The United States, as the leader of the global struggle against communism, largely used its special services and intelligence agencies to conduct covert operations worldwide. To contain communism, however, local aid was needed and was widely found in local criminal organizations. In the early 1930s, organized crime kingpins Charles "Lucky" Luciano and Meyer Lansky trafficked heroin exported from China to support Jiang Jieshi's Guomindang in the civil war there. In 1936 Luciano was jailed, and trafficking in Chinese heroin was considerably disrupted by World War II.
It was during World War II that the American Office of Naval Intelligence cooperated with Luciano. He was to be freed after the war provided that he order his thugs to watch U.S. docks and ports to protect them from Nazi saboteurs. The Office of Strategic Services (OSS), the precursor to the CIA, thus used Mafia assistance in the Allied invasion of Sicily. Such activities initiated what was to be a long-term feature of covert operations led by American intelligence services when consent of the U.S. Congress could not be obtained: the enlistment of nefarious groups engaged in illicit activities in order to wage secret wars through both proxies and alternative funding. Basically, drug traffickers were useful to special services and politicians, and they relied on such connections to expand their activities.
Luciano was freed in 1946 and was sent to Sicily, where he was to cooperate with the CIA. Indeed, to counter the growing communist influence in France and Italy, the CIA turned to the Mafia and condoned its drug-trafficking activities. The CIA soon asked Luciano to use his connections in France to break the strikes led by socialist unions in Marseille's docks, from which arms and supplies were sent to Indochina. The sometimes-violent assistance of Corsican mobsters in cracking down on the unions was notably motivated by their involvement in the opium business in Indochina and in the smuggling of raw opium from Turkey to Marseille, where it was refined into heroin for export to the United States. Luciano took advantage of such high refining capacities and helped turn Marseille into the heroin capital of Europe. These Marseille syndicates, dubbed the French Connection, supplied the American heroin market for two decades.
The CIA most significantly influenced the drug trade in Southeast Asia, Southwest Asia, and Latin America. Its anti-communist covert operations benefited from the participation of some drug-related combat units who, to finance their own struggle, were directly involved in drug production and trafficking. Considering the involvement of different groups in the drug trade (for example, the Hmong in Laos, the Guomindang in Burma, and the mujahideen in Afghanistan), their CIA backing implied that the agency condoned the use of drug proceeds and considerably increased opiate production in Asia. However, no evidence has surfaced to suggest that the CIA condoned or facilitated the exportation of heroin to the United States or Europe, as happened with the Nicaraguan Contras.
In October 1949, the communists defeated the Nationalist Guomindang in China, and in the years that followed they cracked down on what was then the world's largest opium production network. Opium production then shifted to the mountainous and frontier areas of Burma, Laos, and Thailand, where Guomindang remnants had fled and had become deeply involved in drug trafficking. Beginning in 1951, the CIA supported the Guomindang in Burma in an unsuccessful effort to assist it in regaining a foothold in China's Yunan province. Arms, ammunition, and supplies were flown into Burma from Thailand by the CIA's Civil Air Transport (CAT), later renamed Air America and Sea Supply Corporation, created to mask the shipments. The Burmese Army eventually drove the Guomindang remnants from Burma in 1961, but the latter resettled in Laos and northern Thailand and continued to run most of the opium trade.
CAT not only supplied military aid to the Guomindang but also flew opium to Thailand and Taiwan. There is no doubt that the CIA sanctioned both the Guomindang's opium trade and the use of CAT, and later Air America aircraft, in that trade. The Guomindang would eventually increase its role in the opium trade after the CIA withdrew its financial and logistical support, and Burma eventually became one of the world's two main opium producers.
Following the 1954 French defeat in Indochina, the United States gradually took over the intelligence and military fight against communism in both Laos and Vietnam. It also took over the drug trafficking business developed by the French by buying the opium produced by the Hmong and Yao hill tribes to enlist them in counterinsurgency operations against the Viet Minh. To meet the costs of this war, the French Service de Documentation Extérieur et de Contre-Espionnage (External Documentation and Counter-Espionage Service) allied itself with the Corsican syndicates trafficking opium from Indochina to Marseille in order to take over the opium trade that the colonial government had outlawed in 1946. The CIA ran its secret army, composed largely of Hmong tribesmen led by General Vang Pao, in Laos. Air America would fly arms to the Hmong and take their opium back to the CIA base at Long Tieng, where Vang had set up a huge heroin laboratory. Some of the heroin was then flown to the Republic of Vietnam (ROV, South Vietnam), where part of it was sold to U.S. troops, many of whom became addicts. After the Americans pulled out of Vietnam in 1975, Laos became the world's third largest opium producer.
However, Vietnam was not the only battleground of Cold War drug operations. The CIA launched a major new covert operation in Southwest Asia in the early 1980s to support Afghanistan's mujahideen guerrillas in their fight against Soviet occupation. U.S. President Ronald Reagan was determined to counter what he viewed as Soviet hegemony and expansionism, a goal shared by his CIA director, William Casey. To support the mujahideen with arms and funds, the CIA resorted to the Pakistani Inter-Services Intelligence (ISI) that chose which Afghan warlords to back and used trucks from Pakistan's military National Logistics Cell (NLC) to carry arms from Karachi to the Afghan border. However, the ISI not only chose Gulbuddin Hekmatyar, a leading opium trafficker, as its main beneficiary, it also allowed NLC trucks to return from the border loaded with opium and heroin. After the Soviet withdrawal from Afghanistan in 1989, U.S. aid to the mujahideen stopped, and the internecine conflict that ensued in the country favored an increase in opium production in order to maintain rival warlords and armies. Afghanistan eventually became the world's biggest opium-producing country, a situation that still existed in 2007.
In Europe and in Southeast and Southwest Asia, the Cold War saw many drug-related covert operations and secret wars in which the CIA clearly and deliberately ignored evidence of drug production and trafficking by its allies. South America, however, was not to be excluded, and when Reagan vowed to topple the pro-Marxist Sandinista regime in Nicaragua, Vice President George H. W. Bush approved the creation of the anti-Sandinista Contra force to which the CIA allied itself. Of course, the CIA had full knowledge that the Contras were involved in drug trafficking and that the planes bringing them arms were returning to the United States loaded with cocaine. However, the Boland Amendment of 8 December 1982 effectively cut off funding to the Contras. This led the Reagan administration to undertake arms-for-drugs deals that involved illegal weapon sales to Iran.
Illicit drug production and trafficking increased during the Cold War. During this period, the U.S. government was less interested in waging the so-called war on drugs begun in 1971 than in using drug traffickers to support its wars abroad. Indeed, had the CIA cracked down on drug trafficking during the Cold War, it would have forgone valuable intelligence sources, political influence, and much-needed funding for its covert, and sometimes illegal, operations. Ironically, there is no evidence that the Soviet Union or its intelligence service, the Komitet Gosudarstvennoi Bezopasnosti (KGB), resorted to drug sales to fund activities during the Cold War.
McCoy, Alfred. The Politics of Heroin: CIA Complicity in the Global Drug Trade. Rev. ed. Chicago: Lawrence Hill, 2003.; Meyer, Kathryn, and Terry Parssinen. Webs of Smoke: Smugglers, Warlords, Spies, and the History of the International Drug Trade. New York: Rowman and Littlefield, 1998.