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Statements on the Subversive Value of Narcotics

“Opium should be regarded as a powerful weapon. It has been employed by imperialists against us, and now we should use it against them. Such warfare can be called chemical warfare by indigenous methods.” Mao Zedong, 1935

“We will disarm the capitalists with the things they like to taste.” Zhou Enlai, 1958

“We are growing the very best poppies for the US servicemen.” Zhou Enlai, 1965

“Deception and drugs are our first two strategic echelons in the war with capitalism.” Nikita Khrushchev, 1963

“Drugs will be a decisive weapon in disrupting the fabric of Western democracies.” Raul Castro, Late 1960s

“I was ordered to load up the United States with drugs.” Mario Estevez Gonzalez, Cuban Intelligence, 1981

“Drugs were used as political weapons. The target was the youth of the United States.” Antonio Farach, Nicaraguan official. 1984

“Drugs are considered to be the best way to destroy the United States... by undermining the will of American youth, the enemy is destroyed without firing one bullet.” Major Juan Rodriguez, Cuban Intelligence, 1988

Executive Summary

In 1999, two Chinese colonels wrote the book Unrestricted Warfare, describing that modern warfare will no longer be an endeavor defined by traditional military means—or even involve the military at all. Colonels Qiao Liang and Wang Xiangsui argued that war was no longer about armies facing each other on a battlefield, but rather, “using all means, including armed force or non-armed force, military and non-military, and lethal and non-lethal means to compel the enemy to accept one’s interests.” The division between soldiers and civilians would be erased because the battle would be everywhere and include financial warfare, trade warfare, cultural warfare, legal warfare, and many others. Colonel Qiao argued, “The first rule of unrestricted warfare is that there are no rules, with nothing forbidden.” Non-military tactics would occur prior to any formal declaration of war, and they would be a mixture of “covert and overt; licit and illicit” activities. Combatants would be representative of the population: civilians, businessmen, politicians, servicemembers, entrepreneurs, criminals, and terrorists, all constantly shifting between roles. China, Russia, Iran, North Korea, and other violent extremist organizations (VEOs) have been using gray zone methods such as cyber, information, and especially drug warfare against the American population for decades.

The Russian Mafia and Chinese criminal organizations have become the backbone of the Latin American drug cartels, providing precursor chemicals and laundering tens of billions of dollars in illicit profits. The Russian and Chinese governments backed organized crime by suppling military-grade weapons to Latin American drug cartels for drug warfare operations against the United States. General Glen VanHerck, the head of U.S. Northern Command, stated to the U.S. Senate Armed Services Committee that "the largest portion of the GRU members is in Mexico right now. Those are Russian intelligence personnel." (Associated Press 2022). Narcotics are a geopolitical tool to pivot the center of power toward Asia.

The war on drugs is constantly blamed on the weakness of society, capitalism, and Americans demand for illicit substances, but all the evidence proves that is false and deliberate misinformation. Demand for both heroin during the Vietnam War and today’s fentanyl was nonexistent until suppliers flooded a targeted region with those drugs and achieved addiction through covert means by lacing them with substances considered less or non-addictive, such as cigarettes and marijuana. The artificially depressed prices for a higher-purity drugs showed profit was not the primary motive. The drug war has also been hampered by political operatives and double agents for the Russians and Chinese within the U.S. government. Only when the American people are fully informed about the origin and causes of drug warfare can they successfully lobby their local, state, and federally elected representatives for more effective drug policies.

Key Messages

  • The Chinese and Soviets first weaponized narcotics against the United States military during the Korean and Vietnam wars.

  • In the 1960s, Latin American drug routes were taken over or established by the Soviets via Cuban intelligence and blackmail operations of local politicians.

  • In 1955, the Soviets start infiltrating organized crime in the West.

  • Drug Trafficking schools targeted Hispanic and African Americans and were established in Prague, Moscow, and Cuba.

  • The City of London’s offshore secrecy jurisdictions and global financial institutions assisted organized crime and foreign intelligence drug warfare operations against the West.

'Chemical Warfare by Indigenous Methods'

During the war to establish communism in China, Mao Zedong and Zhou Enlai first began cultivating opium on an industrial scale and using it as a political weapon against their own people (Barnouin and Yu 2006). Mao had two objectives: trade for needed supplies and 'drugging the white region,' where 'white' referred to his non-communist opposition (Douglass 1999). As soon as Mao secured his power in 1949, opium production was nationalized and drug use was outlawed. Opium trafficking used against non-communists became a state-sanctioned activity in the People's Republic of China. The primary targets were Japan, United States military personnel stationed in East Asia, and the mainland United States. At this time, North Korea also trafficked drugs in cooperation with China and directed the flow of drugs into Japan during the Second Sino-Japanese War and onto US military bases in East Asia.

