The KLA: gangsters, terrorists and the CIA

by Michel Chossudovsky, Professor of Economics at the University of Ottawa

 Heralded by the global media as a humanitarian peace-keeping
 mission, NATO's ruthless bombing of Belgrade and Pristina goes far
 beyond the breach of international law. While Slobodan Milosevic is
 demonised, portrayed as a remorseless dictator, the Kosovo
 Liberation Army (KLA) is upheld as a self-respecting nationalist
 movement struggling for the rights of ethnic Albanians. The truth of
 the matter is that the KLA is sustained by organised crime with the
 tacit approval of the United States and its allies.

 'Following a pattern set during the War in Bosnia, public opinion has
 been carefully misled. The multibillion dollar Balkans narcotics trade
 has played a crucial role in "financing the conflict" in Kosovo in
 accordance with Western economic, strategic and military objectives.
 Amply documented by European police files, acknowledged by
 numerous studies, the links of the Kosovo Liberation Army (KLA) to
 criminal syndicates in Albania, Turkey and the European Union have
 been known to Western governments and intelligence agencies since
 the mid-1990s.

 "...The financing of the Kosovo guerilla war poses critical questions
 and it sorely test claims of an "ethical" foreign policy. Should the
 West back a guerilla army that appears to partly financed by
 organised crime." 1

 While KLA leaders were shaking hands with US Secretary of State
 Madeleine Albright at Rambouillet, Europol (the European Police
 Organization based in the Hague) was "preparing a report for
 European interior and justice ministers on a connection between the
 KLA and Albanian drug gangs."2 In the meantime, the rebel army
 has been skilfully heralded by the global media (in the months
 preceding the NATO bombings) as broadly representative of the
 interests of ethnic Albanians in Kosovo.

 With KLA leader Hashim Thaci (a 29 year "freedom fighter")
 appointed as chief negotiator at Rambouillet, the KLA has become
 the de facto helmsman of the peace process on behalf of the ethnic
 Albanian majority and this despite its links to the drug trade. The
 West was relying on its KLA puppets to rubber-stamp an agreement
 which would have transformed Kosovo into an occupied territory
 under Western Administration.

 Ironically Robert Gelbard, America's special envoy to Bosnia, had
 described the KLA last year as "terrorists". Christopher Hill,
 America's chief negotiator and architect of the Rambouillet
 agreement "has also been a strong critic of the KLA for its alleged
 dealings in drugs."3 Moreover, barely a few two months before
 Rambouillet, the US State Department had acknowledged (based on
 reports from the US Observer Mission) the role of the KLA in
 terrorising and uprooting ethnic Albanians:

 "...the KLA harass or kidnap anyone who comes to the police, ...
 KLA representatives had threatened to kill villagers and burn their
 homes if they did not join the KLA [a process which has continued
 since the NATO bombings]... [T]he KLA harassment has reached
 such intensity that residents of six villages in the Stimlje region are
 "ready to flee." 4

 While backing a "freedom movement" with links to the drug trade,
 the West seems also intent in bypassing the civilian Kosovo
 Democratic League and its leader Ibrahim Rugova who has called
 for an end to the bombings and expressed his desire to negotiate a
 peaceful settlement with the Yugoslav authorities.5 It is worth
 recalling that a few days before his March 31st Press Conference,
 Rugova had been reported by the KLA (alongside three other
 leaders including Fehmi Agani) to have been killed by the Serbs.

 Covert Financing of "Freedom Fighters"

 Remember Oliver North and the Contras? The pattern in Kosovo is
 similar to other CIA covert operations in Central America, Haiti and
 Afghanistan where "freedom fighters" were financed through the
 laundering of drug money. Since the onslaught of the Cold War,
 Western intelligence agencies have developed a complex
 relationship to the illegal narcotics trade. In case after case, drug
 money laundered in the international banking system has financed
 covert operations.

