By the Editors of
Executive Intelligence Review (EIR).
Commissioned by Lyndon H. LaRouche.
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From the Introduction to Alan B
Jones' How the World
If it takes you more than a few
days to read this book, I have defeated my own purpose. That purpose is to provide a shortcut for politically
astute readers to acquire the essential knowledge needed to be effective in the ongoing fight to save for our
posterity the great experiment in freedom that was launched 200 years ago by our country's
I have selected and reviewed in
this volume a mere handful of the many books which have been written outlining our various problems. Taken
together, however, they will correctly spell out who we are really fighting, what their goals are, and what
strategies they are utilizing to attain those goals. Once these matters are understood, effective
counter-strategies are easy to define. Without this understanding, our efforts will continue to be aimed at
symptoms rather than causes, and will continue to be insufficient, misdirected, and ineffective.
These reviews cannot possibly
cover all the detail contained in the original books themselves. They can, however, convince you that our problems
are interconnected in a way that you probably never guessed, and that very few of even the most politically active
people understand. I urge you to acquire these
several books yourselves to help you fill in more pieces of the puzzle for yourselves. Many of
the actions most needed by our society will then become obvious to you, to the benefit of us all.
Summary of Dope,
(By the Editors of Executive Intelligence Review (EIR). Commissioned by Lyndon H. LaRouche, Jr.
Pub. 1st ed. in 1978, 2nd ed. in 1986, 3rd ed. in 1992 by EIR,
PO Box 17390, Washington, DC 20041-0390.)
McCoy's The Politics of Heroin describes how the
cultivation and distribution of drugs have in recent times been secretly promoted by American and French
governments via the activities of their covert intelligence agencies. Piper's Final Judgment enlarges the
picture by including the British and Israeli governments and agencies, and uncovering a scope of criminal
enterprises larger than just the drug trade which has been undertaken by these agencies in cooperation with
the world's organized crime rings. The EIR's Dope, Inc. seeks to identify the kingpins at the top of the drug
trade by examining the origins of the trade, by studying the paths via which drug profits are laundered, and
by tracing the ownership of the controlling corporate entities.
The first few chapters of Dope, Inc. serve to update the 1986 edition to 1992, and are also
useful in further fleshing out the subject matter of McCoy's and Piper's books. McCoy discusses the cocaine
trafficking attendant to the Nicaraguan Contra affair, but the EIR is less bashful about naming names:
"Colonel [Oliver] North was the day-to-day operations officer for the Contra resupply program. But it was
Vice President George Bush, the former CIA director, who was formally in charge of the entire Reagan
administration Central America covert operations program." Reagan created and placed Bush in charge of the
secret "Crisis Pre-Planning Group" with North as its secretary. In that capacity, North "ran the Central
America spook show – under George Bush." The EIR quotes memos from North's personal notebooks which indicate
that North was fully aware of the cocaine traffic to the United States which was generating funds from
American addicts to pay for Contra arms.
According to the EIR, North and other administration officials were also involved in the
arms-for hostages swap with the Lebanese terrorists who were holding American hostages. Negotiations were
conducted with a Syrian drug and arms smuggler named Mansur Al-Kassar, who was a supplier of arms to the PLO,
a black market partner of Syria's Vice President Rifaat al-Assad, and a known business associate of Medellin
Cartel boss Pablo Escobar Gaviria. North did not manage to get any hostages freed, though Al-Kassar's
drug-running activities were protected, and though he received, in one transaction that was uncovered, $1.5
million from North for Soviet-bloc arms which went to the Contras. Al-Kassar's drug-runners were suspected of
being involved in the bombing of Pan Am Flight 103 over Lockerbie, Scotland, on December 21, 1988, as was
publicly suggested by U.S. Rep. James Traficant among others. Syria's role in the flourishing Middle-Eastern
heroin and hashish trade into Europe, along with Al-Kassar's possible role in the Flight 103 bombing, have
both been deliberately covered up, says the EIR, by British and American intelligence agencies.
Columbian and Middle Eastern dope trafficking seems to the EIR to have a recurring common
denominator of Israeli involvement. In April 1989, the EIR says,
"a DEA and U.S. Customs Service report was covered in the media alleging that New York's Republic National
Bank was serving as a money-laundering facility for Middle East and Ibero-American narcotics-trafficking
organizations. Republic National Bank is owned by Edmond Safra, a prominent Jewish banker of Lebanese
descent" having world-wide banking operations. The report said that Safra and his bank were part of a
money-laundering network run out of the Zurich-based Shakarchi Trading Co., which "operates as a currency
exchange company and is utilized by some of the world's largest drug-trafficking organizations to launder the
proceeds of their drug-trafficking activities…. Shakarchi Trading Company maintains accounts at the Republic
National Bank of New York…." Mr. Safra, the EIR notes, in 1989 donated "a reported $1 million to his favorite
charity – the Anti-Defamation League."
(The EIR goes way beyond the brief description of the ADL which appears in Piper's book, which
simply painted the ADL as a public relations support arm of the "Jewish Mafia" going back to 1913, with
Arnold Rothstein and Meyer Lansky its primary early beneficiaries. The EIR devotes a 49-page appendix to the ADL, which we will briefly review
in a few moments.)
On December 15, 1989, a Columbian army shoot-out with Medellin Cartel boss Rodriguez Gacha
occurred. Gacha was killed, and shortly thereafter large stockpiles of cartel arms were seized, the majority
of which were found to have been made in Israel. After months of investigation, it was determined that
"Israeli intelligence … had been providing weapons and terrorist training to the Medellin Cartel's
assassination squads in collaboration with British mercenaries….
The funds to purchase the weapons … had been provided by the U.S. State Department through a program
personally run by Assistant Secretary of State Elliott Abrams," who later pled guilty to Iran-Contra crimes."
EIR continues: "The trainer of Rodriguez Gacha's killer squads was a reserve Israeli army
colonel named Yair Klein…. In a parallel operation, a group a British mercenaries also engaged in training
the cartel hit squads…. The involvement of British intelligence in the CIA-Mossad Columbia deal was further
confirmed when Louis Blom-Cooper and Geoffrey Robertson, both officials of Amnesty International, which is
funded by British intelligence, were deployed to cover up the official U.S., British, and Israeli government
sponsorship of the Klein operation…."
A shipload of Israeli arms was transferred on April 24, 1989 in the British Crown Colony of
Antigua, to a Panamanian-registered ship, Sea Point, and "shuttled off to Rodriguez Gacha in Columbia…. The
escrow deposit to ensure that the hundreds of guns left Israel on time had come through the Miami branch of
the Israeli Bank Hapoalim" into which Elliott Abrams had deposited the funds to purchase the arms. On
December 20, 1989, just a few days after the start of the Gacha shoot-out, the
U.S. under President Bush invaded Panama, overthrew General Noriega, and installed in his place
"a local Panamanian lawyer, Guillermo "Porky" Endara. A review of court records shows that President Endara
and several of his law partners were the owners of record of the ship Sea Point in April 1989 when the ship
had delivered the Israeli weapons to Rodriguez Gacha…. [Furthermore,] in Panama City, Endara was the
co-owner, along with Rodriguez Gacha, of the drug money-laundering Banco Interoceánico." The
British-Mossad-CIA intelligence combine thus lost or disposed of a former drug ally (Gacha) in Columbia, but
almost simultaneously picked up a new one (Endara) in Panama.
A little more light is shed on this matter by the EIR: "In 1986, in Panama, Gen. Manuel Noriega
closed down First Interamericas Bank after it was proven that the bank was owned by the Cali Cartel. In
December 1989, U.S. occupation forces invaded Panama … and proceeded to place four members of the board of
that same First Interamericas Bank in power – as President, attorney general, president of the Supreme Court,
and minister of the Treasury. The result: Drug running in Panama has grown since Noriega's ouster." Bush's
strategy? "Specifically, a working alliance has been created between the U.S. government and the Cali Cartel,
against the Medellin Cartel of Pablo Escobar and Rodriguez Gacha. The result has been … that the Cali Cartel
has become dominant among the different Columbian groups … all with behind-the-scenes American approval." It
seems clear that Washington wants the drug trade to continue, but that it also wants to be able to hire and
fire those who it chooses to participate in the trade.
