HEROIN PROCEEDS FINANCE TERRORIST NETWORK

WASHINGTON -- Long before he became Public Enemy No. 1, Osama bin Laden was
waging a different kind of war on Americans and their Western allies.

Since the mid-1990s, while the spotlight shone on cocaine cartels in Latin
America, bin Laden has fortified a drug-trafficking network that provided
money for Afghanistan's Taliban regime -- and financed his al-Qaeda terror
network.

His commerce in narcotics helped make Afghanistan the world's leading
exporter of heroin, about 2,200 pounds of which reached the United States
last year, according to the U.S. State Department.

Some of the proceeds from the American heroin sales, with a street value of
at least $260 million, found their way back to bin Laden, who stands
accused by President Bush of orchestrating the Sept. 11 suicide hijack
attacks on the World Trade Center and the Pentagon.

"What better way to poison the Western world than through drugs?" said
Donnie Marshall, who headed the U.S. Drug Enforcement Administration from
July 1999 through June of this year. "It's another weapon in their arsenal."

Yoseff Bodansky, author of a 1999 biography of bin Laden and director of
the congressional Task Force on Terrorism and Unconventional Warfare, said
bin Laden takes a 15 percent cut of the drug money in exchange for
protecting smugglers and laundering their profits.

"The Afghans are selling 7 [billion] to 8 billion dollars of drugs in the
West a year," Bodansky said. "Bin Laden oversees the export of drugs from
Afghanistan. His people are involved in growing the crops, processing and
shipping. When Americans buy drugs, they fund the jihad [holy war]."

Bin Laden is the son of a Saudi construction magnate, and estimates of his
wealth vary widely. Some intelligence experts say his family cut him off
after the Saudi government expelled him in 1992 for organizing violent
protests of its alliance with the United States in the Persian Gulf war.

Many experts say bin Laden needs few personal assets because he oversees a
large stream of income from a web of legitimate businesses, donations from
wealthy Muslims throughout the Middle East, drug trafficking and ties to
other organized crime.

Rachel Ehrenfeld, who tracks international money laundering and drug
trafficking as director of the Center for the Study of Corruption in New
York, said bin Laden recycles drug proceeds through businesses in Europe
and the Far East.

"The drug trade is a triple-pronged weapon for bin Laden and the Taliban,"
she said. "It finances their activities. It undermines the enemy. And it
proves that the enemy is corrupt, which they then use in their own
recruiting propaganda."

Heroin is produced in labs from opium gum, a thick sap scraped from the
scored flower bulbs of poppy plants. Ten pounds of opium produces 1 pound
of pure heroin, which is dried, pulverized into white powder, cut with
cornstarch and other substances and sold on the street in varying degrees
of purity.

Ban Had No Effect

Afghanistan's Taliban rulers announced a ban on poppy plant cultivation 14
months ago. Before the Sept. 11 attacks, they complained that the ban had
not succeeded in easing economic sanctions the United Nations imposed on
Afghanistan in 1998 for harboring terrorists and drug traffickers.

But a five-person panel of U.N. experts concluded that 10 months after the
ban, stored opium was being sold to buy arms, "finance the training of
terrorists and support the operation of terrorists in neighboring countries
and beyond."

The panel also said Afghanistan was still importing large quantities of
acetic anhydride, the main chemical used in heroin production.

Many Western experts suspect the Taliban of stockpiling opium gum and
heroin, which can be stored for years if securely packaged.

Indeed, wholesale opium prices have plummeted recently, signaling to
experts that the Taliban have started to dump their stockpiles in case war
breaks out.

The Taliban, a sect of Islamic extremists, gained control of Kabul and most
of Afghanistan in 1996 after a four-year civil war.

Among the world's poorest countries, Afghanistan has a mainly subsistence
economy with little industry or large-scale commerce.

Robert Brown, deputy director of supply reduction in the White House Office
of National Drug Control Policy, said the Taliban raise revenue by taxing
opium cultivation and heroin production.

"A substantial percentage of the Taliban's government proceeds comes from
the opium trade," Brown said.

Afghanistan and Burma were the only countries the United States did not
certify in March in its annual assessment of nations' cooperation in
fighting illegal drugs. Congress passed a law in 1986 requiring two dozen
countries to get annual anti-trafficking certification as a condition for
getting U.S. aid.

"Traffickers of Afghan heroin continued to route most of their production
to Europe, but also targeted the United States," the State Department
report said. "Those in positions of authority have made proclamations
against poppy cultivation, but they have had little or no effect on the
drug trade, which continues to expand."

Trade Predates Taliban

Afghan drug trafficking didn't begin with the rise of the Taliban or bin
Laden's arrival five years ago. Mujahadeen rebels who repelled the Soviet
invasion financed their war through opium sales.

Alfred McCoy, a professor of Southeast Asian history at the University of
Wisconsin, said U.S. and Pakistani intelligence officials sanctioned the
drug trade because of the rebels' opposition to the Soviets.

Gulbuddin Hekmatyar, a rebel leader who received $1 billion in covert CIA
funds, was a major heroin trafficker, McCoy said. Afghan opium production
ballooned from 250 tons in 1982 to 2,000 tons in 1991.

"The CIA's mission was to fight the Cold War, and for that they were
willing to sacrifice the drug war," McCoy said.

Charles Cogan, now a research associate at Harvard University's John F.
Kennedy School of Government, directed the Afghan operation for the CIA in
the 1980s. He said the agency did not know at the time that the anti-Soviet
rebels were engaged in drug trafficking.

But in 1995, Cogan told an Australian television reporter, "Our main
mission was to do as much damage as possible to the Soviets. We didn't
really have the resources or the time to devote to an investigation of the
drug trade. I don't think that we need to apologize for this. Every
situation has its fallout. ... There was fallout in terms of drugs, yes.
But the main objective was accomplished. The Soviets left Afghanistan."