-- begin forwarded message: --

Date:  Mon, 12 Apr 1999 08:15:13 +0900
From: Hendrik
To: Multiple recipients of NETSOURCE-L <netsource-l@mail.think.service>
Subject:  [NS] Background Info on the Kosovo War

Dear reader,

the following analysis by Dr. Chossudovsky sheds some light on the
long-term development of the Kosovo conflict and provides a necessary
antidote to the shortsighted, two-position ("to bomb or not to bomb")
debate which is a conceptual trap that we have been led into.

Regards: Hendrik



by Michel Chossudovsky

Professor of Economics at the University of Ottawa and author of The
Globalization of Poverty, Impacts of IMF and World Bank Reforms, Third
World Network, Penang and Zed Books, London, 1997.

C Copyright by Michel Chossudovsky, Ottawa, 1999. All rights reserved.
Permission is granted to post this text on non-commercial internet sites,
provided the essay remains intact and the copyright note is displayed.
To publish this text in printed and/or other forms
contact the author at <chossudovsky@sprint.SAPMTRAP.ca>

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 Mitteleuropa."13

Islamic Fundamentalism in Support of the KLA

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 rugged
mountainous 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 countries."20

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

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 laundering operation. These interests have high
stakes in ensuring a safe passage of drug shipments into Western European

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 Macedonia.

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 on
Albania'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 (RTZ).26

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

(...) 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 (...). Intelligence 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 were largely 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 cannons,
tanks and transporter use, as well as on communications, and command and
control". (According to Yugoslav government sources.32

These extensive deliveries of weapons to the Kosovo rebel army were
consistent with Western geopolitical objectives. Not surprisingly, there
has been a "deafening silence" of the international media regarding the
Kosovo arms-drugs trade. In the words of a 1994 Report of the Geopolitical
Drug Watch: "the trafficking [of drugs and arms] is basically being judged
on its geostrategic implications (...) In Kosovo, drugs and weapons
trafficking is fuelling geopolitical hopes and fears"...33

The fate of Kosovo had already been carefully laid out prior to the signing
of the 1995 Dayton agreement. NATO had entered an unwholesome "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 destruction of 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, 1998.

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 Action
Quarterly, 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,

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

Voice box: 1-613-562-5800, ext. 1415
Fax: 1-514-425-6224
E-Mail: chossudovsky@sprint.SPAMTRAP.ca



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