Much of Sea of Lies takes place in Burma. (I refuse to use “Myanmar” unless and until a fairly elected government endorses it.) I don’t know Burma well, having visited it only starting in 2014. The people are very friendly. The country is a failed state, with Shan State in the northeast a candidate for secession or annexation. To the extent that there’s a central government and infrastructure, it is funded on drug money, or perhaps illegal natural resources exports. Khun Sa was the most infamous narcotics trafficker in the world in the 1980s and 1990s. He sired eight children and died in 2007 under house arrest in a Rangoon mansion populated with young Shan mistresses. In Sea of Lies, I describe a fictitious daughter, Myat Noe, and give her a made-up conglomerate “Golden Elephant” with many businesses identical to those Khun Sa owned at the time of his demise. So as True Lies steps away from MH370 to look more broadly at Burma today, Khun Sa and Shan State are attention-worthy topics.

Legendary Far Eastern Economic Review correspondent Bertil Lintner seems to be the core resource most Khun Sa authors rely on. This note is no different, being based on his 2000 monograph, The Golden Triangle Opium Trade: An Overview, aided by Lintner’s tour de force Burma in Revolt (1994) and a handful of other sources cited in the bibliography below.

I’m traveling solidly the next week and may be a little slow to respond to your comments or emails. I’ll be on the other side of the Pacific for the next few months to finalizing a publishing deal for Sea of Lies, taking holiday, and beginning work on the sequel, Pack of Lies.

Bradley West, Pasadena CA, 24 June 2015

 

Shan States forced into staying within Burma post-independence

The Shan States were part of Thailand until 1893 when the British claimed them for Burma. The historical hereditary Shan prince rulers were called sawbwa (or Saophas), “Lords of Heaven”. Alongside the Shan tribes, the Wa were a primitive tribe living in the highlands of northern Shan States, Yunnan and Laos. These subsistence farmer animists invested disproportionate time and treasure appeasing spirits. Part of the Wa rituals involved taking heads, a practice that didn’t die out completely until the 1960s. Understandably, the other tribes in the Shan States left the Wa alone in their moutain and jungle redoubts.

Wah Areas of Burma

Source: Wa People of Burma Blogspot, http://wapeoplenews.blogspot.sg/2013/07/wa-people-of-myanmar.html

In WWII, General Aung San (Burma’s George Washington) and his Burman followers first supported the Japanese as they believed that the war was about independence for Asia’s peoples. Aung San and his compatriots switched sides once Japan’s racist, totalitarian imperial plans made themselves manifest. Post-WWII, the Panglong agreement of 1947 brought the many tribes together under a loose federal structure guaranteeing regional autonomy. Assassins then killed Aung San and eight prominent colleagues.

Burma gained independence in 1948 as a consequence of India’s newly won statehood. The first Burma constitution in 1948 gave the Shan princes the one-time right to opt out of the Burma union in 1958. On this basis, the princes signed up. When 1958 arrived, most talented Shan nationalists were either already dead or in captivity: the government had no intention of letting the Shans declare independence. But without any strong historical ties or government presence in Shan State (now singular), the Shan, Wa and others (e.g. Ta’angs, Jinghpao, Panthays, and Karens) largely looked after their own affairs. Burma then resembled a federation of independent states, with the nine or ten ethnic groups within Shan State retaining their self-governing status.

Today, superficially Burma is a united country, at a cost of 120 infantry battalions stationed in Shan State alone. The Burma army is part of the problem, with low wages and an official “live off the land” decree from the center pushing most units into either manufacturing drugs, protecting those who do, or extorting money and arable land from locals.

Historically, the Shan were neither big growers nor substantial users of opium. They lived in the valleys and tablelands alongside minority Burmans and Chinese. Thus for reasons of geography as well as culture, opium was a small-scale crop. After the 1949 communist victory in China, that would change.

