Another urban legend that will not die: the CIA is the world’s major drug dealer

Summary: Here we discuss one of the more powerful urban legends of American history, undermining America’s social cohesion — that the CIA has been one of the largest drug smugglers into America. This was reformatted in June 2013.

Today we examine another urban legend that will not die. Here is a pure version, lifted from the comments:

Have you considered the possibility that all these drug cartels in Mexico and elsewhere in South America, plus the ones in Afghanistan operate under the blessings and guidance of all-powerful, supreme, cartel above them – The Central Intelligence Agency. The CIA’s main business is to profit from tremendous rents they extract from the drug cartels, in exchange for not doing much anti-drugs enforcement activity.


  1. Origin of the story
  2. Evidence: Prof Alfred W McCoy
  3. Evidence: Report of the DoJ Inspector General
  4. Evidence:
  5. Other sources
  6. For More Information

(1)  Origin of the story

The origin of this urban legend — in its widespread and exaggerated form — is perhaps the most irresponsible story ever done my a major American newspaper, the San Jose Mercury News series about the Contra drug trafficking in August 1996. It was not what they proved, or even said — but what they implied.   Their vague claims have mutated into a vaster set of accusations — culminating in dystopian delusions like those of Indian Investor.

The US government has a long history of working with drug dealers — along with gangsters, tyrants, and the other low-lifes and scum that wield so much power in our broken world.  In a perfect world the government could work with just saints.  A finer government might work with just good people (which in this world would mean a high proportion of them would be martyrs).  But that’s neither our world nor our government.

The debate about this concerns the extent of US government involvement with drug dealers, and the degree of US complicity in their activities.

  1. Often allies of dealers?
  2. Sometimes partners?
  3. Or is our government a prime mover in the drug trade?

In my non-expert opinion, the first is certain.  The second probable; its frequency is the key (the more often, the more disturbing).  The third very unlikely, IMO.

Note that large-scale drug traffic requires government corruption.  That is, bribery of government officials — police, prosecutors, judges, legislators, and other officials.  The massive profits of drug trafficking make this inevitable and unstoppable.  Magnitudes matter here, as everywhere.  A moderate degree of corruption is sustainable; at the other extreme, too much can bring a regime crashing down.

(2)  Evidence: Prof Alfred W McCoy

Much of the research about the CIA’s role in the global drug trade comes from Alfred W. McCoy (History Prof at U of Wisconsin-Madison).  Here are excerpts from his 1972 book, “The Politics of Heroin in Southeast Asia“.  {This is an update to the original post}

The CIA became the vanguard of America’s anti-Communist crusade, and it dispatched small numbers of well-financed agents to every corner of the globe to mold local political situations in a fashion compatible with American interests. Practicing a ruthless form of clandestine realpolitik, its agents made alliances with any local group willing and able to stem the flow of “Communist aggression.” Although these alliances represent only a small fraction of CIA postwar operations, they have nevertheless had a profound impact on the international heroin trade. {page 6}

After pouring billions of dollars into Southeast Asia for over twenty years, the United States has acquired enormous power in the region. And it has used this power to create new nations where none existed, handpick prime ministers, topple governments, and crush revolutions. But US officials in Southeast Asia have always tended to consider the opium traffic a quaint local custom and have generally turned a blind eye to official involvement. A Laotian or Vietnamese general who so much as whispers the word “neutralism” is likely to find himself on the next plane out of the country, but one who tells the international press about his role in the opium trade does not even merit a raised eyebrow.

However, American involvement has gone far beyond coincidental complicity; embassies have covered up involvement by client governments, CIA contract airlines have carried opium, and individual CIA agents have winked at the opium traffic. {page 282}

(3)  Evidence: Report of the DoJ Inspector General

For an exhaustive analysis of the San Jose Mercury News’ claims see this report:  US Department of Justice Office of the Inspector General’s report dated December 1997.  The conclusions appear below.

Conclusions of Inspector General Michael R. Bromwich

It is rare that an investigation of this magnitude is prompted by a series of newspaper articles. We spent over 15 months and significant resources investigating the allegations suggested by San Jose Mercury News articles in August 1996. We did so because the allegations resonated with a substantial number of people and fueled suspicion that our system of criminal justice was corrupted by foreign policy considerations in a manner that would be extremely shocking if true.

The allegations contained an extremely volatile mixture, linking the activities of the intelligence community, support of the Contras in Nicaragua (easily the most controversial foreign policy initiative of the 1980s), the crack cocaine explosion, and the devastation of many of our inner cities by the crack epidemic.

