STILL SUSPECTED BY U.S./ FORMER OPIUM WARLORD IN BURMA

Mr. Lo Insists That He Deals Cars, Not Drugs

RANGOON---Chauffeured about town in his gleaming white sedan, Lo Hsing-han
befits his reputation as one of the most influential businessmen in Burma.

A business card identifies him as chairman of Asia World Co., a conglomerate
managed by his son, Steven Law. Their commercial empire includes jade, ruby
and teak concessions, real estate in Rangoon, its renovated port facilities,
a container-shipping business and toll booths on the resurfaced Burma Road
winding north to the Chinese border.

Mr. Lo has iraveled far from his bare-knuckle origins as an opium warlord of
the Golden Triangle in the early 1960s, when U.S. drug officials linked him
to much of the heroin winding up on the streets of American cities. He later
sunived seven years in a Burmese prison under sentence of death for treason,
but after his release in 1980 he earned the government's gratitude for
brokering a critical cease-fire with ethnic insurgents in 1989.

Now, Mr. Lo says, there is more profit in selling cars across the Chinese
border than in smuggling drugs.

The United States views Mr. Lo's prosperity as evidence that the Burmese
economy is awash in laundered drug money and that its military junta has
encouraged investment of drugs money in its development projects.

"Drug traffickers who once spent their days leading mule trains down jungle
paths are now leading lights in Burma's new market economy and leading
figures in its new political order," Secretary of State bladeleine Albright
told the Association of South East Asian Nations, known as ASEAN, in Kuala
Lumpur last July.

Proving any current complicity by Mr. Lo is more difficult. "There are no
smoking guns, no evidence linking him to any investigation whatsoever" at
present, a Western official who follows narcotics conceded.

At the age of 64, Mr. Lo has not lost the nene that helped him thrive in the
opium trade. Told that several American reporters wanted to inteniew him, he
invited them to dinner. He denied any involvement now in trafficking or
money laundering.

"I welcome the whole world to investigate me," Mr. Lo said, promising $5,000
to anyone who could link him to drugs in the last 25 years.

BARELY glancing at his diamond-studded gold Rolex wristwatch, Mr. Lo fielded
questions in Chinese while his chopsticks poked at a succession of dishes.
He reminisced about the late 1960s and early 1970s when his opium-laden mule
caravans stretched several miles across the mountainsides and ravines of
Kokang, his ethnic Chinese home region in northeast Burma.

What drove him, he contends, was not greed but benevolent concern for
Kokang's struggling poppy growers.

"I don't bother about eating, drinking or traveling," he said. "My whole
life has been spent just helping the poor." Mr. Lo is hardly the only
reputed drug trafficker to succeed in business in Burma. Khun Sa, the
world's biggest heroin producer, surrendered his rebel Shan army in January
1996 and moved into a villa in a government military compound in Rangoon.

The Burmese government refuses to extradite Khun Sa to the United States,
where he has been indicted for trying to smuggle 3,500 pounds (1,600
kilograms) of heroin into New York. He has described himself as a real
estate agent and his investrnents are said to include a new resort casino
and a bus route between Rangoon and Mandalay.

Mr. LO'S drug career began when he commanded a home guard unit battling
Communist insurgents. The only way to equip and feed his troops, he said,
was through the opium trade. "In the Kokang mountains, people earned their
living from poppy for over 100 years," he said. "Over that period,
poppy-growing and trading were legal. It was the only income for people."

As he tells it, rival traffickers demanded commissions of 25 percent or 30
percent to take the opium for refining in Thailand. He undercut them by
charging 20 percent.

Twice a year from 1963 to 1973, Mr. Lo said, he moved 10 to 20 tons of opium
to the Thai border, using his own troops and 800 to 1,000 mules for each
convoy. "It stretched out for three miles," he said. "If it went smoothly,
it took about 26 days."

He waved aside questions about how much he earned. "I was working for the
Kokang people and the poor people who were looking for a way to sell their
product," he said. "I did so much for them, and I felt it was honorable."

When the government ordered hirn to disband his troops, Mr. Lo refused. "The
Kokang people needed the opium market," he said. "I was their sole agent so
the Kokang farmers got a reasonable price."

In 1973 he was lured across the Thai border captured, extradited to Rangoon
and sentenced to death. "I didn't think any harm would come to me," he said.
"The government didn't charge me with opium trafficking. They charged me
with treason and violating socialist economic law."

He sened a month short of seven years in prison before being released in a
1980 amnesty. Mr. Lo opened a bakery in Rangoon, raised livestock in Lashio
and mined precious stones, using what he explained were family loans, not
drug profits.

In 1989, he persuaded Peng Jiasheng, who led Kokang's rebel army, to accept
a truce with the military junta. The junta rewarded Mr. Lo with choice gem
and timber concessions.

Since then, he said, "I have done a lot of importexport business, and also
Chinese-border trade," delivering new cars-from Rangoon to China's Yunnan
Province. Mr. Lo described his Asia World cornpany as "doing quite well"
with an annual profit somewhere "over $1 million." He declined to say how
much more.

He said he did not need to traffic in drugs now. " Since the market economy
appeared in Burma, it is easier to earn money trading vehicles on the
Chinese border," he said. He estimated that he turns a profit of $2,500 on
every car he sells to the Chinese.

Colonel Kyaw Thein, head of the government's drug control program, said of
Mr. Lo, "He's been out of the drug business since he was released from
prison, because he knows that every intelligence agency will be keeping
their eyes on him."

But a Western diplomat charged that the government let Mr. Lo launder his
money in legitimate businesses. "He has the connection with the banks," the
diplomat said.

Checked-by: "Rolf Ernst"