poland's own illicit poppy fields,but consid­ cocaine was hidden in tins labelled as con­ western Europe, especially Scandinavia. ered of too poor quality for export. In 1993, taining meat for Russian consumers. There police located 4,000 illegal. poppy fields in Poland: Dope, Inc. depot were 20 tons of cans altogether. Poland. Commensurate with Poland's rise in Officials of the Russian Ministry of Poland is the "Grand Central Station" for the drug world, is its crime rate, which has Internal Affairs and their western counter­ drug flows, reports of the U.S. Drug nearly doubled yearly in the 199Os. parts tend to emphasize that the dope trade Enforcement Administration (DEA) show. Ukraine: the Dope, Inc. grip in Russia, eastern Europe, and Central Asia Marijuana and cocaine come in to Poland is run by criminal gangs, most of which are from the Baltic Sea from the Western Another country caughtin the drug cross organized along ethnic divides. The widely Hemisphere and Africa bound for points east fire is Ukraine, once the breadbasket of east­ publicized role of the Chechen criminal and west. Heroin and marijuana also come ernEurope and the Soviet Union. In only the clans, and of the Chechen Republic as a pro­ into Poland from the eastern border with first six months of 1995, Ukrainian authori­ cessing and transshipment zone in Russia, is Ukraine, where it is transported to western ties seized 23 tons of illicit drugs, including a case in point. Europe. The amount of drugs flowing hashish, opium poppy straw, and ampheta­ But this picture of the dope trade as run through the country is so dense that in May mines. Ukraine is also a critical transship­ by a bunch of individual criminal gangs, is 1993, Polish Customs officers seized 4.4 ment point for chemicals, such as acetic the same as saying that a train is nothing a metric tons of hashish. In November 1993, a anhydride, which is produced in largequan­ but a bunch of boxcars. What makes a train 2.5 metric-ton shipment of hashish was tities in Russia, for use in opium refining to a train, are the linkages between the box­ intercepted; its point of origin was produce heroin in the Golden Crescent. cars-and the engine. Although each crimi­ Afghanistan. An additional 2.5 tons of the As early as 1993, leaders in Ukraine nal gang may be organized internally along same shipment had been seized in Belarus. were sounding the alarm on the Dope, Inc. ethnic lines, these gangs are in constant con­ In December 1993, Polish Customs seized takeover of their country. The New Jersey­ tact with each other, passing and receiving half a ton of marijuana that had arrivedon a based Ukrainian We ekly reported in May huge shipments of drugs being passed from KLM (Dutch airlines) flight from Lagos, 1993 that the Ukrainian Security Service third parties, oftenlocated continents away. Nigeria. On April 18, 1995, 2. 1 metric tons had called a special meeting of regional The total picture of the drug-smuggling of marijuana were seized from a container administrators to draw up plans on how to routes into Russia from Central Asia and the which had been transported on the Danish thwart the criminaltakeover of the economy.

48 Special Report EIR July 26, 1996 The We ekly 's correspondent Dmytro Mafia groups, such as the Neapolitan sources report that Russian soldiers frequent Filipchenko reported: "Profiting from the Camorra and the Sicilian Mafia. Drugs go the finest restaurants in the city-flush with after-effects of the collapse of the U.S.S.R., the other way also: Kosova Albanians, funds from the drug trade. various gaps in the existing legislation and Russians, Turks, and local Czechs move The Golden Crescent of Pakistan and enforcement, and a lack of regulation of eco­ large cargos of heroin from the Golden Afghanistan was launched with the nomic relations between the enterprises and Crescent to western European markets. Afghanistan war (see article, p. 25). This is the state, criminal elements have created so­ South American traffickers are also finding the major source of heroin and opium going called 'support groups' in the higher eche­ safe passage through the Czech Republic. into the NIS countries. lons of authority in Ukraine. They have also One ephredine-smuggling route from The price of the heroin goes up every time forged strong links with international orga­ Mexico has been discovered, and cocaine is it changes hands along the route, reported nized crime groups, and diversified their now arriving in Czech airports, along with Anatoly Baranov in the Russian daily Pravda activities-primarily in banking and trade." the drug tourists. of Sept 21, 1994, and has become the most lucrative form of business. '"Tajiks have very On the last point, it was reported by the The Central Asia bonanza newspaper Kiev Pravda in August 1993, that little money. . . . Even when there is paper drug dealers from Russia, the United States, While the western mafias are walking in money, the Taj iks have nowhere to earn it­ and Ukraine had held a grand council in the front door opened by the Thatcher-Bush all industry is standing idle, agriculture is Zurich, Switzerland, to set goals for drug imposition of free-trade globalization on extremely unprofitable and inadequate, and expansion in eastern Europe. Russia and eastern Europe, by far the trade is utterly disorganized." The expanded The Ukrainian We ekly article listed the biggest fl ow of drugs coming into and drug trade, coming in from Afghanistan, says methods to be used: "The principal goals of through Russia and eastern Europe, comes Baranov, is flourishing as a result. In the Ukrainian mafia today are perceived to in through the back door, from Central Asia Tajikistan, drugs are called "modeling clay," be: to obtain illegal easements in export and the Golden Crescent of Afghanistan and and a kilogram of it in neighboring trade; to illegally obtain raw materials; to Pakistan. As the agency Novosti described it Afghanistan costs 80,000 rubles, or about use foreign investments to fund criminal in August 1994: "With the collapse of the $35--;10. "When it crosses the Pyandzh in a activities (such as narcotics, production and U.S.S.R., opium from Afghanistan, smuggler's bag, it increases in price approxi­ traffic, and the sale of nuclear materials); Pakistan, and Iran started flooding into the mately tenfold, and in the border regions of and to embezzle humanitarian aid arriving to NIS states. And though border guards and Pamir is valued at 800,000 rubles [$35- Ukraine from abroad. customs officers are doing their utmost, the 40,000]." In Dushanbe, it is worth 2.5 million "As a result, organized crime in Ukraine major part of these lethal powders still seeps rubles, and in Moscow 10 million rubles. is struggling to achieve control over the through the cordons. The new so-called Silk Baranov reports that Afghanistan accepts entire import and export system of the coun­ Road is very convenient for smugglers. It anything in payment for the heroin-"hard­ try " (emphasis added). has replaced the former mainline into ware, ammunition, flour, military materiel, As always, Dope, Inc. in Ukraine is feed­ Europe, through Turkey and Bulgaria, which gasoline, and diesel fuel." He further claims ing on the destruction of young minds. has become far more dangerous because of thatthe RussianArmy rearservices directorate According to the Ministry of Internal the political situation in the Balkans." rides shotgun on food and fuel being sent into Affairs, the spread of drug consumption Hence, even before the opening of Afghanistan, in exchange forthe drugs. there has been "alarming." The cause is not Russia and Central Asia to real economic In addition to carrying heroin from points only poverty and economic crisis, but, said a development and trade along rail corridors southwest, the newly independent countries ministry official, "superabundance." organized as a new Silk Road spanning from of Central Asia, which have traditionally "Every year," Kiev Pravda reported in Beijing to Paris, as proposed by American grown quantities of opium for local consump­ July 1993, "more than 6,000 drug addicts Presidential candidate Lyndon LaRouche, tion, have now emerged as significant pro­ are registered in Ukraine, of which more the Thatcher-Bush policies have produced a ducers in their own right, placing these coun­ than 40% are minors. More than 90% of all drug Silk Road (Map 15). tries, which were already the poorest sections addicts are under 30 years of age. Half of Evidence suggests, furthermore, that one of the U.S.S.R., under the mercy of Dope, them become addicted as teenagers." of the major facilitators of this "Drug Road" Inc. As Novosti reported in 1995, "Under Czech Republic: Shangri-la is the Russian Army. According to some conditions of war, it is difficult to cultivate reports, up to 40% of the Russian and allied agricultural land. Harvests suffer. But the To the Czech Republic, Dope, Inc. has soldiers who fought in the Afghanistan War planting of opium, for example, does not given the special role as the "Nepal" of east­ became addicted to drugs. As one official of require any special conditions, and the profits ern and western Europe-a Dope, Inc. the Russian Ministry of Internal Affairs are incomparably higher than for any of the tourist trap. The government signed on, admitted in a press conference in 1994, in products of normal agriculture. . . . For when it passed legislation which permits answer to a question on this point, "Yes, example, 1 hectare of a fruit-tree farmyielded personal possession of drugs. Simul­ there is some form of cooperation [between in 1991, 15-20,000 rubles, but opium (5 kilos taneously, drug prices dropped. The combi­ servicemen and the drug traffickers]. It's of raw opium) yielded 2.5 million rubles." nation has made the Czech Republic a drug true that the drugs fall into the hands of the • In Tajikistan, drugs arecultivated in the attraction for tourists from western Europe, servicemen. We carried out a number of Parnir region in the east of the country, called especially Austria and Germany, where operations . . . to check army units Badakhshan, whose population are mostly cocaine and heroin sell for three times their deployed in and outside Moscow. A number followers of the Ismaili Prince Karim Agha price in the streets of Prague. of cases were revealed in which drugs were Khan. Sources report to EIR that once a trav­ The Czech Republic also functions as a trafficked to and fro from the barracks." And eler steps out of the capital of Dushanbe, he launching pad toward the East for the Italian in cities such as Dushanbe, Tajikistan, sees poppy fields everywhere in the country-

EIR July 26, 1996 Special Report 49 side. Opium grown in Tajikistan is shipped north to Osh, a largely Uzbek city within Kyrgyzstan on the Uzbek border. • In Uzbekistan, opium poppy and The Dope, Inc. invasion hashish are cultivated in the mountainous regions of Uzbek, particularly in the regions of Samarkand and Syrhandarya, reports the of the Russian economy State Department. But Uzbekistan's use to Dope, Inc. is mostly as a brokering center by Roger Moore and transshipment point for drug operations. • In Thrkmenistan, opium has tradition­ ally been produced for local consumption. n November 1991, at a conference of the logistics for this criminal revolution came Most opium poppy is grown on the Iranian Schiller Institute, only three months after from the We st, and the Russians who joined border in the Akhal Ve layat, which contains the breakup of the Soviet Union, EIR edi­ whole hog, were often already active in the Ashgabat, and in the eastern regions of torI Dennis Small presented to an audience of East-West weapons-for-drugs economy, Lebap and Mary. As the State Department 400 people a documented picture on the dis­ where the borders between the Warsaw Pact explains it, "Opium is bartered by the local aster that the application of neo-liberal ''free and NATO were faded. producersfo r scarce commodities like bread trade" dogma, especially its "shock therapy" Within Russia, all experts admit that the andJuef' (emphasis added). form, has brought to the countries of lbero­ institutional chaos, associated with the shock • Kyrgyzstan is a traditional opium pr0- America. SmaIl wamed the audience of rep­ therapy reforms, has led to uncontrolled bor­ ducer, and after the Soviet Union banned its resentatives of 36 countries, including from ders, unregulated banking, unbridled smug­ cultivation in 1973, illicit cultivation, mostly eastern Europe and almost all the newly gling, underpaid police facing mafias flush in remote mountainous regions, continued. independent states (NIS), that if they accept­ with dollars, and a collapsing health care In 1995, authorities seized 1 ton of indige­ ed the "reform" policy being pushed from system for addicts. How did this Dope, Inc. nous opium. Cannabis is also produced here. the West by such Harvard yuppies as Jeffrey takeover of the Russian economy happen? • In Kazakhstan, police seized 6 tons of Sachs, "this is what will happen to you." Bust the ruble illegal narcotics in 1995. Marijuana is the SmaIl cited the case of Bolivia, where Sachs most important drug crop, but ephedrine and admits that the tin- and oil-sector workers, A crucial step in the looting of Russia opium production is on the rise. Most of this laid offas a result of his reforms, had gone to was the destruction of the Russian ruble. production occurs in the vast Chu Valley, work for the coca growers. Now, in early This plan went into high gear in January which also spans part of the territory of 1996, we read about laid-off fish cannery 1992, with the Gaidar reforms. Prices were Kyrgyzstan and Uzbekistan. According to workers in the Soviet Far East growing mari­ decontrolled, inflation soared to rates of some reports, there are some 40,000 juana and bartering it for food. 2,000% 'per year, and dollarization of the hectares of opium fields in the Chu Valley, Not only have the popUlations of Russia Russian economy began. By December and 4.5 million hectares of hemp (marijua­ and the NIS been reduced to desperate 1992, the ruble had crashed from 1.81 to the na). Ephedra plants, from which ephedrine impoverishment, forcing them onto the pay­ dollar in 1991, to 500 rubles to the dollar. is derived, grow wild in the Taldy-Korgan rolls of Dope, Inc., as foot soldiers. It is By December .l993, it was 1,250 to the dol­ and Dzhambyule regions, with 2,000 tons under the financial framework of the shock lar, and by December 1994, it was 3,306 to harvested in a single summer. therapy imposed on Russia and the NIS the dollar. "Doing business" in the ruble Novosti further reported in 1995 that countries by British Prime Minister became a losing proposition, with the result Russia itself is not immune from the nar­ Margaret Thatcher and U.S. President that transactions generating hard currency cotics cash-cropping. "In Russia, 1.5 million George Bush, that the filthy lucre produced became the name of the game. Anything that hectares of wild-growing hemp are regis­ by the criminalization of these economies could get a price in Western markets was tered. One hectare yields approximately one reaches its ultimate destination: the coffers bought, stolen, or swindled out of the ton of narcotics material annually. Narcotics of Dope, Inc., primarily in the We st. Thanks domestic economy and shipped out. plants (hemp, poppy, oil-poppy) flourish in to Thatcher and Bush, Russia traded in com­ The street mafias, an outgrowth of black southern Russia, in the non-Black Earth ter­ munism for the British Empire's dope-dri­ marketeering under the Soviet system, ritory, in the Far East, in Tuva, the Caucasus, ven black economy---offshore financial cen­ became institutionalized, under International Buryatia, Siberia, and other regions. The ters, metals speculators, money launderers, Monetary Fund (lMF) reforms, when annual growth of narcotics cultivation is 10- crime networks, and drug traffickers. Gorbachov privatized much of the retail 15%" (emphasis added). Meanwhile, in the last six years, Russian sales infrastructure in the Soviet Union. Perhaps nothing better illustrates the industry has been shrunken to 40% of its These so-called cooperatives werepicked up Dope, Inc. degradation of the Russian econ­ previous levels. Russian flight capital, on the by regional Nomenklatura figures and their omy, than the way in which Russia, Poland, order of $300 billion, is locked into the appended assortment of criminal contacts. and other former Soviet satellites have global financial system's specUlative nooks According to Yuri Dashko of Moscow's become leading producers of amphetamines. and crannies, and a vast black economy of Academy for Economic Security, this was a Underground synthetic drug laboratories smuggling and crime in Russia runs the conscious policy to "integrate the shadow have become the major employers for thou­ scale from hard-core criminals to members economy into legal areas." sands of chemists, thrown on the scrapheap of the Nomenklatura with Swiss bank The floodof Western consumer products, by the Thatcher-Bush free-trade regimen, accounts. But, as much as Russians are increasingly out of the reach of the impover­ left to tryto survive on $20 a month. accountable for their own country's fate, the ished average Russian, poured in through

50 SpecialReport ElK July 26, 1996 the cooperatives, whose clients were the tries and instead ship everything out to worked withanother Rich-connected opera­ nouveaux riches-as the domestic consumer We stern markets. George Soros, speculator tive, Shabtai Kalmanowitch, a KGB agent industry shrank. Import-export firms, linked and pro-drug legalizer, boosted this plan. laundered into the organized-crime faction to Western suppliers and staffed by former Prior to his 1984 conviction in a U.S. of Israeli intelligence. Kalmanowitch was KGB agents and others, sat on top of the court on charges of tax fraud, Rich had been adviser to Chief Mangope, head of South streetmafias, and raked in the profits. a partner with oilman Marvin Davis in Africa's Bophuthatswana bantustan. "Bop," Today, estimates of Russian flight capital Twentieth Century Fox, with Henry as the bantustan was dubbed, is known for abroad go up to $300 billion. The October Kissinger on the board. Rich was theperfect its casino gambling and for being one of the 1995 report of the Swiss Federal police, pied piper, having been the official We stern world's biggest producers of platinum. Status Report East Money, estimates that 40- representative for Soviet metals trading in Arrested by the Israelis in 1988, 50% of Russia's Gross Domestic Product is the 1980s, and the architect of the illegal Kalmanowitch was freed toreturn toRussia in in the "shadow economy," and that large flow of Soviet oil to South Africa, in viola­ 1993, where he took up business with the sums of Russian criminal money have land­ tion of international sanctions. He was also mafia-connected Duma member Josef ed in Swiss banks. In Switzerland, "interna­ up to his eyeballs in the 1980s in the trian­ Kobzon. Today, the Liat-Natalie firm founded tional trade deals, particularly raw materials, gular trade in weapons, oil, and drugs by Kalmanowitch and Kobzon is involved in arefinancially arranged, which never appear around the Afghan and Iran-Iraq wars, and some of the biggest real estate and construction in the statistics," it notes. George Bush's Iran-Contra drug caper. ventures in Moscow. According to sources, Simultaneously, Russia was dollarized, Rich was then in a perfect position, in Kobzon hosts Rich whenever the latter visits reaching such levels that in 1994 and 1995, the early 199Os, to set up massive legal and Moscow. Kobzon and his network had been the New York Federal Reserve sold on a illegal exports of oil and other commodities the focus of 1993 German police intelligence seignorage basis, close to $40 billion newly out of Russia, as well as facilitating the off­ leaks exposing the stay-behind crime networks minted U.S. notes, primarily $100 bills, to shore money-laundering channels so that being built up around the Russian We stern the New York-based Republic National this money stayed abroad. Group of Forces stillstationed in Germany. Bank of Edmond Safra. Safra had bought After the 1991 collapse of trade among This network encompassed criminal them for a select group of Moscow-based the former republics, Rich's contact base cells, largely operating through import­ banks and their customers, and the dollars was the only network capable of putting export companies, that went from Moscow, were literally flown to Russia. together inter-republic trade deals. to Berlin and Antwerp, a center for cutting According to V sevolod Generalov of the of Russian diamonds; to Israel and Brighton Enter Marc Rich Russian State Committee for Metallurgy, in Beach in Brooklyn, New York, where the Another step in Dope, Inc.'s takeover was an April 1, 1996 London Metals Bulletin Russian emigre mafia had perfected fuel tax toentice members of the Russian and Soviet interview, "These companies were only frauds running into the billions. Israeli Nomenklatura into get-rich-quick sell-offs of interested in today's profit or 'hit and run' Police intelligence official Leber stated in raw material wealth to the "global markets." operations. There was a lot of speculation the Oct. 2, 1995 Newsweek, that figures in Russia was sold a poisonous stew of and illegal financial activity." this network, Boris Nayfield and Rachmiel Physiocratic doctrine, the "Bounty of By 1992, according to the head of Rich's Brandwain, are handling a heroin and Nature," and Adam Smith free-trade doc­ Moscow office, Daniel Posen, Rich and com­ cocaine business stretching from Ibero­ trines, that provided the basis for Russian pany were doing $2.5 billion in "natural America to Europe and Israel. According to shock therapy czars Yegor Gaidar and Anatoli resources" trading with the former Soviet a Russian weekly, Kobzon is friends with Chubais, who took office in President Union. In 1992, Rich's Moscow contact, "thief-in-law" "Yaponchik" Ivankov, who Yeltsin's first government in late 1991, and Russia's "commodities kingpin" Art yom was arrested by the FBI in June 1995 in began implementing the reforms in 1992. Tarasov, head of the foreign trade ISTOK New York City. After the Fall 1991 breakup of the Soviet association, came under pressure and skidad­ Enter Philip Morris and Union, and the subsequent chaos in trade dled off to London with a bundle of money. Transworld Metals and ruble transfer payments among the new According to a 1992 Izvestia article, in republics, Western raw material trading December 1991, Rich was the main beneficia­ The import flood into Russia is small pirates such as Marc Rich, based in Zug, ry of a top-down decision assigning substan­ change, compared to the raw materials out­ Switzerland, offered their extensive Russian tial hydrocarbon supplies for export. The Wa ll flow to the West. Here, the volumes of contacts quick access to world market prices Street Journal in 1993 estimated Rich's trade wealth require offshore banking skills, met­ for Russian oil, aluminum, gold, and other with the former Soviet Union at $3 billion, als market insiders, secure numbered bank products normally consumed domestically. "about a tenth of his worldwidebusiness." accounts in the We st, and protected opportu­ In his heyday, Rich, now a fugitive want­ Rich has never been shy in bridging the nities for investing the proceeds outside ed in the United States, controlled one of the gap between the masters of British geopoli­ Russia. The unique relationship between a world's biggest commodity trading firms. tics and the sleazy underworld of the black small, London-based metals trading firm, By the early 1990s, Rich had a large economy. In Tajikistan, the drug crossroads Transworld Metals, the Russian aluminum Moscow office, set up by his London part­ of Central Asia, Rich's New York agent, industry, and Philip Morris, Inc., shows just ner Felix Posen. From this office was begun Rabbi Ronald Greenwald, has been in how close Dope, Inc. has come to succeed­ the raw materials looting of Russia, which charge of putting together aluminum trade ing in its conquest of Russia. turned into an avalanche of smuggling. The convoys, protected by private armies drawn The Anglo-Dutch families, grouped into Oct. 24, 1992 issue of the London from the area's armed clans, many of which the Club of the Isles, control the bulk of glob­ Economist put it bluntly: Russia should shut also traffic in heroin. al raw materials production, as a cartel. The down its raw-materials-consuming indus- Since the late 1970s, Greenwald had only significant area of the world not in their