The EIR published a report in November 1990 detailing the growth of narcotic revenues over the
immediately preceding years. The totals were aston¬ishing, and contradicted the Bush administration's
optimistic reports on the same subject. Growth was phenomenal in cultivation and street sales of all the
major drugs – heroine, cocaine, and marijuana. Street sales of all drugs throughout the world had increased
from $175 billion back in 1977 to $558 billion in 1989. Cumulative sales from 1977 to 1989 of drugs raised
only in Ibero-America (Mexico and South and Central America) is nearly $2 trillion, dwarfing even
Ibero-America's gigantic foreign debt of $430 billion. Worldwide addiction continues to grow. Some 70 million
Americans are estimated to have used drugs at some point, with many of these remaining as addicts.
Consumption has jumped throughout South America, including such places as Brazil, Peru, and Columbia. More
millions of people are users in India, Iran, Pakistan, Egypt, and other Asian countries. Europe is another
very large market, with an unknown number of consumers.
Very little of the money raised from street sales is returned and kept by the countries raising
the drugs. Some of the money is laundered by businesses having high cash turnover, such as restaurants and
casinos. A great deal of it is sent out of the country in suitcases and deposited in off-shore banks which
don't have the laws which U.S. banks do requiring cash deposits over $10,000 to be reported to the IRS. The
great bulk of the $558 billion annual revenue (in 1989) is deposited in banks elsewhere. "Although no precise
figures are available," says the EIR, "a leading anti-drug prosecutor in Switzerland, Paolo Bernasconi, told
Italy's La Stampa newspaper in January 1990 that the leading money-laundering centers include the United
States (Miami and Wall Street), Canada, Great Britain, and, of course, Switzerland."
Further, far from fighting the trade, the banks are fighting to get their share: "As the London
Economist wrote proudly in June 1989: 'It is obvious that drug dealers use banks…. The business … has become
part of the financial system…. If you had morals or ethics in this business, you would not be in it.'" The
EIR further writes, "As one banker stated in an off-the-record discussion in London in 1986: Dope 'is the
biggest source of new financial business in the world today…. I know banks which will literally kill to
secure a chunk of this action.' The banker worked for one of Wall Street's biggest investment houses, Merrill
The EIR insists that any strategy of fighting the drug trade must aim at the drug proceeds. "A
competent war on drugs must begin with a war against the banking institutions and bankers who 'launder' Dope,
Inc.'s ill-gotten gains." And: "Shut down the drug money-laundering by the major Anglo-American banks, and
the dope cartel would choke to death on its own profits!" And: "Dope, Inc.'s vulnerable flank is the
international network of banks and other financial institutions that 'launder' the cartel's $558 billion per
year in gross revenue…. Action by governments against the drug bankers could rapidly shut down Dope, Inc."
And yet, says the EIR, "no government has ever touched the system which allowed [the drug trade to develop].
At best, a few accounts here and there have been seized. To this day, money-laundering is not even a criminal
offense in 8 out of the 15 industrial nations. In the United States, the center of the problem, government
action is a joke: No top management has ever been charged or prosecuted for criminal money-laundering
There is negligible opium or cocaine presently being grown in the U.S., says the EIR, but the
same can't be said for marijuana. In fact, the 1987 U.S. pot harvest was valuated by the EIR at $33.1
billion, barely less than the receipts tabulated by the USDA of the largest single farm commodity in 1987,
which was cattle and calves yielding $33.8 billion. Marijuana receipts were greater than any grain crop, or
in fact any other commodity excepting cattle. The major pot-growing states were Hawaii, Washington, Oregon,
California, and a set of relatively impoverished states running from Arkansas and Missouri through Georgia
and North Carolina. A great deal of the financial stress on farmers which helped produce this situation was
the high-interest policies of the Fed imposed during the 80's, which devastated all businesses which had
become dependent upon low-cost credit. The EIR relates instances in which banks actually suggested to
finan¬cially stressed farmers and ranchers that they try their hand at the profitable marijuana business to
help get their bank loans paid off.
We made reference near the beginning of our review to the appendix which the EIR has included on
the Anti-Defamation League (ADL). It's an amazing compendium of information which utterly frees one of the
misapprehension that the ADL is simply an honor¬able, upright, civic-minded institution supporting Judaism.
The appendix goes into detail concerning the following matters related to the
ADL and its operations:
What Is It? Basically, a public relations front for the Rothstein-Lansky branch of American Or¬ganized
Crime, though it operates formally as a tax-exempt public interest organization under Section 501(c)3 of the
Internal Revenue Service Codes.
Structure and Key Personnel: It is an organization having a National Commission of about 150 members, a National Executive
Committee, officers, and a number of standing committees. Membership is by nomination or invitation only. The
standing committees and their chairmen are listed. Nine operatives in the "active core" of the ADL are
listed, some of whom are mentioned below.
Ties to Organized Crime: This gets interesting. First mention is of former ADL national chairman Kenneth Bialkin, who,
says the EIR, masterminded the $60 million looting of Investors Overseas Service (IOS) by financier Robert
Vesco, an indicted fugitive living in Havana and charged with complicity in Medellin Cartel cocaine smuggling
from 1974 to 1989. In January 1980, a jury ordered Bialkin's law firm to pay $35 million to the victims of
the IOS looting, and found Bialkin to be instrumental in that fraud. The IOS was believed by law enforcement
officials to have been used by Meyer Lansky as a conduit for laundering his illicit drug profits. A second
mention is of the Sterling National Bank of New York City. It was charged by Italian authorities in January
1982 of looting $27 million from the Banca Privata Italiana. The chairman of Sterling, says the EIR, "both at
the time of the al¬leged theft and today, is Theodore H. Silbert, another honorary vice-chairman of the ADL
and the former head of the ADL Appeal, its major fundraising arm. Law enforcement sources have identified
Sterling National as a mob front since its founding in 1929 by Meyer Lansky associate Frank Erickson."
The EIR alleges: "A listing of ADL financial contributors and award recipients over the recent
decades reads like a 'Who's Who' of the Meyer Lansky international crime syndicate. Longtime Lansky cronies
such as Victor Posner, Hollywood attorney Sidney Korshak, and Moe Dalitz all appear as ADL patrons. The same
pattern holds true at the regional levels of the ADL." Lots more detail is given.
The final major mention is the Canadian Edgar Bronfman, an honorary vice chairman of the ADL.
His family's criminal dynasty started with his father Sam, who, with Arnold Rothstein, was dispatched to Hong
Kong in 1920 to arrange for supplies of opium, and who further organized the smuggling and retail
distribution of the illegal drugs. A nephew of Edgar Bronfman "was named in a 1972 Montreal Crime Commission
report as an intimate of local crime boss Willy Obront." Further detail is quoted from The Bronfman Dynasty
by Peter C. Newman. The Bronfmans' present holdings include Seagrams Corp., including its majority share in
E. I. du Pont de Nemours Co. The EIR says that, upon the appearance of the 1978 edition of Dope, Inc., which
prominently mentioned the Bronfman clan, Quebec police sources said that Bronfman ordered his attorneys to
sue EIR for libel, but that, "after careful deliberation, the attorneys strongly argued against such an
action." Bronfman instead poured money into the ADL, which then commenced a campaign of shrill attacks
against Lyndon LaRouche and the EIR.
Ties to the Soviet Union: The extensive relationships are detailed between major ADL fig¬ures, including Edgar Bronfman
and Dwayne An¬dreas, the president of the Archer Daniels Midland grain giant, and communist bloc leaders,
including the East German communist dictator Erich Honecker, and Mikhail Gorbachev, who ascended to power in
Moscow in 1985. Some of the purposes were "to improve ADL coordination with the KGB in running pro-Gorbachev
propaganda inside the United States" and "to move in on the 'lucrative new markets' in the liberated nations
of Central Europe – on behalf of organized crime." Ties between the Soviets and the ADL are described going
back as far as the mid-30's, involving also the Soviet spy rings operating during World War 2.
Ties to the Nicaraguan Contra Program: The ADL's ties to this covert program for developing the
South American drug trade are extensively described by reference to the participation of several eminent ADL
figures, including Carl Gershman, the director of the National Endowment for Democracy (NED), the
administration's agency for secretly funding the Contras; Rabbi Morten M. Rosenthal, who, with NED funding,
produced a study pronouncing that the Sandinistas were "anti-Semitic," aimed at marshaling Jewish support for
the Contra effort; Kenneth Bialkin, the attorney for Saudi billionaire Adnan Khashoggi, whose money purchased
arms for Iran via the good offices of Col. Oliver North, as part of the arms-for¬hostages negotiations;
Willard Zucker, who ran the Lake Resources front company in Geneva, Switzerland, which laundered the Iranian
arms profits to the Contras; Edmond Safra, who, with Willard Zucker, owned the corporate jets used by Oliver
North and National Security Advisor Robert MacFarland in traveling to secret conferences in Iran.
