Singapore's blood money
Hanging drug couriers but investing with their suppliers
Strange bedfellows. Opinion editorial
By Dr Chee Soon Juan, secretary general of the Singapore Democratic Party.
Protesters demand accountability from PM Goh on drugs
Feedback: Letter from S'pore Embassy, USA.
Response from the authors.
The Nation (US) October 20, 1997.
By Dennis Bernstein and Leslie Kean
FRIDAYS, just before dawn, are hanging days in Singapore. Navarat Maykha, a Thai mother of two small children, awaited her turn as she prayed in her jail cell with her attorney, Peter Fernando, just a few days before her execution. An impoverished and uneducated woman, and also deeply religious, she swore until her death that she was unaware of the heroin that was hidden in the lining of a suitcase given to her by a Nigerian friend.
Singapore - a tiny island nation of 3 million perched at the southern tip of the Asian continent - prides itself on its strict drug laws, which include a mandatory death sentence for anyone caught with as little as half an ounce of heroin.
"It's heartbreaking sometimes," said Fernando during a recent interview from his office in Singapore. "If you are an addict, and you are simply sitting at home with more than 15 grams of heroin and you cannot prove with scientific accuracy that a portion of the drugs are for personal use, you will hang."
The fiercely authoritarian government micro-manages all aspects of the secretive hangings, as it does everything else in this country. This efficiency allows for the possibility of multiple executions when drug offenders swell the prison. On September 27, 1996, six people were hanged in one morning. Four had been hanged the previous Friday, all for drug trafficking. According to Amnesty International, 1995 - the year Navarat was executed - was a busy year at the gallows in Singapore, when more than fifty people were hanged, the majority for drug offenses.
In its March 1997 International Narcotics Control Strategy Report, the US State Department said that "the number of drug traffickers hanged in Singapore increased dramatically in the last two years." Amnesty International, also describing a "sharp increase in the number of executions" in a 1997 report, states that those executed are most often small-time addicts and couriers, usually poorly educated and economically vulnerable, "while those who organise and profit from the crimes frequently escape capture and prosecution."
But that does not describe the worst of it. The Nation has learned that the highest levels of the Singaporean government, using the New York-based Morgan Guaranty Trust Company, a subsidiary of J.P. Morgan, as a custodial operative, are engaging in joint business ventures with one of the world's most notorious drug lords and with the drug-backed military dictatorship of Burma (Myanmar). This has been confirmed by corporate, government and legal documents from four countries and was contended by high-ranking US narcotics and government officials in private interviews.
ACCORDING to interviews with Singaporean lawyers and US narcotics officials, the heroin found in Singapore comes mostly from Burma, one of the world's largest exporters of the highly profitable drug, with 1996 exports estimated at $1 billion. Since the State Law and Order Restoration Council (SLORC) takeover of Burma in 1988, illicit drug exports have more than doubled; French and US satellite surveys have shown an explosion of poppy-growing in areas under the SLORC's direct control. In 1995 the Australian Parliament heard testimony on SLORC protection of the narcotics trade as a matter of policy, "in order to raise government revenue." And a report last year by the US embassy in Rangoon, based on the SLORC's economic data, concluded that exports of opiates "appear to be worth about as much as all legal exports" and that investments in infrastructure and hotels are coming from major opiate-growing and opiate-exporting organisations [see Bernstein and Kean, "People of the Opiate," December 16, 1996].
"Drug traffickers who once spent their days leading mule trains down jungle tracks are now leading lights in Burma's new market economy," said Secretary of State Madeleine Albright in a statement this past July. "We are increasingly concerned that Burma's drug traffickers, with official encouragement, are laundering their profits through Burmese banks and companies - some of which are joint ventures with foreign businesses," she said. It is with the SLORC, and allied organizations, that Singapore's hang-'em-high government is investing so heavily - in such ventures as hotels and infrastructure.
This dual-track policy is condoned and encouraged at top levels of the Singaporean regime, including by Lee Kuan Yew, the country's undisputed strongman. Lee, whose antidrug policies are among the strictest in the world, is participating in the country's deepening business relationships with renowned heroin trafficker Lo Hsing Han of Burma and his son and business partner, Steven Law. Their operations in Burma, Singapore, Malaysia, Thailand and the United States are now the focus of an ongoing U.S. government narcotics and money-laundering investigation, The Nation has learned.