EIR July 26, 1996 SpecialReport 51 control is the extensive reserves and produc­ based commodities fInns. The laundry works Bank darling Mikhail Khodork �vsky: w'ho tion capabilities in the fonner Soviet Union. by falsifying billings, building into the com­ stated in an interview, "I am convinced· that The London Metals Exchange (LME), with modity transaction price discrepancies which there is a chance for Russia toc �ge�m an the associated commodities trading houses result in money leaving the country. The industrial society into apost-industrial one." grouped around it, like Rich and Transworld LME-connected trade in derivatives permits In July 1995, two of the bankers wOoong Metals, is the center for global metals trading. imaginative variations to the scheme. with tvov were murdered. 0Ii Sept. 8, 1995, LME-connected metals traders operate like With Philip Morris International, Lvov himself was gunned down outside modem-day pirates, descending upon a tar­ Transworld pioneered a variant on this. By Moscow. AlOC was slated for bankruptcy, get, buying, threatening, stealing, much the September 1990, Philip Morris had made and Rich began buying up chunks of way the British Admiralty used the Barbary arrangements with Boris Ye ltsin, then head AlOes .trading divisions. pirates in the 170Ds. of the Russian Federation, for the import of According to Russian economics expert Marlboro cigarettes. Overnight, a black mar­ Cyprqs and the Balkan route Vladimir Panskov, as quoted in the Vienna ket in Marlboros and other We stern brands Wirtschafts Wo che of Nov. 16, 1995, "20% sprang up in Gennany where the We stern Philip Morris also paved the way for the of oil production, 34% of fertilizers, and Group of the Red Anny was stationed until Balkan route that brings drugs into Russia 45% of non-ferrous metals are illegally 1994. Billions of cigarettes were pumped through the back door. From the 1960s on, exported out of the country." South through the military transportation system, Philip Morris sold container-loads of American cocaine and Golden Crescent and into the hands of Russian emigre and Marlboros to wholesale smugglers through heroin and hashish turn up in the same other mafIa blackmarketeering rings. Belgrade, Yu goslavia, and SofIa, Bulgaria, Baltic ports that handle the metals outflow. Within Russia, Philip Morris was accu­ who then handled the smuggling to Italy's The criminal commodities trade provides a mulating rubles from their retail and whole­ Camorra and MafIa. Another center for this means for laundering the proceeds of both sale dealings. Transworld offered a service, smuggling was Cyprus, wherecargo went by raw materials and narcotics smuggling. used by probably 100 other companies, to speedboat or ship into Adriatic ports. According to sources, London's unload rubles accumulated within Russia for Beginning in the 1970s, these well-lubricated Transworld Metals operates in combination hard currency abroad. Transworld would use relations were used to handle Ii massive hero­ with Rich. It is reportedly the world's third Philip Morris's rubles to pay the tolling fee in pipeline from Southwest Asia's Golden largest aluminum producer. Once owned, at the Russian smelters, and simultaneously Crescent to western Europe! and the United and perhaps still, by London interests around Transworld transferred to Philip Morris, in a States. With the escalation of the Lebanese Henry Ansbacher Holding, it was assigned to bank account abroad, dollars earned from civil war, a mUltibillion-dollar, drugs-for­ take over the Russian aluminum industry the marketing of their Russian aluminum. weapons underground economy emerged, based in Siberia. By 1995, Transworld Transworld ran its alumina supply opera­ with Cyprus replacing Beirut as the eastern owned the majority of shares in smelters in tion with its Monte Carlo-registeredjoint ven­ Mediterranean'sdirty-money center. Bratsk (50%) and Sayansk (68%), and tried ture, Trans-CIS Commodities, a partnership Cyprus, home of two British military to take over the Krasnoyarsk smelter. These with the Chernoi brothers from Tashkent, bases, is today the main ju,mping off point smelters, some of the largest in the world, Uzbekistan. The Chernois now reside in for the networks controlling Russia's raw used to supply the Russian aircraft industry. Israel. Russian investigations into Transworld, materials trade and flight capital. Over 7,000 Within its current borders, Russia has no sup­ Chernoi, and the flight capital scheme have Russian offshore companies are registered in plies of the raw materials alumina and baux­ generated presscoverage, but no arrests. Cyprus, and 8 of the 26 foreign banks there ite. 1MF pressure against Russian state subsi­ But, opposition began to grow inside are Russian. According to the Wa ll Street dizing of industry made it impossible for Russia. In January 1995, the newly appoint­ Journal, phone traffic between Cyprus and these firms to import alumina. ed head of the State Property Committee, Russia dominates the island's modern In stepped Transworld, which provided Vladimir Polevanov, who replaced 1MF dar­ telecommunications exchange. Cyprus was the fm ancing for importing alumina, rented ling Anatoli Chubais, stated that it might be used in the 1991 sale of $1 billion in Soviet the Russian factories, for about $500 a ton, necessary for reasons of national security to gold reserves from Tashkent. Cyprus has took possession of "their" aluminum, which renationalize some key industries. He meant also conveniently been an outpostof British was shipped out of a Pacific dock the aluminum industry and Transworld, and, Empire intelligence operations since the Transworld built in Vanino on the Sea of was promptly fIred as a sacrifIce to the IME days when the British fleet controlled the Japan, and into Rich's market for "Russian" As 1995 progressed, opponents of Mediterranean. London's Barclays Bank aluminum. Through the rental procedure, Transworld Metals and its partners in Russia dominates Cyprus, along with France's called tolling, little money went into urgent began turning up dead. OIie such opponent Banque Nationale de Paris. maintenance, and nothing was set aside for was Feliks Lvov. Lvov had been trying to Most of Moscow's banks run their cur­ retooling up to current technological stan­ put together with the New York-based AlOC rency speculation via accounts in We stern dards. Through corruption and threats, metals firm and some Russian banks a new banks. Moscow's Stolichny Bank, one of the Transworld picked up from within the man­ bauxite-alumina supply operation to break recipients of large New York Fed dollar agement, more and more shares of stock. London's stranglehold. sales, has a Vienna company, owned by Most of the deals organized by Rich and In May 1995, Lvov had testifIed before a Stolichny's president, Smolenski, which others, used the foreign sale of raw materials Duma hearing against the looting practices in runs its currency and fInancial transactions commodities to launder money out of the the aluminum industry, pointing the fInger at primarily through the Dutch ABN Amro country. Zug, Switzerland prosecutors are Transworld's Trans-CIS front, and the Bank branch in Vienna. Stolichny and its investigating, for criminal money laundering, Moscow Menatep Bank which had worked Vienna partners were investigated in 1993 in the whole gamut of Russian deals by Zug- with Trans-CIS. Menatep's head is World a $25 million fraud case.

52 SpecialReport EIR July 26, 1996 A Winlling Strategy tivated, by crop type, on the face of the earth. Such capabilities have existed for almost two decades. As 21 st Century Science & Te chnology magazine explained How drugs can be in its January-February 1990 issue, a 1978 joint study by NASA and the Mexican gov­ wiped out, totally ernmentproved the case: "The remote sensing techniques devel­ by Dennis Small oped at NASA's Earth Resources Laboratory to monitor agricultural crops from Landsat satellites [can] be used to detect cannabis. utside of moralindiffe rentism and the all three of these fronts. They are the three The particular radiation reflectance signature overt promotion of every-man-for­ legs of the stool; without all three, the policy for the marijuana crop was determined to be himself hedonism, there are two will not stand up. in the 1.55 to 1.75 micron band, in the recOurring arguments wielded in defense of the The final, related consideration, is that infrared part ofthe electromagnetic spectrum. legalization of drugs. The first, is thatlegaliza­ the drug trade has to be fought simultane­ "With this knowledge, NASA analysts tion will cut drug prices drastically, and there­ ously, in a coordinated fashion, on a global could findthe cannabis fields fromthe air. A by take the high profitability (and concomitant scale. Since Dope, Inc. is a multinational multi spectrum scanning instrument (MSS) violence) out of the trade. We addressed that enterprise with operations in dozens of from NASA, mounted under the wing of a false argument in the opening section of this nations, it does little good to shut it down in Lear 35 jet, could cover 12,000 square miles report, where we proved that Dope, Inc. has one country only: It will simply move its of Mexico per day. The entire country could itself deliberately lowered the prices of cocaine operations to a more favorable environment. be mapped every 15 days, to allow crops to and heroinover the last two decades, as a clas­ be targeted for destruction almost as soon as Eradication sic marketing technique designed to increase they started growing." $e market for their "product." Their strategy Figure 25 shows the disposition of the Once the drug crops are detected, highly succeeded. To do more of the same, under the total quantity of marijuana cultivated world­ effective herbicides, such as glysophate, can guise of legalization, would only ensure a vast wide, over the ten-year period 1985-95. then be applied massively, using virtual air new increase of drug consumption. Most noteworthy is that a full 26% of what flotillas protected by the respective national The second argument is pure, cultural was planted, was eradicated. The United air forces, if necessary. For hard-to-reach pessimism: Drugs cannot be stopped, so we States, the largest producer in the world, mountainous areas and deep valleys, mod­ may as well learn to live with them. Many eradicates an estimated one-third of its crop ern, armored helicopters can be equipped for then go on to cite the experience of the last (the DEA claims it destroys one-half, but a the task. decade-but especially of George Bush's review of the literature indicates this is over­ Environmentalist arguments against such phony "War on Drugs"-as "proof' that you ly optimistic). spraying are specious. Herbicides have been just can't win. Even the well-intentioned Mexico, however, is theworld leader on designed that are damaging only to the drug Clinton administration is promoting the the eradication front: In 1995, they eliminat­ crops, and not to other plants. As for the pur­ pathetic formulation that "this is not a war" ed 11,800 hectares of marijuana, out of a ported harmful effect on the poor, unsuspect­ to be won or lost, but rather it is like "fight­ total of 18,700cultivated; that is, about two­ ing consumers, they should protect them­ ing cancer"-which presumably means that thirds of the total. How do they do it, with selves by simply not consuming the illegal we are destined to lose the battle. almost no resources, and less in the way of substances in the first place. In any event, However, a proper review of the last technology? In general, thousands upon there is some question whether the herbicide decade's anti-drug efforts-both the suc­ thousands of Mexican soldiers are deployed does more damage, or the pot or cocaine does. cesses and the failures-points to a different into the drug-producing zones to chop down Marijuana cultivation in the United set of conclusions: marijuana plants with machetes and other States poses a greater challenge to eradica­ I. Crop eradication is effective. Even rudimentary equipment. Aerial surveillance tion, but it is far from an impossible task. with primitive technologies, upwards of and spraying with defoliants occurs in some The firstproblem is a political one: Much of 25% of the world's marijuana crop is being cases, but is by no means the rule. As U.S. the marijuana cultivation occurs on national eradicated. anti-drug director Gen. Barry McCaffrey parks land, and the environmentalist lobby 2. Seizures and drug interdiction can also reported on April 8, 1996: "The Mexican is a powerful obstacle to serious eradica­ do serious damage. Again with poor equip­ Army has eradicated more illegal drugs in tion. Secondly, over recent years, much of ment and resources, more than 25% of the last year than any other nation on the face domestic production has been moved world cocaine production was seized over of the Earth. And they did this at the risk of indoors or underground, into vast, techno­ the last ten years. their own lives, and [there was] a lot of hard logically sophisticated plantations which are 3. Stopping drug money laundering will work and sweat andblood involved in that." not detectable with standard aerial surveil­ never work ...if it isn't tried. The story If Mexico is able, with such methods, to lance. Here, however, infrared photography, here is that a serious effort has yet to be knock out two-thirds of its marijuana before which is heat sensitive, is very useful. So, made, by any country anywhere in the it is ever harvested, imagine what could be too, is the measurement of unusually high world, on this, the most decisive frontin the done with the application of serious rates of water and electricity consumption war on drugs. resources and technologies. Satellite map­ in areas where they are not warranted. To effectively dismantle Dope, Inc., it is ping and sophisticated aerial photography Similarly, the discharge of unauthorized necessaryto act in a coordinated fashion on are capable of pinpointing every hectare cul- chemical effluents can be readily detected,

EIR July 26, 1996 Special Report 53 FIGURE 25 FIGURE 27 Marijuana eradication and seizures Cocaine eradication and seizures ' percent of total quantity cultivated, 1985-95 percent of total quantity cultivated, 1985-95

Eradicated (2%) Eradicated" (26%)

• Colombia, Mexico, and the United States.

Sources: NNICC; INCSR; DEA; NORML; PGR, Mexico; EIR. Sources: NNICC; INCSR; OFECOD, Peru; PGR, MexiCO; EIR.

and point to probable indoor drug facilities. the competition. However, what if 90%were to Here the level of eradication is pathetically In fact, the Environmental Protection beeradicated? Ifthere is sufficient political will low-2%. There is organized political resis­ Agency is reportedly already providing the from thenational governments in question, and tance to such programs in all three producer DEA with useful assistance in this regard. adequate technology and other resources pro­ nations-Peru, Bolivia, and Colombia-by The same basic approach can and must vided by the more affluent nations (the United "peasant" associations financed by the drug be applied to other drugs, including opium States in particular), it is not unreasonable to cartels and their allied UN-based non-gov­ and coca. Today, only 5% of the opium crop suggest that as much as 90% of all three major ernmental organizations (see EIR, Nov. 10, is eradicated (see Figure 26), while less illicit drug crops-marijuana, opium, and 1995, "New Terror International Targets the than 2% of the total coca crop, is eradicated .. coca-couldbe eradicated on the spot. Americas"). Furthermore, there are major Eradicating a quarter of a drug crop, as cur­ problems at the level of the respective gov­ Seizures rently occurs with marijuana, is not enough to ernments: President Samper Pizano of seriously dent the supply. In fact, it may only Figure 27 shows what has happened Colombia is owned, lock, stock, and barrel, serve to maintain market control and weed out with coca and cocaine over the past decade. by the Cali Cartel; President Sanchez de Lozada of Bolivia is a member of the pro­ drug Inter-American Dialogue, and has him­ self openly advocated drug legalization; and FIGURE 26 Illicit opium eradication and seizures President Alberto Fuj imori of Peru has staunchly refused to eradicate, for fear of percent of total quantity cultivated, 1985-95 driving millions of Andean peasants into the arms of the Shining Path narco-terrorists, and for fear of losing the hundreds of mil­ lions of drug dollars which enter the Peruvian economy every year and without which Peru could not service its foreign debt. Cocaine seizures, however, are a some­ what brighter picture, with 26% of every­ thing produced between 1985-95 having been intercepted and seized by various national authorities. The United States makes about 40% of the total worldwide seizures, but even here, the resources deployed are woefully inadequate to the task. First, there is the question of aerial and maritime detection and interception.

• as heroin. Cooperation between the United States and

Sources: NNICC; INCSR; UN; Abt Associates; ANF, Pakistan; NALA; EIR. various Ibero-American governments has improve<;l somewhat over the recent period,

54 Special Report EIR July 26, 1996 with some U.S. radar equipment and techni­ . FlGUR£28 . . ' ...... '. • ""\, . . .': \;' " cal support being provided to Peru, ... , Colombia, Mexico, and other countries. But . it is far less than what is needed to really ��-!.���.�\��� .. dent the trafficking. A full complement of .10 ' ground radar and linked AWAC capabilities needs to be deployed, which would detect all unregistered flights and immediately transmit the information to national military units each assigned to patrol their own terri­ tory and air space. In-depth technical coop­ eration and intelligence sharing, with strict respect for national sovereignty, is called for in such efforts. Second, there is the monumental prob­ lem of inspecting all of the cargo which legally enters the United States. DEA offi­ cials estimate that a mere 3% of the 8-9 mil­ lion containers entering U.S. ports annually are actually inspected today. Similarly, hun­ dreds of millions of passengers cross the borders, as do about 12 million air cargo shipments, and something like 47 million trucks-a mammoth screening challenge. Even in those cases where inspection does occur, the drug traffickers are constantly , ,. ", developing ingenious new ploys to foil FIGuRE alii .""" : . : :v '·; '; '." ,, :,' . . \' , existing detection systems: packing cocaine "rljUana �: Ift:.I". \: inside concrete posts eludes X-rays; placing thQu$a!l4$ of.�. \' packaged cocaine deep inside blocks of frozen shrimp stymies drug-sniffing dogs; hiding cocaine in canned tuna lots, where only one can in a thousand is not legitimate, stands an excellent chance of passing inspection; and so forth. Only the extensive introduction of new detection technologies will turn the tide. For example, Magnetic Resonance Imaging (MRI)technologies, today applied routinely in the medical field, hold promise for the war on drugs. Here the detection system excites atomic nuclei in the scanned material and, by "reading" the atomic signature of elements, is able to locate the presence of illegal narcotics. Currently, however, only relatively small targets (such as letters or packages) can be effectively scanned this way. Othertechnologies under development, such as the Explosive/Contraband Detection System (E/CDS) which uses alpha and gamma rays, can handle somewhat larger packages, perhaps 2X2X2 feet-still sub­ warheads on it, because existing treaties did Once achieved, all containers entering the stantially smaller than standard cargo con­ not allow the physical opening of the mis­ United States could be subjected to scanning tainers (8X8X40 feet). sile. The converted version of the technolo­ by such detection systems, and there would Another promising possibility is to use gy consists of a kind of gantry through be a gigantic jump in the amount of drugs neutron beam technology, developed in the which up to 30 containers per hour can be seized. This, combined with the aerial inter­ 1980s to verify nuclear and chemical moved, while a neutron beam scans their diction described above, would be capable weapons disarmament accords, in the anti­ contents and tells customs agents what of seizing not 25% of the drugs shipped-as drug war. The technology was designed to chemical elements they contain. with cocaine today-but perhaps 75% or put a Soviet nuclear missile through a Although much work is still required, it more of the amount of all drugs shipped. screening system and count the number of is evident that such an approach is feasible. So, if only 10% of the drugs cultivated

