* West Africa a major transit point for cocaine into Europe
* Cocaine traffickers returning to Guinea under Conde's government
* Guinea lacks resources to tackle trafficking networks
By David Lewis
CONAKRY, Jan 31 (Reuters) - A surge in cocaine trafficking has transformed Guinea into West Africa's latest drug hot spot, jeopardizing President Alpha Conde's efforts to rebuild state institutions after a military coup and attract billion of dollars in mining investment.
Locals and Latin Americans long-accused of smuggling are operating freely in the country, some with high-level protection from within Conde's administration, according to Guinean and international law enforcement officials and internal police reports seen by Reuters.
The growth of trafficking was overlooked as diplomats focused on securing a fragile transition back to civilian rule after the 2008 putsch.
Counter-narcotics agents from the United States and other countries, meanwhile, concentrated on smugglers in neighbouring Guinea-Bissau, a tiny former Portuguese colony dubbed by crime experts Africa's first "narco-state".
However, the U.S. State Department's 2013 International Narcotics Control Strategy Report said seizures in Guinea and cases abroad traced back there show a spike in trafficking since Conde won power at a 2010 election.
A lack of government figures makes estimating volumes tricky, but a foreign security source said one or two planes landed each month last year, ferrying in cocaine from Latin America mostly for smuggling to Europe.
"Whatever the attitude of the head of state, it's clear that traffickers can operate in Guinea. They have deep roots there," said Stephen Ellis, researcher at the African Studies Centre, Leiden, in the Netherlands.
Ellis said drug money was having a corrosive effect on attempts by Conde's government to improve governance: "It's worrying because of the effects not just on the politics of Guinea, but the whole region."
A July report by Guinea's top anti-drugs agency, seen by Reuters, said traffickers were operating with protection of senior civilian, military and police officials. It said proceeds from the trade are laundered through various channels, including real estate, fishing companies and local mining operations.
HIGHWAY 10
Guinea and Guinea-Bissau are at the eastern end of "Highway 10", the nickname given by law enforcement officers for the 10th parallel north of the equator, the shortest route across the Atlantic, used by traffickers over the past decade to smuggle Latin American cocaine destined mainly for Europe.
United Nations experts estimated last year that some 20 tonnes of cocaine, mostly from Colombia and Venezuela, pass each year through West Africa, which became an attractive transit point as U.S. and European authorities cracked down on more direct routes.
Guinea's role has surged since last year, when an April U.S. sting operation targeted Guinea-Bissau's military chief, prompting traffickers to seek sanctuary in Conakry, law enforcement officials said.
The shift of the trade to Guinea raises the stakes. While Guinea-Bissau is an unstable backwater of just 1.6 million people that rarely attracts notice outside a small community of West Africa watchers, Guinea has nearly 8 times as many people and a much larger regional role.
With vast reserves of iron ore, it has also secured billions of dollars in pledges for investment from mining firms including Rio Tinto and Brazil's Vale. A breakdown of law and order associated with the drugs trade could have an impact on that investment.
In the mouldy, potholed seaside capital, expensive restaurants, gleaming hotels and new apartment blocks highlight pockets of wealth. But they soon give way to teeming, rubbish-strewn neighbourhoods away from the centre of town.
"People are frightened to take the lid off Guinea," said one foreign official, who, like others interviewed for the story, declined to be identified. "Authorities know traffickers are there but are powerless to do anything. They need international help."
Part of the problem is that Col. Moussa Tiegboro Camara, Guinea's top anti-narcotics officer, has been accused of involvement in a massacre of protesters under the military junta in 2009, making it impossible for Western nations to cooperate with him.
He did not respond to a request for comment, nor did officials in Conde's office.
Government spokesman Damantang Camara denied that trafficking was rising or that the state was complicit: "There will be no compromise with drug traffickers." (Camara is a common surname in Guinea and several people in this report who share the name are not related.)
Those meant to keep order lack the resources to do so.
A Guinean anti-narcotics officer said his men are unarmed, need money for fuel and are forced to buy second-hand laptops. The 230 anti-drug agents are too few to police the air strips, coastal landing points or chaotic main port, making the country a smuggler's paradise.
Local and international officials with access to intelligence reports say cocaine is increasingly landing by sea at unmonitored ports or flown in by small planes using remote air strips. Shipments then often receive military escort.