Domestic Terrorism: The ADL's activities as agent-provocateur within groups involving the civil rights movement, the
Ku Klux Klan, the Nazis, the anti-war movement, and the paramilitary Right are described, with the ADL
frequently cooperating with the FBI's Division Five in these matters. This collusive work is shown to have
extended to bombings, assaults, jury-tampering, and other illegal activities.
International Terrorism: The EIR focuses on the ADL efforts concerning the preparation for and/or the cover-up after the
murders of Indian Prime Minister Indira Gandhi and Swedish Prime Minister Olof Palme. Prime Minister Gandhi
was murdered in October 1984, perhaps because she was moving toward American and away from Soviet military
assistance. During the immediately preceding months, a Sikh "extremist" group had threatened and predicted
her death, and had formed the World Sikh Organization. That organization has had assistance and ongoing
communication with the ADL, with its leader Surjit Singh being "a close personal friend of ADL Honorary
National Chairman Kenneth Bialkin."
Prime Minister Palme's murder in February 1986 was apparently to cover up the massive arms and
drug trafficking by American, British, Israeli, and Soviet agencies that became known to him from documents
obtained following a police raid which he ordered on a trafficker in his own country. He thereupon undertook
to halt the flow of arms from Sweden to the Persian Gulf, and his murder shortly followed. The ADL's
involvement in the cover-up is described, as is the proof uncovered by the Swedish police of the KGB's prior
knowledge of the assassination.
Penetration of Law Enforcement: Despite its ties to organized crime and other less-than-legal activities outlined above, the ADL
has, with the help of the FBI, "managed to conduct a highly successful campaign to insinuate itself into the
day-to-day workings of virtually every major police department and sheriff's department in the United
States." The methods and some of the results of this activity are described.
Other matters discussed, which we will not go into here, include involvement with Israeli /
Palestinian politics, ties to Mossad operations, support of efforts by the major Midwest grain cartels to
liquidate the independent family farmer, and even the support of cultism, followed by the creation of
"deprogramming" entities to which parents of cultists would pay big bucks to recover their children, both
physically and mentally, from the clutches of those same cults. Study of these matters, and in fact the
entire appendix on the ADL, is highly recommended, since the nature of the ADL is so grossly misunderstood in
our country, and since its works are so pernicious.
Our strategy at this point will be to delve into the core of the first edition of Dope, Inc.,
plainly exposing the tie we presumed would appear between the dynastic banking families and the
conspiratorial combination of intelligence agencies and organized crime rings described by Piper. We will
then end by updating the organizational structure of that combine as was seen by the EIR in their 1986
edition of Dope, Inc.
As McCoy related, the Portuguese and then the Dutch preceded the British in running the drugs
from India, where the opium was raised, to China and else¬where in Southeast Asia, where it was consumed. "By
1659," says the EIR, "the opium trade had become second only to the trade in spices, for which opium was a
medium of exchange. By 1750, the Dutch were shipping more than 100 tons of opium a year to Indo¬nesia,"
where, according to one historian, they took good advantage of one of opium's side effects: its use broke
down the moral resistance of its users.
The British East India Company (BEIC) started getting involved in 1715, when they opened an
office in Canton, on the Chinese coast. They nibbled around the edges of the trade until 1757, when, by
military victory, they turned the prime opium-growing area of Bengal (now Bangladesh) into a Crown Colony.
Profits went into the pockets of local BEIC officials, however, and did not accrue to England or even the
BEIC itself until the effective coup in 1783, when, in the EIR's words, "the dope trade took over Britain."
The coup was organized by Lord Shelburne, who proposed to take two bankrupt entities, the BEIC
and Britain, which was hugely in debt at the end of the Revolutionary War, and combine them into a single
going concern. Drug profits would henceforth go to the BEIC and to Britain, and Britain's political
estab¬lishment would protect and enhance the operations of the BEIC, particularly its profitable drug trade.
Shel¬burne struck an alliance with the BEIC's Lawrence Sullivan, "whose son had subcontracted for the private
opium monopoly in Bengal," and Anglo-Dutch banker Francis Baring. Then with money from the opium trade and
with the support of the monarchical patronage machine, "Shelburne bought the Parliament in 1783, lock, stock,
and barrel," and consolidated an unbeatable financial and political power.
Shelburne's proposed program for returning Britain to greatness was, says the EIR, to "expand
the opium traffic and subvert the United States – both under the banner of free trade. The first achieved
crowning success with the Chinese Opium War; the second not until the twentieth century."
As early as 1787, the British Secretary of State proposed that Britain force the opium market
into China. Jardine Matheson was one of the trading companies entrusted to covertly manage the opium
exportation from India to China, hiding the BEIC's involvement. The drug trade soared, and by 1830, "opium
was the largest commodity in world trade." In China, local criminal gangs called Triads (analogous to
American "Mafia") were selected by the British trading companies to distribute their opium into the
hinterlands. The Chinese Emperor finally resisted by seeking to expropriate the opium in the warehouses of
the trading companies, and the British declared war. It was over very quickly, since "The Chinese forces,
decimated by ten years of rampant opium addiction within the Imperial Army, proved no match for the British."
The peace treaty, signed in 1842, delivered, besides monetary reparations, British extraterritorial control
over the 'free port' of Hong Kong, "to this day [in 1978] the capital of Britain's global drug-running."
Britain's official policy of using mind-destroying drugs to enhance British commerce was laid
out in an 1841 memo from British Prime Minister Lord Palmerston to the British governor-general of India: "…
we must unremittingly endeavor to find, in other parts of the world [than Europe], new vents for our industry
[opium]…. If we succeed in our China expedition [i.e., the Opium War], Abyssinia, Arabia, the countries of
the Indus, and the new markets of China will at no distant period give us a most important extension to the
range of our foreign commerce."
The process was repeated in the Second Opium War, ending with the joint British-French siege of
Beijing in October 1860. Out of this war, "the British merchant banks and trading companies established the
Hongkong and Shanghai Corporation, which to this day serves as the central clearinghouse for all Far Eastern
financial transactions relating to the black market in opium and its heroin derivative." The British had thus
completed the process of opening up all of China, as Lord Palmerston had sought in 1841, and now controlled
about seven-eighths of the Chinese drug trade, which doubled again by 1880. Its modus operandi had been:
Addict the target population, "to sap the vitality of the nation."
Utilize the military as needed to install and protect the drug trade.
Use profits to fund a criminal infrastructure to carry out the trade.
The EIR then outlines ties created by the British merchant bankers to American bankers and
traders, and something of how certain of them were drawn into the drug trafficking business. Some of the
familiar names which come up are John Jacob Astor and his descendent Waldorf Astor, who was chairman of the
Council of the Royal Institute of International Affairs (RIIA) during World War 2. John Murray Forbes of
Boston was U.S. agent for Baring Brothers, the "premier merchant bank of the opium traffic from 1783 to the
present day." Several other Boston families were involved in the trade, including the Hathaway and Perkins
families. The leading banker for this group of families became the House of Morgan. Thomas Nelson Perkins
became the chief Boston agent of the Morgan Bank. Morgan partner Willard Straight spent 1901-1912 in China as
assistant to Sir Robert Hart, the head of the Chinese Customs Service, and thus the leading Britisher
conducting the opium traffic. Straight then became head of the Morgan Bank's Far Eastern operations. Today
(i.e., 1978), the chairman of Morgan Grenfell, which is 40 percent owned by Morgan Guaranty Trust, is Lord
Catto of Cairncatto, who sits on the "London Committee" of the Hongkong and Shanghai Bank.
The bulk introduction of drugs into the United States came about by the introduction of coolies
onto the West Coast. They were transported there by the same British trading companies who were running the
slave trade to the South. Some 117,000 coolies entered in 1846 alone, a great many of them being opium
addicts. The opium followed them, laying the foundation for the later drug trade out of the Chinatowns of the
major West Coast cities. Lincoln outlawed the coolie traffic in 1862, but it continued without significant
pause up to the turn of the century. By 1875, officials estimated that 120,000 Americans in addition to the
Chinese coolies were addicted to opium.
As Americans and others around the world began to perceive addiction problems in their own back
yards, efforts were made to shut down the traffic, efforts which the British sternly opposed. A Hague
Convention was passed in 1905 (which the British signed and then evaded), and a proposal was brought to the
League of Nations Opium Committee in 1923 aimed at worldwide reduction of both production and consumption to
10 percent of current values, a proposal which the British publicly and vehemently opposed. By 1927, British
statistics showed that about 26 percent of British Far Eastern colonial revenues were derived from opium,
providing a believable rationalization for their adamant support of the drug trade.
