The Binh Xuyen operated two major opium-boiling plants in Saigon (one near their headquarters at Cholon's Y-Bridge and the other near the National Assembly) to transform the raw poppy sap into a smokable form. The bandits distributed the prepared opium to dens and retail shops throughout Saigon and Cholon, some of which were owned by the Binh Xuyen (the others paid the gangsters a substantial share of their profits for protection). The Binh Xuyen divided its receipts with Trinquier's MACG and Savani's 2eme Bureau. (13) Any surplus opium the Binh Xuyen were unable to market was sold to local Chinese merchants for export to Hong Kong or else to the Corsican criminal syndicates in Saigon for shipment to Marseille. MACG deposited its portion in a secret account managed by the Action Service office in Saigon. When Touby Lyfoung or any other Meo tribal leader needed money, he flew to Saigon and personally drew money out of the caisse noire, or black box. (13)

MACG had had its humble beginnings in 1950 following a visit to Indochina by the SDECE deputy director, who decided to experiment with using hill tribe warriors as mountain mercenaries. Colonel Grail was appointed commander of the fledgling unit, twenty officers were assigned to work with hill tribes in the Central Highlands, and a special paramilitary training camp for hill tribes, the Action School, was established at Cap Saint Jacques. (14) However, the program remained experimental until December 1950, when Marshal Jean de Lattre de Tassigny was appointed commander in chief of the Expeditionary Corps. Realizing that the program had promise, General de Lattre transferred 140 to 150 officers to MACG, and appointed Maj. Roger Trinquier to command its operations in Laos and Tonkin. (15) Although Grail remained the nominal commander until 1953, it was Trinquier who developed most of MACG's innovative counterinsurgency tactics, forged most of the important tribal alliances, and organized much of the opium trade during his three years of service. (16)

His program for organizing country guerrilla units in Tonkin and Laos established him as a leading international specialist in counterinsurgency warfare. He evolved a precise four-point method for transforming any hill tribe area in Indochina from a scattering of mountain hamlets into a tightly disciplined, counterguerrilla infrastructure-a maquis. Since his theories also fascinated the CIA and later inspired American programs in Vietnam and Laos, they bear some examination.

PRELIMINARY STAGE. A small group of carefully selected officers fly over hill tribe villages in a light aircraft to test the response of the inhabitants. If somebody shoots at the aircraft, the area is probably hostile, but if the tribesmen wave, then the area might have potential. [a 1951, for example, Major Trinquier organized the first maquis in Tonkin by repeatedly flying over Meo villages northwest of Lai Chan until he drew a response. When some of the Meo waved the French tricolor, he realized the area qualified for stage. (17)

STAGE 2. The original recruits returned to their home area with arms, radios, and money to set up the maquis. Through their friends and relatives, they began propagandizing the local population and gathering basic intelligence about Viet Minh activities in the area. Stage 2 was considered completed when the initial teams had managed to recruit a hundred more of their fellow tribesmen for training at Cap Saint Jacques. This stage usually took about two months and $6,000, with most of the increased expenses consisting of the relatively high salaries of these mercenary troops.

Trinquier had developed three important counterguerrilla maquis for MACG in northeast Laos and Tonkin during 1950-1953: the Meo maquis in Laos under the command of Touby Lyfoung; the Tai maquis under Deo Van Long in northwestern Tonkin; and the Meo maquis east of the Red River in north central Tonkin. Since opium was the only significant economic resource in each of these three regions, MACG's opium purchasing policy was just as important as its military tactics in determining the effectiveness of highland counterinsurgency programs. Where MACG purchased the opium directly from the Meo and paid them a good price, they remained loyal to the French. But when the French used non-Meo highland minorities as brokers and did nothing to prevent the Meo from being cheated, the Meo tribesmen joined the Viet Minh-with disastrous consequences for the French.

Unquestionably, the most successful MACG operation was the Meo maquis in Xieng Khouang Province, Laos, led by the French-educated Meo Touby Lyfoung. When the Expeditionary Corps assumed responsibility for the opium traffic on the Plain of Jars in 1949-1950, they appointed Touby their opium broker, as had the Opium Monopoly before them. (22) Major Trinquier did not need to use his four-stage plan when dealing with the Xieng Khoung Province Meo; soon after he took command in 1951, Touby came to Hanoi to offer to help initiate MACG commando operations among his Meo followers. Because there had been little Viet Minh activity near the Plain of Jars since 1946, both agreed to start slowly by sending a handful of recruits to the Action School for radio instruction. (23) Until the Geneva truce in 1954 the French military continued to pay Touby an excellent price for the Xieng Khouang opium harvest, thus assuring his followers' loyalty and providing him with sufficient funds to influence the course of Meo politics. This arrangement also made Touby extremely wealthy by Meo standards, In exchange for these favors, Touby remained the most loyal and active of the hill tribe commanders in Indochina.

