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Dirty Wars: French and American Piaster Profiteering in Indochina, 1945-75
Published online by Cambridge University Press: 14 March 2025
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With its economy devastated by war, its national glory sullied by ignominious defeats at the hands of Germany and Japan, and its colonial legacy morally undercut by the Atlantic Charter, France in 1945 faced immense challenges. Especially daunting was the job of restoring its empire, particularly in distant Indochina.
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1 A. Schweitzer, “The French Colonialist Lobby in the 1930s: The Economic Foundations of Imperialism” (Ph.D. diss., University of Wisconsin, 1971); Stuart M. Persell, The French Colonial Lobby, 1889-1938 (Stanford: Hoover Press, 1983).
2 I was inspired to investigate this topic by Peter Dale Scott's brief observation many years ago that “political corruption by the trafics became a major factor underlying France's inability to disengage from Indochina” and “the apparatus and personnel of the trafic de piastres have continued with little abatement from the French through the American phases of the Vietnam War.” See Peter Dale Scott, “Opium and Empire: McCoy on Heroin in Southeast Asia,” Bulletin of Concerned Asian Scholars, 5 (September 1973), 52.
3 C.-J. Gignoux, “L'Affaire de la Piastre,” La Revue des deux mondes, August 1, 1953, 555.
4 Jonathan Marshall, “Jean Laurent and the Bank of Indochina Circle: Business Networks, Intelligence Operations and Political Intrigues in Wartime France,” Journal of Intelligence History 8 (Winter 2008), 43-74. One U.S. diplomat called the bank “all powerful,” while the Viet Minh denounced it as “the epitome of colonialism.” See Reed (Saigon) to Department of State, April 9, 1946, 800-Indochina file, Record Group (RG) 84, National Archives (NA); James O'Sullivan (Hanoi) to Department of State, September 14, 1946, Hanoi consulate files, RG 84, NA.
5 King Chen, Vietnam and China, 1938-1954 (Princeton: Princeton University Press, 1969), 134-135, 138-139; Jean Sainteny, Histoire d'une paix manquée (Paris: Amiot-Dumont, 1953), 162-163; intelligence memorandum R-3190-CH-45 from Col. Harold Price and Lt. Richard Poole, JICA/China at Hanoi, October 30, 1945, re “French Indo-China: Economic-Financial Situation,” XL 26111, Records of the Office of Strategic Services, RG 226, NA.
6 Richard Ebelling, “The Great Chinese Inflation,” The Freeman, 54 (December 2004) at http://www.fee.org/the_freeman/detail/the-great-chinese-inflation.
7 James O'Sullivan (Hanoi) to Department of State, October 18, 1946, in Miscellaneous Confidential File, Records of the Consulate (Hanoi), RG 84, NA.
8 Ironically, the bank's general manager, Jean Laurent, had warned against an even more extreme plan to retire 100 piaster notes, saying it could “set fire to the smallest Annamite village and turn against us the last of the undecided.” See Hugues Tertrais, La piastre et le fusil: Le Coût de la guerre d'Indochine, 1945-1954 (Paris: Comité Pour l'Histoire économique et Financière de la France, 2002), 37.
9 Brig. Gen. P. E. Gallagher, “The 500$ Note Incident, French Indochina, November 1945,” Gallagher mss., Hoover Institution; Reginald Ungern to Gallagher, January 19, 1946, Gallagher mss.; O'Sullivan dispatch October 18, 1946, see note 7; Sainteny, Histoire d'une paix manquée, 161-162.
10 Chen, China and Vietnam, 135-138; Philippe Devillers, Histoire du Vietnam de 1940 à 1952, 3rd edition (Paris: Seuil, 1952), 213. Eventually the bank mended relations with the Nationalist Chinese, opening a branch in Kunming (Central Daily News [Kunming], April 22, 1947).
