In the early postwar period, General MacArthur saw that financial aid would be required in order to develop democratic institutions in Japan and to rebuild its devastated economy. Primarily because some of these funds would be used to finance political activity deemed necessary to get democratic forces off to a good start, General MacArthur became convinced that it was essential to establish a secret fund. Such a fund was duly created, utilizing primarily money and property that had been in the possession of the Japanese armed forces at war’s end after having been seized during the war in occupied areas such as China, Korea, Taiwan and the Philippines. This wealth, which was turned over to the U.S. at war’s end, was not on Japan’s books as a nation and was available for use by MacArthur without the need of any public legislative action in the United States.
46. Johnson, “The 1955 System and the American Connection.” I have not seen—and Worldcat is not aware of—Hajime Takano, M-Fund: The Unknown World of Underground Finance. Cf. Eiji Takemae: “As an academic, it’s not a subject about which I can publish” (“On the M-Fund,” Japan.Inc, http://www.japaninc.com/article
.php?articleID=1327).
47. Declan Hayes, The Japanese Disease: Sex and Sleaze in Modern Japan (Bloomington, IN: iUniverse, 2005), 262. Cf. David E. Kaplan and Alec Dubro, Yakuza: The Explosive Account of Japan’s Criminal Underworld (Reading, MA: Addison-Wesley, 1986), 68. Both Kodama and the Li Mi KMT troops in Burma were engaged in supplying the CIA with tungsten, a strategic metal then in short supply (Jonathan Marshall, “Opium, Tungsten, and the Search for National Security, 1940–52,” in Drug Control Policy: Essays in Historical and Comparative Perspective, ed. William O. Walker III [University Park: Pennsylvania State University Press, 1992], 100–104).
48. For the extraordinary story of Schlei’s conviction, see Los Angeles Times, April 21, 2003; Johnson, “The 1955 System and the American Connection”; Seagrave and Seagrave, Gold Warriors, 130–37.
49. As mentioned previously, Corson mentions this as a possible explanation for the Killam murder and CIA “Thai flap” of 1952 (William R. Corson, The Armies of Ignorance: The Rise of the American Intelligence Empire [New York: Dial, 1977], 323).
50. Interview with Bill Lair, 137–39.
51. McCoy, The Politics of Heroin, 186.
52. Interview with Bill Lair, 139.
53. Darrell Berrigan, “They Smuggle Drugs by the Ton,” Saturday Evening Post, May 5, 1956, 42, 156–57. Before the tenth session (1955) of the UN Narcotics Commission, the U.S. representative noted that from 200 to 400 tons of opium were imported annually south into Thailand across the Burma–Laos border, of which only 100 tons were consumed in Thailand itself (UN Document E/CN.7/303/Rev. 1, 34). The mule train out of the barely accessible KMT camp must have been impressive. An earlier caravan carrying only six and a half tons required 180 mules (Andrew D. W. Forbes, “The ‘Cin-Ho’ [Yunnanese Chinese] Caravan Trade with North Thailand during the Late Nineteenth and Early Twentieth Centuries,” Journal of Asian History 27 [1987]: 25).
54. At the same time, his candid admission in his oral interview that he obtained the reward for seizing forty tons of opium was followed by a less candid explanation: “Sinay [his Thai counterpart] wanted to get married. He said he didn’t have enough money, but if we could do that we could make some money on this, see, from the reward. It’s always a split according to rank on how much. So, I got money out of it, too, because [sic] I never kept any of the things that they ever paid me. What I did was the money that I got out of that I used to buy some mules.” Using the reward cited by Berrigan ($1.2 million for a twenty-ton seizure), we can perhaps calculate that Lair’s seizure would have earned well over $2 million, enough to pay for a lot more than a wedding and “some mules.”
55. “An Interview with Willis Bird Jr,” http://www.irrawaddy.org/database/2004/vol12.5/interview.html.
