Excerpted From The Politics of Heroin in Southeast Asia by Alfred McCoy
While the history of SDECE and MACGs direct involvement in the tribal opium trade provides an exotic chapter in the history of the narcotics traffic, the involvement of Saigon’s Binh Xuyen river pirates was the product of a type of political relationship that has been repeated with alarming frequency over the last half-century-the alliance between governments and gangsters. Just as the relationship between the OSS and the Italian Mafia during World War 11 and the CIA-Corsican alliance in the early years of the cold war affected the resurrection of the European heroin trade, so the French 2eme Bureau’s alliance with the Binh Xuyen allowed Saigon’s opium commerce to survive and prosper during the First Indochina War. The 2eme Bureau was not an integral cog in the mechanics of the traffic as MACG had been in the mountains; it remained in the background providing overall political support, allowing the Binh Xuyen to take over the opium dens and establish their own opium references. By 1954 the Binh Xuyen controlled virtually all of Saigon’s opium dens and dominated the distribution of prepared opium throughout Cochin China (the southern part of Vietnam). Since Cochin China had usually consumed over half of the monopoly’s opium, and Saigonwith its Chinese twin city, Cholon-had the highest density of smokers in the entire colony, (57) the 2eme Bureau’s decision to turn the traffic over to the Binh Xuyen guaranteed the failure of the government’s antiopium campaign and ensured the survival of mass opium addiction in Vietnam.
The 2eme Bureau’s pact with the Binh Xuyen was part of a larger French policy of using ethnic, religious, and political factions to deny territory to the Viet Minh. By supplying these splinter groups with arms and money, the French hoped to make them strong enough to make their localities into private fiefs, thereby neutralizing the region and freeing regular combat troops from garrison duty. But Saigon was not just another clump of rice paddies, it was France’s “Pearl of the Orient,” the richest, most important city in Indochina. In giving Saigon to the Binh Xuyen, block by block, over a six-year period, the French were not just building up another fiefdom, they were making these bandits the key to their hold on all of Cochin China. Hunted through the swamps as river pirates in the 1940s, by 1954 their military commander was director-general of the National Police and their great chief, the illiterate Bay Vien, was nominated as prime minister of Vietnam. The robbers had become the cops, the gangsters the government.
The Binh Xuyen river pirates first emerged in the early 1920s in the marshes and canals along the southern fringes of Saigon-Cholon. They were a loosely organized coalition of pirate gangs, about two hundred to three hundred strong. Armed with old rifles, clubs, and knives, and schooled in SinoVietnamese boxing, they extorted protection money from the sampans and junks that traveled the canals on their way to the Cholon docks. Occasionally they sortied into Cholon to kidnap, rob, or shake down a wealthy Chinese merchant. If too sorely pressed by the police or the colonial militia, they could retreat through the streams and canals south of Saigon deep into the impenetrable Rung Sat Swamp at the mouth of the Saigon River, where their reputations as popular heroes among the inhabitants, as well as the maze of mangrove swamps, rendered them invulnerable to capture. (58) If the Binh Xuyen pirates were the Robin Hoods of Vietnam, then the Rung Sat (“Forest of the Assassins”) was their Sherwood Forest.
Their popular image was not entirely undeserved, for there is evidence that many of the early outlaws were ordinary contract laborers who had fled from the rubber plantations that sprang up on the northern edge of the Rung Sat during the rubber boom of the 1920s. Insufficient food and brutal work schedules with beatings and torture made most of the plantations little better than slave labor camps; many had an annual death rate higher than 20 percent. (59)
But the majority of those who joined the Binh Xuyen were just ordinary Cholon street toughs, and the career of Le Van Vien (“Bay” Vien) was rather more typical. Born in 1904 on the outskirts of Cholon, Bay Vien found himself alone, uneducated and in need of a job after an inheritance dispute cost him his birthright at age seventeen. He soon fell under the influence of a small-time gangster who found him employment as a chauffeur and introduced him to the leaders of the Cholon underworld. (60) As he established his underworld reputation, Bay Vien was invited to meetings at the house of the underworld kingpin, Duong Van Duong (“Ba” Duong), in the hamlet of Binh Xuyen (which later lent its name to the group), just south of Cholon.
