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FY 2008 PERFORMANCE BUDGET

DRUG ENFORCEMENT ADMINISTRATION

**Congressional Budget Submission**

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# U.S. Department of Justice

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# Table of Contents

Page No.

**I. Overview** 1

**II. Summary of Program Changes** 25

**III. Appropriations Language and Analysis of Appropriations Language**
27

**IV. Decision Unit Justification** 29

A. International Enforcement

1\. Program Description 29

2\. Performance Tables 33

3\. Performance, Resources, and Strategies 37

a\. Performance Plan and Report for Outcomes

b\. Strategies to Accomplish Outcomes

c\. Results of Program Assessment Rating Tool (PART) Reviews

B. Domestic Enforcement

1\. Program Description 45

2\. Performance and Resource Tables 48

3\. Performance, Resources, and Strategies 52

a\. Performance Plan and Report for Outcomes

b\. Strategies to Accomplish Outcomes

c\. Results of Program Assessment Rating Tool (PART) Reviews

C. State and Local Assistance

1\. Program Description 81

2\. Performance and Resource Tables 82

3\. Performance, Resources, and Strategies 85

a\. Performance Plan and Report for Outcomes

b\. Strategies to Accomplish Outcomes

c\. Results of Program Assessment Rating Tool (PART) Reviews

D. Diversion Control Fee Account

1\. Program Description 95

2\. Performance and Resource Tables 98

3\. Performance, Resources, and Strategies 101

a\. Performance Plan and Report for Outcomes

b\. Strategies to Accomplish Outcomes

c\. Results of Program Assessment Rating Tool (PART) Reviews

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**V. Exhibits**

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A. Organizational Chart

> B. Summary of Requirements
>
> C. Program Changes by Decision Unit

D.  Resources by DOJ Strategic Goal and Objective

E.  Justification for Base Adjustments

F.  Crosswalk of 2006 Availability

G.  Crosswalk of 2007 Availability

H.  Summary of Reimbursable Resources

I.  Detail of Permanent Positions by Category

J.  Financial Analysis of Program Changes

K.  Summary of Requirements by Grade

L.  Summary of Requirements by Object Class

> M. Status of Congressionally Requested Studies, Reports, and
> Evaluations
>
> N. Financial Analysis and Cash Flow - DCFA

I. Overview for the Drug Enforcement Administration

1\. Introduction

For FY 2008, the Drug Enforcement Administration (DEA) is requesting
8,791 positions (including 3,744 Special Agents), 8,692 Full-Time
Equivalents (FTE),[^1] and \$2,041,818,000 to reduce the drug
availability in the United States and assist in countering the threats
to the nation, and support the U.S. Department of Justice's (DOJ)
Strategic Goal II, "Enforce Federal Laws and Represent the Rights and
Interests of the American People," Strategic Objective 2.2, "Reduce the
threat, trafficking, use and related violence of illegal drugs", and
Strategic Goal I, "Protect America Against the Threat of Terrorism,"
Strategic Objective 1.1, "Prevent, disrupt, and defeat terrorist
operations before they occur." This request includes 7,604 positions
(including 3,673 Special Agents), 7,516 FTE, and \$1,802,569,000 for the
Salaries and Expenses Account; and, 1,187 positions (including 71
Special Agents), 1,176 FTE, and \$239,249,000 for the Diversion Control
Fee Account (DCFA). The FY 2008 request represents a reduction of 519
positions (including 322 Special Agents) and 481 FTE and an increase of
\$109,533,000 above the FY 2007 President's Budget request of 9,310
positions (including 4,066 Special Agents), 9,173 FTE, and
\$1,932,285,000. Of the requested position and FTE reductions, 466
positions and 466 FTE (including 244 Special Agents) are unfunded.
Beginning in FY 2007, electronic copies of the Department of Justice's
congressional budget justifications and Capital Asset Plan and Business
Case exhibits can be viewed or downloaded from the Internet at:
http://www.usdoj.gov/jmd/2008justification/.

DEA's FY 2008 budget request was developed with the goal of providing
the critical resources necessary to reduce the availability of illicit
drugs and the diversion of licit drugs and precursor chemicals in
America. This is achieved by disrupting[^2] or dismantling[^3]
significant drug trafficking and money laundering organizations,
attacking the economic basis of the drug trade, and contributing to
counterterrorism efforts. Specifically, the resources will be used
for: 1) Attacking poly-drug trafficking organizations (DTOs) located
along the Southwest Border (SWB) and combating the flow of
methamphetamine entering the United States from Mexico; 2) enhancing
DEA's intelligence support for counterterrorism by providing secure IT
infrastructure to channel Intelligence Community (IC) requests to DEA
Intelligence Analysts and Special Agents world-wide, and 3) combating
drug trafficking activity occurring over the Internet.

**FY 2008 S&E Enhancements by Strategic Goal**

  ------------- ------------------- ------------------ --------- ----------- ---------
  **Strategic   **Item**            **Dollars**        **Pos**   **Agent**   **FTE**
  Goal**                                                                     

  2.1           Southwest Border    \$29,172,000       8         0           4
                and Methamphetamine                                          
                Enforcement                                                  

  2.1           Counterterrorism    7,124,000          7         1           4
                and Intelligence                                             
                Sharing                                                      

  2.1           Online              3,020,000          0         0           0
                Investigations                                               

  **Total**                         **\$39,316,000**   **15**    **1**       **8**
  ------------- ------------------- ------------------ --------- ----------- ---------

2.  **Background**

**Strategic and Mission Focus**

The President and the Attorney General have implemented national
strategies to reduce the use and availability of illicit drugs in
America. DOJ's 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.
Specifically, 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.
DEA supports DOJ's goal to reduce the drug supply in America by
disrupting and dismantling international and domestic Priority Target
Organizations (PTOs), assisting State and local agencies with drug
enforcement, and reducing the diversion of licit drugs. The Organized
Crime Drug Enforcement Task Force (OCDETF) also contributes to DOJ's
Strategy to reduce the drug supply by targeting the 46 organizations on
the FY 2007 Consolidated Priority Organization Target (CPOT) list -- the
"Most Wanted" drug trafficking and money laundering organizations
believed to be primarily responsible for the Nation's illicit drug
supply. By FY 2008, DOJ's goal is to dismantle 135 and disrupt 210
CPOT-linked drug trafficking organizations. DEA is a leading participant
in the OCDETF program goal to disrupt or dismantle CPOTs and Regional
Priority Organization Targets (RPOTs)[^4] through multi-agency
investigations. In FY 2006, DEA participated in approximately 88 percent
of all OCDETF cases, and had the lead or co-lead in approximately 80
percent of OCDETF investigations.

**Mission Successes**

**A. Priority Targeting**

DEA's Priority Targeting program relies on intelligence to identify key
drug supply organizations, coordinate drug enforcement investigations
against all levels of the drug and money supply chain, and disrupt or
dismantle drug trafficking organizations responsible for supplying
illegal drugs in America. Classifying targets as CPOTs, RPOTs, and PTOs
ensures that drug enforcement efforts are focused on the most important
pressure points of the drug supply chain. This strategy maximizes DEA's
use of human and financial resources through well coordinated, focused
investigations that support effective prosecutions, reduce the overall
number of active drug trafficking organizations, and incarcerate those
who participate in illegal drug trafficking. The following results
demonstrate this strategy's success:

-   Prevented approximately 165 metric tons of cocaine from entering the
    United States through DEA's international cocaine interdiction
    programs in FY 2006.

-   Maintained a dramatic reduction in the availability of LSD in the
    U.S. through aggressive law enforcement; there were significant
    declines in past year usage of LSD (from 1 million to 558,000, or 44
    percent) between CY 2002 and CY 2003 - this decrease was maintained
    as of CY 2005 (563,000);

-   Indicted 35 and arrested 17 of the 46 CPOTs[^5], the leaders of the
    most wanted international drug supply organizations;

-   Indicted nine and arrested four of Colombia's North Valley Cartel
    leadership who have been responsible for a third to a half of the
    cocaine brought into this country -- two of the four individuals
    arrested were CPOTs;

-   Reduced the number of methamphetamine "super labs" in America,
    forcing large-scale producers to retreat into Mexico. Domestic super
    lab seizures have decreased by 75 percent between CY 2002 and CY
    2005;[^6]

-   Dismantled in FY 2005 the Brij Bansal drug trafficking organization
    that was responsible for illegally distributing through the Internet
    more than 2.5 million dosage units of pharmaceutical controlled
    substances per month;

-   Initiated in FY 2006 more than 218 investigations involving the
    online sale of controlled substances without a prescription - DEA
    seized over \$4.9 million in cash, bank accounts, property, and
    computers in FY 2006 as a result of online investigations.

On August 16, 2006, Francisco Javier Arellano-Felix, one of the world\'s
most violent drug criminals and a CPOT, was arrested off the coast of
Mexico in a joint DEA-Coast Guard operation, and with the cooperation of
the Government of Mexico. The Arellano-Felix organization is the largest
and most violent drug trafficking organization operating in the
Tijuana/Baja California/Mexico area. For over a decade, the
Arellano-Felix family dominated the Mexican drug trade and flooded our
nation with hundreds of tons of cocaine and marijuana, and massive
quantities of methamphetamine and heroin. Javier Arellano-Felix, the
last holdout at the top of that cartel, is a violent drug kingpin who is
wanted in the United States for numerous drug trafficking, conspiracy,
and money laundering charges. He is considered threatening enough to our
nation to warrant a \$5 million U.S. State Department reward for his
capture. His arrest topples a dynasty built on violence and drugs and
puts a chokehold on the destruction this brutal organization has caused
in both the United States and Mexico.

**B. Drug Flow Prevention**

In May 2005, DEA began its Drug Flow Prevention strategy, which attacks
the supply, transportation systems, and financial infrastructure of
major drug trafficking organizations operating between the source zones
and the United States. This new drug flow strategy calls for aggressive,
well-planned, and coordinated enforcement operations with host nation
counterparts in global source and transit zones. This strategy has been
largely successful as evidenced by ***Operation All-Inclusive I-2005***,
which targeted the transit zones of Central America and attacked the
drug trade's main arteries and support infrastructure in Central America
to intercept bulk drug shipments before they reached Mexico. In the
three months in which this operation was conducted, over 46 metric tons
of cocaine and 21 metric tons of marijuana were seized.

Drug distribution at the wholesale-level in the United States generates
between \$13.6 billion and \$48.4 billion annually.[^7] Drug trafficking
organizations are big businesses, and DEA has reenergized its attack on
the financial infrastructure of drug cartels. DEA's Office of Financial
Operations and the specialized Money Laundering Groups in DEA's 21 field
divisions focus on drug proceeds that flow back to the sources of drug
supply, and how they can be identified and seized. In FY 2005, DEA
established a five-year plan with annual milestones through FY 2009 to
meet the challenge of crippling drug cartels so that they are unable to
reconstitute their operations with new leadership. To accomplish this
goal, DEA planned to continue increasing its asset and drug seizures
until it achieves an annual goal of \$3 billion in revenue denied to
drug trafficking organizations through new domestic and international
seizure strategies. In the first years under this plan, DEA exceeded its
goal of \$1 billion in revenue denied by 90 percent. In response to this
success, DEA increased its FY 2006 milestone from \$1.5 billion to \$2.5
billion and achieved \$1.6 billion in revenue denied, which exceeded the
original goal but fell short of the revised goal. DEA's revenue denied
seizure goals for FY 2007, FY 2008, and FY 2009 are \$2 billion, \$2.5
billion, and \$3 billion, respectively.

> **C. Counterterrorism**

DEA's drug trafficking and money laundering enforcement initiatives also
support and augment U.S. efforts against terrorism by denying drug
trafficking and/or money laundering routes to foreign terrorist
organizations, as well as the use of illicit drugs as barter for
munitions to support 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. DEA investigations have identified links between
groups and individuals under investigation for drug violations and
terrorist organizations. DEA has identified 43 percent (18 of 42) of the
organizations on the Department of State's Foreign Terrorist
Organizations list as having possible ties to the drug trade. In
addition, as of the end of FY 2006, 21 of the 46 organizations on the
CPOT list had links to these Foreign Terrorist Organizations. Further,
there have been a number of occasions where DEA agents have been able to
introduce sources to the Federal Bureau of Investigation (FBI) or the
Central Intelligence Agency (CIA) for counterterrorism use.[^8]

The case of Bashir Noorzai illustrates the link that exists between drug
trafficking and terrorist organizations. Noorzai was the leader of the
largest Central and Southwest Asia-based heroin drug trafficking
organization known to DEA. Noorzai provided explosives, weaponry, and
personnel to the Taliban in exchange for protection for his
organization's opium poppy crops, heroin laboratories, drug
transportation routes, and members and associates. Noorzai was also a
close associate of former Supreme Taliban leader Mullah Mohammad Omar,
who is now a fugitive, and was himself a former leader of the Taliban
Shura, or Ruling Council. Noorzai was arrested on April 25, 2005, as
part of DEA's ***Operation Containment***.

The Patriot Act Reauthorization of 2005 greatly enhances DEA's authority
to target and arrest drug traffickers that provide financial support to
terrorist organizations. The Patriot Act makes it a crime for a person
anywhere in the world to manufacture, distribute, or possess with intent
to manufacture or distribute a controlled substance while providing
financial support to terrorist organizations.

**D. Methamphetamine**

DEA is also addressing the methamphetamine epidemic in the United States
by working to halt the production process of methamphetamine, destroy
distribution networks, eliminate the harmful after effects of
production, and reduce demand through public awareness and education.
The primary source of methamphetamine distributed in the United States
is through highly structured Mexican national drug trafficking groups.
These groups operate high-output, clandestine "super labs," mostly in
Mexico. DEA estimates that roughly 80 percent of the methamphetamine
used in the United States comes from super labs, and the remaining 20
percent comes from small toxic labs (STLs).

Increasingly, the methamphetamine smuggled from Mexico across the
Southwest Border, enters via Arizona and Texas. The Southwest Border is
particularly vulnerable to drug smuggling because of the enormous volume
of people and goods that cross the border for legitimate purposes at the
33 regulated crossing points. Vast sections of the nearly 2,000-mile
land border between Mexico and United States are remote, arid, rugged,
and difficult to police.

In recognition of the growing methamphetamine problem, Mexico has taken
proactive measures to assess their legitimate requirements for ephedrine
and pseudoephedrine, and has pledged to reduce their imports of these
substances dramatically in 2006. China, India, and Germany each have
robust chemical production industries and are the world's largest
exporters of ephedrine and pseudoephedrine.

In May 2006, DEA and the Government of Mexico agreed to establish
specialized methamphetamine enforcement teams on both sides of the
border. In Mexico, these teams will focus on investigating and targeting
Mexican methamphetamine trafficking organizations, while DEA efforts on
the U.S. side will focus on the methamphetamine traffickers and
organizations transporting and distributing the finished product being
manufactured in Mexico. Training for the Mexican meth enforcement teams,
comprising over 1,500 law enforcement personnel, was completed in
December 2006.

