[PEN-L:6566] (Fwd) KLA LINKED TO ENORMOUS HEROIN TRADE; POLICE SUSPECT DRUG

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Subject:        	KLA LINKED TO ENORMOUS HEROIN TRADE; POLICE SUSPECT DRUGS
 	HELPED FINANCE REVOLT - San Francisco Chronicle

The San Francisco Chronicle						May 5, 1999

KLA LINKED TO ENORMOUS HEROIN TRADE; POLICE SUSPECT DRUGS HELPED FINANCE
REVOLT

	By Frank Viviano, Chronicle Staff Writer

	Officers of the Kosovo Liberation Army and their backers,
according to law enforcement authorities in Western Europe and
the United States, are a major force in international organized
crime, moving staggering amounts of narcotics through an
underworld network that reaches into the heart of Europe.	
	In the words of a November 1997 statement issued by Interpol,
the international police agency, "Kosovo Albanians hold the largest
share of the heroin market in Switzerland, in Austria, in Belgium, in
Germany, in Hungary, in the Czech Republic, in Norway and in
Sweden."	
	That the Albanians of Kosovo are victims of a conscious,
ethnic-cleansing campaign set in motion by Yugoslav President
Slobodan Milosevic is clear. But the credentials of some who claim
to represent them are profoundly disturbing, say highly placed
sources on both sides of the Atlantic.	
	On March 25 -- the day after NATO's bombardment of Serb
forces began -- drug enforcement experts from the Hague-based
European Office of Police (EUROPOL), met in an emergency
closed session devoted to "Kosovar Narcotics Trafficking
Networks."	
	EUROPOL is preparing an extensive report for European
justice and interior ministers on the KLA's role in heroin smuggling.
Independent investigations of the charges are also under way in
Sweden, Germany and Switzerland.	
	"We have intelligence leading us to believe that there could be a
connection between drug money and the Kosovo Liberation Army,"
Walter Kege, head of the drug enforcement unit in the Swedish
police intelligence service, told the London Times in late March. 	
	As long as four years ago, U.S. officials were concerned about
alleged ties between narcotics syndicates and the People's
Movement of Kosovo, a dissident political organization founded in
1982 that is now the KLA's political wing. 	
	A 1995 advisory by the federal Drug Enforcement
Administration warned of the possibility "that certain members of
the ethnic Albanian community in the Serbian region of Kosovo
have turned to drug trafficking in order to finance their separatist
activities."	
	If the drug-running allegations against the KLA are accurate,
the group could join a rogues' gallery of former U.S. allies whose
interests outside the battlefield brought deep embarrassment and
domestic political turmoil to Washington. 	
	In 1944, the invading U.S. Army handed the reins of power in
Sicily to local "anti-fascists" who were in fact Mafia leaders. During
the next half century, American governments also turned a blind eye
to, or collaborated with, the narcotics operations of Southeast
Asian drug lords and Nicaraguan Contras who were allied with the
United States in Indochina and Central America. 	
	In each case, the legacy of these partnerships ranged from
global expansion of the power wielded by criminal syndicates, to
divisive congressional inquiries at home and lasting suspicion of
American intentions overseas.	
	The involvement of ethnic Albanians in the drug trade is not
exclusively Kosovar. It includes members of Albanian communities
in Europe's three poorest countries or regions -- Kosovo,
Macedonia and Albania -- where the appeal of narcotics trafficking
is self-explanatory, even without a separatist war to fund.	
	The average 1997 monthly salary in all three communities was
less than $200. In Albania, it was less than $50.	
	According to the Paris-based Geopolitical Drug Watch, which
advises the governments of Britain and France on illegal narcotics
operations, one kilogram (2.2 pounds) of heroin costs $8,300 in
Albania, which lies at the western terminus of a "Balkan Route"
that today accounts for up to 90 percent of the drug's exports to
Europe from Southeast Asia and Turkey.
	 Across the border from Albania in Greece, the same kilo of
heroin can be sold for $30,000, yielding an instant profit equal to
nine years' normal income in Macedonia and more than a third of a
century in Albania or prebombardment Kosovo.	
	The Balkan Route is a principal thoroughfare for an illicit drug
traffic worth $400 billion annually, according to Interpol.	
	Although only a small number of ethnic Albanian clans profit
directly from the trade, their activities have cast a dark shadow on
the entire Albanian world.	
	There is a growing tendency among foreign observers, says
former Albanian President Sali Berisha, "to identify the criminal
with the honest, the vandal with the civilized, the mafiosi with the
nation."	
	Those ethnic Albanians who have embraced the narcotics trade
are extraordinarily aggressive.	
	Albanian speakers comprise roughly 1 percent of Europe's 510
million people. In 1997, according to Interpol, they made up 14
percent of all European arrests for heroin trafficking. 	
	The average quantity of heroin confiscated per arrest, among all
offenders, was less than two grams. Among Albanian-speakers, the
figure was 120 grams (4.2 ounces).	
	Until the war intervened, Kosovars were the acknowledged
masters of the trade, credited with shoving aside the Turkish gangs
that had long dominated narcotics trafficking along the Balkan
Route, and effectively directing the ethnic Albanian network. 	
	Kosovar bosses "orchestrated the traffic, regulated the rate and
