HEROIN TRAIL LEADS TO NORTH KOREA

Freighter Delivered Shipment Of Drugs To Australian Coast

MELBOURNE, Australia -- For nearly a month, agents of the Australian police
had been shadowing three men, expecting them to receive a shipment of drugs
- -- from somewhere. This seemed the night: Detectives had followed the three
to a desolate, windswept beach on Australia's southern coast.

As the suspects waited there in the midst of a storm, the worst in years,
the agents peered through sheets of rain and saw an extraordinary sight: a
North Korean freighter, maneuvering dangerously close to rocks and coral reefs.

Soon a dinghy was fighting its way toward shore carrying 110 pounds of
almost pure heroin, stamped with the best brand from Southeast Asia's
clandestine drug labs, police say. Proceeds from the drugs would go to prop
up the impoverished North Korean government, they believe.

This was followed by a dramatic, four-day chase of the freighter through
angry seas. By the time it ended on April 20 with Australian special forces
soldiers sliding down ropes from a helicopter onto the ship's rolling deck,
the vessel had become the centerpiece of a major diplomatic uproar and
another obstacle to solving the tense standoff between North Korea and the
United States over North Korea's nuclear program.

U.S. officials say the capture is proof of their long-standing charge that
the North Korean government has for years operated as a crime syndicate,
smuggling drugs and counterfeit money around the world to generate income
to keep itself alive.

Secretary of State Colin L. Powell recently told a Senate committee the
seizure shows that North Korea "thrives on criminality." Any conciliation
with the communist state, he told reporters last week, must include an end
to its nuclear program and "criminal activities."

That was a tough, new condition, applied as the world grapples with the
communist government's claim that it already possesses nuclear weapons. And
the saga of the freighter Pong Su illustrates that finding and stopping
North Korean drug trafficking can be immensely difficult.

North Korean officials called Powell's charge "slanderous" and denied any
knowledge of drug smuggling. But North Korean diplomats have regularly been
caught since the 1970s smuggling drugs in diplomatic packages through
China, Russia, Laos, Egypt and elsewhere. Defectors from North Korea have
described government efforts to grow opium for heroin production in the
country's rugged mountains. The most recent U.S. Narcotics Control Strategy
report, however, cautions that those reports "refer to events that are now
more than 10 years old, and remain unconfirmed."

Australian authorities say the Pong Su picked up the heroin elsewhere in
Asia, and that the ship's circuitous route to Australia may indicate North
Korea is expanding its role as a middleman, willing to ply faraway waters
for desperately needed income.

There are no reliable estimates of how much money North Korea may derive
from the illicit trade. But the figure will be of crucial concern if the
United States tries to organize economic sanctions against North Korea to
force it out of the nuclear weapons business.

Japan and Taiwan have long alleged that North Korean ships smuggle
amphetamines to their citizens, and Western intelligence analysts have long
believed that the country cultivates opium. But the capture of the
freighter and 30 crew members offers the most dramatic, public link to the
drug trade to date.

Australia's foreign minister, Alexander Downer, brusquely dismissed North
Korea's denials that any smuggling was officially sanctioned. "It's a
totalitarian state, so [the ship] is government-owned," he said. Australia,
he told the grim-faced North Korean ambassador who was summoned to his
office, is "outraged" at the prospect that it is the target of North Korean
drug trafficking.

The vessel's captain and 29 crewmen are being held in Australia without
bail on drug charges. At an initial court appearance April 24 in Melbourne,
Legal Aid lawyer Maria Stylianou said prosecutors have not presented
evidence that the crewmen knew about the heroin and called them "people who
arguably would have had no knowledge at all."

Legal analysts predict that when prosecutors present detailed charges
within a month, they will use the agents' testimony and the ship's lack of
legitimate business in a region thousands of miles from its home port to
argue that the vessel and its crew had only one purpose in coming to
Australian waters: to traffic in drugs.

North Korea has few sources of income for its stricken economy. Many
factories are idled for lack of parts, electricity is scarce, farming is
primitive, and millions of people depend on international charity for food.
Its main sources of foreign exchange, helping it maintain a million-member
armed forces, analysts contend, are missile sales and dealings in drugs and
counterfeit currency.

Australian officials who examined the Pong Su at a naval base where it was
taken say it had been specially equipped with extra fuel tanks, enabling it
to roam long distances. On its stern they found two unusually large
antennas, enabling communications from afar. When it was seized, it had no
freight aboard and had no port calls scheduled in Australia.

"It was fitted to smuggle contraband," said Graham Ashton, southern
operations manager for the Australian Federal Police.

And it was a busy ship, tramping around Asian ports, stopping at more than
20 ports in the last year, according to one report here.

The Pong Su is also on a U.S. list of 30 suspected drug merchant vessels
worldwide, one source said. But when it showed up on April 16 off the
southern coast of Australia near Lorne, a seaside vacation village
southwest of Melbourne, it was a surprise to the Australian Federal Police
agents trailing the trio of suspected dealers.