DEA's 2006 El Paso Intelligence Center (EPIC) Gatekeeper Assessment was
the first in a series of reports produced to further a comprehensive
understanding of drug movement through specific Southwest Border
crossing areas, and the DTOs who control those entry points. Gatekeepers
are individuals who operate geographically specific entry corridors
along the United States-Mexico border, usually in a major Mexican border
town or city, and in support of a particular Mexican DTO. Gatekeepers
provide their services to a variety of drug and illegal immigrant
traffickers. DEA cooperates with the Department of Homeland Security,
Customs and Border Protection (CBP) in investigations involving
Gatekeepers, specializing in their detection and tracking by air.

Successful investigations in the United States and Canada have disrupted
the supply of essential precursor chemicals to these drug trafficking
organizations, forcing them to seek alternative sources of
pseudoephedrine and to move their operations to Mexico. Domestic lab
seizures of all types declined by 62 percent between CY 2002 and CY
2005. However, the purity of methamphetamine has increased. Furthermore,
the geographic spread of STLs throughout the United States has increased
the threat to communities, first responders, and law enforcement. In
fact, from CY 2002 through CY 2005, more than 35,000 STLs were
discovered and seized.

**E. State and Local Law Enforcement Assistance**

State and local law enforcement organizations are important partners in
accomplishing DEA's drug mission. As such, DEA has remained dedicated to
working with State and Local law enforcement partners. For example, as
of December 2006, DEA had 215 State and Local Task Forces, with an
onboard strength of 1,974 Task Force Officers and 1,688 DEA Special
Agents. These task forces in FY 2006 dismantled and disrupted 280 PTOs.
Since the initiation of the PTO program in FY 2001, State and Local Task
Forces have been involved in 26 percent of all PTO investigations (1,467
out of 5,659).

DEA's *Jetway* program, which instructs State and Local law enforcement
officers how to address interdiction issues in airports, bus and train
stations, and hotel/motel environments, conducted nine training sessions
in various cities across the country during FY 2005.

DEA's *Pipeline/Convoy* program, which teaches highway patrol officers
how to address commercial and passenger vehicle interdiction issues,
conducted 16 seminars in FY 2005. These two important programs trained a
total of more than 3,000 officers.

**F. Drug Availability Estimates**

In support of DOJ's goal to reduce the drug supply in America, the
Office of National Drug Control Policy (ONDCP), in consultation with
DOJ, continues to develop estimates of availability for the four major
drug categories: cocaine; heroin; marijuana; and methamphetamine. During
FY 2002, ONDCP and DOJ led an interagency working group to establish a
baseline for drug availability. Estimates of the availability of
cocaine, heroin, methamphetamine, and marijuana for calendar year (CY)
2001 were published in December 2002. These estimates were based on
models that included drugs transported into the United States, as well
as drugs produced domestically, less any federal, State or local
seizures occurring inside the United States. Since that time, the
baseline availability estimates have been recalculated from the initial
models and reflect a more accurate 2001 domestic drug availability.
However, the revised models for cocaine, heroin, and marijuana provide
broad ranges for subsequent years. In addition, methamphetamine
estimates are currently unavailable due to inadequate data. As a result,
the point estimates for baseline availability data have not been
finalized. The Department anticipates that better estimates for drug
availability will be forthcoming.

In an effort to evaluate DEA's impact on drug availability, DEA pursued
several initiatives in FY 2006. DEA coordinated an effort with the ONDCP
who contracted with CNA Corporation to develop a model to determine the
impact of law enforcement operations on the cocaine market. The results
of the 16 month study showed that while DEA enforcement operations did
have a short term impact on the market (cocaine availability as measured
by price and purity), there was no single model that could measure the
impact on a national level. Efforts are continuing with the ONDCP and
CNA Corporation.

DEA is also working with the National Institute of Justice (NIJ) on a
joint research solicitation opportunity in collaboration with the
National Institute on Drug Abuse (NIDA) to determine DEA's impact on the
drug markets and drug availability. Additionally, DEA is pursuing the
establishment of a drug buy program for cocaine and methamphetamine
similar to DEA's Heroin Domestic Monitoring Program to enhance price and
purity data. Finally, a working group has been established to develop
proxy measures to determine DEA's impact on drug availability, and these
measures will be decided and reported on in the FY 2009 budget process.

In the meantime, DEA reports the following drug seizures based on data
recorded in its drug seizure reporting systems. The table below shows a
significant increase in cocaine seizures from FY 2004 to FY 2005, which
was largely sustained in FY 2006 through continued success in foreign
seizures. Over the past three fiscal years, heroin seizures increased
modestly, while methamphetamine and marijuana seizures declined
slightly.

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**G. Program Assessment Rating Tool (PART)**

DEA was among the 20 percent of federal agencies reviewed in the Office
of Management and Budget's (OMB) first-year effort to assess and improve
program performance by identifying program strengths and weaknesses. DEA
was assessed as a single counterdrug program and earned a rating of
"results not demonstrated." In November 2003, OMB reassessed DEA using
the modified Performance Assessment Rating Tool (PART) instrument. This
time, DEA earned a rating of "adequate," an acknowledgement of
significant progress. OMB determined that DEA had made progress and
doubled its score in the PART's four sections.[^9] Specifically, OMB
recognized DEA for the following five accomplishments:

-   Revising budget submissions to track performance;

-   Developing appropriate long-term and annual goals;

-   Revising the strategic plan to encompass a focus that reflects all
    of DEA's programs;

-   Implementing targeting and reporting systems to enable DEA
    Headquarters to review and decide upon the allocation of
    investigative resources; and

-   Receiving an unqualified opinion for the FY 2002 and FY 2003
    financial statements with no internal control weaknesses reported
    and no reportable conditions related to financial management.

The FY 2006 President's Budget recognized DEA as a notable example of
success for integrating budget and performance information: "The Drug
Enforcement Administration (DEA) has demonstrated proficiency at
quantifying the impact of funding increases (or decreases) on its
performance measures relative to targets established from the PART
process. DEA is capable of translating a budget increase for additional
drug enforcement agents into a specific number of additional drug
trafficking organizations that will be either disrupted or dismantled in
the fiscal year."[^10]

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.[^11] DEA will not be
reassessed before the FY 2012 budget process.

**3. Drug Threats to the United States**

The *National Drug Control Strategy* set a two-year goal to reduce the
use of illicit drugs among youth and adults by 10 percent in the United
States between CY 2001 and CY 2003. [^12] This goal has been exceeded,
as drug use among youth has decreased 11 percent over that time period.
However, significant challenges remain.

In CY 2004, an estimated 19.7 million Americans − eight percent of the
population age 12 or older − were current[^13] illicit drug users.[^14]
It is estimated that drug abuse costs the U.S. economy over \$180
billion annually[^15] -- approximately \$1,600 a year to every American
family -- in lost earnings, health care costs, social welfare costs, and
the loss of goods and services to crime. In CY 2003, 28,723 persons died
of drug-induced causes in the United States − a 10 percent increase from
the 26,040 drug-induced deaths in CY 2002.[^16] DEA's most recent
Domestic Threat Assessment[^17] highlights the challenges we still face
in reducing the illicit drug supply in America.

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**A. Methamphetamine**

Methamphetamine is the most widely abused and most frequently
clandestinely produced synthetic drug[^18] in the United States.
Methamphetamine appeals to people across all genders, ages, and
socio-economic levels. Methamphetamine has a high rate of addiction, a
low rate of sustained recovery, and is cheap to manufacture. It has
become a problem of epidemic proportions in the United States,
devastating users, their families, and local communities. According to
the 2005 *National Survey on Drug Use and Health* (NSDUH), 512,000
persons 12 and older used methamphetamine during the past 30 days (an
eighteen percent decrease from 2003) and 1.3 million have used it in the
past year, virtually the same number as in 2003. The estimated number of
past year methamphetamine users is nearly three and one half times the
number of estimated past year heroin users. In FY 2006, DEA domestic
seizures of methamphetamine totaled 2.1 metric tons.

By effectively targeting and arresting the main suppliers of bulk
precursor chemicals, DEA has successfully reduced the number of super
labs[^19] in the United States. As a consequence, operators of super
labs have shifted their production to Mexico. Current drug and lab
seizure data suggest that 80 percent of the methamphetamine consumed in
the United States comes from larger labs, for the most part in Mexico,
and that approximately 20 percent of the methamphetamine consumed comes
from small toxic labs (STLs) in the United States. STLs generally are
unaffiliated with major drug trafficking organizations, but nevertheless
present enormous environmental challenges.

In recent years, the proliferation of STLs has been fueled by the ready
availability of pseudoephedrine, the key ingredient in methamphetamine
and by the fact that the manufacturing process is simple, inexpensive,
and recipes can be found easily on the Internet. In 1990, there were two
states with 20 or more clandestine laboratory seizures. In 1996, this
number increased to 10 states. In 2004, there were over 40 states where
20 or more seizures of clandestine laboratories occurred. From 2002
through 2005, more than 35,000 clandestine laboratories, including over
34,000 STLs, were discovered and seized.

The most promising means of eliminating STLs is to cut off their supply
of ephedrine and pseudoephedrine. DEA has removed a number of
distributors of grey market drug products (those that can be purchased
at truck stops, party/liquor stores, etc.) from the marketplace.
Following DEA's success with removing grey market distributors, STLs
have become heavily reliant on obtaining precursor chemicals from cold
and asthma drug products (usually packaged in blister packs) from
traditional retail outlets, such as chain drug stores. Based on
clandestine lab seizure statistics, those states restricting the
availability of methamphetamine precursor chemicals, like
pseudoephedrine, have seen a dramatic decrease in the number of STLs.
The Combat Methamphetamine Epidemic Act of 2005, which is included in
the Patriot Act Reauthorization, will further reduce the number of STLs
as it makes pseudoephedrine and ephedrine more difficult to obtain.

With the enactment of federal and state legislation limiting the sale of
products containing pseudoephedrine and ephedrine, DEA anticipates
further reduction in the number of STLs.

**B. Non-medical use of prescription drugs**

Non-medical use of addictive prescription drugs has been increasing
throughout the United States at alarming rates. In CY 2005, an estimated
6.4 million[^20] Americans age 12 and older reported past month use of
prescription drugs for non-medical purposes compared to 3.8 million in
CY 2000[^21] − a 68 percent increase in 5 years. Nationally, the misuse
of prescription drugs was second only to marijuana in CY 2005.

Individual users can easily acquire prescription drugs through a variety
of means, generally dependent on the type of drug. DEA and other data
sources reveal that OxyContin^®^ and other Schedule II drugs are most
commonly obtained illegally through "doctor shopping" or are sold
illegally by registrants (e.g., doctors/pharmacists). On the other hand,
Schedule III and Schedule IV drugs (e.g., anti-anxiety medications,
hydrocodone, and anabolic steroids) are often purchased through the
Internet. Many of these pharmacies are foreign-based and expose the
purchaser to potentially counterfeit, contaminated, or adulterated
products.

DEA targets its investigations on domestic Internet pharmacies using
data from available data bases, such as the Automated Reporting of
Completed Orders System (ARCOS), to determine which retail pharmacies
are most likely involved in distribution of large quantities of
controlled substances over the Internet. In FY 2006, 14.7 percent of
investigative work hours dedicated to open diversion cases were Internet
cases. This is an increase of 27.9 percent from FY 2005 when Internet
cases represented 11.3 percent of the investigative work hours dedicated
to open diversion cases, and an increase of 50 percent from FY 2004 when
8.8 percent of case work hours were for Internet cases.

During FY 2006, DEA has initiated over 218 investigations of online
sales of controlled pharmaceuticals without a prescription. As a result
of Internet investigations, DEA seized approximately \$4.9 million in
cash, bank accounts, property, and computers during FY 2006.

In FY 2004, DEA established a specialized section within its Special
Operations Division (SOD) to coordinate multi-jurisdictional Title III
investigations involving the diversion of pharmaceuticals and chemicals
over the Internet. During FY 2006, DEA has coordinated over 90 Internet
investigations, resulting in the arrest of approximately 128 individuals
and the seizure of approximately 14 million dosage units of controlled
substances and approximately \$52.6 million in U.S. currency.

DEA, in collaboration with its State and Local law enforcement
counterparts, investigates registrants and non-registrants who
intentionally divert prescription drugs. DEA has made pharmaceutical
investigations a priority and continues to focus its drug enforcement
efforts toward the most important members of the drug supply chain. In
FY 2005, DEA opened 1,672 investigations focused on the diversion of
pharmaceutical controlled substances by registrants and non-registrants,
an approximate increase of 11 percent over FY 2004 (1,508). DEA's FY
2005 Priority Target pharmaceutical investigations of key drug supply
organizations (59) represent a dramatic increase (168 percent) over FY
2004 (22).

**C. Cocaine**

Cocaine remains a major illegal drug of concern throughout the United
States based upon abuse indicators, violence associated with the trade,
and trafficking volume. After marijuana, cocaine continues to be the
most widely used illicit drug among all age categories. The 2005 NSDUH
found that 2.4 million Americans used cocaine within the past 30 days
and that over 5.5 million Americans used it within the past year.
According to the 2004 Drug Abuse Warning Network (DAWN) report, cocaine
is the most frequently reported illegal drug in hospital emergency room
visits, accounting for 1 in 5 (19 percent) drug related emergency room
visits in CY 2004.[^22]

Although Colombia is the principal source of cocaine distributed in the
United States, most of the wholesale cocaine distribution in the United
States is controlled by Mexican drug trafficking organizations and
criminal enterprises. Even in areas dominated by Colombian and Dominican
drug trafficking organizations, such as the Northeast and Caribbean
regions, the influence of Mexican drug trafficking organizations is
increasing.

DEA's multi-agency cocaine interdiction programs -- known as
***Operation Firewall*** and ***Operation Panama Express*** -- combine
investigative and intelligence resources to interdict and disrupt the
flow of cocaine from the northern coast of Colombia to the United
States. Since the July 2003 commencement of ***Operation Firewall***,
34.4 metric tons of cocaine has been directly seized. Additionally,
***Operation* *Firewall*** provided assistance in ***Operation* *Panama
Express*** seizures of 37.4 metric tons of cocaine, and in other foreign
countries with the seizure of 34.9 metric tons of cocaine. Since the
February 2000 implementation of ***Operation Panama Express*** to the
end of FY 2006, 443.5 metric tons of cocaine have been seized or
scuttled and 1,272 individuals have been arrested. As of the end of FY
2006, these combined operations have resulted in total seizures of 512.8
metric tons of cocaine.

