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6. Hong Kong: Heir to the Heroin Traffic PDF Print E-mail
Written by Alfred Mccoy   
Monday, 04 January 2010 00:00

6. Hong Kong: Heir to the Heroin Traffic

IN MANY ways the British crown colony of Hong Kong resembles Marseille. The narrow streets give both cities an oppressive, cramped atmosphere. The waterfront areas blaze with the neon lights of bars, nightclubs, and thinly disguised brothels. Both have a long-standing tradition of random violence and organized crime. Marseille is the heroin laboratory for Turkish opium, and Hong Kong has played a similar role for Southeast Asia. While Western journalists have written endlessly on the skill of Marseille's master chemists, few are aware that Hong Kong's chiu chau chemists have a longer tradition, produce a higher grade of heroin and are probably more skilled than their Corsican counterparts. American journalists and narcotics specialists have become so addicted to the idea of Marseille as America's one and only heroin laboratory that few have paid any attention to Hong Kong's flourishing laboratories. However, Hong Kong, along with the Golden Triangle region, seems to be the emerging heroinproducing capital of the world, taking over from a Marseille beset with police crackdowns ever since heroin began to flood all of France in 1969, creating a severe drug problem.

Throughout the 1960s Hong Kong's heroin laboratories produced substantial quantities of pure no. 4 heroin for the American market. Since Hong Kong police were tied down chasing addicts off the street and the U.S. Bureau of Narcotics paid almost no attention to Asia, there were few seizures of Asian heroin and little awareness of the colony's growing role in the international traffic. It was not until American GIs serving in Vietnam began using alarming quantities of no. 4 heroin refined in the Golden Triangle region that any attention was focused on the Asian heroin trade. And even then there was almost no realization that the heroin used by GIs in Vietnam was manufactured in the Golden Triangle area by Hong Kong chemists who were members of international syndicates far more powerful and better organized than Marseille's Corsican gangs.

Like Frenchmen and Italians, the Chinese tend to group themselves in business and voluntary groups by linguistic dialect and regional origins. Almost all of the gangsters who belong to Hong Kong's dominant heroin syndicates are members of the chiu chau dialect group. Their ancestors migrated from the region of Swatow, a city about 170 miles up the coast from the colony. However, the chiu chau narcotics syndicates operating in Hong Kong today do not have their origins in either Hong Kong or Swatow, but in Shanghai.

Until it was ceded to Western powers after China's humiliating defeat in the Opium War (1839-1842), Shanghai was little more than a' fishing village. As Western merchants land commercial goods flooded into China in the latter half of the nineteenth century, Shanghai became China's largest and most modern city. But, in reality, it was not a Chinese city. The Chinese imperial government divided much of the city among the British, French, Americans, and other foreign powers, which ran their concessions as they saw fit. Westerners held all the high commercial and municipal offices, and dealt with the Chinese population through a group of Chinese middlemen known as compradores. Since the Westerners dealt with almost no Chinese except these agents, there were soon police compradores, business compradores, and opium compradores.

In the so-called International Settlement, a sector administered jointly by the British and other Western powers, a group of chiu chau became opium compradores soon after the Municipal Opium Monoply was established in the 1840s. (1) Although the franchises for distribution of opium and management of the settlement's smoking dens were formally leased to Western (mainly British) merchants, the chiu chau compradores actually policed the smoking dens and sold the opium. Despite their relatively low social status, the chiu chau "prospered" from the traffic until 1918, when pressure from the new Chinese Republican government and the newly moralistic British Foreign Office finally forced British merchants to give up their franchises and close the dens. *

Although the chiu chau tried to maintain control over Shanghai's illicit traffic, they soon found themselves losing out to a powerful criminal syndicate named the Green Gang. A traditional "patriotic" secret society, the Green Gang had dominated Shanghai's French concession and controlled its opium traffic. When the British decided to abandon the opium trade, the chiu chau lost their legitimate cover in the International Settlement, and the Green Gang began to challenge their well-established hegemony over the city's illicit drug traffic. As the battle between the two groups intensified, smaller gangs joined the fray, and the city's opium traffic dissolved into a costly chaos. Realizing that an equitable division of the spoils would be more profitable for everyone involved, a young Green Gang leader named Tu Yueh-sheng, who had emerged several years earlier as the leader of one of the gang's opium syndicates, mediated between the battling gangs and convinced both sides to form a unified opium cartel. The cartel ended the bitter rivalry by dividing the traffic between the Green Gang and the chiu chau. (2) Tu himself became known as "The Opium King," and used the drug business to catapult himself into the front ranks of the Shanghai underworld.

For over thirty years Tu Yueh-sheng's. cartel managed Shanghai's narcotics traffic with admirable efficiency., It not only imposed order on the city's rival gangs, but it demonstrated a keen awareness of international and domestic market potential. In the early 1920s the Shanghai syndicate began promoting the sale of millions of red-colored heroin pills advertised as "antiopium pills" and "the best medicine in the world." Thousands of Chinese opium smokers switched to that Western wonder drug, heroin, and by 1923 the cartel had to import an estimated 10.25 tons of heroin annually from European and Japanese pharmaceutical companies to keep up with consumer demand. After a new Geneva Convention ban on heroin marketing became law in 1928 and European pharmaceutical companies cut off their shipments to Shanghai, the city's drug dealers "began to manufacture heroin illicitly in China itself. (3)Green Gang agents purchased tons of raw opium in the market towns of distant Szechwan Province and shipped it down the Yangtze River to Shanghai, where it was refined into heroin in clandestine laboratories. Syndicate chemists had evidently mastered the new art, for in 1934 the Shanghai Municipal Council reported that heroin use had become so widespread that "it exceeds the smoking of opium itself." The municipal council concluded that this heroin was being manufactured locally, since Shanghai police discovered one clandestine laboratory and another had blown up when a careless chemist mismanaged the volatile ether-precipitation process. (4) The relative cheapness of heroin (60 percent less expensive than an equivalent dose of opium) made these "anti-opium pills" universally popular, and Shanghai heroin became the staple of addicts everywhere in China. During the late 1930s the cartel began to drop this medicinal facade, and addicts switched to straight heroin, mixed with regular tobacco and smoked in cigarettes. In addition, Shanghai became one of America's most important sources of illicit heroin in the 1930s when the American Mafia entered the drug business and their supplies of legal European heroin began to dry up.

