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Road to Riches Starts in Golden Tri

May 11, 1998

Road to Riches Starts in Golden Triangle



ANGOON, Burma -- Chauffeured about town in his gleaming white sedan, Lo
Hsing-han befits his reputation as one of the most influential businessmen
in Burma. 

A crisp business card identifies him as chairman of Asia World Co. Ltd., a
conglomerate managed by his son, Steven Law. Their commercial empire
includes jade, ruby and teak concessions, real estate in Rangoon, its
renovated port facilities, a container-shipping business and toll booths on
the resurfaced Burma Road winding north to the Chinese border. 

Lo has traveled far from his bare-knuckle origins as an opium warlord of the
Golden Triangle in the early 1960s, when U.S. drug officials linked him to
much of the heroin winding up on the streets of U.S. cities. He later
survived seven years in a Burmese prison under sentence of death for
treason, but after his release in 1980 he earned the government's gratitude
for brokering a critical cease-fire with ethnic insurgents in 1989. 

Now, Lo says, there's more profit in selling cars across the Chinese border
than in smuggling drugs. 

The United States views Lo's prosperity as evidence that Burma's economy is
awash in laundered drug money and that its military junta has encouraged
those who trade in drugs to invest in its development projects. 

"Drug traffickers who once spent their days leading mule trains down jungle
paths are now leading lights in Burma's new market economy and leading
figures in its new political order," Secretary of State Madeleine Albright
told the Association of Southeast Asian Nations, knows as Asean, in Kuala
Lumpur, Malaysia, last July. 

Proving Lo's complicity is more difficult. "There are no smoking guns, no
evidence linking him to any investigation whatsoever" at present, a Western
official who follows narcotics conceded. "We're going to keep him out there
as a target, because there's rampant speculation that he's involved in
moving large quantities of heroin." 

At 64 years old, Lo has not lost the nerve that helped him thrive in the
opium trade. Told that several American reporters wanted to interview him,
Lo invited them to dinner. He denied any involvement now in trafficking or
money laundering. 

"I welcome the whole world to investigate me," Lo said and promised $5,000
to anyone who could link him to drugs in the last 25 years. 

Barely glancing at his diamond-studded gold Rolex wristwatch, Lo fielded
questions in Chinese while his chopsticks poked at a succession of sumptuous

He reminisced about the late 1960s and early '70s when his opium-laden mule
caravans stretched several miles across the mountainsides and ravines of
Kokang, his ethnic Chinese home region in northeast Burma. What drove him,
he contends, was not greed but benevolent concern for Kokang's struggling
poppy growers. 

"I don't bother about eating, drinking or traveling," he said. "My whole
life has been spent just helping the poor." 

Lo is hardly the only reputed drug trafficker to succeed in business in
Burma. Khun Sa, the world's biggest heroin producer, surrendered his rebel
Shan army in January 1996 and moved into a villa in a government military
compound in Rangoon. 

The Burmese government refuses to extradite Khun Sa to the United States,
where he has been indicted for trying to smuggle 3,500 pounds of heroin into
New York. He has described himself as a real estate agent and his
investments are said to include a new resort casino and a bus route between
Rangoon and Mandalay. Until his health deteriorated, he also played golf
with the generals whose army he once bloodied. 

Lo's drug career began when he commanded a home guard unit battling
Communist insurgents. The only way to equip and feed his troops, he said,
was through the opium trade. "In the Kokang mountains, people earned their
living from poppy for over 100 years," he said. "Over that period,
poppy-growing and trading was legal. It was the only income for people." 

As he tells it, rival traffickers demanded commissions of 25 percent or 30
percent to take the opium for refining in Thailand. Lo undercut them by
charging 20 percent. 

Twice a year from 1963 to 1973, Lo said, he moved 10 to 20 tons of opium to
the Thai border, using his own troops and 800 to 1,000 mules per convoy. "It
stretched out for three miles," Lo said. "If it went smoothly, it took about
26 days." 

Lo waved aside questions about how much he earned. "I was working for the
Kokang people and the poor people who were looking for a way to sell their
product," he said. "I did so much for them, and I felt it was honorable." 

When the government ordered him to disband his troops, Lo refused. "The
Kokang people needed the opium market," he said. "I was their sole agent, so
the Kokang farmers got a reasonable price." 

In 1973 he was lured across the Thai border, captured, extradited to Rangoon
and sentenced to death. "I didn't think any harm would come to me," he said.
"The government didn't charge me with opium trafficking. They charged me
with treason and violating socialist economic law." 

He served a month short of seven years in prison before being released in a
1980 amnesty. Lo opened a bakery in Rangoon, raised livestock in Lashio and
mined precious stones, using what he explained were family loans, not drug

In 1989, he persuaded Peng Jiasheng, another opium dealer who led Kokang's
rebel army, to accept a cease-fire with the military junta. The junta
rewarded Lo with choice gem and timber concessions. 

Since then, Lo said, "I have done a lot of import-export business, and also
Chinese-border trade," delivering new cars from Rangoon to China's Yunnan
province. Lo described Asia World as "doing quite well" with an annual
profit somewhere "over $1 million." He declined to say how much more. 

Lo said he does not need to traffic in drugs now. "Since the market economy
appeared in Burma, it is easier to earn money trading vehicles on the
Chinese border," he said. He estimated that he turns a profit of about
$2,500 on every car he sells to the Chinese. 

Moreover, Lo said, he was shocked to discover so many addicts in his Kokang
homeland and wants to stamp out opium. "When a family has a drug addict, the
family is totally destroyed," he said. "I realized that drugs are not good." 

Col. Kyaw Thein, the head of the government's drug control program, said of
Lo, "He's been out of the drug business since he was released from prison,
because he knows that every intelligence agency will be keeping their eyes
on him." 

But a Western diplomat charged that the government let Lo launder his money
in legitimate businesses. "He has the connection with the banks," the
diplomat said. 

Lo was upset when his son Steven Law, who travels widely as Asia World's
managing director, was denied a visa to the United States in 1996 because of
suspected drug links. 

"Steven is a genuine businessman," he said. "He doesn't know about drug
trafficking. He wasn't born when I was in Kokang." Another son, Henry, lives
in Los Angeles, but Lo said, "I can't remember the details." 

Lo wants to see America himself. "If the United States is a democratic
country, why doesn't it allow me to enter?" Lo asked. "Have I committed any