**D. Heroin**

The overall demand for heroin in the United States is lower than for
other major drugs of abuse such as cocaine, marijuana, and
methamphetamine.[^23] However, one cause for concern is the recent
increase in heroin usage. According to the 2005 NSDUH, 379,000 people
aged 12 and older reported using heroin during the past 30 days in CY
2005; a slight decrease from 398,000 in CY 2004.[^24] 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
162,137 mentions in CY 2004.[^25]

Most of the heroin entering the United States is produced in South
America and Mexico. Although heroin production in these areas has
decreased in recent years, the production capacity remains sufficient to
meet U.S. demand for the drug.[^26] In 2004, Afghanistan produced more
than 90 percent of the world's heroin supply.[^27] However, Afghanistan
is not currently a major heroin supplier to the United States; only
about eight percent of the U.S. supply comes from that country. The
majority of the heroin entering the United States is produced in
Colombia and Mexico.

Through ***Operation Containment***, DEA is working with a coalition of
18 countries from Central Asia, the Caucasus, Europe, and Russia, to
reduce the flow of Afghan heroin into world markets, prevent Afghanistan
from becoming a major heroin supplier to the United States, and disrupt
drug-related terrorist activities that could hamper the long term
stabilization of the Afghanistan government. In FY 2006, ***Operation
Containment*** resulted in the seizure of 5.3 metric tons of heroin, 121
kilograms of morphine base, 5.2 metric tons of opium gum, 1,439 liters
of precursor chemicals, and the seizure of 39 clandestine
opium/morphine/heroin processing laboratories.

**E. Marijuana**

Marijuana continues to be a significant threat. The 2005 NSDUH found
that marijuana was the most commonly used illicit drug with 14.6 million
users (6.1 percent of the population 12 and older) during the past month
in CY 2004 − the same as in CY 2003.[^28] More teens seek treatment for
marijuana dependency than for all other drugs combined including
alcohol, and marijuana was involved in 215,665 emergency department
visits[^29] in CY 2004, second only to cocaine among drug-related
visits.[^30]

Marijuana trafficking is prevalent across the nation, with both domestic
and foreign sources of supply. The most recent supply availability
estimates indicate that between 10,000 and 24,000 pure metric tons of
marijuana are available in the United States,[^31] and that Americans
spend more than \$10.4 billion every year on marijuana.[^32] 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 traffic marijuana to help finance their other drug
operations.

Mexican drug trafficking organizations dominate the transportation and
wholesale distribution of the majority of foreign-based marijuana
available in the United States and cultivate marijuana on U.S. public
lands throughout California. High grade marijuana from Canada, commonly
referred to as "BC Bud," is also available in every region of the United
States.

**4. Recent Accomplishments and FY 2008 Strategies for Success**

DEA's accomplishments demonstrate its commitment to DOJ's FY 2003−FY
2008 Strategic Plan, DEA's FY 2003−FY 2008 Strategic Plan,[^33] and the
DEA Administrator's vision of achieving DOJ's goal of reducing the
availability of illicit drugs in America. DEA's drug enforcement
strategy focuses on the most effective efforts to reduce drug
availability in the United States and assist in countering the threats
to the nation's security. These strategies include: 1) Combating
Methamphetamine; 2) Counterterrorism; 3) International Drug Flow
Prevention; 4) Anti-Money Laundering; and 5) Predictive Intelligence.
The following accomplishments illustrate DEA's efforts in attacking drug
trafficking organizations:

**A. Combating Methamphetamine**

Methamphetamine poses a unique and deadly threat to communities across
America. To combat the trafficking and manufacturing of methamphetamine,
DEA takes a comprehensive approach that includes investigations
targeting methamphetamine DTOs, enforcement operations to interdict
trafficking of methamphetamine across the Southwest Border utilizing the
services of Gatekeepers and other means, domestic and international
diversion control to cut off the supply of precursor chemicals to super
labs and small toxic laboratories, and the identification and cleanup of
the large number of small toxic laboratories. In FY 2006, DEA spent an
estimated \$191 million to combat methamphetamine, including \$17
million to administer 4,756 clandestine laboratory cleanups.

In September 2005, DEA San Diego initiated wire intercepts of both the
Perez-Zamarano and Arreola methamphetamine DTOs. Subsequent intelligence
and investigation in cooperation with Mexican law enforcement
authorities identified the Mexico-based supplier of methamphetamine and
the chain of transportation and distribution for the drugs into southern
California and the rest of the United States. The takedown phase of
***Operation Smile*** on March 15, 2006, resulted in the complete
dismantlement of the Perez-Zamorano and Arreola-Gomez DTOs. The
dismantling of these organizations has had a significant effect in the
availability of methamphetamine in the San Diego, California area. In
addition, DEA developed intelligence information that identified new
trends and methods of smuggling methamphetamine from Mexico and its
distribution in the United States. Intelligence also identified the
source of high grade methamphetamine.

In August 2005, DEA concluded ***Operation Wildfire*** -- a nationally
coordinated law enforcement initiative that was designed to target all
levels of the methamphetamine manufacturing and distribution chain in
the country. Two hundred cities took part in the operation with
unprecedented results, including 427 arrests and the seizure of 95
kilograms of methamphetamine, 201,035 tablets of pseudoephedrine, 153
kilograms of pseudoephedrine powder, and 224,860 tablets of ephedrine.
In addition, 56 clandestine laboratories were seized and 30 children,
who had been placed at risk by the laboratory operations, were rescued.

In addition to large scale operations, DEA's Mobile Enforcement Teams
(METs) continued their methamphetamine focus. METs have significantly
increased the number of methamphetamine deployments. In FY 2006, 74
percent of MET deployments initiated targeted methamphetamine
trafficking organizations, compared to 22 percent in FY 2003, 27 percent
in FY 2004, and 41 percent in FY 2005.

DEA also has continued its work with global partners including Mexico,
Canada, Hong Kong, China, and Germany to target international
methamphetamine traffickers and to increase international controls on
precursor chemicals. For example, the United States and Mexico have
obtained a commitment from Hong Kong not to ship chemicals to the United
States, Mexico, or Panama until Hong Kong authorities have received an
import permit or equivalent documentation. Hong Kong officials also
agreed to provide advance notice to a receiving country before a
shipment is made.

In FY 2008, DEA requests 8 positions, 4 FTE, and \$29,172,000 (including
\$28,437,000 in non-personnel funding) to enhance its efforts in
combating methamphetamine. Specifically, DEA will: 1) employ a
comprehensive strategy that targets methamphetamine manufactured in
Mexico and smuggled across the Southwest Border; 2) coordinate a
cooperative approach with global partners to stop the illicit use of
precursor chemicals in the production of methamphetamine; and 3) ensure
the adequate support of all elements needed for DEA's methamphetamine
and related polydrug investigations - aviation support, aerial
surveillance equipment, and other investigative tools to support
methamphetamine investigations and enforcement operations along the
Southwest Border, including multi-agency efforts against Gatekeepers.

**B. Counterterrorism**

Although traditional criminal organizations dominate the international
drug trade at all levels, drug income is an important source of revenue
for some international terrorist groups. Even if only a small fraction
of the world's drug dealing revenues supports terrorist groups, that
relatively small amount could be a large percentage of the world's
terrorist revenues.[^34] DEA has identified 43 percent (18 of 42) of the
organizations on the Department of State's Foreign Terrorist
Organizations list as having possible ties to the drug trade. DEA's
authority to target and arrest drug traffickers that provide financial
support to terrorist organizations is greatly enhanced by the Patriot
Act Reauthorization of 2005, which makes it a crime for a person
anywhere in the world to manufacture, distribute, or possess with intent
to manufacture or distribute a controlled substance while providing
financial support to terrorist organizations.

In 2004, Afghanistan produced more than 90 percent of the heroin
produced worldwide.[^35] Currently, Afghanistan is not a major heroin
supplier to the United States; only about 8 percent of the U.S. supply
comes from that country. However, DEA operations in Afghanistan serve a
dual purpose: 1) preventing the country from returning as a major
supplier of heroin to the United States, as it was in the 1970s and
1980's; and 2) helping stabilize the Afghanistan government as it
battles Taliban terrorists and powerful drug warlords for control of
portions of the country.

During FY 2005, DEA operations initiated the deployment of five
Foreign-deployed Advisory and Support Teams (FASTs) to Afghanistan and
the disruption of eight and dismantlement of two terrorist-linked
Priority Target Organizations (PTOs). The FAST deployments played a
pivotal role in protecting the lives of both our U.S. military and our
coalition partners in Afghanistan. The teams identified narcotics
traffickers involved in targeting U.S. forces with improvised explosive
devices and have provided critical information obtained from DEA Human
Intelligence (HUMINT) sources to U.S. Army Special Forces Operational
Detachments. In fact, on several occasions after DEA shared its source
information, the Special Forces successfully intervened and seized
improvised explosive devices, other bomb-making materials, and weapons
caches.

During FY 2006, the Kabul Country Office/FAST, in conjunction with the
Special Operation Division's (SOD) Bilateral Case Group, the London
Country Office, and the New York Field Division targeted the Khalil
Shinwari organization. During this investigation, an undercover Special
Agent was introduced to Shinwari by a cooperating source. Shinwari
delivered fifteen kilograms of heroin to the undercover agent with
instructions that twelve kilograms be delivered to an associate in the
United Kingdom and that three kilograms of better quality heroin be
given to an associate in the United States. On July 22 and 31, 2006
respectively, 12 kilograms were delivered to UK authorities and three
kilograms were delivered to DEA's New York Field Division. This was the
first international controlled delivery conducted from Afghanistan.

The FAST teams continue to advise, train, and mentor their Afghan
counterparts in the National Interdiction Unit (NIU) of the Counter
Narcotics Police -- Afghanistan (CNP-A), and directly augment the Kabul
Country Office in conducting bilateral investigations to identify,
target, and dismantle transnational drug trafficking operations in the
region. In October 2006 the sixth class of the CNP-A, NIU graduated from
a six-week training program that was sponsored by the U.S. Government.
The course graduates are operationally deployed and working bilaterally
with DEA's FAST teams. As of the fourth quarter of FY 2006, the number
of NIU staff stands at 126 officers. Plans are currently underway to
increase the number of NIU officers to up to 275 officers. This will
entail a gradual increase consisting of six classes of 25 officers per
class.

In FY 2008, DEA requests 7 positions (including 1 Special Agent), 4 FTE,
and \$7,124,000 (including \$6,123,000 non-personnel funding) to enhance
its efforts at combating terrorism. Specifically, DEA's request includes
funding in support of its classified infrastructure. Merlin is the
primary component of DEA's classified infrastructure and provides the
single point of connectivity between DEA offices for rapid transmission
of, and access to, classified investigative and intelligence
information. In the post-9/11 world and especially since DEA has
reintegrated as a member of the Intelligence Community, DEA must ensure
that investigative information is quickly made available in our law
enforcement databases, secure communications systems are adequately
supported, and DEA information technology systems are protected against
security threats.

**C. International Drug Flow Prevention**

In April 2005, DEA initiated a multi-agency International Drug Flow
Prevention Strategy that would utilize intelligence-driven enforcement
investigations to significantly disrupt the movement of drugs, money,
and chemicals between source zones and the United States.

Among the first Drug Flow Prevention initiatives was ***Operation All
Inclusive 2006*-*I***, which resulted in the seizure of 43 metric tons
of cocaine. Maritime seizures in the Eastern Pacific and Western
Caribbean accounted for 16 metric tons of the total cocaine seized.
Highlights include the arrest of three pilots and the seizure of a DC-9
and Dassault Falcon Jet aircraft and 5.6 tons of cocaine at the Cuidad
de Carmen Airport, Campeche, Mexico, as well as the seizure and
dismantlement of 15 cocaine processing laboratories in Colombia, which
resulted in the seizure of 92.6 metric tons of precursor chemicals. The
DEA and other federal, state and host nation law enforcement, task force
and military agencies supported both operational and intelligence
aspects of these operations.

**D. Anti-Money Laundering**

In May 2006, DEA, in conjunction with law enforcement counterparts in
Colombia, Panama, Brazil, Mexico, Ecuador, Venezuela, Spain, and the
United Kingdom, conducted the take down phase of ***Operation Twin
Oceans*,** which targeted the Pablo Rayo-Montano DTO. This DTO was
responsible for the production, smuggling and distribution of tens of
thousands of kilograms of cocaine worldwide. During the investigation,
47,555 kilograms of cocaine were seized. The financial investigation of
this DTO identified and targeted approximately \$100 million in assets.
Over \$30 million in assets have been targeted by Panamanian
authorities. Between October 11 and 16, 2006, the Colombian authorities
executed the first phase of the financial takedown in the 11 Colombian
cities. In total, approximately 130 properties were seized by the CNP
and Fiscalia, including residential houses, apartments, and businesses.
Additionally, approximately 23 vehicles and 4 fishing vessels were
seized. The Colombian authorities have estimated total assets seized to
be approximately \$50 million.

**E. Predictive Intelligence**

Using predictive intelligence methodologies, DEA has identified the
emerging methamphetamine manufacturing threat in Colombia. An
investigation of this threat is in its early stages. Predictive
intelligence initiatives afford DEA the advantage of being able to
respond more quickly and effectively to attempts by DTOs to adapt to
pressure exerted on them by U.S. and host nation drug enforcement.

**5. Online Investigations**

DEA combats trafficking of prescription drugs over the Internet and use
of the Internet as a communication tool for drug trafficking
organizations of illicit drugs. Non-medical use of addictive
prescription drugs has been increasing throughout the United States at
alarming rates. In CY 2005, an estimated 6.4 million[^36] Americans age
12 and older reported past month use of prescription drugs for
non-medical purposes compared to 3.8 million in CY 2000[^37] − a 68
percent increase in 4 years. Nationally, the misuse of prescription
drugs was second only to marijuana use in CY 2005.

The Internet is becoming an increasingly popular method of acquiring
prescription drugs. Schedule III and Schedule IV drugs (e.g.,
anti-anxiety medications, hydrocodone, and anabolic steroids) are often
purchased through the Internet. Many of these e-pharmacies are
foreign-based and expose the purchaser to potentially counterfeit,
contaminated, or adulterated products. While it is difficult to assess
the number of rogue pharmacy websites advertising the sale of controlled
substances on the Internet, a recent search engine query for
"prescription drugs for sale online" resulted in 10.3 million hits. A
query for "no prescription required" resulted in 30 million hits. DEA's
experience indicates that a single operation may be responsible for
several hundred websites.