The early history of the Binh Xuyen was an interminable cycle of kidnapping, piracy, pursuit, and occasionally imprisonment until late in World War II, when Japanese military intelligence, the Kempeitai, began dabbling in Vietnamese politics. During 1943-1944 many individual gang leaders managed to ingratiate themselves with the Japanese army, then administering Saigon jointly with the Vichy French. Thanks to Japanese protection, many gangsters were able to come out of hiding and find legitimate employment; Ba Duong, for example, became a labor broker for the Japanese, and under their protection carried out some of Saigon’s most spectacular wartime robberies. Other leaders joined Japanese-sponsored political groups, where they became involved in politics for the first time. (61) Many of the Binh Xuyen bandits had already taken a crash course in Vietnamese nationalist politics while imprisoned on Con Son (Puolo Condore) island. Finding themselves sharing cells with embittered political prisoners, they participated, out of boredom if nothing else, in their heated political debates. Bay Vien himself escaped from Con Son in early 1945, and returned to Saigon politicized and embittered toward French colonialism. (62)
On March 9, 1945, the fortunes of the Binh Xuyen improved further when the Japanese army became wary of growing anti-Fascist sentiments among their French military and civilian collaborators and launched a lightning preemptive coup. Within a few hours all French police, soldiers, and civil servants were behind bars, leaving those Vietnamese political groups favored by the Japanese free to organize openly for the first time. Some Binh Xuyen gangsters were given amnesty; others, like Bay Vien, were hired by the newly established Vietnamese government as police agents. Eager for the intelligence, money, and men the Binh Xuyen could provide, almost every political faction courted the organization vigorously. Rejecting overtures by conservatives and Trotskyites, the Binh Xuyen made a decision of considerable importance -they chose the Viet Minh as their allies.
While this decision would have been of little consequence in Tonkin or central Vietnam, where the Communist-dominated Viet Minh was strong enough to stand alone, in Cochin China the Binh Xuyen support was crucial. After launching an abortive revolt in 1940, the Cochin division of the Indochina Communist party had been weakened by mass arrests and executions.(63) When the party began rebuilding at the end of World War 11 it was already outstripped by more conservative nationalist groups, particularly politicoreligious groups such as the Hoa Hao and Cao Dai. In August 1945 the head of the Viet Minh in Cochin China, Tran Van Giau, convinced Bay Vien to persuade Ba Duong and the other chiefs to align with the Viet Minh. (64) When the Viet Minh called a mass demonstration on August 25 to celebrate their installation as the new nationalist government, fifteen well-armed, bare-chested bandits carrying a large banner declaring “Binh Xuyen Assassination Committee” joined the tens of thousands of demonstrators who marched jubilantly through downtown Saigon for over nine hours. (65) For almost a month the Viet Minh ran the city, managing its public utilities and patrolling the streets, until late September, when arriving British and French troops took charge.
World War 11 had come to an abrupt end on August 15, when the Japanese surrendered to the Allies in the wake of atomic attacks on Hiroshima and Nagasaki. Allied commanders had been preparing for a long, bloody invasion of the Japanese home islands, and were suddenly faced with the enormous problems of disarming thousands of Japanese troops scattered across East and Southeast Asia. On September 12 some 1,400 Indian Gurkhas and a company of French infantry under the command of British General Douglas D. Gracey were airlifted to Saigon from Burma. Although he was under strict orders to stay out of politics, General Gracey, an archcolonialist, intervened decisively on the side of the French. When a Viet Minh welcoming committee paid a courtesy call he made no effort to conceal his prejudices. “They came to see me and said ‘welcome’ and all that sort of thing,” he later reported. “It was an unpleasant situation and I promptly kicked them out. (66) Ten days later the British secretly rearmed some fifteen hundred French troops, who promptly executed a coup, reoccupying the city’s main public buildings. Backed by Japanese and Indian troops, the French cleared the Viet Minh out of downtown Saigon and began a house-tohouse search for nationalist leaders. And with the arrival of French troop ships from Marseille several weeks later, France’s reconquest of Indochina began in earnest. (67)
Fearing further reprisals, the Viet Minh withdrew to the west of Saigon, leaving Bay Vien as military commander of Saigon-Chol on.(68) Since at that time the Binh Xuyen consisted of less than a hundred men, the Viet Minh suggested that they merge forces with the citywide nationalist youth movement, the Avant-Garde Youth. (69) After meeting with Bay Vien, one of the Avant-Garde’s Saigon leaders, the future police chief Lai Van Sang, agreed that the merger made sense: his two thousand men lacked arms and money, while the wealthy Binh Xuyen lacked rank and file. (70) It was a peculiar alliance; Saigon’s toughest criminals were now commanding idealistic young students and intelligentsia. As British and French troops reoccupied downtown Saigon, the Binh XuYen took up defensive positions along the southern and western edges of the city. Beginning on October 25, French thrusts into the suburbs smashed through their lines and began driving them back into the Rung Sat Swamp. (71) Ba Duong led the amphibious retreat of thousands of Binh Xuyen troops, Avant-Garde Youth, and Japanese deserters deep into the Rung Sat’s watery maze. However, they left behind a network of clandestine cells known as “action committees” (formerly “assassination committees”) totaling some 250 men.
