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We have touched on the sale of illegal drugs as a means to fund certain aspects of the illegal war in Laos. In actual fact, some high levels in the Thai Government at the time benefited, as well as many in the so-called government of Laos. Porous borders, blind eyes, and huge financial incentives underscored the ability to cultivate and produce narcotics at a very low cost. Several incidents come to mind in the author's past experience in Thailand and Laos.

In the late sixties, Colonel Chang of the Thai Communist Suppression Organization, Khun Toy, whose father was an influential member of the Thai Government, and the author spent some time on the Thai/Burma border between Kanchanaburi and Three Pagoda Pass.

My friends obviously had considerable knowledge of an operation smuggling antimony ore which came over from Burma in raw ore form packaged in burlap bags. The economics of moving large quantities of antimony ore in massive Isuzu off-road trucks to be transported south made no sense unless the bags contained a significant quantity of opium which was the main hard currency generator in the area.

The Thai higher levels were given a pass by the U.S. as their support was needed in the war effort in Laos. Moreover, it was common practice and well understood by the U.S. folks on the ground, that the Hmong in Laos did the same in order to support their army under CIA direction in the conflict with the Pathet Lao. Where else in the world could one drive massive trucks through the jungle and openly load long-tail boats on the Salwein river between Burma and Thailand to transship smuggled suspicious burlap bags?

Therefore, we had a porous border on the Burmese side of Thailand to bring opium into Thailand. At the time, Bangkok had several spots where folks could go smoke a pipe though it was generally limited to Chinese who did it as a throw-back to their past heritage. Accordingly, the bulk of the volumes were devoted to export.

At this point in time, it would not be possible to gain any further details from Colonel Chang or Toy as they have both passed. Chang lived a very dangerous life and Toy was an enjoyable playboy who lived on the margin. One day, I was with Toy when he was introducing his girlfriend to an M-16 assault rifle and placed it on automatic fire. Normally, the safest place to stand when a neophyte is shooting is behind them. However, in this instance, the slight lady held her finger on the trigger and the force drove the weapon higher until she fell over shooting behind her. Toy should have had her hold it sideways or even better not have given it to her. Nonetheless, we all survived and it made us "even". As I mentioned in an earlier blog, I happened to shoot his hat off by mistake in a previous adventure.

Below is an image of the author and Toy in one of our camps which does not match up with the famous Four Seasons Tented Camp.

Moving to Laos, it was an entirely more brazen endeavor than that on the western side of Thailand. The Corsicans openly removed unsold passenger seats on commercial DC-3 flights to transport bales of opium. It adds a certain pungent fragrance to the air. The author was a newbie to Laos as he stood under the wing of a DC-3 in Ban Houi Xay while the Lao Air Charter staff wrote tickets, counted the passengers and removed the front seats to add opium bales. Interestingly enough, the plane crashed the next week but that is yet another story. Most of the opium on this route wound up in Saigon to be processed into heroin and sold to U.S. troops who came home with addictions no one could understand.

Another experience of the author underscores the unbelievable economics in the drug business. Esso sold aviation fuel to the U.S. Agency for International Development which was then used to fuel Air America and Continental Air Services who provided logistical support to the CIA-directed Hmong army in Laos. USAID or the U.S. Department of Defense depending on the ultimate user, though the distinction was a bit vague, took ownership of the fuel in Ras Tanura in the Middle East where it was shipped to a large floating vessel offshore Tanjang Uban, Indonesia. It was then to be loaded into smaller tankers going to Chong Nong Sri, Thailand, placed in trucks driven to Nong Khai northern Thailand, then placed on barges into Laos, offloaded into tanks, decanted into drums or bladders and moved up country in Laos. As you might expect, there were huge losses given evaporation, amounts left in the tanks, theft, and the odd drums falling into the wrong hands as they were dropped into hostile locations under fire.

Now, here comes the General Accounting Office of the U.S. Government with the ridiculous notion of an audit of the aviation fuel losses incurred in an illegal war. Nonetheless, I needed to address some issues with a Lao guy who worked for us in Savanakhet, Laos. As my Laos visa had expired, I decided to go with no papers by a small boat from Mukdahan, Thailand.

Below is a modern image of the Thai border town of Mukdahan with Savanakhet across the Mekhong below the mountains in the background. You can only imagine how remote it was over forty years ago.

Everything worked fine as I quietly got off the boat, walked ashore and tried to mix with the crowds. I thought my visit was all sorted until one of the Lao border guards was sufficiently awake to observe a gringo who stood out in the crowd in all respects. A horde of trigger happy Laos quickly surrounded the author. I tried to finesse the lack of a "lost" passport but my Thai associate took care of the documentation issue with another set of papers which had denominations.

I then went to the market to find a pedi-cab to take us to the airstrip when I saw several heaping piles of mountain tobacco and marijuana sitting openly on the ground. I asked the elderly Lao woman the cost of the marijuana and she responded "kilo le Baht" which was five cents per kilo or .001 cents per ounce. As the equivalent Thai stick in San Francisco was rumored to sell for $30 per ounce, there appeared to be a significant location arbitrage between the two places.

I subsequently had a chat with one of the pilots in a Hawaiian shirt and learned that a single C-123 aircraft we had flying all around Laos and Thailand could carry a cargo load which would have yielded some $9 million in 1970 dollars on a $3000 investment, even accounting for product shrinkage along the way due to the smoking habits of the pilots. All we needed was aircraft and fuel which was our business.

If a 3,000 percent rate of return is true for this product, it would be even greater for more easily transported higher value products such as the heroin being made from Burmese and Lao opium during the Vietnam War and concealed in U.S. Military coffins being sent back to the U.S. As these equivalent rates of return undoubtedly exist today, most informed people would conclude that attacking the source of illegal narcotics is foolhardy given the astronomical rates of return. Therefore, suppression of demand in many different forms is the only real solution of something that is a scourge on a significant component of mankind. That is a lesson we still have not learned though it appears that the marijuana issue is lurching toward a clear path of legalization and some form of control.





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