U.S.: Taliban continue to profit from drug trade

By Manuel Perez-Rivas
CNN Washington Bureau

WASHINGTON (CNN) -- Afghanistan's ruling Taliban government appears to be benefiting from sharp spikes in the price of opium that have come about after it banned cultivation of poppy, the plant that produces the drug, United States officials said Wednesday.

Officials said the drug market in Afghanistan appears to be flourishing, based on record drug seizures this year in neighboring countries, as well as the seizure of materials used in drug production that were intercepted on their way in to Afghanistan.

The trade seems to have continued unabated -- even though the ban was effective in slashing cultivation -- because of the existence of large stockpiles of opiates within Afghanistan.

Meanwhile, the price of the drug has skyrocketed in the region since the Taliban imposed its ban on poppy growers last year.

Asa Hutchinson, head of the Drug Enforcement Administration, said that regional prices for opium in Afghanistan jumped dramatically, from $44 per kilogram before the ban to as much as $746 per kilogram before the September 11 terrorist attacks on New York and Washington. The worldwide market price, however, has remained stable -- a sign that supplies have not dropped off.

After the attacks, the regional price fell back to $95 per kilogram, as traffickers dumped stockpiles before possible U.S. retaliation against the Taliban for the September 11 terrorist attacks on New York and Washington. Prices since have climbed back to $429 per kilogram.

"This price increase, which was limited to the immediate region and did not resonate in the international market, appears to be a means for the Taliban to capitalize on a rise in the price of a commodity over which they exercise virtually total control," said Hutchinson, who called the regime's level of control over the opium market in Afghanistan "incredible and impressive."

The Taliban's use of the drug trade to finance government operations and to pay for its ongoing war in Afghanistan has drawn increased attention from U.S. officials since the terrorist attacks. That attention is because of the regime's support for Osama bin Laden, and his al Qaeda network, the prime suspects behind the attacks.

Sources have said that destroying the Taliban's drug production facilities is one option being weighed as the United States plans retaliation.

Trade appears strong despite poppy ban

At a hearing of the House Government Reform subcommittee on criminal justice and drug policy, officials said there is little evidence directly connecting bin Laden or al Qaeda to the drug trade. Most of the terrorist networks' funding seems to come from other sources.

Officials said, however, that bin Laden at least benefits indirectly from the drug trade because of the support he gets from the Taliban.

"The relationship between the Taliban and bin Laden is believed to have flourished, in large part, due to the Taliban's substantial reliance on the opium trade as a source of organizational revenue," Hutchinson said.

Hutchinson said the ban on poppy cultivation resulted in a steep drop in opium production -- from 4,000 metric tons last year to 74 metric tons in 2001. Yet despite this decrease, and despite the Taliban's claims that heroin labs have been destroyed, the indications are that the trade continues on a large scale.

"The DEA has seen no decrease in availability and no increase in prices of southwest Asian heroin in the United States and in Europe," he said. "This indicates that significant amounts of opiates still remain available."

The drug trade has provided a major source of revenue for the Taliban ever since it took over control of Afghanistan in the mid-1990s. In that time, production of heroin in the war-torn country doubled and Afghanistan became the world's leading producer of the highly addictive drug, providing more than 70 percent of the world's market.

U.S. officials have said the Taliban has benefited directly from this trade, through taxes on farmers who grow poppies as well as drug traffickers. Officials said the drug has sometimes been accepted as payment for taxes, and that the Taliban holds large stockpiles of the product.

Officials estimate that some $40 million to $50 million have flowed into Afghan government coffers annually in revenues from the drug trade, and some believe that number might be higher.

William Bach, a State Department official in the Bureau of International Narcotics and Law Enforcement Affairs, said the Taliban has used drug proceeds to purchase weapons and help finance its ongoing war. Despite the regime's call last year for a ban on poppy growing, Bach said record seizures of the drug this year in neighboring countries show that "the flow of opiates out of Afghanistan has not abated."

Congressman blasts 'calculated ploy'

Rep. Mark Souder, R-Indiana, the chairman of the subcommittee, said the Taliban's ban on poppy cultivation "appears in reality to be a coldly calculated ploy to control the world market price for their opium and heroin."

Most of the heroin produced in Afghanistan is sold in Europe and Asia, with heroin from southwestern Asia accounting for less than 10 percent of the heroin sold in the United States.

Souder said this means the United States, which has traditionally focused drug control efforts on stopping flows into the country, may need to do more on an international level as a way of controlling illicit revenues that could flow to terrorist coffers.

Although he said there is little evidence connecting bin Laden to the drug trade directly, Hutchinson cautioned against ignoring "the extent to which the profits from the drug trade are directed to finance terrorist activities. The issue has to be of paramount concern to our nation, and it is certainly to the DEA."

In addition, he said, there is a concern that bin Laden and other terrorists may increasingly turn to the drug trade as governments step up efforts to thwart their other means of financing.

"Whenever you have a terrorist organization that has to have sources of money and they are geographically alongside drug organizations that produce money, then there's obviously the potential for a stronger connection between the two," he said.