The next major step, taken in 1920, was Pro¬hibition. Basic opium supply was now available, and
its transport into the country was simple enough. What was needed was a criminal infrastructure to deliver it
on American streets. The effort started by mounting a campaign in both Canada and the U.S. to outlaw liquor.
The agitation for Prohibition was not spontaneous. Rather, it was deliberately funded by American families
who had been drawn into the British web. The Women's Christian Temperance Union (WCTU) and its offshoots
"enjoyed the financial backing of the Astors, the Vanderbilts, the Warburgs, and the Rockefellers."
Tax-exempt foundations were also brought in, "especially the Russell Sage Foundation and the
Prohibition commenced first in Canada, running from 1915 to 1919. During this period, the
Canadian criminal infrastructure for the delivery of British (and Scotch) booze was developed, centered
largely on Canada's Bronfman family, who "established the local mob contacts in the United States [which
would soon be needed], and consolidated contractual agreements with the Royal Liquor Commission in London."
In the United States, the Prohibition Amendment was ratified in 1917, but only went into effect via the
Volstead Act in January of 1920. Canadian Prohibition terminated just one month earlier, giving the
Bronfman's free rein in their own country to import and manufacture distilled spirits, and to move that
liquor into the hands of the American organized crime rings under development.
The scheme worked like a charm. The needed street gangs were spawned, and those capable of
managing their internal organization rose to the top, with Meyer Lansky being the final emergent kingpin.
Even though Prohibition was repealed in 1933, narcotic drugs remained illegal, and the criminal gangs were
enabled to continue honing their skills by branching out in other directions, including casino gambling,
prostitution, extortion, loan-sharking, etc. Narcotics, however, was not to become their really big business
until the supply was further developed after World War 2, the monetary pathways developed for handling the
anticipated flood of illicit cash, and a cultural climate created "conducive to fostering drug addiction."
The British stayed demurely above all this illegal fray. The heroin they sold to Arnold
Rothstein and Meyer Lansky in the 20's was sold legally. What the buyers did with it was their own business.
Likewise the booze the British sold to Joe Kennedy and the Bronfman family was legally sold, and what those
buyers did with it was likewise their own business, simply a matter of "free enterprise" at work.
The EIR next plunges into how the monetary end of the drug system works. It looks first at the
size of the trade. Annual street sales in the U.S. of the three major drugs (heroin, cocaine, and marijuana)
amount to about $233 billion, according to House Select Committee on Narcotics in 1986. The worldwide trade
is accordingly estimated at about $500 billion. The first question, says the EIR, is "How is it possible that
$500 billion in dirty money … can remain outside the control of the law?" It is obvious that no one bank is
large enough to handle this volume of money. The EIR answers its own question: "A huge chunk of international
banking and related financial operations has been created solely to manage dirty money." And who is capable of creating such a network? "British banking operations
[comprise] the only possible banking network that could handle the requisite volume of illegal traffic." That
network has become qualified to do so, says the EIR, by virtue of having handled the trade for about a
century and a half, by controlling the political jurisdiction over the major off-shore banking outlets (whose
records are invisible to target governments), by controlling the world trade in gold and diamonds (used to
hide the routes of illicit cash flows), and by possession of the needed connections to organized crime, law
enforcement, and intelligence agencies around the world.
Off-shore banking occurs largely in Britain's old island colonies around the Caribbean, as in
the Bahamas and Cayman Islands, and "with very few exceptions … is under the thumb of the British oligarchy."
The bulk of the net drug proceeds in the U.S., i.e., after paying off the crime rings engaged in street
distribution, are then "laundered" by including such cash in bank deposits made by companies normally
handling large volumes of cash, such as casinos, race tracks, sports stadiums, commodity or other brokerages,
restaurant chains, and even department stores. Once such a deposit is made, the illicit money is wired to an
off-shore bank, following which it is lost in an electronic maze of transfers substantially impossible to
trace, even if investigative agencies had access to off-shore banking records, which they do not.
The trick is making that first laundering deposit and then transferring the money out of the
depositing bank in such a way as to make the transaction disappear or appear normal to the bank's computers
and to later auditors. The EIR devotes a chapter of Dope, Inc. describing some of the illegal ways in which
this can and has been done, usually involving an inside con¬spirator in the bank accepting the deposit, in
addition to the needed conspirator(s) in the business establishment making the deposit. However, says the
EIR, "If the reader is beginning to suspect that thousands of bankers and IRS officials are all in on the
game, we emphasize that no such thing is, or could possibly be the case. Dope, Inc. is a tightly run little
network. What makes it effective is that there is nothing 'abnormal' about it; it is built into the business
structure of the United States and a number of other countries." The "good news" part of this is that the
group of conspirators is small enough to be successfully attacked. As the EIR put it, "We know their names
and addresses, and how to mop them up."
The EIR relates an instructive example at this point which involves a small American airline
suspected of delivering dope to various urban crime centers, while simultaneously contracting with the
Federal Reserve to deliver cleared checks. The airline was partially owned by Airborne Freight of Seattle,
controlled by a New York bank called Allen and Co., the Allen being Meyer Lansky's investment banker Charles
Allen. On the board of Airborne Freight was one James H. Carey, an executive Vice President of Chase
Manhattan Bank. Carey had previously worked at Hambro's, the leading British merchant bank, for its then
president Richard Hambro, immediately following which he became CEO of First Empire Bank, a joint venture
between Hambro's and Macy's. First Empire did banking for the Jacobs brothers, who ran a major
money-laundering branch of Lansky's empire. Carey's sponsors at Hambro's, says the EIR, "were among the
best-connected of Britain's elite: Richard Hambro's uncle, the late Sir Charles Hambro, was chief of
Britain's Special Operations Executive during World War 2, the superior of Sir William 'Intrepid' Stephenson"
who we have met a number of times before.
But the "choke point" of dirty money was in Hong Kong, where the huge money volume dwarfed
legitimate economic activity. The drug money estimated by the EIR to have flowed through Hong Kong in 1978
was $10 billion, about twice Hong Kong's total money supply. The EIR therefore focused its attention upon
Hong Kong and set about to trace that money flow back to its origins in the British-controlled syndicates in
The core of control is at the Hongkong and Shanghai Bank (the "HongShang"), created by the
British after the Second Chinese Opium War. The bank, says the EIR, "is the semi-official central bank for
the Crown Colony, regulating general market conditions, holding excess deposits of the myriad smaller banks,
providing rediscount facilities, and so forth. The HongShang is also the financial hydra unifying the
production, transportation, and distribution of Asia's opium." The colonial government and the bank "often
work closely together," as the London Financial Times is quoted, though neither entity makes any banking
statistics public. Sitting adjacent to the HongShang in the Crown Colony are "213 deposit-taking finance
companies, as well as 34 local banks and 104 bank representative offices" via which the HongShang receives
deposits from and tenders payments to the external world.
One of the bank's chores is to finance the cultivation and acquisition of each year's new crop.
This goes a little beyond legitimate agriculture, since the financing must cover not only the equivalent of
seed, fertilizer, and equipment, but also transportation on pack mule trains, chemicals for heroin
laboratories, smuggling to ports of embarkation, private armed security forces, and official bribery as
required at each step along the way. Opium from the farm costs about $100 per pound, grows to $200 at the
Thai border, becomes $2000 per pound for heroin out of the laboratory, and ultimately grows to about $2
million per pound on the streets of San Francisco, Los Angeles, or Chicago. The HongShang must see that the
finances are in place to pay for each new year's heroin supply, at $2000 per pound, before any of the heroin
ever reaches the final markets. Some portion of that seed money is probably available from retained earnings
by the several participants in the production, transportation, and marketing processes. However, any and all
credit which the HongShang may have to extend within Southeast Asia, which the EIR says might amount annually
to around $150 million, can readily be handled, particularly when it is realized that a much larger stream of
money is coming into the area than is going out.
The larger stream is labeled "reflow" by the EIR, and consists of the cut that the Far Eastern
end of the dope trade is receiving out of the overall profits realized by the trade, the great bulk of which
comes about from the huge price markups at the street level. "In other words," says the EIR, "the Hong Kong
networks are directly represented in the Western 'organized crime' segment of Dope, Inc., and take their cut
in the form of a reflow of the retailing profits. Scattered bits
of evidence … indicate that this is, in fact, how these syndicates operate."