During the Korean War, the Chinese and North Koreans used narcotics against US servicemen to undermine the effectiveness of the American military and raise revenue. As part of this mission, Eastern Bloc Czechoslovakia assisted in constructing a hospital in North Korea under the guise of treating casualties. The hospital was instead used as a research facility in which Czechoslovak, Soviet, North Korean, and Chinese doctors experimented on US and South Korean prisoners of war (Douglass 1999, 15-16). Those studies exposed American and South Korean POWs to chemical, biological, and psychochemical warfare experiments. These experiments were justified as preparations for the next war. During the Vietnam War, China and the Soviet Union competed for the drug business of US servicemen. During a 1958 meeting in Wuhan, Zhou Enlai discussed increasing opium production:

“The Centre has decided to promote poppy cultivation on a large scale.... Every one of you must awake to the fact that the war in Vietnam is likely to escalate and US imperialism has determined to fight against our revolutionary camp by increasing its military force in Vietnam.... From the revolutionary point of view, the poppy is a great force to assist the course of our revolution and should be used; from the class point of view, the poppy can also become a powerful weapon to win the proletarian revolution.... By exporting large quantities of morphine and heroin, we are able to weaken the US combat force and to defeat it without even fighting at all” (Douglass 1999, 58).

 Throughout the 1950s and 1960s, Zhou Enlai orchestrated China's covert narcotics warfare operation. In the early 1970s, data shows there was a huge surge in drug addiction among US servicemembers stationed in Southeast Asia and Europe. Heroin was available outside every American base in Vietnam and was supplied to the local population by the Chinese (Emerson 1971). The reaction of the US military to the drug crisis was to deny the existence of a problem and then blame it on the poor quality of recruits. But there is no question as to what caused the increase in drug use: It was due to flooding a target area with drugs, high-pressure marketing techniques, and artificially depressed prices. Prostitutes were used to push drugs on unsuspecting servicemen, and addiction was acquired covertly by mixing opium and heroin into drugs that weren’t considered addictive, such as marijuana and cigarettes (Douglass 1999, 134). Heroin was also sold as cocaine, which at the time was not considered addictive. We are seeing the same techniques used in the past that they are using with fentanyl today. In 1972, Professor J. H. Turnbull, the head of the Department of Applied Chemistry at the Royal Military College of Science, summarized the Chinese narcotics trafficking strategy as “directed broadly at the major industrial sectors of the Free World (Douglass 1999, 13-14). Turnbull emphasized that narcotics were “a valuable source of national income, and a powerful weapon of subversion.”

The Soviets Expand the Drug Warfare Operation

In the late 1940s, The Soviet Union discovered China was waging war with opium against its own citizens. The Soviets gathered intelligence on trafficking routes, organizations behind production, and distribution. While the Chinese used drugs for large-scale political warfare, it was the Soviets who turned narcotics trafficking into an effective political tool and intelligence weapon. Drug Trafficking was under the Soviet military division of chemical warfare.

General Jan Sejna, a top-level Czechoslovak official, defected to the West in 1968 and had detailed knowledge of the Soviet drug offensive. Sejna was Secretary of the Defense Council, which was the top decision-making body in defense, intelligence, and foreign policy. He was present during meetings about the Soviet drug operations and regularly met with Nikita Khrushchev. Sejna explained how the Soviet concept of drug trafficking emerged during the Korean War, using drugs to undermine the combat effectiveness of the U.S. military. Narcotics were formally added to military planning as part of chemical warfare research. Originally approved in 1955, the operation 'Druzhba Narodov' (Friendship of Nations) drug warfare strategy ramped up in the early 1960s (Douglass 1999, 43). By 1963, the Soviets had arranged for Czechoslovakia to assist the North Vietnamese in setting up a drug trafficking training center. The Soviets expanded their operations to ensure drugs were available in locations that U.S. servicemen would visit during 'rest and recuperation.' According to Sejna, Soviet General Yepishev stated, “If the US military were inclined to take drugs, they should if necessary be given them free of charge” (Douglass 1999, 59-61). Profit was far less important than undermining the effectiveness of the U.S. military with narcotics. The Soviets under Khrushchev believed the world revolutionary movement had become stagnant under Stalin; thus, the drug trafficking operation was modernized. As detailed by General Sejna, there were five principals in the new strategy:

  1. Enhanced training for the revolutionary movement leaders

  2. Training of terrorists

  3. International drug trafficking

  4. Infiltrate organized crime

  5. Plan and prepare for sabotage throughout the world

One of the last measures before the actual mass trafficking operation began was the establishment of training centers for drug traffickers. The centers were joint Soviet-Czechoslovak operations and managed by both civilian and intelligence units. Each course consisted of three months of intensive training, and while indoctrination in Marxism-Leninism was present, the emphasis was strictly on the drug business (Douglass 1999, 17-20). The Soviets provided the Czechoslovaks with lesson plans, which were used to set up drug trafficking networks in Latin America.