EIR July 26, 1996 Special Report 55 gets past the eradication stage, and if only area harvested dropped during that same producer, for the firsttime since 1982. 25% of that reduced amount gets past the period by an even greater 87%-from The moral of the story is, that Dope, Inc. seizure stage, we are talking about only 2- 53,900 hectares in 1989 to 6,900 in 1995. In must be defeated everywhere, if it is to be 3% of the total amount initially cultivated terms of marijuana output, Mexico went defeated anywhere. With that in mind, we actually making it through to the consumer from producing an astonishing 30,200 tons recall for the reader the prescient remarks by market. That would put a substantial dent in in 1989, to "only" 3,650 tons in 1995. Lyndon LaRouche to an EIR-sponsored anti­ Dope, Inc. But it is still not enough. Was Dope, Inc. concerned? Not particu­ drug conference in Mexico City, held over larly. Stopping drug-money ten years ago, on March 13, 1985, just as At precisely the point that Mexico laundering Dope, Inc. 's "Development Decade" was began to put a dent in its marijuana output, getting under way: The third leg of the stool, and the key to Dope, Inc. took steps to make sure that "It is clear to the governments fighting any successful anti-drug strategy, is to another major producer, Colombia-which the international drug-traffickers, that the aggressively identify and put out of business itself had been successfully eradicating in drug-traffic could never be defeated if each any and all financial institutions that engage the rnid- 1980s-was brought back on line of our nations tried to fight this evil indepen­ in drug money laundering-which, after all, as a major source. As Figure 29 shows, in dently of the other nations of this hemi­ is the level from which the drug trade is 1985, under the government of Virgilio sphere. If the drug-traffickers' laboratories actually controlled. It is at this point in the Barco, Colombia was eradicating half of its are shut down in Colombia, new laborato­ discussion that people normally start getting cultivated marijuana: 6,000 of 12,000 ries open up in Brazil. . . . very nervous. hectares. Over the subsequent four years, "The greatest political threat to democra­ The reason, as we have documented the eradication campaign, which made very cy in Venezuela, Colombia, Peru, and other elsewhere in this report, is that global money successful use of glysophate herbicide, in countries, is the use of the billions of rev­ laundering is run from the top by the most particular, forced the total amount cultivat­ enues held by the drug-traffickers to fund powerful fi nancial interests on the face of ed and harvested to drop drastically, down terrorist armies .. ..It is impossible to the Earth: the City of London, the British to a low point of 1,500 hectares harvested break the ominously increasing political Commonwealth, and associated forces. in I 990-a 75% drop from five years earli­ power of the drug-traffickers . . . without But once the political will is established er. But then, under the Cesar Gaviria capturing the billions of dollars of drug-rev­ to carry out the task, here, too, modem tech­ (1990-94) and current Ernesto Samper gov­ enues run through corrupt banking institu­ nologies are available. Besides introducing ernments, all marijuana eradication tions ... anti-money-laundering legislation in coun­ ceased-to the delight of the British-run "Special attention should be concentrat­ tries where it doesn't now exist, and closing environmentalists, the British-run legaliza­ ed on those banks, insurance enterprises, and all the obvious loopholes in existing report­ tion lobby, and the British-run drug cartels. other business institutions which are in fact ing regulations in countries like the United Predictably, marijuana production rose elements of an international financial cartel States, real-time computer tracking of even back up to nearly the levels it had achieved coordinating the flow of hundreds of billions the most sophisticated money-laundering before the eradication campaign began. annually of revenues from the international schemes is possible. Coupled with banking Thus, in 1995, Colombia produced 4, 133 drug-traffic. Such entities should be classed transparency-the bane of the free marke­ tons of marijuana, to Mexico's 3,285- as outlaws according to the 'crimes against teers-such computer monitoring and track­ beating Mexico out for the dubious distinc­ humanity' doctrine elaborated at the postwar ing of suspect transactions can identify the tion of being Ibero-America's biggest pot Nuremberg Tribunal." vast majority of money laundering globally. As important as they are, none of the above measures will be effective, however, unless they are carried out on a global scale by a coordinated effort among sovereign nation-states. The following case study shows why. In Figure 28 we see the growing effec­ tiveness of Mexico's marijuana eradication campaign, beginning in 1989. In 1988, only 4,500 hectares were eradicated; but in 1989, according to officialstati stics, this more than doubled to 10,200 hectares eradicated. In subsequent years, equivalent amounts, and more, were eradicated, reaching a high of 16,900 hectares eradicatad in 1992. As the graph shows, the effect of that campaign was not only to eliminate the specific hectares in question, but it also significantly discouraged cultivation in general, which, as a result, dropped from over 64,000 hectares planted in 1989, to less than 19,000 in Eradication of marijuana fields in Virginia. Marijuana cultivation poses a challenge to eradication 1 995-a 70% decline in only six years. The efforts, but is by no means an impossible task, especially if advanced technologies are used.

56 Special Report EIR July 26, 1996 warns that the growing narcotics cartel is targeting Europe. Feb. 8, 1991: EIR, "Where Are the LaRouche's war on drugs: Sorties against U.S. Pot Fields, Mr. Bush?" U.S. marijuana production has soared as the a bibliography economic depression has destroyed American agriculture. April 1991: EIR Special Report, "Bush's Lyndon H. LaRouche, Jr. and his associates and Soviet Commissars. Second edition of Surrender to Dope, Inc.: How U.S. Policy is have been in the fo refro nt of a campaign fo r Dope, Inc., includes new sections on the Destroying Colombia." Official U.S. policy a military war against the global narcotics dope cartel's command structure, the drug under President Bush fostered Colombia's trade since the 1970s. Below are their prin­ traffic in Ibero-America and Southwest Asia, "truce" with the drug traffickers, turning it cipal case-studies and exposes. and the Soviets' role in running the drug into a testing ground for global drug legal­ trade with the British and their Boston ization and setting the stage for the current Sept. 12-23, 1978: EIR, "Why the World Brahmin retainers. narco-democracy. Bank Pushes Drugs," details how the inter­ July 8, 1988: EIR, "How the Banks Got Aug. 23, 1991: EIR, "Dope, Inc. Expands national monetary institutions enforce eco­ Hooked on Ibero-American Drug Money," in Asia," The creation of "free trade zones" nomic policies which have driven Third proves that the international financial institu­ in Asia's formerly communist regions, World nations into producing drugs as cash tions encourage Third World drug produc­ became fertile ground for the drug trade. export crops, in order to pay their foreign tion to facilitate payment of the foreign debt, June 1992: Dope, Inc. : The Book Th at debts. and shows how they promote legalization as Drove Kissinger Crazy. Third edition of December 1978: Dope, Inc.: Britain 's the next phase to keep their moribund world Dope, Inc., adds new material on the phe­ Op ium Wa r against the United States, com­ financial system alive. nomenal growth rates of the global drug missioned by LaRouche and written by a June 23, 1989: EIR, "Kissinger's China trade, on China's role in international drug team of EIR researchers. The expose of the Card: The Drug Connection," is an expose trafficking, and on the Anti-Defamation financial and political networks behind the of the involvement of Henry Kissinger with League of B'nai B'rith. multibillion-dollar international drug trade the major Hongkong dope banks. May 21, 1993: EIR, "JMF Free-Traders became an instant best-seller. January-February 1990: 21st Century Tum East Europe into Smugglers' Paradise," June 1980: Wa r on Drugs, Vo l. I, No. I, Science & Te chnology, "Yes, We Can Win under IMF-imposed "free trade" policies; is published. The magazine of the the War on Drugs !" describes the technolo­ expose has special focus on Seagram's and LaRouche-founded National Anti-Drug gies-aerial detection, radar, remote sensing Philip Morris. Coalition, it names the names of the "citi­ scanners-available for a high-tech war on Nov. 10 and Nov. 17, 1995: EIR, zens above suspicion" in the drug legaliza­ drugs, and counters the naysayers who claim "London's Irregular Warfare vs. Nations of tion lobby and behind the dope trade. that we must surrender to the cartels. the Americas." Eighty pages on the Cuba­ July 1980: The Ugly Truth About Milton Nov. 9, 1990: EIR, " 'Dope, Inc.' spawned Sao Paulo Forum, detail who is Friedman. Co-authored by Lyndon Doubling Every 5 Years; Next Target behind this "Narco-Terrorist International," LaRouche, this book documents the Nobel Europe," debunks the Bush administration's created to sow separatism, drugs, and terror­ economist's role in pushing drug legaliza­ pretense that U.S. drug use is declining; EIR ism. tion as the essence of "free enterprise." February 1985: Narcotrafico, SA : La Nueva Guerra del Opio. The translation of Dope, Inc. causes a furor across Ibero­ America. Within days, it is banned in Ve nezuela, on the demand of the powerful Cisneros family. A few months later, Peru's Ulloa family tries, in vain, to do the same. April 2, 1985: EIR, "A Proposed Strategic Operation against the Western Hemisphere's Drug Traffic," a speech by Lyndon LaRouche for a March 13, 1985 EIR conference, in Mexico City. The text, along with its 15-point program for a mili­ tary war on drugs, is published in November 1985, in LaRouche's election platform, A Programfo r America, and in the 1986 edi­ tion of Dope, Inc. July 1985: EIR Special Report, "Soviet Unconventional Warfare in Ibero-America: The Case of Guatemala," is a case-study of narco-terrorism. June 1986: Dope, Inc. : Boston Bankers

EIR July 26, 1996 SpecialReport 57 �1IDlIntemationa1

Clinton pulls Samper's visa for abetting drug trade by Robyn QUijano

When U.S. President William Clinton stripped Colombian ourselves in the national flag so Samper and his friends can President Ernesto Samper Pizano of his U.S. entrance visa maintain power." The editors reiterated their long-standing on July 11, under a provision in the U.S. Immigration and call for Samper's resignation. Naturalization Act which "provides for visa ineligibility Rumors that the United States is preparing to indict when there is reason to believe that the individual has know­ Samper are circulating in Colombia and throughout the re­ ingly assisted or abetted illegal narcotics trafficking,"the Brit­ gion. A high-level law enforcement official told EIR on July ish plot to use Samper in their drive for international drug 17 that an indictment is possible. legalization took a hit. Cries that the move would cause a According to widely read El Tiempo columnist Enrique nationalist backlash against the United States have been Santos Calder6n, Samper may end up indicted by a U.S. court: muted by the evidence that it has given Colombian patriots "The withdrawal of the visa did not merely refer to Samper's the maneuvering room to take their nation back from rule by witting acceptance of narco-money for his campaign, but [to Dope, Inc. The British, and the entire Britsh-run apparatus the fact that] in exchange for that financing, he encouraged within the United States, from Henry Kissinger to the Inter­ policies designed to protect and encourage the interests of the American Dialogue, had worked overtime to stop any escala­ drug cartels." tion of Clinton's battle with Samper's narco-dictatorship. In what looks like the firstmajor defection fromSamper' s Samper responded to the cancellation of his visa by reiter­ camp by a national board member of his own ruling Liberal ating his long-standing refusal to resign, declaring it now a Party, Ines G6mez de Vargas told the press, "Intolerance and "a question of principles," which would mean surrendering violence are growing daily because sometimes one feels that Colombia's "dignity " and "sovereignty." But El Tiempo, a one is not living in a democratic country, but that a dictator­ Liberal Party daily that has previously backed Samper, called ship is being established here ....The possibility of dissent for his resignation, and business leaders and other opponents, doesn't exist, and those who dare to think differently are who have demanded that Samper step down since the begin­ struck down." ning of this year, renewed calls for his resignation. The day after the corrupt Colombian Congress absolved Samper of criminal charges that he knew about drug cartel Demands for Samper to get out contributions to his 1994 election campaign, because of "lack The day after the visa was rescinded, the editorial of La of evidence," Samper's lawyer announced that anyone who Prensa declared: "The truth is that Ernesto Samperhas turned repeated the charges would be sued. But opponents and for­ Colombia into a narco-democracy and an earthly paradise for mer allies have suffered more than legal harassment. organized crime .... Today Ernesto Samper, thanks to his In an interview with El Tiempo, former Samper campaign brotherhood with the Cali Cartel, is a universal citizen of treasurer Santiago Medina revealed that just before his arrest, infamy and secretary general of narcotics trafficking." an assassin was sent by the Samper crowd to shut him up, The conservative daily El Nuevo Siglo, in its main edito­ but that he was tipped off in time. He had been given some rial the same day, warned, "Surely he will ask us all to wrap damaging evidence against Samper and company by one-time

58 International EIR July 26, 1996 Samper financier (and the wife of a cartel boss), Elizabeth warnedagainst using the crisis in U.S.-Colombian relations to Montoya, to prove that she had the goods to bury Samper. "give the advantage to the enemies of peace." Bogota Mayor Before she could testify before the Prosecutor's office, she Antanas Mockus warnedthat "we could soon end up with our was killed, with 19 bullets to the face. Hours before her grue­ own Fidel Castro." some murder, Samper's aide-de-camp Col. German Osorio Samper's narco-terrorist "popular base" has given him had made an appointment to meet her. He was ushered out of the power to resist demands for his resignation for over a the country to a diplomatic post in Italy, where he had been year. Crucial to his success has been the destruction of the hiding until mid-July, when the Prosecutor's office forced military's ability to fightthe drug lords and the narco-guerril­ him to return to Colombia and testify. Medina predicts that, las. Witch-hunts against the military for alleged human rights like Montoya, Osorio will be killed. violations in their war against subversion, which is sponsored by British-run non-governmental organizations such as Am­ Narco-sovereignty? nesty International,combined with budget cuts, have sharply Samper's interior minister, Horacio SerpaUribe (known curtailed the military's ability to fightthe war (see Documen­ in Colombia as an agent for the Cuba-linked narco-terrorist tation). And the 1991 Constitution that was bought and paid ELN guerrillas), has charged the United States with wielding for by the drug cartels, forbids extradition and other measures a "big stick" in the worst imperialist tradition. Similarly, the that would allow a successful war on drugs. Cuban government called the U.S. action "arrogant and un­ On July 15, director of the U.S. Officeof National Drug justified,"and claimed it represented "imperial thinking." Control Policy Gen. Barry McCaffreyidentified narco- terror­ Many of Ibero-America's worst enemies have, like Cas­ ism as one of the greatest difficultiesfacing Colombia. Asked tro's Cuba, proclaimed themselves advocates of "national at a White House briefingwhether he thought the administra­ sovereignty" to defend Samper's narco-dictatorship. Im­ tion's decision to revoke President Samper's visa would ad­ peached Venezuelan President Carlos Andres Perez, just con­ versely affect U.S.-Colombian cooperation on drug interdic­ victed of fraud and embezzlement in his own country, has tion, McCaffrey said, ''The Armed Forces, the police, the furiously denouncedClinton 's anti-Samper move as "flagrant prosecutors, the judges are still confronting an internalenemy intervention" into Colombian internalaff airs, and as a viola­ that's just incredible-l 0,000 narco-guerrillas ...assas sina­ tion of national sovereignty. He has called on the rest of the tion attempts. So, we will continue to cooperate in the counter­ continent to rally to Samper's defense. drug arena. That is unaffected by de-certification. We're all Ironically, it was Perez who, as Venezuelan President, extremely sad about the complicity ... of senior members took the lead in imposing the doctrine of "limited sover­ of that government with drug cartels. And that's why the eignty" in the region, and who was praised in 1992 by Kissing­ President took the action he did." erian State Department adviser Luigi Einaudi for promoting Inside Colombia, President Clinton's squeeze on Samper collective intervention "in defense of democracy"-or was has given room to those who want to take the nation back that narco-democracy? from the drug cartels to act. On July 9, Colombia's chief Also coming to Samper's defense is Inter-American Dia­ prosecutor Alfonso Valdivieso, who has collaborated with logue President Peter Hakim, who told the July 12 Washing­ the Clinton administration, seized over $1 billion in assets of ton Post that the U.S. action will be seen by Colombians as the Rodriguez Orejuela brothers, and other top Cali Cartel "an insult to their country's sovereignty"-echoing Samper' s bosses. The funds from the seizures are to go into the war on own argument. It should surprise no one that, like Perez, this drugs, thus strengthening Valdivieso, one of Samper's most would-be guardian of Colombian sovereignty is an ardent important opponents. defender of the concept of "limited sovereignty." Hakim has even committed the pro-drug-Iegalization Dialogue to a so­ called "Sovereignty Project," to rewrite the very concept of national sovereignty. Documentation Desperate to shore up his Presidency, Samper has called on Colombia's 10,OOO-man irregular army of narco-terrorists to join him in an anti-U.S. "patriotic front." In mid-July, two On July 5, the Conservative Party-linked Center for Colom­ of the country's most powerful labor unions, heavily infil­ bian Studies sponsored a seminar in Bogota which featured trated by the narco-guerrillas, carried out a day-long strike Armed Forces Commander Adm. Holden Delgado and Army to protest Samper's privatization plans. But the rallies were Commander Gen. Harold Bedoya. The two distinguished mil­ turned into anti-U.S. protests, including the burning of U.S. itary leaders used the opportunity to blast the Samper govern­ flags. ment's financialand political attacks on the military. Samper's policy of appeasement toward the FARC-ELN The main speaker at the conference, Admiral Delgado, terrorists was slammed by Colombia's top military leaders, presented a detailed analysis of the budget cuts that have the who denounced the guerrillas as part of the drug cartels, and Armed Forces on the verge of paralysis. He observed that the

EIR July 26, 1996 International 59 original military budget proposed by the Armed Forces was approximately $2 billion. The budget passed by the Congress was $1.5 billion. The firstbudget "adjustment," owing to an agreement between the Samper government and the Central Bank, reduced the military budget to $1.3 billion. A recent decision by the National Planning Department cut the military TransAfiica's Payne budget another $500 million, with plans to make yet a further $300 million cut. This leaves the budget of the Armed Forces, bill at war with a 1O,OOO-strong narco-terrorist army, at $500 fields anti-Sudan million! by Linda de Hoyos In contrast, Admiral Delgado pointed out, the narco-ter­ rorists have not suffered from the Planning Ministry's axe. In fact, the financing of the FARC, ELN, and EPL narco­ The TransAfrica Institute, the Anti-Defamation League, and guerrillas has grown considerably in recent years, reaching Baroness Caroline Cox's Christian Solidarity International the incredible annual figure of $1.6 billion-$7oo million (CSI) are now operating as co-conspirators for the purpose from drug trafficking, $480 million fromextortion and rob­ of forcing President Clinton to ram international sanctions bery, $330 million from kidnapping, $12 million frominvest­ against Sudan through the United Nations Security Council. ment profits, $71 million diverted from municipal and provin­ The barrage in this British-orchestrated assault on Sudan cial treasuries through blackmail, and $22 million from is a bill introduced on July 9 into the U.S. House of Represen­ other sources. tatives by Rep. Donald Payne (D-N.J.), chairman of the Delgado pointed out that President Samper's strategy is Congressional Black Caucus and a member of the House to "defeat subversion by forcing it to negotiate." He said the Africa Subcommittee. The bill puts into legislative form the principal difficultiesof this strategy are: 1) that 40% of mili­ precise strategy of Baroness Cox, deputy speaker of the tary troops are guarding oil installations; 2) the campaign that British House of Lords and chairman of CSI. has been launched against obligatory military service, which would do away with the Armed Forces altogether; 3) that "the The British 'slavery' campaign soldiers most distinguished in battle against narco-subversion Taking a page from a Britain's long history of waving are accused of crimes they have not committed. At this mo­ the charge of "slavery" as a weapon for its own geopolitical ment, there are 700 cases before the Prosecutor General's ends, Cox's CSI is the source of hoked-up allegations that office and 300 before the Attorney General's office"; and 4) the Sudanese government is deliberately conducting slavery the low budget and lack of personnel and equipment. in Sudan. The CSI's literature explains that the slavery charge is to be used as "motivation" for the United States Bedoya: The 1991 Constitution tied our hands to force through the UN Security Council an international "The worst enemies of the Armed Forces," said General trade embargo and economic and military sanctions Bedoya, "are not declared enemies. 'Tirofijo' [head of the against Sudan. FARC narco-guerrillas] is not our worst enemy, because we Representative Payne has taken the bait. It is unlikely already know he is an enemy .... More dangerous are the that concern for Africans is his motivation, however. In undeclared enemies, the ones with white collars and top hats, 1980, the National Democratic Policy Committee, founded who are like the termites that one cannot see but which gnaw by Lyndon LaRouche, was waging a campaign against the away at your house until it crumbles. One findsthese treacher­ International Monetary Fund's murder of African countries, ous enemies in the AttorneyGeneral 's office,in the Prosecu­ and calling up African-American leaders to stand up for a tor General's office, in the People's Defender's office.... U.S. policy of economic development for Africa. Hulan "The main problem is that we lack the legal tools for Jack, a leader of the NDPC and the first African-American defeating narco-subversion. We have spoken with the Peru­ to be elected to high offi.ce in New York City, approached vian military, with [Armed Forces Commander] General Her­ Payne at the 1980 Democratic Convention, to seek his sup­ moza for example, and presented them with our situation. port-to which Payne replied: "Why should I give a sh-t They told us: 'Change the legal framework or you can do about Africa?" nothing.' That is the problem of the 1991 Constitution. That This attitude may be the reason Payne is on the executive Constitution tied our hands ....In Colombia there is no war­ board of Randall Robinson's TransAfrica Institute. Another time legislation because the Constitution prohibits it. The sponsor of the bill, Rep. Ron Dellums (D-Calif.), also has commander has no authority. The evidence we present is not close associations with TransAfrica's Robinson, as Robin­ considered evidence. We have no ability to do intelligence. son's wife worked in Dellums' s office. As EIR has docu­ The 1991 Constitution has taken all of that from us." mented in detail, TransAfrica is a funded outlet of the Ford