The business structure managing the drug trade in Southeast Asia consists of "the old British
banks and trading companies, including the HongShang, Jardine Matheson, Charterhouse Japhet, Swire's, and the
Peninsular and Orient Lines" plus a second satellite group of "overseas Chinese networks, under the control
of London and Beijing." This latter group is indispensable to the HongShang: "The essence of the bank's drug
control is its intimate relationship to scores of expatriate Chinese banking families scattered throughout
the Far East. The British and Dutch con¬nection to these families dates back to the first East India Company
penetration of the region. The central banking role of the HongShang expresses an agreement that grew out of
a century of official opium trade and continues through to the present." The Bangkok Metropolitan Bank is
cited as an example. The bank developed the Golden Triangle's major source of acetic anhydride, an essential
component of heroin production. It has reported links to the Triads, the expatriate Chinese secret society
involved in much of the legwork of the drug trade. Yet the Chairman of the Bangkok Bank, Chin Sophonpanich,
"is actually nothing more than a subcontractor of the Hongkong and Shanghai Bank."
The Chinese expatriate community handles a large percentage of the legitimate commerce of the
Southeast Asian region, much of it in partnership with the HongShang. The corrupt segments of that community
which handle the drug trade "have provoked a long series of clashes with national authorities…. The one exception is the British possession of Hong Kong, the center of
illegal operations in the area, where smugglers are members of Hong Kong's high society…."
A critical element in managing the finances of the drug trade is the use of gold and diamonds to
hide the route of money transfers from point A to point B. As the EIR puts it, "One bar of gold looks like
any other; changing a bank balance into gold or diamonds, and then changing it back into a bank balance, is
like crossing a river to avoid bloodhounds." The trade simply could not be run without these commodities.
These facts led the EIR to examine where the gold and diamonds that were readily available in Hong Kong came
First, the Hong Kong gold market was found to be run by a company called Sharps Pixley Ward, 51
percent owned by the HongShang. The Hong Kong diamond market was found to be monopolized by the Union Bank of
Israel, which was wholly owned by Israel's largest finance house, Bank Leumi. Following each of these
commodities back to their source brought the EIR to Harry Oppenheimer in South Africa.
Taking gold first, the market in Hong Kong involved a daily trading volume in the hundreds of
millions of dollars, on a par with the other major gold markets in London and Zurich. The EIR quotes from an
address by British expert Timothy Green of Consolidated Gold Fields, Ltd. at the Gold Conference of the
London Financial Times in October 1972: "It is a fact that both in 1970 and 1971 at least 500 tons of gold –
that is to say half of all South Africa's production, or 40% of total gold production in the non-Communist
world – passed through unofficial [i.e., illegal] channels on the way to its ultimate destination. These
unofficial channels usually start in gold markets such as Beirut [since defunct], Dubai, Vientiane, Hong
Kong, and Singapore…. Their chief role – their raison d'être – is as distribution centers for smuggling….
Dubai has become the largest gold market in the world, except for London and Zurich." In 1970 and 1971 the
Dubai market transmitted about 200 tons of gold, about one-fourth of South Africa's production, into a golden
pipeline toward India and the East. The EIR notes, "The dominant commercial and gold market force in Dubai is
the British Bank of the Middle East, a 100% subsidiary of the Hongkong and Shanghai Bank."
Many more details about the mechanics of illegal use are discussed, but we'll try to keep
focused on the bigger picture. Hong Kong, says the EIR, "depends entirely on the London gold pool for its
supplies [of gold]. The London gold pool is the same operation
as the Hongkong and Shanghai Bank, controlled by the same London families whose drug-running activities go
back 150 years." The EIR then offers up its details, including:
There are two major South African gold com¬panies: Anglo-American and Consolidated Gold Fields.
The Anglo-American chairman is Harry Oppenheimer. In 1980 Oppenheimer also took 28% control of Consolidated
Gold Fields. The gold pool consists of five firms which meet daily to "fix" the day's gold price. "Examining
these firms individually," says the EIR, "we discover such a manifold of connections that it is meaningless
to speak of the London and Hong Kong gold markets as anything but branch offices of the same operation."
The first London pool member, Sharps Pixley, has a subsidiary Sharps Pixley Ward, which is 51%
owned by the HongShang. Other cited ties: Sharps Pixley is itself fully owned by the London merchant bank
Kleinwort Benson, whose employee George Young "was the number-two man of British intelligence throughout the
1960s." Kleinwort Benson's deputy chairman is Sir Mark Turner, the chairman of Rio Tinto Zinc, which was
founded a century ago by a member of the Matheson family with the opium-trading profits of Jardine
Matheson. Members of the Matheson family are still large
shareholders in the HongShang.
The second pool member is Mocatta Metals, a majority share of which is owned by Hong Kong's
second largest bank, the Standard and Chartered Bank, whose predecessor, the Standard Bank, was created a
century ago by Cecil Rhodes. Standard and Chartered has for years been closely interlocked with the
Hong-Shang. Mocatta Metals' current chairman is Dr. Henry Jarecki, who has of late been investigated for
illegal activities. The EIR says that European intelligence sources have alleged that Jarecki's money
laundering activities in the New York City area have helped fund the activities of the Mossad. Other details
The third pool member is Samuel Montagu, which is wholly owned by the Midland Bank. Midland also
owns 20% of Standard and Chartered, thus standing behind Mocatta Metals as well. Sir Mark Turner, mentioned
above, "is a director of both Midland Bank and Samuel Montagu. The Montagu family is heavily intermarried
with the Rothschilds, Montefiores, and Samuels. One of the family's protégés is HongShang board member Philip
de Zulueta." The fourth pool member is N.M. Rothschild and Sons, which commenced Hong Kong operations in
1975. The Rothschild name appeared in our earliest reviews, and will frequently appear again.
The fifth and last member of the London gold pool is Johnson Matthey. Both it and N.M.
Rothschild and Sons are "interlocked several times over with both the HongShang and the major South African
gold producers, Consolidated Gold Fields and Anglo-American, who control between them 90% of South Africa's
Going briefly to diamonds, the second com¬modity facilitating the opium trade, we noted above
that the Hong Kong market was under the financial control of Israel's largest finance house, Bank Leumi. That
bank in turn is under the control of Barclays Bank, "on whose board sat Harry Oppenheimer and the Oppenheimer
family itself." Harry Oppenheimer, who is first of all the manager of the largest South African gold
producer, Anglo-American, is also the presiding manager of the De Beers Corporation, which runs the worldwide
diamond cartel. De Beers was created in 1888 by Cecil Rhodes (again!). Today the diamond cartel sells raw
diamonds to 300 secret, select custom¬ers, following which the purchased diamonds are sent to either Antwerp
or Ashqelon, Israel for cutting. The Israeli processing is financed by Bank Leumi, the Antwerp processing by
the Banque Bruxelles-Lambert. The latter bank is "controlled by the Lambert family, the Belgian cousins of
the Rothschilds." I think that we could fairly say at this point that a pattern has emerged.
Whereas the "reflow" of drug profits to the HongShang and other destinations in the Far East is
no doubt desired to be entirely in laundered, readily negotiable form, some portion of it apparently trickles
in in small U.S. bills which still require laundering, since Hmong peasants and other legmen in the trade
much prefer goods, gold, or their own local currency. One such laundering attempt by the HongShang and five
other Hong Kong banks illustrated this need when an American bank receiving large cash deposits from them was
caught by the U.S. Treasury department, and fined $2.25 million, for not reporting deposits greater than
$10,000 from 1980 to 1984 aggregating some $3.43 billion. The bank in question was the Crocker National Bank
of San Francisco, which is closely tied to the HongShang. "Indeed," says the EIR, "the HongShang is the
parent company of the Crocker Bank," with both of them being owned wholly or in part by the London-based
Midland Bank. Note that the fine amounted to about 60 cents per $1000 of illegal deposits, a truly negligible
The true nature of the drug and supportive financial operations in Hong Kong are well-known to
U.S. officialdom. The EIR notes, "In testimony before the House Select Committee on Narcotics Abuse and
Control in 1984, Assistant Secretary of State Dominick Di Carlo pointed to Hong Kong as 'the major financial
center for Southeast Asia's drug-trafficking. Hong Kong-based trafficking organizations operate through¬out
the world.'" The EIR further quotes a 1984 Presi¬dential Commission on Organized Crime which noted that the
currency being repatriated from Hong Kong in small bills "exceeds the total volume of all currency
transactions with any European country," including France and West Germany. The commission discounted any notion that the flood of small bills could be
anything other than dope money.