11 Stein Tonnesson, Vietnam 1946: How the War Began (Berkeley: University of California Press, 2010), 106-145; George Armstrong Kelly, Lost Soldiers: The French Army and Empire in Crisis, 1947-1962 (Cambridge: MIT Press, 1965), 44-45; Alexander Werth, France, 1940-1955 (New York: Henry Holt and Co., 1956), 338.
12 Tertrais, La piastre et le fusil, 330.
13 Jacques Despuech, Le Traffic des piastres (Paris: La Table Ronde, 1974), 81.
14 Journalist Lucien Bodard noted, “The importance of the Exchange Office was not economic but political. It was an instrument of government. All the great secrets of Indochina at war, the Indochina of the palaces and the army staffs, led to these dusty, moth-eaten offices in the Rue Guynemer where sanction for the transfers was given or refused.” The Quicksand War (Boston: Little Brown, 1967), 86.
15 Gignoux, “L'Affaire de la Piastre,” 558-559; Despuech (1974), 214.
16 The same technique also serves to evade taxes, launder money, conceal illegal commissions, and engage in capital flight. John Zdanowicz, a finance professor at Florida International University, states that, “The use of international trade to move money, undetected, from one country to another is one of the oldest techniques used to circumvent government scrutiny.” See “Trade-Based Money Laundering and Terrorist Financing,” Review of Law and Economics 5:2 (2009), 855-878. For a more general and theoretical discussion, see Pierre-Richard Agénor, “Parallel Currency Markets in Developing Countries: Theory, Evidence, and Policy Implications,” Essays in International Finance no. 188, Department of Economics, Princeton University, November 1992. Only in recent years have government agencies seriously come to grips with invoice fraud as a means of money laundering. For a notable report on this channel, see Financial Action Task Force [OECD], “Trade Based Money Laundering,” June 23, 2006.
17 Final Report of the National Assembly's Commission to Investigate the Traffic in Indochinese Piasters, June 17, 1954 (hereafter Final Report), reprinted in Despuech (1974), 203-208.
18 David D. Duncan, “Indochina, All But Lost,” Life, August 3, 1953, 73-91. Although France officially abolished its colonial opium monopoly in 1946, the local administration continued selling opium through official “detoxification” clinics. By the late 1940s, opium sales accounted for anywhere from a fifth to a third of government revenues. See Consul Charles Reed II to Department of State, June 13, 1947, 851g14 Narcotics/6-1347, RG 59, NA; State Department to Paris embassy, June 7, 1948, 851g.114 Narcotics/6-748, RG 59, NA; George M. Abbott, Consul General Saigon, to Department of State, October 1, 1948, 851g.00/10-148, RG 59, NA; Acting Treasury Secretary William Sanders to Secretary of State, October 21, 1948, 851g.114 Narcotics/10-2148, RG 59, NA; “Indo-China,” Life, March 7, 1949, 99; “In French Indo-China it's ‘Disintoxication,’” U.S. News and World Report, October 15, 1948, 69-70; William O. Walker III, Opium and Foreign Policy: The Anglo-American Search for Order in Asia, 1912-1954 (Chapel Hill, NC: University of North Carolina Press, 1991), 177. For the memoirs of one opium buyer for the French administration, see André Roland, L'Action dans l'ombre (Paris: Editions du Dauphin, 1971). In 1945, François Bloch-Lainé, financial adviser to High Commissioner d'Argenlieu, said, “it would be absurd to dismantle the monopoly immediately to obey some puritanical injunctions that no one in the Far East actually follows.” Tertrais, La piastre et le fusil, 251.
19 Jacques Dalloz, The War in Indochina, 1945-54 (Dublin: Gill and Macmillan, 1990), 117.
20 In addition to those cited elsewhere, sources for this section include Col. Pierre Fourcaud, “L'Affaire des Généraux,” Historia, hors série 24, 1972, 140-152; Jacques Fauvet, Le IVe République (Paris: Fayard, 1959), 160-162; Kelly, Lost Soldiers, 65-69; Philip Williams, Wars, Plots and Scandals in Postwar France (Cambridge: Cambridge University Press, 1970); P. L. Thyraud de Vosjoli, Lamia (Boston: Little, Brown and Co., 1970); Werth, France:1940-1955, 458-466; and Claude Guillaumin, “L'affaire des généraux,” in Les grandes énigmes de la IVe république, II, ed. Bernard Michal (Paris: Editions de Saint-Clair, 1967), 79-117.