While Binh Xuyen waterborne guerrillas harassed the canals, the action committees effectively provided intelligence, extorted money, and unleashed political terror. Merchants paid the action committees regular fees for a guarantee of their personal safety, while the famous casino, the Grand Monde, paid $2,600 a day as insurance that Binh Xuyen terrorists would not toss a grenade into its gaming halls. (72) These contributions, along with arms supplies, enabled the Binh Xuyen to expand their forces to seven full regiments totaling ten thousand men, the largest Viet Minh force in Cochin China. (73) In 1947, when the Viet Minh decided to launch a wave of terror against French colonists, the Binh Xuyen action committees played a major role in the bombings, knifings, and assaults that punctuated the daily life of SaigonCholon . (74)
But despite their important contributions to the revolutionary movement, the Binh Xuyen marriage to the Viet Minh was doomed from the very start. It was not sophisticated ideological disputes that divided them, but rather more mundane squabblings over behavior, discipline, and territory. Relations between Binh Xuyen gangs had always been managed on the principle of mutual respect for each chief’s autonomous territory. In contrast, the Viet Minh were attempting to build a mass revolution based on popular participation. Confidence in the movement was a must, and the excesses of any unit commander had to be quickly punished before they could alienate the people and destroy the revolution. On the one hand the brash, impulsive bandit, on the other the disciplined party cadre-a clash was inevitable.
A confrontation came in early 1946 when accusations of murder, extortion and wanton violence against a minor Binh Xuyen chieftain forced the Viet Minh commander, Nguyen Binh, to convene a military tribunal. In the midst of the heated argument between the Binh Xuyen leader Ba Duong and Nguyen Binh, the accused grabbed the Viet Minh commander’s pistol and shot himself in the head. Blaming the Viet Minh for his friend’s suicide, Ba Duong began building a movement to oust Nguyen Binh, but was strafed and killed by a French aircraft a few weeks later, well before his plans had matured. (75)
Shortly after Ba Duong’s death in February 1946, the Binh Xuyen held a mass rally in the heart of the Rung Sat to mourn their fallen leader and elect Bay Vien as his successor. Although Bay Vien had worked closely with the Viet Minh, he was now much more ambitious than patriotic. Bored with being king of the mangrove swamps, Bay Vien and his advisers devised three strategems for catapulting him to greater heights: they ordered assassination committees to fix their sights on Nguyen Binh; (76) they began working with the Hoa Hao religious group to forge an anti-French, anti-Viet Minh coalition; (77) and they initiated negotiations with the French 2eme Bureau for some territory in Saigon.
The Viet Minh remained relatively tolerant of Bay Vien’s machinations until March 1948, when he sent his top advisers to Saigon to negotiate a secret alliance with Captain Savani of the 2eme Bureau. (78) Concealing their knowledge of Bay Vien’s betrayal, the Viet Minh invited him to attend a special convocation at their camp in the Plain of Reeds on May 19, Ho Chi Minh’s birthday. Realizing that this was a trap, Bay Vien strutted into the meeting surrounded by two hundred of his toughest gangsters. But while he allowed himself the luxury of denouncing Nguyen Binh to his face, the Viet Minh were stealing the Rung Sat. Viet Minh cadres who had infiltrated the Binh Xuyen months before called a mass meeting and exposed Bay Vien’s negotiations with the French. The shocked nationalistic students and youths launched a coup on May 28; Bay Vien’s supporters were arrested, unreliable units were disarmed and the Rung Sat refuge was turned over to the Viet Minh. Back on the Plain of Reeds, Bay Vien sensed an ugly change of temper in the convocations, massed his bodyguards, and fled toward the Rung Sat pursued by Viet Minh troops. (79) En route he learned that his refuge was lost and changed direction, arriving on the outskirts of Saigon on June 10. Hounded by pursuing VietMinh columns, and aware that return to the Rung Sat was impossible, Bay Vien found himself on the road to Saigon.
