KLA LINKED TO ENORMOUS HEROIN TRADE

Police Suspect Drugs Helped Finance Revolt

Officers of the Kosovo Liberation Army and their backers, according to
law enforcement authorities in Western Europe and the United States,
are a major force in international organized crime, moving staggering
amounts of narcotics through an underworld network that reaches into
the heart of Europe.

In the words of a November 1997 statement issued by Interpol, the
international police agency, ``Kosovo Albanians hold the largest share
of the heroin market in Switzerland, in Austria, in Belgium, in
Germany, in Hungary, in the Czech Republic, in Norway and in Sweden.''

That the Albanians of Kosovo are victims of a conscious, ethnic-
cleansing campaign set in motion by Yugoslav President Slobodan
Milosevic is clear. But the credentials of some who claim to represent
them are profoundly disturbing, say highly placed sources on both
sides of the Atlantic.

On March 25 -- the day after NATO's bombardment of Serb forces began
- -- drug enforcement experts from the Hague-based European Office of
Police (EUROPOL), met in an emergency closed session devoted to
``Kosovar Narcotics Trafficking Networks.''

EUROPOL is preparing an extensive report for European justice and
interior ministers on the KLA's role in heroin smuggling. Independent
investigations of the charges are also under way in Sweden, Germany
and Switzerland.

``We have intelligence leading us to believe that there could be a
connection between drug money and the Kosovo Liberation Army,'' Walter
Kege, head of the drug enforcement unit in the Swedish police
intelligence service, told the London Times in late March.

As long as four years ago, U.S. officials were concerned about alleged
ties between narcotics syndicates and the People's Movement of Kosovo,
a dissident political organization founded in 1982 that is now the
KLA's political wing.

A 1995 advisory by the federal Drug Enforcement Administration warned
of the possibility ``that certain members of the ethnic Albanian
community in the Serbian region of Kosovo have turned to drug
trafficking in order to finance their separatist activities.''

If the drug-running allegations against the KLA are accurate, the
group could join a rogues' gallery of former U.S. allies whose
interests outside the battlefield brought deep embarrassment and
domestic political turmoil to Washington.

In 1944, the invading U.S. Army handed the reins of power in Sicily to
local ``anti-fascists'' who were in fact Mafia leaders. During the
next half century, American governments also turned a blind eye to, or
collaborated with, the narcotics operations of Southeast Asian drug
lords and Nicaraguan Contras who were allied with the United States in
Indochina and Central America.

In each case, the legacy of these partnerships ranged from global
expansion of the power wielded by criminal syndicates, to divisive
congressional inquiries at home and lasting suspicion of American
intentions overseas.

The involvement of ethnic Albanians in the drug trade is not
exclusively Kosovar. It includes members of Albanian communities in
Europe's three poorest countries or regions -- Kosovo, Macedonia and
Albania -- where the appeal of narcotics trafficking is
self-explanatory, even without a separatist war to fund.

The average 1997 monthly salary in all three communities was less than
$200. In Albania, it was less than $50.

According to the Paris-based Geopolitical Drug Watch, which advises
the governments of Britain and France on illegal narcotics operations,
one kilogram (2.2 pounds) of heroin costs $8,300 in Albania, which
lies at the western terminus of a ``Balkan Route'' that today accounts
for up to 90 percent of the drug's exports to Europe from Southeast
Asia and Turkey.

Across the border from Albania in Greece, the same kilo of heroin can
be sold for $30,000, yielding an instant profit equal to nine years'
normal income in Macedonia and more than a third of a century in
Albania or prebombardment Kosovo.

The Balkan Route is a principal thoroughfare for an illicit drug
traffic worth $400 billion annually, according to Interpol.

Although only a small number of ethnic Albanian clans profit directly
from the trade, their activities have cast a dark shadow on the entire
Albanian world.

There is a growing tendency among foreign observers, says former
Albanian President Sali Berisha, ``to identify the criminal with the
honest, the vandal with the civilized, the mafiosi with the nation.''

Those ethnic Albanians who have embraced the narcotics trade are
extraordinarily aggressive.

Albanian speakers comprise roughly 1 percent of Europe's 510 million
people. In 1997, according to Interpol, they made up 14 percent of all
European arrests for heroin trafficking.

The average quantity of heroin confiscated per arrest, among all
offenders, was less than two grams. Among Albanian-speakers, the
figure was 120 grams (4.2 ounces).

Until the war intervened, Kosovars were the acknowledged masters of
the trade, credited with shoving aside the Turkish gangs that had long
dominated narcotics trafficking along the Balkan Route, and
effectively directing the ethnic Albanian network.

Kosovar bosses ``orchestrated the traffic, regulated the rate and set
the prices,'' according to journalist Leonardo Coen, who covers
racketeering and organized crime in the Balkans for the Italian daily
La Repubblica.