60 International EIR July 26, 1996 Foundation, which, in tum, coordinates its work on Africa two reporters declined an invitation of the Sudanese govern­ with the Royal Institute of International Affairs and specifi­ ment to travel legally to Sudan with visas, to go wherever cally Baroness Lynda Chalker, British Minister of Overseas they wanted in Sudan, and to be introduced to government Development (formerly the Colonial Office). and other leaders who could show them the realities of To justify its funding, evidently, TransAfrica has led the this country. charge against African countries under the British gun­ Nigeria and Sudan. The TransAfrica Institute has been one The Somalia model of the key conduits of British policy into the Congressional The British oligarchy is determined to destroy Sudan, Black Caucus. as its stands today as an example of self-sufficiency and Two sponsors of the bill are known for their strong ties independence that cannot be tolerated in the fascist night­ to the Anti-Defamation League, an insidious subsidiary of mare of globalization and world dictatorship envisioned at British intelligence services operating in the United States: the Lyons summit of the Group of Seven major industrial­ Reps. Tom Lantos (D-Calif.) and Bamey Frank (D-Mass). ized nations. Other sponsoring members of the bill show the input of The Payne bill, if it is passed, is to function as a death Christian Solidarity International, which gained entry into sentence for Sudan, from the United States. It demands that the U.S. Congress on the basis of its Cold War campaigning the U.S. organize: on behalf of the "captive nations." Among this group of • A total multinational economic embargo against Su­ sponsors is found Rep. Edward Royce (R-Calif.), who is dan. The blockade that will cause untold suffering in the also a vocal supporter of the Contract with America; Rep. Sudanese population. John Edward Porter (R-Ill.); and Rep. Steve Chabot (R­ • An international arms blockade against the Sudanese Ohio), a member of the Africa Subcommittee and booster government, along with a continuation of the arming of the of Newt Gingrich's Contract with America. insurgency in the south. • The stationing of United Nations monitors throughout A hoax the country to report alleged "human rights violations." Since the United States has already cut off all military Payne is demanding that the United States carry out the and economic aid to Sudan, Payne's bill is in reality part annihilation of this African nation, a policy that will not of the pressure campaign against President Clinton, to force only destroy Sudan, but will bring chaos and war to the the administration to do the bidding of British intelligence entire northeast quadrant of Africa-spreadingthe "Somalia at the United Nations. British efforts heretofore to force full­ model" throughout East Africa. scale sanctions against Sudan are all but a lost cause oth­ Ted Dagne, the behind-the-scenes coordinator for Baron­ erwise. ess Cox et al. against Sudan, has admitted that "another The firstbid for such sanctions, fieldedin January, cen­ Somalia" will definitelybe the result offull sanctions against tered on London's demand that unless Sudan coughed up Sudan. Predicting that the government would fall if full three alleged would-be assassins of Egyptian President sanctions were imposed, Dagne, currently at the Con­ Hosni Mubarak in 60 days, then the UN Security Council gressional Research Service and formerly an aide to the would impose full-scale sanctions against Sudan. After 60 Africa Subcommittee, admitted that there was no national days, minor sanctions were imposed, but the wind went of institutionalized force to replace that government-just as out London's sails, when Egypt publicly indicated its lack occurred in Somalia when the United States and Europe of interest in destroying Sudan, and when the hit team sent forced the ouster of President Siad Barre. Dagne claimed out against Mubarak turned up in Afghanistan, telling jour­ that there are "factions in the military," factions in the oppo­ nalists that they had never worked with the Sudanese govern­ sition, the southern opposition is completely fragmented. ment at all! "All these factions will simply start killing each other," Now, "slavery" has become the issue of choice for the he said. British. Precisely timed with Payne's ballyhoo in Congress, Dagne has denied any British involvement in the cam­ the Baltimore Sun sent two of its employees, Gilbert A. paign against Sudan, boasting that the "action" against Sudan Lewthwaite and Gregory Kane, to Sudan to "explore" the was coming strongly fromthe United States Congress. Brit­ slavery charges. Strangely, they wound up in the same plane ain, he told this reporter, has "no financialintersts in Africa"! with Baroness Cox, who squired them around in sections In the second week of July, while Payne's sanctions of Sudan controlled by John Garang, the British-backed legislation was being introduced, Dagne was squiring Suda­ insurgent in southern Sudan. According to the reporters, nese People's Liberation Armywarlord John Garang around they "bought" a slave! town. In a seminar at the U.S. Committee on Refugees, Although the results of their escapade were smeared all Dagne stated his conviction that foreign policy should be over the front pages of the Baltimore Sun June 23-25, the made in Congress, not in the Executive branch.

EIR July 26, 1996 International 61 'Ron Brown II' mission to Bosnia: a chance to defeat the British by UmbertoPascali

The Boeing 707 that, in November 1963, flewPresident John Kantor surprised many analysts who knew him as a Kennedy to Dallas and then carriedhis body back to Washing­ champion of unbridled free trade, by his statements on the ton afterhe was assassinated, landed in the airport of Dubrov­ need for building up the physical economy, long-term invest­ nik, Croatia on the morning of July 11. The plane carried ments in infrastructure, and collaboration between the gov­ U.S. Commerce Secretary Mickey Kantor and a delegation ernment and the private sector, in which the government of business executives representing 16 U.S. companies, in­ would provide a general framework for private investments. cluding Boeing, Bechtel, Riggs Bank, Northrop Grumman, At least from the public speeches, the "Ron Brown II" mis­ United Technologies, and Enron Development. The mis­ sion was a breath of fresh air, in sharp contrast with the sion's aim: to contribute to the reconstruction of Croatia and usual trend of laissez-fa ire. Bosnia. The team visited Croatia and Bosnia for three days, concluding several economic deals and opening the way to a Clash with British policy potential strategy of real investment in economic recon­ Kantor' s clear intention, declared in every speech, to struction. make the reconstruction of Bosnia possible, clashed with the The Boeing 707, U.S. officials announced, will be retired British determination to carry on "genocide through financial in 1998 and displayed at the U.S. Air Force Museum at the means." A verbal confrontationtook place in Sarajevo on July Wright-Patterson Air Force Base in Dayton, Ohio, where the 13, after Kantor had visited with President Alija Izetbegovic accord that ended the most bloody part of the warof aggres­ and other leaders. Kantor was mobbed by journalists who sion against Bosnia was initialled last year. Nobody offered asked how could he talk about economic opportunities in an explanation of how the decision was made to use President Bosnia, when British businessmen-notably the chairman of Kennedy's plane for this mission, but everybody involved the British Overseas Trade Board who had visited Bosnia a linked this last historical flightof the assassinated President's few days before-had emphasized the "problems" that stand plane, to the crash that, on April 3, killed Commerce Secretary in the way of foreign investment. Kantor reacted with what Ron Brown and the 34 members of the delegation of execu­ the British news agency Reuter labeled spitefully as "the usual tives who were flying with him. The crash was followed by American boosterism that goes with his job." The commerce a quick investigation that did little to clarify the causes of secretary said: "We Americans think there are more opportu­ the crash. nities than problems. That's what distinguishes us from our At the time of the crash, President Clinton made clear competitors." He further explained that the difference was that a similar delegation, including representatives of every that "we see opportunities, but they're long-term"-a slap in corporation that had participated in the first mission, would the face to the British cult of monetarism. go back to Dubrovnik to accomplish Brown' s mission. Speak­ The official Commerce Department press release empha­ ing in July to the convention of the National Association for sizes such a long-term perspective: "Secretary Kantor' s mis­ the Advancement of Colored People (NAACP), Clinton again sion initiates the implementation of the Clinton administra­ emphasized the continuity of policy: ''The last thing 1 did tion's comprehensive commercial and investment before 1 got in the helicopter to come here, was to meet with development strategy for Bosnia and Croatia ....This com­ Mickey Kantor and Michael Brown, Ron Brown's son, and mercial strategy is the next step following the Dayton Ac­ the delegation leaving today to finish the mission that Ron cords, underscoring America's long-term commitment to the Brown started." region through both our private sector resources and those of Kantor, as soon as he landed, underlined that the sacrifice our government" (emphasis in the original). made by Ron Brown would not be forgotten. "Ron Brown Kantor also stressed an expression that had been used and 34 other wonderful people gave their lives," he said, "so by Secretary Brown and by President Clinton, in his first that the threat of war would be trivial, when compared to the comment after Brown's death. "Secretary Brown was com­ promise of opportunity." mitted to helping sustain the peace," Kantor said. "I am dedi-

62 International EIR July 26, 1996 cated to continuing that work-focussing the power of trade World Bank's Michel Noel gave his ultimatum to the Bos­ and commerce to generate opportunities and development nian government just three days before the arrival of the thoughout the region. This trip will be a tangible demonstra­ U.S. mission: "The state and its entities must disengage itself tion of the Clinton administration's unwavering support to very rapidly from any direct role in the productive. sphere . , ,;uring ..la sting peace and economic prosperity and improv­ of the economy." ing the lives of all the region's citizens .... This mission Inside the United States itself, the task of pushing "recon­ is not an isolated event. Rather it is an integral part of the struction" is being handed to an assortment of monetarists, President's strategy to sustain the peace process." usurers, and fast-buck artists. A U.S. expert with experience Immediately before leaving for his mission, Kantor in Bosnia told EIR that this may be happening because the underlined the point: "You can't have peace if people don't administration cannot find anybody who knows how the have jobs. We have to undergird this peace process with pri­ real, productive economy works. vate sector and public sector building of these economies. For A typical example was a high-level, semi-confidential instance, in Bosnia today, 75-80% of the people are unem­ conference at the Center for Strategic and InternationalStud­ ployed. Roads, bridges, gas lines, generators are all gone or ies in Washington, D.C. on July 17, titled "Bosnian Recon­ destroyed. Industries have been completely obliterated. There struction: Challenges and Opportunities." Executives from needs to be a complete rebuilding process. . ..It is going to some of the biggest U.S. corporations were present. But the be a concrete and demonstrable presence of U.S. and private word "reconstruction" became, in the main speech and in business working with government resources as well as pri­ the ensuing debate, a synonym for "quick and easy money," vate resources, in Bosnia." a pretext for an infantile attack against "public intervention," and a celebration of the magic of privatization. Save Bosnia, and save the United States Bosnian leaders ,are becoming increasingly outspoken The missions of Kantor and Brown are stages in the about this problem. On July 17, three months after the gov­ battle to save Bosnia from the "genocide through financial ernment of Sarajevo was forced to swallow the ferocious means" which is being pushed by the British oligarchs and austerity conditionalities of the World Bank, Bosnian Prime their appendices from the International Monetary Fund and Minister Hasan Muratovic criticized the World Bank pub­ the World Bank. But more than that, the battle for Bosnia licly for the first time, at a press conference in Washington is a "battle for the United States"-to save America from the while on an official visit. Knowing the kind of deadly pres­ same British free-trade lunacy, which is destroying industries sure that the World Bank can exercise, Muratovic's words and human lives. The verbal confrontation between Kantor reveal a conflictthat is on the verge of exploding. He stressed and the British journalist is a signal of something much that, besides some small projects of reconstruction, the. re­ deeper than mere "competition." Bosnia could become the building of the big industrial centers in .Bosnia· cannot be place where the best of the American tradition can find the achieved "without either big money or new investments." courage to successfully challenge the British system. "Lately, we have problems with the World Bank," he said. "There were three main points in the world where Clin­ "The World Bank is posing conditions which are very diffi­ ton's America had challenged what you call the British," a cult to reach. And I must say that for the time being, we Bosnian source told EIR. "The points are the Middle East, have been taking credits from the World Bank that are part Northern Ireland, and Bosnia. In the first two, the 'British' of our agreement for reconstruction of our previous debts are winning. Through the use of the weapon of terrorism, and new loans"-a reference to the fact that the "credits" they have potentially pushed them back to their worst mo­ Bosnia is receiving from the World Bank were already paid ment. In Bosnia-that was supposed to be the weak point­ by Bosnia to the Wo rld Bank in the form of payments on the British did not succeed. Will Kantor's words about real the debt of former Yugoslavia. reconstruction and investments become a reality? Will this The situation risks going out of control for the British. supply the U.S. government with the momentum to go for This is why, over recent weeks, there has been a constant the final confrontation with this horrible system? It must be attempt to re-ignite a Balkan conflict. On July 19; Richard clear that when and if the U.S. fightsthe evil veto of Bosnia's Holbrooke, the former U.S. "trouble-shooter," was recalled reconstruction, when and if they fightin Bosniathe insanity to active diplomatic duty, to try to deal with the situation. of privatization, when and if they fight the geopolitical He succeeded in pushing Bosnian Serb leader Radovan Kara­ dogma, whenever the U.S. does that, they are fightingforces dzic, the war criminal who has not yet been arrested, out of that have planted deep roots inside its own society. Will public office. they be able to recognize it?" Karadzic's public announcement will probably make it This contradiction is dramatic at this point. While Kantor possible to go ahead with the plan to hold elections in Bosnia stresses the need for a comprehensive intervention of govern­ on Sept. 14. But the situation will not be stabilized, .until ment and the private sector to rebuild Bosnia, the British an alternative to the British-World Bank financial genocide "businessman" Martin Laing calls for privatization. And the is found.

EIR July 26, 1996 International 63 Interview: Faris Nanic

WhatW"e need is help to ignite the engine ofre construction This interview encompasses several conversations held from by a sense of responsibility toward future generations. And June 29 to July I I, in which Bosnian representative Faris because they look constantly to the future, despite all the Nanic discussed with EIR's Umberto Pascali the key prob­ horrors they have seen, they maintain an optimistic attitude lems that are tormenting the young Republic of Bosnia. These and a strong sense of justice and morality. particularl y concern the economy, thecreation of a state appa­ During the firstconversat ion, Nanic' s thoughts were con­ ratus, and of a unified army for the Bosnian Federation. The centrated on the negotiations on the Defense Law, which was Federation is one of the two entities that form Bosnia and later approved by the Bosnian Parliament. The aim of that Hercegovina, under the provisions of the Dayton Accords. law was the unification of the Bosnian Army and the Bosnian­ It represents 51% of the territory controlled by the Bosnian Croatian military formations (HVO) in the Muslim-Croat fed­ government and the Bosnian Croats. The other 49%-the so­ eration. But the representatives of the so-called Herceg-Bosna called Republika Srpska-is under the Nazi-like regime of insisted on keeping the two armies separated. Radovan Karadzic and Gen. Ratko Mladic. Finally, an agreement was reached, and the Bosnian Par­ On July 1, Nanic was nominated chief of staff of Bosnia's liament approved a plan of integration within three years. President Alija Izetbegovic. He had previously served as Immediately after that, President Clinton announced the be­ spokesman for the Defense Ministry. Nanic, who was in Za­ ginning of the "train and equip" program for the Bosnian greb when the Serbian aggression against Croatia started, was Federation's Armed Forces. That result was also the work of one of the first who contributed to the formation, "from Nanic and his direct superior at that time, Deputy Defense scratch," of the Croatian Army. He also set up the firstBosnia n Minister Hasan Cengic. Besides all the-often necessary­ press agency, which he still leads, the TWRA Press Agency. tactics, Nanic's "bottom line" position during these tough He has led or has been part of diplomatic missions for his negotiations, was that the "United States, because of their country, often as the personal representative of the President. power position, must implement the principles that are at the Nanic co-authored the first major interview with Lyndon base of the American Republic." LaRouche to appear in the countries of post-Yugoslavia; it was published in the Bosnian magazine Lj i/jan, and sparked EIR: In a recent conversation in Washington, the bishop of a great deal of interest. Many readers were surprised to learn Banj a Luka, Franjo Komarica, was stressing to us that he is that LaRouche had already, in October 1988, denounced not particularly impressed by the problem represented by the Greater Serbia's strategy of aggression. war crminals Radovan Karadzic and Ratko Mladic. The prob­ Nanic has been a speaker at events organized by the Schil­ lem, he essentially said, is the protection they have enjoyed. ler Institute, and was one of the initiators of the International The U.S. is being blocked by the influenceof the "Europeans" Parliamentarians Against Genocide in Bosnia (IPGB), the whom they do not want to "displease," i.e., the Entente Cordi­ organization which, in October 1993, defiedthe UN's policy ale of Britain and France. In reality, if a political decision is and sent a multinational delegation of 10 parliamentarians to taken, then the problem of the war criminals can be solved Sarajevo. In April 1996, Nanic was the key Bosnian leader easily. What is your opinion? who made possible the visit of a Schiller Institute delegation Nanic: I do not really think that Mr. Karadzic and General in the Bosnian capital (see EIR Feature, May 10). Mladic are the problems per se. They wouldn't have so much Despite the terrible situation of destruction the Bosnian impact, unless they had been pumped up in a certain way by leadership has to face every day, it is clear from Nanic's the Westernpowers, by the internationalcommunit y's envoys words, what a principled approach, a sense of historical re­ in Bosnia. And the only problem that I see is that, if there is a sponsibility, characterizes many of these "nation-builders." political decision in Europe to remove them, and to indict and Non-professional politicians such as Nanic are motivated by extradite them to the War Crimes Tribunal in The Hague, then an understanding of the immense task they have at hand, and they would represent no problem at all.