21 Werth notes that under Pignon, there was “a spectacular development of corruption and of some of the more grandiose rackets: the racket in import and export licenses, the opium racket and, above all, the piastre racket—on which immense fortunes were made at the expense of the French Treasury, and which was alleged to provide a constant flow of money into certain Party funds in France itself.” Werth, France: 1940-1953, 459. Pignon was a fierce opponent of devaluing the piaster. Tertrais, La piastre et le fusil, 83.
22 Edward Francis Rice-Maximin, Accommodation and Resistance: the French Left, Indochina, and the Cold War (Westport, CT: Greenwood Press, 1986), 87.
23 Paul Marcus, La République trahie: De l'affaire des généraux à l'affaire des fuites (Paris: le cherche midi, 2009), 33.
24 Georgette Elgey, La Republique des illusions, 1945-1951 (Paris: Fayard, 1965), 482-3.
25 Dalloz, The War in Indochina, 118-119.
26 de Vosjoli, Lamia, 203.
27 Final Report, 239.
28 Werth, France: 1940-1953, 468; Tertrais, La piastre et le fusil, 312; Rice-Maximin, Accommodation and Resistance, 89.
29 Tertrais, La piastre et le fusil, 86, 245-6, 308-311. U.S. officials were concerned that the cost of the colonial war was gravely weakening France while Western Europe was in peril: “Indochinese expenditures impose such a burden on the French public finances as to constitute an important obstacle to the success of the whole French recovery and stabilization effort. The 167 billion francs spent in Indochina in 1949 is not only equivalent to over two-thirds of the total direct American aid to France for 1949-50, but some ten billion francs greater than the estimated French budgetary deficit for the year… . It is clear that the struggle to create conditions necessary for the continued growth of a non-Communist Viet Government in Indochina, to which the French are apparently irrevocably committed, constitutes for the moment a major obstacle in the path of French financial stabilization and economic progress, with all that that implies for the European Recovery Program as a whole.” See Paris embassy to Department of State, December 22, 1949, 851g.00/12-2249, RG 59, NA.
30 Tertrais, La piastre et le fusil, 180.
31 Based on an exchange rate of 350 francs to the dollar. 2014 dollars calculated from http://www.bls.gov/data/inflation_calculator.htm (accessed April 16, 2014).
32 Final Report, 176, 188. On the remarkable lack of legal sanctions against fraudulent transfers, see Saigon embassy to Department of State, July 28, 1953, Confidential Security Information, 851G,131/7-2853, RG 59, NA.
33 Quoted in Marcus, La République trahie, 81-83.
34 Le Monde, November 20, 1952; Jacques Despuech, Le Traffic des piastres (Paris: Deux Rives, 1953).
35 More conservatively, Tertrais estimates the total sum of fraudulent transfers at between 130 billion and 200 billion francs, “around a year of Treasury disbursements to Indochina in the last years of the war.” Tertrais, La piastre et le fusil, 321.
36 Despuech (1953), 62-64; Despuech (1974), 73.
37 Despuech (1953), 83; Final Report, 200, 245; c.f. Mag Bodard, L'Indochine, c'est aussi comme ça (Paris: Gallimard, 1954), 142-143; Alfred W. McCoy, The Politics of Heroin: CIA Complicity in the Global Drug Trade (Brooklyn: Lawrence Hill Books, 1991), 157. The director of SDECE in Saigon, Col. Belleux, told an American diplomat in 1951 that although it was “exceptionally difficult to get proof regarding illegal piaster transactions,” he “expected within several months to be able to bring about the expulsion from Indochina of several of the leading traffickers, among whom he included Mr. Franchini and Mr. Adriani, Director of the Croix du Sud night club but also the director of a large gambling, narcotics, and white slavery organization.” Evidently the Corsican mafia proved more resilient than he expected. See Saigon embassy to Department of State, April 6, 1951, 851G.131/4-651, RG 59, NA.