The course included instruction in:

  • The nature of the drug business, types, and quality

  • Means of production and organization of distribution

  • Drug markets and buyers

  • Security and Infiltration of existing production networks

  • How to use the experience of intelligence networks

  • Communications within drug organizations

  • How to pass intelligence information

  • How to recruit intelligence sources

By 1956, drugs, terrorism, and organized crime were coordinated in long-range strategic operations. Drugs were used to destroy society. Terrorism destabilized the targeted country and prepared a revolutionary environment. Organized crime controlled the elites and politicians through blackmail. The real trafficking didn’t begin until 1960, when the marketing strategy had been ironed out, strategic intelligence agents were trained, and training schools were turning out indigenous graduate drug traffickers. All recruits were screened by counterintelligence to ensure they didn’t have criminal records that rendered them susceptible to blackmail (Douglass 1999, 19-20). In the drug operation, the objective of propaganda and disinformation was to place the blame on 'society' and divert attention away from drug trafficking. They wanted to focus on domestic issues, the Vietnam War, and anti-Americanism. Additionally, corruption and blackmail data would be released to discredit individuals and organizations considered hostile. A 1964 letter signed by Leonid Brezhnev directed the Chinese drug trafficking operation to be made public and to advertise China’s role as the source by drawing attention away from the Soviet operation (Douglass 1999, 41). One of the first articles written for this purpose appeared in Pravda on September 13, 1964, written by V. Ovchinnikov and entitled 'The Drug Dealers.'

Khrushchev discussed the many benefits derived from drug trafficking, such as a source to finance intelligence operations. It would also undermine the health and morale of American servicemen because people on drugs are unreliable. He discussed the American schools at length because they were a high-priority target. Khrushchev concluded, “there were some who were concerned that this operation might be immoral. But we must state categorically that anything that speeds the destruction of capitalism is moral” (Douglass 1999, 37). Another target was the American work ethic, pride, and loyalty, all of which would be undermined through drugs.

The Soviets Set Up the Latin American Network

Initially, the Soviets used Czechoslovak intelligence (StB) as their proxy to bring the Castro regime to power in 1959. The Czechoslovaks provided Cubans with intelligence reports, spying equipment, and training at the Lourdes signal Intelligence station. Czechoslovak StB organized terrorist and drug trafficking training courses in Prague, not just those in Latin America. According to Dr. Jan Koura, “We have some documents that talk about the general strategy of the KGB and Eastern Bloc intelligence services to penetrate the Third World, to weaken the position of Western states as soon as possible. It ranged from supporting liberation movements, delivering weapons, training of people, or recruiting local politicians, journalists, and prominent people to get information. It was all about the information during the Cold War. It was an ideological war and information was very precious in this conflict” (McEnchroe 2021).

Rudolph Barak, the Czechoslovak Minister of Interior, personally aided the Cubans drug production and assisted in setting up transportation routes through Canada and Mexico into the United States. In 1961, the StB received directions from the Soviet Defense Council to expand the operation by having Cuban intelligence infiltrate existing drug operations in Latin America and the United States by recruiting these independent operations (Douglass 1999, 25-26). The Soviet strategy was to entice people in positions of influence into taking drugs or drug trafficking, especially people in financial institutions, politics, the military, scientific institutions, and middle management in industry, because of the potential for blackmail. The StB divided its dossiers on corruption into two categories: people already in positions of power and people at lower levels who were likely to advance into positions of power. (Douglass 1999, 25-26). Starting in 1962, the StB cooperated on top-secret ‘Operation Manuel,’ which falsified the passports of 1,179 Latin American guerrillas by moving them through Prague after extensive military and political training in Cuba (Spenser 2002). The 1966 Tricontinental Conference, held in Havana, provided the organizational structure to support terrorists and anti-American groups in the Middle East and Latin America. 17-year-old Carlos the Jackal attended the event with his father. After the conference, Carlos spent the summer at Camp Matanzas, a guerrilla warfare school run by the Cuban DGI. According to Cuban defector Hildago Castro, he stated Cuban intelligence ran the training camps for guerrilla warfare and in terrorist techniques (Ferrara 1988). Cuban agents operating out of Mexico committed bank robberies to finance terrorist groups in Latin America. Eugene Pons of the Institute for Cuban and Cuban-American Studies says, “Several dozen Mexicans received training in terrorism and guerrilla warfare in Sierra del Rosario, Pinar del Rio Province and in Guaynabo, in eastern Cuba” (Pons 2001). Castro also became involved with African Americans and the Macheteros, a Puerto Rican terrorist group that committed bank robberies in the U.S. Cuba focused attention on the black struggle in America, providing aid and training to the Black Panthers and the Black Liberation Army.