Unwilling to join with the French openly and be labeled a collaborator, Bay Vien hid in the marshes south of Saigon for several days until 2eme Bureau agents finally located him. Bay Vien may have lost the Rung Sat, but his covert action committees remained a potent force in SaigonCholon and made him invaluable to the French. Captain Savani (who had been nicknamed “the Corsican bandit” by French officers) visited the Binh Xuyen leader in his hideout and argued, “Bay Vien, there’s no other way out. You have only a few hours of life left if you don’t sign With US. (80) The captain’s logic was irrefutable; on June 16 a French staff car drove Bay Vien to Saigon, where he signed a prepared declaration denouncing the Communists as traitors and avowing his loyalty to the present emperor, Bao Dai. (81) Shortly afterward, the French government announced that it “had decided to confide the police and maintenance of order to the Binh Xuyen troops in a zone where they are used to operating” and assigned them a small piece of territory along the southern edge of Cholon (82)
In exchange for this concession, eight hundred gangsters who had rallied to Bay Vien from the Rung Sat, together with the covert action committees, assisted the French in a massive and enormously successful sweep through the twin cities in search of Viet Minh cadres, cells, and agents. As Bay Vien’s chief political adviser, Lai Huu Tai, explained, “Since we had spent time in the maquis and fought there, we also knew how to organize the counter maquis. (83)
But once the operation was finished, Bay Vien, afraid of being damned as a collaborator, retired to his slender turf and refused to budge. The Binh Xuyen refused to set foot on any territory not ceded to them and labeled an independent “nationalist zone.” In order to avail themselves of the Binh Xuyen’s unique abilities as an urban counterintelligence and security force, the French were obliged to turn over Saigon-Cholon block by block. By April 1954 the Binh Xuyen military commander, Lai Van Sang, was director-general of police, and the Binh Xuyen controlled the capital region and the sixty-mile strip between Saigon and Cap Saint Jacques. Since the Binh Xuyen’s pacification technique required vast amounts of money to bribe thousands of informers, the French allowed them carte blanche to plunder the city. In giving the Binh Xuyen this economic and political control over Saigon, the French were not only eradicating the Viet Minh, but creating a political counterweight to Vietnamese nationalist parties gaining power as a result of growing American pressure for political and military Vietnamization. (84) By 1954 the illiterate, bullnecked Bay Vien had become the richest man in Saigon and the key to the French presence in Cochin China. Through the Binh Xuyen, the French 2eme Bureau countered the growing power of the nationalist parties, kept Viet Minh terrorists off the streets, and battled the American CIA for control of South Vietnam. Since the key to the Binh Xuyen’s power was money, and quite a lot of it, their economic evolution bears examination.
The Binh Xuyen’s financial hold over Saigon was similar in many respects to that of American organized crime in New York City. The Saigon gangsters used their power over the streets to collect protection money and to control the transportation industry, gambling, prostitution, and narcotics. But while American gangsters prefer to maintain a low profile, the Binh Xuyen flaunted their power: their green-bereted soldiers strutted down the streets, opium dens and gambling casinos operated openly, and a government minister actually presided at the dedication of the Hall of Mirrors, the largest brothel in Asia.
Probably the most important Binh Xuyen economic asset was the gambling and lottery concession controlled through two sprawling casinos -the Grand Monde in Cholon and the Cloche d’Or in Saigon-which were operated by the highest bidder for the annually awarded franchise. the Grand Monde had been opened in 1946 at the insistence of the governor-general of Indochina, Adm. Thierry d’Argenlieu, in order to finance the colonial government of Cochin China. (85) The franchise was initially leased to a Macao Chinese gambling syndicate, which made payoffs to all of Saigon’s competing political forces-the Binh Xuyen, Emperor Bao Dai, prominent cabinet ministers, and even the Viet Minh. In early 1950 Bay Vien suggested to Capt. Antoine Savani that payments to the Viet Minh could be ended if he were awarded the franchise. (86) The French agreed, and Bay Vien’s political adviser, Lai Huu Tai (Lai Van Sang’s brother), met with Emperor Bao Dai and promised him strong economic and political support if he agreed to support the measure. But when Bao Dai made the proposal to President Huu and the governor of Cochin, they refused their consent, since both of them received stipends from the Macao Chinese. However, the Binh Xuyen broke the deadlock in their own inimitable fashion: they advised the Chinese franchise holders that the Binh Xuyen police would no longer protect the casinos from Viet Minh terrorists (87) kidnapped the head of the Macao syndicate, (88) and, finally, pledged to continue everybody’s stipends. After agreeing to pay the government a $200,000 deposit and $20,000 a day, the Binh Xuyen were awarded the franchise on December 31, 1950. (89) Despite these heavy expenses, the award of the franchise was an enormous economic coup; shortly before the Grand Monde was shut down by a new regime in 1955, knowledgeable French observers estimated that it was the most profitable casino in Asia, and perhaps in the world. (90)
Sometime after 1950 the French military awarded the Binh Xuyen another lucrative colonial asset, Saigon’s opium commerce. The Binh Xuyen started processing MACG’s raw Meo opium and distributing prepared smokers’ opium to hundreds of dens scattered throughout the twin cities. (91) They paid a fixed percentage of their profits to Emperor Bao Dai, the French 2eme Bureau, and the MACG commandos. The CIA’s Colonel Lansdale later reported that:
“The Binh Xuyen were participating in one of the world’s major arteries of the dope traffic, helping move the prize opium crops out of Laos and South China. The profits were so huge that Bao Dai’s tiny cut was ample to keep him in yachts, villas, and other comforts in France.” (92)
The final Binh Xuyen aset was* prostitution. They owned and operated a wide variety of brothels, all the way from small, intimate villas staffed with attractive young women for generals and diplomats down to the Hall of Mirrors, whose twelve hundred inmates and assemblyline techniques made it one of the largest and most profitable in Asia. (93) The brothels not only provided income, they also yielded a steady flow of political and military intelligence.