In Khun Sa’s heyday from the late 1970s through the mid-1990s, his 20,000-man army controlled 60-70% of the total heroin supplied to the US.1 Once Khun Sa retired in 1996, other warlords took his place. The 2006 exposé Hand in Glove: The Burma Army and the Drug Trade in Shan State by S.H.A.N. (a Chiang Mai-based Shan diaspora organ) describes in detail how Burma’s army and politicians were inextricably linked to the drugs business. Names are named and lab locations marked on the supplied maps. As of 2011, 90% of the heroin supplied to Southeast Asia came from Shan State. Plus, Shan State supplied a majority of the methamphetamine pills and crystal meth consumed in China, Thailand and East Asia. Heroin and pills are each billion dollar export businesses p.a.

Hand in Glove
Hand in Glove

Source: Hand in Glove: The Burma Army and the Drug Trade in Shan State, Shan Herald Agency for News (“S.H.A.N”), 2006, p. 16.

Burma today is a narco state from top to bottom with nothing having changed in at least twenty years and probably fifty. The US Embassy’s 1996 analysis of funds flows found US$600m in funds that couldn’t be explained by official trade and investment statistics. Their conclusion: this was a single year’s inflow from drug sales. The Burma government first fought money launderers by de-monetizing larger bank notes, something that destroyed the life savings of many honest Burma citizens without access to US dollars. In an about-face, the government devalued the kyat from 6-to-1 USD to the then-black market 300-to-1 rate. (As of May 2015, a flawless US$100 bill earned 1050 kyat.) Then the government imposed a 40% (soon reduced to 25%) tax on large, unexplained cash deposits. Drug businessmen were also allowed to pay cash for Yangon real estate at inflated prices. One wag describes the Myanmar Chamber of Commerce as the Who’s Who of the Burma drug trade. In 2015 Rangoon real estate continues to boom with psf pricing and rents comparable to Singapore and Hong Kong.

As of 2015, there doesn’t seem to be any serious government-led effort made to arrest narco traficantes or stop supply networks. International observers claimed a substantial drop in opium tonnage harvested in the late 2000s.  As of early 2014, production was back up and Burma holds a solid #2 position in world opium and heroin output, trailing only Afghanistan.

 

Early Khun Sa (born Chang Chi Fu) was self-reliant almost from birth

Khun Sa (1934-2007), means Prince Prosperous in Shan though his English nicknames were “Opium King” and “Lord of the Golden Triangle”. For several years in the early 1980s, Khun Sa was described as the most wanted man in the world. Movies and books such as American Gangster and Year of the Dragon depict incidents in his life in fictional form.

Khun Sa was the leader of the so-called Shan United Army (later merged with the Mong Tai Army).  Khun Sa was of mixed blood with a Chinese father and a Shan mother. Both parents died before he was five, and his paternal grandfather raised him. Khun Sa was illiterate, with only a few years as a temple boy in a Buddhist monastery serving as his formal education. Somewhere in young adulthood, he became an avid golfer. In 1950, sixteen year old Khun Sa formed his own band to fight the Kuomintang (“KMT”) who had relocated to northern Shan State from end 1949 after losing the China Civil War to Mao’s People’s Liberation Army. His half-blooded status made Khun Sa’s self-styled “liberator of the Shan people” claims suspect in the eyes of many. In the end, the doubters were right: he was a drug lord with a low golf handicap, not an independence leader.

 

The Kuomintang (“KMT”): Oppressors, not Liberators

From a force of maybe 800 troops in early 1950, the KMT used local conscription to swell its ranks to perhaps 6000 by 1951. Famous KMT General Duan Xiwen was quoted as saying that armies needed to be fed, money was needed for food, and opium was the only form of money in Shan State. In short order, the KMT raised opium for export. In the later 1950s and 1960s, the KMT pioneered the importation of Taiwan and Hong Kong chemists who fashioned heroin out of opium combined with trucked-in, India-made acetic anhydrite.

KMT in Shan State 1950 S.H.A.N.