At a 1964 Moscow meeting, General Boris Shevchenko, the deputy chief of Soviet Military Intelligence, introduced the ‘pink epidemic’ and thought more people could be reached with cocaine than with heroin. In the beginning, the lead countries in establishing the cocaine production and distribution were the Soviet Union, Czechoslovakia, and Cuba. Czechoslovakia immediately began a special technology program to develop the necessary production techniques. This operation was run by military intelligence and the Health Administration under the control of military counterintelligence. Narcotic production experimentation was conducted at a top-secret scientific research center at Milovice (Douglass 1999, 33). The operation was facilitated by the Cubans, who learned the techniques that were used in South America and then passed the information on to Czechoslovak StB. The Czechoslovak scientists took the procedures and developed more professional mass-production techniques. Between 1960 and 1965, the Soviet Bloc intelligence services directed drug production, distribution, and money-laundering operations throughout South, Central, and North America. Future drug traffickers from all over the world were taught the drug trade in Eastern European drug training centers. Additional training centers were later established in North Korea, North Vietnam, and Cuba. The initial drugs trafficked were heroin, marijuana, and synthetic narcotics.

Convicted Colombian drug lord, Carlos Lehder, is an example of how drug cartels use law enforcement to discipline members. He brought unwanted attention to the Medellin Cartel by giving interviews to The Miami Herald. Lehder stated, "Cocaine has become a revolutionary weapon in the struggle against North American imperialism" (Milloy 1989). By simply turning him over to American law enforcement, it improved law enforcement’s public image, even though they were acting as disciplinary agents for the drug cartel.

Western Bankers Aided Communists and National Socialists

The Opium Wars were initiated by the East India Company and involved major City of London banks, trading companies, and shipping lines. In 1865, the Hongkong and Shanghai Banking Corporation (HSBC) was founded by Thomas Sutherland and was the clearinghouse for the world’s opium. International bankers, oil titans, and Wall Street funded infrastructure projects in Soviet Russia, Nazi Germany, and Communist China by aiding their economies. The Rockefeller family has been selling kerosene in China since at least the Civil War. In 1921, Equitable Eastern Bank opened its Shanghai branch; nine years later, the bank merged with Chase National Bank, giving Chase a foothold in Shanghai and Hong Kong (J.P.Morgan Chase & Co. 2023). This made Chase the largest bank globally, and its board of directors has longstanding ties with the successor companies of Standard Oil, especially ExxonMobil, which is also part of Rockefeller's holdings.

In the 20th century, the Rockefeller Brothers Fund’s investment in China’s science, medicine, and higher education was upwards of a billion dollars. The Rockefellers were major donors to ivy league schools such as Yale and Harvard (Bullock 2011). The primary benefactor of Yale College, Elihu Yale, was the President of the East India Company at Fort St. George, Madras in India. The Yale Divinity School established several colleges and hospitals throughout China that were collectively known as ‘Yale in China.’ By the 1920s, the group had founded medical schools, including Rockefeller’s Peking Union Medical College (Yale University 2018). Without Yale’s support, Mao Zedong may never have risen from obscurity to control the Chinese Communist Party. Mao received his introduction to communist theory at a Yale in China school, and he was the editor of the Yale Journal (Yale Daily News 1972). David Rockefeller met Zhou Enlai in a late-night meeting that birthed the China Medical Board (Bullock 2011). Rockefeller stated, “The social experiment in China under Chairman Mao's leadership is one of the most important and successful in human history” (Rockefeller 1973). Mao Zedong was responsible for at least 40 million to possibly upwards of 80 million deaths.