But Tu Yueh-sheng was more than just a good businessman. Like such other great criminals of the modern age as Lucky Luciano or Franqois Spirito, Tu was a skilled politician who understood the paramount importance of having reliable protectors in high office. And just as Spirito ingratiated himself with French Fascists by battling Communist street demonstrators in Marseille, so Tu served Chiang Kaislick's Nationalist party by smashing Communist labor unions in Shanghai. And Tu's emergence as a national figure in China is intimately involved with Chiang Kai-shek's rise to power.*

* For more details on Shanghai, see the Appendix by Leonard P. Adams 11.

During the chaotic warlord era of the 1920s, Chiang Kai-shek emerged as the commander of China's new Nationalist army. In 1926 Chiang led his armies on the famous Northern Campaign to establish the authority of the Nationalist government (Kuomintang, KMT) in northern and central China. As Chiang's troops approached China's Industrial capital, Shanghai, in February 1927, the Communist-led labor movement rebelled against the entrenched local warlord in a show of support for the Nationalists. Instead of pressing on toward Shanghai, however, Chiang halted his march while the warlord troops slaughtered the workers.(5) Although Chiang was supported by another Communist uprising when he finally entered Shanghai in late March, he was already determined to crush the Communist labor movement.
* For a more detailed account, see the Appendix by Leonard P. Adams 11.

Unable to rely on his own troops, many of whom were sympathetic to the workers, Chiang met with the Green Gang's leaders, including Tu, soon after he arrived in Shanghai." Then, on the morning of April 12, thousands of Green Gang thugs stormed out of the French concession into Chinese sections of the city and began a reign of terror which ultimately decimated the Communist labor unions.(7)

Tu was rewarded with the rank of major general in the KMT army, and soon became one of Shanghai's most respected citizens. The 1933 edition of The China Yearbook described Tu as the "most influential resident, French Concession" and a "well-known public welfare worker." One Chinese historian later commented, "Perhaps for the first time in Chinese history, the underworld gained formal recognition in national politics." (8)

Although much of China's regular commerce was disrupted during World War 11 when the invading Japanese army occupied the addictridden coastal cities, forcing Chiang Kaishek's government into the interior, the opium trade continued unabated with Tu still the reigning "Opium King." Chiang's government at Chungking in the rich opiumgrowing province of Szechwan gave Tu the responsibility for negotiating opium sales across the battlelines.

Writing to his superior officer in October :1943, a U.S. army intelligence officer reported the following about Tu's involvement in the wartime opium trade:

Prior to 1937 Tu Yueh-sheng was one of the three bosses of Shanghai's underworld. He was leader in the Ching Pang (or "Green Circle").... Tu was the "opium king" and having been friendly with Chiang Kai-shek for many years, he was never persecuted by the Chinese authorities. When the Japs invaded Shanghai, Tu pulled out and subsequently settled down in Chungking....

1943-In Chungking Tu became known as a great philanthropist and headed several relief societies. Not until Jan. 1942 was the time ripe for Tu Yueh-sheng to go into action in his particular line of business. Smuggling between occupied and Free China had become so lucrative a business that the Chungking government decided to step in and control it. It was arranged for Tu Yueh-sheng to manage this trade with the enemy through the firing lines, and five banks were ordered to finance Tu's new organization to the tune of 150 million Chinese national dollars.(9)

After World War II, as the Chinese revolution gathered momentum in the late 1940s, Shanghai's gangsters realized it was only a matter of time until the Communist forces would occupy the city. Most of the city's gangsters had participated in the Green Gang's 1927 massacre of Communist supporters, and so almost the entire underworld migrated en masse to Hong Kong from 1947 to 1950. This massive influx of thousands of China's toughest criminals was too much for Hong Kong police to handle, and organized crime flourished on an unprecedented scale. Both the Green Gang and chiu chau syndicates were national organizations, and their Hong Kong branches served as welcoming committees. However, local gang leaders turned the situation to their advantage, and in the case of the Green Gang, and probably the chiu chau as well, usurped the authority of their Shanghai bosses."(10)

Green Gang members had been the most powerful racketeers in Shanghai, and during their first few years in Hong Kong it seemed as though they would dominate the colony's organized crime as well. The Green Gang opened up huge dance halls, organized large-scale prostitution, and committed a series of spectacular robberies. Most important of all, their master chemists began producing abundant supplies of highgrade heroin, which became increasingly popular as the colonial government's antiopium campaign got underway. Before the Shanghai gangsters emigrated to the colony there had been no heroin production and only a moderate level of consumption. The Green Gang's early production was aimed at exiles who had acquired the habit before coming to Hong Kong, but gradually its market expanded to include local opium smokers who switched to heroin because of the colonial government's opium suppression campaign. (11) Green Gang members are well aware of their role in introducing the technology of heroin processing into Hong Kong, and some of the society's older members claim that all of the colony's present chemists were trained by the "one-armed master chemist and his seven Green Gang disciples" who fled from Shanghai in 1949. (12)

