Author Examines Drug Trade, Afghan Insurgency

GRETCHEN PETERS: Well, I first worked in the region prior to 9/11. And I felt that we did a lot of important reporting in those days about the many abominable things the Taliban did towards women and other human rights abuses, but most journalists who were out there really missed the story.

The terror camps were all around us, and we didn't report on them. And we were, in fact, discouraged from reporting from them. So I sort of vowed that I wouldn't let that happen again.

And so when I saw the drug trade starting to grow and grow and grow and kept hearing that it was fueling the resurgence of the Taliban and these other extremist groups in the border areas, I decided that I needed to get to the bottom of it.

And it was dangerous. There were times when I was in danger, and the local reporters who helped me on it really did a lot of the heavy lifting in that regard. But I felt it was going to be more dangerous not to report the story, and so that was why I did it.

MARGARET WARNER: Well, in a nutshell now, explain how this works. How is the Taliban and the other insurgent groups enmeshed in the drug trade?

GRETCHEN PETERS: Well, it does depend on the group, and it depends in what region or what part of the border you're on.

The Taliban in southern Afghanistan, the Afghan Taliban, taxed the drug trade. They taxed the farmers. They also taxed the drug convoys leaving the areas. They provide protection. That's probably their biggest source of earnings from drugs, is protecting the drug convoys, protecting drug labs along the border. They also get direct donations from trafficking groups to the high-level leadership.

Other groups, like al-Qaida, and other regional extremist groups, like the Islamic Movement of Uzbekistan, they come in at the border areas. And they start moving the shipments as they leave Afghanistan and start heading out of the region. That's where you actually stand to profit the most. Again, they're by and large in the protection trade.

So far, none of these groups are actually drug traffickers themselves. However, increasingly you hear stories about Taliban commanders running their own heroin labs along the border. They're vertically integrating through the trade.

And what that means is that it's very much following the pattern of what happened in Colombia with the Revolutionary Armed Forces of Colombia, or the FARC. They eventually said, "You know, we've got the guns. We've got the power," and they just took over the drug trade. So that could happen in Afghanistan and Pakistan. It hasn't yet.

GRETCHEN PETERS: It was very clear from my research that drug money pays for the vast majority of the Taliban's operational expenses. So that means every time a U.S. soldier is killed in an IED attack or a roadside bomb, drug money helped pay for putting those explosives in place or paid the insurgents who did it.

MARGARET WARNER: In the book, there's a lot of very interesting history which we cannot get into totally, but what you point out is the seeds of these seeds were really planted both in the '80s when the U.S. was involved there helping to fight the Soviets...

GRETCHEN PETERS: Absolutely.

MARGARET WARNER: ... actually backed the insurgents, then Mujahideen, and as well in the '90s, when the Taliban were in power, ostensibly against all drugs, but not the case?

GRETCHEN PETERS: Right. The history of this is fascinating. To my mind, the two history chapters are, for me, the most interesting chapters in the book and the most fascinating to research. We helped fund this. We overlooked this -- the United States government, when I say "we," it's what I mean -- in the 1980s. The...

MARGARET WARNER: Meaning because the Mujahideen were involved in this trade?

GRETCHEN PETERS: Yes, it was clearly known. There were intelligence documents, State Department cables that went back, U.S. officials working on supporting the Muj in the Soviet resistance, knew that they were involved in drugs trafficking.

And the ones who were most deeply involved in drugs trafficking are the ones that went on to become or to -- members of those groups went on to become the Taliban and al-Qaida.

And there's a widely held misperception in this country that the Taliban was anti-poppy because for the one year they banned farmers from growing poppy. But from my research, it was quite clear that there were such huge stockpiles of poppy by the year 2000, because Afghanistan was producing these unbelievably enormous poppy crops, that they banned it so the stockpiles would go up in value. It was essentially an insider trading deal.

What is the problem there? I mean, they do have units designed to track this money and try to go after it or try to go after the kingpins. What's missing?

GRETCHEN PETERS: Well, it's an unbelievably complex proposal, what I'm suggesting we need to do, but I also think it's unbelievably important. But very little has been done to disrupt the funds that are getting to the Taliban.

Every time somebody puts together a new proposal for Afghanistan, it's always about the farm level. It's always about giving them alternative crops or spraying the fields. We need to start tracking flows of money to that region, separating the good from the bad. And that means regulating the Hawala network. That means...

MARGARET WARNER: That's their informal money-moving...

GRETCHEN PETERS: The informal -- it's like the subcontinent's answer to Western Union, basically. We need to go after the traffickers. There's a very, very small number of people who control this industry, and they are known. They are known to our law enforcement and intelligence community, but the focus is always on the farmers.

I say we need to take it off the farmers and put it on the money. The money is -- we need to follow the money. And that is going to lead us to the people we're looking for in that region.