64 International EIR July 26, 1996 Of course, I am not able to say whether there is really Bosnia, which is aimed not just to save Bosnia, but to save the direct support for them from official circles in Great Britain United States from our common enemies: the International or France, but our impression, from the public statements Monetary Fund, the World Bank, etc. How do you see the by officials in France and Britain and the Organization for perspectives, possibilities for the implementation ofthis Mar­ Security and Cooperation in Europe [OSCE], is that their shal Plan? attitude toward this problem is not principled. I cannot say Nanic: I think this a matter of political decision, as it had whether there is open support, but there is some kind .... been a matter of political decision when the Marshall Plan Karadzic and Mladic are being given much more importance was launched in postwar Europe. I think that if a political then they really have. decision is taken, then there would be no problem. I think that Actually, there are a couple of problems connected to whenever you talk about reconstruction, or about the funds that. First of all the OCSE and the international community, and investments necessary to rebuild and to reconstruct, then especially through its representative in Bosnia, Mr. Carl Bildt, you actually are talking about politics. This is not a technical­ insists on the removal of Karadzic and Mladic, as war crimi­ economic issue. The most important thing, is that you decide nals, from their political posts, as being the only prerequisite that you want to help the reconstruction of the country that for holding democratic elections in September. That is not has been devastated by war. Therefore, in the same way that true, because even Ambassador Robert Frowick, who is the the United States played the leading role afterWorld War II American representative at the OSCE in charge of the elec­ in reconstructing Europe, so, now, the U.S. should take on the tions in Bosnia, at the beginning of this month said that out responsibility in the reconstruction efforts in Bosnia and the of the 14 preconditions for the elections in Bosnia, only one whole region, in tight coordination with the Bosnian gov­ has been fulfilled.This means that there are really no precon­ ernment. ditions for the elections in Bosnia. What does that mean? If we hold elections under these EIR: What is your assessment of the overall economic situa­ circumstances, then we will legalize and legitimize the final tion in Bosnia at this moment? partition of Bosnia, because then the regimes of the para-state Nanic: First of all, in Bosnia at this moment there is no econ­ Republika Srpska will be finally legalized by the so-called omy. Our industrial plants and facilities are destroyed and democratic elections. Why? Because the Muslims and the damaged to a great extent. We were not a self-sufficientfood­ Croats who have been expelled from their homes, still cannot producing country before the war, so we are not now. A couple go back, cannot return to their homes; there is no freedom of of months ago, the rate of unemployment was about 70-80%. movement; there is no freedom of press, no freedom of public We have a destroyed transportation system and communica­ assembly, of political organizing, and therefore the only party tions system. We have problems in re-starting some of the that is represented in Republika Srpska is the Serbian party. production facilities that have not been damaged, because we Therefore, you risk getting a completely opposite effectfrom do not have funds. There is no conception of how the eco­ the one you expect. The risk is to pave the way for the partition nomic strategy of the country should look, because there are of Bosnia between the two "entities" constituting Bosnia ac­ too many pressures from the outside. We are not able to launch cording to Dayton. a real development program, because we are not able to issue long-term credits through our National Bank. EIR: Mr. Nanic, I would like to ask you about an issue on As you know, as part of the Dayton Accords, the head of which you have done a lot of original work, of analysis and the National Bank of Bosnia, for at least one year, must be a elaboration: what is commonly known today as the Marshall foreigner-appointed by the World Bank-who will be in Plan for Bosnia. One of the issues that has never been faced charge of monetary policy. He will take care only about bal­ by the successor of Lord Carrington and Lord Owen, the ancing the budget, some kind of bookkeeping, without envi­ "international mediator" Carl Bildt, is the question of eco­ sioning any development or any reconstruction. This is our nomic reconstruction. This issue, together with the arrest and fear. prosecution of the war criminals, is the key to peace and Secondly, you know that former Yugoslavia had a debt reconciliation. But Mr. Bildt never dealt with the "civilian of about $16 billion. Now the debt will be divided among aspects" of Dayton-that was supposed to be his primary the republics emerging from former Yugoslavia, including task; while he spoke a lot about the problem of the war crimi­ Bosnia. It is some kind of paradox. We have firstto reschedule nals, in my opinion, it was in a purposeless, demagogical, and our debts, as a precondition to get any help from outside, in counterproductive way. But without reconstruction, there is terms of productive loans which have not yet been launched. no peace. Every leader we-the Schiller Institute delega­ tion-met in April in Bosnia, agreed with the need for recon­ EIR: Speaking purely from a technical standpoint, leaving struction through a Marshall Plan, because this is also the way aside the political impositions: Do you think it would be dif­ to have a real reconciliation based on justice. ficultto arrange a program of adequate reconstruction, a Mar­ We are launching a campaign on the Marshall Plan for shall Plan, that would put Bosnia on its feet like it was before,

EIR July 26, 1996 International 65 or even better? some 40,000 soldiers were to be demobilized from the Cro­ Nanic: Technically it would not be difficult, because we atian Defense Council (HVO). These people were demobi­ have tremendous resources for a small country. We have con­ lized and now represent 205,000 unemployed people. And siderable human, scientific, and natural resources to re-start this is only .on the territory of the Federation. very advanced production of various kinds. The majorityof these are skilled workers, industrial work­ For example, we have two main sectors that I see as of ers, engineers, medical personnel, doctors, professionals, var­ vital importance: the military industry that we had before the ious kind of experts, and they can be utilized immediately. war, which has been partially damaged, but could be revived Besides, it is imperative to prevent possible social· :turmoil very fast and converted to civilian production; and the con­ and instability as the result of the anger of these people, who. struction sector, public works. We have quite an experience have been fightingfor their country for four years. We think there, because our companies used to work all over the world, these people should be given jobs as soon as possible. There­ before the war. I think these two sectors can be utilized imme­ fore, I think that the reconstruction process could also serve diately, and I don't think that technically there is any problem as a possible way to use these resources and prevent a social at all. explosion. Let me give you some examples. First of all Bosnia's Unfortunately, no program has been submitted tothe Bos­ largest construction company, called Hidrogranija, was a nian government, to the Defense Ministry, or anybody .else, large contractor in Iraq before the war, for the construction of that would take care of the demobilized soldier. Nobody in a high dam-a $2.5 billion contract. It was also involved in Dayton thought about the possible consequences .... We huge construction works in Asia and Africa. We have a skilled have also another problem, the Ministry of Defense doesn't labor force, we have a large number of engineers, we have have a penny from the budget, because under the Dayton international experts, i.e., we really know what an interna­ agreement, there is no budget fo r defense in the Federation tional contract is, what the terms and conditions are, how to of Bosnia-Hercegovina. We have to find our way anywhere, compete and how to conduct the whole project in a proper to try to take care not only of the military that we now have, way. but we feel an obligation to take care of the demobilized Secondly, we had a large military industry, because the soldiers, to help in some small way, at least with a monthly military industry of former Yugoslavia was concentrated in salary, like DM 50-100 [$30,70]. We are trying to find some Bosnia. And we have actually inherited all these plants, which financial source, some donor state ...presenting it as an hu­ are partially damaged, but we are able to produce interesting manitarian problem.. ..Bu t our soldiers are telling.us·: We civilian and military programs with the plants that we have. are not a humanitarian problem, we are workers. They have You know that a skilled workforce and expertise are the ba­ their dignity and their rights, which they have clearly demon­ sics, and we have them. strated by fightingfor their GOuntry. So, if somebody thinks that to come to help the reconstruc­ tion of Bosnia is like going into the desert or a primitive EIR: On April 3, the plane of U.S. Commerce Secretary Ron society, this is a very wrong assumption. We know how to Brown crashed in Dubrovnik, Croatia, killing the secretary rebuild Bosnia and we have capabilities; what we need is and some of the most prominent U.S. business leaders. When investment and help, to ignite the engine of our reconstruc­ we talk about the Marshall Plan for Bosnia, many in this tion. We are an industrialized nation: This is the most import­ country say, "Oh, you mean what Ron Brown was doing: ant thing to say. We know what industrial production is. Of direct, massive investment from the United States to Bosnia, course, it is not at the level of the United States or western without any intermediaries." Europe, but we were an industrialized nation and we had a Nanie: We have always advocated that certain bilateral co­ capability to export our goods all over the WOrld: operation is crucial. Mr. Brown led a delegation of about 30 prominent businessmen, who were committed to investigate EIR: By the end of June, a huge number of military person­ the real economic situation in Bosnia and to invest-but to nel-220,000 people between the Bosnian army and the Cro­ invest in productive investments. I cannot say precisely what atian military formations in Bosnia-have been demobilized, program of investments they would have started, had the according to the Dayton agreement. No provisions have been plane not crashed, but if our information is correct, these contemplated for these soldiers, who fought against all odds people were committed to invest real money, to launch a to save the country from aggression. It also wastes a precious real reconstruction of the country. That crash has been areal resource, in terms of labor, for the potential reconstruction of setback. We have the impression that the crash somehow Bosnia. I know that you, as the main civilian authority in the discouraged potential investors. Defense Ministry, have dealt with this problem. How can this It is useful to compare the situation in the Middle Eqst and situation be solved? here. They are similar situations. We in Bosnia also accepted Nanie: Under the terms of the Dayton agreement, we were an unjust peace, in order to have reconstruction. But now, the obliged to demobilize 165,000 from the Bosnian Army and resultis the same: You have an unjust peace, and on the other

66 International EIR July 26, 1996 hand there is no reconstruction. So the peace will lose its war conditions, this has been an isolated case. It is totally false stability, if reconstruction is not implemented. and absurd to blame the government of Bosnia. Concerning In the Middle East, after the last elections in Israel, the the article, the "facts" reported there, on the so-called com­ peace process could be over; the same thing can happen to plicity of the government,are completely, completely, wrong. Bosnia. If the other part of the deal-reconstruction-is not The journalistdoes not base his article on any facts. fu lfilled, then also the first part-the unjust peace-will be very fragile. EIR: Why is there so much focus on this now in Wash­ So, the first part of the Dayton Accord, the formal princi­ ington? ple of the guarantee of territorial integrity and sovereignty of Nanic: Maybe it is connected with the starting of the "train Bosnia, would just evaporate, if no mechanism, no mediation and equip" program by the U.S. It also could be an attack is found to implement that principle in reality .... against the U.S. administration's efforts to successfully im­ plement the Dayton agreement. It is interesting that it coin­ EIR: Lyndon LaRouche has been focussing on the question cides with the finalapproval of the defense law, which opened of the Middle East and Bosnia, in the sense that there is a war, the way for the train and equip program, which is considered not only in loco, but also in Washington. He has pointed a a main pillar of the military balance [with the so-called Re­ finger at what he called the "new British Empire," as trying publika Srpska]-i.e., the basis for a durable peace. to establish its full control and prevent, for example, the emer­ gence of an independent, prosperous Bosnia. As a Bosnian, EIR: Mr. N anic, we hope that in your new position of respon­ what do you think people in the United States should do? sibility, you will be able to do much more-and you have Nanic: First of all, I think that from the beginning of this done so much already-for Bosnia and for a real peace based century, the U.S. has been hostage of the European powers. on justice and economic growth. And we hope to interview My opinion is that somehow the U.S. was forced to jump into you soon again, to have an update on these developments. the European "circle of death" twice in this century, and now Nanie: Thank you very much for your wishes and I hope to it seems there is someone trying to involve the U.S. in a third be able to comply with all the demands that stand in front one. The U.S., as the most powerful country in the world, has of me. been the leader in many fields;I think the U.S. should be more firm, more determined, not only concerning Bosnia, but all the other crisis points in the world. To take a leading role, to take initiatives, to give ideas and programs. And the U.S. should not pay too much attention to what the European allies and friends would say. These "allies" will comply with the American initiatives. This is the way to defeat the influence LaRouche of those powers in Europe that are not committed to peace and development. I think the United States should decisively Campaign and bravely take up its traditions and fulfillits leading role in the world. Is On the

EIR: On July 8, the Wa shington Post published a front-page Internet! article alleging that a large number of mujahideen are still in Bosnia, involved in violent activities. The Post alleges that Lyndon LaRouche's Democratic presidential pri­ they are connected to the party of President Izetbegovic. This mary campaign has established a World Wide happened after the U.S. administration "certified"that Bosnia Web site on the Internet. The "home page" brings had complied with the so-called de-Iranization, i.e., that there you recent policy statements by the candidate as are no organized Iranian forces in loco. well as a brief biographical resume. Nanie: Yes, after that article, the U.S. ambassador asked for an urgent meeting with the President. He met Izetbegovic and 1l.1;114-" the LaRouche page on the Internet: asked what that was all about. We told him that we were going http://www.clark.netllarouche/welcome.html to investigate the allegations. He was very satisfied when he left. 1l.13t+ii1U the campaign by electronic mail: I can assure you that there is no support in Bosnia for any ideological influence from outside. There are a fe w, let's say, [email protected] "lone riders," who came into Bosnia during the war, and some Paid for by Committee to Reverse the Accelerating Global Economic of them would like to get married and stay here. In particular, and Strategic Crisis: A LaRouche Exploratory Committee. there was the case of the kidnapping of a young girl. Even in

EIR July 26, 1996 International 67 .: .i... . S InternationalIntel ligence

"to work out in the next ten days" a plan to counter the "Orthodox bloc," dovetail neatly German daily hails work restructure the staff. with British plans for regional destabiliza­ of Leibniz and Kep ler In his first comments, Chubais directed tion, including the appointment of former a barb against Gen. Aleksandr Lebed, secre­ British UN ambassador Sir David Hannay­ In a rare occurrence in German media, the tary of the Security Council. "I think it was a career Mideast hand-to the. new lycreated. a grave error, that Lebed claimed responsi­ FrankfurterAllgemeine Zeitungpaid tribute post of special envoy to Cyprus. to the work of two of the world's great minds bility in the economic policy domain, in the name of national security." Then, in his of classical science: Gottfried Wilhelm usual mode of cloaking lies with formalisms, Leibniz (whose 350th birthday is celebrated EU, human rights mafia Chubais said: "I will not be concerned with this year), and Johannes Kepler. In one arti­ economic policymaking"; in fact, he will push fo r Burma sanctions cle in the July 6-7 issue, the Zeitung investi­ certainly try to have the biggest possible say gates Leibniz's role in the formulation of in that domain. Until January, Chubais had On July 15, at the European Union foreign statecraft, as including a system of public been vice premier in charge of the economy. ministers' meeting in Brussels, Danish For� education for the citizens of a state. The arti­ This year, he ran Yeltsin's election cam­ eign Minister Niels Helveg demanded EU cle also delves into his efforts to develop paign. support for full sanctions against the military policies of social welfare, a functioning pen­ government in Burma, and called for a "full sion system, and a system of incentives for and satisfactory" UN investigation o\.�he manufactures. death in a Rangoon jail in June of James The article on Kepler examines the crisis New Turkish premier Leander Nichols, honorary consul of Den­ of the Christian calendar in 1604, and mark, Finland, Norway, and Switzerland. Kepler's role-based on a sound knowledge Erbakan confirmed Helveg has secured the support of EU Presi­ of the apparent movements of the stars and dent John Bruton of Ireland, and had button­ of the organization of the universe-in de­ Necmettin Erbakan won a confirmationvote holed U.S. Secretary of State Warren Chris­ veloping a functioning new calendar, as laid in the Turkish parliament on July 8 as prime topher on July 10. out in a 1613 memorandum. The Zeitung minister. Deputies voted 278-265 to approve Burma, under the State Law and Order presents Kepler's work on the calendar Erbakan's Welfare Party coalition with the Restoration Council (SLORC), is" effec­ problem, as a seminal moment of modern True Path Party of Tansu Ciller. Under the tively, a Chinese client state. The opposition historic science, because he had to look into coalition agreement, Ciller, who was prime run by Nobel Prize-winner Aung San Suu the history of the period around the assumed minister from 1993 until March 1996, will Kyi is a typical "human rights" countergang, birthdate of Jesus Christ, to provide a more be foreign minister for two years, and then complete with heavy backing from specula­ precise date for the beginning of the Chris­ become prime minister. Her party will also tor George Soros. Soros's Open Society In­ tian calendar. control the Defense Ministry. stitute runs the "Burmanet" on the Internet. Erbakan's party, which won the highest On July II, both Christopher and Na­ plurality of votes in December, had been tional Security Adviser Adviser Anthony Yeltsin raises IMF stooge blocked from forming a government due to Lake said that the United States "does not its opposition to Turkey's status as a secular rule out sanctions," but is seeking consulta­ Chubais to high post state. In 1980, the Turkish military took tion with Asian governments, among Asso­ power in a coup after Erbakan had publicly ciation of Southeast Asian Nations member The post-election situation in Russia took an called for making Turkey an Islamic repub­ nations, and Japan, none of which supports ugly turnon July 15, when President Boris lic, in the wake of the Khomeini takeover in sanctions, and which strongly . oppose Yeltsin named Anatoli Chubais, Russia's neighboring Iran. "Western" interference. "Mr. Privatization," to head the Presidential The party's platform calls to "liberate Administration. Chubais's appointment co­ Chechnya, Azerbaijan, Jerusalem, and Bos­ incided with the arrival in Moscow of an nia," and for an "Islamic NATO." With co­ Canadian indigenist maps International Monetary Fund delegation, vert Saudi financing, it provides training, which is to monitor compliance with IMF mercenaries, and arms, to Chechen and simi- aggressive organizing plan conditions for a three-year $10 billion 1ar insurgencies in the former Soviet Union. standby credit. The Welfare Party's intelligence director, At the Assembly of First Nations general Presidential spokesman Sergei Med­ Gen. Sami Karasimir, had earlier directed meeting on July 9, Chief Ovide Mercredi vedev announced that Chubais would be the Special Warfare Department of the Turk­ said aboriginal people don't need govern­ replacing Nikolai Yegorov (former Russian ish General Staff, which oversees the covert ment approval of their sovereignty. His of­ Nationalities Minister) "in connection with aid to these insurgencies. fice issued a declaration meant as a blueprint [his] transfer to another position." The Presi­ More recent calls by the Welfare Party for a new, more aggressive style of abo rig i­ dential decree naming Chubais ordered him for the revival of the Ottoman Empire, to nal leadership. "Every action by a firstnation

68 International EIR July 26, 1996 it Briefly

ROYALS do the darndest things: Prince Charles celebrated his divorce from Princess Diana on July 15 by attending the 50th birthday party of within its jurisdiction must be recognized as The editorial says that British policy was Sultan Sir Hassanal Bolkiah of Bru­ an assertion of its sovereignty and cannot be obsessed with "fightingthe wrong war," and nei. The sultan dropped a cool $25 made subject to the approval of other gov­ making the equation between "the Prussian million for his party, including foot­ ernments," the document says. "We have military" and Hitler's Nazis. "With hind­ ing the bill for three free Michael talked about sovereignty ad nauseam," Mer­ sight, it would clearly have been wiser to Jackson concerts. credi said. "Let's begin to implement sover­ have taken the emissaries of the German op­ eignty." position seriously, and to have offered them ' ARIEL SHARON buddy Yossef Mercredi, a supporter of Mexico's the very limited encouragement they re- Bodansky, who is now director of the narco-terrorist Zapatista movement, cou­ quested ....But whatever their motives, the U.S. Congress task force on terror­ pled his remarks with a call for an October men and women of the German resistance ism, is claiming that China, Pakistan, conference in British Columbia to promote helped to redeem their nation and hu­ and Iran are playing a role in the un­ non-violent civil disobedience, including manity." rest in Kashmir, Afghanistan, and wider use of roadblocks and sit-ins. "The Tajikistan, because of the strategic political system is not serving the interests importance of the revival of the Silk of my people. I've got to wake up those guys Road, the Asia Times reported on July some other way," he said. LaRouche interviewed in 5. Bodansky's allegations, made in a Mercredi said be wants to establish an Italy 's 'Ordine Pubblico ' report issued by the Freeman Institute Institute for Aboriginal Non-Violence that of Texas, are a clear attack on the na­ would conduct training operations through­ The May-June issue of Ordine Pubblico, tions attempting to build the vital Eur­ out the country. "I want to identify a core with 85,000 subscribers in the Italian army asian Continental Land Bridge. group of individuals who are inclined in this and law enforcement organizations, pub­ way who would become a core group of lished an exclusive interview with Lyndon GERMANY'S first private prison teachers that would go into communities to LaRouche. Under the headline, "We Need has been built in Waldeck near Ros­ promote the idea." a New Roosevelt," the interview introduces tock. The project took only two years, LaRouche as "an economist, Democratic which is considered breakneck speed candidate for the U.S. Presidential elec­ for Germany, where environmental Book exposes U.K. betrayal tions, [who is] much debated because his impact statements and other red tape economic analyses are unorthodox and have delayed construction. The new of anti-Hitler resistance because of his polemical style. He created prison, in the northeastern state of turmoil, for example, with his ruthless criti­ Mecklenburg-Prepomerania, will be An editorial in the July 8 London Times, "In cism of the present financial and monetary leased to the state for 30 years at Another July: When Brave Germans Battled system centered on the U.S. Federal Re­ DM 7 million per year. Alone Against Hitler," admits that Britain's serve. He created turmoil with his attacks wartime elite knew about, and actively un­ against the free market international lobby ." ARCHBISHOP Tulio Manuel dermined German patriots' July 1944 plot to Over three pages, the magazine presents Chirivella of Barquisimeto, Vene­ kill Hitler. The editorial refers to a new book LaRouche's analysis of the ongoing finan­ zuela has just been elected to head the by German historian Joachim Fest, Plotting cial disintegration and his proposals for a country's Conference of Bishops. A Hitler's Death, which the Times publishes financial reorganization, accompanied by former vice president of the Latin extracts from. pictures of FDR, Clinton, and A1cide de American Conference of Bishops The editorial begins: "In politics, tyran­ Gasperi, who was Roosevelt's ally and the (CELAM), Archbishop Chirivella is nicide is the ultimate test of moral courage. Vatican's man in Italy's first postwar one of several Ibero-American prel­ ... If any tyrant deserved that fate, it was government. ates who signed the letter to President Hitler .... In response to a question on Gingrich's Clinton calling for the exoneration of "Fest [argues] that British leaders, "Contract on America" and Thatcherite eco­ Lyndon LaRouche. including Chamberlain, Eden and Chur­ nomics, and his statement that "unbalanced chill, not only ignored overtures from Ger­ minds cannot balance a budget," LaRouche EUROPEAN UNION President man resistance circles, but were actively launched into a detailed attack on the John Bruton called for expanded hostile. The British treated these brave Entente Cordiale between Thatcher and powers for the EU' s police force, Eu­ patriots as dishonorable traitors, even to the Mitterrand, and the Maastricht treaty. ropol, on July 11. Bruton, who is Ire­ point at which 'Nazi propagandists and LaRouche concluded the interview specify­ land's premier, claimed that the new Allied spokesmen joined forces, in a de ing that the United States is in the best police force is the only way to fight facto coalition, to belittle the accomplish­ position to stop this "globalism," and af­ organized crime and Europe's grow­ ments of the resistance and disparage its firming, "I will do everything in my power ing drug problems. motives.' " to do so."