Tu Yueh-sheng's cartel had crumbled when the underworld fled Shanghai, and the old chiu chau-Green Gang struggle for the narcotics traffic revived soon after the two groups arrived in Hong Kong. Tu himself moved to Hong Kong in April 1949, but any possible role he might have played as a mediator ended with his death in August 195 (13) In the ensuing struggle, the chiu chau possessed certain advantages that contributed to their decisive victory. The Green Gang, with its predominantly northern Chinese membership, was a relative outsider in Hong Kong. But the chiu chau syndicate had strong local connections: chiu chau dialect speakers comprised 8 percent of the colony's population; there were a number of powerful chiu chau street gangs; (14) and, perhaps the most significant of all, some of the higher Chinese officials in tile Hong Kong police hierarchy were chiu chau. Rather than engaging in bloody gun battles or street fights, the chiu chau utilized these police connections to eliminate their rivals. Although colonial police have officially ascribed the Green Gang's precipitous decline to a special police squad formed in 1950,(15) in their more candid moments police officers admit that their success was due mainly to tips received from chiii chau and other criminal gangs.(16) The police scored their first significant blow in 1952 when they deported reputed Green Gang leader Li Choi-fat. Although Li's arrest shocked his followers into abandoning flamboyant but risky robberies and concentrating on the safer clandestine vice trades, deportations and arrests continued to thin their ranks. (17) By the mid 1950s the Green Gang's narcotics import and distribution network was shattered, (18) and most of its chemists went to work for the chiu chau syndicate.(19) A few independent Green Gang laboratories are still believed to be operating today, but even these depend on the chiu chau syndicate for supplies of imported morphine base and for outlets for their finished product.

The chiu chau's victory over the Green Gang was only their first step in establishing a complete monopoly over the Hong Kong heroin trade. The Hong Kong syndicate then proceeded to monopolize imports of Thai morphine and opium. Since most of Bangkok's commerce, including the opium traffic, is controlled by chiu chau speakers, this was not too difficult. As Iranian, Indian, and mainland Chinese opium disappeared from the market in the mid 1950s, control over the Bangkok drug connection gave the chiii chau a total import monopoly. After defeating the Green Gang, the chiu chau syndicate had established a virtual monopoly over the manufacture and wholesale distribution phases of the colony's drug traffic. However, retail distribution, the most lucrative phase, was managed by a collection of Cantonese family associations, secret societies, and criminal gangs. When the chiu chau first began to edge into this sector of the business, their chances for success appeared limited: the Cantonese comprised over 80 percent of Hong Kong's population and their syndicates were much larger and more powerful. However, in the wake of three days of bloody rioting by Cantonese secret societies in October 1956, the Hong Kong police formed the Triad Society Bureau and declared it a crime for any colony resident to belong to one of these organizations. In the five years following the riots, police arrested 10.500 suspected secret society members and deported 600 more; they thus broke the powerful Cantonese organizations into dozens of impotent splinter groups. (20) Although the weakening of Cantonese secret societies removed an important barrier, the chiu chau did not take over retail distribution until the mid 1960s, when the police began a serious effort to close smoking dens and arrest street pushers. But before the significance of the police crackdown can be fully understood, it is necessary to know a little bit about addiction and street pushing in Hong Kong.

With an estimated 100,000 narcotics addicts out of a total population of 4 million, (21) Hong Kong has the highest percentage of drug users anywhere in the world. Most of the addicts are poor wage laborers who live in cramped tenements and sprawling slums, which many social workers consider to be ideal breeding grounds for addiction. (22) About 85 percent of all inmates in the colony's prisons are heroin addicts, and 47 percent of all those sentenced are narcotics offenders. Prison officials have found it impossible to cut off the narcotics supply, and heroin is so common inside the prison that it is used as a form of currency. (23) The colony's addict population is increasing at an alarming rate, and the Hong Kong press noted a sharp rise in teenage addiction in 1970-1971. (24)

Although most of Hong Kong's addicts were opium smokers before World War 11, twenty-five years of police opium suppression have driven most addicts to heroin. By the early 1960s 60 to 70 percent of the colony's addicts were heroin users, and most of those still smoking opium were in their fifties and sixties. (25) As the elderly addicts died off and the young turned exclusively to heroin, the percentage of addicts using heroin increased to an estimated 80 to 90 percent by 1971. But unlike the American addict who has to shoot directly into his veins with a syringe to get any kick at all from the diluted, 5 percent pure heroin he buys on the street, the Hong Kong addict can satisfy his craving by smoking it, since he can buy a much purer grade. The majority of them use a grayish, lumpy brand of no. 3 heroin, which is usually about 40 percent pure. Since its quality is high and its price low, most addicts get high with no. 3 "chasing the dragon" or "playing the mouth organ." The user places several lumps of no. 3 on a piece of aluminum foil and heats it with a lighted match. As it melts and gives off smoke, he sucks in the wavering fumes through a rolledup piece of paper ("chasing the dragon") or through a match box cover ("playing the mouth organ"). About 25 percent of the addict population uses a higher grade of no. 3, known popularly as "White Dragon Pearl." It is about 50 percent pure, and gains its characteristic chalky-white color when cut with a form of barbiturate called "barbitone." The user grinds the white chunks into a granular powder and smokes them in an ordinary tobacco cigarette. Since euphoria builds with the short, staccato bursts of each puff, addicts call this method "shooting the ack-ack gun." (The few Hong Kong addicts who do use the needle usually cannot afford the expensive, powdery no. 4 heroin and content themselves with grinding down "White Dragon Pearl."(26) )

Before the police crackdown of the mid 1960s, addicts had the choice of smoking alone or getting high in the more convivial atmosphere of the neighborhood "heroin den." Police were preoccupied with other matters, and pushers were dealing openly in almost every street, factory, and tenement in Hong Kong. However, as the police campaign began, small-time pushers were arrested, the more obvious dens were closed, and the entire structure was driven underground.

