Karen P. Tandy
Drug Enforcement Administration
March 24, 2004
Mr. Chairman and Members of the Subcommittee:
Thank you for the opportunity to address this Subcommittee on the President’s
President Bush’s National Drug Control Strategy provides a balanced, holistic approach to reducing the availability and usage of illicit drugs in the United States. In 2002, the President set an ambitious performance-based goal: To reduce the use of illegal drugs by 10 percent over two years, and by 25 percent over five years. The Strategy’s success can be measured by its results. The most recent Monitoring the Future Survey1shows that overall drug use by our youth is down 11 percent, exceeding the President’s two-year goal of reducing youth drug use by 10 percent. Most significantly, this finding represents the first decline in drug use across all three grades surveyed (i.e., 8th, 10th, and 12th) in more than a decade. The Department of Justice’s (DOJ’s) Domestic Drug Enforcement Strategy and DEA’s Priority Targeting efforts have contributed to this overall reduction.
DOJ’s Draft FY 2003-FY 2008 Strategic Plan and Domestic Drug Enforcement Strategy support the President’s goal of reducing illegal drug use in America by implementing Priority III of the President’s National Drug Control Strategy - Disrupting the Drug Market. DOJ’s goal is to reduce the drug supply in America by 10 percent by the end of FY 2008 by conducting coordinated, nationwide attacks on the entire infrastructure of the most significant drug trafficking and money laundering organizations responsible for supplying America’s illicit drug market. As the world’s leading drug enforcement agency and the only single-mission federal agency dedicated to drug law enforcement, DEA plays a significant role in DOJ’s Domestic Drug Enforcement Strategy. Through Priority Targeting, DEA relies on intelligence to identify key drug supply organizations, coordinate drug enforcement investigations against all levels of the drug and money supply chain, and disrupt2 or dismantle 3drug trafficking organizations responsible for supplying illegal drugs in America.
At the top of the chain are the international “command and control” organizations – the “Most Wanted” of the drug trade. These 40 international targets are identified on the multi-agency Consolidated Priority Organization Target (CPOT) list.4The CPOT list is developed by OCDETF member agencies, including DEA, the Federal Bureau of Investigation (FBI), the Bureau of Immigration and Customs Enforcement (BICE), the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Internal Revenue Service (IRS), the U.S. Marshals Service (USMS), the Executive Office of U.S. Attorneys (EOUSA), and the U.S. Coast Guard (USCG), and is shared with the Intelligence Community. At the next level are the Regional Priority Organization Targets (RPOTs), which operate domestically and pose a major threat to a particular region(s) of the United States. The RPOT lists5 are created annually by the OCDETF member agencies as part of the regional strategic plans submitted by each of the nine OCDETF regions. In addition to CPOTs and RPOTs, DEA also designates local Priority Target Organizations (PTOs) that have a major impact on drug availability in the United States. Classifying targets as CPOTs, RPOTs, and PTOs ensures that DOJ’s drug enforcement efforts are focused on the most important pressure points of the drug supply chain. This strategy also maximizes the use of the Department’s manpower and financial resources through well coordinated, focused investigations that support prosecutions, reduce the overall number of active drug trafficking organizations, and incarcerate those who participate in illegal drug trafficking. In fact, as of March 2004, more than 80 percent of the CPOTs (i.e., 33 of the 40) have been indicted. The arrest of these CPOT leaders will significantly impact investigations in multi-jurisdictions throughout the United States.
“Disrupting the drug market” may also play a role in the war against terrorism. Although traditional criminal organizations continue to dominate the international drug trade at all levels, drug income is a source of revenue for some international terrorist groups. While DEA does not specifically target terrorists or terrorist organizations, DEA investigations have identified links between groups and individuals under investigation for drug violations and terrorist organizations. As of February 2004, DEA has identified 17 (or 47 percent) of the U.S. Department of State’s current list of 36 designated foreign terrorist organizations as having some degree of connection with drug activities. DEA has disrupted 1 PTO linked to the Revolutionary Armed Forces of Colombia (FARC), and has dismantled 4 PTOs with links to Hezbollah (Party of God) and Hamas. As of February 2004, DEA has 51 open PTO cases with links to terrorist organizations. For example, during Operation Northern Star – a successful DEA-led, OCDETF investigation that disrupted the Canadian supply of pseudoephedrine to Mexican drug traffickers and led to 78 arrests – a connection between drug proceeds, U.S.-based Middle Eastern organizations, and terrorist organizations was identified.
DEA’s drug trafficking and money laundering enforcement initiatives support and augment U.S. efforts against terrorism by denying drug trafficking and/or money laundering routes to foreign terrorist organizations, and the use of illicit drugs as barter for munitions to support terrorism. DEA’s intelligence program is working very closely with law enforcement and the Intelligence Community to identify and anticipate emerging threats posed by the links between drugs and terrorism. Furthermore, the OCDETF Drug/Financial Fusion Center will enhance the DEA’s capabilities to uncover links between drugs and terrorists by maintaining a strong relationship with the Foreign Terrorist Tracking Task Force (FTTTF). Investigative leads developed by the Fusion Center, based on links between drug trafficking and/or money laundering organizations and terrorists or terrorist organizations, will be disseminated to the appropriate elements of the FBI, the Departments of Homeland Security and Treasury, and the Intelligence Community.
DEA’s Mission and Strategic Plan
DEA’s mission supports DOJ’s Draft FY 2003-FY 2008 6Strategic Plan through Strategic Goal II, “Enforce Federal Laws and Represent the Rights and Interests of the American People” and Strategic Objective 2.2, “Reduce the threat, trafficking, use and related violence of illegal drugs.” To accomplish its mission, DEA has developed a draft five-year strategic plan for FY 2003- FY 2008, consistent with DOJ’s Draft FY 2003-FY 2008 Strategic Plan, that supports DEA’s General Goal of reducing the availability of illegal drugs in America by disrupting or dismantling PTOs. To accomplish its General Goal, DEA has developed four strategic goals that are directly linked to its enforcement operations and measure DEA’s performance in support of the President’s National Drug Control Policy and DOJ’s Strategic Plan as follows:
DEA Goal One: Disrupt or Dismantle International PTOs: DEA continues working with its foreign counterparts to attack the vulnerabilities of major international drug and chemical trafficking organizations at all levels of their operations. DEA eliminates the command and control infrastructures of these organizations by disrupting or dismantling the operations of supporting organizations that provide raw materials and chemicals, produce and transship illicit drugs, launder narcotics proceeds worldwide, and direct the operations of surrogates in the United States. One focus of this strategy is the disruption or dismantlement of organizations on the CPOT list, and the PTOs directed at or linked to them.
DEA Goal Two: Disrupt or Dismantle Domestic PTOs: DEA continues an aggressive and balanced enforcement program with a multi-jurisdictional approach that focuses federal resources on illegal drug and chemical traffickers, disrupts or dismantles organizations that control the illegal drug trade within regions of the United States, and seizes proceeds and assets involved in those illegal activities. DEA accomplishes this by disrupting or dismantling PTOs, RPOTs, and CPOTs. DEA’s State and Local Task Force Program serves as a force multiplier in DEA’s efforts.7
DEA Goal Three: Assist State and Local Agencies with Drug Enforcement: DEA supports state and local law enforcement with assistance and training, which allows these entities to better address the drug threats in their communities. Addressing the local drug threats that plague America’s cities, rural areas, and small towns also reduces associated crime that follows drug markets. DEA supports state and local efforts with specialized programs aimed at reducing the demand for, and availability of, drugs through DEA’s expertise and leadership, including state and local law enforcement officer training, marijuana eradication, Mobile Enforcement Teams (MET), and demand reduction.
DEA Goal Four: Reduce the Diversion of Licit Drugs: DEA carries out the mandates of the Controlled Substances Act (CSA) ensuring that adequate supplies of controlled drugs are available to meet legitimate domestic medical, scientific, industrial, and export needs, while preventing, detecting, and eliminating the diversion of these substances into illicit traffic. Specifically, DEA provides regulatory guidance and support to over one million legitimate handlers of controlled substances. Keeping legitimate importers, exporters, manufacturers, retailers, and practitioners compliant with CSA regulations contributes significantly toward reducing the diversion of controlled substances and chemicals.
Recent Accomplishments and Plans for the Future
DEA’s accomplishments demonstrate its commitment to reducing the availability of illegal drugs in America. In FY 2003, DEA disrupted or dismantled 319 domestic and foreign PTOs, of which 45 were linked to one or more CPOTs. DEA continues working with its partners at the federal, state, local, and international level to improve cooperative efforts against drug smuggling and to cut off drug money as a support for international crime. By focusing on linking cases to high level organizations, DEA is achieving a greater return on the investment per investigative work hour. To maximize DEA’s impact against the most significant drug trafficking and money laundering organizations, DEA has, and will continue to:
Eliminate the financial infrastructure of drug organizations and their systems that move $65 billion in U.S. drug proceeds annually.