Touby proved his worth during the 1953-1954 Viet Minh offensive. In December 1952 the Viet Minh launched an offensive into the Tai country in northwestern Tonkin (North Vietnam), and were moving quickly toward the Laos-Vietnam border when they ran short of supplies and withdrew before crossing into Laos. (24) But since rumors persisted that the Viet Minh were going to drive for the Mekong the following spring, an emergency training camp was set up on the Plain of Jars and the first of some five hundred young Meo were flown to Cap Saint Jacques for a crash training program. Just as the program was getting underway, the Viet Minh and Pathet Lao (the Lao national liberation movement) launched a combined offensive across the border into Laos, capturing Sam Neua City on April 12, 1953. The Vietnam 316th People's Army Division, Pathet Lao irregulars, and local Meo partisans organized by Lo Faydang drove westward, capturing Xieng Khouang City two weeks later. But with Touby's Meo irregulars providing intelligence and covering their mountain flanks, French and Lao colonial troops used their tanks and artillery to good advantage on the flat Plain of Jars and held off the Pathet Lao-Viet Minh units. (25)

In May the French Expeditionary Corps built a steel mat airfield on the plain and began airlifting in twelve thousand troops, some small tanks, and heavy engineering equipment. Under the supervision of Gen. Albert Sore, who arrived in June, the plain was soon transformed into a virtual fortress guarded by forty to fifty reinforced bunkers and blockhouses. Having used mountain minorities to crush rebellions in Morocco, Sore appreciated their importance and met with Touby soon after his arrival. After an aerial tour of the region with Touby and his MACG adviser, Sore sent out four columns escorted by Touby's partisans to sweep Xieng Khouang Province clean of any remaining enemy units. After this, Sore arranged with Touby and MACG that the Meo would provide intelligence and guard the mountain approaches while his regular units garrisoned the plain itself. The arrangement worked well, and Sore remembers meeting amicably on a regular basis with Touby and Lieut. Vang Pao, then company commander of a Meo irregular unit (and now commander of CIA mercenaries in Laos), to exchange intelligence and discuss paramilitary operations. He also recalls that Touby delivered substantial quantities of raw opium to MACG advisers for the regular DC-3 flights to Cap Saint Jacques, and feels that the French support of the Meo opium trade was a major factor in their military aggressiveness. As Sore put it, "The Meo were defending their own region, and of course by defending their region they were defending their opium." (26)

Another outsider also witnessed the machinations of the covert Operation X. During a six-week investigative tour of Indochina during JuneJuly 1953, Col. Edward 0. Lansdale of the American CIA discovered the existence of Operation X. Trying to put together a firsthand report of the Viet Minh invasion of Laos, Lansdale flew up to the Plain of Jars, where he learned that French officers had bought up the 1953 opium harvest, acting on orders from General Salan, commander in chief of the Expeditionary Corps. When Lansdale later found out that the opium had been flown to Saigon for sale and export, he complained to Washington that the French military was involved in the narcotics traffic and suggested that an investigation was in order. General Lansdale recalls that the response ran something like this:

"Don't you have anything else to do? We don't want you to open up this keg of worms since it will be a major embarrassment to a friendly government. So drop your investigation." (27)

By mid 1953, repeated Viet Minh offensives into northern Laos, like the spring assault on the Plain of Jars, had convinced the French high command that they were in imminent danger of losing all of northern Laos. To block future Viet Minh offensives, they proceeded to establish a fortified base, or "hedgehog," in a wide upland valley called Dien Bien Phu near the Laos-North Vietnam border. (28) In November the French air force and CAT (Civil Air Transport, later Air America) began airlifting sixteen thousand men into the valley, and French generals confidently predicted they would soon be able to seal the border.