 According to author Alfred McCoy, the pattern of covert financing
 was established in the Indochina war. In the 1960s, the Meo army in
 Laos was funded by the narcotics trade as part of Washington's
 military strategy against the combined forces of the neutralist
 government of Prince Souvanna Phouma and the Pathet Lao.6

 The pattern of drug politics set in Indochina has since been
 replicated in Central America and the Caribbean. "The rising curve
 of cocaine imports to the US", wrote journalist John Dinges
 "followed almost exactly the flow of US arms and military advisers to
 Central America".7

 The military in Guatemala and Haiti, to which the CIA provided
 covert support, were known to be involved in the trade of narcotics
 into Southern Florida. And as revealed in the Iran-Contra and Bank
 of Commerce and Credit International (BCCI) scandals, there was
 strong evidence that covert operations were funded through the
 laundering of drug money. "Dirty money" recycled through the
 banking system--often through an anonymous shell company--
 became "covert money," used to finance various rebel groups and
 guerilla movements including the Nicaraguan Contras and the
 Afghan Mujahadeen. According to a 1991 Time Magazine report:

 "Because the US wanted to supply the mujehadeen rebels in
 Afghanistan with stinger missiles and other military hardware it
 needed the full cooperation of Pakistan. By the mid-1980s, the CIA
 operation in Islamabad was one of the largest US intelligence
 stations in the World. `If BCCI is such an embarrassment to the US
 that forthright investigations are not being pursued it has a lot to do
 with the blind eye the US turned to the heroin trafficking in Pakistan',
 said a US intelligence officer.8

       America and Germany join Hands

 Since the early 1990s, Bonn and Washington have joined hands in
 establishing their respective spheres of influence in the Balkans.
 Their intelligence agencies have also collaborated. According to
 intelligence analyst John Whitley, covert support to the Kosovo rebel
 army was established as a joint endeavour between the CIA and
 Germany's Bundes Nachrichten Dienst (BND) (which previously
 played a key role in installing a right wing nationalist government
 under Franjo Tudjman in Croatia).9 The task to create and finance
 the KLA was initially given to Germany: "They used German
 uniforms, East German weapons and were financed, in part, with drug
 money".10 According to Whitley, the CIA was, subsequently
 instrumental in training and equipping the KLA in Albania.11

 The covert activities of Germany's BND were consistent with Bonn's
 intent to expand its "Lebensraum" into the Balkans. Prior to the
 onset of the civil war in Bosnia, Germany and its Foreign Minister
 Hans Dietrich Genscher had actively supported secession; it had
 "forced the pace of international diplomacy" and pressured its
 Western allies to recognize Slovenia and Croatia. According to the
 Geopolitical Drug Watch, both Germany and the US favoured
 (although not officially) the formation of a "Greater Albania"
 encompassing Albania, Kosovo and parts of Macedonia.12
 According to Sean Gervasi, Germany was seeking a free hand
 among its allies "to pursue economic dominance in the whole of

   Islamic Fundamentalism in Support of the

 Bonn and Washington's "hidden agenda" consisted in triggering
 nationalist liberation movements in Bosnia and Kosovo with the
 ultimate purpose of destabilising Yugoslavia. The latter objective was
 also carried out "by turning a blind eye" to the influx of mercenaries
 and financial support from Islamic fundamentalist organisations.14
 Mercenaries financed by Saudi Arabia and Koweit had been fighting
 in Bosnia.15 And the Bosnian pattern was replicated in Kosovo:
 Mujahadeen mercenaries from various Islamic countries are
 reported to be fighting alongside the KLA in Kosovo. German,
 Turkish and Afghan instructors were reported to be training the KLA
 in guerilla and diversion tactics.16 According to a Deutsche
 Press-Agentur report, financial support from Islamic countries to the
 KLA had been channelled through the former Albanian chief of the
 National Information Service (NIS), Bashkim Gazidede.17
 "Gazidede, reportedly a devout Moslem who fled Albania in March
 of last year [1997], is presently [1998] being investigated for his
 contacts with Islamic terrorist organizations."18

