What Suo’s reporting revealed was a timeline of failure, most of it at the crushing and unfair expense of Gene Haislip, DEA’s deputy assistant administrator in the Office of Compliance and Regulatory Affairs from 1982 to 1996. Up until 1987, Haislip had worked against the lobbyist Allan Rexinger, who represented the pharmaceutical company Warner-Lambert, to pass a bill that would monitor shipments of ephedrine powder entering the United States. Companies like Warner-Lambert, which used the ephedrine to make nasal decongestants, resisted the idea, fearing that it would lead to more stringent oversight. Rexinger, by appealing directly to the Reagan White House, had won the battle with DEA, forcing Haislip into a compromise that allowed bulk loads of ephedrine to enter the U.S. unmonitored, so long as the ephedrine was in pill—not powder—form.
The production of methamphetamine at the time was just industrializing, largely at the hands of the Amezcua brothers, who’d understood the lucrative, illegal application of the lax laws governing ephedrine imports. Once Haislip’s watered-down law passed, the Amezcuas simply bought ephedrine pills from legitimate sources, crushed them into powder, and used the powder to make meth. In addition, they began importing ephedrine powder into the port at Mazatlán, on Mexico’s Pacific coast, then driving the powder north across the border. As trade increased between Mexico and the United States, culminating in 1993 with the ratification of the North American Free Trade Agreement (NAFTA), truck traffic at ports of entry like San Ysidro, California, increased 278 percent, according to a study by UC-San Diego economics professor Joan Anderson. As a result, border security became more difficult to enforce, making it easier than ever to drive loads of ephedrine right into Los Angeles and the Inland Empire. Months after Haislip’s weakened bill passed, according to Suo, meth purity was at an all-time high throughout the West, indicating a glut in product. The spread of large amounts of the Amezcuas’ meth into Iowa and several other Midwestern states—thanks in great part to Lori Arnold of Ottumwa and to lesser extent to Jeffrey William Hayes of Oelwein—is one of what is sure to be many unreported side effects of this first, defining breakdown.
Haislip, though, was not done trying. By 1993, he was moving to close the loophole that his earlier bill had created, writing new legislation to limit imports not only of ephedrine powder but of pills, too. The law passed and seemed to produce immediate dividends: DEA, according to Suo, intercepted 170 metric tons of illegal ephedrine pills in eighteen months, reducing by a large chunk the available methamphetamine in the United States. In addition, Haislip took the unprecedented step of approaching the International Narcotics Control Board in Vienna, asking it to help DEA broker a deal with the nine factories in Germany, India, China, and the Czech Republic that produced the ephedrine. All the companies agreed. Using bills of lading to trace bulk loads of both raw ephedrine powder and finished pills that had been sent from their plants through third-party nations to Mexico, DEA was able to limit the number of countries through which ephedrine would travel to only those nations willing to keep serious records—all without significantly cutting into the profit margins of pharmaceutical companies. In just twelve months, according to Haislip, DEA blocked or seized 200 tons of ephedrine, or one sixth of the world’s annual production at that point, all of it earmarked for meth labs. Haislip’s sixteen-year-old plan of crippling the drug’s production by implementing multinational precursor controls seemed to be bearing fruit: across California, meth purity was down to an average of only 40 percent, an indication that production was slowing to a crawl.
The problem was that Haislip repeated his earlier mistake and left a loophole in the ephedrine legislation that allowed pills containing pseudoephedrine to remain unregulated, this despite the fact that DEA chemists had warned him that meth could be made from pseudoephedrine just as easily as from ephedrine. The loophole, according to Suo, was the direct result of intense lobbying, eight years after he’d derailed Haislip’s original anti-precursor bill, by Allan Rexinger, who proudly characterized his involvement to Suo by saying that he simply “pulled the plugs” on DEA. In fact, pointing traffickers to pseudoephedrine was the biggest favor that anyone could have done for the makers of meth; it set the stage for fifteen years (and counting) of arguably the worst period in American narcotic history.