set the prices," according to journalist Leonardo Coen, who covers
racketeering and organized crime in the Balkans for the Italian daily
La Repubblica.
	"The Kosovars had a 10-year head start on their cousins across
the border, simply because their Yugoslav passports allowed them
to travel earlier and much more widely than someone from
communist Albania," said Michel Koutouzis, a senior researcher at
Geopolitical Drug Watch who is regarded as Europe's leading
expert on the Balkan Route.
	"That allowed them to establish very efficient overseas
networks through the worldwide Albanian diaspora -- and in the
process, to forge ties with other underworld groups involved in the
heroin trade, such as Chinese triads in Vancouver and Vietnamese
in Australia," Koutouzis told The Chronicle.
	 On assignments in Kosovo and Macedonia between 1992 and
1996, a Chronicle reporter frequently encountered groups of ethnic
Albanian men -- ostentatiously dressed in designer clothing and
driving luxury cars far beyond the normal means of their community
-- at restaurants in the Macedonian capital of Skopje and near the
Kosovo frontier.
	The men were quite willing to speak about politics, confirming
that they were Kosovar, and asserting their determination to bring
down Milosevic. But when asked how they earned their livings,
they uniformly answered "in business," declining to provide any
details.
	 The rise of Kosovar bosses to the pinnacle of the drug trade --
and the sudden, simultaneous appearance of the KLA -- dates from
1997, when the Berisha government fell in Albania amid nationwide
rioting over a collapsed financial pyramid scheme that destroyed the
savings of millions and wrecked the economy. In the unchecked
looting that followed, the nation's armories were emptied of
weapons, explosives and ammunition.
	In June 1997, Berisha was succeeded as president by Rexhep
Mejdani, who unlike Berisha was openly sympathetic to a separatist
rebellion in Kosovo.
	Last year, a NATO official in Brussels quoted by Radio Free
Europe cited intelligence findings of "the wholesale transfer of
weapons to Kosovo" in 1997, destabilizing the precarious balance
between ethnic Albanians and Serbs in the province and
undercutting the position of pacifist Kosovo leader Ibrahim Rugova
in autonomy negotiations with Belgrade.
	A U.N. study found that at least 200,000 Kalashnikov
automatic assault weapons stolen from Albanian military armories
wound up in the KLA arsenal. So many, according to reliable
sources, that KLA operatives were themselves exporting guns to
overseas black markets at the start of 1999.
	In effect, the KLA's armed insurgency, escalating at a time
when U.S. and Western European diplomats were seeking a
peaceful solution to the crisis, provided a pretext for Milosevic to
press for a nationalist solution to the Kosovo problem.	
	Then came the failed Rambouillet talks, the NATO bombing
decision, and with it what Koutouzis calls "the militarization" of the
Kosovar drug trade.
	"Narcotics trafficking has been a permanent part of the Kosovo
picture for a long time. The question is where the profits go,"
Koutouzis said.
	"When Rugova held sway and the object was a peaceful
settlement, the drug proceeds of Kosovo clans were at least
invested in growth, in things like better housing and health care. It
was a form of social taxation in a sense, and the more illegal the
activities, the more that their `businessmen' were expected to pay."	
	But with the outbreak of war, Koutouzis adds, "the investment
is only in destruction -- and the KLA's first effort was to destroy the
influence of Rugova, and no one in the West did much to help him."	
	Nonetheless, NATO military officers and diplomats have always
been troubled by the murky origins and financing of the KLA,
which materialized for the first time in Kosovo on Nov. 28, 1997,
outfitted in expensive Swiss-manufactured uniforms and equipped
with the purloined Albanian Kalashnikovs.	
	The mistrust is reciprocated. According to Veton Surroi, the
widely respected editor of Kosovo's Albanian-language daily
newspaper Koha Ditore, U.S. negotiator Richard Holbrooke had a
Kalashnikov held to his head when he arrived for a meeting with
KLA officers during one of his shuttle missions to Kosovo.
	As recently as February 25, U.S. Ambassador Chris Hill,
another of the negotiators, said, "The KLA must understand that its
members have a future as members of political parties or local
police forces, but not in the continuation of armed struggle."	
	The eruption of war changed almost everything. Since the
bombing campaign opened, NATO has had little alternative but to
rely on the KLA for intelligence. Its guerrilla units inside Kosovo
are the only eyewitness sources of information on Serb troop
movements.	
	Solid intelligence about the KLA itself is nearly impossible to
nail down. NATO estimates put its forces at 15,000. Avdija
Ramadom, the organization's official spokesman, claims that the
KLA has more than 50,000 men.
	In addition to alleged drug receipts, the group is said to be
funded by a war tax of 3 percent imposed by the People's
Movement of Kosovo on the earnings of 500,000 ethnic Albanian
emigrants in Western Europe, a population that is soaring with the
immense exodus of refugees. Half of the prewar immigrants have
settled in Germany, according to the International Migration
Organization, and a third in Switzerland.
	A single fund-raising evening in Switzerland earlier this year is
believed to have raised $7 million from ethnic Albanian immigrants,
much of it earmarked for the KLA struggle against Serbia.