These allegations fed an already profound suspicion of the government that exists within our inner cities and sparked widespread belief that the Contras were permitted to create massive drug enterprises in pursuit of a foreign policy initiative. More relevant to our inquiry, the allegations suggested that the pursuit of the policy of aiding the Nicaraguan Contras resulted in the manipulation of the criminal justice system, the protection of certain individuals by the CIA, and the failure of the Department of Justice to pursue investigations and prosecutions of these persons even though they were engaged in substantial drug trafficking activities.

We found that the allegations contained in the original Mercury News articles were exaggerations of the actual facts. Our investigation involved detailed reviews of the investigations and prosecutions of the various individuals who were at the center of the allegations contained in the original articles — Danilo Blandon, Norwin Meneses, Ricky Ross, Ronald Lister, and others.

We found that although the investigations suffered from various problems of communication and coordination, their successes and failures were determined by the normal dynamics that affect the success of scores of investigations of high-level drug traffickers: the availability of credible informants, the ability to penetrate sophisticated narcotics distribution organizations with undercover agents, the ability to make seizures of narcotics and other physical evidence, the availability of resources necessary to pursue complex cases against the key figures in narcotics distribution enterprises, and the aggressiveness and judgments of law enforcement agents.

These factors, rather than anything as spectacular as a systematic effort by the CIA or any other intelligence agency to protect the drug trafficking activities of Contra supporters, determined what occurred in the cases we examined.

We also found that the claims that Blandon and Meneses were responsible for introducing crack cocaine into South Central Los Angeles and spreading the crack epidemic throughout the country were unsupported. Undoubtedly, Blandon and Meneses were significant drug dealers guilty of enriching themselves at the expense of countless drug users, as well as the communities in which those drug users lived, just as is the case with all drug dealers of any magnitude. They also contributed some money to the Contra cause.

But we did not find that their activities were responsible for the crack cocaine epidemic in South Central Los Angeles, much less the rise of crack throughout the nation, or that they were a significant source of support for the Contras. This is not to say that we did not find problems or ambiguities in the matters we examined.

  • We found that Blandon received the benefit of a green card in a wholly improper manner.
  • We found that during a period of time in the 1980s, the Justice Department was not certain whether it wanted to prosecute Meneses or use him as a cooperating witness to make cases against others.
  • We found that part of the government was not anxious to have DEA agent Castillo openly probe the activities at Ilopango Airport because of sensitive covert operations there.
  • We found that the CIA did in fact intervene in the Zavala case and may have played a role in having a sum of money returned to him.

Although these findings are troubling, they are a far cry from the type of broad manipulation and corruption of the federal criminal justice system suggested by the original allegations.

We are well aware of the furor that these allegations created in communities throughout the country. We also recognize that it is impossible to draw conclusions about these questions with absolute certainty because of the age of the cases involved, faded memories, the dispersion of witnesses and evidence, and the special interests of many of the people we interviewed. We are also realistic enough to recognize that the suspicion of federal law enforcement will not be extinguished by our report on these allegations, especially because there remain some unanswered questions, which are multiplied when the investigation takes place so long after the events being investigated.

Nevertheless, we believe that a full consideration of the results of our investigation will show that we have conducted an exhaustive review of these allegations and that our findings are supported by the evidence.

(4)  Evidence: Report of the CIA Inspector General

The CIA IG also conducted an investigation:

Excerpts from the conclusions:

No information has been found to indicate that CIA as an organization or its employees conspired with, or assisted, Contra-related organizations or individuals in drug trafficking to raise funds for the Contras or for any other purpose.

… No information has been found to indicate that other Contra organizations engaged in drug trafficking for fundraising or any other purpose, although individual members were alleged from time to time to be involved in drug trafficking.

… In 1984, CIA received allegations that five individuals associated with the Democratic Revolutionary Alliance (ARDE)/Sandino Revolutionary Front (FRS) were engaged in a drug trafficking conspiracy with a known narcotics trafficker, Jorge Morales. CIA broke off contact with ARDE in October 1984, but continued to have contact through 1986-87 with four of the individuals involved with Morales.

And so forth, in a similar vein at great length.

(5)  Other evidence

Here are some other sources of valuable data, although of widely varying reliability:

  1. An archive of the San Jose Mercury News articles, posted at Dark Alliance
  2. The Contras, Cocaine, and Covert Operations, The National Security Archive of George Washington University — Much damning material
  3. The CIA, Contras, Gangs, and Crack“, William Blum, Foreign Policy in Focus (published by the Institute for Policy Studies), November 1996
  4. An archive of links posted at the Serendipity website.