From a drug chemist’s standpoint, ephedrine and pseudoephedrine, or pseudo, are identical; good crank can be made from both. But from a drug trafficker’s standpoint, pseudo is far superior. Ephedrine, as a licit pharmaceutical, has a strictly limited number of uses: first, as a stimulant used to bring surgery patients out from under anesthesia, and second, as a nasal decongestant. Pseudo, on the other hand, has for three decades been the dominant ingredient in cold medicine, 80 percent of which was (and remains) controlled by American companies. As such, the availability of pseudo in the world, along with its importance as a revenue source, is many orders of magnitude greater than that of ephedrine. And because pseudo is deemed the most reliable precursor for megadrugs like Sudafed, Actifed, and NyQuil, the drug lobby protecting pseudo is many times more powerful than that protecting ephedrine, which had already shown a proven ability to cripple DEA.
By 1996, the Amezcuas were in jail. In their absence, other Mexican drug-trafficking organizations, only too aware of the lucrative potential of meth, had begun to fill the Amezcuas’ shoes. Slowly, those loosely defined organizations were melding into what DEA would come to call the five major DTOs, each of which was destined to quickly become many times more powerful than the Amezcuas had ever been. The DTOs were aided by the wider opening of the border and the expanding immigrant presence in the United States engendered by NAFTA. Within the population of illegals streaming across the border to work in meatpacking plants throughout the Great Plains, in the fields of California’s Central Valley, and in the orchards and orange groves of the Southeast, there was unlimited potential for a narcotic retail and distribution force. One that, because it was nationwide, mobile, undocumented, and protean, was almost impossible to track by law enforcement. In addition, the DTOs controlled the manufacture of meth by following Amezcua’s practice of importing precursors into Mexico, thereby achieving business’s holy trinity: dominance of the entire value chain. In one fell swoop, the Mexican drug traffickers directed every aspect of what was now a major international narcotics phenomenon—in the same way that Cargill, Tyson, and ADM were taking control of the food business “from plow to plate,” as the marketing slogan went.
Within months of Haislip’s newest legislation, the nascent DTOs made the switch to pseudoephedrine combined with red phosphorus. This new Red-P, or Mexican dope, was considered to be more powerful still than the old P2P meth of Lori Arnold’s day, especially when the traffickers soaked the powdered Red-P in refrigerated trays of denatured alcohol, a process that turns the drug into the pretty, icelike shards that would come to be known throughout the world as crystal meth. This more powerful form of the drug again increased the DTOs’ range and effectiveness, for the simple reason that it was more addictive, allowing them to saturate old markets even as they opened new ones.
The move to pseudo was really the blockbuster moment in the modern history of the meth epidemic. That’s because the DTOs were able firmly to tie the fate of their illicit product to perhaps the world’s most lucrative legal drug. This, really, is the genius of the meth business. Cocaine and heroin are linked to illegal crops—coca and poppies, respectively. Meth on the other hand is linked in a one-to-one ratio with fighting the common cold. Not only was the pharmaceutical industry likely to fight harder against pseudoephedrine monitoring than it had regarding ephedrine, but the shear bulk of pseudoephedrine being produced also made it difficult to track compared with the relatively small amount of ephedrine being manufactured. Add to that that 50 percent of the world’s pseudoephedrine was (and is) manufactured in China—a nation that has been increasingly unwilling to negotiate with the United States—and Haislip’s dream of international cooperation in monitoring meth’s precursors had, after a
short and unprecedented victory, fallen completely apart.
Still, Haislip wasn’t done. In 1995, he proposed a bill stipulating that any company wishing to sell more than four hundred tablets of pseudoephedrine at a time would have to get a license from DEA and would have to keep records of its sales—hardly, notes Suo, a rigorous law. But it would have at least given the DEA’s Office of Diversion Control a place to start in the inevitable task of identifying companies that diverted large amounts of pseudoephedrine to the meth trade. This time, it was not Allan Rexinger who came to the aid of the big drug companies; it was Senator Orrin Hatch, Republican of Utah, then chairman of the Senate Judiciary Committee.