In reviewing Bay Vien’s economic activities in 1954, (94) the French 2eme Bureau concluded:
“In summary, the total of the economic potential built up by General Le Van (Bay) Vien has succeeded in following exactly the rules of horizontal and vertical monopolization so dear to American consortiums.” (95)
“Bay Vien’s control over Saigon-Cholon had enabled him to build “a multi-faceted business enterprise whose economic potential constitutes … one of the most solid economic forces in South Vietnam.” (96)
After having allowed the Binh Xuyen to develop this financial empire, the 2eme Bureau witnessed its liquidation during the desperate struggle it waged with the CIA for control of Saiaon and South Vietnam. Between April 28 and May 3, 1955, the Binh Xuyen and the Vietnam ese army (ARVN) fought a savage house-to-house battle for control of SaigonCholon. More troops were involved in this battle than in the Tet offensive of 1968, and the fighting was almost as destructive. (97) In the six days of fighting five hundred persons were killed, two thousand wounded, and twenty thousand left homeless. (98) Soldiers completely disregarded civilians and leveled whole neighborhoods with artillery, mortars, and heavy machine guns. And when it was all over the Binh Xuyen had been driven back into the Rung Sat and Prime Minister Ngo Dinh Diem was master of Saigon.
This battle had been a war by proxy; the Binh Xuyen and Diem’s ARVN were stand-ins, mere pawns, in a power struggle between the French 2eme Bureau and the American CIA. Although there were longstanding tactical disagreements between the French and Americans, at the ambassadorial and governmental levels, there was an atmosphere of friendliness and flexibility that was not to be found in their respective intelligence agencies.
Prior to the French debacle at Dien Bien Phu the two governments had cooperated with a minimum of visible friction in Indochina. During the early 1950s the United States paid 78 percent of the cost for maintaining the French Expeditionary Corps and hundreds of American advisers served with French units. After Dien Bien Phu and Geneva, however, the partnership began to crumble.
France resigned herself to granting full independence to her former colony, and agreed at Geneva to withdraw from the northern half of the country and hold an all-Vietnam referendum in 1956-an election the Viet Minh were sure to win-to determine who would rule the unified nation. Under the guidance of Premier Mendes-France, France planned “a precedent-setting experiment in coexistence”; she would grant the Viet Minh full control over Vietnam by adhering strictly to the Geneva Accords, and then work closely with Ho Chi Minh “to preserve French cultural influence and salvage French capital. (99) Needless to say, the French premier’s plans did not sit well in a U.S. State Department operating on Secretary John Foster Dulles’ anti-Communist first principles. Fundamental policy disagreements began to develop between Washington and Paris, though there was no open conflict.
The Pentagon Papers have summarized the points of disagreement between Washington and Paris rather neatly. All the foregoing tension resolved to two central issues between the United States and France. The first was the question of how and by whom Vietnam’s armed forces were to be trained. The second, and more far reaching, was whether Ngo Dinh Diem was to remain at the head of Vietnam’s government or whether he was to be replaced by another nationalist leader more sympathetic to Bao Dai and France. (100)
The first question was resolved soon after Special Ambassador Gen. J. Lawton Collins arrived in Vietnam on November 8, 1954. The Americans were already supplying most of ARVN’s aid, and French High Commissioner Gen. Paul Ely readily agreed to turn the training over to the Americans.