 The supply route for arming KLA "freedom fighters" are the
 ruggedmountainous borders of Albania with Kosovo and Macedonia.
 Albania is also a key point of transit of the Balkans drug route which
 supplies Western Europe with grade four heroin. 75% of the heroin
 entering Western Europe is from Turkey. And a large part of drug
 shipments originating in Turkey transits through the Balkans.
 According to the US Drug Enforcement Administration (DEA), "it is
 estimated that 4-6 metric tons of heroin leave each month from
 Turkey having [through the Balkans] as destination Western
 Europe."19 A recent intelligence report by Germany's Federal
 Criminal Agency suggests that: "Ethnic Albanians are now the most
 prominent group in the distribution of heroin in Western consumer

         The Laundering of Dirty Money

 In order to thrive, the criminal syndicates involved in the Balkans
 narcotics trade need friends in high places. Smuggling rings with
 alleged links to the Turkish State are said to control the trafficking
 of heroin through the Balkans "cooperating closely with other groups
 with which they have political or religious ties" including criminal
 groups in Albanian and Kosovo.21 In this new global financial
 environment, powerful undercover political lobbies connected to
 organized crime cultivate links to prominent political figures and
 officials of the military and intelligence establishment.

 The narcotics trade nonetheless uses respectable banks to launder
 large amounts of dirty money. While comfortably removed from the
 smuggling operations per se, powerful banking interests in Turkey
 but mainly those in financial centres in Western Europe discretely
 collect fat commissions in a multibillion dollar money laudering
 operation. These interests have high stakes in ensuring a safe
 passage of drug shipments into WesternEuropean markets.

             The Albanian Connection

 Arms smuggling from Albania into Kosovo and Macedonia started at
 the beginning of 1992, when the Democratic Party came to power,
 headed by President Sali Berisha. An expansive underground
 economy and cross border trade had unfolded. A triangular trade in
 oil, arms and narcotics had developed largely as a result of the
 embargo imposed by the international community on Serbia and
 Montenegro and the blockade enforced by Greece against

 Industry and agriculture in Kosovo were spearheaded into
 bankruptcy following the IMF's lethal "economic medicine" imposed
 on Belgrade in 1990. The embargo was imposed on Yugoslavia.
 Ethnic Albanians and Serbs were driven into abysmal poverty.
 Economic collapse created an environment which fostered the
 progress of illicit trade. In Kosovo, the rate of unemployment
 increased to a staggering 70 percent (according to Western sources).

 Poverty and economic collapse served to exacerbate simmering
 ethnic tensions. Thousands of unemployed youths "barely out of
 their Teens" from an impoverished population, were drafted into the
 ranks of the KLA...22

 In neighbouring Albania, the free market reforms adopted since 1992
 had created conditions which favoured the criminalisation of State
 institutions. Drug money was also laundered in the Albanian
 pyramids (ponzi schemes) which mushroomed during the government
 of former President Sali Berisha (1992-1997).23 These shady
 investment funds were an integral part of the economic reforms
 inflicted by Western creditors on Albania.

 Drug barons in Kosovo, Albania and Macedonia (with links to the
 Italian mafia) had become the new economic elites, often associated
 with Western business interests. In turn the financial proceeds of the
 trade in drugs and arms were recycled towards other illicit activities
 (and vice versa) including a vast prostitution racket between Albania
 and Italy. Albanian criminal groups operating in Milan, "have
 become so powerful running prostitution rackets that they have even
 taken over the Calabrians in strength and influence."24