Previously, the government had been lax enough so that small pushers could afford to bribe the policemen on the beat. However, when the colonial government and police hierarchy took a harsher attitude toward the narcotics traffic, the small pusher dealing openly on the street became too blatant and a small bribe was no longer worth the risk. As the small Cantonese pushers were driven off the streets, the chiu chau syndicates concentrated most of the colony's retail trade in seven high-volume retail distribution centers labeled "drug supermarkets" by one Hong Kong reporter. Since each of these retail centers sells from $150,000 to $300,000 a month worth of heroin (27) the profit margin is large enough to pay the necessary bribes to Chinese and British officers in the Hong Kong police. While the police offensive in no way inhibited the growth of the narcotics traffic, it made many Chinese police sergeants millionaires. The corruption was so pervasive that in August 1969 the mere hint of an anticorruption campaign produced a wave of resignations by senior Chinese detectives and sergeants (28) Reliable Hong Kong sources report that one of the chiu chau officers who resigned has invested his fortune of several million dollars in real estate, restaurants, gambling houses, and apartment buildings.

A microcosmic example of the impact of the police crackdown on the colony's narcotics traffic is the growth of the Ma Shan distribution center. Until the mid 1960s the addicts of this region on Hong Kong Island's northeast coast purchased their narcotics from neighborhood street dealers or else smoked in nearby dens. When police swept he. pushers off the streets and closed the dens, a chiu chau gangster bought a small neighborhood den in the Ma Shan area from the local Cantonese secret society and made it the major "drug supermarket" for the northeast coast. Clinging to a clifflike hillside overlooking one of Hong Kong's more comfortable neighborhoods, Ma Shan is a ramshackle sprawl of impoverished squatter shacks. Although not the most convenient location, its elevation and maze of steps and ladders make it almost impossible for the police to launch a surprise raid. While ten guards and scouts patrol the perimeter, the distribution center provides twentyfour-hour service for thousands of addicts. Although Ma Shan is a Cantonese area and all its other rackets are controlled by a local secret society, the chiu chau reap most of the profit from narcotics peddling and only pay the Cantonese a rather nominal rental fee. This story s been repeated with minor variations throughout the entire colony: the chiu chau have penetrated territory traditionally dominated by Cantonese gangs to establish huge narcotics retail distribution operations.(29)

Although the Hong Kong press has exposed their location and importance on a number of occasions, the publicity has only forced the supermarkets either to move several blocks or change buildings; it has yet to result in any major police action.(30) The police concentrate most of their energies on shutting down smaller dens managed by entrepreneurs operating without syndicate protection. Since the police have to raid an occasional den to keep their record clean, syndicates have been known to hire impoverished addicts to do a term in prison and set them up in a fake den for "discovery" by the police. The press are often invited along on these operations, and the hired addicts usually give excellent performances complete with weeping, rage, or feeble escape attempts.(31)

Acquisition of the retail drug traffic has given the chiu chau a total monopoly on Hong Kong's drug traffic. Morphine base and opium are purchased from chiu chau dealers in Bangkok, smuggled into Hong Kong, and refined into heroin by chiu chau chemists. The wholesale distribution is managed by chiu chau, and the "drug supermarkets" are chiu chau owned. Although the chiu chau comprise only 8 percent of the colony's population, Hong Kong police report that a substantial majority of those arrested for trafficking in dangerous drugs are chiu chau.(32) But does this mean that all of Hong Kong's drug traffic from the heroin laboratory to the street-is controlled by a monolithic chiu chau syndicate? Is all of Southeast Asia's narcotics traffic controlled by a single chiu chau syndicate, a veritable Chinese Mafia?

While decades of painstaking investigation by police agencies and journalists have given us a reasonably clear picture of the Sicilian Mafia and the Corsican syndicates, there is almost no information on the chiu chau. Protected from scrutiny by powerful official patrons in Thailand, Laos, Vietnam, and Hong Kong, not even the names of the prominent chiu chau narcotics dealers are known to those outside ruling circles. However, recent developments in Southeast Asia's narcotics traffic have revealed a high degree of coordination among chiu chau traffickers and point toward the existence of some kind of unified syndicate. There are indications that many of the Golden Triangle laboratories producing heroin for American GIs in Vietnam are staffed by chiu chau chemists from Hong Kong. At Nam Keung village on the Lao side of the Mekong river, for example, the local military commander, Maj. Chao La, reported in September 1971 that the nearby heroin laboratory was directed by a chiu chau chemist from Hong Kong. (33)

This was not the first time that the chiu chau had exported Hong Kong's heroin technology to Southeast Asia. Shortly after the Thai government closed the opium dens and launched a crackdown on opium smokers in 1958, Hong Kong heroin chemists arrived in Thailand, set up heroin laboratories in the Bangkok area and began producing lowgrade, no. 3 heroin for the local Thai market. (34) Since opium's distinctive odor made smokers vulnerable to arrest, within several years the police antiopium campaign forced most Thai opium addicts to become heroin users. The arrival of new chiu chau chemists from Hong Kong in 1969-1970 introduced the complex technique for producing highgrade, no. 4 heroin and represented a significant upgrading of the region's heroin industry-and the opening up of a new market, since no. 4 heroin is used almost exclusively by a Western clientele, mainly Americans.

In July 1971 the Vietnamese police broke up a large heroin-smuggling ring in Saigon and arrested over sixty traffickers. All were chiu chau. Although the press hailed the arrests as a major victory for the antidrug campaign, Vietnamese police had only been able to make the arrests because the chiu chau syndicate leader in Bangkok was convinced that the Saigon operation was cheating him and decided to use the police as "enforcers. (35)

In addition, it appears that the chiu chau have played an important role in developing Southeast Asia's illicit traffic and sustaining the mass addiction fostered by old colonial opium monopolies. Through a web of international contacts, the chiu chau can provide raw materials, heroin chemists, and managerial skills necessary for the illicit traffic. Usually, they prefer to reach some sort of understanding with local governments, and in many Southeast Asian nations this relationship is so close that the chiu chau appear to be operating a semiofficial government franchise. Like most businessmen, they will not set up operations in a country unless business conditions are favorable.