Senator Hatch had a history of aiding the pharmaceutical industry, and had, among other things, supported legislation curbing federal regulation of dietary supplements, namely Methedrine, a form of methamphetamine illegally prescribed by the billions of pills during the 1970s and ’80s. What the Hatch camp wanted in 1995 was proof that pseudoephedrine was being used to make meth. DEA had what it thought to be incontrovertible verification: nearly a quarter of all the meth superlabs it had dismantled in the last year had already made the switch from ephedrine to pseudoephedrine. Even in labs that were still using the old method, agents had founds bills of lading for bulk orders of pseudo, a further indication that the market was in the midst of a dynamic shift. Hatch, though, didn’t consider this compelling enough, and he tabled the proposal by calling for more investigation.
Haislip was distraught. Despite help from Senator Dianne Feinstein of California, the bill languished with Hatch’s committee for over a year—while the DTOs’ production of crystal meth went unhampered. It wasn’t until the spring of 1996 that Hatch and Haislip finally agreed on language that was acceptable to both the government and the pharmaceutical companies: vendors of pill-form pseudoephedrine would be subject to DEA licensing and bookkeeping unless those pills were sold in the now-ubiquitous clear-plastic containers with aluminum backing. Hatch’s logic, it seems, was that the narco-empire built around methamphetamine would crumble in the face of the tamper-proof blister pack.
The connection that Steve Suo doesn’t make explicit in the Oregonian is that the aggregation of the Mexican drug traffickers during the 1990s into five enormous DTOs mirrors the consolidation of the pharmaceutical industry in that same period. As both types of organizations grew, they increased their market share, their wealth, and their power. Warner-Lambert was subsumed by Burroughs Well-come, which was ultimately added, along with Pharmacia, to the pharma-titan Pfizer. That’s to say, over a short period in the 1990s, fewer companies shared increasing profits. In 2003, Fortune 500 rated the U.S. pharmaceutical business the third most profitable in the nation and valued the industry at $593 billion. (That was the first year since 1995 that the industry had not been rated the number-one most profitable American industry.)
A similar consolidation was occurring in the illegal drug business during the late 1990s. Throughout the 1970s and ’80s, the American narcotics market was split between the competing interests of the Colombians, the Mexicans, the Nigerians, the Vietnamese, and the Filipinos, among others. By 2003, 85 percent of all the illegal drugs sold in the United States—whether meth, cocaine, heroin, or marijuana—were controlled by the five DTOs, each of which controls at least one major port of entry with the United States.
The simultaneous growth of these two businesses had remarkable and tragic consequences for the modern meth trade between 1987 and 2003. Had DEA forced more oversight of the rapidly deregulating pharmaceutical industry—one that is hallmarked by its production of cold medicine—the DTOs would never have had access to the drug they needed in order to make meth. Had the DTOs not been able to make meth, it’s less likely that they would have so thoroughly monopolized the U.S. drug market.
One might ask if the drug companies should really have been made to monitor their imports simply because cold medicine happens to be made from the same drug as methamphetamine. It’s a question that lobbyists like Allan Rexinger made a career of asking. It’s also one that needn’t ever have been posed. For, beginning over a decade ago, American pharmaceutical companies could have chosen to make cold medicine from something other than pseudoephedrine.
According to Suo, in 1997 a research team at the University of North Texas began testing a new nasal decongestant in dogs and rats. The team was in the employ of Warner-Lambert, which the year before had taken over the manufacture of Sudafed and Actifed from Burroughs Wellcome and added those lines to Warner-Lambert’s highly profitable antihistamine, Benadryl. By then, Sudafed’s brand recognition was so widespread that the product, like Xerox to both photocopies and the machines that produce them, had become synonymous with the industry of cold remedies. All three nonprescription medicines—Sudafed, Actifed, and Benadryl—relied on pseudoephedrine for their manufacture. Fearful that pseudoephedrine would come under federal control, or worse, that it would be outlawed completely by legislation being pushed by Gene Haislip and DEA, Warner-Lambert had developed a new product based on a biochemical technology called mirror imaging. By Christmas of 1997, according to interviews published in the Oregonian, trials on dogs and rats at the University of North Texas showed great promise for the drug.