 The application of "strong economic medicine" under the guidance of
 the Washington based Bretton Woods institutions had contributed to
 wrecking Albania's banking system and precipitating the collapse of
 the Albanian economy. The resulting chaos enabled American and
 European transnationals to carefully position themselves. Several
 Western oil companies including Occidental, Shell and British
 Petroleum had their eyes rivetted onAlbania's abundant and
 unexplored oil-deposits. Western investors were also gawking
 Albania's extensive reserves of chrome, copper, gold, nickel and
 platinum... The Adenauer Foundation had been lobbying in the
 background on behalf of German mining interests. 25

 Berisha's Minister of Defence Safet Zoulali (alleged to have been
 involved in the illegal oil and narcotics trade) was the architect of the
 agreement with Germany's Preussag (handing over control over
 Albania's chrome mines) against the competing bid of the US led
 consortium of Macalloy Inc. in association with Rio Tinto Zimbabwe

 Large amounts of narco-dollars had also been recycled into the
 privatisation programmes leading to the acquisition of State assets
 by the mafias. In Albania, the privatisation programme had led
 virtually overnight to the development of a property owning class
 firmly committed to the "free market". In Northern Albania, this
 class was associated with the Guegue "families" linked to the
 Democratic Party.

 Controlled by the Democratic Party under the presidency of Sali
 Berisha (1992-97), Albania's largest financial "pyramid" VEFA
 Holdings had been set up by the Guegue "families" of Northern
 Albania with the support of Western banking interests. VEFA was
 under investigation in Italy in 1997 for its ties to the Mafia which
 allegedly used VEFA to launder large amounts of dirty money.27

 According to one press report (based on intelligence sources), senior
 members of the Albanian government during the Presidency of Sali
 Berisha including cabinet members and members of the secret police
 SHIK were alleged to be involved in drugs trafficking and illegal
 arms trading into Kosovo:

 "(...) The allegations are very serious. Drugs, arms, contraband
 cigarettes all are believed to have been handled by a company run
 openly by Albania's ruling Democratic Party, Shqiponja (...). In the
 course of 1996 Defence Minister, Safet Zhulali [was alleged] to had
 used his office to facilitate the transport of arms, oil and contraband
 cigarettes. (...) Drugs barons from Kosovo (...) operate in Albania
 with impunity, and much of the transportation of heroin and other
 drugs across Albania, from Macedonia and Greece en route to Italy,
 is believed to be organised by Shik, the state security police (...).
 agents are convinced the chain of command in the rackets goes all
 the way to the top and have had no hesitation in naming ministers in
 their reports." 28

 The trade in narcotics and weapons was allowed to prosper despite
 the presence since 1993 of a large contingent of American troops at
 the Albanian-Macedonian border with a mandate to enforce the
 embargo. The West had turned a blind eye. The revenues from oil
 and narcotics were used to finance the purchase of arms (often in
 terms of direct barter): "Deliveries of oil to Macedonia (skirting the
 Greek embargo [in 1993-4] can be used to cover heroin, as do
 deliveries of kalachnikov rifles to Albanian `brothers' in Kosovo".29

 The Northern tribal clans or "fares" had also developed links with
 Italy's crime syndicates.30 In turn, the latter played a key role in
 smuggling arms across the Adriatic into the Albanian ports of Dures
 and Valona. At the outset in 1992, the weapons channelled into
 Kosovo werelargely small arms including Kalashnikov AK-47 rifles,
 RPK and PPK machine-guns, 12.7 calibre heavy machine-guns, etc.

 The proceeds of the narcotics trade has enabled the KLA to rapidly
 develop a force of some 30,000 men. More recently, the KLA has
 acquired more sophisticated weaponry including anti-aircraft and
 antiarmor rockets. According to Belgrade, some of the funds have
 come directly from the CIA "funnelled through a so-called
 "Government of Kosovo" based in Geneva, Switzerland. Its
 Washington office employs the public-relations firm of Ruder
 Finn--notorious for its slanders of the Belgrade government".31