The success of the Singapore government's antinarcotics drive illustrates the importance of international syndicates in maintaining the region's narcotics problem. The city was the major distribution center for the Malayan peninsula to the north and the Indonesian archipelago to the south. It was the regional headquarters of four or five international syndicates. Unlimited drug supplies frustrated government efforts at reducing the addict population; frequent seizures of one thousand to two thousand kilograms (I kilogram=2.2 pounds) by customs and police had little impact on the availability of drugs. (36) Instead of harassing opium addicts and driving them to heroin, the government decided to crack down on the syndicates. In 1962 Special Branch Police arrested the five most powerful syndicate leaders (one of whom was chiu chau) and had them deported after an unpublicized hearing. (37) The chiu chau gangster went to Bangkok, where he is believed to be involved in the narcotics traffic, and the others scattered across the region. Thereafter, smugglers began avoiding Singapore, and intensified customs searches turned up only small quantities of opium. (38)

Singapore has become the only Southeast Asian nation (except North Vietnam) with a declining number of addicts; in 1947 there were twentyfive thousand registered opium smokers, today there are only an estimated eight thousand drug addicts. Significantly, almost seven thousand of these are forty to sixty years old, a legacy of the colonial era. The e are few teenage addicts and almost no heroin problem. (39) The Singapore example proves conclusively that a Southeast Asian government can reduce its local drug problem and end its role in the international traffic if it is really serious about doing so.

Although not enough is known about chiu chau operations in Hong Kong to detail the precise relationships between importers and "drug supermarket" operators, colonial police do know something about the syndicates' leadership and general operating methods. Currently police officials believe that almost all of the city's narcotics are financed and imported by only five chiu chau gangsters.(40) The most important of these is a middle-aged chiu chau, whom we shall call Hua Ko-jen. He is thought to control about fifty percent of all the morphine and opium imported into Hong Kong. (41) Hua has achieved this preeminence in the narcotics traffic in only six years, and his sudden rise is something of a rags-to-riches story.

His family was so poor that Hua first began work as an ordinary street peddler, but soon was supplementing his income by selling drugs on the side. Hua gradually worked his way up in the drug traffic, becoming a full-time pusher, an opium den guard, and eventually the owner of a prosperous smoking den near the Kowloon nightclub district.(42) When the police crackdown on opium dens in the mid 1960s forced him out of business, Hua was one of the chiu chau gangsters who opened a "drug supermarket." From retail distribution he moved into importing, and within several years he had become Hong Kong's most important smuggler of opium and morphine base. (43) With profits from the narcotics traffic, other members of Hua's family have a piece of "36 Beasts," a Chinese numbers racket. As Hua prospered, he became increasingly concerned about his family's low social status and started to purchase respectability. As a result of his generous contributions to many civic causes, members of his family have been publicly lauded for their services to the colony's youth. Hua himself is fast becoming just another respectable Hong Kong businessman, and has invested his narcotics profits in office buildings, apartments, and restaurants.

Although Hong Kong authorities are well aware of Hua's role in the heroin traffic, they have no way to gather sufficient evidence to convict him before a court of law. Hua maintains no direct contact with the traffic and receives his share of the profits through a string of bank accounts whose trail is buried in hundreds of legitimate domestic and international money transfers. The heroin traffic is so well organized at all levels, and the chiu chau are so disciplined and secretive, that Hong Kong authorities despair of ever being able to convict the major traffickers; they have in fact made public admissions of their inability to halt narcotics smuggling. (44) But Hong Kong's drug industry is no longer just a local problem. The inability of the government to slow the narcotics traffic is making the colony increasingly important as a source of heroin for the American market. Today Hong Kong's heroin laboratories are at the end of the opium trail from Southeast Asia and the beginning of a heroin pipeline to the United States.

On September 13, 1971, a small, wooden-hulled Thai fishing trawler left Paknam, Thailand, with a cargo of 1,500 kilograms of raw opium and 260 kilograms of morphine bricks. Its destination was Hong Kong. With favorable sailing conditions, the ship would chug along at five to ten knots an hour and arrive within a week.

This fishing boat is a member of a small but active fleet carrying narcotics between Thailand and Hong Kong. Its journey is the last leg of a voyage that began in the mountains of Burma. Almost all of Hong Kong's narcotics come from Thailand, and are smuggled into the colony on these small trawlers. This is a relatively recent development. Until about five years ago, most drug shipments arrived on regular freighters, concealed in cargo such as refrigerators and lumber. This sort of smuggling was relatively easy for Hong Kong's Preventive Services to detect, and a number of spectacular seizures forced the smugglers to change their tactics. Their present method is virtually arrestproof. When the trawlers leave Paknam they are usually empty, but just before departure time a contact man boards the vessel. The ship then sets a course in an easterly direction, paralleling the Thai coastline until it arrives at a prearranged meeting place known only to the contact man. After coded signals are flashed from ship to shore, a high-powered speed boat darts out from the coastline, transfers the drugs and speeds away with the contact man. (45) By the time the trawler has rounded Vietnam's Camau peninsula and moved into the South China Sea, it has usually been spotted by U.S. navy radar aircraft patrolling the Gulf of Siam. Within minutes after the patrol aircraft lands at its base in Uttapao, Thailand, the trawler's course, heading, and speed are radioed to the United States Navy Market Time Surveillance Patrol in Cam Ranh Bay, Vietnam. Although its primary mission is monitoring freighter traffic bound for Haiphong, North Vietnam, and coastal shipping moving toward South Vietnam, these Lockheed Electras are also responsible for spotting the "dope boats" as they chug northward toward Hong Kong. After the dope boat has been spotted for the last time by another radar patrol in the South China Sea, its course and estimated time of arrival in Hong Kong are radioed to Saigon and forwarded to authorities. (46)