The second question-whether Diem should continue as premierprovoked the CIA-2eme Bureau war of April 1955. Diem was a political unknown who had acceded to the premiership largely because Washington was convinced that his strong anti-Communist, anti-French beliefs best suited American interests. But the immediate problem for Diem and the Americans was control of Saigon. If Diem were to be of any use to the Americans in blocking the unification of Vietnam, he would have to wrest control of the streets from the Binh Xuyen. For whoever controlled the streets controlled Saigon, and whoever controlled Saigon held the key to Vietnam’s rice-rich Mekong Delta.
While the French and American governments politely disavowed any self-interest and tried to make even their most partisan suggestions seem a pragmatic response to the changing situation in Saigon, both gave their intelligence agencies a free hand to see if Saigon’s reality could be molded in their favor. Behind the smiles on the diplomatic front, Colonel Lansdale, of the CIA, and the French 2eme Bureau, particularly Captain Savani, engaged in a savage clandestine battle for Saigon.
In the movie version of Graham Greene’s novel on this period, The Quiet American, Colonel Lansdale was played by the World War II combat hero, Audie Murphy. Murphy’s previous roles as the typical American hero in dozens of black hat-white hat westerns enabled him accurately to project the evangelistic anti-Communism so characteristic of Lansdale. What Murphy did not portray was Lansdale’s mastery of the CIA’s repertoire of “dirty tricks” to achieve limited political ends. When Lansdale arrived in Saigon in May 1954 he was fresh from engineering President Ramon Magsaysay’s successful counterinsurgency campaign against the Philippine Communist party. As the prophet of a new counterinsurgency doctrine and representative of a wealthy government, Lansdale was a formidable opponent.
In seeking to depose Bay Vien, Colonel Lansdale was not just challenging the 2eme Bureau, he was taking on Saigon’s Corsican community -Corsican businessmen, Corsican colonists, and the Corsican underworld. From the late nineteenth century onward, Corsicans had dominated the Indochina civil service. (101) At the end of World War II, Corsican resistance fighters, some of them gangsters, had joined the regular army and come to Indochina with the Expeditionary Corps. Many remained in Saigon after their enlistment to go into legitimate business or to reap profits from the black market and smuggling that flourished under wartime conditions. Those with strong underworld connections in Marseille were able to engage in currency smuggling between the two ports. The Marseille gangster Barthelemy Guerini worked closely with contacts in Indochina to smuggle Swiss gold to Asia immediately after World War II. (102) Moreover, Corsican gangsters close to Corsican officers in Saigon’s 2eme Bureau purchased surplus opium and shipped it to Marseille, where it made a small contribution to the city’s growing heroin industry. (103)
The unchallenged leader of Saigon’s Corsican underworld was the eminently respectable Mathieu Franchini. Owner of the exclusive Continental Palace Hotel, Franchini made a fortune playing the piastergold circuit between Saigon and Marseille during the First Indochina War. (104) He became the Binh Xuyen’s investment counselor and managed a good deal of their opium and gambling profits. When Bay Vien’s fortune reached monumental proportions, Franchini sent him to Paris where “new found Corsican friends gave him good advice about investing his surplus millions.” (105) And according to reliable Vietnamese sources, it was Franchini who controlled most of Saigon’s opium exports to Marseille. Neither he nor his associates could view with equanimity the prospect of an American takeover.
Many people within the 2eme Bureau had worked as much as eight years building up sect armies like the Binh Xuyen; many Corsicans outside the military had businesses, positions, rackets, and power that would be threatened by a decline in French influence. While they certainly did not share Premier MendesFrance’s ideas of cooperation with the Viet Minh, they were even more hostile to the idea of turning things over to the Americans.
When Lansdale arrived in Saigon in May 1954 he faced the task of building an alternative to the mosaic of religious armies and criminal gangs that had ruled South Vietnam in the latter years of the war. Ngo Dinh Diem’s appointment as premier in July gave Lansdale the lever he needed. Handpicked by the Americans, Diem was strongly anti-French and uncompromisingly anti-Communist. However, he had spent most of the last decade in exile and had few political supporters and almost no armed forces. Premier in name only, Diem controlled only the few blocks of downtown Saigon surrounding the presidential palace. The French and their clients-ARVN, the Binh Xuyen, and the armed religious sects, Cao Dai and Hoa Hao-could easily mount an anti-Diem coup if he threatened their interests. Lansdale proceeded to fragment his opposition’s solid front and to build Diem an effective military apparatus. French control over the army was broken and Col. Duong Van Minh (“Big Minh”), an American sympathizer, was recruited to lead the attacks on the Binh Xuyen. By manipulating payments to the armed religious sects, Lansdale was able to neutralize most of them, leaving the Binh Xuyen as the only French pawn. The Binh Xuyen financed themselves largely from their vice rackets, and their loyalty could not be manipulated through financial pressures. But, deserted by ARVN and the religious sects, the Binh Xuyen were soon crushed.