Americans spend approximately $65 billion per year on illicit drugs,8 but the costs to society from drug consumption far exceed this amount. Illegal drugs cost the U.S. economy $98.5 billion in lost earnings, $12.9 billion in health care costs, and $32.1 billion in other costs, including social welfare costs and the cost of goods and services lost to crime.9 Current seizures of drug proceeds by all law enforcement combined are estimated at less than $1 billion per year -- less than 1 percent of the illicit drug market. Given the Congressionally mandated shift of IRS Special Agents to legal income tax enforcement and the redirection of FBI Special Agents to counter-terrorism and security activities, there are fewer federal investigators to attack the proceeds of the illicit drug industry. To address this issue, the FY 2005 President’s Budget not only restores federal drug agent staffing to the pre-September 11th level, but actually exceeds that level by more than 200 agents.
DEA’s drug intelligence information, technology, and agent resources continue to address the drug trade as a business by attacking drug trafficking organizations’ financial infrastructure. To this end, DEA has established a new Office of Financial Operations and specialized Money Laundering Groups in each DEA domestic field division to aggressively address the drug trade as a business. Approximately 500 DEA Special Agents, Group Supervisors, and Intelligence Analysts will receive money laundering training in 2004. In addition, DEA is proposing the establishment of a Money Laundering Investigative Group at the Bogotá Country Office. DEA is also increasing its agent commitment to money laundering investigations in Mexico to focus on identifying and seizing illicit proceeds flowing back to drug trafficking organizations. Most importantly, the OCDETF Drug/Financial Fusion Center will provide specialized, financial analytical support to ongoing investigations directed at, or linked to, the 40 organizations on the CPOT list.
Five (5) of the 40 organizations on the CPOT list (13 percent) are financial targets. As of February 2004, DEA had 33 open money laundering PTO investigations, of which 9 were linked to these 5 financial CPOTs. Between FY 2001 and FY 2003, DEA dismantled one and disrupted three money laundering PTOs. Drug traffickers are in business to make money, and DEA intends to deny them that revenue, as evidenced by the following success story:
• On August 29, 2003, DEA announced the results of Operation Double Trouble, a four-year OCDETF undercover international drug and money laundering investigation that targeted and disrupted the Colombia-based money laundering and cocaine trafficking organization headed by CPOT Ivan Henao - one of the initial 53 criminal organizations designated as a CPOT. As of March 2004, this operation has resulted in the seizure of more than $12.8 million in U.S. currency and 36 bank accounts from 11 Colombian banks, 370 kilograms of cocaine and heroin, 6 weapons, and the arrest of over 60 drug traffickers and Colombian money brokers. During the course of this operation, more than 28 Title IIIs were conducted. This investigation is still ongoing.
• Two Financial CPOTs (Gilberto and Miguel Rodriguez-Orejuela) are in custody in Colombia and pending extradition. Gilberto Rodriguez-Orejuela was arrested on March 12, 2003 by members of the Colombia National Police, Sensitive Investigative Unit 10 (CNP-SIU) near Cali. The Rodriguez-Orejuela brothers were two of the principal members of the infamous Cali Cartel, who attempted to conceal their ownership of certain drug assets from U.S. authorities to avoid economic sanctions.
Reduce illicit drug supply by concentrating DEA enforcement against CPOTs and RPOTs.
DEA is working toward reducing drug supply in America by conducting coordinated, nationwide attacks on the entire infrastructure of the most significant drug trafficking and money laundering organizations. As of March 4, 2004, DEA has 294 active Priority Target investigations linked to one or more of the 40 CPOT targets. The nine DEA regional OCDETF coordinators certified that there are 332 DEA RPOT investigations, of which 167 are active DEA PTOs. 11
In 2003, federal law enforcement successfully dismantled eight organizations identified on the CPOT list. For example, the U.S. distribution chain for CPOT Ismael Zambada-Garcia’s organization – one of the largest and most powerful cocaine and marijuana organizations in Mexico - was dismantled in 2003. DEA’s efforts against the Zambada-Garcia CPOT are reflected in the following accomplishment:
• On July 31, 2003, DEA announced the results of Operation Trifecta, a multi-jurisdictional OCDETF operation targeting CPOT Ismael Zambada-Garcia’s organization-- a CPOT responsible for trafficking cocaine, marijuana, and methamphetamine across the U.S.-Mexican border for over 30 years. Approximately 10 tons of cocaine seized from a fishing vessel off the coast of Mexico in December 2001 were directly tied to the Zambada-Garcia organization. This amount of cocaine would potentially carry a retail street value of approximately $929 million. Operation Trifecta resulted in the indictment of Mexican drug lord Zambada-Garcia and the arrests of more than 400 associates in the United States and Mexico. This operation involved 8 Federal agencies, more than 65 State and local departments, the Colombian National Police, and Mexican authorities. As of March 2004, this operation has resulted in 463 arrests and the seizure of 12,706 kilograms of cocaine, 15.5 kilograms of heroin, 35,321 pounds of marijuana, 162 pounds of methamphetamine, 28,000 dosage units of MDMA, 41 vehicles, 1 maritime vessel, 83 weapons, and $11.7 million in U.S. currency. Zambada-Garcia, who has been indicted in California and Texas on narcotics trafficking charges, remains a fugitive.
Stop the diversion and abuse of legal controlled substance pharmaceuticals.
The diversion and abuse of legal controlled substances have been increasing at alarming rates throughout America. In 2002, an estimated 6.2 million Americans reported past month use of prescription drugs (e.g., pain relievers, sedatives/tranquilizers, or stimulants) for non-medical purposes.12 Pain reliever incidence increased by nearly 400 percent from 628,000 initiates in 1990 to 2.4 million in 2001. Emergency room visits associated with narcotics abuse have increased 163 percent since 1995.13
On March 1, 2004, President Bush announced a coordinated national strategy to confront the illegal diversion and abuse of prescription drugs. The strategy balances the need for effective pain management therapies with the prevention of misuse, abuse, and diversion of psychotherapeutic drugs. DEA has committed to work with the Food and Drug Administration (FDA) to implement additional investigative efforts and enforcement actions against the illegal sale, use, or diversion of controlled substances, including diversion occurring over the Internet. Many of these e-pharmacies are foreign-based and expose the purchaser to potentially counterfeit, contaminated, or adulterated products. In 2003, as a result of its online investigations, DEA seized approximately $2.5 million in computers, cash, real-estate, and bank accounts. An additional $2.6 million was seized in 2002. As of March 2004, DEA has 95 open investigations involving the online sales of controlled substances without a prescription. The following case highlights DEA efforts to curtail the diversion of controlled substances:
• DEA, in cooperation with the FDA and the FBI, shut down Rx Network of South Florida after agents conducted undercover purchases of diet drugs from Rx Network over the Internet without proper consultation with a physician. On December 3, 2003, 10 individuals and 3 companies were indicted on 108 counts in the Eastern District of Virginia. Besides criminal prosecution, the defendants face forfeiture of $1.25 million in proceeds obtained as a result of conspiracy to violate the Controlled Substances Act. In addition, the DEA issued an immediate suspension of RX Network’s registration. This investigation is ongoing.
Enhance intelligence driven enforcement strategies and operations.
Intelligence must drive enforcement efforts if DEA is to have maximum impact against the organizations responsible for the greatest volume of illicit drugs and money laundering in America. As the events of September 11, 2001 demonstrated, it is not the availability of sufficient intelligence, but rather the inability of agencies within the Intelligence Community to share existing information across departmental and agency boundaries that is of most concern. DEA recognizes that without an all-source collection and analysis capability covering foreign and domestic intelligence, it is difficult to identify the connections among all the components of a drug trafficking network and impossible to determine where these organizations are the most vulnerable to dismantlement.
DEA is currently sponsoring an external review of its Intelligence Program to identify areas for improvement in collecting, analyzing, producing, and disseminating intelligence, as well as in the training and career development of DEA intelligence analysts. Further, DEA is working with the National Drug Intelligence Center (NDIC) to further bolster its partnership, leverage individual strengths, eliminate duplication, and realize efficiencies from joint efforts, which will allow DEA to shift intelligence resources to support enforcement operations and investigations.
OCDETF’s Drug/Financial Fusion Center will provide OCDETF member agencies a complete intelligence picture of targeted drug trafficking organizations and their financial infrastructure through enhanced technical capability and human analysis. This capability will develop focused investigative leads in support of OCDETF investigations nationwide aimed at disrupting or dismantling the most significant drug trafficking organizations and their financial infrastructure. The OCDETF Drug/Financial Fusion Center will significantly expand DEA’s Special Operations and Special Intelligence Divisions by providing the ability to cross analyze and exploit all investigative information (e.g., names, addresses, criminal associates) to their current, effective exploitation of command and control communications. The importance of intelligence-driven operations is highlighted by the following OCDETF, DEA PTO investigation:
• On February 24, 2003, DEA announced the indictment of 50 individuals on charges of trafficking illegal drug paraphernalia. The charges marked the culmination of two nationwide investigations, Operation Pipe Dreams and Operation Headhunter, and included indictments against distributors of drug paraphernalia nationwide. The defendants were charged with conspiracy to sell and offering to sell various drug paraphernalia, in violation of 21 U.S.C. Sections 846, 853, and 863. Many of the defendants had used the Internet to run their businesses. Ten individuals arrested sold drug paraphernalia in retail shops in the Western District of Pennsylvania. Many of the items were disguised as common objects, such as highlighters and lipstick to avoid detection as drug paraphernalia, and were marked using code names and symbols. As of March 2004, these investigations have led to 76 arrests, 65 convictions, and the seizure of 169 tons of drug paraphernalia (valued at $27 million), 3.5 tons of Mannitol (a popular cutting agent for cocaine and heroin), and approximately $7 million in assets (cash and property). Operations Pipe Dreams and Head Hunter targeted 65 paraphernalia businesses, successfully eliminating 17 nationwide and 14 local paraphernalia businesses across the United States and 11 online paraphernalia websites.