38 Despuech (1953), 104-6. American diplomats regarded Diethelm's administration of Indochina's finances in the early 1930s as highly corrupt, noting that his officials regularly allowed illegal smuggling of opium from Yunnan into Indochina, undercutting the official opium monopoly. See W. Evertt Scotten report, January 12, 1933, 8516.114 Narcotics/53, RG 59, NA.
39 Frédéric Turpin, De Gaulle, les gaullistes et l'Indochine, 1940-1956 (Paris: Les Indes Savantes, 2005), 484, 389-90; Frédéric Turpin, André Diethem (1896-1854): De Georges Mandel à Charles de Gaulle (Paris: Les Indes Savantes, 2004), 236-242.
40 Despuech (1953) 35-37. Another leading if much less credible critic of the Bank of Indochina at the time was Arthur Laurent, author of La Banque de l'Indochine et la piastre (Paris: Deux Rives, 1954). Laurent was convicted of using fraudulent documentation to obtain financing from the bank for his rum importation business.
41 Marc Meuleau, Des Pionniers en Extrême-Orient: Histoire de la Banque de l'Indochine, 1875-1975 (Paris: Fayard, 1990), 488-500. The parliamentary commission noted that the Bank of Indochina “always opposed devaluation” and added, “It is undeniable that the Banque de l'Indochine sought to take out of Indochina the maximum capital and thus it could not but benefit from the disparity in value of the piaster and franc.” The commission concluded that the bank deserved “a very severe inquiry” into its affairs and “very serious oversight.” Final Report, 228-233.
42 Saigon embassy to Department of State, April 6, 1951, 851G.131/4-651, RG 59, NA. The ambassador noted the view of the embassy, however, that the piaster traffic contributed only a small percentage of funds available to the Viet Minh. See also his dispatch to the Department of State, August 30, 1952, 851G.131/8-3052 (Secret Security Information), RG 59, NA. For a more alarmist view of how the Viet Minh and Communist China allegedly profited from the traffic, see Despuech (1974), 119-154; Frederik Logevall, Embers of War: The Fall of an Empire and the Making of America's Vietnam (New York: Random House, 2012), 348; and Victoria Pohle and William J. Mazzocco, Office of Vietnam Affairs, U.S. Agency for International Development, “Viet-Minh Economic Warfare and the Traffic of Piasters” (no date, probably 1960s).
43 Seymour Topping, Journey Between Two Chinas (Harper & Row, 1972), 128. The head of the French Sûreté admitted paying agents and “prominent personalities in Saigon” with profits from the piaster traffic, and accused his rivals in SDECE of funding its operations through the illegal sale of import licenses. At least one SDECE agent who later became notorious as a heroin trafficker, André Labay, was said to have engaged in piaster trafficking. See Pierre Galante and Louis Sapin, The Marseilles Connection (London: W.H. Allen & Co., 1979), 224.
44 With regard to the missionaries, an American diplomat in Saigon observed that “whereas the Lord once drove the money changers from the temple, it now seemed that in order to do the Lord's work it was necessary to bring them back again.” Robert McClintock, Chargé d'Affaires, to Department of State, April 27, 1954, 861G.131/4-2754 (Secret file), RG 59, NA.
45 Report of C. Tyler Wood, Associate Deputy Director, Mutual Security Agency, “Relative to the Exchange Rate in the Associated States of Indochina,” January 7, 1953, 851G.131/1-753 (Top Secret), RG 59, NA. See also Bonsal memorandum to Allison, “Possibility of Securing a Diplomatic Exchange Rate in Indochina,” March 25, 1953, 851G.131/3-2553 (Secret Security Information), RG 59, NA.
