It's The Economy, Stupid!

The Impact of the Illicit Drug Trade on the American Political Process

Second Edition, 2019

Kent Heiner, Editor



In order to understand the role of narcotics profits in American politics, one must first understand the political system itself and some basic concepts of economics, banking, and finance. One must also understand American law enforcement, the media, and people in general if one is to explain how these three groups have failed to come to terms with the widespread and systematic corruption of American high officials by the drug trade.

1. State-Organized Crime
    William Chambliss

1988 presidential address to the American Society of Criminology: "The study of state-organized crime serves as a reminder that crime is a political phenomenon and must be analyzed accordingly."

2. Patterns of Organizational Corruption
    Kent Heiner

There are diverse ways in which organizations may be corrupted and diverse reasons that people may tolerate or cooperate with corrupt practices.

3. Creating Corporate Criminals
    Carolyn Baker

The CEOs of the corporations whose massive fraud and looting is now being exposed to public view were all children once. How can society do a better job of rearing its future leaders?

4. Invitational Edges of Corruption: Some Consequences of Narcotic Law Enforcement
    Peter K. Manning and Lawrence John Redlinger

Licit and illicit markets have many similarities, including potential conflicts of interest on the part of regulators.

5. Vice, Corruption, Bureaucracy, and Power
    William Chambliss

This case study of corruption in Seattle is used to demonstrate that the vices, though lucrative, cannot thrive without the partnership of media, legitimate commerce, law enforcement, and government.

6. How To Launder Money
    J. Orlin Grabbe

If you're a major drug trafficker with truckloads of cash and you want the job done right, you need a commercial or investment bank and/or a high-revenue business in order to bypass money-laundering regulations.

7. Pathologizing Protest
      Carolyn Baker

Why America is in denial regarding 9-11 and government-organized trafficking.

8. The Global Media Giants: The Nine Firms That Dominate the World
    Robert W. McChesney

The majority of American media outlets are owned by the same few parent corporations.

9. The Truth Is Way Out There
      Kent Heiner

The reasons behind the failure of the major media in reporting CIA drug trafficking and other explosive issues.


In what ways has the drug trade affected the historical course of American politics and foreign policy? These essays show specific examples.

10. The CIA, The Drug Traffic, and Oswald in Mexico
      Peter Dale Scott

Lee Harvey Oswald, the man said in many historical accounts to have shot and killed President Kennedy, was also reported to have contacted the Cuban and Soviet Embassies during a trip to Mexico City in the months preceding the assassination. In this essay, the role of these allegations in the investigation of the president's murder is examined. Peter Dale Scott shows that the allegations originated in a city where intelligence operations crossed paths with the drug trade; he argues that these allegations were deliberately used to create conditions in which the presidential commission reporting on the assassination would be eager to conclude that Oswald had acted alone.

11. Familiar Faces in Dealey Plaza
     Allan Eaglesham and Martha Schallhorn

Faces seen in photos taken at Dealey Plaza on the day of the assassination bear striking resemblances to many key figures in the CIA's drug trafficking operations.

12. Rogue Elephant: The Drug Trade, the Kennedy Assassination and the War in Vietnam
     Kent Heiner

The Kennedy Administration's effort to break a major drug smuggling ring had a tragic ending. The assassination was carried out in large part to protect this smuggling ring and facilitate its expansion into Southeast Asia. American intervention in Vietnam was driven in large measure by the drug trade.

13. The Political Economy of Smack: Opiates, Capitalism, and the Law 
      William Chambliss

A brief history of the opium and heroin trade; how the Nixon administration altered major trafficking patterns for the benefit of its allies in organized crime.

14. Dateline Australia: America's Foreign Watergate?
      James A. Nathan

The activities of the Nugan Hand Bank suggest that it was a CIA front for the laundering money, the smuggling of drugs, and the overthrow of a democratic government in the 1970s.

15. Langley's Revenge
       Kent Heiner

The Reagan-Bush campaign team negotiated arms sales to Iran in exchange for Iran's agreement to delay release of American hostages until after the 1980 elections. The significance of this arrangement to the illegal drug trade is twofold: first, that the incumbent president had undertaken an extensive cleanup of the CIA, particularly of smuggler-ridden covert operations personnel; and second, that Reagan's campaign manager was William Casey, who subsequently became Reagan's CIA director and oversaw the agency's drug smuggling operations.

16. The Crimes of Mena
      Sally Denton and Roger Morris

"The documents confirm that from 1981 to his brutal death in 1986, Barry Seal carried on one of the most lucrative, extensive, and brazen operations in the history of the international drug trade, and that he did it with the evident complicity, if not collusion, of elements of the United States government, apparently with the acquiescence of Ronald Reagan's administration, impunity from any subsequent exposure by George Bush's administration, and under the usually acute political nose of then Arkansas governor Bill Clinton."