Improve the measures of effectiveness for DEA programs and operations.
DEA was among the 20 percent of federal agencies reviewed in the Office of Management and Budget’s (OMB’s) first-year effort to assess agency progress in integrating performance and budget, which is one of five areas in the President’s Management Agenda. In November 2003, OMB reassessed DEA using the modified FY 2005 PART instrument. OMB determined that DEA has made progress and doubled its score in the PART’s four sections.14 DEA was recognized for:
DEA is revising its long-term goals and refining its performance measures to establish links between a Priority Target’s disruption or dismantlement and its impact on drug availability. 15 DEA continues searching for new and innovative methods to measure its effectiveness in reducing the Nation’s illicit drug supply. DEA’s strategic drug availability reduction technique is centered on four principles: 1) accurate and timely intelligence; 2) effective tactics; 3) rapid deployment of personnel and resources; and 4) relentless follow-up and assessment. The importance of measuring DEA’s impact in reducing illicit drug availability is highlighted by the following success story:
• In Operation White Rabbit, an OCDETF/PTO investigation, DEA dismantled the world’s leading LSD manufacturing organization headed by William Leonard Pickard. This was the single largest seizure of an operable LSD lab in DEA’s history. On November 6, 2000, DEA agents seized from an abandoned missile silo located near Wamego, Kansas, approximately 91 pounds of LSD, 215 pounds of lysergic acid (an LSD precursor chemical), 52 pounds of iso-LSD (an LSD manufacturing by-product), and 42 pounds of ergocristine (an LSD precursor with the ability to create an additional 27 pounds of LSD). On November 25, 2003, Pickard was sentenced to life imprisonment without parole, and his associate was sentenced to 30 years imprisonment without parole. Since that operation, reported LSD availability declined by 95 percent nationwide. Furthermore, according to the 2002 Drug Abuse Warning Network (DAWN), LSD mentions 16 have declined steadily from 4,016 mentions in CY 2000 to 891 for CY 2002.17 The 2003 Monitoring the Future Survey 18shows that LSD use has declined sharply in the past two years, which is attributed to Operation White Rabbit since perceived risk and personal disapproval of LSD use generally have not moved in ways that would explain this downturn in use.
DEA’s Response to America’s Illicit Drug Threats
The President’s National Drug Control Strategy has made a difference. The most recent Monitoring the Future Survey shows that overall drug use by our youth is down 11 percent, exceeding the President’s two-year goal of reducing youth drug use by 10 percent.19 It is the first significant downturn in youth drug use in nearly a decade, with reductions in drug use noted among 8th, 10th, and 12th graders, and levels of use for some drugs that are lower than they have been in almost three decades. Current MDMA use is down by more than half, marijuana use is down 11 percent, and amphetamine use (including methamphetamine) fell by 17 percent.
Despite these successes, DEA’s most recent Domestic Threat Assessment20 highlights the many challenges we are still facing. In 2002, an estimated 19.5 million Americans - 8.3 percent of the population age 12 or older - were current 21illicit drug users.22 I would like to take this opportunity to discuss these domestic threats and how DEA makes a difference in reducing the availability of illicit drugs in America.
Marijuana continues to be a significant threat given its popularity and availability. Americans spend more than $10.4 billion every year on marijuana.23 Recent supply availability estimates indicate that between 10,000 and 24,000 pure metric tons of marijuana are available in the United States.24 The 2002 National Survey on Drug Use and Health (NSDUH), formerly called the National Household Survey on Drug Abuse (NHSDA), found that marijuana was the most commonly used illicit drug with 14.6 million users during the past month. This represents a statistically significant increase in the use of marijuana between CY 2001 and CY 2002 (from 5.4 to 6.2 percent). About one third of the marijuana users (4.8 million) used the drug on 20 or more days in the past month. 25Marijuana accounted for 119,472 mentions26in emergency department visits in CY 2002, second only to cocaine among drug-related visits.27 Each year, more teens enter treatment for marijuana dependence than for all illicit drugs combined, including alcohol.
Marijuana trafficking is prevalent across the nation, with both domestic and foreign sources of supply. Small, independent operators generally control the indoor and outdoor cultivation of domestic marijuana. Mexican drug trafficking organizations dominate the transportation and wholesale distribution of the majority of foreign-based marijuana available in the United States and are believed to be cultivating marijuana on U.S. public lands throughout California. Traffickers in Mexico move bulk shipments of marijuana through the Southwest Border by land, sea, and air. Drug trafficking organizations based in Colombia and Mexico move shipments of marijuana through the Caribbean to the eastern and southeastern United States on commercial and noncommercial vessels. Canada also has become a substantial source of marijuana smuggled into the United States. Marijuana from Canada, commonly referred to as BC Bud, is now available in every region of the United States. Since the demand for marijuana far exceeds that for any other illegal drug and the profit potential is so high, some cocaine and heroin drug trafficking organizations reportedly traffic marijuana to help finance their drug operations.
DEA aggressively strives to halt the spread of marijuana cultivation in the United States through the Domestic Cannabis Eradication and Suppression Program (DCE/SP) ? the only nationwide program that exclusively targets marijuana. DEA continues to improve the effectiveness of its marijuana eradication efforts by spending $12.6 million in CY 2003 to support the 100 state and local agencies that are now active DCE/SP participants.28 DEA’s marijuana eradication activities resulted in the eradication of 3.6 million cultivated marijuana plants, the execution of 8,480 arrests, and the seizure of $25 million in assets in CY 2003. In addition, DEA continues monitoring state legislation to combat marijuana legalization. Where appropriate, DEA provides information to state legislators about the facts concerning marijuana and how proposed legislation impacts on drug law enforcement. 29
Eight (8) of the 40 “Most Wanted” drug trafficking and money laundering organizations (20 percent) - CPOTs - engage in marijuana trafficking. As of February 2004, there are 23 active DEA Priority Target investigations linked to these 8 CPOTs. Between FY 2001 and FY 2003, DEA disrupted 28 and dismantled 35 marijuana PTOs. As of February 2004, there were 86 open marijuana PTO investigations. 30DEA’s efforts on reducing the availability of marijuana in the United States are evidenced by the following recent success stories:
• Operation Enigma - a Special Operations Division (SOD)-supported, multi-jurisdictional, multi-national OCDETF wire intercept operation initiated in January 2001 - targeted CPOT Armando Valencia-Cornelio. This Mexico-based, poly-drug trafficking organization is believed to be responsible for the importation and distribution of multi-ton quantities of cocaine and marijuana, and multi-hundred pound quantities of heroin and methamphetamine, in the United States. Specifically, this organization was responsible for the receipt and distribution of approximately 20-30 tons of cocaine on a monthly basis. As of March 2004, Operation Enigma has resulted in 214 arrests and the seizure of 1,361 kilograms of cocaine, 43 kilograms of heroin, 38,665 pounds of marijuana, 117 pounds of methamphetamine, 96 weapons, and $8.9 million in U.S. currency. CPOT Valencia-Cornelio was arrested in August 2003.
• On February 25, 2004, DEA, in cooperation with ATF, discovered a three-level, indoor marijuana “grow” operation behind a concealed entrance in a Youngstown, Ohio warehouse. DEA Agents seized approximately 3,800 marijuana plants in various stages of maturity from seven separate rooms in the warehouse. In production since 2000, the sophisticated indoor operation utilized an automated watering and fertilizing system, as well as extensive artificial lighting, to foster rapid growth of the plants. Intelligence information indicated the operation harvested only the buds of the marijuana plant and shipped two 55 gallon drums of product weekly. Additional plant material was discarded. Prior surveillance at the location had observed the delivery of 15 – 17 pallet-loads of expensive grow mix. Electric bills for the warehouse during the past year averaged $3,000 per month.
• On February 18, 2004, Rigoberto Gaxiola-Medina and nine additional subjects were indicted in the Judicial District of Arizona as a result of a DEA investigation in cooperation with Mexican authorities. The investigation revealed a close link between Gaxiola-Medina and CPOT Joaquin Guzman-Loera, aka “Chapo.” This OCDETF/PTO investigation disrupted a major marijuana trafficking organization operating on both sides of the Southwest Border by eliminating the use of a tunnel for criminal activities. As a result of this investigation, DEA conducted two separate seizures of marijuana totaling approximately 1,237 lbs., which were directly linked to the tunnel. A provisional arrest warrant is being submitted for the arrest and extradition of Gaxiola-Medina.