There is one aspect of the drug trade which is not well known, however, or which is at least
officially denied. That is the matter of the involvement of the People's Republic of China (PRC). On this
issue, the EIR takes explicit exception to the allegations of Alfred McCoy in his The Politics of Heroin. The
issue is important enough for us to clearly identify.
With respect to PRC involvement, McCoy claims in his book: 1) that Harry Anslinger, the first
director of the Federal Bureau of Narcotics, was wrong in claiming PRC involvement; 2) that the Golden
Triangle opium cultivation and collection area excluded any portion of the PRC, specifically Yunnan province;
3) that all opium production within mainland China was terminated upon the Communist conquest; 4) that
Vietnamese officials were primarily responsible for pushing drugs onto American soldiers, in order to raise
money to support their corrupt political infrastructure; and 5) that the Hong Kong drug business was run by
the heads of Chinese criminal syndicates who had fled from Shanghai just before the Communists arrived.
The EIR takes issue with each of these claims, even to the point of alleging that McCoy was led
to make them because of his own sympathy with the anti-Vietnam War movement, and his desire to help stop the
war by exposing the U.S. government's complicity in promoting the drug trade. The EIR's footnote on Part III,
Chapter 7 says in part (p. 278): "Experts on the Southeast Asian theater at the time McCoy wrote simply doubt
the author's integrity. McCoy had available to him a mass of documentary evidence showing that roughly half
the Golden Triangle growing area lay within the confines of Communist China's Yunnan province…. McCoy simply
chose to ignore this evidence, or, more accurately, to attempt to refute it with unsubstantiated assertions….
McCoy's book cannot be taken seriously as far as the PRC issue is concerned." [EIR's emphasis]
With respect to the PRC, the EIR updates to 1992 what it first wrote back in 1978, and also adds
an entirely new appendix covering the PRC's involvement. The EIR's evidence is extensive. They start by
quoting comments made by Chinese Prime Minister Chou En-lai in a 1965 conversation with Egyptian President
Nasser: "Some of [the U.S. troops in Vietnam] are trying opium, and we are helping them. We are planting the
best kinds of poppies especially for the American soldiers in Vietnam…. Do you remember when the West imposed
opium on us? They fought us with opium, and we are going to fight them with their own weapons…. The effect
this demoralization is going to have on the United States will be far greater than anyone realizes."
It is through the triad of the PRC and the British and expatriate Chinese in Hong Kong that the
PRC will realize its share of the drug trade profits, says the EIR. It quotes from a Reuters report of Sept.
25, 1982 in which British Prime Minister Margaret Thatcher flew to Beijing to consult with PRC elder
statesman Deng Xiaoping on the future of Hong Kong. From there she flew to Shanghai to have lunch with Sir Y.
K. Pao, an expatriate Chinese and British knight who is a board member of both the HongShang and the Chase
Manhattan Bank, and who runs Hong Kong's World¬wide Shipping, which manages the world's largest merchant
fleet. From there she went to a shipyard in Shanghai and performed the naming ceremony for one of Pao's new
ships, called World Goodwill. She told the Shanghai mayor, "The ship is the symbol of the close relation
between China, Britain, and Hong Kong."
The EIR continues, "Since the late 1950s, Beijing has deliberately integrated its external
financial affairs with the top British drug-running firms in Hong Kong and Macao and the overseas Chinese
drug wholesaling and dirty money networks throughout the Orient…. Beijing's financial dependence on Hong Kong
is a matter of public record. On Oct. 2, 1978, Chase Manhattan's newsletter East-West Markets estimated that
the financial flow into mainland China in 1978 (excluding [payments for] exports) through Hong Kong would
total $2.5 billion…. Beijing does all its banking through Hong Kong, largely through the Hongkong and
Shanghai Bank, and secondarily through the Standard and Chartered Bank. The astonishing $2.5 billion
financial reflow back to Communist China represents the fruits of Beijing's twenty-year program of moving
into the higher echelons of the drug traffic, by agreement with the British…. Beijing's current policy
represents a direct line of continuity between the current regime and Britain's nineteenth-century corrupt
collaborators in China. Correspondingly, the fortunes of the
Beijing Communists are linked to the opium trade and the British oligarchy. They have staked China's economy
– its capacity to import urgently needed foreign goods – on the opium trade."
Much more detail and lines of evidence are offered by the EIR in the update of their old
material, including the complicity of the PRC intelligence service, the PRC's participation in the Hong Kong
gold market, Hong Kong's act of self-protection by moving its heroin labs out of Hong Kong, another joint
venture between Sir Pao and the PRC in 1980, born out of an earlier discussion with Margaret Thatcher in
London, and more.
Then in their new appendix, the EIR seeks to summarize the then-present (1992) state of the PRC
involvement. The cover-up of the PRC's drug war against us far exceeds in effectiveness the Warren Commission
attempted cover-up of the Kennedy assassination. The PRC cover-up was orchestrated by Henry Kissinger
following his trip to China in 1972. Nixon fought it, but was outmaneuvered and eventually driven from
office. The PRC never did stop growing and distributing opium, though they outlawed its domestic consumption,
ruthlessly enforced that proscription, and brought production under state monopoly control. "Corroborated
reports indicate that today  the PRC is the world's largest opium producer, [at] 800 metric tons of
opium per year…. The Hong Kong-based Liberation Monthly reported
in December 1989 that the PRC provides 80% of the high-quality heroin selling on the international market…. A
San Jose Mercury article, published May 16, 1975, explained why [such details were seldom seen]: 'A secret
federal report, the Mercury has learned, pinpoints the PRC as the producer of quantities of heroin that have
been detected in the Bay area. The report … supposedly is being
kept under wraps … for fear its release could affect détente between the U.S. and China." This makes it clear
enough that official Washington is well aware that the PRC is growing and distributing drugs to the U.S. It's
only the public that doesn't know.
The EIR appendix discusses the drug routes out of the Golden Triangle, including the Yunnan
province, and something about the local controlling entities. It quotes the Thai police chief who predicted
that the 1989 opium harvest would increase to 2000 tons, over triple the 600 ton yield in 1981. The new figure includes PRC opium raised in Yunnan and smuggled into Burma
for delivery through Thailand. Eyewitnesses are quoted concerning the Yunnan operations. Several PRC leaders
of the drug operations are identified. Also discussed is Beijing's relatively new attempt to bring
distribution under their own in-house control in place of that of the expatriate Chinese, since the latter
are too prone to invest their profits in legitimate businesses outside of the PRC instead of sending it all
back to mainland China. Gang warfare has broken out in such places as Amsterdam over this issue.
The EIR then backs up a few years to further examine the recent origins of the current
PRC-British drug venture. The EIR's sources are recently released documents of both the U.S. State Department
and Britain's Royal Institute of International Affairs (RIIA) covering the years of the Communist conquest of
China. The EIR recalls first that the RIIA was created in 1919 by Lord Milner, in furtherance of the tasks he
undertook as administrator of the Rhodes Trust to fulfill the wishes of Cecil Rhodes. Those wishes were
expressed in Rhodes' will (somewhat abridged) as follows:
"To establish a trust, to and for the establishment and promotion and development of a secret
society, the true aim and object whereof shall be the extension of British rule throughout the world … and
especially the occupation by British settlers of the entire continent of Africa, the Holy Land, the valley of
the Euphrates, the islands of Cyprus and Candia [Crete], the whole of South America, the islands of the
Pacific not heretofore possessed by Great Britain, the whole of the Malay Archipelago, the seaboard of China
and Japan, the ultimate re¬covery of the United States of America as an integral part of the British Empire,
the consolidation of the whole Empire … and finally, the foundation of so great a power as to hereafter
render wars impossible and promote the best interests of humanity."
In support of this strategic policy, the events respecting China and Britain during the World
War 2 period went something as follows. Britain became convinced during 1942 that they would lose the support
of the American public if they disavowed the Atlantic Charter's declaration in favor of self-determination
for all, and instead insisted upon retaining autonomy over their enclaves in the Far East. In particular this
included the portion of Shanghai which they administered, Shanghai coincidentally being the world's center
for refining opium into heroin. The RIIA and its offspring, the Institute of Pacific Relations (IPR),
therefore proposed and pushed an alternative policy of fostering Maoism.
Why? One clue appears in a 1976 book by Peter Vladimirov, the Soviet liaison to Mao Zedong's
wartime headquarters in the north-central Chinese city of Yenan, in which Vladimirov alleged that Mao
supported the continued cultivation around Yenan of opium as a major cash crop, a practice begun before Mao's
arrival. He also questioned Mao's "close contact with American visitors connected to the IPR." A second clue
appeared in a 1978 issue of the RIIA's journal International Affairs. Victor Farmer, of the RIIA's Far
Eastern Committee, is reported to have stated following a 1944 visit to the Far East: "I have met some
[Chinese] Communists and their ideas are very open-minded. If you could get rid of this ultra-nationalist
clique in the saddle at present in Chungking … I think that the way would be open for a compromise with the
Communists; and an effective compromise."