To deal with the increasing opportunities for diversion created by the
Internet, DEA has developed an Online Pharmacy Strategy. This strategy
utilizes a combination of enforcement, regulatory, and technological
efforts to detect and prevent diversion, and requires the coordination
of multi-agency resources and industries. Specifically, DEA coordinates
Internet investigations with Federal, State, and local agencies to
maximize investigative resources and prosecution. DEA also provides
training and educational seminars to investigators, prosecutors,
industry representatives, DEA registrants, and the public regarding
online pharmacies. Additionally, DEA supports legislation and regulatory
initiatives that propose to curtail and prevent diversion of controlled
substances over the Internet. Finally, DEA coordinates the introduction
of new technology to the field, and will be at the forefront in
discovering and exploiting new trends in technology.

DEA has also begun an Internet Distributor Initiative to educate the
over 800 DEA-registered distributors of controlled substances about
identifying characteristics of an illegal Internet drug sales scheme
("rogue pharmacy") to cut the supply lines of these illicit operations.
DEA emphasizes to wholesalers the need to immediately stop selling where
large scale diversion appears to be occurring or else face the loss of
their DEA registration and possible judicial sanctions.

In FY 2005, as a result of one Internet drug trafficking investigation,
***Operation Cyberchase***, DEA identified 8 separate drug trafficking
organizations that together operated over 200 websites that illegally
sold prescription drugs, and arrested 20 individuals who had been
operating in the United States, India, Asia, Europe, and the Caribbean.
DEA also led a 21-month OCDETF investigation that led to criminal
charges against the principal Mexican steroid manufacturers, whose U.S.
sales totaled an estimated \$56 million annually. In FY 2006, this
investigation resulted in 26 further arrests, the seizure of 5.8 million
dosage units of controlled substances, 105 kilograms of Ketamine, and
\$8.6 million in U.S. currency.

Drug trafficking organizations distributing illicit drugs rely on the
use of the Internet to facilitate their drug trafficking and money
laundering activities. Analysis provided by DEA's Special Operation
Division (SOD) indicates that a majority of Southwest Border
investigations involving CPOTs in Colombia and Mexico contain a major
component of traffickers using Hotmail, Yahoo, and other e-mail
accounts. Drug traffickers are also switching to advanced Internet
communications such as Voice over Internet Protocol (VoIP), Blackberry
and other mobile devices, instant messaging, and encrypted e-mail.

In FY 2008, DEA requests \$3,020,000 in non-personnel funding to provide
operational funding for the support of Internet investigations, Internet
intercept capabilities, and computer forensics support. Traditional drug
trafficking organizations increasingly rely on the use of the Internet
to facilitate their drug trafficking and money laundering activities. To
remain on the forefront of communication exploitation capabilities, DEA
needs to improve and expand its Internet investigative technologies to
combat the evolving methods used by drug trafficking organizations.

6\. Information Technology Investments

Information technology (IT) resources are an important component in
DEA's efforts to fulfill its mission. In addition, information sharing
with other law enforcement agencies and the Intelligence Community is
only possible with an adequate IT infrastructure. In FY 2008, DEA is
requesting enhancements for\` the following IT Investments:

![](media/image4.wmf){width="3.2930555555555556in"
height="2.5881944444444445in"}

-   *Southwest Border and Methamphetamine Enforcement*: Digital Imaging

-   *Counterterrorism and Intelligence Sharing*: Merlin

-   *Online Investigations*: Digital Evidence Storage Area Network

7\. Full Program Costs

DEA's budget integrates its own priorities together with DOJ's Strategic
Goals and Objectives to ensure that each performance objective is linked
to the costs of critical strategic actions. This request supports DEA's
Strategic Plan, which divides DEA's resources (including reimbursable
funds) into four strategic focus areas to achieve the maximum
enforcement impact across the full spectrum of drug trafficking
activity. DEA maps its resources to the four strategic focus areas.
Requested enhancements are designed to support specific strategic focus
areas.

![](media/image5.wmf){width="4.511805555555555in" height="3.24375in"}

> Note: This chart reflects all DEA resources including the Salaries and
> Expenses Account, the Diversion Control Fee Account, and Reimbursable
> Resources.

DEA's strategy takes into account the current drug trafficking situation
affecting the United States and identifies the drug trade's
characteristics and vulnerabilities at all levels, targeting each of
them simultaneously. DEA's resources in support of DOJ Strategic Goal II
and Objective 2.2, and Strategic Goal I and Objective 1.1, are provided
in each decision unit justification in Section II.

For FY 2008, approximately 74 percent of DEA's budgetary resources
(including reimbursable funds) are associated with Domestic Enforcement,
14 percent with International Enforcement, two percent with State and
Local Assistance, and ten percent with the Diversion Control Fee
Account. The activities and initiatives in each of DEA's programs play a
crucial role in accomplishing DEA's overall strategy. Total costs
include:

-   Direct costs of all outputs;

-   Indirect costs; and,

-   Common administrative systems.

Some programs, as well as management and administration costs, cross
decision units. Both performance and resource tables within each
decision unit justification define the total costs of achieving the
strategies DEA will continue in FY 2008. The resource and performance
charts include the costs of lower level strategies, which also
contribute to achieving the objectives. The indirect costs of continuing
activities, which are central to each DEA decision unit's operations,
are also included.

8\. Performance Challenges

The challenges that impede progress towards achieving DEA's goals are
complex and ever changing. Marketplace dynamics, global politics,
technological developments, and criminal behavior are only a few factors
that can impact law enforcement practices and pose challenges that
demand attention. DEA faces the following potential obstacles to meeting
its performance objectives:

**[External Challenges]{.underline}:** There are many external
challenges that DEA has to address to meet its goals successfully. While
these factors are beyond its control, DEA can provide tools and
assistance to Headquarters and field personnel, as well as its Federal,
State, local, and international partners, to minimize dangers. External
challenges include the following:

-   Following the September 11, 2001 attacks, DOJ and other federal
    agencies redirected resources from fighting drugs to combating
    terrorism and improving national security. As a result, additional
    resources are required for drug enforcement operations, including
    intelligence and other investigative support, to maintain the
    momentum of the Federal government's drug enforcement efforts.

-   The smuggling, money remittance, and communications infrastructures
    utilized by international drug and chemical trafficking
    organizations will continue to provide an operational template that
    can be readily exploited by terrorist organizations. For example,
    drug income is among the sources of revenue for some international
    terrorist groups, most notably the Revolutionary Armed Forces of
    Columbia (FARC) and the United Self-Defense Forces of Colombia
    (AUC).

-   Many international drug laws are inadequate to address counter-drug
    efforts. Furthermore, many countries lack effective legislative
    measures and the judicial means necessary to effectively thwart
    production, diversion, transportation, communications, finance, or
    distribution of drugs in their countries.

-   Corruption can stymie DEA's efforts to affect international
    enforcement. Developing nations face an inordinate amount of
    problems (including indebtedness, insurgency, corruption, and
    underdevelopment) in conjunction with drug production and
    trafficking.

-   As DEA identifies and infiltrates drug trafficking organizations,
    the leaders of those organizations are finding more sophisticated
    ways to insulate themselves from the criminal justice system. For
    example, they are using long and complex chains of delivery systems
    and state-of-the-art technology to keep their operations
    clandestine.

-   Newly emerging drug threats continue to affect the United States and
    the world.

-   Technological advancements in communications require vigilance and
    technical competency on the part of law enforcement. Internet,
    banking methods, and other sophisticated uses of equipment, such as
    instant messaging (instant two-way communications using the
    Internet), BlackBerrys, Hush Mail (free online encryption tool), and
    VoIP (which provides push to talk, email, and picture capability to
    wireless phones), all present challenges to law enforcement.

-   The globalization of the social, technical, and economic
    environments of the United States and other nations creates new
    venues for drug production, transportation, diversion, and money
    laundering techniques.

-   Increase in demand will drive an increase in production and
    trafficking. Changes in the population mix may also have an impact
    on illegal drug use.

-   Source countries, drug traffickers, methods of operations, and
    production are constantly changing.

-   Legalization in any form would likely: 1) reduce the perception of
    the risks and costs of use; 2) increase availability and access to
    harmful drugs; 3) increase demand, abuse, and addiction; and 4)
    remove the social sanction against drug abuse that is reinforced by
    legislation. Legalization would increase risks and costs to
    individuals, families, and communities.

-   Changes in laws could affect the closed system of distribution and
    would allow distribution of foreign-sourced controlled substances.

-   Continued growth in preference in the abuser population for
    legitimate controlled substances to replace or supplement illicit
    drugs.

-   Growing DEA registrant population increases legal access to
    controlled substances and the opportunity for their diversion.

**[Internal Challenges]{.underline}**: DEA faces many internal
challenges in FY 2008, such as:

-   Maintaining operations within resource constraints.

-   Addressing critical infrastructure requirements.

-   Enhancing career development opportunities to ensure effective
    succession planning in DEA's leadership, since 49 percent of DEA's
    Senior Executives are eligible for retirement by the end of FY 2007.

-   Expanding intelligence sharing for money laundering investigations
    and drug enforcement efforts across OCDETF member agencies through
    the OCDETF Fusion Center.

-   Strengthening existing partnerships and building new ones with
    Federal, State, local, and international counterparts.

-   Ensuring accountability across the agency through the integration of
    budget and performance.

In December 2004, the Congress passed and the President signed the
Commercial Spectrum Enhancement Act (CSEA, Title II of P.L. 108-494),
creating the Spectrum Relocation Fund (SRF) to streamline the relocation
of Federal systems from certain spectrum bands to accommodate commercial
use by facilitating reimbursement to affected agencies of relocation
costs. The Federal Communications Commission has auctioned licenses for
reallocated Federal spectrum, which will facilitate the provision of
Advanced Wireless Services to consumers. Funds are made available to
agencies in fiscal year 2007 for relocation of communications systems
operating on the affected spectrum. These funds are mandatory and will
remain available until expended, and agencies will return to the SRF any
amounts received in excess of actual relocation costs.

[]{.mark}

DEA's initial estimate of its total spectrum relocation costs was
\$75,000,000. A revised estimate is being considered by the Office of
Management and Budget (OMB). SRF funds are mandatory and will remain
available until expended. Agencies will return to the SRF any amounts
received in excess of actual relocation costs. These amounts are not
included in the discretionary budget estimates included in this budget
request.

> **This page intentionally left blank**

**II. Summary of Program Changes**

**Program Improvements**

+-------------+--------------------------------+----+----+-------+----+
| **Item      | **Description**                |    |    |       | ** |
| Name**      |                                |    |    |       | Pa |
|             |                                |    |    |       | ge |
|             |                                |    |    |       | ** |
+-------------+--------------------------------+----+----+-------+----+
|             |                                | ** | *  | **Do  |    |
|             |                                | Po | *F | llars |    |
|             |                                | s. | TE | (\$0  |    |
|             |                                | ** | ** | 00)** |    |
+-------------+--------------------------------+----+----+-------+----+
| **Southwest | **Attack poly-drug trafficking | ** | *  | **    | ** |
| Border      | organizations transiting the   | 11 | *6 | \$29, | 59 |
| and**       | Southwest Border by increasing | ** | ** | 983** | ** |
|             | DEA's intelligence gathering,  |    |    |       |    |
| **Meth      | detection, monitoring, and     |    |    |       |    |
| amphetamine | surveillance capabilities.**   |    |    |       |    |
| En          |                                |    |    |       |    |
| forcement** |                                |    |    |       |    |
+-------------+--------------------------------+----+----+-------+----+
| **Count     | **Improve information sharing  | *  | *  | *     | ** |
| erterrorism | with the Intelligence          | *7 | *4 | *\$7, | 71 |
| and         | Community (IC) and other law   | ** | ** | 124** | ** |
| I           | enforcement agencies in order  |    |    |       |    |
| ntelligence | to enhance our Nation's        |    |    |       |    |
| Sharing**   | efforts in reducing the supply |    |    |       |    |
|             | of drugs, protecting our       |    |    |       |    |
|             | national security, and         |    |    |       |    |
|             | combating global terrorism.**  |    |    |       |    |
+-------------+--------------------------------+----+----+-------+----+
| **Online    | **Expand and improve Internet  | *  | *  | *     | ** |
| Inves       | investigations of illicit      | *0 | *0 | *\$3, | 75 |
| tigations** | drugs by providing technical   | ** | ** | 020** | ** |
|             | Internet intercept equipment   |    |    |       |    |
|             | and computer forensics         |    |    |       |    |
|             | support.**                     |    |    |       |    |
+-------------+--------------------------------+----+----+-------+----+
| **Online    | **Combat the diversion of      | ** | *  | *     | *  |
| Diversion   | pharmaceutical drugs over the  | 12 | *6 | *\$4, | *1 |
| Inves       | Internet.**                    | ** | ** | 011** | 13 |
| tigations** |                                |    |    |       | ** |
+-------------+--------------------------------+----+----+-------+----+
| **Diversion | **Convert Diversion            | *  | *  | **    | *  |
| I           | Investigators to criminal      | *0 | *0 | \$11, | *1 |
| nvestigator | investigative series           | ** | ** | 588** | 19 |
| C           | positions.**                   |    |    |       | ** |
| onversion** |                                |    |    |       |    |
+-------------+--------------------------------+----+----+-------+----+

**Program Offsets**

  -------------- --------------------------------- ---------- ---------- ---------------- ----------
  **Item Name**  **Description**                                                          **Page**

                                                   **Pos.**   **FTE**    **Dollars        
                                                                         (\$000)**        

  **Mobile       **Reduce MET positions and        **(80)**   **(83)**   **(\$20,578)**   **91**
  Enforcements   funding in order to direct                                               
  Teams (MET)**  resources towards disrupting or                                          
                 dismantling Priority Targets.**                                          
  -------------- --------------------------------- ---------- ---------- ---------------- ----------

> **This page intentionally left blank**

III. **Appropriations Language and Analysis of Appropriations Language**

Appropriations Language

> **DRUG ENFORCEMENT ADMINISTRATION**
>
> **SALARIES AND EXPENSES**

*[For necessary expenses of the Drug Enforcement Administration,
including not to exceed \$70,000 to meet unforeseen emergencies of a
confidential character pursuant to 28 U.S.C. 530C; and expenses for
conducting drug education and training programs, including travel and
related expenses for participants in such programs and the distribution
of items of token value that promote the goals of such programs,
\$1,802,569,000; of which not to exceed \$75,000,000 shall remain
available until expended; and of which not to exceed \$100,000 shall be
available for official reception and representation
expenses.]{.underline}*[^38]

**Analysis of Appropriations Language**

No substantive changes proposed.