Lo Hsing Han, a Kokang Chinese from the opium-producing region of Burma's Golden Triangle, was convicted and sentenced to death in 1973 - not for drug trafficking, which had been carried out with the tacit agreement of the state, but for treason. After being released in a 1980 government amnesty, he returned to the Kokang region. As of 1994, Lo controlled the most heavily armed drug-trafficking organization in Southeast Asia. Today he rules with godfather status over a clan of traffickers, and his organisation controls a substantial amount of the world's opium production, according to US narcotics officials. A memo from the Thai government's Office of Narcotics Control Board states that Lo's trafficking activities are augmented through his link to Burma's military intelligence chief, Lieut Gen Khin Nyunt, described as Lo's "supporter." It says that in 1993 Lo was granted the "privilege from Lieut. Gen Khin Nyunt to smuggle heroin from the Kokang Group to Tachilek [on the Thai border] without interception."
Lo is chairman of Burma's Asia World Company Limited, managed by his son Law, who has achieved unprecedented success under the current dictatorship. "Law's power and connections are unparalleled," comments one US official. "No other domestic investor in Burma can get an audience with a cabinet member with one phone call. When Law got married, eight cabinet members showed up." Law's multimillion-dollar business ventures seem to win all bidding wars in Burma's development race. (Law was denied a visa to the United States last year. "We have information that leads us to believe he is a trafficker in illicit substances," a US government official told The Nation in explanation.)
Business is business
WALL Street Journal editors, in the 1997 Index of Economic Freedom, rated Singapore as the most business-friendly country in the world. Unfortunately, that friendliness has been extended to Lo Hsing Han, Steven Law and the narco-dictatorship of Burma.
As Tay Thiam Peng, director of foreign operations at Singapore's Trade Development Board, bluntly put it in 1996, when it comes to business, morality takes a back seat to profits. "While the other countries are ignoring Myanmar (Burma), it's a good time for us to go in," Tay stated. "You get better deals, and you're more appreciated... Singapore's position is not to judge them and take a judgmental moral high ground." As Burma's number-one business partner, Singapore now has 53 projects in Burma, which as of January totaled nearly $1.2 billion.
"Since 1988...over half of [the investments from] Singapore have been tied to the family of narco-trafficker Lo Hsing Han,'' says Robert Gelbard, former US Assistant Secretary of State for the Bureau of International Narcotics and Law Enforcement Affairs. Most of these investments are in joint projects with Lo's family-controlled Asia World Company. Asia World includes a host of subsidiaries and three overseas branches in Singapore. US narcotics officials say that these "overseas branches" are part of the ongoing money-laundering investigation.
Asia World's 1996 company profile states that it began as a trader in agricultural and animal feed products but today "has emerged as one of Myanmar's (Burma's) fastest growing and most diversified conglomerates." Burma's largest private-sector enterprise, it has interests in trading, manufacturing, real estate, industrial investment, development, construction, transportation, imports and distribution. Asia World's operations now include the running of a deep-water port in Rangoon, the bus company Leo Express into northern Burma, and a $33 million toll highway from Burma's poppy-growing region to the Chinese border.
The combination of the Burmese military's ability to protect shipments and production in the country and Asia World's ability to move product over land and sea completes a perfect marriage of convenience. In addition to these operations, US narcotics officials say that Lo Hsing Han also runs a container business, shipping cargo out of Rangoon from a nondescript container yard the size of a city block. They suspect it of being a drug-shipping operation. Although it is a subsidiary of Asia World, the containerized cargo processing facility has no name, no sign and is not mentioned in Asia World's business profile. According to one official, some of the several hundred containers that have left this yard have gone to Singapore and the United States.
In a June telephone interview from his headquarters in Rangoon, Law denied all allegations of drug trafficking. He laughed and said that Asia World operates under government regulations, "so if we do anything against government policy, we cannot do our business," Law said. "That's why concerning your point of any drugs in our city, I can say we haven't [been] involved."
The money trail: the Myanmar Fund
THE Singapore government, in cooperation with Morgan Guaranty Trust Company, is directly connected to key business ventures of drug kingpin Lo through an investment group called the Myanmar Fund. The fund, which provides investors "with long term capital appreciation from direct or indirect investments in Myanmar (Burma)," is registered as a tax-free fund in Jersey, Channel Islands, according to documents provided to the Irish Stock Exchange.
Singapore's largest government-controlled financial institution - the Government of Singapore Investment Corporation (GIC) - is listed in the documents along with Morgan Guaranty Trust Bank (a J.P. Morgan subsidiary separate from the Trust Company) as a core shareholder in the Myanmar Fund. A September 1996 GIC business profile from the Registry of Companies and Businesses in Singapore shows that high-level
Singaporean politicians are officers and directors of the GIC, including senior minister Lee Kuan Yew; his son, deputy prime minister Brig Gen Lee Hsien Loong; and finance minister Dr Richard Hu. As a core shareholder, the GIC helps determine how the fund's money is invested in Burma. Jean Tan, a spokesperson for the Singaporean embassy in Washington, confirmed in a June interview that the GIC holds a 21.5 percent share of the Myanmar Fund. As of last November, this investment was worth $10 million, according to the Singaporean government.