• On July 2, 2003, DEA’s San Francisco Field Division, working with the Placer County Sheriff’s Department (PCSO), California Bureau of Narcotic Enforcement (BNE) and the U.S. Forest Service (USFS), seized 3,499 growing marijuana plants at an outdoor grow site in the Forest Hill National Forest, in Placer County, CA. Pedro Villa-Garcia was arrested at the grow site and one other unidentified Hispanic male fled from the scene and was not apprehended. This grow site was previously identified pursuant to a DEA investigation, Operation Green Wine. The plants seized from the site were located in well-traveled area, which likely would have been discovered by the public, and therefore posed a threat to the publics’ safety. During the interview, Villa-Garcia identified himself as an illegal alien from Michoacan, Mexico brought to the area for the purpose of tending to the crop. Villa-Garcia was booked on California State charges for “cultivation and possession with intent to distribute marijuana.” In January 2004, Villa-Garcia was sentenced to 60 months in prison for his involvement with the grow operation.
OxyContin® diversion and abuse are a serious problem throughout the United States. OxyContin® is the number one prescribed Schedule II narcotic in the United States accounting for 7.7 million prescriptions in CY 2003. According to the 2002 NSDUH, 4.4 million people - 1.8 percent of the population age 12 or older - reported current use 31of pain relievers, including OxyContin®, for non-medical purposes.32 DAWN reported that oxycodone, the active ingredient in OxyContin®, accounted for 22,397 mentions 33in CY 2002 -- a 21.6 percent increase from the 18,409 mentions in CY 2001.34 OxyContin® was linked to 464 deaths nationally between January 2000 and February 2002.35 The diversion and abuse of controlled substances demand a different enforcement approach since these substances have a legitimate medical use.
DEA continues to aggressively address the diversion and abuse of OxyContin® through a comprehensive National Action Plan that focuses on enforcement and regulatory investigations targeting key points of OxyContin® diversion, such as unscrupulous and/or unethical medical professionals, forged and fraudulent prescriptions, pharmacy theft, and ‘doctor shoppers.’ DEA’s National Action Plan has been successful in addressing OxyContin® diversion as evidenced by: (1) a reduction in the rate of increase of OxyContin® prescriptions being written; and (2) a leveling-off of OxyContin® sales since the Plan’s implementation in the Spring of 2001.36
Between FY 2001 and FY 2003, DEA has initiated 424 OxyContin® investigations, which have resulted in approximately 600 arrests. In fact, 25 percent of DEA’s Schedule II narcotics investigations conducted by the Diversion Control Program involve OxyContin®: approximately 60 percent of the cases target DEA registrants (e.g., doctors, pharmacists, etc.) and 40 percent target non-registrants (e.g., ‘doctor shoppers,’ prescription forgers, etc.). These investigations have uncovered organized rings of individuals diverting, selling, and abusing OxyContin®. Since April 2002, DEA has disrupted four and dismantled two OxyContin® Priority Targets. As of February 2004, DEA had 9 open OxyContin® Priority Target investigations.37 A sample of recent success stories follow:
• In 2002, seven physicians practicing out of a medical office in South Shore, Kentucky were arrested for trafficking in controlled substances, including OxyContin®. On April 29, 2003, the owner, Dr. David Proctor, pled guilty to conspiracy to distribute controlled substances and agreed to a 16-year sentence and a $650,000 fine. The six other physicians received sentences between 3 and 20 years of incarceration.
• On September 24, 2003, a Federal Grand Jury in the Eastern District of Virginia indicted Dr. William E. Hurwitz on 49 counts, including the unlawful distribution of controlled substances, engaging in a “Continuing Criminal Enterprise,” and a forfeiture count seeking proceeds of $2.2 million. Additionally, Dr. Hurwitz was charged on 2 counts of drug trafficking resulting in death. Witnesses have testified that Dr. Hurwitz would charge “new patients”an initial fee of $1,000-$1,500, and a monthly fee of $150-$250. After one became a “patient,” Dr. Hurwitz would freely prescribe large quantities of Schedule II controlled substances, including oxycodone, hydromorphone, methadone, and morphine. He would also write prescriptions for Schedule III controlled substances (e.g., testosterone) and Schedule IV controlled substances (e.g., Ativan® and Valium®). Witnesses state that Dr. Hurwitz would rarely see patients and that one could either call into his office requesting a prescription of their choice or send a request via electronic mail. Dr. Hurwitz would often send customers to specific pharmacies (e.g., Boulevard Pharmacy or The Plains Pharmacy) for their drugs. The investigation resulted in Dr. Hurwitz’s arrest and the arrest of 45 street-level dealers of OxyContin®.
• Dr. Randolph W. Lievertz, of Indianapolis, Indiana, and several other individuals were arrested in December 2001 for distribution of OxyContin®, morphine, methadone and Fentanyl. On February 28, 2003, Dr. Leivertz was sentenced in U.S. District Court to 51-months imprisonment and three years probation.
DEA is working with the FDA and the Office of National Drug Control Policy (ONDCP) to develop public service announcements that will appear automatically during Internet prescription drug searches to alert consumers to the potential danger and illegality of purchasing controlled substances, such as OxyContin®, online. In addition, DEA will provide online continuing medical education on the proper use of opioids, such as OxyContin®, and their potential for abuse and diversion to doctors and other medical practitioners as part of the registration process beginning in FY 2005.
President Bush has declared that combating the threat of synthetic drugs remains a priority, particularly the threat of “club drugs.” 38 MDMA is the most popular of the “club drugs.” Formerly distributed almost exclusively at all-night dance parties, commonly known as “raves,” MDMA can now be found in America’s high schools, colleges, and many other social settings. In 2002, 3.2 million people reported using MDMA during the past year and 676,000 reported using it during the past 30 days. 39MDMA accounted for 4,026 mentions40 in emergency department visits in CY 2002.41
MDMA is synthetically manufactured in clandestine laboratories, primarily in the Netherlands, and to a lesser extent in Belgium. Canada is emerging as an MDMA-producing country. In CY 2003, several large-scale MDMA laboratories were seized in the Toronto area. MDMA is smuggled into the United States by couriers via commercial airlines and the use of express-package carriers. Law enforcement has seen an increasing number of shipments transiting the Caribbean and Mexico en route to the United States. The Dominican Republic has become a major transshipment country for European MDMA entering the United States through Florida.
DEA is working extensively with Dutch and Belgian law enforcement agencies to target organizations in their countries that manufacture and transport MDMA. DEA is also targeting the supply of source chemicals for producing MDMA. Since many of these source chemicals originate in China, DEA has developed an intelligence sharing network with Chinese authorities to ensure that source chemicals are being accounted for and properly used. Domestically, DEA launched Operation X-OUT in November 2002 to address the threat of “club drugs” by educating the public on the dangers of MDMA and increasing DEA’s enforcement efforts. Since its inception, DEA has conducted approximately 22 Ecstasy and Predatory Drug Demand Reduction events nationwide. An additional three events are planned for FY 2004. DEA continues to actively raise public awareness on the health risks of MDMA abuse. For instance, on October 20, 2003, Dutch and Belgian Ambassadors, Drug Czar John Walters, and DEA joined Congressman Mark Steven Kirk (R-Illinois) for an MDMA awareness event in suburban Chicago. The participants pledged to work together to reduce the flow of dangerous club drugs, such as MDMA. The Administration’s educational and enforcement efforts appear to be working. The Monitoring the Future Survey indicates that more youths today understand the dangers of MDMA use.42
Three (3) of the 8 European/Asian organizations on the CPOT list (38 percent) engage in Ecstasy distribution. As of February 2004, DEA has 12 active MDMA PTO investigations linked to these CPOTs. Between FY 2001 and FY 2003, DEA disrupted 23 and dismantled 22 MDMA PTOs. As of February 2004, there were 98 open MDMA PTO investigations.43 Examples of these recent DEA accomplishments on MDMA targeting follow:
• On June 4, 2003, DEA’s Detroit Field Division culminated a two-year OCDETF/PTO investigation with the execution of four search warrants and the arrest of eight individuals affiliated with an MDMA distribution organization headed by Tarek Dib in the Detroit Metropolitan area. Seizures during the investigation included eight limousines valued at approximately $500,000, and two residences with a combined value of over $450,000, and over 17,000 tablets of MDMA. The success of dismantling this group has been seen through the reduction in availability of MDMA at local college campuses in the Detroit area.
• Through Operations Rave I and II, DEA captured CPOT Oded Tuito, who was known as the world’s largest trafficker of MDMA. Tuito was a high-ranking member of an Israeli crime syndicate responsible for the importation of over 7 million tablets of MDMA into the United States. The investigative efforts of this SOD-supported, multi-jurisdictional OCDETF investigation completely dismantled CPOT Tuito’s MDMA trafficking organization and seriously impacted the ability of Israeli organized crime groups to distribute MDMA into domestic consumer markets. As of March 2004, Operation Rave I and II have resulted in the arrest of 247 individuals and the seizure of 7.5 million tablets of MDMA, $2.7 million in U.S. currency, and $1.9 million in other assets. During the course of this operation, 71 wire intercepts were utilized in Europe and the United States.