EIR July 26, 1996 International 69 �mnNational

President Clinton is back on the policy offensive

by Jeffrey Steinberg

In a radio interview with "EIR Talks" on July 18, Lyndon Adams, as another public display of his anger at the 'British LaRouche reported, with satisfaction, that President Clinton efforts to sabotage his NorthernIreland peace initiatives. The has, since the beginning of July, reasserted leadership on a NorthernIreland peace process has been a Clinton administra­ wide range offoreign policy fronts."I think," LaRouche said, tion initiative since Day One, and the President's personal "that what the President has done, respecting Bosnia, in par­ emissary, former Sen. George Mitchell (D-Me.), remains on ticular, and a couple of other things, in the past couple of the scene, chairing the Peace Forum, in an effort to hold the weeks in the foreign policy area, as signalled by his address fragile process together. to the NAACP, the National Association for the Advancement of Colored People conference, shows that the President is The 'Dirty Dick' factor really, shall we say, really back on track, at least in terms of Since the beginning of the year, every single benchmark foreign policy, and that he is resisting those kinds of things Clinton foreign policy has been systematically undermined, which are represented by Dick Morris, and so forth, in many principally through the Rasputin-like influence of his cam­ respects. I think that's all beautiful." paign strategist, Dick Morris. Morris, a protege and relative of LaRouche cited the President's involvement in Bosnia, the late Roy Cohn, has had an on-again, off-again relationship his deployment of National Security Adviser Anthony Lake with the Clintons since 1977. He was brought back into the to China, and his decision to liftthe U.S. entry visa of Colom­ Clinton campaign apparatus, following the disastrous 1994 bia's narco-President, Ernesto Samper Pizano (see article, Republican Party mid-term election victories, and he has done p. 58), as the most significant indicators of a revival of the everything in his power to tum the President into a warmed­ kind of foreign policy, that earnedhim the hatred of the British over Republican, ever since. Crown, since he came into officein January 1993. It was Dick Morris who pressured the President into ac­ The Financial Times also reported, on July 13, that the cepting the Republican ground rules for a "date-certain"bal­ President had ordered the National Security Council to send anced federal budget, according to Bob Woodward's recent a strongly worded letter of protest to the British government Clinton biography, The Choice. Morris conduited White of John Major, holding it accountable for the recent rioting in House inside information to the Republicans, including to Northern Ireland. Three days of the worst rioting in decades his client Trent Lott (R-Miss.), who is now Senate Majority were triggered, on July 11, by the Royal Ulster Constabulary, Leader, in order to give the GOP an inside track on how to when they permitted Order of Orange rioters to march through bend the President toward accepting their balanced budget a Catholic neighborhood in a suburb of Belfast. A powerful demands. The conduit? The Republican Party's primo con­ car bomb that wrecked a resort hotel near the Irish-Northern sulting firm,Manafort, Black, Stone, and Kelly. Partner Roger Ireland border on July 14, is also suspected of being the work Stone was a lifetime intimate of Roy Cohn; and Dick Morris, of British intelligence-controlled "countergangs." when not peddling bad advice to Bill Clinton, spent the better According to the Financial Times, President Clinton has part of the 1990s, working with Manafort, Black on behalf of decided to renew the U.S. travel visa of Sinn Fein leader Gerry a number of Clinton's leading Republican enemies, including

70 National EIR July 26, 1996 Lou, Sen. Jesse Helms (R-N.C.), Gov. Tom Ridge (R-Pa.), greatly exaggerated by Time. It didn't do President Clinton and Gov. William Weld (R-Mass.). any good to have his own name, and that of his campaign Morris had also steered the President into a state of mind, strategist, linked to dirty tricks in Russia. in which all strategic policy considerations took a back seat to his re-election campaign. Gradually, over the firsthalf of A break from paralysis this year, the President withdrew from leadership on many of At the June 27-29 Group of Seven summit in Lyons, his most important foreign policy initiatives. France, Clinton reportedly got into a behind-closed-doors In the case of the Middle East peace process, this pull­ confrontation with his British and French counterparts on a back took a disastrous form. While actively campaigning for variety of issues. After his return to the United States, he Prime Minister Shimon Peres's election, the President made began to break from his Morris-induced political paralysis. the strategic blunder of turningto the "Dirty Dick" team. EIR When the President returnedto the White House, he un­ has learned from Israeli sources that Morris dispatched one doubtedly learnedthat Washington, D.C. had been saturated, of his proteges, pollster Doug Schoen, to Israel, to "help" in his absence, with copies of the New Federalist, the newspa­ Peres. Schoen, like Morris, is a political "switch-hitter." He per of Lyndon LaRouche's political movement, blasting Mor­ cut his teeth working for Republican pollster David Garth ris as a Roy Cohn mole, out to wreck his Presidency. Thou­ (and Dick Morris) on Democrat Ed Koch's mayoral cam­ sands of copies of the newpaper had been circulated on paigns in New York City. In Israel, Schoen had served as Capitol Hill and near the White House. campaign adviser to the Likud Party's Menachim Begin, dur­ One of the earliest signs of the policy shift came whenthe ing Begin's successful campaign against Shimon Peres! President spoke, on July 10, before the annual convention Israeli and Washington, D.C. sources confirm that of the NAACP, in Charlotte, North Carolina. The President Schoen's impact on the Peres campaign was "very negative." announced that he had just met with Commerce Secretary Was Morris working at cross-purposes with the President Mickey Kantor and the son of the late Ron Brown, to give inside the Israeli election campaign? The remnants of the Roy them finalinstructions before they lefton a mission to Bosnia Cohn apparatus in New York City (Cohn died of AIDS in and Croatia "to finish the mission Ron Brown started," to 1986) poured huge amounts of cash into the coffers of Likud help rebuild the war-ravaged Balkans. A week earlier, the candidate Benjamin Netanyahu, who is now Israel's prime President had sent Defense Secretary William Perry to Sara­ minister. Netanyahu's campaign was run by another Cohn jevo, to nail down the details of a military agreement, under protege, pollster Art Finkelstein, whose other principal "cli­ which the Bosnian Armed Forces will be armed and trained. ent" is Sen. Alfonse D'Amato (R-N.Y.), perhaps the U.S. Following the NAACP speech, the President also called Senate's most rabid Clinton-basher. D' Amato owes his politi­ Richard Holbrooke out of retirement, to make one more trip cal carear to Roy Cohn and Cohn's law partner, Tom Bolan. to the Balkans, to secure the removal of Radovan Karadzic, EIR has also learned that, in 1981 and 1988, Schoen the accused war criminal, from the leadership of the Bos­ served as a pollster for the Anti-Defamation League of B'nai nian Serbs. B'rith. The ADL was one of the driving forces behind the The President also sent Anthony Lake to Beijing in a effort·todefeat Peres's re-election effortsand scuttle the Mid­ major diplomatic initiative, aimed at putting U.S.-Chinese dle East peace process. When Netanyahu won the recent Is­ relations on a solid footing for years to come. Lake met with raeli election, ADL National Chairman Abe Foxman was be­ the entire Chinese leadership, and laid the basis for an ex­ side himself with joy. change of head of state visits, perhaps before the end of the year. While Lake was in China, the U.S. Export-Import Bank Three bozos in Moscow announced that it was granting millions of dollars in credits The dirty hand of Dick Morris was also behind a nasty for the building of a new hydroelectric power plant on the public relations stunt against President Clinton, surrounding Yellow River. Commenting on the Lake visit on July 18, this month's elections in Russia. On July 15, Time magazine LaRouche noted that the cornerstoneof any effectiverelation­ claimed that three American political consultants, including ship with China is support for the New Silk Road project, also Dick Dresner, longtime partner of Dick Morris, had been the known as the Eurasian land-bridge. "It looks like the United "secret weapon" behind Boris Yeltsin' s victory overCommu­ States has come to a good understanding with the Chinese nist Gennady Zyuganov. In television interviews, Dresner governmenton this question," said LaRouche, "and that the hinted that he had been working on the Russian election proj­ President might be over there fairly soon, to concretize this­ ect with Dick Morris, and that the entire operation, although all of which I think is excellent." it involved nominally GOP-linked campaign operators, was With this shiftback onto the policy offensive, President sanctioned by President Clinton. Clinton has now positioned himself to take yet another crucial Wbile Dresner, George Gorton, and Joe Shumate (the trio step toward securing his re-election, under circumstances fa­ that ran Pete Wilson's aborted Presidential campaign) were, vorable to himself, to the United States, and to the world: indeed, in Moscow, their role in the Yeltsin victory was dumping Dick Morris.

EIR July 26, 1996 National 71 Qther miscQnduct. The FBI's "sexual deviate" file,indexing Book Review repQrts Qf alleged hQmQsexuality repQrted between 1937 and 1977, ran to. SQme 300,000 pages. " HQQver's puritan persQna, as is well knQwn; Simply masked his Qwn hQmQsexuality. AlthQugh he deployed the full PQwer Qf the FBI against anyQne whO was Qyerheard Parody of J. Edgar discussing the directQr's proclivities, in recent ye�, abun" dant dQcumentatiQn has emerged cQncerningHQQve r's Qwn in theWhite House deviant activities, including his IQng-term hQmQsexual rela­ tiQnship with aide Clyde TQlsQn, and his cross-dressing. at by Edward Spannaus drag parties thrown by RQy CQhn-at which HQQver was affectiQnately knQwn as "Mary." Aldrich's Qwn QbsessiQns, Qn display thrQughout his

bQQk, are eerily reminiscent Qf HQQver' s. . . . In describing his first day at the ClintQn White HQuse, Unlimited Access: AnFBI AgentInside the Aldrich regales the reader with stQries Qf how different it Clinton WhiteHouse was from "the buttQned-dQwn Bush administratiQo," Aldrich by GaryAldrich describes it: "the shaggy-haired middle-aged guy ... in a Regnery Publishing, Inc., Washington, D.C., 1996 IQud, checkered, PQlyester, dQuble-knit suit and b�dly scuffed 222 pages, hardbound, $24.95 shQes," the WQman "dressed like a cQcktaii waitress. Her shirt was tQQ tight and ended at her midriff; her skirt w.asshQrt, and she wasn't wearing any hQse ....I saw jeans! T-shirts, and It WQuid be a c1Qse CQntest as to.whether the prize fQr the sweatshirts; men with earrings and PQnytails; and ew!'y ��: literary hQax Qf the year shQuld go.to Newsweek cQlumnistlQe ner Qf fQQtwear except nQrmal dress shQes." Then therewas Klein fQr Primary Colors, Qr to. Gary Aldrich fQr Unlimited the WQman whQse breasts kept tumbling Qut Qf her blQuse, Access. At least Klein's bQQk fQrthrightly PQrtrays itself as a and the yQung lady who.bent Qver in front Qf HillaryClintQn work Qf fictiQn, while Aldrich's parades as a first-handdQcu­ shQwing her "bare behind." mentary aCCQunt Qf life in the ClintQn White HQuse. Revealing mQre abQut himself than abQut the ClintQn After a flurry Qf lurid headlines, even SQme Qf Bill Clin­ White HQuse, Aldrich cQnfesses: "There was a unisex quality tQn's WQrst detractQrs began to. realize that the hype arQund to. theClintQn staff that set it far apart from the Bush adminis­ Aldrich's bQQk was backfiring,and mQre than Qne CQmmenta­ tratiQn. It was the shape Qf their bQdies. In the ClintQn admin­ tQr suggested that it might wQrk to. ClintQn's benefit, because istratiQn, the broad-shQuldered, pants-wearing WQmen and it was so.easily discredited. AfterPQking SQme hQles in Ald­ the pear-shaped, bQwling-pin men blurred distinctiQns be­ rich's mQst highly publicized tale-that Qf the President tween the sexes. I was used to. athletic types, physically fit sneaking Qut Qf the White HQuse late at night fQr trysts at a persQns who.tQQk pride in bQdy image.... " dQwntQwn WashingtQn hQtel-ABC-TV's Sam DQnaldsQn Aldrich's bQQk boils dQwn to. a cQllectiQn Qf after�hQurs said he'd suggested to. a White HQuse Qfficial that "maybe barrQQm gQssip, supplemented by PQlitical slanders and at­ Aldrich is a mQle Qf yQurs." tacks Qn ClintQn lifted directly Qut Qf the Wa shington Times, Even SQme Qf the mQst rabidly anti-ClintQn press, such as the American Sp ectator, and kindred publicatiQns. Financial the New York Post and the Washington Times, were quickly backing fQr the bQQk was provided by Richard MellQn Scaife, cQmpelled to. distance themselves from Aldrich's ravings whQse projects Qtherwise include bankrQlling the Vincent after a cQuple days Qf promQting the bQQk. And fQr the FBI, FQstercQnspiracy-theQry industry; Scaife is Qne Qfthe funders which has labQred hard to. riditself Qf the tainted aura Qf the Qf the Heritage FQundatiQn. late J. Edgar HQQver, the bQQk was especially embarrassing. Aldrich alSo. displays his particular QbsessiQns with pro­ fanity and neatness. As with everything else, accQrding to. Shades of G-man Hoover Aldrich, a profane wQrd was never heard in the White HQuse J. Edgar HQQver, who. was Aldrich's firstemplQyer at the priQr to. its takeQver by the ClintQn crowd. In the Bush and FBI (he wQrked in HQQver' s mail roQm), was famed fQr his Reagan administratiQns, everyQne sPQke politely, WQre un­ alleged prudishness, his insistence that FBI special agents derwear, and PQlished their shoes. Of CQurse they also.traded have shQrt hair, be clean-shaven, and wear suits and ties at guns fQr drugs in Central America and Mghanistan, dealt all times. HQQver was knQwn fQr displaying public Qutrage with terrQrists in Iran and elsewhere, and then lied abQut it to. tQward any perceived sexual deviance, and he maintained CQngress. But that's nQt Qf CQncernto. Aldrich, who. hasmQre filesQn knQwn Qr suspected hQmQsexuals in gQvernment,and important things to.be WQrry abQut, such as the lack Qf athletic Qn persQnnel who.were repQrted to. have engaged in sexual Qr bQdies Qn display in the ClintQn White HQuse.

72 NatiQnal EIR July 26, 1996 House Republicans cover up J�stice Department role inWac , o , by EdwardSpannaus

The Republicans who headed the Corigressional hearingsinto tration, even though the A TF investigation of the Branch Da­ the 1993 Waco disaster have tipped their hand, and revealed, vidians was initiated under that administration, and almost all not unexpectedly, that they intend to have their committees of the misconduct he cited took place prior to the Clinton issue a wildly fraudulent version of the events of 1992-93. administration coming into office.Like wise, the written sum­ Thefictitious GOP "findings"load all the blame on President mary lays out criticisms of the ATF, but fails to make any Clinton and Attorney GeneralJanet Reno, while completely mention of George Bush or Bush administration Treasury burying the role of the Justice Department's permanent bu­ Department officials, such as Bush's ally Nicholas Brady, reaucracy, which arm-twisted Reno into approving the April who was secretary of the Treasury when the Branch Davidian 19, 1993 assault on the Branch Davidian compound in Waco, investigation was initiated, and when the plans for the raid Texas, resul�ing in the deaths of at least 80 people. Further­ were prepared. But, in contrast, the report is highly critical of more, they intend to hide the role of the Bush administration, Clinton administration Treasury officials Lloyd Bentsen and under which the initial bungled raid of February 1993 was Roger Altman, who been in office only about a month at the prepared and set into motion. point of the bungled raid. Rep. Bill McCollum (R-Fla.) of the House Judiciary Com­ mittee, and Rep. Bill Zeliff(R-N .H.) of the House Govern­ The DOJ and the second raid ment Reform and Oversight Commmittee, previewed their Representative McCollum presented the GOP findings fundamentally flawed "Findings and Recommendations" at with regard to the April 19, 1993 assault, which resulted in an unannounced press conference at the Capitol on July 11- the deaths of 80 Davidians. McCollum declared that the deci­ before even presenting their supposed "findings"to the com­ sion by Attorney General Reno to approve the FBI's plan to mittees which they chair. end the standoffon April 19, was "premature, wrong, and At the July 11 press conference, Zeliff presented the GOP highly irresponsible." He said that Reno was "seriously negli­ conclusions with respect to the Alcohol, Tobacco and Fire­ gent," and that she "knew or should have known that the plan arms (ATF) Division of the Treasury Department, and Mc­ to end the standoff would endanger the lives of the Davidians Collum presented the GOP conclusions with regard to the inside the residence, including the children," and that she Department of JusticelFBI actions which followed the bun­ "knew or should have known that there was little risk to the gled A TF raid; they jointly issued a written statement. FBI agents, society as a whole, or to the Davidians from con­ tinuing the standoff, and that the possibility of a peaceful A TF and the first raid resolution continued to exist." McCollum furthermore pro­ Zeliff set out his findings concerning the investigation claimed that President Clinton should have accepted Reno's carried out by the ATF, leading up to the Feb. 28, 1993 raid resignation when she offered it afterthe Waco disaster. in which four ATF agents were killed. As has been documented by EIR (June 30, 1995, "The Zeliff s major points were: Long Overdue Cleanup of the Justice Department"), the key 1) A TF agents had made misrepresentations to the De­ role in the Waco massacre was played by the top career offi­ fense Department, claiming that the Davidians were manufac­ cials in the DOl's Criminal Division: John Keeney and Mark turing illegal drugs, in order to obtain assistance from the Richard. Keeney-who has been in the Justice Department Defense Department, and the information had come from a since 1951, was the acting head of the Criminal Division in "disgruntled" Davidian. Unmentioned also is the role of the early 1993. Mark Richard, at DOl since 1967, was the second Anti-Defamation League (ADL) and the Cult Awareness Net­ in command regarding Waco, but played the critical role, work (CAN) in directing the "disgruntled" ex-Davidians to going personally to Waco twice, and then briefingthe brand the ATF. new AttorneyGeneral on his and the FBI's recommendations. 2) A TF agents had made false statements in the affidavits It is thoroughly documented by the Justice Department used to justify the Feb. 28 search-and-seizure operations. itself-but totally ignored by McCollum-that it was Mark Zeliff made no mention whatsoever of the Bush adminis- Richard who pressured Reno to accept the FBI plan to launch