The Rockefeller Foundation often partners with the Ford Foundation and the Robert Wood Johnson Foundation, which was founded by Johnson & Johnson. Xian-Janssen Pharmaceutical Ltd., a subsidiary of Johnson & Johnson, was the first Western pharmaceutical company to open a Chinese plant in 1985. Dr. Paul Janssen, who invented fentanyl in 1959, met with Mao Zedong’s personal physician, a Maronite Lebanese American named Ma Haide, in 1978 (Baetens n.d.). In 1936, Ma Haide sent requests to Soong Ching-ling, Agnes Smedley, and Norman Bethune to recruit foreign medical personnel for Mao's troops. Bethune, a Canadian thoracic surgeon, organized medical services for the war and an early advocate of socialized medicine. Westerners sent to China by the Rockefeller Foundation had to have known about the weaponization of narcotics against the non-communist Chinese, Japanese, and American GIs.

The Dulles brothers created front companies to hide that their client, Nelson Rockefeller, was heavily invested in the Nazi industrial complex and was supplying oil to Adolf Hitler. Prescott Bush, father of George H. W. Bush, agreed to sit on the boards of Nazi front companies as a placeholder for Rockefeller (Loftus 2021). Prescott was a founder of the Union Banking Corporation, a bank that operated as a clearinghouse for assets held by German steel magnate Fritz Thyssen, a financier of the Nazi Party. Bush continued to work for the bank after America's entry into World War II. Yale University and the Rockefeller Foundation funded the German Kaiser Wilhelm Institute, whose research facilities were involved in weapons research, experimentation, and production in both WWI and WWII. During World War II, some of the weapons and medical research performed by the KWI were connected to human experimentation in Nazi concentration camps.

In April 1920, the Bolsheviks seized power in Baku, Azerbaijan, and the oil fields. A few weeks later, the Nobel family sold half their Branobel shares to Standard Oil of New Jersey after the nationalization of the Russian economy (Levine 2007). The Rockefellers not only enriched themselves but saved Vladimir Lenin’s economy. Chase National Bank was instrumental in establishing the American-Russian Chamber of Commerce. David Rockefeller continued his family’s close ties to the Soviets when he met Nikita Khruschev at the Kremlin in 1964. By the early 1970s, New York's two largest banks—the First National City Bank (Citibank) and the Chase Manhattan Bank—had opened branches in the Soviet Union (Heinemann 1972). Chase Manhattan later merged with JP Morgan to form JP Morgan Chase that aided Jeffrey Epstein’s sexual blackmail operations.

The Geopolitical Goals of Drug Warfare

Adolf Hitler's eastward expansion and “lebensraum” were greatly influenced by his mentor Karl Haushofer. During Hitler’s incarceration in 1924, Haushofer spent hours visiting Landsberg prison and teaching him Friedrich Ratzel's Political Geography and Carl von Clausewitz's Vom Kriege. Haushofer's primary geopolitical concept was the necessity for Germany to control the Eurasian heartland, as taught by London School of Economics professor John Halford Mackinder:


“Who rules East Europe commands the Heartland;
who rules the Heartland commands the World-Island;
who rules the World-Island commands the world.”

Any power that controlled the world’s island would manage over 50% of global resources. The size and central position of Eurasia made it the key to controlling the world. The historical record shows Nazi leaders used the language of geopolitik, Haushofer's maps, and reasoning in their propaganda. Mackinder’s theory not only influenced Hitler’s ‘New Order’ for Europe but also Vladimir Putin’s battle for Eurasia—the Russia-Ukraine war.

The Dartmouth Conference, funded by the Ford Foundation, was the longest bilateral dialogue between American and Soviet representatives. Notable conference participants were David Rockefeller, Zbigniew Brzezinski, and Yevgeny Primakov. Dartmouth XVII was the last conference held before the collapse of the Soviet Union (Voorhees 2002). In 1999, Yevgeny Primakov promoted the "Primakov Doctrine," which advanced Russia, China, and India as a "strategic triangle" to control the Eurasian heartland. Primakov had close ties to Henry Kissinger, and he was the mentor of Vladimir Putin.

Russia—A Mafia State

Undercover operations have caught Russian organized crime selling Colombian drug traffickers a submarine, helicopters, and surface-to-air missiles. Barry R. McCaffrey, former national drug-control policy director, stated that at least two Russian combat helicopters and small arms have been sold to cartels in Colombia. The Russian Mafia provides military-grade weapons, money laundering services, and front companies to Colombian cartels. "What makes the Russians so dangerous is that they are capable of so much; they are so sophisticated," stated an undercover DEA Russia expert. "We are talking people with PhDs, former senior KGB agents with access to sophisticated weapons, people who have laundered billions of dollars" (Farah 1997).