• In October 2002, an international MDMA investigation conducted in Belgium, Israel and the United States culminated with three arrests in New York City. This OCDETF/PTO investigation began with the seizure of 1.4 million tablets of MDMA in Antwerp, Belgium by the Belgian Federal Police. The pills were secreted inside three diamond polishing tables scheduled to be loaded onto a container ship bound for the United States. This investigation included the Belgian and Israeli national police agencies, as well as DEA offices in Los Angeles, Newark, New York, Brussels, and Nicosia. This case marked the largest MDMA seizure in Europe to date and the third largest MDMA seizure in the United States. The shipment had a retail value of approximately $42 million. Most significantly, this seizure led to another SOD-supported OCDETF investigation, Operation Southern X-Posure, which targets Israeli organized crime groups involved in MDMA trafficking and money laundering linked to a CPOT. This investigation is still ongoing.
Cocaine, in powder and crack form, is still a major illegal drug of concern throughout the United States based upon abuse indicators, violence associated with the trade, and trafficking volume. The 2002 NSDUH found that 2 million persons - almost one percent of the adult population in the United States - used cocaine within the past 30 days. 44Almost 6 million reported using cocaine during the past year. According to the DAWN report, cocaine is the most frequently reported illegal drug in hospital emergency department visits, accounting for 199,198 mentions 45in CY 2002.46
Supply availability estimates indicate that between 260 and 270 pure metric tons of cocaine are available to illegal drug users in the United States. 47Approximately 72 percent of the cocaine entering the United States moves across the Southwest Border.48 Drug trafficking organizations operating from South America smuggle cocaine and heroin into the United States via a variety of routes, including land routes through Mexico, maritime routes along Mexico’s east and west coasts, sea routes through the Caribbean, and international air corridors. Traffickers operating from Mexico control wholesale cocaine distribution throughout the western and mid-western United States.
Although most of the cocaine available in the United States enters through the Southwest Border, drug trafficking organizations also use aircraft, high-speed boats, Dominican freighters, and containerized cargo to move cocaine shipments into the United States via the Caribbean. Approximately 27 percent of cocaine shipments destined for the United States flowed through the Caribbean corridor in 2002. Countering this threat consumes enormous domestic counter-drug resources since international drug trafficking organizations have demonstrated an ability to modify trafficking operations, shift smuggling routes, and improve concealment techniques in response to multinational interdiction efforts.
In 2002, Colombia’s coca crop declined for the first time in over a decade. The crop declined from 170,000 hectares in 2001 to 144,000 hectares in 2002. Aggressive eradication efforts in southern Colombia resulted in a 15 percent crop reduction in 2002. The United Nations has estimated that coca cultivation declined as much as 30 percent in the first half of 2003. Colombia’s estimated potential cocaine production declined by 14 percent, from 795 metric tons in 2001, to 680 metric tons in 2002. This decline notwithstanding, Colombia still accounts for roughly 70 percent of the total cocaine production in the Andean Region.
More than half of the organizations on the CPOT list are involved in cocaine trafficking. Of the 16 Latin American/Caribbean organizations identified in the CPOT list, most are involved in the large-scale distribution of cocaine. In addition, of the 11 Mexico-based organizations, more than half are polydrug organizations responsible for importing and distributing cocaine, methamphetamine and marijuana. As of March 2004, DEA had 209 PTO investigations linked to these CPOTs. Between FY 2001 and FY 2003, DEA disrupted 157 and dismantled 145 cocaine PTOs. As of February 2004, there were 647 open cocaine PTO investigations.49 Examples of DEA’s success in disrupting or dismantling cocaine PTOs follow.
• As of February 27, 2004, Operation Panama Express, an OCDETF investigation that targets maritime cocaine smuggling for interdiction, accounted for the direct seizure of 169 metric tons of cocaine and the destruction of an additional 90 metric tons. These interdictions have resulted in the arrest and prosecution of 473 suspects in Tampa, Florida, as well as 76 suspects arrested in San Diego, California, and in foreign countries including Colombia, Mexico, Honduras, Panama, France, and the Netherlands.
• Operation Caso M, an SOD-supported, multi-jurisdictional, OCDETF investigation targeted the Dominican Republic-based CPOT Jose Arismendy Almonte-Peña. This organization was one of the most significant cocaine transportation and distribution organizations operating in the Caribbean. It was responsible for transporting approximately 2,000 kilograms of cocaine each month between 1995 and 2003 from South America to Puerto Rico and the Caribbean for distribution in the continental United States. As of March 2004, 26 members of the targeted CPOT, have been arrested, including Almonte-Peña, who is in U.S. custody as of March 10, 2004. Three associates remain at large. Seizures to date include 188 kilograms of cocaine, $364,000 in U.S. currency as well as 2 houses, 11 apartments, 15 vehicles, several businesses, and 14 bank accounts in the Dominican Republic valued at approximately $3 million in U.S. currency. Operation Caso M will be the first test of the Dominican Republic’s first asset forfeiture laws enacted in June 2003. The dismantlement of this organization, along with the indictment and arrest of CPOT Almonte-Peña and high level members of his organization, will have a significant effect on cocaine trafficking into the United States through the Caribbean.
• On May 11 and 12, 2003, the DEA-supported Ecuadorian National Police (ENP) SIU in Guayaquil, Ecuador developed information relative to the drug trafficking activities of Roberto Centeno Martinez. Reportedly, Centeno was transporting multi-kilograms of cocaine to Europe via shipments of plywood. On May 20, 2003, the ENP SIU executed warrants at the Algomerados Cotopaxi warehouse in Guayaquil. As a result, 9 Ecuadorian nationals were arrested and 762 kilograms of cocaine were seized. Based on post-arrest interviews, the SIU conducted another search at the home of one of the other warehouse defendants. In total, the ENP SIU seized in excess of 2.7 metric tons of cocaine in their enforcement activity.
• On March 27, 2003, DEA, in cooperation with Colombian authorities, executed the takedown of Operation Pegasus II, a multi-district, multi-agency, OCDETF investigation. This organization was responsible for transporting more than 100 metric tons of cocaine from the Pacific Coast of Colombia to the United States between 2001 and March of 2003. The enforcement operation involved the coordinated execution of 55 search warrants and 7 US Provisional Arrest Warrants (PAW). Fifteen (15) of the 19 targets were arrested. In addition, $30,000 in U.S. currency, $60,000,000 in Colombian pesos, $100,000 in jewelry and watches, HF communication equipment used to communicate with fishing vessels, 6 fishing vessels, and several weapons were seized. As of result of Operation Pegasus II, this organization was disrupted.
Heroin remains readily available in major metropolitan areas and is the third most frequently mentioned illegal drug reported to DAWN by participating emergency departments after cocaine and marijuana, accounting for 93,519 mentions 50in CY 2002. 51In fact, heroin distribution and abuse are more prevalent in the Northeast than in any other region of the country. The increased availability of low-cost, high-purity South American heroin, and the fear of infection by sharing needles, has made snorting and smoking the drug more common. There is also the misconception by users that snorting or smoking heroin will not lead to addiction as injection does.52 The 2002 NSDUH found 404,000 people reported they had used heroin in the past year, and 166,000 reported they had used it in the past month. 53
Opium cultivation and heroin production are pervasive in four geographic areas of the world: South America (primarily Colombia), Mexico, Southwest Asia, and Southeast Asia. Estimates indicate that in CY 2001 there were between 13 and 18 pure metric tons of heroin available in the United States. 54There are two distinct heroin markets in the United States. East of the Mississippi River, highly pure, white powder heroin from South America is the predominant type available, entering the United States primarily through the Caribbean. West of the Mississippi River, black tar heroin from Mexico is the predominant type, entering the United States through the Southwest Border.
To address the threat of heroin at its source, DEA has taken a number of initiatives. For example, in FY 2002, DEA established the Bogotá Heroin Task Force. As proposed in the Overseas Rightsizing Report, DEA plans to add a second dedicated Heroin Group in Cartagena, Colombia, in FY 2004 to further the Administration’s efforts of targeting South American heroin.
• Operation Crown Jewel, a SOD-supported OCDETF investigation, targeted the Medellín, Colombia-based cocaine and heroin trafficking organization headed by Jorge Ivan Cardona-Betancur, and its distribution cells in the United States, which are RPOTs. The organization used a variety of smuggling methods, such as couriers, body carriers, narcotics concealed in luggage aboard commercial aircraft, and Mexican and Dominican transportation organizations. On August 27-28, 2003, the Bogotá Heroin Task Force arrested three individuals for extradition to the United States as a result of a DEA Boston Field Division’s investigation, one of the ten judicial districts involved in this operation. As of March 16, 2004, Operation Crown Jewel has resulted in 71 arrests, and the seizure of 7 kilograms of heroin, 53 kilograms of cocaine, $853,000 in U.S. currency, 6 vehicles, and 7 weapons. This investigation is still ongoing.