An "effective compromise" was in fact obtained, primarily through the efforts of Sir John Henry
Keswick, of the hereditary drug-trading family which founded Jardine Matheson. Sir John Henry was at¬tached
to the British embassy in Chungking during World War 2, and was in regular contact during this period with
Chou En-lai, who was running the Chinese Communist legation in Chungking. Concerning that compromise, the EIR
says that both the RIIA and the State Department documents "yield the same interpre¬tation: the creation of
the PRC included an alliance between the British dope-runners and the Chinese dope-runners. This was
negotiated from the British side by Sir John Henry Keswick and from the Chinese side by Chou En-lai. The
Chinese team also prominently included top figures in the opium trade … [including] elements of the so-called
Green Gangs, [who] ran the opium trade not only in the Far East but throughout the far-flung Chinese
The EIR continues: "From both the British and the Chinese side, the alliance was explicitly
against the United States. The Chinese knew it, and said so, the British knew it, and said so, and American
diplomats cabled home that the United States had been shafted."
The British then replaced their "pro-colonialist" policy with the "softer" pro-Maoist policy,
with the help of the pro-Maoist IPR group in the U.S. State Department centered around John S. Service and
John Carter Vincent. When the Communists finally took over China, Americans were infuriated at what they
thought were Communists in the IPR who had infiltrated the State Department and helped bring about the
Communist victory. The fact that the IPR was a British entity serving British foreign policy objectives was a
deep secret never remotely guessed at by the general public or the U.S. Congress. Concerning the IPR, the EIR
summarizes: "The dead giveaway on the IPR's British character is the organization's move to Canada subsequent
to the 1950 McCarran Committee investi¬gation, which mistook pro-British treason for pro-Communist treason.
With hearty British cheers, the disgraced IPR moved to Canada … [where it] came under the official
sponsorship of the Canadian Institute of International Affairs, the local RIIA subsidiary…."
And what did the British get out of their secret deal? First, the PRC granted them continued
control over Hong Kong. Second, the PRC in 1949 let them move the Shanghai heroin laboratories into Hong
Kong. Third, as early as 1947, the Chinese banking community in Shanghai was organizationally divided between
a PRC faction which remained on the mainland and an "expatriate" faction which soon left for
British-controlled Hong Kong. The two factions remained in close contact, however, thereby creating the
financial ties between the PRC, the expatriate Chinese, and the British which "would later [be used to]
underwrite the Far East narcotics traffic."
Around 40 million Chinese died in the post-war PRC consolidation. Americans and others of the
West have since suffered vast narcotics addiction. To what bottomless depth is it possible for human
corruption to fall?
Lord Humphrey Trevelyan was appointed in 1951 as British ambassador to the PRC. He is credited
with laying the groundwork for the later American commercial opening to the PRC, executed by Henry Kissinger.
Trevelyan today sits on the Board of the British Bank of the Middle East, and also on the board of British
Petroleum, "along with John Keswick's brother Sir William Johnston Keswick, and various other members of the
boards of the HongShang and the RIIA Council. Lord Trevelyan completed the circle by taking the chairmanship
of the Council of the Royal Institute, while keeping an active hand in the opium business through the British
Bank of the Middle East."
The EIR has included a fascinating chapter on the history of the Canadian Bronfman family, of
which we can only scratch the surface. First came Yechiel Bronfman, "a grist mill owner from Bessarabia,
Ro¬mania," who emigrated to Canada in 1889, sponsored by the Moses Montefiore Colonization Committee, created
in 1872 by Baron Maurice de Hirsch, Baron Alfred de Rothschild, and others in the Zionist community. In
Canada, says the EIR, the Bronfman family "first turned to selling wood, then to horse trading, and then most
successfully to the hotel business (and prostitution)." The Bronfmans, who shortly attained multi-millionaire
status, were selected by the British to import and distribute British liquor during the Canadian Prohibition
period, and then to export that same liquor to the U.S. during the American Prohibition which started
immediately thereafter. During the Canadian Prohibition, two of the Bronfman sons, Sam and Abe, "collaborated
with the Hudson's Bay Company – in which the Keswick family of Jardine Matheson had controlling interest – to
buy the Canadian Pure Drug Company," utilized to enable the legal distribution of "medicinal" alcohol. But
the family's major assignment came with American Prohibition, when it was charged with selecting the American
gangs which would distribute British liquor, and smuggling that liquor to them. That success led to the use
of the same network to distribute opium from the Far East.
Arnold Rothstein, who had started the serious work of creating an American crime syndicate
consist¬ing of members who would cooperate instead of seeking to kill each other, was himself killed in 1928.
His work was picked up by one John Torrio, "a Bronfman man" says the EIR, who was better able to work with
the Italian crime elements in the U.S. than Rothstein or Bronfman himself could. Torrio was very successful,
and he was later followed by Luciano and ultimately by Meyer Lansky. The crime kingpins, however, were the
Bronfmans, who were beholden to the British elites, who were the Bronfmans' financiers, their political
protectors, and their booze and opium suppliers.
The EIR devotes a whole chapter to the Per¬mindex operation. Of course that entity also leads
back to the British, and makes the involvement of such a person as Major Louis Bloomfield, the personal
attorney of the Bronfman family, much more understandable. Bloomfield, the Chairman of the Board of
Permindex, was recruited in 1938 into the British Special Operations Executive (SOE) where he worked under
Sir William Stephenson to implement an agreement negotiated by Stephenson (for Winston Churchill) and
President Roosevelt to allow "British intelligence to set up shop in the United States and to effectively
merge its operations with those of the FBI and military intelligence…. Bloomfield, described by numerous
authors and associates as a practicing homosexual, developed a deeply personal friendship with FBI Director
J. Edgar Hoover. Through that relationship, Bloomfield was able
to retain his powerful position in Division Five long after the end of the war. As late as 1963, when
Bloomfield was case-officering the assassination plot against John F. Kennedy, he was still a top official in
Let's pause to reconsider the Kennedy assassination. The operative elements of a plausible
scenario might be as follows:
Joe Kennedy was supplied booze by Bronfman and the British, and (like Bronfman himself) remained
interested his whole life in becoming a part of, and being accepted by, the British elites.
Upon JFK's election, Joe and his son John started doing the task assigned by the
British-Bronfman combine of expunging the unwanted Mafia elements from the American crime syndicate and
preserving the desired ones, including Lansky and Trafficante.
The Kennedys did OK until their anti-Semitism got in the way, causing them to choke on Israel's
covert development of nuclear weapons.
The British, seeing their creation, Israel, being threatened, concurred with Israeli Prime
Minister David Ben-Gurion's desire to terminate John Kennedy.
The assassination was then ordered and executed as described by Michael Collins Piper in
The Permindex operation is discussed in very great detail, as is its more modern replacement
entity known as Resorts International, which is the real headquarters organization of the overtly criminal
aspects of the drug business, including money-laundering, drug and gun-running, and assassination. A whole
chapter is also devoted to the well-developed and long-planned British effort to lure American youth into
drug usage, i.e., to develop their drug market, resulting in the paroxysm of the 60's with which we are all
familiar. We will resist the urge to go into these matters as well, and content ourselves to discuss just two
other topics covered in this uniquely valuable book.
The first has to do with the EIR's description of the organization of the family elements within
the oligarchy which is attempting to control us. Some of the family names at the top go back to the 1300's.
The religious and other ties that bind them together are described. Some of the family names are Bruce (from
King Robert Bruce of Scotland), Russell, Villiers, Keswick, Inchcape, Pease, Matheson, Mackay, Chur¬chill,
Lloyd, Cecil, and Lytton. These folks hide their involvement in the illegal activities which afflict us by
utilizing several camouflaging layers of subordinates who do their dirty work for them. Law enforcement
officials call these layers "cutouts." There are three cutout layers below the elite oligarchy, says the EIR:
"The first is a front for Jewish-surnamed criminal elements. [In the first edition of Dope, Inc.
were the words, 'In the West, the prime cutout … is the Zionist lobby…. In China (it was) the corrupted Soong
family which carried out the day-to-day business operations of Jardine Matheson.'] This cutout begins at the
top with a cohesive grouping of Hofjuden ('Court Jews') who have served British monarchs and Venetian doges
for generations. These families have a centuries-long unbroken tradition of attaching themselves to the
predominant noble houses of Europe: the Venetians and Genoese, the nobility of Amsterdam, and then when the
Dutch nobility was merged with the British in the so-called Glorious Revolution of 1688, the Hofjuden
centered themselves around the British and have served it to this day.