Source:  Shan Herald Agency for News (“S.H.A.N”), 26 July 2005 as provided online by http://english.panglong.org/the-kuomintang/

The KMT terrorized the peasants in the north, reducing the opium farmers to subsistence existences, conscripting their children and adult males, and alienating the Shan, Wa and other indigenous peoples. What started out as a fight for living space and exploitation rights took on a much larger importance once the CIA backed the KMT with weapons and free access to narcotics export markets. Once the Burma army marched north to exert its sovereignty, the indigenous tribes and militias were caught in a vise. At one point in 1953, the KMT nearly captured the capital Taunggyi and occupied all of Shan State until pushed back by the Burma army.

From 1950-1952, the KMT invaded Yunnan, China seven times without success. Finally, the UN passed a resolution calling for the evacuation of KMT troops from Shan State. The airlift was only for show, as the same troops flown out by day to Thailand and then on to Taiwan returned two nights later. At the end of the UN’s evacuation program in late 1953, the KMT had 12,000 heavily armed troops on the Burma-Thai border, just about the pre-evacuation headcount.

The CIA was central to the KMT’s funding, protection and logistics. In 1951 the CIA’s Col. Paul Helliwell2 flew arms, ammunition, and reinforcements into the expanded Mong Hsat airstrip near to Chiang Rai, Thailand. The KMT lengthened Mong Hsat’s runway to 5000’, thereby allowing C-46 and C-47 cargo planes to take off and land. This in turn created the economic scale to make opium wholesaling and arms importation feasible.  The CIA wanted the KMT in Shan State to re-invade China through Yunnan province (“the back door”), though after 1952 no more forays were made.

The Burma army (“Tatmadaw”) came north to expel the KMT intruders. The Tatmadaw proved to be as brutal and predatory as the KMT. The Shan inhabitants ended up caught between the two forces. Insurgent groups flourished, and they either taxed, transported, or grew opium to provide the money needed to support their forces.

 

Khun Sa in the 1960s rose to pre-eminence behind a narcotics-funded militia

In 1963, Khun Sa took his 300-man militia and auctioned it to General Ne Win (who came to national power in a 1962 coup, and took Burma down a disastrous path of autarky). The Burma junta recognized Khun Sa’s rabble as a “Ka Kwe Ye” (“KKY”) or home guard militia, based at Loi Maw.

Khun Sa portrait Economist 2007

Source: The Economist, Khun Sa Obituary, 8 November 2007, as sourced online at http://www.economist.com/node/10097596

As long as Khun Sa’s people fought the KMT, the Communist Party of Burma (“CPB”) and other regime foes (e.g. legitimate independence movements such as the Shan State Army, “SSA”), the central government turned a blind eye to other activities, principally opium trading. Khun Sa spent the opium profits on weapons in Thailand, and soon outgunned the Burma army units in his area.

In 1967 Khun Sa upped the stakes and assembled a 500-man, 300-mule 16-ton opium convoy that headed for Ban Khwan in Laos, just across the Mekong River. The Kuomintang tried to steal it. The fighting raged for days. Ouane Rattikone, Commander-in-Chief of the Royal Laos army, owned heroin refineries in the vicinity making him the natural buyer. The Laos air force bombed both sides, and Khun Sa and the KMT retreated. The KMT spread the word that they’d won the battle, but Khun Sa had already pre-sold the opium to Rattikone. Subsequently, Khun Sa made large investments in Thailand as proof of his windfall.

The Burma government captured Khun Sa in 1969 in Mandalay when he went to negotiate with Shan rebels, perhaps as a prelude to changing sides. The court convicted Khun Sa of treason (not drugs) for daring to meet the SSA. Prince Prosperous spent the next four years in prison. In 1973, Khun Saw’s second-in-command Charlie Win won Prince Prosperous’ release by kidnapping two Russian doctors in Taunggyi, the capital of Shan State. Khun Sa was a long-time campaign contributor to Thai general Kriangsak, so the soon-to-be Prime Minister stepped in to negotiate the swap of the Russian medics for him.