The Myanmar Fund owns 25 percent of an Asia World subsidiary, Asia World Industries. In fact, the Myanmar Fund's 1997 first-quarter report features two pictures of Asia World factories on its cover. The Myanmar Fund has also heavily invested in a number of luxury hotels in Burma, including Rangoon's Traders and Shangri-La. The Asia World business profile describes the Traders and Shangri-La hotels as major investment projects for Lo Hsing Han's company. It says that the Shangri-La Hotel (and surrounding apartments and offices) will be "the biggest of all" Asia World's investments, with "$200 million...in appropriation of the project."
In an official press release last November, the Singapore government stated that its investments in the Myanmar Fund were "completely open and above board" and that its investments in both the two luxury hotels and Asia World were "straightforward investments in bona fide commercial projects." However, the fund's operations are hardly straightforward and open. The operations of the GIC itself are effectively a state secret. The government company is not required to file annual reports or report to parliament. It has no public accountability, even though it uses public moneys for its investments. Furthermore, according to fund documents, in late 1994 - only weeks after being listed on the Irish Stock Exchange - the GIC's shares disappeared from the stock exchange register and were re-registered under the name of Ince & Co. The Singaporean government acknowledged in November that Morgan Guaranty Trust Company is the custodian for the GIC securities, and that Ince & Co. was set up by Morgan to hold the shares in its custody.
Morgan Guaranty Trust Bank, investing yet other funds on behalf of clients, is the largest core shareholder (followed by the GIC) of the Myanmar Fund at 42 percent, according to a fund report. This means that together, the Singaporean regime's GIC and Morgan Guaranty Trust Bank have been in control of 63 percent of the Myanmar Fund and its co-investments with the corporation chaired by drug baron Lo Hsing Han. (The GIC shares re-listed as Ince & Co have shifted hands once again. In a February document obtained by The Nation, the fund reported transfer of the Ince & Co. shares to another company, Hare & Co. In telephone interviews, spokesmen for the Myanmar Fund, the GIC and Morgan Guaranty refused to provide information about the identity or purpose of the new custodial company.)
Dining with the devil
SINGAPORE'S dealings with Lo Hsing Han and Steven Law continue to expand unabated. Singapore's GIC investment in the Myanmar Fund increased by 4.3 percent in 1996. In Rangoon, the Traders Hotel celebrated its official opening last November. At the opening ceremony, attended by Singapore's Ambassador and graced with an ap-pearance by Lo himself, the presiding SLORC minister publicly thanked both Steven Law and the government of Singapore for paving the road for a smooth business partnership. "I would like to extend my sincere gratitude to the government of Singapore," he said, "without whose support and encouragement there would be very few Singaporean businessmen in our country."
Since then, ground has been broken on the construction of Sinmardev, a new, $207 million industrial park and port on the outskirts of Rangoon. A Singaporean consortium is the leader in a joint venture with the SLORC, the Myanmar Fund, Lo's family company and a slew of international shareholders. The Myanmar Fund holds a 10 percent interest in Sinmardev. Singaporean entrepreneur Albert Hong, head of Sinmardev, described the project as the largest foreign investment in Burma outside the energy field.
"Singapore is more involved with Lo than any other country, because that's basically where Steven Law is functioning out of when he's not in Burma," observes a US narcotics official.
Singapore's rulers continue to deny any wrongdoing in connection with their relationship to Asia World. "It is fairly far-fetched, trying to link the Singaporean government and drug traffickers," said embassy spokesperson Jean Tan.
"Nonsense," says Singapore's former solicitor general Francis Seow, now a research fellow at the East Asian Legal Studies Program of Harvard Law School. The former close associate of Lee Kuan Yew says he knows "through personal experience" that Lee micro-manages every aspect of Singaporean political, economic and social policy.
Dr Chee Soon Juan, secretary general of the Singapore Democratic Party and a leader of Singapore's political opposition, was labeled a traitor for raising the drug issue in Singapore. "Drug peddlers are routinely hanged in Singapore for carrying heroin," wrote Chee, in a rare and courageous act of public protest in response to a documentary that aired on Australian television last year, Singapore Sling. "And where are all these drugs coming from? Drug lords like Lo Hsing Han are the big-time pushers aided by the SLORC generals." "Is this not hypocrisy at its worst?" he asked.
"The Singapore government knows it's having dinner with the devil, and sharing a very short spoon," says Seow. "And it is a terrible double standard. Drug moneys are being laundered apparently by the same drug lords who supply the heroin for which small-time drug dealers are hanged. We are reaping profits as Burma's biggest investor, but we're being paid with blood money."