46 State Department to Saigon embassy, August 15, 1952, 851G.131/8-1552, RG 59, NA; Saigon embassy to Department of State, August 20, 1952, 851G.131/8-2052 (Secret Security Information, Personal and Eyes Only Allison and Bonsal), RG 59, NA.
47 Department of State to Saigon embassy, September 12, 1952, 851G.131/9-1252, RG 59, NA.
48 Debate of December 4, 1952, in Journal Officiel de la République Française, Debats Parlementaires Assemblée Nationale, December 5, 1952.
49 Quoted in Donald J. McGrew, assistant Treasury representative, dispatch 1726 for State, Treasury and Mutual Security Agency, February 16, 1953, 851G.13/2-1653, RG 59, NA.
50 Saigon embassy to Department of State, March 12, 1953, in U.S. Department of State, Foreign Relations of the United States [FRUS], 1952-1954, Indochina, XIII, 407.
51 Saigon embassy to Department of State, March 8, 1953, 851G.131/3-853, RG 59, NA.
52 Memorandum by E. Donegan, March 2, in Saigon embassy to Department of State, March 17, 1953 851G.131/3-1753, RG 59, NA.
53 Report of C. Tyler Wood, Associate Deputy Director, Mutual Security Agency, Relative to the Exchange Rate in the Associated States of Indochina, January 7, 1953, 851G.131/1-753 (Top Secret), RG 59, NA.
54 Department of State circular airgram 523, June 4, 1953, 851.131/6-453 (secret), RG 59, NA.
55 Ambassador Douglas Dillon, Paris embassy, to Department of State, May 15, 1953, 851G.131/5-1553, RG 59, NA.
56 Evidently the devaluation did not surprise everyone. As the Saigon embassy reported, “there seem to have been a few individuals who had enough advance notice so that they had made the necessary transfers before devaluation. Most of these individuals seemed to have excellent trading or political connections in Paris… . One local French observer considered that leaks in the announcement did occur, because it is his understanding that Dreyfus and Company, a large French export-import firm, made considerable commodity purchases both locally and externally on Friday and Saturday before devaluation.” Saigon embassy to Department of State, June 4, 1953, 851G.131/6-453, RG 59 NA.
57 André Valls, quoted in Tertrais, La piastre et le fusil, 302.
58 Saigon embassy to Department of State, May 11, 1953, 851G.131/5-1153, RG 59, NA. Another report claimed, however, that Tam was “secretly elated” by the devaluation since it gave him license to act more independently of France. See Charge at Saigon (McClintock) to Department of State, May 21, 1953, #2273, in FRUS, 1952-1954. Indochina, XIII, 577.
59 Chargé (McClintock) to Department of State, May 13, 1953, #2190. FRUS, 1952-1954. Indochina, XIII, 562.
60 Saigon embassy to Department of State, June 4, 1953, 851G.131/6-453, RG 59 NA.
61 Saigon embassy to Department of State, May 12, 1953, 851G.131/5-1253, RG 59 NA.
62 Paris embassy to Department of State, September 16, 1953, 851G.131/9-1653, RG 59 NA.
63 Alain Ruscio, Les communistes français et la guerre d'Indochine, 1944-1954 (Paris: L'Harmattan, 1985), 382.
65 Testimony of George Staples, General Accounting Office, in U.S. Congress, House, Committee on Government Operations, United States Aid Operations in Laos: Hearings, 86th Congress, 1st Session (Washington: USGPO, 1959), 259.
66 Seth Jacobs, The Universe Unraveling: American Foreign Policy in Cold War Laos (Ithaca, N.Y.: Cornell University Press, 2012), 65-66; cf. Martin Goldstein, American Policy Toward Laos (Cranbury, N.J.: Associated University Presses, 1973), 179-200; Denis Warner, The Last Confucian (New York: Macmillan Company, 1963), 203; William Conrad Gibbons, The US Government and the Vietnam War: Executive and Legislative Roles and Relationships, Part 1: 1945-1960 (Princeton: Princeton University Press, 1986), 316-317.