A grateful Khun Sa gave Charlie ownership and management rights over a front trading company in Chiang Mai where Khun Sa’s to-be-named “Shan United Army” weapons and supplies were warehoused for many years. The SUA was a sham, purporting to be fighting for the liberation of Shan State when Khun Sa was actually directing a multi-million dollar drug empire.

The official recognition of the “KKY” (“Home guard”) bands lasted until 1973 when all KKY were disbanded. By then, Khun Sa and his rivals had their networks well entrenched. Khun Sa’s 800+ man army no longer needed overt Burma army support, and in 1974 he formally named the Shan United Army.

Call them the KKY or SUA, it made no difference to Khun Sa’s people. They were already into opium cultivation, were working toward heroin production and transported others’ opium product to market for a fee. In 1976 the SUA was based out of Chiang Rai, Thailand under the protection of General Kriangsak’s men.

China heavily supported the Communist Party of Burma (“CPB”) in the 1960s and early 1970s. This meant that Burma, Thailand and the US viewed Khun Sa’s anti-communist narco-army as the lesser of two evils. By that same token, the remnant KMT forces were now resettled in Chiang Mai and Chiang Rai to buffer the border versus CPB incursions, falling under CIA patronage and Thai military benign negligence.

In an about-face, China practiced Realpolitik by cutting off aid to the CPB in return for transshipment rights across Thailand to arm the Khmer Rouge against Vietnam, the better to thwart their common enemy.

In 1977 Khun Sa offered to sell his entire opium crop to the US government for eight consecutive years at US$50m p.a.3 This was rejected. A New York grand jury indicted him for drugs offenses shortly thereafter, officially raising his status to Public Enemy Number One in the popular media. Shortly thereafter, the New York City district attorney received a bomb in the mail. The police defused the bomb. The papers pointed to Khun Sa. Within 24 hours Khun Sa called the attorney from remote Thailand to say (1) he hadn’t sent the bomb; (2) he had nothing personal against her: she was just doing her job; and (3) he would not harm her as a consequence of her pursuit of him. Khun Sa at his peak was a very well-informed man.

 

Khun Sa, under pressure from the US, bribed is way into house arrest in 1996

In 1981, the DEA ordered a hit on Khun Sa. He survived the attack by the US-led 39-man Thai Rangers and Burmese mercs. With all the publicity, Thailand could no longer shelter Khun Sa. By January 1982 the SUA had been driven back across the border into Burma at Homong, near the Thailand border town of Mae Hon Song.

In 1985, Khun Sa joined forces with the Tai Revolutionary Council of Moh Heng. This gave him control of the Thai-Burmese border and his prominence in opium smuggling soared. Khun Sa flooded the US with 90%-pure heroin from 1974-1994, gaining a peak 80% market share of street dope in NYC. The DEA offered a USD two million bounty on Khun Sa in 1988. Khun Sa was the world’s most wanted man.

Khun Sa lived in Homong in a nice wooden house ringed by orchids, strawberry plots and Norfolk pines. Surrounding his home were bunkers with .50 caliber anti-aircraft machine guns, plus plenty of heavily armed soldiers. Khun Sa once told visiting journalist Bertil Lintner that the reason Aung San Suu Kyi was under house arrest, and he was free, was that he had an army and she didn’t. But in truth no one seriously looked to capture or kill him. Khun Sa had paid off both the Burma and Thailand armies, and the DEA seemingly left him alone as the lesser of two evils, as the Burmese Communist Party (and later the United Wa State Army) was even less desirable.

Ma Zhengiven (variously “Ma Cheng-wen”), a Yunnanese Muslim (“Panthay”), was Khun Sa’s major international sales conduit. Ma transported the product into northern Thailand and from there to the world. The Panthays in general played low-key, but prominent roles in selling the drugs. Their original niche lay in being the best muleteers among the various tribes up country. From running mule trains across the border for dollars-per-kilo-delivered, the Panthays branched into distribution and sales. Pre-9/11 Bin Laden claimed to have Al Qaeda operatives in Burma, but the details were never confirmed and the downtrodden Rakhine Muslims in the west of Burma usually got the Al Qaeda rap anyway. Post-2010, some believe that Al Qaeda operates in plain view.