So far this precise information has been of little use to Hong Kong's antismuggling police unit, the Preventive Services. With only six launches to patrol two hundred islands, hundreds of miles of coastlines, and a local fishing fleet of fifteen thousand sampans and junks.(47) Preventive Services has found it impossible to discourage this kind of smuggling even with detailed intelligence on the "dope boats." Once the Thai trawler reaches Hong Kong it ordinarily uses one of three methods for transferring its cargo to a local fishing boat: (I) it can bury it on the beach of a deserted island; (2) make a direct transfer in Chinese waters, where Hong Kong authorities cannot follow; or (3) drop the narcotics into the shallow coastal waters in watertight steel drums. If pursued by an official launch, the trawler simply retreats to international waters and waits until the understaffed Preventive Services gives up its surveillance. Once the local fishing boat makes the pickup it usually hauls the cargo into port by towing it underneath the water line in heavy steel drums. If an official launch comes after them the crew simply cuts the line and lets the cargo sink to the bottom of the ocean.(48)

Once safely in Hong Kong, the morphine base goes to one of the ten or so heroin laboratories usually operating at any given time. While the largest laboratories may have as many as seven workers and produce up to fifty pounds of heroin a day, most have only three or four employees processing about ten pounds a day.(49) Even the most unskilled of Hong Kong's heroin chemists can manage the relatively simple chemical process required to produce an adequate grade of no. 3, and most of the morphine smuggled into the colony is used to manufacture the chunky, low-grade brands favored by local addicts.

For the United States the critical question is, of course, how much of Hong Kong's efficient heroin industry is producing the powdery no. 4 used by American addicts, and what percentage of this output is going to the United States? It is impossible to make precise estimates when dealing with such a clandestine business, but there is every indication that Hong Kong has become a major supplier for the U.S. market. Although any chemist can go through the rather simple operations to produce no. 3, the production of the fluffy white no. 4 grade of heroin requires a final, dangerous step, which demands a great deal of extra skill. The chemist has to precipitate the grayish, lumpy no. 3 through a solution of ether and alcohol. (50) Unless properly handled, the ether forms a volatile gas. In 1970 one Hong Kong laboratory exploded when the chemist became a bit careless and the ventilation fan shorted out during the ether process. The chemist and several assistants escaped, leaving a rather badly burned co-worker lying in the smoldering rubble. (51) This final stage is not only dangerous, but it doubles the time required to complete the processing; a laboratory that can produce a batch of no. 3 in six hours requires twelve to fifteen hours for the same amount of no. 4. Despite all the extra risk and time involved, no. 4's only real advantage is its high degree of water solubility, which makes it easier to inject with a syringe. Since very few of the colony's addicts inject their heroin (and almost none of those who do can afford the more expensive no. 4), Hong Kong officials are unanimous in asserting that there is no local market for no. 4.

However, a good deal of no. 4 heroin is being produced in Hong Kong. The Government Chemist's Office reports that many of the heroin laboratories they have examined in the course of police investigations over the last ten years have been producing impressive quantities of no. 4. They have also been struck by the absence of any no. 4 in the confiscated street packets they test for the police in narcotics possession cases. Their conclusion is the obvious one: large quantities of no. 4 are being produced for export. (52) Members of the narcotics police concur with this, and add that the U.S. Bureau of Narcotics has so far not heeded their warnings on the growing importance of Hong Kong's heroin exports. (53)

Since the Hong Kong narcotics police were preoccupied with chasing pushers and addicts off the streets and the U.S. Bureau of Narcotics was woefully understaffed in Asia, it was not until recently that any substantial quantities of heroin from Hong Kong were intercepted. The first breakthrough came in January 1967, when a series of coordinated police raids in Miami, New York, and Sydney, Australia, netted an entire smuggling ring operating out of Hong Kong. Its organizers were retired Australian policemen, and eleven of the fifteen arrested persons were Australians as well. (54) The ring had been operating for almost a year using standard "body packs" and a sophisticated duplicate passport system to bring $22.5 million worth or heroin into the United States.

Subsequent interrogation of the Australian suspects revealed that the ringleaders had been hired by one of Hong Kong's big five chiu chau syndicate leaders to smuggle heroin into the United States. Every two weeks a group of couriers with duplicate passports flew to Hong Kong from Sydney, where they each picked up five to six kilograms of undiluted no. 4 heroin. After concealing the heroin underneath their clothing by taping the plastic-wrapped packets to their chests and stomachs, they usually caught a flight direct to London, where they disembarked. There they switched to the second passport. Once this second passport was stamped by British customs, they caught another flight to New York and passed through U.S. customs as ordinary, pot-bellied businessmen flying direct to New York from Australia with a brief stopover in London. Most New York authorities would be suspicious of a passport that showed a Hong Kong stopover. Those who entered the United States through Honolulu had no need for the duplicate passport, since it was common enough for Australians en route to the United States to stop off in Hong Kong. (55) Their profits were enormous; a kilogram of heroin the Australians bought from the Hong Kong chiu chau for $1,600 was sold to American distributors for $34,000. (56)

Although these arrests drew a good deal of attention from the press, U.S. narcotics officials regarded the Australian ring as a freak phenomenon with little more than curiosity value. It was not until three years later, when an even larger Hong Kong-based smuggling ring was broken up, that they began to pay serious attention to Hong Kong. In 1970 federal narcotics agents launched a coordinated series of arrests at airports across the United States that netted a group of Filipino couriers as they stepped off various trans-Pacific flights. All were carrying "body packs" of no. 4 Hong Kong heroin to be delivered to Mafia contact men in the United States.