"The Hofjuden have less than nothing to do with the Jewish people, their well-being and
aspirations for themselves and their posterity. These families' only relation to the Jews has been to
periodically call down persecution upon them, and then to excuse their own role in it by their surnames
[i.e., hide their role by claiming to be one of the persecuted Jews]. One cannot condemn the Jewish people
for the centuries of crimes committed by the Hofjuden, whose primary victim has been that people itself.
"Among these top families are the Montefiores, servants of the Genoese nobility since the
thirteenth century; … the Goldsmids and Mocattas, leading bullion merchants for the British royal family; …
the Oppenheimers, controllers of a large proportion of the diamond and gold mining in South Africa; the
Sassoons, the first Hofjuden to settle in India and devote their resources primarily to opium production; …
the Canadian de Hirsch family, bankrollers of Jewish emigration from Eastern Europe to Canada; the
Rothschilds, with a long-standing special interest in subverting the American republic; and the other 'Our
Crowd' banking families of Warburg, Schiff, Meyer, Loeb, Schroder, etc.…
"The second major layer of cutouts [consists of] the émigré nobility and pseudo-nobility of
Eastern Europe and the Mediterranean – the Jesuit / Russian Orthodox, or 'Solidarist' nobility…. Typical of
these families are the Radziwills, leaders of the Polish Solidarists; the unreconstructed fascist Ferenc Nagy
of Permindex; the de Menils, [involved in Permindex]; the di Spadaforas, representatives of the Italian House
of Savoy in the Permindex Assassination Bureau; and of course, the families of minor nobility such as one
well-known Brzezinski. The political family of William F. Buckley, Jr. and James Buckley are permanent
hangers-on of the Jesuit émigré circles, and promoters of drug decriminalization.
"The third and most active 'cutout' [consists of] the Socialist International front
organizations in North America. [Included are] Social Democrats
U.S.A. and the League for Industrial Democracy, … [which] are the funding sources for pro-drug
and pro-terrorist organizations: the Institute for Policy Studies, the Communist Workers Party, Yippies, and
the rotten American Civil Liberties Union networks epitomized by William Kunstler."
The first edition of Dope, Inc. was more explicit about the relationship between the Hofjuden
and the Jewish people. The EIR there stated:
"The Hofjuden should not be confused with the Jewish people…. The only relation the Hofjuden have had to Jewry
is that of persecutors and tormentors. As the clandestine operations bureau of the oligarchy, they quickly
learned that they could augment their capabilities tremendously by subjecting Jews to waves of persecutions
and then recruiting terrorized Jews into Zionist organizations that had as their ostensible aim the
'survival' of Jewry! In street parlance, the Hofjuden have run a six-century-long protection-extortion racket
against the Jewish people – to the overall effect of building up a sizable 'Zionist' network at the disposal
of British Secret Intelligence. This traditional relationship to Jewry was carried to its [logical]
conclusion in the 20th century when the Rothschilds, Warburgs, Oppenheimers, Schroders, and other Hofjuden
became the leading financial backers of Adolf Hitler.
"One of the greatest benefits that the Hofjuden gained by their complicity in Hitler's genocide
of the East European population was that they could henceforth hide behind the memory of the awesome fate of
millions of Jews and conduct the filthiest sorts of operations – from drug-running to terrorism to genocide
against Arab and related populations – without being exposed for these crimes against humanity. Whenever any critic attempted to expose these crimes, he was
quickly assaulted as a 'Nazi,' a 'fascist,' or an 'anti-Semite.'"
Our final effort will be to summarize the EIR's view of the organizational structure of Dope,
Inc. as of 1986. The oligarchy, says the EIR, views the world's peoples as so many "talking beasts" to be
utilized as desired in the service of the oligarchy. Narcotics serve that purpose as an efficient tool for
both control and profit, since it weakens the resistance of the target populations, and also brings in
several hundred billion dollars annually to help grow the oligarchy's various criminal projects. These
projects presently include depopulation (fewer proles are needed to harvest the required food, fiber, and
minerals), destruction of national sovereignty, debt collection, destruction of the Western Alliance, and the
reduction of U.S. power to 25% of its post-World War 2 strength.
The effort is led by the families owning or controlling the network of major London banks and
holding companies, including the HongShang, the Oppenheimer interests, Barclays Bank, the London gold pool,
etc. Bronfman's Canadian enterprises are controlled by Eagle Star Insurance, a major London financial
corporation, which in turn is jointly run by Barclays, Lloyds, Hill Samuel, and N.M. Rothschild and Sons.
Canada itself is little more than a colonial tool in the hands of
the British elites, useful in helping to bring the U.S. to heel.
A large-scale effort to "buy up" American finance was launched following Nixon's (i.e., Paul
Volcker's) removal of the gold backing from the dollar. A 40% de facto devaluation occurred with respect to
gold-based European capital pools, and, combined with a troubled stock market, the London and other European
elites found easy pickings, particularly among the U.S. brokerage firms. One of the first to go was George
Ball's Lehman Brothers, followed by Lazard Frères, Drexel Burnham Lambert, and others. Then in 1981, Salomon
Brothers, investment banker to Citibank, and perhaps the most powerful investment banker on Wall Street,
merged with Phibro, the Oppenheimer trading arm. An indicator of the great strength of the European financial
power in the U.S. security markets, which helped to bring about these foreign takeovers, is that foreign
equity investment amounted in 1980 to about 20% of the value of all U.S. stocks. Much of the money brought to
bear in our markets is suspected to be "drug money," much of which otherwise disappears from the world's
Back in the early 60's, the First National City Bank had hired a Dutchman, Robert Meyjes, who
proposed to set up a "private international banking" division of the bank. He did so, and sent some 600 bank trainees through the division in the next
10 years. Meyjes is now in Citibank's Paris office, and his "trainees" are scattered in various banks around
the world, running an "old-boy" network of covert "banking," privately handling the deposits of people who
are not anxious to say where their money came from. David Rockefeller's Chase Manhattan Bank quickly caught
on (they referred to it internally as "looking for Mafia money"), and followed suit, not very successfully,
says the EIR, until they accepted onto their board Mr. Y.K. Pao, the vice-chairman of the HongShang, prior to
which they found no entry into Hong Kong's lucrative activities.
Further consolidations took place in the 80's. Lehman Brothers had been taken over by Kuhn Loeb,
which was in turn taken over by American Express, on whose board Henry Kissinger was elected in 1984.
American Express also absorbed Shearson Hayden Stone, which had just previously gobbled the German-Jewish
investment bank Loeb Rhoades. American Express then became the monster Wall Street umbrella called Shearson
Lehman American Express. The board member of American Express who managed that series of mergers was attorney
Kenneth Bialkin, the then-current  chairman of the ADL.
Henry Kissinger is the at least nominal head of Kissinger Associates, whose members, says the
EIR, "represent a de facto board of directors for the entity we call Dope, Inc." The members include:
Mario d'Urso, who ran the old Kuhn Loeb international department, and is now "the New York chief
for the Jefferson Insurance Company," a joint arm of the two giant Italian insurance companies which control
the fortunes of the ancient Venetian trading families.
Britain's Lord Carrington, the cofounder of Kissinger Associates and a former director of both
Hambro's Bank and Barclays Bank.
Lord Eric Roll of Ipsden, the chairman of the London merchant bank S.G. Warburg. Kissinger
Associates is represented in Hong Kong by Sir Y.K. Kan, who also "represents the four overseas Chinese
families which control the Hong Kong-based Bank of East Asia."
The EIR summarizes as follows: "The monster we identified in 1978 has molted, shedding such skin
as the Banco Ambrosiano and Investors Overseas Service, only to multiply in extent and influence. Six years
ago, the narcotics traffic menaced all future generations of youth. Now it is the center of the gravest
threat to Western civilization since the fourteenth century. Slowly, belatedly, the governments of the West
have acknowledged the extent of the problem, and, in their lumbering fashion, accepted parts of the analysis
we offered six years ago. But effective, ruthless action has yet to be taken against the citizens and
institutions who have brought the dregs of the financial underworld to the apex of power in political life."
The EIR has also said, however, that the malefactors are known, and given the political will, the cleanup job
can be accomplished.
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