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Window on Burma #18



BINA  -- The Burma Independent News Agency  --  

Window on Burma  #18

(From Local BINA News Sources, August 25, 1999)


DIRTY DRUG MONEY CONVENIENTLY CLEANED BY BURMESE GENERALS
"As Good as New, and Ready to Invest Again," Says SPDC
 
While Druglord Khun Sa's son Charm Herng has been in the news recently for
his alleged involvement in drugs and guns in the Tachilek area of Shan
State, another of Khun Sa's sons, Than Kywe (pronounced "Tan Chway"), has
been busy in southern Burma.  Than Kywe recently paid US$ 3.5 million to
the Burmese "SPDC" military junta for land in Myawaddy Township, in Karen
State.  This sum gave him ownership of about half the Township, which
borders on Tak province in Thailand.  

It is generally understood that the money for the land came from Khun Sa's
vast cash holdings, which were earned during his well-known heroin
operations in Shan State.  This cash now must be "laundered" through
property titles and other financial investments, in order to be used again
without embarrassing questions being asked about its origin.

Son Than Kywe's investment company for the Myawaddy operation is called,
rather appropriately, the "H" group ["H" is slang for heroin in many
western cities- Editor].  The Managing Director of the "H" group is one of
Khin Nyunt's personal gang of former military officers, Maj. Te Maung Aye.  

Legitimate business operations, however, do not seem to be the "H" group's
forte.  Their first project in Myawaddy, a construction company, collapsed,
as well as their local restaurant business, which also went belly up.  

The latest scheme on the "H" group's boardroom table may work out, though.
They plan a big casino operation right next to the Thai border, to lure the
wealthy Thai military and political honchos over for a bit of excitement
that they can't get at home.  

A casino is not a gas pipeline, however, and the income to be generated by
providing gambling to the Thais will probably not cover costs.  But since
the primary purpose of the "H" group is to turn dirty drug money into
sparkling clean investment capital, capital clean enough to purchase US
Treasury notes through a Swiss bank, what they actually earn on the land is
rather irrelevant.  

Another project the "H" boys are planning is to open a bank in Myawaddy
town proper, near the Thai-Burma bridge.  While his banking experience may
be limited, Than Kywe has plenty of cash, the main ingredient, so this
project would be a long-term benefit to the "H" group, a sort of giant
money washing machine.

"H" owner Than Shwe can sometimes be seen driving around Mae Sot, the Thai
border town just opposite Myawaddy, in one of his new sports utility
vehicles.  In fact, when he wants to visit his Myawaddy property, he
doesn't go by road through the Burmese countryside from Rangoon to
Myawaddy, too dangerous.  Instead, he flies from Rangoon to Bangkok,
Bangkok to Mae Sot, then drives across the little bridge into Burma.  The
drive through the Burmese countryside is long and hard, the highway is in
poor condition, and vehicles may be subject to attack from still-untamed
ethnic resistance fighters in the area.

The old man, Khun Sa, never travels abroad because of a US court's
international warrant for his arrest and extradition.  Instead, he is now
the junta's most reliable banker, trading a bit of his huge cash reserves
for protection and legitimacy with the iron-fisted military government that
has ruled Burma since 1989, when former dictator Ne Win let his protégé
officers take over day-to-day control of the country.  

Khun Sa's investments are in banks, hotels, and travel agencies, all run by
SPDC-controlled companies.  He also likes real estate, especially
undeveloped land, and owns many properties in Rangoon, Mandalay, and
elsewhere in Burma.  He buys these tracts from the government, which
accumulates them in part through the army's confiscation of the farms and
villages of ethnic minorities.  When the properties are sold or used as
collateral for loans, the money begins to acquire its "legitimate" history,
and thus it can eventually be used, for example, to buy shares in
multinational corporations, such as UNOCAL or TOTAL. 

Khun Sa's big cash infusion came just in time for the SLORC/SPDC
dictatorship, which was on the brink of bankruptcy in 1995 when the
generals went to Khun Sa's Shan State stronghold to work out a deal for his
"return to the legal fold."  The US reward for his arrest might have
brought them a small, one-time dollar windfall, but the daily milking of
his foreign currency cash cow has helped to keep their army expansion
program chugging along on schedule for the past four years.

With success stories like that of the Khun Sa family well-known among the
Burmese elite, the ambitious sons and daughters of the army generals are
getting a practical education in modern economics and finance, even though
all the universities in the country have been shut down.

END