Lansdale’s victory did not come easily. Soon after he arrived he began sizing up his opponent’s financial and military strength. Knowing something of the opium trade’s importance as a source of income for French clandestine services, he now begin to look more closely at Operation X with the help of a respected Cholon Chinese banker. But the banker was abruptly murdered and Lansdale dropped the inquiry. There was reason to believe that the banker had gotten too close to the Corsicans; involved, and they killed him to prevent the information from getting any further. (106)
An attempted anti-Diem coup in late 1954 led to Lansdale’s replacing the palace guard. After the Embassy approved secret funding (later estimated at $2 million), Lansdale convinced a Cao Dai dissident named Trinh Minh The to offer his maquis near the Cambodian border as a refuge in case Diem was ever forced to flee Saigon. (107) When the impending crisis between the French and the Americans threatened Diem’s security in the capital, The moved his forces into the city as a permanent security force in February 1955 and paraded 2,500 of his barefoot soldiers through downtown Saigon to demonstrate his loyalty to the premier. (108) The 2eme Bureau was outraged at Lansdale’s support for The Practicing what Lansdale jocularly referred to as the “unorthodox doctrine of zapping a commander, (109)The had murdered French General Chanson in 1951 and had further incensed the French when he blew up a car in 1953 in downtown Saigon, killing a number of passersby. 2eme Bureau officers personally visited Lansdale to warn him that they would kill TM, and they “usually added the pious hope that I would be standing next to him when he was gunned down. (110)
On February 11, 1955, the French army abdicated its financial controls and training responsibilities for ARVN to the United States, losing not only the ARVN but control of the Hoa Hao and Cao Dai religious sects as well, Approximately 20,000 of them had served as supplementary forces to the French and Vietnamese army, (111) and had been paid directly by the 2eme Bureau. Now, with their stipends cut and their numbers reduced, they were to be integrated into ARVN, where they would be controlled by Diem and his American advisers.
Lansdale was given $8.6 million to pay back salaries and “bonuses” to sect commanders who cooperated in “integrating” into the ARVN. (112) Needless to say, this aroused enormous hostility on the part of the French. When Lansdale met with General Gambiez of the French army to discuss the sect problem, the tensions were obvious:
“We sat at a small table in his office…. A huge Alsatian dog crouched under it. Gambiez informed me that at one word from him, the dog would attack me, being a trained killer. I asked Gambiez to please note that my hands were in my pockets as I sat at the table; I had a small 25 automatic pointing at his stomach which would tickle him fatally. Gambiez called off his dog and I put my hands on the table. We found we could work together.” (113)
By February the 2eme Bureau realized that they were gradually losing to Lansdale’s team, so they tried to discredit him as an irresponsible adventurer in the eyes of his own government by convening an unprecedented secret agents’ tribunal. But the session was unsuccessful, and the 2eme Bureau officers were humiliated; their animosity toward Lansdale was, no doubt, intensified. (114)
But the French were not yet defeated, and late in February they mounted a successful counteroffensive. When Diem refused to meet the sects’ demands for financial support and integration into ARVN, the French seized the opportunity and brought all the sect leaders together in Tay Ninh on February 22, where they formed the United Front and agreed to work for Diem’s overthrow. Money was to be provided by the Binh Xuyen. When a month of fruitless negotiations failed to wring any concessions from Diem, the United Front sent a five-day ultimatum to Diem demanding economic and political reforms. (115) Suddenly the lethargic quadrille of political intrigue was over and the time for confrontation was at hand.