EIR July 26, 1996 National 73 the assault on the Davidian compound using CS gas. When Reno first rejected the FBI plan. Richard's comment was: "The FBI will not be pleased." Under increased pressure, Reno finally acceptedthe FBI plan, and it was Mark Richard who handed Reno the documentation prepared by the FBI justifying the planned attack. It is therefore with utter duplicity that McCollum attacked Reno-and only Reno-for approving the FBI plan. McCol­ lum stated that "every one" of the reasons cited for ending the standoff"la cked merit." These reasons-which were the reasons cooked up and argued by Mark Richard and the FBI­ included arguments that the negotiations had reached an im­ passe, that there was a threat of a Davidian breakout, that the the FBI Hostage Rescue Team needed rest and retraining, that conditions inside the compound had deteriorated. As to the allegations of physical and sexual abuse of minors (the argu­ ment that ultimately swayed Reno), McCollum said that this , I' had occurred, but "there was no basis to conclude that minors Mark Richard, a top Justice Department career bureaucratwho were being subjected to any greater risk of physical or sexual played the critical role in the Waco massacre-but whose role is abuse during the standoff, than prior to February 28th." ignored by the GOP "fi ndings. "

Will lying agents be prosecuted? At the July 11 press conference, Zeliff stated: "Although presented publicly by Zeliffand McCollum. McCoHum s-aid probable cause likely existed to suspect [Branch Davidian that after the report is assembled, it will be reviewed by the leader David] Koresh of crimes, the A TF agents responsible members of the House Judiciary Committee's Subcommittee for preparing the affidavits knew or should have known that on Crime, and that members could submit additional views many of the statements they were making were false." or dissenting views, and the report will then be published. Zeliff then declared: "If the false statements in the affida­ Zeliff said that there would be a vote in the subcommittee of vits filed in support of the search-and-arrest warrants were the GovernmentReform and Oversight Committee on July made with the knowledge of their falsity, criminal charges 18, then the report would go to the full committee; the final should be brought against the people making those state­ report will be issued in August. ments. The affidavitin support of the warrants contained nu­ merous errors. If their swornstat ement was made with knowl­ edge of the falsity of these statements, criminal charges should be brought against the person or persons involved who Two cases show real swore out the affidavits." This conclusion is also set forth in the written summary corruption ofDOJ presented by Zeliff and McCollum. This presents an interesting question for the Judiciary by Jeffrey Steinberg Committee. Were this standard to be adopted and generally applied, then the authors of the affidavits used to justify a much larger raid-the 400-agent raid directed against Lyndon If Congressmen William Zeliff (R-N.H.) and Bill McCollum LaRouche and associates in Leesburg, Virginia in October (R-Fla.) are serious about their July 11 grandstand attack 1986-would be sitting in jail. There exists overwhelming against Attorney General Janet Reno, and their call for prose­ evidence, on the court record, that the "LaRouche" search cution of Department of Justice (DOJ) officials who issue warrant affidavits,sig ned by FBI special agent Richard Egan, false sworn statements, then they will immediately convene and by Virginia State Police special agent C.D. Bryant, were hearings to study the corruption, abuse of prosecution, and riddled with deliberate lies and fal sehoods. How consistent fraud upon the court, committed by the most senior, career are Representative McCollum and his colleagues on the Judi­ Justice Department prosecutors, in the case of John Deriljan­ ciary Committee prepared to be? juk, a naturalized American citizen who was knowingly, falsely accused by the Officeof Special Investigations '(OS I) Not the finalreport of being aNazi war criminal. And then, they will launcha long Neither subcommittee which was involved in the hearings overdue probe into the circumstances of the assassination had yet seen the so-called "findings and recommendations" of Tscherim Soobzokov in 1985 by Jewish Defense League

74 National EIR July 26, 1996 (JDL) terrorists. Soobzokov was also accused by New York the U.S. Supreme Court rejected a Justice Department appeal Times poison-pen and longtime LaRouche-slanderer Howard of the Sixth Circuit's ruling. Blum, of being a wartime Nazi. When he successfully sued the Despite all of this, Attorney General Reno, at the urging Times and Blum, and won a multimillion-dollar settlement, of Mark Richard and other Criminal Division bureaucrats, Soobzqkov was murdered by the JDL. is, to this day, pursuing a new denaturalization case against These two cases-along with the judicial railroading of Demjanjuk. Is this not a case of a continuing criminal enter­ Lyndon LaRouche-are the yardstick, by which all other in­ prise-by the DOJ? stances. of systemic Justice Department corruption must be measured. To talk about Department of Justice corruption at The Soobzokov case Waco,and to even demand criminal prosecution of the rele­ Tscherim Soobzokov did not fare so well. Demjanjuk is vantJusnceDepartment officials, without taking up the Dem­ alive today, reunited with family and friends; and, in the eyes janjuk, Soobzokov, and LaRouche cases, is the height of hy­ of all but the most hateful ADL-types within, and outside, pocrisy andcover-up . the Justice Department, he is vindicated. But Soobzokov, a Circassian-American, was, like Demjanjuk, initially targetted Demjanjuk's 16-year ordeal by the KGB. Communist Party U.S.A. propagandist Charles Based on KGB-fabricated "evidence," first published in Allen named Soobzokov as a Nazi war criminal, in a series a UkrainianCommunist Party newspaper, the U.S. Immigra­ of tracts he penned, beginning in the 1973, based on "data" tion and Naturalization Service launched a probe, in 1978, of provided by East Germany's most notorious state security a Ukrainian-American retired auto worker from Cleveland, service ("Stasi") propagandist, Julius Mader. The list contain­ John Demjanjuk. Over the course of 16 years, Demjanjuk was ing Soobzokov's name was passed on to Rep. Elizabeth deliberately falsely accused of being the Treblinka, Poland Holtzman (D-N.Y.) and Secretary of State Henry Kissinger, concentration camp mass murderer, known as "Ivan the Terri­ who were working together to launch a special Justice Depart­ ble." In the 1980s, Demjanjuk was prosecuted by the Justice ment unit devoted exclusively to hunting wartime Nazis-in Department's OSI, was denaturalized, and deported to Israel, partnership with both Soviet and Israeli intelligence agencies. where he was tried and convicted of genocide. In March 1977, the Allen-Mader phony documentation All the while that the DOJ was prosecuting the Demjanjuk appeared in the bookstores as Wanted: In Search of Nazis in case, and throughout the duration of his capital offense trial America, by Howard Blum, published by the New York Times. in Israel, top officials of the DOJ, beginning with Deputy The book helped fuel the creation of the OSI two years later. Assistant AttorneyGeneral Mark Richard, and leading into a Soobzokov sued the Times and Blum for the slanders. In gaggle of Anti-Defamation League (ADL) zealots inside the 1985, after Soobzokov's attorneys obtained a court order to OSI, were in possession of reams of evidence proving that travel to the Soviet Union to deposition officials who could Demjanjuk was innocent. prove that the Blum information was knowingly phony, the That evidence was withheld from defense attorneys, in Times agreed to a very lucrative out-of-court settlement, in both the United States and Israel; and, were it not for the which Soobzokov was, reportedly, to receive over $1 million, unflinching efforts of members of Demjanjuk's family, and and public vindication. others, including Lyndon LaRouche, Pat Buchanan, and Rep. All of that was short-circuited on Aug. 15, 1985, when a Jim Traficant (D-Ohio), Demjanjuk would have almost cer­ pipe bomb, planted on Soobzokov's Paterson, New Jersey tainly been executed. Long after Demjanjuk' s extradition to front porch, blew up and killed him. At the time of his murder, Israel, and even after an Israeli court convicted him of crimes Soobzokov was still under fire from the OSI, which, despite against humanity and sentenced him to be hanged, Demjan­ the outcome of the Times libel case, was still out to denatural­ juk's supporters were able to uncover some of the buried ize and deport him. He had just won an important court victory evidence. An Israeli Supreme Court panel eventually over­ against the OSI. turnedhis conviction; and, back in the United States, on June The day before Soobzokov's assassination, a JDL splin­ 5, 1992, the Sixth Circuit Court of Appeals, in Cincinnati, ter-group, headed by Mordechai Levy, had demonstrated in angered at the Justice Department's refusal to respond to in­ front of Soobzokov's house, branding him a "Nazi." quiries about the apparent withholding of evidence, took the Every step along the way, in both the Demjanjuk and extraordinary step of initiating a review of the entire case. Soobzokov cases, Deputy Assistant Attorney General Mark Ultimately, as some of the buried evidence was uncovered, the Richard, a longtime "friend" of the ADL, was in the know. Sixth Circuit appointed Judge Thomas Wiseman as a Special As the highest ranking career Justice official,in charge of all Master, assigned to probe whether the Justice Department international cases in the Criminal Division, Richard was at conduct had constituted fraud upon the court. In September the top of the chain of command. He knew or should have 1994, the Sixth Circuit ruled that the DOJ had, indeed, com­ known that his department was hiding evidence of both men' s mitted fraud, and, based on the Justice Department's action, innocence. In the case of Soobzokov, and, nearly, in the case overturnedthe entire Demjanjuk proceeding. On Oct. 3, 1994, of Demjanjuk, that means murder.

EIR July 26, 1996 National 75 congressionalCl oseup by Carl Osgood

Smith introduces Social stead of gridlock being broken it is be­ states control over Medicaid would Security reform bill ginning to get worse every day." cause 18 million children to lose Med­ Rep. Nick Smith (R-Mich.), the man Lott blamed Democrats for block­ icaid coverage. "The Democrats will who tried to force the federal govern­ ing legislation, including a bill on the block any effort to raid Medicare or ment into default during the budget White House Travel Office affair, the Medicaid to pay for tax breaks for the wars last winter, announced on July 9 health insurance reform bill, the tax­ wealthy," he said. that he had introduced a bill to reform payer bill of rights (which was cleared House Minority Leader Richard the Social Security System, suppos­ for action later that afternoon), the Nu­ Gephardt (D-Mo.) said thatthe Demo­ edly to make it solvent until 2070. The clear Waste Policy Act, and a bill to crats' plan is to require insurance com­ plan would allow taxpayers to invest establish a national gaming com­ panies and managed care companies 2.3% of the current tax into a private mission. which do business with the govern­ account (with that proportion increas­ Minority Leader Tom Daschle (D­ ment to provide low-cost health care ing over time). S.D.) accused Republicans of holding for children, and to provide protec­ At a forum at the Heritage Founda­ conference committee meetings with­ tions for that care, such as preventing tion on July 10, Smith said that not only out telling Democrats and of doing ev­ them from dropping sick children or is the rate of returnmuch higher on pri­ erything possible to prevent debate on refusing care because of "preexisting vate investments than from the Trea­ bills on which Democrats want to offer conditions." sury, but that "if Americans start \n­ amendments that might pass. "We can Other Democrats pointed out that vesting and they see the fruits of that deal with any one of these bills," he the United States is the only industrial investment in the returnsand the differ­ said, "but it has to be done in a biparti­ nation which does not provide health ence it can make in their wealth and san way." care for all children. Democratic Na­ their retirement well-being, we're go­ tional Committee General Chairman ing to have an exciting new dimension Sen. ChristopherDodd (D-Conn.) re­ of investment by more and more peo­ ported on a Government Accounting ple in the United States"-in other Office report that he had commis­ words, an obvious windfall for Wall Democrats hold forums sioned on the status of health coverage Street. on Family First agenda for children. It was "significant and The growth of benefits would be Congressional Democrats held the alarming," he said; 10 million children slowed for middle- and upper-income first forum on their Families First were uninsured in 1994. workers and for married couples, and Agenda on July 12, and focused on the retirement age would be slowly their health care program, which calls raised to 69. It would also prohibit the for "kids-only," low-cost insurance Treasury from borrowingfrom the So­ policies, to be subsidized by the gov­ cial Security trust funds. ernment, and tax credits for families Republican leadership who can't pay the full costs of these blocks wage increase policies. According to House Democrats, A "kids-only" health insurance speaking on the floor on July 10, the bill has been introduced by Sen. John Republican leadership has decided Senate grinds its Kerry (D-Mass.). Democratic leaders not to let the minimum wage increase way to gridlock took testimony from witnesses on the go to conference committee. Harold The conciliatory attitude that has char­ need for such an initiative. Most of the Volkmer (D-Mo.) predicted that acterized Senate business since Trent Democrats on the panel made clear, House Speaker Newt Gingrich (R­ Lott (R-Miss.) was elected majority however, that they supported. univer- Ga.) would either not appoint mem­ leader on June 12, came to an end on sal health care. bers to a conference committee until July 11 when an exasperated Lott com­ The forum was introduced by September or October, or fail to ap­ plained that "there is a planned, con­ Senate Minority Leader Tom Daschle point them at all, or, "if they appoint certed effort to have gridlock in the (D-S.D.), who said that 40 million conferees, the conferees are never go­ U.S. Senate." He said that doing "the Americans have no health care cover­ ing to come to an agreement." people's business" was "the best thing age and that the fastest growing cate­ Albert Wynn (D-Md.) accused the to do for ourselves politically" and for gory of uninsured is children. He said GOP leadership of holding the mini­ the country. But "now I find that in- the Republican proposals to give mum wage bill hostage until they get

76 National EIR July 26, 1996 T

the medical savings accounts into the to even figureout who would actually NLRB decisions they were discussing health insurance reform bill, which receive an increase." actually meant. has been stalled for three months. Republicans accused Democrats Democrats said the bill would Rosa DeLauro (D-Conn.) said that of using the minimum wage issue allow the return of the "company this "sounds a lot like, 'if you do not solely for partisan political gain. Phil union," a practice that was outlawed play by my rules, then I am going to Gramm (R-Tex.) said that raising the with the passage of the National Labor take my ball and go home.' " Such a minimum wage is like trying to repeal Relations Act in the 1930s. Edward M. refrain belongs in "sandboxes," not in the law of supply and demand, but pro­ Kennedy (D-Mass.) said, "This legis­ the U.S. Congress, she said. ceeded to talk about the tax provisions lation has nothing to do with coopera­ ofthe bill. John Ashcroft (R-Mo.) sug­ tion and everything to do with under­ gested that the Senate should address mining workers' rights. It overturns issues "which do not address 4 to 5 one of the fundamental protections of million people but address 70 to 80 American law, that employers cannot Minimum wage increase million people." set up company-dominated unions as finallyclears Senate Chris Dodd (D-Conn.) responded a trick to prevent workers from joining On July 9, the Senate passed a mini­ that "this ought to be passing unani­ real unions." He pointed to thefact that mum wage increase, by a vote of 74- mously on a voice vote. This ought not there are 30,000companies with coop­ 24 vote, with 27 Republicans voting in to be the subject of an acrimonious de­ erative programs in place and the faV6r: Three amendments were con­ bate on minimum wage at the very NLRB has only decided 15 cases in sidered, according to an agreement hour we are trying to move people the last four years under the relevant worked out by party leaders Trent Lott from welfare to work." portion of the currentlaw . (R-Miss.) and Tom Daschle (D-S.D.). The Democratic amendment, of­ fe red by Edward Kennedy (Mass.), provided for an across-the-board, two­ National 'right to work' step increase in the minimum wage, to TEAM Act passes act dies in cloture vote $5.15 an hour, by July 1, 1997, and Senate amid veto threat Sixty-eight Senators voted against in­ repealed the 90-day "training" wage The Senate passed the Teamwork for voking cloture on July 10, on a bill provision in the House version of the Employees and Management, or sponsored by Lauch Faircloth (R­ bill. The Republican amendment, of­ TEAM, Act on July 10, by a vote of N.C.) which would outlaw mandatory fered by Kit Bond (Mo.), sought to ex­ 53-46. It seeks to modify labor rela­ union membership as a condition for clude all small businesses making un­ tions law to expand the issues that em­ work, an issue that was left to the states der $500,000 a year in sales and to ployers can discuss with employees to decide in 1947. The vote prevented extend the training wage, or "opportu­ outside the union-management rela­ the bill from being brought to the floor. nity wage," as Republicans called it, tionship, to supposedly improve coop­ Democrats opposed to the bill used to all workers employed on the job less eration. The bill, however, faces a veto arguments that throughout the l04th than six months, a.s well as delay im­ threat from President Clinton. Congress have been the ideological plementation of the increase by six Nancy Kassebaum (R-Kan.), the property of Republicans. Robert Byrd months. Both amendments failed by chief sponsor of the bill in the Senate, (D-W.V.), pointing out that only 21 votes of 52-46. said that it will "improve the quality of states have right to work laws, said the Kennedy called the Republican life for workers on the job as well as the Senate would be "imposing a federal amendment "gimmickry and chica­ quality and productivity of American mandate on those states that have cho­ nery ....If we care about helping the firmscompeting in the global market­ sen not to restrict union security working poor, then we must support place." She also said the bill is in re­ clauses." Byron Dorgan (D-N.D.) an increase in the minimum wage, re­ sponse to a series ofN ational Labor Re­ added that the bill "underminesthe ba­ gardless of the size of the company lations Board decisions "that cast sic principles of state rights and work­ they work for." doubt on the legality of employee place democracy." Chris Dodd (D­ Paul Wellstone (D-Minn.) called involvement programs, particularly in Conn.) said the bill was "simply one the Republican bill a "great leap back­ nonunion settings." However, it was more example of the Republican Par­ ward," which contained "so many clear during the debate that the two ty's systematic and unremitting attack loopholes and exemptions ...it is hard sides couldn't even agree on what the on America's labor unions."