Mirror imaging is a process whereby a chemical’s molecular structure is reversed, moving, for example, electrons from the bottom of a certain ring to the top, and vice versa. Pseudoephedrine, ephedrine, and methamphetamine are already near mirror images of one another. To make meth from ephedrine, it is necessary to remove a single oxygen atom from the outer electron ring. Thus ephedrine and methamphetamine not only look the same under a mass spectrometer, but both dilate the alveoli in the lungs and shrink blood vessels in the nose—hence ephedrine’s use as a decongestant—while raising blood pressure and releasing adrenaline. The key difference is that meth, unlike ephedrine, prompts wide-scale releases of the neurotransmitters dopamine and epinephrine.
What the 1997 tests at the University of North Texas showed was that, at least in lab animals, mirror-image pseudoephedrine was equally as effective as regular pseudoephedrine as a decongestant. Unlike regular pseudo, however, the mirror-image version didn’t cause any side effects to the central nervous system, such as high blood pressure and a racing heart: the common “buzz” that one associates with cold medicine. Better yet for Warner-Lambert, mirror-image pseudoephedrine could only be synthesized into mirror-image methamphetamine, which, according to the Oregonian, had no stimulant effects and could not then be made into regular meth.
Had Warner-Lambert been unable in the end to develop mirror-image pseudo—or to bring it to the market—it had yet another option that would have significantly helped Haislip and DEA. Also in 1997, chemists at Warner-Lambert had begun experimenting with additives that would make it impossible to extract pseudoephedrine from Sudafed. This combination would undermine the basic building block of Nazi cold meth production, which is to pour anhydrous ammonia onto crushed-up cold pills in order to extract the pills’ pseudo. On this project, researchers at Warner-Lambert had, according to the Oregonian, been working closely with DEA. Moreover, the additives were already FDA-approved. Therefore, any drug containing them would not be considered new and would avoid the costly testing period mandated by the FDA. At the very least, manufacturing cold pills with these additives might have reduced the ever-increasing legions of small-time cooks like Roland Jarvis in states like Iowa, which at the time was seeing small-meth-lab increases of 300 percent a year.
If the cold pills with additives or, particularly, the mirror-image pseudoephedrine had come to market, the effect may well have been enormous. Were the U.S. cold medicine market, the largest in the world, suddenly dependent on any new form of pseudoephedrine, it stands to reason that the nine factories that provide all the planet’s pseudo would have begun producing large amounts of the new meth-resistant drug. This in turn would have drastically reduced the amount of meth-ready chemicals available to the DTOs. Either drug could h
ave effectively accomplished what Gene Haislip and DEA had five times been unable to achieve between 1984 and 1996.
Instead, by the time Pfizer bought Warner-Lambert in 2000, all research into a cold-medicine alternative ceased. Why should Pfizer worry about DEA when its predecessor had had such an easy time lobbying Congress? In 2002, meth lab numbers in Iowa topped one thousand for the first time, and were nearing two thousand in Missouri.
CHAPTER 7
THE COP SHOP
Oelwein’s difficult and unsure rebirth in 2006 began in the same place in which the town had been born 134 years earlier: in a cornfield. In 1872, Oelwein was founded on land belonging to Gustav Oelwein, a poor Bavarian farmer, as a place for what was then called the Rock Island Railroad to take on water and coal between Chicago and Minneapolis. The center point of town was plotted at the intersection of Charles and Frederick streets, so named for Gustav’s two sons. (Oelwein’s principal thoroughfare has three names—Charles, Frederick, and Old 150. Around town, all three are often referred to in the aggregate as “Main.”) By 1905, the population had soared to 5,134 people, and Charles and Frederick were among the wealthiest men in the Midwest. Driving south on Frederick Street today, you can still see the cabin where the Oelwein brothers were born. Heading farther south after a dogleg at the Country Cottage Café, what is now South Frederick dead-ends at Highway 150. To the left is an open parcel of land; to the right is a campground. Across Highway 150 is what might be the most important of all Oelwein’s undeveloped properties—the 250-acre Industrial Park. By the spring of 2006, the IP, as Mayor Larry Murphy calls it, was ready to be shopped to prospective customers and had unceremoniously been denuded of the corn that had grown there. Murphy foresaw the IP as the bright, shining future of his beleaguered town.
Nick Reding Page 12