By March 1954, however, the Viet Minh had ringed Dien Bien Phu with wellentrenched heavy artillery; within a month they had silenced the French counterbatteries. Large-scale air evacuation was impossible, and the garrison was living on borrowed time. Realizing that an overland escape was their only solution, the French high command launched a number of relief columns from northern Laos to crack through the lines of entrapment and enable the defenders to break out. (29) Delayed by confusion in high command headquarters, the main relief column of 3,000 men did not set out until April 14. (30) As the relief column got underway, Colonel Trinquier, by now MACG commander, proposed a supplementary plan for setting up a large maquis, manned by Touby's irregulars, halfway between Dien Bien Phu and the Plain of Jars to aid any of the garrison who might break out. After overcoming the high command's doubts, Trinquier flew to the Plain of Jars with a large supply of silver bars. Half of Touby's 6,000 irregulars were given eight days of intensive training and dispatched for Muong Son, sixty miles to the north, on May 1. But although Trinquier managed to recruit yet another 1,500 Meo mercenaries elsewhere, his efforts proved futile. (31) Dien Bien Phu fell on May 8, and only a small number of the seventy-eight colonial troops who escaped were netted by Touby's maquis. (32)

Unlike the Meo in Laos, the Meo in northwestern Tonkin, where Dien Bien Phu was located, had good cause to hate the French, and were instrumental in their defeat. Although in Laos Operation X had purchased raw opium directly from the Meo leaders, in northwestern Tonkin political considerations forced MACG officials to continue the earlier Opium Monopoly policy of using Tai leaders, particularly Deo Van Long, as their intermediaries with the Meo opium cultivators. By allowing the Tai feudal lords to force the Meo to sell their opium to Tai leaders at extremely low prices, they embittered the Meo toward the French even more and made them enthusiastic supporters of the Viet Minh.

When the Vietnamese revolution began in 1945 and the French position weakened throughout Indochina, the French decided to work through Deo Van Long, one of the few local leaders who had remained loyal, to restore their control over the strategically important Tai highlands in northwestern Tonkin. (33) In 1946 three highland provinces were separated from the rest of Tonkin and designated an autonomous Tai Federation, with Deo Van Long, who had only been the White Tai leader of Lai Chau Province, as president. Ruling by fiat, he proceeded to appoint his friends and relatives to every possible position of authority. (34) However, since there were only 25,000 White Tai in the federation as opposed to 100,000 Black Tai and 50,000 Meo, (35) his actions aroused bitter opposition.

When political manipulations failed, Deo Van Long tried to put down the dissidence by military force, using two 850-man Tai battalions that had been armed and trained by the French. Although he drove many of the dissidents to take refuge in the forests, this was hardly a solution, since they made contact with the Viet Minh and thus became an even greater problem. (36)

Moreover, French support for Deo Van Long's fiscal politics was a disaster for France's entire Indochina empire. The French set up the Tai Federation's first autonomous budget in 1947, based on the only marketable commodity-Meo opium. As one French colonel put it:

"The Tai budgetary receipts are furnished exclusively by the Meo who pay half with their raw opium, and the other half, indirectly, through the Chinese who lose their opium smuggling profits in the [state] gaming halls."(37)

Opium remained an important part of the Tai Federation budget until 1951, when a young adviser to the federation, Jean Jerusalemy, ordered it eliminated. Since official regulations prohibited opium smoking, Jerusalemy, a strict bureaucrat, did not understand how the Tai Federation could be selling opium to the government.

So in 1951 opium disappeared from the official budget. Instead of selling it to the customs service, Deo Van Long sold it to MACG officers for Operation X. In the same year French military aircraft began making regular flights to Lai Chau to purchase raw opium from Deo Van Long and local Chinese merchants for shipment to Hanoi and Saigon.(38)

With the exception of insignificant quantities produced by a few Tai villages, almost all of the opium purchased was grown by the fifty thousand Meo in the federation. During the Second World War and the immediate postwar years, they sold about 4.5 to 5.0 tons of raw opium annually to Deo Van Long's agents for the Opium Monopoly. Since the Monopoly paid only one-tenth of the Hanoi black market price, the Meo preferred to sell the greater part of their harvest to the higher-paying local Chinese smugglers. (39) During this time, Deo Van Long had no way to force the Meo to sell to his agents at the low official price. However, in 1949, now with three Tai guerrilla battalions, and with his retainers in government posts in all of the lowland trading centers, he was in a position to force the Meo to sell most of their crop to him, at gun point, if necessary. (40) Many of the Meo who had refused to sell at his low price became more cooperative when confronted with a squad of well-armed Tai guerrillas. And when he stopped dealing with the Opium Monopoly after 1950, there was no longer any official price guideline, and he was free to increase his own profits by reducing the already miserable price paid the Meo.