``The Kosovars had a 10-year head start on their cousins across the
border, simply because their Yugoslav passports allowed them to travel
earlier and much more widely than someone from communist Albania,''
said Michel Koutouzis, a senior researcher at Geopolitical Drug Watch
who is regarded as Europe's leading expert on the Balkan Route.

``That allowed them to establish very efficient overseas networks
through the worldwide Albanian diaspora -- and in the process, to
forge ties with other underworld groups involved in the heroin trade,
such as Chinese triads in Vancouver and Vietnamese in Australia,''
Koutouzis told The Chronicle.

On assignments in Kosovo and Macedonia between 1992 and 1996, a
Chronicle reporter frequently encountered groups of ethnic Albanian
men -- ostentatiously dressed in designer clothing and driving luxury
cars far beyond the normal means of their community -- at restaurants
in the Macedonian capital of Skopje and near the Kosovo frontier.

The men were quite willing to speak about politics, confirming that
they were Kosovar, and asserting their determination to bring down
Milosevic. But when asked how they earned their livings, they
uniformly answered ``in business,'' declining to provide any details.

The rise of Kosovar bosses to the pinnacle of the drug trade -- and
the sudden, simultaneous appearance of the KLA -- dates from 1997,
when the Berisha government fell in Albania amid nationwide rioting
over a collapsed financial pyramid scheme that destroyed the savings
of millions and wrecked the economy. In the unchecked looting that
followed, the nation's armories were emptied of weapons, explosives
and ammunition.

In June 1997, Berisha was succeeded as president by Rexhep Mejdani,
who unlike Berisha was openly sympathetic to a separatist rebellion in
Kosovo.

Last year, a NATO official in Brussels quoted by Radio Free Europe
cited intelligence findings of ``the wholesale transfer of weapons to
Kosovo'' in 1997, destabilizing the precarious balance between ethnic
Albanians and Serbs in the province and undercutting the position of
pacifist Kosovo leader Ibrahim Rugova in autonomy negotiations with
Belgrade.

A U.N. study found that at least 200,000 Kalashnikov automatic assault
weapons stolen from Albanian military armories wound up in the KLA
arsenal. So many, according to reliable sources, that KLA operatives
were themselves exporting guns to overseas black markets at the start
of 1999.

In effect, the KLA's armed insurgency, escalating at a time when U.S.
and Western European diplomats were seeking a peaceful solution to the
crisis, provided a pretext for Milosevic to press for a nationalist
solution to the Kosovo problem.

Then came the failed Rambouillet talks, the NATO bombing decision, and
with it what Koutouzis calls ``the militarization'' of the Kosovar
drug trade.

``Narcotics trafficking has been a permanent part of the Kosovo
picture for a long time. The question is where the profits go,''
Koutouzis said.

``When Rugova held sway and the object was a peaceful settlement, the
drug proceeds of Kosovo clans were at least invested in growth, in
things like better housing and health care. It was a form of social
taxation in a sense, and the more illegal the activities, the more
that their `businessmen' were expected to pay.''

But with the outbreak of war, Koutouzis adds, ``the investment is only
in destruction -- and the KLA's first effort was to destroy the
influence of Rugova, and no one in the West did much to help him.''

Nonetheless, NATO military officers and diplomats have always been
troubled by the murky origins and financing of the KLA, which
materialized for the first time in Kosovo on Nov. 28, 1997, outfitted
in expensive Swiss-manufactured uniforms and equipped with the
purloined Albanian Kalashnikovs.

The mistrust is reciprocated. According to Veton Surroi, the widely
respected editor of Kosovo's Albanian-language daily newspaper Koha
Ditore, U.S. negotiator Richard Holbrooke had a Kalashnikov held to
his head when he arrived for a meeting with KLA officers during one of
his shuttle missions to Kosovo.

As recently as February 25, U.S. Ambassador Chris Hill, another of the
negotiators, said, ``The KLA must understand that its members have a
future as members of political parties or local police forces, but not
in the continuation of armed struggle.''

The eruption of war changed almost everything. Since the bombing
campaign opened, NATO has had little alternative but to rely on the
KLA for intelligence. Its guerrilla units inside Kosovo are the only
eyewitness sources of information on Serb troop movements.

Solid intelligence about the KLA itself is nearly impossible to nail
down. NATO estimates put its forces at 15,000. Avdija Ramadom, the
organization's official spokesman, claims that the KLA has more than
50,000 men.

In addition to alleged drug receipts, the group is said to be funded
by a war tax of 3 percent imposed by the People's Movement of Kosovo
on the earnings of 500,000 ethnic Albanian emigrants in Western
Europe, a population that is soaring with the immense exodus of
refugees. Half of the prewar immigrants have settled in Germany,
according to the International Migration Organization, and a third in
Switzerland.

A single fund-raising evening in Switzerland earlier this year is
believed to have raised $7 million from ethnic Albanian immigrants,
much of it earmarked for the KLA struggle against Serbia.