67 See terms of the Laotian government's contract with Universal Construction Co. Ltd., whose performance was deemed fraudulent by an auditor for the International Cooperation Administration, in United States Aid Operations in Laos, 365. One of the two main principals of Universal Construction was Willis Bird, whose connections to the CIA and drug trafficking are discussed in Jonathan Marshall, “Cooking the Books: The Federal Bureau of Narcotics, the China Lobby and Cold War Propaganda, 1950-1962,” The Asia-Pacific Journal, Vol. 11, Issue 37, No. 1, September 14, 2013.
68 Quoted in Jacobs, The Universe Unraveling, 114.
69 Warner, The Last Confucian, 203-4.
70 Memorandum of a Conversation, Department of State, January 15, 1958, in FRUS, 1958-1960. XVI: East Asia-Pacific Region; Cambodia; Laos, 420-422.
71 Vientiane embassy to Department of State, May 19, 1958, FRUS, 1958-1960. XVI: East Asia-Pacific Region; Cambodia; Laos, 443.
72 Ibid., 455n7; United States Aid Operations in Laos, 8, 48.
73 United States, Congress, Senate, Committee on the Judiciary, Subcommittee to Investigate Problems Connected with Refugees and Escapees, North Vietnam and Laos, Relief and Rehabilitation of War Victims in Indochina, hearings, 93rd Congress, 1st session (Washington: USGPO 1973), 119.
75 Quoted in George McT. Kahin, Intervention: How America Became Involved in Vietnam (New York: Alfred A. Knopf, 1986), 86-87. Rutherford Poats, assistant administrator for the Far East, USAID, called the CIP “our primary weapon in the battle to prevent runaway inflation which could cause a breakdown in Vietnamese support of the war effort.” See United States, Congress, Senate, Committee on Government Operations, Permanent Subcommittee on Investigations. Improper Practices, Commodity Import Program, U.S. Foreign Aid, Vietnam: Hearings. Ninetieth Congress, First Session (Washington: USGPO, 1967), 6.
76 Kahin, Intervention, 87. See also Douglas C. Dacy, Foreign Aid, War, and Economic Development: South Vietnam, 1955-1975 (Cambridge: Cambridge University Press, 1986, 33, 153.
77 Hillaire du Berrier, Background to Betrayal: The Tragedy of Vietnam (Belmont, Mass.: Western Island, 1965), 197.
78 Memorandum of Conversation, July 16, 1965; and Saigon embassy to Department of State, July 17, 1965, in FRUS, 1964–1968 Volume III, Vietnam, June–December 1965 (http://history.state.gov/historicaldocuments/frus1964-68v03/d60 accessed April 15, 2014).
79 James Hamilton-Patterson, The Greedy War: How Profiteers Made Billions Out of Your Blood, Sweat and Taxes in Vietnam (New York: David McKay Co., 1971), 68-70, 123-124.
80 William Allison, “War for Sale: The Black Market, Currency Manipulation and Corruption in the American War in Vietnam,” War & Society, 21 (October 2003), 148-9.
81 Robert Parker testimony, in United States Senate, Committee on Government Operations, Permanent Subcommittee on Investigations. Fraud and Corruption in Management of Military Club Systems: Illegal Currency Manipulations Affecting South Vietnam. Hearings. 9/1. (Washington: USGPO, 1970) [hereafter SPSI hearings], 536, 545; Hamilton-Patterson, The Greedy War, 89-90. These Indian money changers were Muslim, unlike the traditional Hindu Indian money lenders often known collectively as “Chettys” or “Chettiars.”