> **This page intentionally left blank**

**IV. Decision Unit Justification**

**A. International Enforcement**

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**1. Program Description**

The major focus of DEA's International Enforcement program is the
disruption or dismantlement of drug trafficking organizations identified
by DEA Country Attachés as the most significant international drug and
chemical trafficking organizations, also known as PTOs. Specifically,
DEA's foreign country offices focus their investigative efforts on PTOs
with a direct connection to DOJ's CPOT targets, which include the most
significant international command and control organizations threatening
the United States as identified by OCDETF member agencies. Recently, the
International Narco-Terrorism Provisions in the USA Patriot Improvement
and Reauthorization Act of 2005 enhanced DEA's investigative authority
overseas. DEA now has the authority to pursue drug traffickers who are
terrorists or provide funding to terrorists even if the drugs are not
destined for the U.S. In addition, the Patriot Act makes it a Federal
crime to engage in drug trafficking to benefit terrorists.

To attack the vulnerabilities of major international drug and chemical
trafficking organizations, DEA is working to strengthen partnerships
with its international law enforcement counterparts worldwide. With the
Drug Flow Prevention initiative, DEA is implementing an innovative,
multi-agency strategy, designed to significantly disrupt the flow of
drugs, money, and chemicals between the source zones and the United
States by attacking vulnerabilities in the supply, transportation
systems, and financial infrastructure of major drug trafficking
organizations. This new strategy calls for aggressive, well-planned and
coordinated enforcement operations in cooperation with host-nation
counterparts in global source and transit zones.

DEA's foreign operations address the problem of U.S.-bound drugs in many
ways, but share the common theme of supporting proactive and successful
bilateral investigations in partnership with nations committed to
combating a problem that undermines their societies, and whose law
enforcement agencies welcome the expertise and enhanced capabilities DEA
imparts to them. Therefore, the Drug Flow Prevention initiative will
have a broader impact on the drug flow into the United States, and
augment U.S. efforts against terrorism by depriving criminal
organizations of drug proceeds that could be used to fund terrorist
acts.

On August 5, 2005, the DEA implemented the first initiative of the
strategy, ***Operation All Inclusive 2005-1***, throughout Central
America. ***Operation All Inclusive 2005-1*** was a multi-agency
international drug flow prevention strategy designed to significantly
disrupt the flow of drugs, money, and chemicals between Mexico, Central
America, and the United States by attacking vulnerabilities in the
supply and transportation systems, and the financial infrastructure of
major drug trafficking organizations. The strategy included aggressive,
well-planned and coordinated enforcement operations with host-nation
counterparts in Mexico and Central America. Through innovative,
multi-faceted and intelligence-driven operations, participating agencies
attacked the drug trade's main arteries and support infrastructure in
Central America. The Intelligence Community, the Department of Defense,
and other U.S. government agencies supported both operational and
intelligence aspects of the operation. The success of this multi-agency,
multi-jurisdictional operation exemplified the cooperation between law
enforcement entities throughout the United States and Latin America.
With coordination between DEA, Defense Intelligence Agency (DIA), and
Joint Interagency Task Force (JIATF)-South, ***Operation All Inclusive
2005-1*** demonstrated how coordinated intelligence and enforcement
efforts can significantly enhance operational impact. The steadfast and
tireless efforts of foreign and domestic law enforcement counterparts
led to the successes of this operation.

DEA has also initiated several partnering efforts in Afghanistan. For
example, DEA initiated ***Operation Containment*** in February 2002 in
response to the growing threat of Afghan opium. Through ***Operation
Containment***, DEA is implementing a series of administrative,
diplomatic, and investigative measures needed to reduce the flow of
Afghan heroin into world markets and prevent Afghanistan from becoming a
major supplier of illicit drugs to U.S. markets. DEA had similar
operational success by eliminating the heroin supply from Afghanistan
through the French Connection in the 1970s. Today, these measures are
essential to prevent the billions of dollars involved in the drug trade
from reaching people who seek to return the ousted Taliban to power, or
those financing terrorist organizations.

In FY 2006, DEA collaborated with 18 countries from Central Asia, the
Caucuses, Europe and Russia in support of ***Operation Containment**.*
As of September 30, 2006, this collaboration resulted in the seizure of
5.3 metric tons of heroin, 121 kilograms of morphine base, 5.2 metric
tons of opium gum, 1,439 liters of precursor chemicals, 3.9 metric tons
of cannabis, 39 clandestine heroin laboratories, as well as the arrest
of 357 individuals. Also, the Government of Afghanistan, with the
assistance of DOJ prosecutors in Kabul, extradited Haji Baz Mohammad to
the United States for prosecution. This was the first ever extradition
from Afghanistan to the United States. On July 11, 2006, he pled guilty
to conspiracy to import heroin into the United States in the U.S.
District Court for the Southern District of New York. He faces a
mandatory minimum of ten years imprisonment and up to a life sentence
when he is sentenced in January 2007.

DEA is working with the government of Afghanistan to assist in building
narcotic enforcement initiatives and protocols. DEA's Kabul Country
Office is participating in the training of the Counter Narcotics Police
-- Afghanistan (CNP-A) as an institution building effort. The CNP-A is
being trained to target and dismantle drug trafficking organizations and
conduct interdiction and laboratory destruction operations. In addition,
DEA is developing a clandestine laboratory and drug identification
awareness course for U.S. military forces operating in Afghanistan.

In support of the *Counternarcotics Strategy for Afghanistan*, developed
by the U.S. Embassy Kabul in conjunction with the Government of
Afghanistan to reduce heroin production and contribute to the
stabilization and rebuilding of the country, DEA created five
Foreign-deployed Advisory Support Teams (FAST). The five FAST teams
(each team consisting of a Group Supervisor, four Special Agents, and
one Intelligence Analyst) completed an intensive six week training
course provided by the Department of Defense (DOD) on February 28, 2005.
The first two teams were deployed to Afghanistan on April 2, 2005. Two
additional teams were deployed in July 2005 for a 120-day rotation. Upon
conclusion of that deployment, the fifth team began its rotation in
November 2005 that concluded in March 2006. The most recent rotation of
FAST commenced in November 2006 and will conclude in late February 2007.

The FAST provide guidance to DEA's Afghan counterparts and conduct
bilateral investigations that identify, target, and disrupt illicit drug
trafficking organizations. The FAST are deployed two groups at a time,
and rotate every 120 days. The other three teams remain at the
DOD-provided FAST office facility located at U.S. Marine Corps Base
Quantico, Virginia, to train and provide operational support for the
deployed teams. To carry out the FAST mission, the teams rely heavily on
DOD air assets and use DEA's aviation capabilities as a supplement to
this military support. DOD assistance is crucial to the FAST because DEA
alone does not possess the aviation resources needed to fully combat the
Afghan drug threat. The FAST program directly enhances DEA's work force
and capabilities in Afghanistan by enhancing connectivity with DEA's
Afghan counterparts to identify, target, investigate, disrupt, or
dismantle transnational drug trafficking operations in the region.

The FAST training program has proven to be valuable and directly
supports counter terrorism activities in the region. In FY 2005, the
DEA-trained National Interdiction Unit (NIU), of the CNP-A, seized drugs
and munitions that belonged to anti-coalition forces including the
Taliban. Seizures included 42.9 metric tons of opium, 5.5 metric tons of
heroin, 220 kilograms of morphine base, 142.4 metric tons of hashish, as
well as Rocket Propelled Grenade rounds, artillery-style 85 mm rockets
with propellant charges, and directional anti-personnel mines. The
munitions seized are typically used in Afghanistan to make Improvised
Explosive Devices (IED). As of September 30, 2006, the NIU seized 6.2
metric tons of opium, 1,021 kilograms of heroin, 1,246 kilograms of
hashish, as well as numerous IEDs.

DEA's ultimate goal in Afghanistan is to conduct operations in
conjunction with the newly established NIU of the CNP-A. DEA will assist
the NIU by supporting the U.S. Embassy's plan to destroy clandestine
labs and seize precursor chemicals, opium, and drug stockpiles. With DEA
advisory assistance, training, and mentoring, the NIU will be made
increasingly proficient in the conduct of drug enforcement operations.

Finally, as the legally mandated U.S. government single point of contact
for coordinating international drug and chemical investigations, DEA
provides interagency leadership in the effort to disrupt or dismantle
drug trafficking organizations. Under the policy guidance of the
Secretary of State and U.S. Ambassadors, DEA coordinates all programs
involving drug law enforcement in foreign countries. In addition, DEA
provides intelligence to assist the interagency community in determining
future trends in drug trafficking and evaluating these trends to
determine their long-term impact on drug trafficking. DEA also works
closely with the United Nations, Interpol, and other organizations on
matters relating to international drug and chemical control programs.

In addition to collaboration with its foreign counterparts, significant
international enforcement efforts require coordination with DEA's
domestic offices. These enforcement efforts require a system of
well-coordinated international and domestic investigations that combine
elements of all operational, regulatory, and intelligence resources of
the United States. DEA targets the most significant domestic surrogates
of the international drug and chemical trafficking organizations, and
sustains a long-term effort designed to dismantle these targeted
organizations. This coordination, both international and domestic,
ultimately leads to the disruption or dismantlement of organizations
that provide raw materials and chemicals used for the production of
illicit drugs, launder narcotics proceeds worldwide, and direct the
operations of their surrogates in the United States.

The initiatives requested within this decision unit support more than
just International Enforcement; therefore, only a share of the requested
enhancements is scored to this decision unit.

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3\. Performance, Resources, and Strategies

The International Enforcement decision unit primarily contributes to
DOJ's Strategic Goal II: Enforce Federal Laws and Represent the Rights
and Interests of the American People. Within this Goal, the resources
specifically address DOJ's Strategic Objective 2.2: "Reduce the Threat,
Trafficking, Use, and Related Violence of Illegal Drugs."

The International Enforcement decision unit also contributes to
Strategic Goal I: Protect America Against the Threat of Terrorism.
Within this Goal, the resources specifically address DOJ's Strategic
Objective 1.1: "Prevent, Disrupt, and Defeat Terrorist Operations Before
They Occur."

#### a. Performance Plan and Report for Outcomes

DEA has included three performance measures related to the
counterterrorism activities carried out in specific DEA foreign offices.
DEA is in the process of working with the Department to develop an
outcome measure for these activities that can be easily tracked and
reported. As there has been a link established between terrorists and
drug trafficking organizations, DEA is engaging in proactive enforcement
and intelligence gathering operations with its host nation counterparts
by targeting the command and control structure of heroin trafficking
organizations operating in the Middle East, Central Asia, and Southwest
Asia region.

As of September 30, 2006, 14 percent of bilateral investigations were
initiated in the Middle East, Central Asia and Southwest Asia region.
DEA fell short of its FY 2006 target of 17 percent bilateral
investigations initiated. Since DEA cannot operate unilaterally in the
foreign arena, DEA is constantly faced with complex external challenges
that impede progress towards achievement of agency goals. For example,
most international drug laws are inadequate to address counter drug
efforts. Many countries lack effective legislative measures and the
judicial means to effectively impede illicit drug production, diversion,
transportation, or distribution in their countries. In addition, changes
within foreign governments may decrease cooperation in host countries in
the areas of drug and chemical control.

The number of bilateral investigations will continue to fluctuate as DEA
works to establish a permanent presence in various countries located in
this region and develop strong relationships with its host nation
counterparts. Currently, DEA estimates that the percent of bilateral
investigations initiated in the Middle East, Central Asia and Southwest
Asia region will be 15 percent in FY 2007 and 16 percent in FY 2008. In
FY 2008, DEA will focus on financial operations and intelligence
gathering capabilities by establishing offices in Dubai, United Arab
Emirates and Dushanbe, Tajikistan. In addition, through ***Operation
Containment***, DEA will continue to work with 18 countries from Central
and Southwest Asia to reduce the heroin flowing out of Afghanistan and
seeks to increase its overseas presence by expanding ***Operation
Containment*** into additional countries. By expanding this operation,
DEA will work to deny safe havens to criminal organizations involved in
drug trafficking, drug- related terrorist activities, and money
laundering, and deprive these organizations of the financial basis for
their activities.

Two counterterrorism-related performance measures have also been
developed for DEA's FAST teams. The main focus of the FAST teams is to
provide guidance, training, and mentorship to Afghanistan's Counter
Narcotics Police, National Interdiction Unit (NIU) so that they will
become a self sustaining narcotics police institution capable of
identifying and disrupting heroin trafficking organizations linked to
terrorists in Afghanistan. The following measures, which are relevant to
the core mission of this program, have been established and will
demonstrate the results the program is intended to achieve.

The first measure is the number of counternarcotics operations conducted
by the FAST in conjunction with the Afghan NIU. SSSince Afghanistan is a
combat zone and enforcement operations entail a higher level of risk,
DEA is not projecting the number of counternarcotics operations.
Afghanistan poses significant health, environmental and operational
risks to all personnel operating in country which makes it difficult to
conduct enforcement operations on a consistent basis.

The second measure is the number of Afghan NIU officers trained by FAST
agents. In FY 2006, DEA trained 126 NIU officers. This number represents
both trained and deployed NIU officers. The number of NIU officers
trained will fluctuate due to attrition as officers are reassigned out
of their unit if their work performance does not meet appropriate
standards set by DEA and NIU supervisors. Since DEA receives funding
from the Department of Defense (DoD) to train Afghan NIU officers, the
projected number of officers trained in fiscal years 2007 and 2008 is
contingent upon the availability of DoD funding. DEA anticipates that by
FY 2007, 175 Afghan NIU Officers will be trained by FAST agents and by
FY 2008, 200 will be trained. Training of the NIU has proven to be
valuable in that the DEA-trained NIU have seized drugs and munitions
that belonged to anti-coalition forces, including the Taliban. In
addition, through these training initiatives, DEA is implementing
diplomatic measures to reduce the flow of Afghan heroin into world
markets, prevent Afghanistan from becoming a major heroin supplier to
the United States, and disrupt drug-related terrorist activities.

Although DEA is involved in counterterrorism-related activities, DEA's
primary mission is to enforce the controlled substances laws and
regulations of the United States and bring to the criminal and civil
justice system of the United States, or any other competent
jurisdiction, those organizations and principal members of organizations
involved in the growing, manufacturing, or distribution of controlled
substances appearing in or destined for illicit traffic in the United
States. Please refer to page 7 in the Overview for a discussion on drug
availability estimates.

In an effort to evaluate DEA's impact on drug availability, DEA is
currently piloting the Significant Investigation Impact Measurement
System (SIIMS) to assess the impact that the disruption or dismantlement
of major drug trafficking organizations has on a wide range of variables
such as drug availability, crime statistics and other quality of life
factors. Under SIIMS, DEA collects and analyzes enforcement, public
health and social service statistics before the takedown of the targeted
organization and for six months afterwards. This information can be used
by the Administrator to report on DEA's performance to the Attorney
General, Congress, and ONDCP.