(6)  For more information

See the FM reference page National Intelligence Estimates – an archive.

Posts about the CIA:

  1. The Plame Affair and the Decline of the State, 25 October 2005
  2. When will global oil production peak? Here is the answer!, 1 November 2007
  3. The new NIE, another small step in the Decline of the State, 10 December 2007
  4. A must-read book for any American interested in geopolitics, 5 March 2008 — “Legacy of Ashes”
  5. When will global oil production peak? Ask the CIA!, 1 May 2008
  6. Something every American should read, 25 May 2009 — About the CIA’s use of torture



10 thoughts on “Another urban legend that will not die: the CIA is the world’s major drug dealer”

  1. A former Intellegence officer for the CIA once made the wry statement that at the CIA he had never met anyone who was stupid or anyone who was Republican. So maybe Indian Investor has let us all in on how Obama and the Congressional Democrats are going to finance Health Care, et al. Transferred profits from the CIA illegal drug rackets. In the immortal words of John Lovitz of Saturday Night Live Fame: “Yeah, that’s the ticket.”

  2. If you set up a business , you start with an idea , then do a hypothetical cash flow and work flow . I find it hard to imagine a business model for ‘the Taliban’ or ‘ International drugs trade ‘ without putting in some sort of banking facility at some level in the chain . In view of the palaver of anti money-laundering controls in my , and your ,countries , its hard to see how this can be done . Where there is a mismatch , cant help looking for an explanation. Official connivance would be a possible explanation .

  3. electrophoresis

    You’re quite likely correct that the CIA is not some invisible Dr. No-style mastermind behind the global drug trade. For one thing, by Occam’s Razor, it’s quite unnecessary to posit any global mastermind in the drug trade — there’s so much profit in the activity that plenty of people in Third World countries have enormous incentive to set up business for themselves quite without anyone’s help. Second, as with any allegedly enormous conspiracy (see claims that the Pentagon blew up the twin towers on 9/11), there would be too many conspirators for the whole enterprise not to fall apart and become public.

    That’s not to say that the CIA probably isn’t heavily involved in protecting drug dealers in countries where America believes it has a vital interest in doing so. For example, U.S. troops for a while were guarding poppy fields owned by major opium lords in Afghanistan because they were useful allies against the Taliban.

    Too, there are little incidents like this every once in a while.

  4. For me, the link goes back to the Pepsi plant in Laos which was actually a processing center for heroin. That involvement precedes the Mercury story by decades.

    The underlying problem goes back millenia, which is paying dirtbags for intelligence. Sun Tzu could do it without looking over his shoulder. But when Congress has oversight, and there are political consequences for how taxpayer money is spent, I imagine it becomes convenient to simply let those ‘bad allies’ make money, rather than paying them out of pocket.
    Fabius Maximus replies: I agree with your last paragraph. The Pepsi plant is an interesting story, first told (I believe) by Alfred McCoy in his 1972 book, “The Politics of Heroin in Southeast Asia” (He is a History Prof at U of Wisconsin-Madison, and has written extensively about CIA-drug ties). I have added an excerpt from this book to the post. Note it shows involvement of South Vietnam’s leaders in the drug trade, not direct CIA involvement. Of course they knew; everybody involved knew. Excerpt:

    Of South Vietnam’s 3 major narcotics rings, the air transport wing loyal to Air Vice-Marshal Ky must still be considered the most professional. … Rather than buying heroin through a maze of middlemen, Ky’s apparatus deals directly with a heroin laboratory operating somewhere in the Vientiane region. According to a U.S. police adviser stationed in Vientiane, this laboratory is supposed to be one of the most active in Laos, and is managed by a Chinese entrepreneur named Huu Tim Heng. Heng is the link between one of Laos’s major opium merchants, Gen. Ouane Rattikone (former commander in chief of the Laotian army), and the air transport wing heroin ring. (109) From the viewpoint of the narcotics traffic, Huu Tim Heng’s most important legitimate commercial venture is the Pepsi-Cola bottling factory on the outskirts of Vientiane. With Prime Minister Souvanna Phourna’s son, Panya, as the official president, Heng and 2 other Chinese financiers began construction in 1965-1966. Although the presence of the prime minister’s son at the head of the company qualified the venture for generous financial support from USAID (U.S. Agency for International Development), the plant has still not bottled a single Pepsi after 5 years of stop-start construction. (110) The completed factory building has a forlorn, abandoned look about it. While Pepsi’s competitors are mystified at the company’s lacadaisical attitude, the US Bureau of Narcotics has an answer to the riddle. Bureau sources report that Heng has been using his Pepsi operation as a cover for purchases of chemicals vital to the processing of heroin, such as ether and acetic anhydride, and for large financial transactions.