While these methods may have made Deo Van Long a rich man by the end of the Indochina War (after the Geneva cease-fire he retired to a comfortable villa in France), they seriously damaged his relations with the Meo. When they observed his rise in 1945-1946 as the autocrat of the Tai Federation, many joined the Viet Minh. (41) As Deo Van Long acquired more arms and power in the late 1940s and early 1950s, his rule became even more oppressive, and the Meo became even more willing to aid the Viet Minh.

This account of the Tai Federation opium trade would be little more than an interesting footnote to the history of the Indochina Opium Monopoly were it not for the battle of Dien Bien Phu. Although an ideal base from a strategic viewpoint, the French command could not have chosen a more unfavorable battlefield. It was the first Black Tai area Deo Van Long had taken control of after World War 11. His interest in it was understandable: Dien Bien Phu was the largest valley in the Tai Federation and in 1953 produced four thousand tons of rice, about 30 (42) percent of the Federation's production. Moreover, the Meo opium cultivators in the surrounding hills produced three-fifths of a ton of raw opium for the monopoly, or about 13 percent of the federation's legitimate sale. (43) But soon after tile first units were parachuted into Dien Bien Phu, experienced French officials in the Tai country began urging the high command to withdraw from the area. The young French adviser, Jean Jerusalemy, sent a long report to the high command warning them that if they remained at Dien Bien Phu defeat was only a matter of time. The Meo in the mountain area were extremely bitter toward Deo Van Long and the French for their handling of the opium crop, explained Jerusalemy, and the Black Tai living on the valley floor still resented the imposition of White Tai administrators.(44)

Confident that the Viet Minh could not possibly transport sufficient heavy artillery through the rough mountain terrain, the French generals ignored these warnings. French and American artillery specialists filed reassuring firsthand reports that the "hedgehog" was impenetrable. When the artillery duel began in March 1954, French generals were shocked to find themselves outgunned; the Viet Minh bad two hundred heavy artillery pieces with abundant ammunition, against the French garrison's twenty-eight heavy guns and insufficient ammunition. (45) An estimated eighty thousand Viet Minh porters had hauled this incredible firepower across the mountains, guided and assisted by enthusiastic Black Tai and Meo. Gen. Vo Nguyen Giap, the Viet Minh commander, recalls that "convoys of pack horses from the Meo highlands" were among the most determined of the porters who assisted this effort. (46)

Meo hostility prevented French intelligence gathering and counterintelligence operations. It is doubtful that the Viet Minh would have chosen to attack Dien Bien Phu had they been convinced that the local population was firmly against them, since trained Meo commandos could easily have disrupted their supply lines, sabotaged their artillery, and perhaps given the French garrison accurate intelligence on their activities. As it was, Colonel Trinquier tried to infiltrate five MACG commando teams from Laos into the Dien Bien Phu area, but the effort was almost a complete failure. (47)Unfamiliar with the terrain and lacking contacts with the local population, the Laotian Meo were easily brushed aside by Viet Minh troops with local Meo guides. The pro-Viet Minh Meo enveloped a wide area surrounding the fortress, and all of Trinquier's teams were discovered before they even got close to the encircled garrison. The Viet Minh divisions overwhelmed the garrison on May 7-8, 1954.

Less than twenty-four hours later, on May 8, 1954, Vietnamese, French, Russian, Chinese, British, and American delegates sat down together for the first time at Geneva, Switzerland, to discuss a peace settlement. The news from Dien Bien Phu had arrived that morning, and it was reflected in the grim faces of the Western delegates and the electric confidence of the Vietnamese. (48) The diplomats finally compromised on a peace agreement almost three months later: on July 20 an armistice was declared and the war was over.

But to Col. Roger Trinquier a multilateral agreement signed by a host of great and small powers meant nothing-his war went on. Trinquier had forty thousand hill tribe mercenaries operating under the command of four hundred French officers by the end of July and was planning to take the war to the enemy by organizing a huge new maquis of up to ten thousand tribesmen in the Viet Minh heartland east of the Red River. (49) Now he was faced with a delicate problem: his mercenaries had no commissions, no official status, and were not covered by the cease-fire. The Geneva agreement prohibited overflights by the light aircraft Trinquier used to supply his mercenery units behind Viet Minh lines and thus created insurmountable logistics and liaison problems. (50) Although he was able to use some of the Red Cross flights to the prisoner-of-war camps in the Viet Minh-controlled highlands as a cover for arms and ammunition drops, this was only a stopgap measure. (51) In August, when Trinquier radioed his remaining MACG units in the Tai Federation to fight their way out into Laos, several thousand Tai retreated into Sam Neua and Xieng Khouang provinces, where they were picked up by Touby Lyfoung's Meo irregulars. But the vast majority stayed behind, and although some kept broadcasting appeals for arms, money, and food, by late August their radio batteries went dead, and they were never heard from again.