17. Kosovo "Freedom Fighters" Financed By Organised Crime
      Michel Chossudovsky

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.


18. Man, the State and Dope
      Kent Heiner

Why does the United States government prosecute some traffickers while protecting others? Following the example of Kenneth Waltz's Man, the State and War, the author divides the possible explanations for this phenomenon into three categories: private greed, the demands of the state, and the conditions of the international system.


Carolyn Baker, Ph.D., is a college history professor, author and former psychotherapist.

William J. Chambliss is a Professor of Sociology at The George Washington University in Washington, D.C.  He is the author and editor of over fifteen books in the field of sociology of law, criminology and sociological theory including, "Law, Order and Power" (with Robert Seidman), "On The Take: From Petty Thieves to Presidents" and "Exploring Criminology".  He is a past President of the American Society of Criminology (1989 - 1990).

Michel Chossudovsky is Professor of Economics at the University of Ottawa. He is a former president of the Canadian Association of Latin American and Caribbean Studies.

Sally Denton, an award-winning investigative reporter in both print and television, has written for the New York Times, the Washington Post, and the Chicago Tribune. She is the author of The Bluegrass Conspiracy: An Inside Story of Power, Greed, Drugs, and Murder. She lives in the Southwest with her husband, who is her coauthor, and her three sons.

Allan Eaglesham is a free-lance editor with broad interest in the Kennedy assassination; he has published articles on the sniper's nest, questions of authenticity of the Zapruder film, and on the Pitzer case.

J. Orlin Grabbe is the president of Kalliste, Inc., a multimedia publishing firm. He is a former professor in the Department of Finance at  the Wharton School,  University of Pennsylvania and the author of International Financial Markets (3rd edition), Simon & Schuster, 1995

Kent Heiner is the founder and president of Mem Research, a non-profit organization with the purpose of supporting research into state-organized crime. He graduated from Brigham Young University with a bachelors degree in international relations in April 1995.

Peter K. Manning is Brooks Chair of Policing at Northeastern University.

Robert W. McChesney is a research professor in the Institute of Communications Research and the Graduate School of Information and Library Science at the University of Illinois at Urbana-Champaign.

Roger Morris served on the senior staff of the National Security Council under Presidents Johnson and Nixon, until he resigned over the invasion of Cambodia. He has won several national journalism prizes, including the Investigative Reporters and Editors Award for the finest investigative journalism in all media nationwide. He is the author of several books on history and politics, including Richard Milhous Nixon: The Rise of an American Politician, which was short-listed for both a National Book Award and a National Book Critics Circle award.

James A. Nathan is presently Khalid bin Sultan Eminent Scholar, Auburn University at Montgomery. Dr. Nathan is the author of seven books on foreign affairs and a former United States Foreign Service Officer. He is Executive Director of the Alabama World Affairs Council and a member of the Council on Foreign Relations.

Lawrence J. Redlinger is Professor of Sociology and Political Economy and Associate Provost at the University of Texas at Dallas.

Martha Schallhorn is a homemaker and researcher particularly interested in the foreign relations aspects of the Kennedy assassination.

Peter Dale Scott is Professor of English at U. of C. Berkeley. He is a former Canadian foreign service officer and holds a Ph.D. in political science. He is the author of Deep Politics and the Death of JFK (University of California Press, 1993), and co-author (with Jonathan Marshall) of Cocaine Politics: Drugs, Armies, and the CIA in Central America (University of California Press, 1991) and (with Jonathan Marshall and Jane Hunter) The Iran-Contra Connection: Secret Teams and Covert Operations in the Reagan Era (South End Press, 1987).

It's The Economy, Stupid! is a project of Mem Research. Copyright on individual articles is held by the author unless otherwise noted. This compilation copyright 2002, 2019 by Kent G. Heiner.

The following articles are reprinted here with permission:
"Invitational Edges of Corruption: Some Consequences of Narcotic Law Enforcement" by Peter K. Manning and Lawrence John Redlinger; 
"Vice, Corruption, Bureaucracy, and Power," "The Political Economy of Smack: Opiates, Capitalism, and the Law," and "State-Organized Crime" by William Chambliss;
"Kosovo 'Freedom Fighters' Financed by Organised Crime" by Michel Chossudovsky;
"The Global Media Giants" by Robert W. McChesney;
"How to Launder Money" by J. Orlin Grabbe;
"The Crimes of Mena" by Sally Denton and Roger Morris;
"Pathologizing Protest" and "Creating Corporate Criminals" by Carolyn Baker;
"Dateline Australia: America's Foreign Watergate?" by James A. Nathan;
"Familiar Faces In Dealey Plaza" by Allan Eaglesham and Martha Schallhorn;
"The CIA, the Drug Traffic, and Oswald in Mexico" by Peter Dale Scott.