• On July 29, 2003, the Bogotá Heroin Task Force initiated Operation Bravo, which targeted the Luis Fernando Becerra-Hoyos (a.k.a. Barry) heroin trafficking organization based in Pereira, Colombia. Becerra-Hoyos was responsible for the transportation of approximately 10 kilograms of heroin a week from Colombia to the United States. The Bogotá Heroin Task Force uncovered additional drug couriers as well as those responsible for coordinating and facilitating couriers through the El Dorado International Airport in Bogotá. The investigation led to the seizure of 15 kilograms of heroin and numerous arrests in Colombia and Panama. Future indictments and extraditions are anticipated.
DEA has also taken preventive measures against Southwest Asian heroin by implementing Operation Containment - DEA’s Afghanistan Initiative - in FY 2002. Through Operation Containment, DEA has re-established a presence in Kabul, Afghanistan; strengthened its presence in Asian and European cities where Afghan morphine is transported, processed, and distributed; and established a SIU in neighboring Uzbekistan - a country critical to containing this threat. In its first two years, Operation Containment has resulted in 23 significant seizures of narcotics and precursor chemicals (including 4,638 kilograms of heroin, 7,071 kilograms of morphine base, 1,010 kilograms of opium, and 8,707 liters of acetic anhydride), and has led to the dismantlement or disruption of major distribution and transportation organizations involved in the Southwest Asian drug trade. For example:
• In November 2003, DEA working jointly with the Turkish National Police, seized 495 kilograms of heroin in an ongoing, 9-month PTO investigation. Two suspected heroin laboratories, controlled by this organization, were destroyed. Most recently, in January 2004, DEA and the Turkish National Police seized 1,004 kilos of heroin and arrested 7 drug traffickers.
• In March 2002, DEA’s efforts led to the arrest of 15 members of the Attila Ozyildirim heroin trafficking organization and the seizure of 7.4 tons of morphine base in Turkey. The amount seized was more than 4 times greater than the total worldwide morphine base seizures made in 2000. To put the magnitude of this seizure in perspective, morphine base can be converted to heroin at a ratio of 1:1.
Thirteen (13) of the 40 organizations on the CPOT list (33 percent) are primarily large-scale heroin distributors. As of February 2004, there were 20 active DEA PTO investigations linked to these 13 CPOTs. Between FY 2001 and FY 2003, DEA disrupted 52 and dismantled 58 heroin PTOs. As of February 2004, there were 153 open heroin PTO investigations. 55Some successful DEA heroin investigations include:
• On May 20, 2003, DEA announced the dismantlement of the Franklin Santos Heroin Organization – a major heroin organization that operated in Colombia, New York, Newark, and Philadelphia. This Colombian-Dominican trafficking organization distributed 20 kilograms of heroin per month in the Northeastern corridor of the United States between 1995 and 2003. As of March 2004, this operation has resulted in the arrest of 54 defendants, and the seizure of approximately 15.5 kilograms of heroin, 12 kilograms of cocaine, $320,000 in U.S. currency, and 7 properties.
• Operation Magic Fumble is a one-year long, SOD-supported, multi-jurisdictional, OCDETF operation targeting a Medellin, Colombia-based heroin trafficking organization, headed by Colombian National Alejandro Triana-Ceballos. This organization is responsible for sending 20 kilogram shipments of heroin per month into the continental United States from Colombia between 1995 and 2004. On March 16, 2004, DEA assisted Colombian law enforcement counterparts in executing search warrants in Colombia and arresting four subjects pursuant to the U.S. Provisional Arrest Warrants. All four defendants were indicted in the Eastern District of New York and are pending extradition to the United States. As of March 2004, Operation Magic Fumble has resulted in 13 arrests and the seizure of approximately 5 kilograms of heroin, 13 kilograms of cocaine, 2 handguns and $60,000 in U.S. currency. The arrests are expected to dismantle the Triana-Ceballos organization operating in Colombia, and have a disruptive impact on Triana-Ceballos’ domestic-based distributors and his money laundering cell.
• On July 25, 2003, DEA announced the extradition of four Argentine heroin traffickers to the United States. The extradition was unprecedented for any Latin American nation because it provided for the temporary surrender of these defendants for prosecution in the United States while narcotics charges remained pending against them in Argentina. It was also the first extradition of Argentine nationals under a new treaty between the United States and Argentina, ratified in 2000. On
Methamphetamine is the synthetic drug 56 most widely abused and most frequently produced clandestinely in the United States. Synthetic drugs are particularly attractive to traffickers since they are not as vulnerable to interdiction as crop-based products and their production site can be relocated easily. Methamphetamine’s street availability in CY 2001 was estimated at between 110 and 140 pure metric tons.57 According to the 2002 NSDUH, 1.5 million people reported using methamphetamine during the past year, and 597,000 used methamphetamine during the past 30 days.58 DAWN reported 17,696 emergency room mentions59 for methamphetamine in CY 2002.60 These emergency room mentions are concentrated in the West Coast, particularly San Francisco, San Diego, Phoenix, Seattle, and Los Angeles.
Methamphetamine dominates the illegal drug market in the West Coast and much of the Rocky Mountains. The West Coast has the highest number of methamphetamine “super labs,” 61which are controlled by Mexico-based and California-based Mexican traffickers, and supplied with Canadian pseudoephedrine - a primary precursor for methamphetamine - transiting via the Northern Border. Methamphetamine produced in Mexico enters the United States primarily through the Southwest Border. The supply of methamphetamine in the United States is supplemented by multiple Small Toxic Laboratories (STLs) operated by independent cooks who obtain manufacturing ingredients from retail, convenience, and tack and feed shops. According to the El Paso Intelligence Center (EPIC), approximately 9,417 clandestine laboratories were seized in the United States in CY 2003. Of those labs, 8,561 were capable of producing between 0 and 8 oz. of methamphetamine in a 24-hour cycle. The growing number of STLs suggests an increased demand for the drug.
Methamphetamine production can be very dangerous because the chemicals used are volatile and the by-products are very toxic. The Internet has facilitated access to laboratory equipment, chemicals, and ‘recipes,’ resulting in an increase in the number of STLs nationwide. Since July 2003, DEA has been in contact with eBay to request their assistance in preventing the diversion of methamphetamine and MDMA chemicals through their auction site (e.g., ephedrine, pseuodephedrine, iodine, sassafras oil, etc.). As a result of DEA’s efforts, eBay has stopped brokering all ephedrine products. At the request of eBay, DEA is developing “pop-ups” for the remaining chemicals advertised on eBay. The “pop-ups” would inform eBay customers of federal laws and penalties regarding these chemicals. The “pop-up” agreement is expected to be completed by the end of March 2004.
To meaningfully reduce the supply of methamphetamine, DEA focuses on disrupting or dismantling methamphetamine trafficking organizations and those that supply the chemicals to make the drug. DEA continues to work with state and local law enforcement partners to investigate and seize large, methamphetamine-producing “super labs” as well as SLC labs. In FY 2003, DEA funded 8,177 state and local clandestine laboratory cleanups. New contracts implemented in FY 2003 reduced the cost per clean-up by 46 percent allowing the maximum use of resources available. In addition, DEA has undertaken a pilot “container program” to reduce the overall costs, including overtime costs for state and local law enforcement, while providing greater flexibility.62 In addition, DEA trained and certified more than 5,000 state and local law enforcement officers to conduct clandestine laboratory investigations between 1998 and October 2003. Each student was provided approximately $2,500 worth of equipment that allows him or her to seize and process clandestine methamphetamine laboratories in a safe manner.
DEA continues working with global partners to target international methamphetamine traffickers and to increase chemical control efforts abroad. In June 2003, DEA conducted training for Mexican federal inspectors responsible for regulatory oversight of listed chemicals. In addition, as a result of DEA’s continued discussions with Canadian authorities regarding the enactment of stronger Canadian precursor laws, legislative restrictions of pseudoephedrine in Canada went into effect on January 9, 2003. DEA continues cooperating with the Royal Canadian Mountain Police (RCMP) on cross-border pseudoephedrine investigations. As a result of our law enforcement efforts, coupled with new Canadian chemical regulations, the number of methamphetamine “super labs” seized in California declined by 41 percent from 224 seized in 2001 to 133 seized in 2003. In addition, the price of illegal pseudoephedrine in California has risen to $3,500 per case in 2003 compared to $2,100 - $2,400 per case in 2002.
Eight (8) of the 40 organizations on the CPOT list (20 percent) are involved in methamphetamine trafficking. As of February 2004, there are 27 active DEA PTO investigations linked to those 8 CPOTs. Between FY 2001 and FY 2003, DEA disrupted 51 and dismantled 71 methamphetamine PTOs. As of February 2004, there were 176 open methamphetamine PTO investigations.63 A sample of DEA’s most significant success stories in reducing the availability of methamphetamine follows.