 The KLA has also acquired electronic surveillance equipment which
 enables it to receive NATO satellite information concerning the
 movement of the Yugoslav Army. The KLA training camp in Albania
 is said to "concentrate on heavy weapons training - rocket propelled
 grenades, medium caliber "marriage of convenience" with the mafia.
 "Freedom fighters" were put in place, the narcotics trade enabled
 Washington and Bonn to "finance the Kosovo conflict" with the
 ultimate objective of destabilising the Belgrade government and fully
 recolonising the Balkans. The destructionof an entire country is the
 outcome. Western governments which participated in the NATO
 operation bear a heavy burden of responsibility in the deaths of
 civilians, the impoverishment of both the ethnic Albanian and Serbian
 populations and the plight of those who were brutally uprooted from
 towns and villages in Kosovo as a result of the bombings.


 1. Roger Boyes and Eske Wright, Drugs Money Linked to the
 Kosovo Rebels The Times, London, Monday, March 24, 1999.

 2. Ibid.

 3. Philip Smucker and Tim Butcher, "Shifting stance over KLA has
 betrayed' Albanians", Daily Telegraph, London, 6 April 1999

 4. KDOM Daily Report, released by the Bureau of European and
 Canadian Affairs, Office of South Central European Affairs, U.S.
 Department of State, Washington, DC, December 21, 1998;
 Compiled by EUR/SCE (202-647-4850) from daily reports of the U.S.
 element of the Kosovo diplomatic Observer Mission, December 21,

 5. "Rugova, sous protection serbe appelle a l'arret des raides", Le
 Devoir, Montreal, 1 April 1999.

 6. See Alfred W. McCoy, The Politics of Heroin in Southeast Asia
 Harper and Row, New York, 1972.

 7. See John Dinges, Our Man in Panama, The Shrewd Rise and
 Brutal Fall of Manuel Noriega, Times Books, New York, 1991.

 8. "The Dirtiest Bank of All," Time, July 29, 1991, p. 22.

 9. Truth in Media, Phoenix, 2 April, 1999; see also Michel Collon,
 Poker Menteur, editions EPO, Brussels, 1997.

 10. Quoted in Truth in Media, Phoenix, 2 April, 1999).

 11. Ibid.

 12. Geopolitical Drug Watch, No 32, June 1994, p. 4

 13. Sean Gervasi, "Germany, US and the Yugoslav Crisis", Covert
 ActionQuarterly, No. 43, Winter 1992-93).

 14. See Daily Telegraph, 29 December 1993

 15. For further details see Michel Collon, Poker Menteur, editions
 EPO, Brussels, 1997, p. 288.

 16. Truth in Media, Kosovo in Crisis, Phoenix, 2 April 1999.

 17. Deutsche Presse-Agentur, March 13, 1998.

 18. Ibid.

 19. Daily News, Ankara, 5 March 1997.

 20. Quoted in Boyes and Wright, op cit.

 21. ANA, Athens, 28 January 1997, see also Turkish Daily News, 29
 January 1997.

 22. Brian Murphy, KLA Volunteers Lack Experience, The
 Associated Press, 5 April 1999.

 23. See Geopolitical Drug Watch, No. 35, 1994, p. 3, see also Barry
 James, In Balkans, Arms for Drugs, The International Herald
 Tribune Paris, June 6, 1994.

 24. The Guardian, 25 March 1997.

 25. For further details see Michel Chossudovsky, La crisi
 albanese,Edizioni Gruppo Abele, Torino, 1998.26. Ibid.

 27. Andrew Gumbel, The Gangster Regime We Fund, The
 Independent, February 14, 1997, p. 15.

 28. Ibid.

 29. Geopolitical Drug Watch, No. 35, 1994, p. 3.

 30. Geopolitical Drug Watch, No 66, p. 4.

 31. Quoted in Workers' World, May 7, 1998.

 32. See Government of Yugoslavia at

 33. Geopolitical Drug Watch, No 32, June 1994, p. 4.

 Michel Chossudovsky
 Department of Economics,
 University of Ottawa,
 Ottawa, K1N6N5