For example, one SIIMS assessment examined ***Operation All Inclusive
2005-1***. ***Operation All Inclusive 2005-1*** was the first initiative
conducted under the auspices of DEA's on-going International Drug Flow
Prevention Strategy, the primary objective of which is to disrupt the
flow of drugs, money, and chemicals between source zones and the United
States. ***Operation All Inclusive 2005-1*** was designed to use a
predictive intelligence-based attack of the maritime, land, and air
smuggling vulnerabilities of drug trafficking organizations. On October
8, 2005, ***Operation All Inclusive 2005-1*** concluded with the arrest
of 346 individuals and the seizure of 47 metric tons of cocaine, which
equates to 5 to 10 percent of the estimated quantity of cocaine that was
transported through the transit zones to the United States during all of
2005.

DEA's international investigative efforts focus primarily on CPOT
targets. The objective is to dismantle these organizations so that
reestablishment of the same criminal organization is impossible and the
source of the drug is eliminated. The disruption or dismantlement of
CPOT organizations is accomplished primarily via multi-agency
investigations. These investigations emphasize developing
intelligence-driven, multi-regional efforts to identify and target
international drug trafficking organizations that play significant roles
in the production, transportation, distribution, financing, or other
support of large scale drug trafficking.

DEA's first two drug--related performance measures on the Performance
and Resources Table relate to the disruption or dismantlement of
Priority Targets linked to CPOT targets. The FY 2006 target for the
disruption and dismantlement of Priority Targets linked to CPOT targets
is four and eight respectively. As of September 30, 2006, DEA disrupted
9 and dismantled 9 Priority Targets linked to CPOT. DEA exceeded its FY
2006 target as DEA's success at disrupting and dismantling priority
targets emphasizes DEA's ultimate objective-the dismantlement of the
most significant drug trafficking and money laundering organizations so
that the reestablishment of the same organization is impossible. Based
on performance to date, DEA expects to meet targets for disrupting and
dismantling Priority Targets linked to CPOT in FY 2007 and 2008 via
multi-agency investigations and close collaboration with foreign
counterparts.

In addition to disruptions and dismantlements, DEA began reporting a
component of active Priority Target investigations, *disruptions pending
dismantlement*, in FY 2004. Disruptions pending dismantlement are active
investigations that have been successful at impeding the normal and
effective operation of the targeted organization, but are continuing
towards the organization's complete evisceration such that it is
incapable of operating and/or reconstituting itself. Prior to FY 2004,
DEA limited its reported disruptions to Priority Target investigations
that had been closed. As long as the investigation was open, DEA did not
report any disruption in the normal and effective operations of the
targeted organization, which led to an underreporting of Priority Target
disruptions. DEA began reporting *disruptions pending dismantlement* as
a component of active cases in its FY 2004 Management's Discussion and
Analysis (MD&A), a component of DEA's FY 2004 Financial Statements.

The target level of performance for FY 2006 is eight disruptions pending
dismantlement of Priority Targets linked to CPOT targets. As of
September 30, 2006, DEA had 8 disruptions pending dismantlement of
linked Priority Targets.

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DEA's third and fourth drug-related performance measures on the
Performance and Resources Table are the disruption or dismantlement of
Priority Targets not linked to CPOT targets. The FY 2006 targets for the
disruption and dismantlement of Priority Targets not linked to CPOT
targets are 13 and nine respectively. As of September 30, 2006, DEA
disrupted 18 and dismantled 26 Priority Targets. DEA exceeded its FY
2006 target and expects to meet FY 2007 and 2008 targets through
coordination with foreign counterparts and DEA domestic offices. The FY
2006 target for disruptions pending dismantlement of Priority Targets
not linked to CPOT targets is 15. As of September 30, 2006, DEA had 18
disruptions pending dismantlement of Priority Targets not linked to CPOT
targets. The current emerging drug trafficking trends necessitates a
focused approach, and DEA must respond globally and strategically as
well as strive to ensure that resources are deployed to the highest
priority overseas locations to maximize DEA's impact on the global
narcotics trade.

The effectiveness of DEA's international enforcement efforts is measured
not only by the number of Priority Target disruptions or dismantlements,
but also by the number of bilateral investigations conducted with host
nation law enforcement counterparts and the number of DEA-sponsored
international training courses conducted.

As of September 30, 2006, the total number of bilateral investigations
initiated with host nation counterparts was 1,191. DEA exceeded its FY
2006 target of 949 bilateral investigations and anticipates meeting its
FY 2007 and 2008 target of 950; however, DEA's success is contingent
upon host nation law enforcement cooperation and participation.
Therefore, if there is a decrease in host nation cooperation and
participation, DEA cannot achieve internally developed agency goals and
objectives.

As of September 30, 2006, DEA conducted 83 international training
classes with 2,954 participants. DEA expects to exceed its established
FY 2007 and FY 2008 targets of 83 classes and 2,954 provided DEA
maintains the fourth mobile training team comprised of Special Agent
Course Developers and Instructors from the Domestic Training Section.

### Strategies to Accomplish Outcomes

DEA collaborates and supports its foreign counterparts on investigations
leading to the arrest and prosecution of major international drug
traffickers around the world. Specifically, DEA works with its foreign
counterparts to disrupt or dismantle international PTOs, which includes:

-   Identifying, prioritizing, and targeting the most significant
    international drug and chemical trafficking organizations;

-   Disrupting the networks, financial infrastructures, operations, and
    the resource bases of targeted international drug and chemical
    trafficking organizations; and

-   Dismantling those international organizations that have a nexus to
    domestic organizations.

DEA has proposed to enhance specific regions that are considered to be
the highest priority locations in order to pursue the following
objectives:

1.  **Provide an operational focus that ensures the conduct of long-term
    bilateral investigations with foreign counterparts against
    significant international drug and chemical trafficking
    organizations and their major affiliates and facilitators.**

Special Agents assigned to DEA foreign offices conduct bilateral
investigations with foreign counterparts in countries that have
demonstrated the commitment to proactively combat drug trafficking
organizations. The additional overseas positions at existing, as well as
newly proposed foreign offices will allow DEA to interact with foreign
counterparts to improve U.S drug enforcement efforts against emerging
heroin, cocaine, and synthetic drug threats and the diversion of
precursor chemicals.

In FY 2008, DEA seeks to place additional resources in Panama to target
the smuggling of essential precursor chemicals. Strategically, these
resources will be invaluable as the majority of the containerized cargo
transiting Central America passes through Panama. DEA will continue to
work with its foreign law enforcement counterparts to pursue
international chemical trafficking organizations who traffic in the
precursor chemicals used to produce methamphetamine. While most
methamphetamine found in the U.S. is manufactured in Mexico, the
precursor chemicals used to make the drug come from all over the world.
Most methamphetamine produced in Mexico and domestic super labs is made
with precursor chemicals imported from China, the Czech Republic,
Germany, Hong Kong, India, Switzerland, Thailand, and the United Arab
Emirates. China and India, in particular, have vast commercial chemical
industries, which produce significant quantities of ephedrine and
pseudoephedrine.

2.  **Continue to deny safe havens to criminal organizations involved in
    drug trafficking, drug-related terrorist and money laundering
    activities and deprive these organizations of the financial basis
    for their activities.**

DEA seeks to expand its overseas presence in order to continue
investigative efforts against organizations in the Middle East, Central
Asia and Southwest Asia region and pursuing linkages to foreign
terrorist organizations. DEA will continue to implement administrative,
diplomatic, and investigative measures to reduce the flow of drugs into
world markets and disrupt drug-related terrorist activities. DEA is
currently engaging in proactive enforcement and intelligence gathering
operations targeting the command and control structure of heroin
trafficking organizations in Afghanistan and the Central and Southwest
Asia regions. In FY 2007, DEA will expand its operations in these
regions by opening Country Offices in Dushanbe, Tajikistan and in Dubai,
United Arab Emirates, where DEA will address the growing problem of
money laundering of drug proceeds.

**3. Continue DEA's leadership role and promote cooperation among all
domestic and foreign agencies involved in international drug enforcement
programs.**

DEA's foreign offices support domestic investigations. This coordination
between international and domestic offices extends to evidence sharing,
extradition, controlled deliveries, and other programs having the
potential to assist ongoing investigations or lead to the initiation of
new cases in the United States.

Because they are interdependent and intertwined, the international
aspects of drug trafficking cannot be separated from the domestic
aspects. The drug trafficking industry begins abroad and ends in the
cities, towns, and communities of America. Although the heads of drug
trafficking organizations remain ensconced in foreign countries, they
are deeply involved in the day-to-day operations of their surrogate
organizations, which carry out their instructions and orders. These
organizations employ thousands of workers within the United States who
are sent into our communities to ensure a continuous influx of drugs and
a corresponding return of profits to the organization.

**4. Lead and influence international counterdrug and chemical policy
and support institution building in host nations.**

Institution building is a critical component of DEA's overseas success,
and DEA Special Agents are expected to aggressively carry out these
activities with their counterparts. Increasing DEA's overseas presence
will allow Special Agents to establish close relationships and networks
with their counterparts that foster cooperation in international drug
law enforcement. The additional Special Agents placed in areas where
there are emerging drug threats will work with their foreign
counterparts on policy and legislative issues and provide assistance in
developing drug control laws and regulations as well as work to
establish specialized units in support of drug investigations.

Through ***Project Prism***, DEA is working with global partners to
target international methamphetamine traffickers and to increase
chemical control efforts abroad. There are currently 95 countries and 5
international organizations participating in ***Project Prism***. Since
March 2004, ***Project Prism*** has used pre-export notifications to
monitor shipments of methamphetamine precursor chemicals. With DEA
encouragement, Mexico has recently instituted voluntary controls on
pseudoephedrine in cooperation with industry, and has imposed a policy
limiting imports of pseudoephedrine and ephedrine to manufacturers only.

In addition to meeting with foreign counterparts on legislative issues,
DEA also plays a significant role by providing investigative equipment
and training. An important contribution to this end is the establishment
of Sensitive Investigative Units (SIUs) in selected countries. SIUs are
groups of host nation investigators that are polygraphed, trained,
equipped, and guided by DEA. The SIU program seeks to create focused and
well-trained drug investigative and intelligence units of high moral
character and integrity in selected nations. Eleven SIUs have been
approved by Congress. Investigations are ongoing, and cases,
particularly those involving sensitive and high-level targets, are being
developed by these units. In view of the outstanding records of drug
seizures and arrests by the SIUs, DEA will continue to expand the SIU
program into other crucial countries.

DEA is currently working to enhance and build the expertise to identify,
disrupt or dismantle money laundering organizations, as well as
identify, seize and forfeit their illicit revenues. Therefore, DEA
foreign offices are refocusing their investigative efforts to increase
concentration on money laundering organizations. Vetted Money Laundering
Units have been established in Bangkok, Thailand and Bogotá, Colombia,
which consist of DEA and host nation personnel who have been trained and
equipped by DEA. In order to successfully target money laundering
systems, techniques and organizations, DEA is working to enhance
relationships and collaborate with international law enforcement
counterparts.

**5. Maintain an intelligence program that drives international
enforcement operations and analyzes information to identify trends.**

DEA coordinates intelligence worldwide that assists in disrupting or
dismantling international drug trafficking organizations. DEA
coordinates intelligence on the cultivation and manufacture of illicit
substances, the sale of precursor chemicals for illegal drug production,
and the transportation routes of these drugs into the United States.

DEA's foreign offices share intelligence they have collected with
relevant U.S. Federal agencies to augment both foreign and domestic
investigations. DEA's personnel abroad work closely with their domestic
counterparts to investigate leads and dismantle international drug
trafficking organizations that target American citizens.

To assist host nation counterparts in the exchange of information, DEA
established regional Centers for Drug Information (CDIs). To date, five
regional Intelligence Centers have been established in the following
countries: the Dominican Republic, Colombia, Mexico, Bolivia, and
Afghanistan. These CDIs provide the facilities and capability to share
tactical and investigative information in a timely manner and support
over 350 foreign users in 47 countries. The equipment and connectivity
provided though the CDIs affords participating countries the capability
to exchange near real-time information regarding ongoing investigations,
drug movements and seizure, alien smuggling, money laundering, weapons
trafficking, and clandestine drug laboratories.

**6. Provide training and assistance in developing the basic legal
framework in support of foreign counterparts' efforts to dismantle drug
and chemical trafficking organizations and their financial affiliates.**

DEA's International Training Program, with funding from the Department
of State's Bureau of International Narcotics and Law Enforcement,
focuses directly on establishing international cooperative law
enforcement efforts and approved judicial training programs. These
programs are tailored to provide narcotics-related enforcement expertise
to foreign governments and are offered on a country or regional basis.

For the period covering October 1, 2005, through September 30, 2006, DEA
administered 83 training seminars as detailed below:

-   7 International Asset Forfeiture Seminars;

-   10 SIU Seminars;

-   18 Supervisory and Specialized training programs at the ILEAs; and,

-   48 Specialized Bilateral training programs worldwide.

### Results of Program Assessment Rating Tool (PART) Reviews

Please refer to page 8 in the Overview.

**B. Domestic Enforcement**

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1\. Program Description

DEA continues an aggressive and balanced domestic enforcement program
with a multi-jurisdictional approach designed to focus federal resources
on the disruption or dismantlement of drug trafficking organizations
that control the illegal drug trade, and the seizure of the proceeds and
assets involved in the illegal drug trade. Similar to legitimate
businesses, drug trafficking organizations have corporate leaders,
employees, chemical suppliers, transporters, financial service
providers, communication needs, infrastructure, and assets. The drug
trafficking business is therefore subject to market forces.

Consistent with the President's National Drug Control Strategy, DEA
focuses on finding and exploiting strategic vulnerabilities in the drug
market. DEA's strategy relies heavily on intelligence and investigative
capabilities to identify significant domestic drug trafficking
organizations and drug facilitators, collect and maintain in-depth
information concerning their leadership and operations, and assist field
offices in establishing priorities and developing targets. This strategy
emphasizes the disruption or complete dismantlement of the organizations
targeted by DEA domestic field offices.

The Priority Targeting program is DEA's flagship initiative for meeting
its enforcement goals. It was implemented in April 2001 to identify,
target, investigate and disrupt or dismantle those international,
national, regional, and local impact drug trafficking and/or money
laundering organizations having a significant impact on drug
availability within the United States. DEA domestic field divisions,
under the supervision of Special Agents in Charge (SACs), identify and
target major drug threats within their areas of responsibility. These
identified Priority Targets are then tracked using the *Priority Target
Activity Resource Reporting System* (PTARRS). Through PTARRS, DEA
assesses and links Priority Targets into drug trafficking networks and
addresses the entire continuum of the drug conspiracy.

The Priority Targeting program focuses on dismantling the drug networks
most responsible for the supply of drugs in America by targeting their
leaders for arrest and prosecution, confiscating the profits that fund
continuing drug operations, and eliminating their international supply
sources. DEA continues to collect and analyze drug seizure data as a
means of evaluating its progress towards its ultimate performance goal
of contributing to the reduction of drug availability in America. In
addition, DEA is working to estimate the real impact of selected
disruptions and dismantlements on drug availability.