• Operation Mountain Express III and Operation Northern Star, OCDETF investigations involving DEA and the RCMP and supported by SOD, significantly disrupted the Canadian supply of pseudoephedrine to Mexican drug traffickers. As of March 2004, Operation Northern Star has resulted in 78 arrests and the seizure of more than 37,555 pounds of pseudoephedrine (which could produce approximately 22,821 pounds of methamphetamine), 500 pounds of solvents and reagents, and $3.6 million in U.S. currency. Most significantly, Operation Northern Star significantly reduced the amount of Canadian pseudoephedrine entering the U.S. illicit market. This impact is evidenced by an 85 percent reduction in Canadian border seizure events for these chemicals between CY 2001 and CY 2003 (from 419 in 2001 to 61 in 2003), and a 37 percent reduction in Canadian pseudoephedrine and ephedrine seizures along the U.S.-Canadian Border (from 30,032 pounds in 2001 to 18,787 pounds in 2003). 64
• On January 21, 2003, Anh Tuan Duong was sentenced in federal court in Oklahoma City to 121 months imprisonment, and fined $20,000 and $400 in administrative costs. He was previously indicted of one count of violating 21 USC 841(c)(2) (i.e., possession or distribution of a controlled substance), and three counts of violating 18 USC 1957(a) and 1956 (a)(1) (A)(1) (i.e., money laundering) . The indictment covered violations committed during May 2000 when Duong, using his business, purchased/distributed approximately 11 million dosage units of pseudoephedrine tablets with reasonable cause to believe that they would be used to manufacture methamphetamine. It is believed that the majority of the pseudoephedrine tablets went to labs located in California. Eleven million dosage units of pseudoephedrine tablets would make approximately 1,336 lbs of methamphetamine. The 18 USC 1957(a) and 1956 (a)(1)(A)(I) counts stem from the fact that Duong used illicit drug proceeds to buy additional amounts of pseudoephedrine tablets.
Changes in DEA’s FY 2005 Budget
For FY 2005, DEA has combined its current decision units, under the Salaries and Expenses Account, to reduce their number from ten (10) to three (3): Domestic Enforcement, International Enforcement, and State and Local Assistance. Support functions for these programs are included in the proposed decision units.
Domestic Enforcement: Through effective enforcement efforts and associated support functions, DEA disrupts or dismantles the leadership, command, control, and infrastructure of PTOs directed at, or linked to, the “Most Wanted” drug trafficking and money laundering organizations responsible for America’s illegal drug supply. This decision unit contains most of DEA’s resources, including domestic enforcement groups, state and local task forces, other funded federal and local task forces, forensic laboratories, and intelligence groups.
International Enforcement: This decision unit encompasses DEA’s work with its foreign counterparts to attack the vulnerabilities in the leadership, production, transportation, communications, finance, and distribution sectors of major international drug trafficking and money laundering organizations.
State and Local Assistance: Through this decision unit, DEA supports activities to advise, assist, and train state and local law enforcement and local community groups to ensure a consistent national approach to drug law enforcement. DEA’s training enhances their enforcement capabilities and provides access to the latest intelligence and investigative methods.
The proposed decision unit consolidation will allow DEA to better align its resources with strategic plan goals and financial reporting categories while retaining detailed reporting capability. In addition, in FY 2005, DEA has merged the Construction Account into its Salaries and Expenses (S&E) Account.
The President’s FY 2005 Budget Proposal for DEA
The President’s FY 2005 Budget Proposal for DEA of $1.8 billion and 9,466 positions (including 4,275 Special Agents) responds to the challenge we face – reducing the availability of illegal drugs in America by disrupting the drug market. Of this amount, $1.7 billion and 8,446 positions (including 4,257) are requested under the S&E Account, and $154 million and 1,020 positions (including 18 Special Agents) under the Diversion Control Fee Account (DCFA). This request represents a 7 percent increase, or $113 million and 315 positions (including 105 Special Agents), over the FY 2004 enacted appropriation.
DEA’s FY 2005 Budget Request includes eight programmatic enhancements (four under the S&E Account and four under DCFA) and three program offsets that support DEA’s four strategic goals and DOJ’s Strategic Objective 2.2: “Reduce the threat, trafficking, use and related violence of illegal drugs.” The program changes requested in the FY 2005 President’s Budget, along with DEA’s base resources, provide the funding required in FY 2005 to address DEA’s strategic goal of reducing the availability of illicit drugs in America by disrupting or dismantling the most significant drug trafficking organizations and money laundering organizations responsible America’s drug supply.
• Strengthening Priority Target Investigations: DEA requests $34.7 million and 256 positions (including 100 Special Agents) to disrupt or dismantle PTOs responsible for America’s illicit drug supply, including those linked to CPOTs and RPOTs. This initiative includes: $25.4 million and 244 positions (including 100 Special Agents and 82 administrative support positions to free up the equivalent of 77 Special Agents’ work hours for enforcement activities) to provide investigative and administrative support to DEA investigations, particularly PTO investigations; $3 million for the Special Operations Division’s operational expenses in support of Southwest Border investigations and for exotic language linguists; $4 million and 3 positions for investigative technology support for DEA’s field division, including enhancing the Translation/Transcription Support System (T2S2), telephone intercepts, and investigative technology equipment (e.g., audio, video, and tracking); $1.2 million and 9 positions for computer forensic support to reduce DEA’s existing digital evidence backlog and improve the timeliness and quality of examinations; and $1 million for aviation support to permanently increase the base of the Aviation Program’s operations and maintenance base. These resources are necessary to fully support the Administration’s efforts to restore federal drug agent staffing to the pre-September 11, 2001 level, and DOJ’s goal of reducing illicit drug availability by 10 percent by the end of FY 2008.
• Modernizing DEA’s Mission-Critical Systems (Concorde): DEA requests $8.5 million and 10 positions for the Concorde Project and to upgrade the Web Infrastructure by continuing to modernize DEA’s legacy mainframe-based Information Technology (IT) applications and transform them into web-based applications. This effort will fund the full development and deployment of several critical DEA software programs that support case investigations, investigation support, non-drug evidence management, and operational management, including the Investigative Management Program and Case Tracking System (IMPACT) - an IT system which improves the efficiency of DEA Special Agents. An independent study, conducted by Keane Federal Systems, Inc. in 2000, indicated that by using the old IT applications, a DEA agent spent an average of six hours completing forms and reports for every two hours of investigative field work. By using IMPACT, the study reported a 50 to 70 percent time reduction to complete these same forms and reports.
• Upgrading EPIC’s Information System (EIS): DEA requests $4.8 million and 4 positions to standardize and upgrade the EIS’ IT infrastructure. EPIC’s data and services are available to federal, state, and local law enforcement in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam. Currently, access to EPIC is by telephone, teletype, facsimile, and e-mail. In FY 2003, approximately 11,500 different users contacted EPIC with requests for information. These requests resulted in 311,135 inquiries (a 29 percent increase from the 241,481 queries made in FY 2002) and 2,291,667 database accesses (a 20 percent increase over the 1,915,063 database accesses made in FY 2002). 65The EIS upgrade will allow federal, state and local law enforcement officers to send automated queries through a secure Internet connection and receive an immediate positive or negative response to their queries. For all positive responses, EPIC will review and provide deconfliction.
• Enhancing DEA’s International Training Program: DEA requests $876,000 and 6 positions (including 5 Special Agents) to add one mobile training team and address the backlog in requests for international training. DEA’s international counter-narcotics training for its law enforcement counterparts overseas has contributed significantly to the success of host-nation counter-drug operations. With three mobile training teams, DEA annually trains an estimated 2,100 foreign law enforcement personnel from 58 countries worldwide. The addition of one mobile training team will specifically address international training needs in the Andean Region and Mexico in support of SIU program as well as training needs in vital areas of Southwest Asia, Eastern Europe, and the Middle East.
• Strengthening DEA’s Diversion Control Program (DCP): Under the DCFA, DEA requests $31.6 million and 227 positions (including 5 Special Agents and 144 Diversion Investigators) to strengthen its enforcement capabilities to prevent, detect, and investigate the diversion of controlled substances, including OxyContin®, and the diversion of precursor chemicals. These initiatives will provide a strong deterrent against the diversion of controlled substances and precursor chemicals and the illegal prescribing of controlled substances, allow for the rapid and effective detection of diversion, and provide critical customer service support. Specifically, this request includes the following:
Customer Service & E-Commerce: $11.7 million and 24 positions (including 1 Diversion Investigator) to continue the DCP’s IT reengineering and modernization efforts and its E-Commerce Initiative. These resources will support the continued modernization of the Automation of Reports and Consolidated Orders System (ARCOS) and the Comprehensive Drug Abuse Prevention and Control Act of 1970 (CSA) System as well as DEA’s E-Commerce Initiative related to the Controlled Substances Ordering System (CSOS) and the Electronic Prescriptions for Controlled Substances System (EPCS).
Diversion Control Enforcement: $3.5 million and one position to continue the DCP’s Internet Online Investigations Project and to update the Controlled Substances Information System II (CSIS II).
DCP Management & Administrative Support: $659,000 and 14 positions (including 1 Diversion Investigator) to strengthen program management and administrative support for the DCP.