In July, Guinean anti-drugs agents were tipped off about a boat landing carrying cocaine and tried to scramble officers to the scene near Boffa, 80 km (50 miles) north of Conakry.
They didn't get very far. Before they left the capital, they were ordered off the case by other security forces. Their men later found a boat stained with dried blood and stripped of identification and communications equipment.
"We were shut out by the Navy and the Gendarmerie ... They were hostile to our presence on the ground," said a Guinean anti-narcotics officer with detailed knowledge of the case. "There has been a total blackout on the incident."
"THE UNTOUCHABLES"
Drug trafficking in Guinea flourished in the years leading up to veteran president Lansana Conte's death in 2008. Political and military elites, including the late president's eldest son Ousmane Conte, secured the trade, according to Guinean legal documents and foreign law enforcement officials.
Dadis Camara, the army captain who seized power in the chaos after the end of Conte's 24-year rule, hauled senior civilian and military figures before him to confess their roles in drug trafficking. The inquisitions - known as the Dadis Show - became popular TV viewing and were used to neutralise rivals.
In a signed police transcript, Ousmane Conte admitted in February 2009 to taking $300,000 from an alleged drug trafficker who used the late president's son's name to secure clearance for planes ladened with cocaine.
In 2010, Washington nominated Ousmane Conte a drug kingpin. But, like others accused of trafficking, the son of the late president was soon free again.
He has said on national television: "I confess that I have participated in the trafficking of drugs, but I am not a godfather." Reuters was not able to reach him for comment.
He is now sidelined. But the Guinean anti-drugs officer said the network, dubbed "The Untouchables", is back in action: "We fear they've taken the president hostage. If we don't get international support, we'll never be able to tackle them."
Dadis Camara, the junta leader who took over after Lansana Conte's death, fled Guinea after an assassination attempt in December 2009. Elections were held the following year, bringing to power Conde, a longstanding figure in the opposition.
Conde took office after years in exile abroad. This has left him vulnerable and reliant on figures who know the system, according to a diplomat who follows Guinean politics.
"He doesn't know who to trust ... Once they realised that he barked but did not bite, the networks reformed," the diplomat said.
Guinea's drug operations initially shifted to smaller Guinea-Bissau during a crackdown after Conte's death.
But the July memo by Guinea's top anti-drugs unit, which reports directly to the president, said traffickers had "tactically withdrawn" back to Guinea after last year's U.S. sting operation in the smaller country, which missed its target, Guinea-Bissau army chief General Antonio Injai.
"They had never gone very far. For a number of years, they have been in touch with Guinea's cocaine networks," the memo said.
IN PLAIN VIEW
In 2010, according to Guinean Supreme Court documents reviewed by Reuters, the court seized two dozen buildings owned by suspected traffickers. But legal cases subsequently fell through and the buildings were returned. They now swell the property portfolios of people accused by police of trafficking.
One, a half-finished, sky-blue building with a dry-cleaner downstairs, has risen up just down the road from the drug unit's headquarters, according to the local anti-narcotics officer.
Government spokesman Camara said cases against traffickers during military rule had not been properly put together.
"Their lawyers had no problem in taking them apart," he said. "Not all those traffickers were neutralised. That doesn't mean they are operating again. I don't believe that."
According to a second international law enforcement officer, several known foreign traffickers, many of them targeted in the 2008-9 crackdown, live in Conakry. They come from countries including Colombia, Nigeria, Greece, Brazil and Suriname.
At a conference in Abu Dhabi in November, Conde touted the country as "open for business" in a bid to woo Gulf investors. He won billions of dollars in mining investment.
Yet Conde faces a tough battle for re-election in 2015. He must also accomplish the delicate task of keeping in check the armed forces, implicated in trafficking.
"We are dealing with a government that lacks the most basic forms of governance ... If you are a narco, the conditions you would want are all here," said a second Western diplomat.
The U.S. State Department report said officials tackling trafficking had been threatened due to their work. A State Department spokesman, however, said there appeared to be no significant threats to Guinea's stability from trafficking.
However, the July 2013 memo from Guinea's anti-drug unit challenged this, calling on Guinea's highest authorities to "neutralise" traffickers operating in complicity with officials.
"The stability of the country depends on it," it warned.