Although the Filipino ring was also working for one of Hong Kong's chiu chau syndicate leaders, their operations were much more extensive than those of the Australian group. While the Australians usually only had three or four couriers in the air at the same time, the Filipinos "shotgunned" as many as eight couriers on a single run. During a twelvemonth period in 1969-1970, the Filipinos smuggled an estimated one thousand kilograms of Hong Kong heroin into the United States.(57) This amount alone accounts for at least 10 to 20 percent of all the heroin consumed in the United States in an entire year. Since Hong Kong's heroin was manufactured from Burmese and Thai opium, this was hard evidence that Southeast Asia was fast becoming the major source of America's heroin supply. (58)

However, the official wisdom of the day held that Southeast Asia only accounts for 5 percent of America's heroin. The Bureau of Narcotics was convinced that 80 percent was refined from Turkish opium and 15 percent from Mexican, and had been concentrating almost all its investigative efforts in these areas.(59) But suddenly it was faced with a single Southeast Asian smuggling ring that had been supplying a substantial part of America's annual dosage. And the Filipinos were only messenger boys for one of five chiu chau syndicate leaders in Hong Kong. Why couldn't the other four syndicate leaders have courier organizations just as big, or even bigger?

Questions like this soon prompted a reorganization of the Bureau of Narcotics' international enforcement effort and intelligence gathering techniques. Unprecedented quantities of heroin were flooding into the United States in the late 1960s, and top-level agents had become concerned that their old methods no longer seemed to have any effect. As one U.S. narcotics agent explained in a November 1971 interview:

In 1961 when we ... seized fifteen kilos there was street panic in New York City. Junkies were lined up in front of doctors' offices begging for the stuff. Even as late as 1965, when we seized fifteen or sixteen kilos, it had the same effect. Now we seize five hundred kilos in three weeks, and it has no effect whatsoever.

Yet at the same time these massive quantities of heroin were pouring into the United States, Turkey-the alleged producer of 80 percent of the opium that entered America in the form of heroin-abolished poppy cultivation in fourteen out of its twenty-one opium-producing provinces and reduced total official output by over 70 percent between 1967 and 1971. (60) (See Map 1, page 11, for abandoned growing areas in Turkey.) It was evident that major changes were taking place in the international traffic, and the bureau established a special research and analysis division to deal with this. Its chief, Mr. John Warner, explained in an October 1971 interview:

"We found we knew very little about the actual pattern of drug trafficking. We were saying that 80 percent of the narcotics entering the U.S. came from Turkey and only 5 percent came from Southeast Asia. In fact, this was based on ignorance. So a year ago we created the Strategic Intelligence Office to find out what was really going on.

The bureau has not yet abandoned its emphasis on Turkey, but increased intelligence and enforcement work are already starting to produce results in Southeast Asia and Hong Kong. Although it has not yet produced any arrests, current investigative work seems to indicate that the Australian and Filipino groups were only two of a number of courier rings the chiu chau have been using. Recent intelligence has shown that the chiu chau syndicate is using a new group of couriers to smuggle large quantities of heroin into the United States through an incredible maze of commercial air routes: Hong Kong to Okinawa, Okinawa to Buenos Aires, Buenos Aires to Paraguay, Paraguay to Panama City, and Panama City to Los Angeles (see Map 1 on pages 10- 11).

There is speculation that this new route from Hong Kong may be contributing to the growing amounts of heroin entering the United States from Latin American." (61)

Yet, despite the increased enforcement effort and mounting evidence of Southeast Asia's growing role in the international heroin traffic, the U.S. State Department has not yet broken its addiction to the myth of Turkey's importance. Convinced that the root of the problem still lies in the Mediterranean, and unwilling to suffer the political consequences of thinking otherwise, America's diplomats have so far been reluctant to apply the same political leverage in Southeast Asia as they have in France and Turkey. It is undeniable that the State Department and the Bureau of Narcotics have made enormous strides in repressing the opium traffic in Turkey and Europe. But it is also true that the Mediterranean's loss is Southeast Asia's gain.

6 Hong Kong: Heir to the Heroin Traffic

1. Y. C. Wang, "Tu Yuch-sheng (1888-1951): A Tentative Political Biography," The Journal of Asian Studies 26, no. 3, (May 1967), 435.

2. Ibid., p. 436-, Howard L. Boorman, ed., Biographical Dictionary of Republican China (New York: Columbia University Press, 1970), v. 111, pp. 328-330.

3. United Nations, Department of Social Relations, Bulletin on Narcotics 5, no. 2 (April-June 1953), 49.

4. Ibid., p. 52.

5. Harold R. Isaacs, The Tragedy of the Chinese Revolution (Stanford, Calif.: Stanford University Press, 1951), p. 135.

6. Ibid., pp. 142-145.

7. Ibid., pp. 174-180; Wang, "Tu Yueh-sheng (1888-1951): A Tentative Political Biography," pp. 437-438.

8. Wang, "Tu Yueh-sheng (1888-1951 ):.A Tentative Political Biography," pp.438-439.

9. U.S. Congress, Senate Committee on the Judiciary, The AMERASIA Papers: A Clue to the Catastrophe of China, 91st Cong., Ist sess., 1970, pp. 272-273. (In the original document the date given for the beginning of Tu Yueh-sheng's opium dealings in Chungking was 1944. However, since this report was submitted in October 1943 this must be a misprint. The authors believe that 1942 was the likely date.)

10. W. P. Morgan, Triad Societies in Hong Kong (Hong Kong: Government Press, 1960), pp. 76-77.

11. Ibid., pp. 77-78.

12. Interview with a retired Green Gang member, Hong Kong, July 13, 1971.

13. Y. C. Wang, "Tu Yueh-sheng (1888-1951): A Tentative Political Biography," p. 453.

14. Interview with George Dunning, Hong Kong, July 6, 1971. (George Dunning is superintendent of police, Narcotics Bureau, Royal Hong Kong Police.)