82 Hamilton-Patterson, The Greedy War, 89-90, 122-124.
83 Ibid, 188-90.
84 Rufus Phillips, who ran the Office of Rural Affairs for the U.S. aid mission in Vietnam in the mid-1960s, exposed the blatant diversion of goods from American PXs to the Saigon black market in a memo to Edwin Lansdale, who said he forwarded it to Ambassador Lodge and General Westmoreland. Phillips recalls that when he got back to Washington, “I asked Lansdale by phone about any action resulting from my corruption memo. ‘Nothing significant,’ he said. When I checked about a year later, during my next visit, I heard the black market depot had been moved but was still in operation and that corruption in general had gotten worse… . I found it amazing that the issue was never directly addressed by General Westmoreland or Lodge. How could this be allowed to continue, when Americans and Vietnamese were dying in combat? How did we expect the Vietnamese to be honest when Americans were either fomenting or allowing such corruption and our highest officials appeared unconcerned? It was hard to take and hard to blame on the Vietnamese.” Why Vietnam Matters: An Eyewitness Account of Lessons Not Learned (Annapolis: Naval Institute Press, 2008), 273-4.
85 Woolridge told a committee investigator, “There's a lot of senior officers and General Westmoreland included knew of wrongdoings, and I think they wanted to control that investigation from Washington to be sure that certain names never came up… . I believe there was a coverup, yes sir.” (United States Senate, Committee on Government Operations, Permanent Subcommittee on Investigations. Fraud and Corruption in Management of Military Club Systems: Illegal Currency Manipulations Affecting South Vietnam (Second Series). Hearings. 93/1. (Washington: USGPO, 1973) [hereafter SPSI hearings, Second Series], 150). For a discussion of the Army's alleged “obstructionist tactics” toward the Senate investigation, see Clark Mollenhoff, Game Plan for Disaster (New York: W.W. Norton, 1976), 39-41. The PX scandals were the subject of a novel by Robin Moore, The Khaki Mafia (New York: Crown Publishers, 1971).
86 SPSI hearings, Second Series, 23.
87 Sergeant William Higdon, in SPSI hearings, Second Series, 161
88 United States Senate, Committee on Government Operations, Permanent Subcommittee on Investigations. Fraud and Corruption in Management of Military Club Systems: Illegal Currency Manipulations Affecting South Vietnam. Report, 92nd Congress, 1st session (Washington: USGPO, 1971), 189.
89 Ibid., 534. See also statements of Sen. Ribicoff and Carmine Bellino, SPSI hearings, 657-8. Since then, his observation has been repeatedly borne out by the involvement of major U.S. and international banks in laundering money for drug traffickers and even terrorists. For two particularly notorious recent examples, see Michael Smith, “Wachovia's Drug Habit,” Bloomberg News, July 7, 2010, and United States Senate, Committee on Homeland Security and Governmental Affairs, Permanent Subcommittee on Investigations. U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History. Report, 2012.
90 SPSI report, Fraud and Corruption in Management of Military Club Systems, 189; SPSI hearings, 646. Jacques Despuech (1953) linked Irving Trust to the piaster traffic (98, 102). The bank had a long history of involvement in money laundering and other controversial banking operations, ranging from Nugan Hand Bank (Jonathan Kwitny, Crimes of Patriots (New York: W. W. Norton, 1987), 154) to the complex dealings of the Israeli banker Baruch Rappaport (SPSI, Role of U.S. Correspondent Banking in International Money Laundering: Hearings, 107th Congress, 1st session, (Washington, D.C.: USGPO 2001) to suspected Colombian drug accounts (“Suspected Drug Cash Sparks Legal Dispute Over Pursuit by U.S.,” Wall Street Journal, April 25, 1985).
91 SPSI report, 194-7; Allison, “War for Sale,” 151. One significant source of transfers to this account was the Bank of Indochina in Laos (SPSI hearings, 830).
92 Scott Deitche, Cigar City Mafia: A Complete History of the Tampa Underworld Fort Lee, NJ: Barricade Books, 2004), 111, 274; Scott Deitche, The Silent Don: The Criminal Underworld of Santo Trafficante Jr. (Fort Lee, NJ: Barricade Books, 2007), 79, 191. Frank moved out to live with his mother after his parents divorced when he was a young teenager.