DEA is also working to strengthen financial drug investigations by
targeting the financial infrastructures of major drug trafficking
organizations and members of the financial community who facilitate the
laundering of their proceeds. Through the Office of Financial Operations
and specialized money laundering groups in each DEA field division, DEA
uses its drug intelligence information, technology, and agent resources
to aggressively address the drug trade business. In this effort, DEA
works closely with elements of the private sector financial community to
include federal and State regulators who oversee the industry. This
concentrated enforcement effort will disrupt the drug market and cause
organizations to lose personnel and/or profits to the point at which
drug trafficking is no longer profitable.

Targeting the financial infrastructures of major drug trafficking
organizations and members of the financial community who facilitate the
laundering of their proceeds is a vital component of DEA's overall
strategy. In FY 2005, DEA established a five-year plan with annual
targets through FY 2009 to meet the challenge of crippling drug cartels
so that they are unable to reconstitute their operations with new
leadership. To accomplish this goal, DEA planned to increase its drug
and asset seizures through new domestic and international seizure
strategies until annual seizures of drug profits totaled \$3 billion. In
FY 2006, DEA seized a combined total of \$1.6 billion in drugs and
assets.

DEA's intelligence program is comprised of several components that are
responsible for collecting, analyzing, and disseminating drug-related
intelligence domestically. This intelligence facilitates DEA seizures
and arrests, strengthens investigations and prosecutions of major drug
trafficking organizations, and provides policy makers with drug trend
information upon which tactical and strategic decisions are based. DEA's
intelligence units are located in all domestic field divisions. In
addition, DEA's intelligence program supports the El Paso Intelligence
Center (EPIC), a multi-agency facility that serves as a clearinghouse
for tactical intelligence and a central point for the collection,
analysis, and dissemination of information related to worldwide drug
movement and alien smuggling. EPIC provides support for all drug law
enforcement interdiction operations and is accessible 24 hours a day/7
days a week.

DEA's SOD also supports domestic enforcement by providing vital
information for investigative and enforcement activity directed against
major national or international trafficking organizations. Specifically,
SOD manages special operations and projects within DEA that target
trafficker command and control communications. Additionally, SOD manages
and develops programs and procedures which ensure discrete and timely
distribution of sensitive and vital intelligence data to DEA, the
Federal Bureau of Investigation (FBI), Bureau of Immigration and Customs
Enforcement (ICE), and the Internal Revenue Service (IRS) field units.
SOD provides guidance and technical assistance to all divisions that
have domestic Title III operations involving drug trafficking. SOD also
coordinates international conspiracy investigations for the importation
of narcotics to ensure that these cases result in suitable evidence
presentation in court. The staff at SOD specializes in areas such as
electronic surveillance and international criminal conspiracy laws,
while responding to specialized linguistic needs for international
cases.

In recognition of the national security threat that illegal drugs pose
to the United States, the contributions that DEA makes in the area of
national security and the continued mandate for increased intelligence
sharing between law enforcement and intelligence agencies, a component
of DEA joined the Intelligence Community (IC). As a member of the IC,
DEA will facilitate full coordination and information sharing with other
members of the U.S. Intelligence Community to enhance our nation's
efforts to protect our national security, combat global terrorism, and
reduce the supply of drugs.

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. 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. DEA investigations have identified links between
groups and individuals under investigation for drug violations and
terrorist organizations.

Since September 11, 2001, DEA's intelligence sharing in the war on
terror has increased significantly. In FY 2006, DEA's Office of Special
Intelligence and Special Operations Division completed over 24,000
counterterrorism products since the September 11, 2001 attacks,
including 309 in the three weeks of FY 2001 following September 11,
2001. In FY 2004, there were 7,759 counter terrorism-related products
and 9,762 in FY 2005. SOD completed 5,409 counter terrorism-related
products in FY 2006.

In addition to the PTO program, DEA is an integral part of DOJ's
revitalized OCDETF program. In FY 2006, DEA participated in
approximately 89 percent of all OCDETF cases, and led or co-led
approximately 80 percent of OCDETF investigations. In FY 2006, 40 of the
46 identified FY 2006 CPOT targets had validated DEA Priority Target
investigations directed at or linked to them. In addition, there were
338 active DEA Priority Target investigations directly linked to at
least one CPOT target.

The Domestic Enforcement decision unit comprises the majority of DEA's
investigative and support resources. These resources, in conjunction
with DEA's foreign offices, create a seamless intelligence and
investigative web to pursue drug trafficking organizations, from
multi-national and poly-drug conglomerates, to independent specialty
one-function cells.

The initiatives requested within this decision unit support more than
just Domestic Enforcement; therefore, only a share of the requested
enhancements is allocated to this decision unit.

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3\. Performance, Resources, and Strategies

The Domestic Enforcement decision unit primarily contributes to DOJ's
Strategic Goal II: "Enforce Federal Laws and Represent the Rights and
Interests of the American People." Within this Goal, the resources
specifically address DOJ's Strategic Objective 2.2: "Reduce the Threat,
Trafficking, Use, and Related Violence of Illegal Drugs."

Beginning in FY 2007, a portion of the Domestic Enforcement decision
unit also contributes to Strategic Goal I: Protect America Against the
Threat of Terrorism. Within this Goal, the resources specifically
address DOJ's Strategic Objective 1.1: "Prevent, Disrupt, and Defeat
Terrorist Operations Before They Occur."

#### Performance Plan and Report for Outcomes

DEA has established one new performance measure related to its counter
terrorism activities, which is reflected under DOJ's Strategic Goal I on
the Performance and Resources Table. DEA is in the process of working
with DOJ to develop an outcome measure for its counter terrorism
activities that can be easily tracked and reported. Since a link has
been established between terrorists and drug trafficking organizations,
DEA prepares intelligence products in support of the war on terror. The
new performance measure is the percent of counter terrorism-related
products completed by DEA's Office of Special Intelligence and SOD. In
FY 2006, 9 percent of DEA's total products were related to counter
terrorism. Targets for FY 2007 and FY 2008 have been established at 10
percent.

Although DEA is involved in counter terrorism, DEA's primary mission is
drug enforcement. Related to this primary mission, DEA's long-term goal
is to contribute to DOJ's goal of reducing the availability of drugs in
America by 10 percent by the end of FY 2008. Please refer to page 7 in
the Overview for a discussion on drug availability estimates.

In the meantime, DEA's Intelligence Division is actively developing
initiatives to better collect drug price and purity information.
Currently, DEA's Intelligence Division manages the Heroin Domestic
Monitor Program, which provides data on the source, cost, and percent of
purity of heroin being sold at the retail level in 25 U.S. cities.
Beginning in FY 2007, DEA, in coordination with ONDCP, will manage
similar monitoring programs for methamphetamine and cocaine.

In an effort to evaluate DEA's impact on drug availability, DEA is
currently piloting the *Significant Investigation Impact Measurement
System* (SIIMS) to assess the impact that the disruption or
dismantlement of major drug trafficking organizations has on a wide
range of variables such as drug availability, crime statistics and other
quality of life factors. Under SIIMS, DEA collects and analyzes
enforcement, public health and social service statistics before the
takedown of the targeted organization and for six months afterwards.
This information can be used by the Administrator to report on DEA's
performance to the Attorney General, Congress, and ONDCP.

In October 2005, a SIIMS assessment was conducted for ***Operation
All-Inclusive***, which was an operation that consisted of
comprehensive, intelligence-driven operations that attacked Central
American and Mexican drug trade arteries and their support
infrastructures. The SIIMS assessment, completed in March 2006,
identified the following impact of ***Operation All Inclusive I-2005***:

-   ***Operation All Inclusive I-2005*** was responsible for the seizure
    of 46.55 metric tons of cocaine which equates to 5 to 10 percent of
    the estimated quantity of cocaine that was transported through the
    transit zones to the United States during all of 2005.

-   Cocaine seizures by DEA domestic offices for the three-month period
    after ***Operation All Inclusive I-2005*** decreased 27 percent
    compared to the three-month period prior to the operation, from
    34,350 kilograms to 24,969 kilograms.

-   The average price per pure gram for cocaine purchases made by DEA
    increased 58 percent for the 65-day period after ***Operation All
    Inclusive I-2005*** compared to the 65-day period prior to the
    operation, from \$25.23 to \$39.76.

-   The second phase of ***Operation All-Inclusive*** yielded 131
    arrests and the seizure of 19.65 metric tons of marijuana, 92.6
    metric tons of precursor chemicals, 43.77 metric tons of cocaine and
    over \$4 million in currency. As a result, drug trafficking
    organizations were forced to delay shipments, change modes of
    transportation and prepare for shortages in supply.

DEA's first two drug-related performance measures under DOJ's Strategic
Goal II on the Domestic Enforcement Performance and Resources Table
relate to the disruption, disruption pending dismantlement or
dismantlement of Priority Targets linked to CPOT targets. The efforts to
disrupt or dismantle Priority Targets linked to CPOTs are accomplished
primarily via multi-agency and multi-regional investigations. These
investigations are intelligence-driven and identify and target national,
regional, and international drug trafficking organizations that play
significant roles in the production, transportation, distribution,
financing or other support of large scale drug trafficking.

The goal is to dismantle these organizations so that reestablishment of
the same criminal organization is impossible. DEA's Priority Targets
comprise the most significant investigations in each domestic field
division. As these organizations are identified, disrupted, or
dismantled, the investigative intelligence developed is utilized to
identify and target all organizational elements on the drug trafficking
continuum. As entire drug trafficking networks, from sources of supply
to the transporters/distributors, are disrupted or dismantled, the
availability of drugs within the United States will be reduced.

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The target level of performance for FY 2006 is the disruption of 66 or
dismantlement of 96 Priority Targets linked to CPOTs. As of September
30, 2006, DEA had 69 disruptions and 68 dismantlements of CPOT-linked
Priority Targets reported. These results are largely due to the
continued emphasis placed on linking Priority Targets to CPOTs. DEA has
embraced the importance of coordinated attacks against the "Most Wanted"
drug trafficking and money laundering organizations believed to be
primarily responsible for the Nation's illicit drug supply.

In addition to disruptions and dismantlements, DEA began reporting a
component of active Priority Target investigations known as *disruptions
pending dismantlement* in FY 2004. Disruptions pending dismantlement are
active investigations that have been successful at impeding the normal
and effective operation of the targeted organization, but are continuing
towards the organization's complete evisceration such that it is
incapable of operating and/or reconstituting itself. Prior to FY 2004,
DEA limited its reported disruptions to Priority Target investigations
that had been closed. As long as the investigation was open and active,
DEA did not report any disruption in the normal and effective operations
of the targeted organization. As a result, DEA underreported its
Priority Target disruptions. Therefore, DEA began reporting *disruptions
pending dismantlement* as a component of active cases in its FY 2004
Management's Discussion and Analysis (MD&A), a component of DEA's FY
2004 Financial Statements.

The target level of performance for FY 2006 was 95 disruptions pending
dismantlement of Priority Targets linked to CPOT targets. As of
September 30, 2006, DEA had 68 disruptions pending dismantlement of
linked Priority Targets.

DEA's third and fourth performance measures under DOJ's Strategic Goal
II on the Domestic Enforcement Performance and Resources Table relate to
the disruption, disruption pending dismantlement or dismantlement of
Priority Targets not linked to CPOT targets. The target level of
performance in FY 2006 for Priority Targets not linked to CPOT targets
was 181 disruptions and 261 dismantlements. As of September 30, 2006,
DEA had 298 disruptions and 392 dismantlements of Priority Targets not
linked to CPOT targets reported. DEA exceeded its annual targets for
both disruptions and dismantlements. This is mainly the result of
increased investigative work hours devoted to Priority Target
investigations. In addition, DEA exceeded its FY 2006 target for the
number of Priority Targets not linked to CPOTs disrupted pending
dismantlement. The target level of performance for disruptions pending
dismantlement was 198. As of September 30, 2006, DEA had 322 Priority
Targets not linked to CPOTs disrupted pending dismantlement.

Since the inception of DEA's Priority Targeting Program, DEA has
repeatedly exceeded its annual targets for disruptions, disruptions
pending dismantlement and dismantlements. As a result, DEA has refined
its projection methodology by incorporating additional enforcement
factors. Specifically, the new methodology uses a statistical analysis
tool to generate the relative weight of many variables and their
contribution to the number of PTOs disrupted, disrupted pending
dismantlement and dismantled in a year through regression analysis.
Included for fiscal years 2007 and 2008 are the targets based on this
refined methodology.

To measure the level of effort concentrated on Priority Targets, DEA
also tracks the percentage of total Special Agent investigative work
hours spent investigating Priority Targets. DEA has consistently met or
exceeded the work hour percentage targets. In FY 2006, DEA exceeded its
target for percentage of Special Agent investigative work hours
dedicated to Priority Target investigations of 62 percent. In FY 2006,
approximately 64 percent of total Special Agent investigative work hours
were committed to PTO investigations. DEA's FY 2007 and 2008 targets
anticipate the maintenance of this level of effort against Priority
Targets. DEA's performance against this measure is depicted in the table
below:

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### 

### b. Strategies to Accomplish Outcomes

To fulfill the critical mission of reducing drug use in the U.S., DEA
devotes resources to the disruption or dismantlement of domestic
Priority Targets. DEA's strategy is to attack entire drug trafficking
organizations, from their international command and control, through
their smuggling and transportation systems, down to their distribution
cells that are networked throughout the United States. DEA's Priority
Targets represent the major drug trafficking organizations responsible
for the production, transportation, and distribution of illegal drugs
destined for consumption in the United States and the recovery of
profits from the sale of those illegal drugs. DEA accomplishes its
strategy by:

-   exploiting drug trafficking organization vulnerabilities;

-   employing traditional and creative enforcement methods that lead to
    the disruption or dismantlement of targeted organizations and the
    incarceration of their leaders; and,

-   assessing the financial underpinnings of each organization and its
    key leaders to disrupt or dismantle financial organizations
    responsible for the control of capital belonging to the targeted
    organizations.

To achieve the strategic goal of contributing to DOJ's goal of reducing
drug supply, DEA:

-   Systematically disrupts or dismantles targeted organizations by
    arresting/convicting their leaders and facilitators, seizing and
    forfeiting their assets, targeting their money laundering
    operations, and destroying their command and control networks;

-   Works with international offices to disrupt or dismantle domestic
    organizations directly affiliated with international cartels; and,

-   Identifies and targets the national/regional organizations most
    responsible for the domestic distribution, manufacture, and
    diversion of precursor chemicals.