Lansdale was now working feverishly to break up the United Front and was meeting with Diem regularly. (116) With the help of the CIA station chief, Lansdale put together a special team to tackle the Binh Xuyen, the financial linchpin of the United Front. Lansdale recruited a former Saigon police chief named Mai Huu Xuan, who had formed the Military Security Service (MSS) with two hundred to three hundred of his best detectives when the Binh Xuyen took over the police force in 1954. Embittered by four years of losing to the Binh Xuyen, the MSS began a year-long battle with the Binh Xuyen’s action committees. Many of these covert cells had been eliminated by April 1955, a factor that Xuan feels was critical in the Binh Xuyen’s defeat. (117) Another of Lansdale’s recruits was Col. Duong Van Minh, the commander for Saigon-Cholon. Lansdale made ample discretionary funds available to Minh, whom he incorporated in his plans to assault the Binh Xuyen. (118)
The fighting began on March 28 when a pro-Diem paratroop company attacked the Binh Xuyen-occupied police headquarters. The Binh Xuyen counterattacked the following night and began with a mortar attack on the presidential palace at midnight. When French tanks rolled into the city several hours later to impose a cease-fire agreed to by the United States, Lansdale protested bitterly to Ambassador Collins, “explaining that only the Binh Xuyen would gain by a cease fire. (119)
For almost a month French tanks and troops kept the Binh Xuyen and ARVN apart. Then on April 27 Ambassador Collins met with Secretary of State Dulles in Washington and told him that Diem’s obstinancy was the reason for the violent confrontation in Saigon. Dismayed, Dulles cabled Saigon that the U.S. was no longer supporting Diem. (120) A few hours after this telegram arrived, Diem’s troops attacked Binh Xuyen units, and drove them out of downtown Saigon into neighboring Cholon. Elated by Diem’s easy victory, Dulles cabled Saigon his full support for Diem. The Embassy burned his earlier telegram. (121)
During the fighting of April 28 Lansdale remained in constant communication with the presidential palace, while his rival, Captain Savani, moved into the Binh Xuyen headquarters at the Y Bridge in Cholon, where he took command of the bandit battalions and assigned his officers to accompany Binh Xuyen troops in the house-to-house fighting. (122) The Binh Xuyen radio offered a reward to anyone who could bring Lansdale to their headquarters where, Bay Vien promised, his stomach would be cut open and his entrails stuffed with mud.(123)
On May 2 the fighting resumed as ARVN units penetrated Cholon, leveling whole city blocks and pushing the Binh Xuyen steadily backward. Softened by years of corruption, the Binh Xuyen bandits were no longer the tough guerrillas of a decade before. Within a week most of them had retreated back into the depths of the Rung Sat Swamp.
Although the war between Diem and Bay Vien was over, the struggle between Lansdale and the Corsicans was not quite finished. True to the Corsican tradition, the defeated French launched a vendetta against the entire American community. As Lansdale describes it:
A group of soreheads among the French in Saigon undertook a spiteful terror campaign against American residents. Grenades were tossed at night into the yards of houses where Americans lived. American owned automobiles were blown up or booby-trapped. French security officials blandly informed nervous American officials that the terrorist activity was the work of the Viet Minh. (124)
A sniper put a bullet through Lansdale’s car window as he was driving through Saigon, a Frenchman who resembled him was machine-gunned to death in front of Lansdale’s house by a passing car. When Lansdale was finally able to determine who the ringleaders were (many of them were intelligence officers), grenades started going off in front of their houses in the evenings. (125)
During his May 8-11, 1955, meeting with French Premier Edgar Faure in Paris, Dulles asserted his continuing support for Diem, and both agreed that France and the United States would pursue independent policies in Indochina. The partnership was over; France would leave, and the United States would remain in Vietnam in order to back Diem. (126)
Diem’s victory brought about a three-year respite in large-scale opium trafficking in Vietnam. Without the Binh Xuyen and Operation X managing the trade, bulk smuggling operations from Laos came to an end and distribution in Saigon of whatever opium was available became the province of petty criminals. Observers also noticed a steady decline in the number of opium dens operating in the capital region. But although American press correspondents described the Binh XuyenDiem conflict as a morality play-a clash between the honest, moral Premier Diem and corrupt, dope-dealing “super bandits”-the Binh Xuyen were only a superficial manifestation of a deeper problem, and their eviction from Saigon produced little substantive change. (127)
For over eighty years French colonialism had interwoven the vice trades with the basic fabric of the Vietnamese economy by using them as legitimate sources of government tax revenue. During the late 1940s the French simply transferred them from the legitimate economy to the underworld, where they have remained a tempting source of revenue for political organizations ever since. By exploiting the rackets for the French, the Binh Xuyen had developed the only effective method ever devised for countering urban guerrilla warfare in Saigon. Their formula was a combination of crime and counterinsurgency: control over the municipal police allowed systematic exploitation of the vice trade; the rackets generated large sums of ready cash; and money bought an effective network of spies, informants, and assassins.
The system worked so well for the Binh Xuyen that in 1952 Viet Minh cadres reported that their activities in Saigon had come to a virtual standstill because the bandits had either bought off or killed most of their effective organizers. (128) When the Diem administration was faced with large-scale insurgency in 1958 it reverted to the Binh Xuyen formula, and government clandestine services revived the opium trade with Laos to finance counterinsurgency operations. Faced with similar problems in 1965. Premier Ky’s adviser, General Loan, would use the same methods. (129)