93 SPSI report, 198; SPSI hearings, 277; FBI interview with Lucretia G. Furci, March 25, 1968, by SAS John A. Ambler and Patrick T. Laffey, TP-92-900 NARA Record Number: 124-10197-10287; Cablegram from Director FBI to Legat Hong Kong, January 25, 1968, NARA Record Number: 124-10205-10245; copy of Furci's entry visa, January 25, 1962, in author's possession.
94 SPSI hearings, Second Series, 195 (International Credit Bank); Sunday Times, June 8, 1975 (Mossad). International Credit Bank's liaison to American organized crime, John Pullman, paid a visit to Hong Kong, along with other promising business venues, in 1965. See Hank Messick, Lansky (New York: G.P. Putnam's Sons, 1971), 241.
95 SPSI hearings, 276-7; SPSI hearings, Second Series, 23, 159-161;
96 SPSI report, 133-4; McCoy, The Politics of Heroin, 252-3. In my view, McCoy makes too much of a visit to Furci in Hong Kong by his father, Dominic, and the mafia boss of Tampa, Santo Trafficante, Jr., in January 1968. The two men were traveling together on around-the-world tickets. Despite investigations federal agents, officials found no evidence to support suspicions that the men might have been pursuing a narcotics trafficking conspiracy. One informant said Trafficante, tired of being harassed, was thinking about leaving the United States permanently if he could get his wife to agree. Another source said Frank Furci asked his father not to visit again for fear of ruining his reputation. See Report by Wendell W. Hall, Jr., February 26, 1969, re Santo Trafficante, Jr., MM 92-88, NARA Record Number: 124-10213-10207.
97 Sen. Abraham Ribicoff, in SPSI hearings, 690. Ribicoff said earlier that “various governmental agencies had knowledge of these transactions, the thefts and black market and all types of wrong-doing and dishonesty, but paid no attention to the information they were receiving.” Bellino noted that the Treasury's Foreign Assets Control Division “did nothing whatsoever to determine about this blackmarket activity” (SPSI hearings, 657).
98 Mark Ames and Alexander Zaitchik, “James Bond and the killer bag lady,” Salon, December 2, 2012, at http://www.salon.com/2012/12/02/better_than_bourne_who_really_killed_nick_deak/ (accessed April 16, 2014)’ Time, June 12, 1964.
99 “CIA Currency Deals Alleged,” Washington Post, June 9, 1976.
100 Saigon embassy to Department of State, January 31, 1970, in FRUS, 1969–1976 Volume VI, Vietnam, January 1969–July 1970, Document 175, http://history.state.gov/historicaldocuments/frus1969-76v06/d175 (accessed April 15, 2014).
101 “Viet Nam: A Cancerous Affliction,” Time, June 7, 1971. The story added, “Some Vietnamese charge that the real motive behind the current U.S. investigations is to protect American smugglers against their Vietnamese competitors. One newspaper cited the case of Maj. Delbert W. Fleener, occasional pilot for Ambassador Bunker, who was convicted last year of smuggling 850 pounds of opium into Viet Nam from Thailand aboard Air Force planes.”
102 Quoted in Sallie Pisani, The CIA and the Marshall Plan (Lawrence: University Press of Kansas, 1991), 83.
103 Allison, “War for Sale,” 135.
104 SPSI hearings, 540.
105 See n. 100.
106 James Carter, “'A National Symphony of Theft, Corruption and Bribery,’ Anatomy of State-Building from Iraq to Vietnam,” in Vietnam in Iraq: Lessons, Legacies and Ghosts, ed. John Dumbrell and David Ryan (Milton Park: Routledge, 2007), 98.
107 Stephen T. Hosmer, Konrad Kellen, Brian M. Jenkins, The Fall of South Vietnam: Statements by Vietnamese Military and Civilian Leaders (Santa Monica: Rand, 1978), 31. See also Jeffrey Record, The Wrong War: Why We Lost in Vietnam (Annapolis: Naval Institute Press, 1998), 123-133.