Recall that over a decade previously, China and Thailand had cut a deal to stop supplying the CPB with arms and funds in return for being free to send the same to what became a murderous Khmer Rouge regime. It took a while, but by 1988 the CPB army had collapsed and splintered into four smaller forces. The largest was the United Wa State Army (“UWSA”) based in the Wa Hills on the Burma-China border. The UWSA kept dealing opium and heroin as per their CPB predecessors, and China remained their patron. The Burma army nevertheless granted the UWSA immunity (and free access to government controlled roads, checkpoints and border crossings) in return for joining in common cause against the only ideologically-driven rebels still in the field in Shan State, the SSA-S. The SSA-S takes as a point of pride their destruction of heroin and meth labs under UWSA ownership.

The Burma army by this time had troops in strength in the field in Shan State, headed by General Maung Aye (then number two in the Burma junta). General Maung’s and Khun Sa’s forces never traded fire. The DEA and the Thais sprung operation TIGER TRAP which closed the Thailand-Shan State Burma and squeezed Khun Sa at the same time that the Thais arrested his middlemen. Khun Sa had neither supplies nor customer lists, and soon was running short of money. The story out of Rangoon is that the Burma Army threw a noose around Homong in 1994. Over two years, they cut off Khun Sa’s access to drugs, money and arms. Irrespective of which version is right, Khun Sa negotiated capitulation terms in January 1996. The SUA surrender cache impressed observers, with AK-47s, piles of ammunition and four Soviet surface-to-air missiles handed over.

Khun Sa portrait from BBC 2007

Source: BBC, Notorious Asian Drug Lord is Dead, 30 October 2007 as provided online at http://news.bbc.co.uk/2/hi/asia-pacific/7068868.stm

As part of his surrender, Khun Sa disbanded the 20,000-strong Shan United Army, which splintered into three smaller groups with many troops deserting altogether. In return, the government agreed to leave Khun Sa’s three daughters and five sons alone. In response to those who saw the US’s hand behind his capture, 1990’s CIA Yangon station chief Barry Broman said that the Burma government did it all on its own. This is unlikely.

Khun Sa moved to Rangoon under house arrest with four young Shan mistresses, and lived out his days in luxury. Using laundered drug money, he had substantial investments in real estate, Rangoon hotels, a ruby mine and the toll road linking Rangoon to Mandalay. In Oct 2007 Khun Sa died at 73 of causes unknown.

 

Post Khun Sa, Burma’s drug trade still flourishes under new management

Khun Sa’s retirement from the drugs trade changed little. Today Wei Xuegang and Bao Youxiang of the United Wa Army’s control the bulk of the Burma heroin trade. In addition, they also own the majority of the labs making methamphetamine pills (“yaa baa” or “crazy medicine”) and crystal meth that have become the scourge of Thailand, China and Japan. Their historic ties to China (recall that the CPB core was Wa tribesmen) mean that their second language is Mandarin, the legal currency along the China border from Muse through Northern Wa State is the renminbi, and the cell phones run off Yunnan-based sites in China.

The Wa’s home territory lies in extremely rugged terrain, the heartland of the former headhunters. The other tribes (starting with the Burmans) largely left the Wa alone throughout Burma’s post-independence period. In return for the UWSA’s nominally agreeing to stay in Burma, the army lets their leaders and soldiers do whatever they want. Just as long as the Wa show up to fight the SSA-S a couple times a year, they can do their own thing the rest of the time.