In 2001, a seizure of 20 tons of cocaine from two fishing boats manned by Russian and Ukrainian crewmen alerted U.S. officials that Mexican drug smugglers were working with the Russian mafia. U.S. intelligence officials believe Mexican cartels have followed the lead of Colombian cartels to form alliances with the Russian mafia. The collaboration was led by the Arellano-Felix cartel in Tijuana and involved the shipment of both cocaine and heroin. The Russians, who operated from New York, Florida, and Puerto Rico, moved to help the Colombians import drugs into Europe through Italy. The Russian mobsters, many of them former KGB agents, controlled numerous banks in Moscow, Panama, and the Caribbean to launder hundreds of millions of dollars in illicit drug profits (The Washington Times 2001).

Vladimir Putin and his long-time ally Victor Ivanov were implicated in narcotics trafficking and money laundering in St. Petersburg by ex-FSB officer Alexander Litvinenko and ex-KGB officer Yuri Shvets. During a 2006 inquiry into the death of Litvinenko, Shvets testified that Putin and Ivanov rose from their positions in the security services (KGB and FSB) to more prominent ones within the St. Petersburg administration during the 1990s. Ivanov was cooperating with gangsters such as the convicted money-launderer and boss of the Tambovskaya gang, Vladimir Kumarin-Barsukov. According to Shvets' sources, "Mr. Putin was directly involved in a company that was laundering drugs from Colombia" (Sharkov 2015).

One of Putin’s close associates, Oleg Deripaska, whom authorities said had been investigated for money laundering, threatening business rivals, illegally wiretapping a government official, extortion, racketeering, and having links to Russian organized crime (Davis O'Brien 2023). The U.S. Senate intelligence committee has stated Deripaska's companies "are proxies for the Kremlin, including for Russian government influence efforts, economic measures, and diplomatic relations" (Nicholls 2022). Deripaska’s RUSAL and Kissinger Associates Inc. are both on the U.S.-Russia Business Council.

City of London—Laundromat for Organized Crime

The City of London Corporation uses its offshore jurisdictions, trusts, and shell companies to obscure illicit profits from criminal organizations and foreign intelligence services by hiding beneficial owners. In 1992, David Rockefeller was selected as a leading member of the Russian-American Bankers Forum, an advisory group set up by the Federal Reserve Bank of New York to advise Russia on the modernization of its banking system. General Jan Sejna testified that he received instructions as to which financial institutions were to be used for laundering drug money from the Soviet Bloc and the Soviet bank in London was involved in the transfer of illicit drug profits (Douglass 1999, 40). Dr. Zdzislaw Rurarz, a Polish military intelligence officer and adviser to the Ministries of Foreign Trade and Foreign Affairs, defected to the United States in 1981 (Sullivan 2007). Rurarz stated that Soviet banks, financial institutions, and joint ventures were assisting in the money laundering operation around the globe (Douglass 1999, 43).

In 2012, London-based HSBC admitted it had laundered at least $881 million for Mexican drug cartels. Drug traffickers used specially shaped boxes that fit HSBC’s teller windows to drop off large amounts of drug money. Under the deal with prosecutors, HSBC paid $1.9 billion in fines, and the government would withhold criminal charges if HSBC kept its pledge to fight money laundering. During that five-year period, HSBC continued to move money for questionable organizations and characters, including suspected Russian money launderers and a Ponzi scheme. “By utterly failing to prevent large-scale corrupt transactions, financial institutions have abandoned their roles as front-line defenses against money laundering,” said Paul Pelletier, a former senior U.S. Justice Department official. “They operate in a system that is largely toothless.” Bankers routinely ignore Suspicious Activity Reports without repercussions.

The leaked financial documents known as the Pandora Papers exposed the web of secret offshore accounts of 35 world leaders, including presidents, prime ministers, and heads of state, as well as more than 100 billionaires, celebrities, and business leaders. The International Consortium of International Journalists estimates the amount of money held offshore (outside the country of origin) to range from $5.6 trillion to $32 trillion dollars (Pandora Papers 2021). Five international banks were singled out—J.P. Morgan Chase, HSBC, Standard Chartered Bank, Deutsche Bank, and Bank of New York Mellon—as profiting from illicit cash even after U.S. authorities fined these institutions. J.P. Morgan Chase moved money for people and companies tied to the looting of public funds in Malaysia, Venezuela, and Ukraine. Between 2010 and 2015, Chase received more than $1 billion in transactions from a shell company, ABSI Enterprises, owned by Semion Mogilevich, the boss of the Russian Mafia (Tatone 2020). In 2016, J.P. Morgan Chase agreed to pay $264 million in fines for violating the Foreign Corrupt Practices Act, under which the bank secured business deals in Hong Kong by agreeing to hire hundreds of friends and relatives of Chinese government officials. Most recently, Chase had to pay out the victims of Jeffrey Epstein for aiding his sexual blackmail operations with ties to Israel’s Mossad.

