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
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 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,
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
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
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 , is presently  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
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
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
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
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),
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
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.
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",
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).
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.
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,
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
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.
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.
Department of Economics,
University of Ottawa,