Shan State Army vs Burma 2015

Source: Wars in the World, Burma-Myanmar: 2 clashes between Shan State Army-South (SSA-S) and Burma Army, 29 November 2013, as provided online at http://www.warsintheworld.com/index.php/2013/11/29/burma-myanmar-2-clashes-between-shan-state-army-south-ssa-s-and-burma-army/

The Shan State Army–South in 1996 (post-surrender) split from the SUA under Yawd Serk. The SSA-S remains based at Loi Thai Leng mountain on the Thailand border, levying taxes on cross-border smuggling, but otherwise uninvolved in the drugs business. The SSA-S also fights the UWSA and Burma armies. In a 2005 clash, the SSA-S inflicted 700 casualties on the more poorly trained UWSA while suffering fewer than 100 wounded themselves.

Northern Shan State now forms an important part of Yunnan province’s supply chain. The amount of China-sourced investment and amount of natural resources being trucked north over new, China-funded roads startles many observers. Road signs are in Chinese between Lashio and Muse in northern Shan State. Both foreign and domestic observers fear that China will follow Russia’s 2014 Crimea precedent and either try to annex northern Shan State outright (ostensibly to protect the rights of ethnic Chinese living there), or send in the PLA in the event that there’s any violence against China nationals along the lines of the May, 2014 anti-Chinese riots in Vietnam. The central government very much wants non-native visitors to stay out of northern Shan State. It could be a powder keg in years to come.

Approximately 150,000 ethnic Shan live in Chiang Mai, Thailand. The Shan fall into two camps: the diaspora comprised of intellectuals, dissidents, and fighters who left Burma for non-economic reasons; and the economic migrants of the last 10-15 years. The latter do menial jobs that the Thais no longer want to do. The diaspora gives money to the SSA-S to keep it under arms, well-trained, and in the field.

Former Khun Sa lieutenant Khur Yen lives in Chiang Mai and set up a news agency called S.H.A.N to report in English and Thai on Shan liberation efforts. Ex-Khun Sa information officer Khvensai Jaiyen (could be a variant of “Khur Yen”) is listed as a director. Their major publication was 2006’s tell-all Hand in Glove: The Burma Army and the Drug Trade in Shan State. S.H.A.N. is also on the web: www.shanland.org.

* * * * *

Against this backdrop of near-anarchy, the fictional Sea of Lies firefight in Southern Wa State between corrupt Burma soldiers, US Special Forces and United Wa Army troops becomes plausible in principle, despite reading like a scene from a Hollywood B-movie.

 

End Notes 

1Frontline: The Opium Kings interview with Donald Ferrarone (Chief of DEA office in Bangkok, 1993-1995) in February, 1996 as sourced online at http://www.pbs.org/wgbh/pages/frontline/shows/heroin/interviews/ferrarone.html

2Helliwell also trained Cubans and flew combat missions in the Bay of Pigs for the CIA, as well as a showing up in the 1970s during the Nugan Hand Bank saga.

3The story also is less reliably cited as occurring in 1988, with the Australia government being offered the same terms. (Wikipedia’s Khun Sa bio has even grander sums.)

 

Bibliography

Burma in Revolt: Opium and Insurgency since 1948, Bertil Lintner, White Lotus Press, Bangkok, 1994

The Golden Triangle Opium Trade: An Overview, Bertil Lintner, 2000, as provided online by http://www.asiapacificms.com/papers/pdf/gt_opium_trade.pdf

http://wapeoplenews.blogspot.sg/2013/07/wa-people-of-myanmar.html for Wa map and recent description of the Wa people by Wa’s.

Hand in Glove: The Burma Army and the Drug Trade in Shan State, Shan Herald Agency for News (“S.H.A.N”), 2006 as provided online by http://www.burmalibrary.org/docs07/HandinGlove.pdf

http://www.atimes.com/atimes/Southeast_Asia/IK01Ae01.html for Bertil Lintner’s obituary of Khun Sa

http://news.bbc.co.uk/2/hi/asia-pacific/7068868.stm for Khun Sa’s obituary in BBC News

http://lukeduggleby.photoshelter.com/image/I0000DyFdXKGe7lI for photos of a spooky Wa burial ground, © Luke Duggleby, 2012