EIR July 26, 1996 National 77 NationalNews

In answer to a question on the relation­ ship between Islam and the West, and the fact that such terms as "fundamentalism," Dole snubs NAACP, fo r "violence," and "terrorism" have scarred Confederate constitution this relationship, he responded: "I do not see is model fo r 'Contract' baseball with Tom Ridge any scars in our relationship with the Islamic When GOP front-runner Bob Dole told the world. ... We do not believe that Islam Columnist Jess Bravin charged that Bob National Association for the Advancement equals violence, and we don't see that there Dole, Newt Gingrich, and other proponents of Colored People that a "scheduling con­ is a clash of civilizations between Islam and of the "Contract on America," who rave flict" prevented him from addressing their the western world." about "states' rights," and appeal to the convention on July 9, he neglected to say that With respect to Palestinian-Israeli rela­ Tenth Amendment to justify this, are in fact his "conflict" was a baseball game. Worse, tions, since the new Israeli government came "reading the wrong Constitution," he wrote Dole's partner at the All-Star game in Phila­ in, President Clinton reminded both parties in a Washington Post commentary on June delphia was Pennsylvania's Gov. Tom that he expects them to implement "their 30. "There is another American charter that, Ridge. Ridge, widely mooted by the press to promises as being part of the temporary more than a century ago, enacted much of the be Dole's choice for vice president, appar­ agreement they had concluded." He also modem Republican agenda for the nation." ently had more difficultybalancing the pop­ praised the Palestinian Authority efforts Like the Contract with America, Bravin corn, hot dogs, and Cracker Jacks at the against terrorism and urged the PA to con­ explains, the Confederate constitution "pro­ game, than he's had balancing the state bud­ tinue. vided for a line-item Presidential veto, as get by cutting 220,000 medically indigent well as other sections that seem consistent Pennsylvanians off from health insurance. with the GOP agenda." Like the Contract, Ridge's latest outrage has been to pro­ the Confederate constitution also "forbade pose that the state's survey of prevailing liberal boondoggles like industrial policy or social insurance. It barred Congress from wages in construction contracts factor in La Raza, Catholic bishops both non-union (i.e., lower) and union wage spending money to spur commerce, and de­ rates. Since the state guarantees the prevail­ blast anti-immigrant bill leted the offensive clause that has permitted the federal government to cause so much ing wage on state-funded building projects, Cecilia Munoz, deputy vice president of the mischief-that of granting Congress power the newly calculated average would substan­ National Council of La Raza, and John to allocate tax revenue for the 'general wel­ tially cut construction wages. A spokesman Swenson, executive director of the Office fare of the United States.' " for the state secretary of labor, in discussion of Migration and Refugee Services for the He concludes "Dole, Gingrich and the with EIR, denied organized labor allegations United States Catholic Conference, de­ Republicans of today, probably don't realize that the new survey would lower wages by nounced the pending federal immigration that many of their ideas, rejected by the $200 million. But in the next breath, he ner­ bill as "extremist," in their commentary in founders of the United States, were ratified vously stammered that "taxpayers would the Washington Post on July 5. "Reportedly, by the Confederacy in 1861 ...and that after save up to $200 million." some in Congress hardly can contain their the Civil War,rather than use the Confeder­ glee at the prospect that the President will ate constitution as a model, the United States sign either this dangerous bit of policymak­ repudiated its values by enacting the 13th, ing or open himself to attacks that he 'killed' 14th and 15th Amendments." the immigration reform bill." Clinton tells Arab daily, The bill could lead to denial ofeducation to undocumented schoolchildren; and would 'peace is my priority' bar U.S. citizens from sponsoring their President Bill Clinton reemphasized his per­ spouses or children under the legal immigra­ sonal commitment "to exert all his efforts to tion system unless they earnmore than 100% Clinton announces new help the issue of peace in the Mideast" in an of the poverty level-"hardly a rational pol­ exclusive interview with Arabic daily icy for a 'pro-family' Congress," they point meat inspection plans Asharq Alawsat. Clinton's remarks ap­ out. In addition, legal immigrants could be President Bill Clinton announced in his July peared in the London-based paper on the eve deported for participating in student aid and 6 radio address that the administration is re­ of the Cairo Arab Summit that started on loan programs, prenatal care, and even cer­ vamping the U.S. meat inspection process. June 22. Clinton stressed: "Achieving com­ tain English classes. "Where is the wisdom "We all remember how in 1993 tragedy prehensive peace in the Middle East remains in a law that would deport immigrants for struck hundreds of families in the Western a foremost priority in the program of the doing things we want them to do-such as United States," he said. "Undercooked ham­ U.S. administration and my own personal learning English, nurturing their children burgers served in a fast-food restaurant were program." and furthering their educations?" they ask. contaminated with a deadly strain of E. coli

78 National EIR July 26, 1996 Briefly

HENRY ESPY, the brother of for­ mer Agriculture Secretary Mike Espy, was indicted by "independent" prosecutor Donald Smaltz. This is the bacteria. Five hundred people became ill, the murder spree, when the son of victim No. fourth set of indictments returned in and four children died." 30, Shirley Cline, agreed to cooperate with the Espy investigation. It is widely "Now ...sometimes families have been investigators. Kevorkian's attorneytold the believed that the ultimate target of exposed illnesses because some meat and press that Cline was "in horrific suffering fo Smaltz's probe is not Mike Espy, but poultry shipped to our supermarket shelves from bowel cancer," which had spread to her President Clinton; Smaltz's investi­ contained Invisible and deadly bacteria. The organs and lungs. At autopsy, it was found gation is very active in Little Rock. reason was shocking and simple: For all our that there was no lung metastasis, and, al­ technological advances, the way we inspect though the cancer had spread, she could have GINGRICHITES who have been meat and poultry had not changed in 90 continued to live for years, benefittingfrom targetted by AFL-CIO electronic me­ years." new medical protocols. dia ads are howling: California's Clinton'splan was given more detail that Moreover, many new drugsare coming Brian Bilbray, one of the ads' targets, day by Agriculture Secretary Dan Glick­ on the market to treat the effects of multiple whined to the Los Angeles Times, man. I) The government will set standards sclerosis, a non-fatal disabling disease. Five "They're like heroin addicts. They for salmonella contamination, and the of Kevorkian's victims have been MS pa­ need their power fix." According to USDA will, for the firsttime, responsible tients. As recently as May 17, the FDA ap­ be the Times, labor walking tours in 76 for its testing. Beginning this summer, no proved use of A vonex (Interferon beta I-a), congressional districts is "harming plant will be allowed to exceed the current first �herapy shown to slpw the progres­ tbe Republicans in close races." average contamination (currently, 20% of sion of physical disability and decrease the chicken products and of turkey prod­ frequency of acute relapses. 49% INMATES in Sheriff Joe Arpaio's ucts show traces of salmonella). The proc­ 2) get-tough prison system in Maricopa essors will be required to test for coli, for E. County, Arizona are being punched, which a maximum level will be set. Each 3) kicked in the head, and thrown meat- or poultry-processing plant must iden­ against the walls by guards, accord­ tify points where contamination could oc­ Expose of Bush cover-up ing to a preliminary Justice Depart­ cur, then check for contamination at each, of Pan Am 103 shredded ment investigation. Guards are also subject to USDA approval. 4) All processing All remaining copies of Trailof the Octopus, armed with stun guns, in this much­ plants would have to adopt a written plan the 1993 book which exposes the efforts by touted, new version of good old within three months. George Bush and Margaret Thatcher to di­ Southernjus tice. vert investigation of the bombing of Pan Am 103 from Syria and Iran to Libya, will be GOODBYE OLLIE, again. A few destroyed. The book by Lester Coleman and months ago, Ollie North's radio talk Donald Goddard, will be "pulped," as a re­ show in Washington was bounced ReSistance grows to sult of an out-of-court settlement between from its prime-time slot of 3-6 p.m. the publishers and retired Drug Enforcement to 9 p.m. Now, his newsletter, Ollie Kevorkian death march Administration officer Michael Hurley, ac­ North 's Front Lines, has folded. He Detroit's Cardinal Adam Maida launched cording to the New York Post of July 7. started the newsletter after the 1994 Project Life on July 9 to counter the despair Coleman was a Defense Intelligence elections, trying to capitalize on the of people facing "a life-or-death decision in­ Agency employee assigned to penetrate and GOP congressional sweep, while volving abortion or assisted suicide," and to observe DEA operations in Cyprus, where never mentioning his own Senate de­ provide them with an alternative. "Before Hurley was DEA station chief. Coleman's feat, organized by LaRouche associ­ you pick up the telephone to schedule a con­ book threatened the Bush-led cover-up of ate Nancy Spannaus. sultation with Jack Kevorkian," he told a De­ the Pan Am 103 bombing, by exposing how troit audience, "call Project Life." He Iranians and Syrians, with help from Monzer RICHARD LAMM is a better can­ pledged whatever resources it takes to offer AI-Kassar, penetrated a DEA "sting" opera­ didate than Ross Perot, croons an edi­ alternatives. He said: "No one should feel tion and placed a bomb aboard the plane, toria
in the New York Times on July forced-by whatever problems or pressures which blew up over Lockerbie, Scotland, on 12. Why? "This is aman who not only they face-to choose abortion or assisted Dec. 21, 1988. EIR has previously reported warnsabout the dangers of the budget suicide." on the considerable evidence that high-level deficit,but proposes to deal with it by Jack Kevorkian, the self-styled "obitia­ U.S. government officials were aware that ...cutting off Social Security bene­ trist," has racked up 33 victims since 1990. Pan Am 103, on that day, had been targetted, fitsfor high-income retirees, slashing None of the decedents was terminal, and and failed to intervene. Were the threads of veterans' benefits,making people pay many did not even have fatal diseases. the investigation to be followed, they would more money for Medicare and impos­ On July 4, Michigan law enforcement likely lead to the doors of George Bush and ing a huge gasoline tax on motorists." authorities made a breakthrough in stopping his flunky Oliver North.

EIR July 26, 1996 National 79 Editorial

Britain's war against Ireland

President Clinton's intervention last year to negotiate injured, oftenby plastic bullets fired by the Ulster Con­ a cease-fire in Northern Ireland was perceived as an stabulary; one Irish Catholic was killed when he was run intolerable insult by the British monarchy. With the aid over by an armoreq personnel carrier; 110 police officers of his National Security Council, President Clinton by­ have been injured; over 300 hijackings took place; and passed the traditionally pro-British careerists in the more than 900 gasoline bombs were thrown. State Department, in a move which threatened to break: Still, on July 12, the Ulster Constabulary allowed the so-called special relationship between the United another march by the Protestant Orange Order along States and the United Kingdom. Ormeau Road in Belfast. Police, backed by troops, A crucial step in the process was the decision by the threw a heavy security cordon around the road, near the President to issue a visa to Sinn Fein's Gerry Adams, city center. Catholic residents were kept behind police which was followed by President Clinton's visit to Ire­ lines. Over 1,000 more special forces were flown in, land in December 1995. The peace process was re­ raising troop levels toward 20,000-the highest they versed, by a series of deliberate moves initiated by John have been in Northern Ireland in 15 years. Major's Tory government, with direct support from the The Catholic population of Northern Ireland rightly British Crown. A pretext for Major' s refusal to allow feared that the British Crown intended to foster the eth­ all-party talks to continue, were bombings purportedly nic cleansing of Belfast. This created a climate in which carried out by a group of intransigents in the Irish Re­ the bombing of a hotel at Enniskillen, near the border publican Army (IRA). with the Irish Republic, might be ascribed to the IRA­ Under the circumstances, although there is no direct notwithstanding their denial of any involvement. evidence, it is difficultto believe that the bombings were The blatancy of this latest British outrage has not in fact not orchestrated by British Intelligence, working been lost on Irish Prime Minister John Bruton, who has under the direction of the Queen's Privy Council. Cer­ generally been extremely restrained, even as the peace­ tainly, the latest riots and bombings were triggered by process was being sabotaged by the British. And Sinn the Privy Council, which provocatively first banned and Fein President Gerry Adams· suggested that the bomb­ then allowed demonstrations by Irish Protestant zealots, ing might be part of a "dirty tricks" campaign by pro­ in and around Belfast. British agents to discredit his organization: "It comes at The current round of violence started on July 11, a time when the British government is in the dock, and when the Royal Ulster Constabulary rescinded orders I think it is quite fortuitous for them at this time. I am that would have kept the Protestant Orange Order from saying it comes as a major distraction," he said, charac­ marching in their annual victory parade, commemorat­ terizing the peace process as "in absolute ruins." ing the Battle of Boyne, through the Roman Catholic Cardinal Cabal Daly, leader of Ireland's Catholics, section of Portadown, south of Belfast. Ostensibly, the said angrily: "This was a wrong decision, a disastrously police were motivated to stop a riot by the thousands of wrong decision. I feel it will have very negative conse­ Orangemen who had gathered to protest, not to march. quences ....I, with regret, have to say that I feel be­ But, the Orange constabulary immediately began to trayed, betrayed by the British government." beat up Catholic protesters, who were staging a sit-in to If the British monarchy and the Major government stop the march. thought that they would be giving President Clinton a That night, unknown snipers shot three members of black eye by blowing up Northern Ireland once again, the Ulster Constabulary, and all hell broke loose. In all, their calculations may be backfiring, as their own per­ some 200 Catholics have been arrested and 121 civilians fidious methods now stand exposed for all to see.

80 National EIR July 26, 1996 SEE L A ROUCHE ON CAB L E TV Al l programs are Th e LaRouche Connection unless otherwise noted. ALASKA IDAHO NEW YORK .WEBSTER-GRC Ch. 12 • 44 • • Wednesdays-9 :30 p.m: ANCHORAGE-ACTV Ch. MOSCOW-Ch. 37 ALBANY-Ch. 18 • Wednesdays-9 p.m. (Check Readerboard) Tuesdays-5 p.m. YO NKERS-Ch. 37 • Fridays-4 p.m. ARIZONA ILLINOIS BRONX-Bronx Net Ch. 70 • • • Saturdays-6 p.m. YORKTOWN-Ch. 34 PHOENIX-Dimension Ch. 22 CHICAGO-CAN Ch. 21 • BROOKHAVEN (E. Suffolk) Thu rsdays-3 p.m. Wednesdays-7 p.m. Schiller Hotline-2 1 • TCI-Ch. 1 or Ch. 99 OREGON TUCSON-Access Fridays-6 p.m. • Wednesdays-5 p.m. PORTLAND-Access Mondays-5 pm (Ch. 61 ) The LaRouche Connection • BROOKLYN Tuesdays-l pm (Ch. 63) Tues., July 30-10 p.m. Tuesdays-6 p.m. (Ch. 27) CALIFORNIA INDIANA Cablevision (BCAT)-Ch. 67 Thu rsdays-3 p.m. (Ch. 33) • • Tlme-Warner B/O-Ch. 34 TEXAS E. SAN FERNANDO-Ch. 25 INDIANAPOLlS-p.a. Ch • . . . (call station for times) AUSTIN ACTV Ch 10 & 16 Saturdays-8:30 p.m. Amencan Cabievision ' • -:- . • BUFFALO-BCAM Ch 18 ' LANC.!PALMDALE-Ch. 3 Mon.-5:30 p.m; Fn .-l l p.m. (call station for times) • T e d 11 ' • SOUTH BEND-Ch. 31 • DALLAS-Access Ch. 23-B Sundays-l :30 p.m. H��SOY�VALtE�":""Ch . 6 • Thursdays-l 0 p.m. . Sun.-8 p.m.; Thurs.-9 p.m. MARIN COUNTY-Ch. 31 2nd Sunday monthly- l .30 p.m .• • EL PASO-Paragon Ch . 15 Tuesdays-5 p.m. KENTUCKY ILlON-TIW Ch. 10 . • • Th urs d ays-l0.30 p.m. MODESTO-Access Ch. 5 LOUISVILLE-TKR Ch. 18 & F ' d -3 p m. 10 m • HOUSTON-Access Houston Fridays-3 p.m. Wednesdays-5 p.m. • _ • rrHtt� pegas· ys_C�·. 57 Mondays-5 p.m. ORANGE COUNTY-Ch. 3 LOUISIANA Mon. & Weds -8 .05 p.m. Fridays-eveni ng • : VIRGINIA NEW ORLEANS-Cox Ch. 8 Saturdays-4.35 p.m. Ch. 57 • PASADENA-Ch. 56 • ARLIN GTON-. ACT Ch 33 Mondays-l l p.m. MANHATTAN-MNN Ch. 34 · Tuesdays-2 & 6 p.m. Sun.-l pm; Mon.-:-6:30 pm • Sun., Aug. 4 & 18-9 a.m. SACRAMENTO-Ch. 18 MARYLAND • Tuesdays-12 Midnight • MONTVALE/MAHWAH-Ch. 14 & BALTIMORE-BCAC Ch . 42 Wednesdays-12 Noon - 2nd 4th Weds.-10 p.m. Wedsnesdays-5 30 p .. m • M d 9 • ' • CHESTERFIELD COUNTY- SAN DIEGO-Cox Cable • NASSAU-Ch. 25' North County-Ch. 15 B��TI�C;RE 80� NTY- om ast-Ch. 6 Last Fri., monthly-4:00 p.m. i � Comcast Cablevision-Ch 2 • ues ays-5 p.m. Wednesdays0-4:30 p.m. OSSINING-Continental Greater San Diego-Ch. 24 2nd Tues monthly-9 p � • FAIR FAX-FCAC Ch. 10 • ' Southern Westchester Ch. 19 Wednesdays-4:30 p.m. MONTGOMERY-M CTV Ch 49 Tuesdays-12 Noon . ' ' Rockland County Ch. 26 • SAN FRANCISCO-Ch. 53 W d -1 F'-8 30 Thurs.-7 pm; Sat.-l 0 am • 1st & 3rd Sundays-4 p.m. • Fridays-6 :30 p.m. PR� N�E G fORG�S COUN��- • LOUDOUN �OUNTY-Ch. 59 • POUGHKEEPSIE-Ch. 28 SANTA ANA-Ch. 53 PGCTV Ch. 15 a ' p S un.-1 l P.m. 1st & 2nd Fn days-4 :30 p.m. • s ' Tuesdays-6 :30 p.m. Thu rsdays-9:30 p.m. • N ssZ -J ones C h .64 • OUEENS-OPTV Ch. 56 1 • WEST HOWARD COUNTY- �S altur d a s 12 N oon STA. CLARITAlTUJUNGA (call station fo r times) Comcast Cablevision-Ch 6 • Y - King VideoCable-Ch. 20 ' • R ICH M O N D -C ontl Ch . 38 . . ' RIVERHEAD Wednesdays-7 :30 p.m. Dally-l0.30 a.m. & 4.30 p.m. (call station fo r times) Peconic Bay TV-Ch. 27 • • ROANOKE-Cox Ch. 9 W. SAN FERNANDO-Ch. 27 MICHIGAN Thursdays-1 2 Midnight Wednesdays-6 :30 p.m. • TRENTON-TCI Ch. 44 Wednesdays-2 P ''!1 1st & 2nd Fridays-4 p.m. • ' ' • YORKTOWN-Conti Ch. 38 COLORADO Wednesdays-2 :30 p.m. ROCHESTER-G RC Ch. 15 • Mondays-4 p.m DENVER-DCTV Ch. 57 MINNESOTA Fri.-l l p.m.; Sun.-1 1 a.m. • Sat.-4 p.m.; Mon.-6 p.m. • EDEN PRAIRIE-Ch. 33 ROCKLAND-PA Ch. 27 WASHINGTON • CONNECTICUT Wed.-5:30 pm; Sun.-3 :30 pm Wednesdays-5:30 p.m. KING COUNTY-TCI Ch. 29 • • • MINNEAPOLIS-MTN Ch. 32 SCHENECTADY-P.A. Ch. 11 Thursdays-l0 :30 a.m. BETHEUDANBURY/RIDGEFIELD • Fridays-7 :30 p.m. Mondays-l0 p.m. SNOHOMISH COUNTY Comcast-Ch. 23 • • Wednesdays-l 0 p.m. MINNEAPOLIS (NW Suburbs) STATE N ISL.-CTV Ch. 24 Viacom Cable-Ch. 29 • Northwest Comm. TV-Ch. 33 Wed.-l l p.m.; Sat.-8 a.m. (call station for times) BRANFORD-TCI Ch. 21 • • Weds., 10 a.m. & 7:30 p.m. Mon.-7 pm; Tue.-7 am & 2 pm SUFFOLK, LI.-Ch. 25 SPOKANE-Cox Ch. 25 • • NEWTOWN/NEW MILFORD ST. LOUIS PARK-C h. 33 2nd & 4th Mondays-l0 p.m. Tuesdays-6 p.m. • • Ch. Charter-Ch. 21 Friday through Monday SYRACUSE-Adelphia Ch. 3 TRI-CITIES-TCI 13 Thursdays-9:30 p.m. 3 p.m., 11 p.m., 7 a.m. Fridays-4 p.m. Mon.-l l :30 am; Weds.-6 pm • • DISTRICT OF COLUMBIA ST. PAU L-Ch. 33 SYRACUSE (Suburbs) Thu rsdays-8 :30 pm • Mondays-8 p.m. Ti m e-Warner Cable-Ch. 12 WISCONSIN WASHINGTON-DCTV Ch. 25 MISSOURI Saturdays-9 p.m. • WAUSAU-Ch. 10 Sundays-12 Noon • • ST. LOUIS-C h. 22 UTICA-H arron Ch. 3 (call station fo r times) Wednesdays-5 p.m. Thursdays-6 :30 p.m. If you are interested in getting these programs on your local cable TV station, please call Charles Notley at (703) 777-9451 Ext. 322. ' For more info rmation, visit our Internet HomePage at http://www.axsamer.org/ - laro'uche

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Journal of Poetry, Science, and Statecraft

Publisher of LaRouche)s major theoretical writings

FEATURED in the Summer 1996 issue:

(Homeostatic) Simulation by Lyndon H. LaRouche, Jr.

«Although no mathematical model of economic processes would attempt to program the artistic fa ctor in social progress, th e mathematician must take into account that potential margin of error in his 'model'which might be introduced by excluding consideration of Classical art fo rms. "

Th e Power of Great Poetry to Shape Character and Build th e Na tion: Dante) Hu mboldt) and Helen Keller, by Muriel Mirak We issbach

Peter Abelard: Discoverer of In dividuality in the Feudal Ag e) by Helga Zepp LaRouche

Lyric Song and the Birth of th e Korean Na tion) by Kathy Wo lfe

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