Transfer of Chemical Program to DCFA: $15.8 million and 188 positions (including 5 Special Agents and 142 Diversion Investigators) as part of DEA’s proposal to transfer the Drug and Chemical Diversion Control Decision Unit from the S&E Account to DCFA.
DOJ continues to evaluate its programs and operations with the goal of achieving both component-specific and departmental economies, increased efficiencies, and cost savings. The Department recognizes that these efficiencies require tough choices, but we believe that these are realistic and responsible measures given our mission priorities and the current budget constraints. These program offsets will enable DEA to redirect resources to higher priorities, including targeting PTOs, RPOTs, and CPOTs for disruption or dismantlement. The following programmatic offsets have been incorporated into the President’s FY 2005 budget proposal for DEA:
• Riverine Program – Offset: DEA proposes to redirect $2 million to support Priority Target investigations by discontinuing its participation in the joint Riverine Program with the U.S. Department of Defense (DOD), the USCG, and DOS. DEA will continue addressing the drug trafficking threats in the Amazon region through its international enforcement activities, including SIUs in Brazil, Colombia, and Ecuador.
• Charge DC Government for Forensic Services – Offset: DEA proposes an offset of $3.1 million by charging the District of Columbia Metropolitan Police Department (MPD) a fee for forensic services. The DEA’s Mid-Atlantic Laboratory analyzes all of the DC MPD’s drug evidence exhibits, including cases where DEA is not involved, and fully absorbs the costs associated with these analyses. The Mid-Atlantic Laboratory is the only DEA laboratory where the workload for state and local law enforcement entities exceeds one percent. DEA is dedicating approximately $3.1 million of its appropriated resources per year on DC drug evidence analysis. This proposal would require the District of Columbia to cover this cost.
• Transfer of the Drug and Chemical Diversion Control Decision Unit – Offset: DEA proposes an offset of $15.8 million and 188 positions (including 5 Special Agents and 142 Diversion Investigators) by transferring the Drug and Chemical Diversion Control Decision Unit from the S&E Account to the DCFA. Under 21 USC Section 821, DOJ is allowed “to charge ‘reasonable fees’ relating to the registration and control of the manufacture, distribution and dispensing of controlled substances, and the registration and control of regulated persons and of regulated transactions.” The amount proposed gives DEA one year from the announcement of the intended plan to publish a new rule and revise the fee structure. The proposed transfer will streamline the budget planning and financial management of the DCP while ensuring that DEA recovers the full costs of operating the program, as mandated by law, through a revised fee structure.
Organized Crime Drug Enforcement Task Force
The FY 2005 President’s Budget includes $3.4 million and 30 positions (including 6 Special Agents) for DEA’s SOD in OCDETF’s Operational Support for the Drug/Financial Fusion Center Initiative. This request includes analytical and agent resources to support the volume of new, multi-jurisdictional investigations expected to be generated by the Fusion Center.
With its multi-agency partnerships and its focus on coordinated, multi-regional investigations, OCDETF is the driving force behind DOJ’s Drug Enforcement Strategy. As OCDETF’s largest contributing member, DEA will continue to work with other program participants in maximizing OCDETF’s support of investigations linked to the CPOT list. As of March 2004, DEA has 294 active Priority Target investigations linked to one or more of the 40 CPOT targets with 372 direct linkages identified. As of February 2004, there were 332 approved DEA RPOT investigations, of which 167 are active DEA PTOs. 66
1 Johnston, L.D., O’Malley, P. M., & Bachman, J.G. Monitoring the Future National Survey Results on Drug Use: Overview of Key Findings, 2002. (2003) The survey, conducted by the University of Michigan’s Institute for Social Research and funded by the National Institute on Drug Abuse, has tracked 12th graders’ illegal drug use and attitudes towards drugs since 1975. In 1991, 8th and 10th graders were added to the study.
2 A disruption occurs when the normal and effective operation of a targeted organization is impeded, as indicated by changes in organizational leadership and/or changes in methods of operation, including financing, trafficking patterns, communications, or drug production.
4 The first CPOT list, developed in June 2002 by OCDETF member agencies, included 53 targets. As a result of coordinated, multi-jurisdictional enforcement efforts between law enforcement agencies, eight CPOTs were dismantled and removed from the list – an overall reduction of 15 percent. The activities of another seven were significantly disrupted, but remain on the list. An additional nine CPOTs were removed due to more stringent and defined CPOT criteria, and four new CPOTs were added to the list. As of October 1, 2003, the CPOT list includes 40 targets.
6 In FY 2003, DEA developed a draft FY 2003 – FY 2008 Strategic Plan, which arrays DEA’s resources into four strategic focus areas designed to achieve the maximum impact on DEA’s overarching goal of reducing the availability of illegal drugs. Each strategic focus area includes ambitious two-year and five-year objectives with corresponding performance measures that report on DEA’s progress towards accomplishing these stated objectives. The proposed Strategic Plan is currently under review.
7 As of March 2004, DEA’s State and Local Task Force Program consists of 218 state and local task forces, of which 114 are program funded, 51 are High Intensity Drug Trafficking Area (HIDTA) funded, and 53 are provisional. These task forces are staffed by 1,205 DEA Special Agents and 1,989 state and local police officers.
9 Executive Office of the President, Office of National Drug Control Policy. The Economic Costs of Drug Abuse in the United States, 1992-1998. September 2001.
13 U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration. Emergency Department Trends from DAWN [Drug Abuse Warning Network]: Final Estimates 1995-2002. August 2003.
15 In its January 2003 report, Major Management Challenges and Program Risks for the Department of Justice, the General Accounting Office (GAO) acknowledged DEA’s significant progress and commitment to developing measurable performance targets for reducing illegal drugs.
20 DEA’s Domestic Threat Assessment provides a snapshot, as of January 2004, of the U.S. environment in a highly dynamic drug trafficking environment. It is based on intelligence relating to the demand for illegal drugs and their suppliers and distributors. The threat assessment encompasses data findings from DEA field division assessments, open-source reports, drug abuse indicators, reports from DEA’s El Paso Intelligence Center (EPIC) and the Joint Interagency Task Force West (JIATF-W), DEA’s Field Management Plans and information on Priority Targets. The secondary evaluation involved a survey of DEA field management to more precisely identify the most significant drug problems in the field divisions and factors affecting those priorities (e.g., level of violence associated with the trade, abuse indicators, and volume of drug movement).
25 U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. Overview of Findings from the 2002 National Survey on Drug Use and Health. 2003.
29 Since 1996, nine states have enacted laws that legalize the manufacture, distribution, and possession of marijuana for purported medical use. Efforts are underway in other states and localities to legalize or authorize medical use of marijuana by legislation or ballot initiative.
32 U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. Overview of Findings from the 2002 National Survey on Drug Use and Health. 2003.
35 Based on a voluntary request by DAWN for information from 800 medical examiners regarding oxycodone-related deaths.
38 The term ‘club drug’ usually refers to those synthetic drugs that are associated with raves and dance clubs (e.g., MDMA, Ketamine, and GHB). ‘Club drugs’ are not the only illegal drugs of abuse found at raves and dance clubs. Other illegal drugs abused at raves and clubs, such as heroin, cocaine, marijuana, LSD, and methamphetamine, are not categorized as ‘club drugs.’
39 U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. Overview of Findings from the 2002 National Survey on Drug Use and Health. 2003.
44 U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. Overview of Findings from the 2002 National Survey on Drug Use and Health. 2003.
53 U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. Overview of Findings from the 2002 National Survey on Drug Use and Health. 2003.
56 The term ‘synthetic drugs’ refers to controlled substances such as methamphetamine, MDMA “ecstasy” (and its analogues), GHB (and its analogues), ketamine, and other substances, which are not of primarily organic origin and are usually associated with clandestine manufacture.
58 U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. Overview of Findings from the 2002 National Survey on Drug Use and Health. 2003.
62 DEA is working with several states to develop a program where the state and local officials will characterize, package, transport, and store wastes from clandestine laboratories in containers designed for hazardous waste storage. On a weekly basis, DEA’s contractors would then consolidate, transport, and dispose of the waste in the container.
65 These numbers do not include those requests for information, which were run in commercial databases or off-line by agency representatives in their parent databases (e.g., USMS, ATF, legacy Immigration and Naturalization Service, U.S. Secret Service, etc.) for OCDETF cases.
66 In some cases, a PTO investigation and an RPOT investigation target the same organization. In many cases, they do not. RPOTs that do not target an organization that is targeted by a PTO represent investigations that are led either by DEA (non-PTO) or another OCDETF agency (e.g., FBI, ATF, ICE).
Karen P. Tandy
Drug Enforcement Administration
March 24, 2004
Good Morning Chairman Wolf, Ranking Member Serrano, and members of the Subcommittee. Thank you for the opportunity to discuss the President’s FY 2005 budget request for the Drug Enforcement Administration.
First, I want to thank the Subcommittee for its unequivocal commitment to DEA’s critical mission of reducing the supply of illicit drugs in America.