15. W. P. Morgan, Triad Societies in Hong Kong, p. 78.

16. Interview with a retired Royal Hong Kong Police officer, London, England, March 2, 1971.

17. W. P. Morgan, Triad Societies in Hong Kong, p. 78.

18. Interview with George Dunning, Hong Kong, July 6, 1971.

19. Interview with a retired Green Gang member, Hong Kong, July 13, 1971.

20. Interview with Brian Webster, Hong Kong, July 9, 1971. (Brian Webster is superintendent of police, Triad Society Bureau and Juvenile Liaison Office.)

21. Hong Kong Standard, October 17, 1970.

22. South China Morning Post (Hong Kong), May 25, 1971.

23. Interview with T. G. P. Garner, Hong Kong, July 7, 1971. (T. G. P. Garner is deputy commissioner of prisons.)

24. Hong Kong Standard, January 20, 197 1.

25. Albert G. Hess, Chasing the Dragon (New York: The Free Press, 1965),p.42.

26. Interview with T. G. P. Garner, Hong Kong, July 7, 1971; interview with James Chien, Hong Kong, July 8, 1971. (James Chien is director of the Society for the Aid and Rehabilitation of Drug Addicts.)

27. Hong Kong Standard, December 1, 1970.

28. South China Morning Post, August 28, 1969.

29. Interview with a Ma Shan customer, Hong Kong, July 1971; interview with a chiu chau secret society member, Hong Kong, July 1971.

30. Interview with a government narcotics expert, Hong Kong, July 8, 1971.

31. Interview with a retired Royal Hong Kong Police officer, London, England, March 2, 1971.

32. Interview with George Dunning, Hong Kong, July 6, 1971.

33. Interview with Maj. Chao La, Ban Nam Keung, Laos, September 12, 1971.

34. Interview with Police Col. 'Smith Boonlikit, Bangkok, Thailand, September 17, 1971. (Col. Smith Boonlikit is employed in the Foreign Bureau of the Central Narcotics Bureau, Thailand.)

35, Interview with Redactor Ly Kv Hoana, Saigon, Vietnam, August 12, 1971. (Redactor Hoang is chief of the Narcotics Bureau of the National Police, Vietnam.)

36. See, for example, The New York Times, June 3, 1955, p. 9.

37. Malay Mail (Singapore), April 2, 1965.

38. Interview with Liao Long-sing, Singapore, September 24, 1971. (Liao Long-sing is deputy director of the Central Narcotics Intelligence Bureau, Singapore.)

39. T. A. Mugan, "Drugs Addiction," mimeographed (Singapore, 1970). (T. A. Mugan is senior superintendent of customs, Harbour Division, Singapore); The New York Times, May 5, 1970, p. 10.

40. Interview with George Dunning, Hong Kong, July 6, 1971.

41. Police records show that he is a Kowloon resident who is known to the police for his involvement in gambling and narcotics. He has never been arrested and has no provable triad connections (interview with Brian Webster, Hong Kong, July 10, 1971). Privately, one narcotics officer labeled him as Hong Kong's maior drug importer and provided much of the following information (interview with a Narcotics Bureau police officer, Hong Kong, July 13, 1971).

42. Interview with a chiu chau secret society member, Hong Kong, July 1971.

43. Interview with a Narcotics Bureau police officer, Hong Kong, July 13, 1971.

44. Hong Kong Standard, January 25, 1971.

45. Interview with an agent, U.S. Bureau of Narcotics and Dangerous Drugs, Bangkok, Thailand, September 16, 1971.

46. Interview with flight crew, Market Time Surveillance Patrol, Cam Ranh Bay, Vietnam, August 2, 197 1.

47. Interview with Graham Crookdake, Hong Kong, July 5, 1971. (Graham Crookdake is assistant chief preventive officer, Royal Hong Kong Preventive Services.)

48. John Hughes, The Junk Merchants (Boston: The Christian Science Publishing Company, 1970), p. 31. (This description assumes that the Market Time intelligence data is actually finding its way through the maze of British and American bureauacries to the Preventive Services. Sources in South Vietnam assured the authors that this information was, in fact, being used by Hong Kong authorities.)

49. Interview with George Dunning, Hong Kong, July 6, 1971.

50. "The Illicit Manufacture of Diacetylmorphine Hydrochloride," xeroxed (Hong Kong, n.d.), p. 1,

51. Interview with a Hong Kong government chemist, Hong Kong, July 9, 1971.

52. Ibid.

53. Interview with a Narcotics Bureau police officer, Hong Kong, July 13, 1971.

54. The Age (Melbourne, Australia), January 16, 1971.

55. Interview with a Narcotics Bureau police officer, Hong Kong, July 13, 1971.

56. The New York Times, January 14, 1967, p. 13.

57. Interview with an agent of the U.S. Bureau of Narcotics and Dangerous Drugs, October 14, 1971.

58. In March 1970 the director of the Bureu of Narcotics and Dangerous Drugs estimated that the U.S. consumed a total of 2.5 to 3.0 tons of heroin a year (The New York Times, March 6, 1970, p. 44). Since then estimates of U.S. consumption have been revised upward. Experts now feel that in 1964-1966 the U.S. consumed 3.0 to 3.5 tons annually, and in 1971 U.S. addicts used about 10.0 tons of heroin (interview with John Warner, Washington, D.C., October 14, 1971).

59. The New York Times, April 3, 1970, p. 3.

60. Morgan F. Murphy and Robert H. Steele, The World Heroin Problem, Report of Special Study Mission, 92nd Cong., Ist sess. (Washington, D.C.: Government Printing Office, May 27, 1971), p. 12.

61. Interview with an agent, U.S. Bureau of Narcotics and Dangerous Drugs, New Haven, Connecticut, November 18, 1971.

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