The three, identified as Kiam Fah Teng, 45, and Yau Kim Lam, 44, from
Malaysia, and Qwang Lee, 34, of Singapore, had entered Australia on tourist
visas. But police believed they came to make the connection between a large
shipment of drugs and a nationwide network of dealers. So authorities
quietly began watching their moves and listening through eavesdropping
equipment, according to federal agent Ian McCartney, coordinator of what
became known as Operation Sorbet.

Authorities had no reason to suspect the shipment would come on a North
Korean ship, never before implicated as a drug source in Australia. But on
that stormy Wednesday night, police say, the agents watched as the Pong Su
maneuvered to within about 250 yards of shore at a rugged and isolated spot
called Boggally Creek.

Police allege that despite the high seas, two crewmen clambered into a
rubber dinghy and headed toward a meeting place on shore. It was a fatal
miscalculation.

The waves tossed the dinghy like a toy. As it neared shore, it flipped
over. One crewman struggled to dry land. The other drowned. His body washed
up on shore, along with two tightly wrapped blue plastic bundles,
containing 144 blocks of high-purity heroin.

Agents watched coolly as Teng and Lee scooped up the bags, threw them into
a van, and drove to a local motel. The police waited until the next morning
to arrest them, moving in as the suspects started to drive away.

In the back of the van were the neat blocks of heroin, each pressed and
stamped with a distinctive red seal featuring two lions and the words
Double UOGlobe Brand. It is a brand of distinction in the heroin world,
identifying top-quality drugs from the Golden Triangle region of Burma,
Laos and Cambodia. Police said the street value of the haul would be nearly
$50 million.

The third man, Lam, was nabbed at a nearby motel. The surviving crewman who
came ashore was found during a police search, shivering and hiding in
brushes near the beach. "He was cold, a long way from home, and in a lot of
trouble," said McCartney. All four were later charged with drug offenses.

A police launch put to sea to hail the Pong Su, demanding that it head into
harbor. Instead, the ship began steaming away up the eastern coast. For the
police, it was the equivalent of a crook in a getaway car, a "hot pursuit."

The rules that would allow Australia to seize the Pong Su required that the
ship be kept in constant surveillance from the scene of the heroin drop.
But given the storm, even keeping sight of the freighter was difficult for
police.

A police launch from Tasmania took the first shift. The Pong Su, riding
high in the water with no freight, rolled and pitched in the seas. But for
the comparatively tiny police launch, the punishment was brutal. The men
aboard it were soon sick and exhausted. "They got hammered pretty bad,"
said New South Wales Police Sgt. Joe McNulty.

Another police launch, the Fearless, took over the next night. The waves
were so tall, "you get over one wave and you're in a free fall. You land
and the next one hits," said Sgt. James Hinkley, who skippered the boat. At
one point, he found the Fearless surfing down a wave on its side, the keel
horizontal.

But the police launch, with siren wailing and flashing lights, darted
around the Pong Su. The officers radioed repeated demands to head into
harbor. The ship's radio operator acknowledged the messages, but said it
would not comply. Eventually the vessel stopped replying.

The 72-foot patrol boat Alert, the largest vessel of the New South Wales
Police, then headed south under McNulty's command to pick up the
surveillance in the still-punishing seas.

The police pursuit was tenacious, "like a bunch of terriers," said one
maritime official, but a bigger dog was needed. A call went out to the navy.

In Sydney, Cmdr. David Greaves of the Royal Australian Navy was preparing
to let the crew of his frigate HMAS Stuart go home for an Easter holiday.
The 387-foot vessel was in dock, undergoing maintenance. But on Friday,
April 18, Greaves was ordered to sea to intercept the Pong Su.

Teams of army special operations soldiers were flying in from Perth, 2,400
miles away, to take part in an assault from the Stuart. After six hours of
hasty preparations, it launched, with Greaves offering up as a cover story
to his crew a vague explanation about a search and rescue operation.

The next day, the Stuart positioned itself over the horizon from the Pong
Su and ran through a practice drill, 90 miles from shore. The seas and wind
were slowly subsiding, and Greaves decided to launch the assault at daybreak.

Australia's maritime commander, Rear Adm. Raydon Gates, who was monitoring
from the Navy's Operations Center in Sydney, provided this account: The
Stuart "came over the horizon at 27 knots, full speed, spray all over, with
a five-inch gun on the bow, helicopter in the air adding to the noise, and
suddenly ropes drop and men are dropping down even before the ropes hit."

Sliding untethered 90 feet down with only gloves, the special forces
soldiers hit the deck and stormed the bridge as other soldiers in two
rubber boats moved in from the Stuart, threw grappling hooks and ladders
onto the ship, and scrambled aboard.

Within minutes, the crew was under guard in the mess hall, and the soldiers
were searching the ship. None of the detainees put up a fight. If there was
any incriminating evidence, it had all been thrown overboard or burned.

For Australian authorities, who lauded the cooperation among military,
state and local police and other agencies, the seizure in such menacing
weather has been a source of great pride, with Gates calling it a
"tremendous feat of seamanship." For McNulty, who struggled to steer the
police patrol boat Alert as it was tossed like a can by the seas, the
motivation was the kind of personal affront felt by a cop to a crime on his
beat.

"You owe it to yourself, the police, and to the kids on the street who
would have gotten that heroin," he said. "You don't want some ship from
North Korea coming to your doorstep and dropping off drugs."