    1. I’ve heard this one banged about before – that the Pepsi Corporation went to Vietaine in 1968 to sell heroin in Indochina. The Christic Institute was big with this one, and Alan Moore made a comic that said as much too.

      Pepsi is still in Laos as part of the Carlsberg Group (Carlsberg Group – Laos). They are part owners in a multi-billion dollar soft drink subsidiary in the country, and have a substantial share of the soft drink market in Indochina. What Leftists don’t understand, and don’t seem to have ever figured out, is that a corporation can and most usually does make enormous profits from engaging in completely legitimate business and trade.

      1. Jacques,

        “What Leftists don’t understand, and don’t seem to have ever figured out, is that a corporation can and most usually does make enormous profits from engaging in completely legitimate business and trade.”

        Every Leftist I know (I live near Berkeley CA) understands that quite well. You must move in unusual circles.

  5. Drug prohibtion has been as effective as alchohal prohibition and has lead to the same consequences… arguably little to no reduction in use and the formation of organized criminal syndicates. What is revealing about the actions of the CIA, regardless of whether the CIA is actually heavily involved in the drug trade or if all its trafficking support arises out of mere convenience and corruption, is the lack of seriousness with which drug use is actually viewed by the government. When this is viewed in the light of the crusades by politicians against drugs (“Just say no!”), which in operation involves putting African Americans and Latinos in prison for a long time for distribution and interfering in the affairs of other countries through ecological warfare and other means (see Columbia), in my opinion this merely exposes the bald hypocrisy involved, and the lack of genuine concern by politicians for policies which actually serve the welfare of the American people.

    While I think the “solution” to the drug war is to make drugs, or at least most drugs, legal and regulated, I don’t know if there is any cure for the cynical manipulations of those in power, especially when the msm allows them to dominate the discourse.

  6. The official narrative is that the CIA has nothing to do with the drug trade (or any form of organized crime) and the DEA is valiantly trying to stem it worldwide. The urban legend errs to the same degree in the opposite direction. It’s a matter of which kind of legend suits your taste.

    As an inveterate skeptic, I never believe the official line, and often find the opposite approach illuminating. We see through a glass darkly, and all that. The main enemy is certainty.
    Fabius Maximus replies: Of the almost 11,000 comments on this site (since started in Nov 2007), this is the one with which I most strongly agree.

  7. This story did not start with the San Jose Mercury story in 1996. You may or may not recall the Eugene Hasenfus affair of the mid-1980’s. Hasenfus, a CIA employee, was captured by the Sandanistas after his Contra supply plane was shot down. These planes were running arms one way and cocaine the other way. See this from early 1992.

    The drug connection was mentioned in the 1987 Kerry Report, in 1994 in ex-DEA agent Celerino Castillo’s book “Powderburns: Cocaine, Contras & The Drug War.” Other articles on the web mention other incidents, testimonies, etc. in the time before 1996. For example here.

    Also see the book “Cocaine” available on the web, which quotes a number of early sources about Coke-Contra connections. For example, pages 326 onwards.

    The same funding method was long used with Opium/Heroin in the Golden Crescent to fund the mujahadeen and in the Golden Triangle to fund various anti-communist groups in Laos, Burma, Vietnam, and Cambodia. From what I can see, the War on Drugs, like the Opium War, is not about interdicting the drug trade, but controlling who gets the money and who gets addicted to the drugs.
    Fabius Maximus replies: The post clearly shows that the “This story did not start with the San Jose Mercury story in 1996. I mention a book published in 1972 plus the Senendipity website and GW University archives — which contain reams of material before 1996. IMO the Mercury articles boosted the story to urban legend status: widespread distribution and gross exaggeration. I’ve added a note to the text to make this clearer.

  8. It should be clear to everyone that Indian Investor is actually FM masquerading as a nut in a desperate attempt to generate more ad views which are secretly embedded throughout his blog. No one could be that crazy. At least that’s what the radio signals in my fillings tell me.

    This reminds me of the people who exaggerated Al Qaeda’s ties to Baathist Iraq and/or the US Government. A safe-house here and a meeting in a coffee shop there turns into incontrovertible evidence of a conspiracy.

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