There was an ironic footnote to this last MACG operation. Soon after several thousand of the Tai Federation commandos arrived in Laos, Touby realized that it would take a good deal of money to resettle them permanently. Since the MACG secret account had netted almost $150,000 from the last winter's opium harvest, Touby went to the Saigon paramilitary office to make a personal appeal for resettlement funds. But the French officer on duty was embarrassed to report that an unknown MACG or SDECE officer had stolen the money, and MACG's portion of Operation X was broke. "Trinquier told us to put the five million piasters in the account where it would be safe," Touby recalls with great amusement, "and then one of his officers stole it. What irony! What irony!". (52)

When the French Expeditionary Corps began its rapid withdrawal from Indochina in 1955, MACG officers approached American military personnel and offered to turn over their entire paramilitary apparatus. CIA agent Lucien Conein was one of those contacted, and he passed the word along to Washington. But, "DOD [Department of Defense] responded that they wanted nothing to do with any French program" and the offer was refused. (53) But many in the Agency regretted the decision when the CIA sent Green Berets into Laos and Vietnam to organize hill tribe guerrillas several years later, and in 1962 American representatives visited Trinquier in Paris and offered him a high position as an adviser on mountain warfare in Indochina. But, fearing that the Americans would never give a French officer sufficient authority to accomplish anything, Trinquier refused. (54)

Looking back on the machinations of Operation X from the vantage point of almost two decades, it seems remarkable that its secret was so well kept. Almost every news dispatch from Saigon that discussed the Binh Xuyen alluded to their involvement in the opium trade, but there was no mention of the French support for hill tribe opium dealings, and certainly no comprehension of the full scope of Operation X. Spared the screaming headlines, or evert muted whispers, about their involvement in the narcotics traffic, neither SDECE nor the French military were pressured into repudiating the narcotics traffic as a source of funding for covert operations. Apparently there was but one internal investigation of this secret opium trade, which only handed out a few reprimands, more for indiscretion than anything else, and Operation X continued undisturbed until the French withdrew from Indochina.

The investigation began in 1952, when Vietnamese police seized almost a ton of raw opium from a MACG warehouse in Cap Saint Jacques. Colonel Belleux had initiated the seizure when three MACG officers filed an official report claiming that opium was being stored in the MACG warehouses for eventual sale. After the seizure confirmed their story, Belleux turned the matter over to Jean Letourneau, high commissioner for Indochina, who started a formal inquiry through the comptrollergeneral for Overseas France. Although the inquiry uncovered a good deal of Operation X's organization, nothing was done. The inquiry did damage the reputation of MACG's commander, Colonel Grall, and Commander in Chief Salan. Grall was ousted from MACG and Trinquier was appointed as his successor in March 1953. (55)

Following the investigation, Colonel Belleux suggested to his Paris headquarters that SDECE and MACG should reduce the scope of their narcotics trafficking. If they continued to control the trade at all levels, the secret might get out, damaging France's international relations and providing the Viet Minh with excellent propaganda. Since the French had to continue buying opium from the Meo to retain their loyalty, Belleux suggested that it be diverted to Bangkok instead of being flown directly to Saigon and Hanoi. In Bangkok the opium would become, indistinguishable from much larger quantities being shipped out of Burma by the Nationalist Chinese Army, and thus the French involvement would be concealed. SDECE Paris, however, told Belleux that he was a "troublemaker" and urged him to give up such ideas. The matter was dropped. (56)

Apparently SDECE and French military emerged from the Indochina War with narcotics trafficking as an accepted gambit in the espionage game. In November 1971, the U.S. Attorney for New Jersey caused an enormous controversy in both France and the United States when he indicted a high-ranking SDECE officer, Col. Paul Fournier, for conspiracy to smuggle narcotics into the United States. Given the long history of SDECE's official and unofficial involvement in the narcotics trade, shock and surprise seem to be unwarranted. Colonel Fournier had served with SDECE in Vietnam during the First Indochina War at a time when the clandestine service was managing the narcotics traffic as a matter of policy. The current involvement of some SDECE agents in Corsican heroin smuggling (see Chapter 2) would seem to indicate that SDECE's acquaintance with the narcotics traffic has not ended.