In 2017, the Industrial and Commercial Bank of China in Madrid was accused of money laundering and transferring illegal income to China. Prosecutors stated the Chinese bank was a conduit for laundering illegal cash from tax fraud and smuggling by Chinese criminal organizations. The sums laundered were so large, the prosecutors said, “The damage to the socio-economic order and the national economy is clear” (Berwick and Lague 31). Back in 2006, three strategic investors injected $3.7 billion into ICBC: Goldman Sachs, Alliance Group, and American Express (ICBC News 2006). In 2001, Allianz acquired 80% of Dresdner Bank, which is a subsidiary of Commerzbank. Goldman Sachs and Commerzbank have both been accused of money laundering. Among the 41 locally incorporated foreign banks in China, there are eight from the U.S. that operate about 80 branches in China (International Trade Administration 2019).

  • Citibank

  • Bank of America Merrill Lynch

  • BNY Mellon

  • East West Bank

  • JPMorgan Chase Bank

  • Morgan Stanley Bank International

  • SPD Silicon Valley Bank

Every single one of these financial institutions has been accused of having weak anti-money laundering programs and/or being involved in money laundering. The Fentanyl Crisis isn’t a Chinese-made epidemic, but a crisis instigated by global banks and private equity for geopolitical goals. “Right now, broker-dealers, mutual funds and banks are legally required to understand who their clients are and evaluate the source of their clients’ funds before investing them, but hedge funds, private equity, and venture capital funds don’t—which doesn’t make any sense,” stated Elise Bean, former staff director of the Senate Permanent Subcommittee on Investigations. Bean advised the SEC that regulators should have a list of “all beneficial owners” and the countries where those investors reside.

U.S. law enforcement rarely prosecutes banks that break money laundering laws. The Pandora Papers document the web of offshore financial centers established for the primary purpose of facilitating money laundering. Many of the major banks dominating these centers were the original British and American opium financiers during the Opium Wars. Obviously, the City of London has never gotten out of the opium business. Many of the world's key financial institutions must be wittingly involved in drug money laundering. How else could such large volumes of cash be shuttled from one corner of the globe to another in a continuous cycle of drug production, processing, marketing, and refinancing?

Why the War on Drugs Failed

Harry Anslinger, U.S. Commissioner of Narcotics, publicized that China was the primary force responsible for drug trafficking throughout the 1950s. “The mafia was not the biggest drug dealer,” Anslinger explained in response to misleading press reports. By far the biggest drug dealer was “Peking.” A. H. Stanton Candlin observed the same problem: “The matter was handled differently until about 1962, before which year the United States showed signs of official comprehension of the problem. Since then, the threat has apparently been concealed from the public by persons who have evidently had the desire to cultivate better relations with the Red Chinese” (Douglass 1999, 89-90). Perhaps it’s not a coincidence that Harry Anslinger retired in 1962 and pro-China interests moved into the State Department in 1961?

U.S. officials have suppressed data and evidence considered contrary to policy of détente. For example, prior to the Biological and Toxin Weapons Arms Control Treaty signed in 1972, the United States was aware of Soviet activity in applying genetic engineering to chemical and biological warfare. At the Defense of Western Europe conference in 1988, Herbert E. Meyer stated that data was “removed at the specific request of Henry Kissinger.” Had the data been pursued, the Soviet drug trafficking operation might have been uncovered as a component of the Soviet chemical warfare strategy. Ray Cline, former Director of the State Department's Intelligence and Research Bureau, stated that “crucial intelligence was often suppressed to ensure that only Nixon and Kissinger had the full body of information...” (Douglass 1999, 108-109). Henry Kissinger altered the CIA’s ‘Golden Triangle’ map to hide China’s, especially Yunnan province, as a major source of heroin (Douglass 1999, 90-94). He was responsible for major decisions related to the Vietnam War and kept the bombing of Cambodia a secret from Congress. In 1959, Polish intelligence officer Colonel Michael Goleniewski identified 1,600 Soviet Bloc agents, including Henry Kissinger’s codename “Bor” (Tate 2022). This wasn’t the first time he had been accused of being a spy. In 1955, Kissinger was investigated by U.S. military intelligence due to his publication, Confluence, which promoted a pro-communist point of view and was funded by the Ford, Richardson, and Far Eastern Foundations (Capell 1974). He also worked for the Rockefeller Brothers Fund. Kissinger aided the Mackinder geostrategic plan to pivot the center of power to Asia, even at the cost of American lives. Shortly after the bombings of the Cambodian Viet Cong sanctuaries, pure-quality heroin was available below wholesale prices outside the gates of U.S. military bases in Southeast Asia. As General Lewis Walt explained:

"In June of 1970, immediately after our Cambodian incursion, South Vietnam was flooded with heroin of remarkable purity—94 to 97 percent—which sold at the ridiculously low price of first $1 and then $2 a vial. If profit-motivated criminals were in charge of the operation, the price made no sense at all, because no GI who wanted to get high on heroin would have batted an eyelash at paying $5 or even $10. The same amount of heroin in New York would have cost $250. The only explanation that makes sense is that the epidemic was political rather than economic in inspiration—that whoever was behind the epidemic wanted to hook as many GIs as possible, as fast as possible, and as hard as possible" (Douglass 1999, 61).

From 1970 to 1971, the US Air Force lost more people to drugs than to combat. During investigations into the drug epidemic, the Chinese and the Viet Cong were all identified as major sources of heroin. Aldrich Ames was a key figure in the American effort to thwart the flow of narcotics into the United States and impede the subversive influence of the drug cartels. In 1994, Ames worked in the CIA’s counternarcotics division when he was convicted of spying on behalf of Russia (Congressional Record 1994). The KGB used moles like Aldrich Ames to sabotage the war against international drug trafficking. The pattern of ignoring clear evidence that proved the KGB and Cuba were involved in the illegal drug trade is like the way the bureaucrats stonewalled congressional investigations into Manuel Noriega's narcotic activities. Only after pressure from Congress and an indictment by a Miami prosecutor did the State Department address the allegations of narcotrafficking against Noriega. Washington bureaucrats were not interested in exploring the KGB and the Cuban drug connection. The 1993 International Narcotics Control Strategy Report confirms that the government exchanged law enforcement data with the Cubans. The State Department routinely certified Cuba as a state sponsor of terrorism and Fidel Castro’s involvement in drug trafficking. On November 4th, 1993, a Foreign Relations Committee hearing asked Secretary Christopher whether the United States shares intelligence information with Cuba, and the Secretary said, “We do share [drug] enforcement information with the Cubans” (Congressional Record 1994). Exchanging narcotics trafficking intelligence with Fidel Castro makes as much sense as sharing intelligence with Noriega or the Latin American drug cartels.

In January 2023, the former head of the FBI’s counterintelligence, Charles McGonigal, was arrested and federally indicted on charges of money laundering, making false statements to the FBI, violating U.S. sanctions on Russia, and allegedly working with Russian oligarch Oleg Deripaska, who had allegedly tasked him with investigating Deripaska’s rival. McGonigal began his career in 1996, when he was assigned to the Russian Illegals Program and investigated Russian organized crime. One must question if McGonigal only started working for the Russians after he retired from the FBI and not before.


  • Charge banking executives, private equity, and venture capitalists caught money laundering for organized crime under Racketeer Influenced and Corrupt Organizations (RICO) Act.

  • Ban United States financial institutions, companies, and individuals from using the City of London Corporation’s offshore secrecy jurisdictions.

  • Enact a public registry for ALL beneficial owners.

  • Financial institutions caught money laundering for drug traffickers should pay restitution to the targeted country and population.


America’s war on drugs has been impeded by international bankers, politicians, geopolitical operatives, counternarcotics double agents, foreign intelligence, and communists. Narcotics have been an effective gray zone weapon against civilians and have been deployed multiple times since their inception during the Korean War. It seems that the United States was never supposed to win the drug war when Henry Kissinger, Nixon’s right-hand man, is doing business with Russian oligarchs and Rockefeller banks are profiting from the laundering of drug money from Colombian and Mexican cartels. These bankers are rarely, if ever, prosecuted for their crimes. Focusing on poor, low-level drug dealers is not going to end drug warfare operations. Instead, targeting money laundering operations by financial institutions is the key to winning the fentanyl crisis. Domestic financial institutions, lawyers, venture capitalists, and shell companies should be labeled as domestic terrorist organizations when they profit from and work with organized crime groups that are backed by foreign intelligence services.


If you would like an early copy of the policy brief, you can email me at


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