The following strategies outline DEA's plan to achieve the Domestic
Enforcement objectives:

1.  **Reduce the flow of illicit drugs, money, and chemicals between the
    source zones and the United States.**

DEA developed an International Drug Flow Prevention Strategy, which
involves multiple agencies in numerous countries. This bilateral
strategy is specifically designed to disrupt the flow of illicit drugs,
money, and chemicals between the source zones and the United States by
attacking the drug organization's vulnerabilities in their supply,
transportation systems, and financial infrastructures. In FYs 2005 and
2006, DEA implemented the first initiatives under the strategy
throughout Central America, ***Operation All-Inclusive 2005-1 and
2006-1*.** ***Operation All-Inclusive 2005-1's*** success included 346
arrests and the seizure of nearly 47 metric tons of cocaine, which
equates to 5 to 10 percent of the estimated quantity of cocaine that was
transported through the transit zones to the United States during all of
2005. The successes for ***Operation All-Inclusive 2006-1*** include
seizures of 38 metric tons of cocaine, over 13 metric tons of marijuana,
and 75 tons of precursor chemicals. As a result of these operations,
drug trafficking organizations were forced to delay or suspend their
drug operations, divert their routes, change their modes of
transportation, and jettison loads. The success of these multi-agency,
multi-jurisdictional, and bilateral operations exemplified the
cooperation between law enforcement entities throughout the United
States and Latin America.

2.  **Strengthen counternarcotics efforts to combat illicit drug
    trafficking along the Southwest Border.**

Narcotics smuggling along the Southwest Border poses a significant
national security issue for the United States. The Southwest Border
provides hundreds of miles of open areas, which are an ideal environment
for cross-border drug trafficking and money laundering activities. DEA's
Southwest Border Initiative is designed to enhance the collection of
intelligence on cross-border trafficking activities; improve information
sharing among U.S. and Mexican agencies; disrupt and dismantle
trafficking organizations; interdict illegal bulk currency movements and
electronic currency transfers; and enhance Mexico's counterdrug
capabilities.

3.  **Disrupt and dismantle Consolidated Priority Organization Targets
    (CPOTs).**

The OCDETF Program, of which DEA is a leading participant, contributes
to DOJ's Strategic Goal to reduce the drug supply by targeting
organizations on the CPOT list -- the "Most Wanted" drug trafficking and
money laundering organizations believed to be primarily responsible for
the nation's illicit drug supply. The objective is to dismantle these
organizations so that reestablishment of the same criminal organization
is impossible and the source of the drug is eliminated. The disruption
or dismantlement of CPOT organizations is accomplished primarily by
multi-agency investigations. These investigations emphasize developing
intelligence-driven operations to identify and target international drug
trafficking organizations that play significant roles in the production,
transportation, distribution, financing, or other support of large scale
drug trafficking.

4.  **Deny drug revenues to drug trafficking organizations in order to
    disrupt trafficking activities and reduce drug availability.**

The DEA Anti-Money Laundering Strategy is designed to reduce the threat,
trafficking, use, and related violence of illegal drugs. DEA's
perspective on the money laundering threat to the United States is
two-fold. First, DEA is solely focused on proceeds generated by the
illegal drug industry and the devastating effect this money has on the
American public and financial services industry, as well as other
governments and societies around the world. Second, DEA is addressing
the threat that drug proceeds represent as a means of financing
terrorist organizations. Due to the nature and scope of DEA's
investigations and its global presence, evidence and intelligence
gleaned from its investigations often provide critical information on
terrorist financing, which is immediately shared through established
protocols with those agencies charged with counter terrorism
responsibilities. DEA's Anti-Money Laundering Strategy targets the flow
of drug money back to sources of drug supply because these funds are
destined to finance the next cycle of illegal drugs to be sent to the
U.S. consumer market.

5.  **Utilize intelligence to support counternarcotics strategies and
    stop drug-related terrorist activities.**

DEA's Intelligence Program has been refocused on the concept of
predictive intelligence to identify trends and vulnerabilities and then
direct limited enforcement resources to those areas. In addition to its
traditional drug law enforcement mission, DEA has assumed new
intelligence responsibilities and functions in 2006 to support the
global war on terror. DEA has expanded its Intelligence Program and is
currently implementing the following initiatives: a new DEA Office of
National Security Intelligence; a new Representation in the National
Security Council Office for Combating Terrorism; an Organized Drug
Enforcement Task Force Fusion Center (OFC); a National Virtual Pointer
System (an information system that provides federal, State and local law
enforcement agencies with a target deconfliction capacity for all
crimes); and the Centers for Drug Intelligence Program.

6.  **Disrupt and dismantle violent gangs involved in drug
    trafficking.**

Major violent street gangs have become an increasing threat to the
safety and security of our domestic communities. Law Enforcement
authorities throughout the country report that gangs are responsible for
most of the serious violent crime in the major cities of the United
States. They commonly use drug trafficking as a means to finance their
criminal activities. These gang drug trafficking organizations are often
well organized, have an identifiable hierarchy with organized levels of
command and control, and utilize sophisticated techniques and
organizational processes to further their drug trafficking efforts. 

7.  **Reduce the threat, trafficking, and use of methamphetamine.**

Methamphetamine is a continuing problem in the United States.  Once
confined primarily to the west and mid-west, it is now spreading across
the eastern half of the United States. Because of the unique
characteristics of methamphetamine, fighting the drug demands aggressive
and collaborative efforts. The Administration is focused on the
following six methods to combat methamphetamine: increase DEA's
enforcement operations and arrests; make methamphetamine prosecutions a
priority for U.S. Attorneys; work with state and local law enforcement;
provide information and awareness training; strengthen international
partnerships, specifically between the U.S. and Mexico; and use
additional tools to target methamphetamine traffickers, such as the
Combat Methamphetamine Act contained in the Patriot Act.

[Program Increases]{.underline}

**Item Name: Southwest Border & Methamphetamine Enforcement**

[]{.mark}

Budget Decision Units: Domestic Enforcement

Diversion Control Program

[]{.mark}

Strategic Goal & Objective: Goal 2; Objective 2.2

[]{.mark}

Organizational Program: DEA-wide

[]{.mark}

Program Increase: Pos: [11]{.underline} Agents: [1]{.underline} FTE:
[6]{.underline} Dollars: [\$29,983,000]{.underline}

[Description of Item]{.underline}

DEA requests \$29,983,000 (including \$28,437,000 in non-personnel
funding and \$811,000 in personnel funding to be funded by the Diversion
Control Fee Account) and 11 positions (including 1 Special Agent, 6
Intelligence Analysts, and 2 Diversion Investigators) to attack
poly-drug trafficking organizations (DTOs) located along the Southwest
Border (SWB) by increasing DEA's intelligence gathering, detection,
monitoring, and surveillance capabilities, increasing the effectiveness
of DEA's methamphetamine investigations, and curtailing the illicit use
of precursor chemicals.

The SWB of the United States is the principal arrival zone for most
illicit drugs smuggled into the United States as well as the predominant
staging area for the drugs' subsequent distribution throughout the
country. According to El Paso Intelligence Center's (EPIC) drug seizure
data, most of the cocaine, marijuana, methamphetamine, and
Mexican-produced heroin available in the United States are smuggled into
the country across the SWB. In addition, the SWB provides a nexus where
three transnational threats converge: drug trafficking, alien smuggling,
and terrorism. Terrorists could attempt to enter the U.S. or smuggle
weapons of mass destruction (WMD) across the SWB by exploiting
established routes and methods used by drug smugglers.

Increasingly, the methamphetamine available for distribution in the
United States is smuggled from Mexico across the SWB, most commonly
using Arizona and southern Texas as entry points.[^39] The SWB is
particularly vulnerable to drug smuggling because of the enormous volume
of people and goods crossing the border that constitutes legitimate
trade between the two countries. Moreover, large sections of the nearly
2,000 mile land border between Mexico and the United States are both
remote and difficult to monitor. In addition to the 33 legitimate
crossing points, the border includes hundreds of miles of open desert,
rugged mountains, the Rio Grande River, and the associated coastal
waters, which provide additional smuggling opportunities for DTOs.

In December 2005, EPIC's Gatekeeper Project was initiated to gather,
research, analyze, and report information on the Mexican DTOs
controlling entry corridors along the United States-Mexico border.
Gatekeepers are defined as individuals who are located at and manage
geographically specific entry points along the United States-Mexico
border, usually a major Mexican border town or city. [^40] Gatekeepers
generally operate at the behest of a Mexican DTO and enforce the will of
the DTO through bribery, intimidation, extortion, beatings, and murder.
Because of their location within geographically strategic corridors,
they lend themselves to wide use by a number of drug and illegal
immigrant traffickers. With few exceptions, the longevity of a
gatekeeper is determined by his relationship to a particular DTO. This
is particularly true with younger gatekeepers who are considered
"expendable." The more established gatekeepers have been co-opted by
Mexican DTOs. These individuals are often left in place due to their
extensive political and corrupt law enforcement contacts that facilitate
smuggling operations, as well as their ability to mask illicit
activities with legitimate businesses.

Command and control is typically exercised through frequent
communication between the gatekeeper and principal subordinates.
Reporting indicates many DTOs along the border are engaging in
intelligence and counter-intelligence techniques, to include
sophisticated surveillance and communications-intercept equipment to
monitor U.S. and Mexican law enforcement. In addition, many gatekeeper
organizations are comprised of tight family networks, making penetration
and organizational dismantlement extremely difficult.

Incidents of violence and murder, much of which are drug-related, have
remained at elevated levels in Mexico for almost two years, as the major
Mexican DTOs in that country continue to vie for control of the
lucrative drug smuggling corridors that lead to the United States. In
2005, murders more than doubled in Nuevo Laredo, Tamaulipas---from 65
murders in 2004 to at least 177 murders, including 19 active and former
Municipal and Ministerial police officers. According to the Mexican
press (*El Universal*), 2,221 people were killed in drug-related murders
in Mexico in 2006, the highest total in 6 years. Border cities such as
Ciudad Juarez, Nuevo Laredo, and Tijuana continue to experience much of
the violence, but cities in the southern states of Guerrero, Michoacán,
and Sinaloa have experienced an increase in violence as the drug-war has
spread to other regions of the country. In 2006, two unusual violence
trends that have proliferated throughout Mexico: the decapitation of
victims and the use of fragmentation grenades to attack police stations.

To address these issues of drug smuggling and violence, DEA and Mexican
officials have developed unprecedented cooperation in law enforcement
efforts in recent years. Anti-corruption efforts and institutional
reforms have increased DEA's ability to share information and conduct
joint investigations. Additionally, relations between Mexican
authorities and DEA are at an all time high in terms of chemical
control. Mexico has enhanced its Federal Commission for Protection
Against Sanitary Risks (COFEPRIS), which has led to the integration of
chemical control under a single department. COFEPRIS intends to reduce
pseudoephedrine and ephedrine importation permits to 70 tons per year.
This is an 80 ton reduction from the 2005 importation levels of 150 tons
of these bulk substances and an aggressive action which bodes well for
DEA's future interaction with the agency.

This enhancement request will provide DEA with the resources necessary
to properly attack the proliferation of methamphetamine and other drugs
entering the U.S. through the SWB, including the gatekeepers who control
the ports of entry. The production, trafficking, and abuse of
methamphetamine are evolving problems that require innovative strategies
and significant resources. Methamphetamine was previously only
associated with long established markets in the Pacific, Southwest and
West Central regions, but the availability of this illicit drug has
recently increased in the Great Lakes, Northeast, and Southeast
regions.[^41] As the methamphetamine problem continues to spread across
the country and production and distribution patterns change, DEA
requires additional resources to predict trends, tackle the evolving
DTOs, and prevent further spread of this drug.

There are two main components to this initiative:

1.  A comprehensive strategy that uses sophisticated investigative
    technology to target methamphetamine manufactured in Mexico and
    smuggled across the SWB; and,

2.  A coordinated and cooperative approach of intelligence gathering and
    sharing with law enforcement counterparts to stop the trafficking of
    methamphetamine and the illicit use of precursor chemicals in the
    production of methamphetamine.

[Justification]{.underline}

*[Methamphetamine and Southwest Border Investigative
Technology]{.underline}*

For FY 2008, DEA requests \$23,912,000 in non-personnel funding to
increase the technological sophistication of methamphetamine
investigations and other drug trafficking along the SWB. Due to the
success of regulation and enforcement efforts, the number of super labs
seized in the U.S. has decreased from 143 in 2002, to 130 in 2003, 55 in
2004, 35 in 2005, and 13 in 2006 \-- a 91 percent decrease from 2002 to
2006.[^42] Many of the domestic super labs controlled by Mexican DTOs
have been forced to relocate to Mexico. The resulting increase in
production of methamphetamine in Mexico has been accompanied by an
increase in U.S. law enforcement interdiction and seizures along the
Southwest Border. Seizures of methamphetamine along the SWB increased by
over 140 percent from 1.2 metric tons in CY 2001 to 2.9 metric tons in
CY 2005.[^43]

The SWB is crucial to DEA's efforts to contribute to the reduction of
drug availability in the United States. Current drug and lab seizure
data suggests that roughly 80 percent of the methamphetamine used in the
United States comes from larger labs, increasingly in Mexico, and that
approximately 20 percent of the methamphetamine consumed in this country
comes from small toxic laboratories.

In support of addressing these issues, DEA requests funding to combat
methamphetamine trafficking from Mexico through increased investigative
and technological capabilities.

*[Helicopters, High Definition Camera Systems, and Aviation Operations &
Maintenance]{.underline}:* To support SWB operations, DEA requests
\$15,440,000 in non-personnel funding to purchase 3 helicopters and 4
High Definition (HD) camera systems (for the 3 new helicopters and 1
existing helicopter) and to enhance DEA's aviation maintenance program
which provides funding for the aircraft maintenance contract, fuel,
travel, and other operational requirements and recurring expenses. In
combating the efforts of gatekeepers to guide shipments of
methamphetamine and other illicit drugs across the vast expanse of the
SWB, DEA will need to rely heavily on aviation support equipped with
advanced surveillance tools. DEA's Aviation Division provides crucial
mission support including surveillance capabilities, and assistance in
investigations where undercover aircraft and pilots are required to gain
the confidence of drug traffickers and build cases designed to disrupt
or destroy their organizations. Additional helicopters would enhance the
investigative capabilities of Special Agents located along the SWB by
allowing DEA to provide more effective surveillance and collection of
evidence for more investigations. The new helicopters would enhance DEA,
State, and local investigative capabilities while contributing to
interagency efforts to secure the SWB.

The HD camera systems will enhance the investigative capabilities of
Special Agents located along the SWB by making surveillance and
collection of evidence more effective and discrete. The high definition
surveillance equipment installed in helicopters will provide three times
the resolution of standard definition equipment, enabling more distant
standoff with improved visual clarity. This enhanced standoff capability
will allow Special Agents to detect and monitor illegal activity without
the target becoming aware of the surveillance, even in the vast open
spaces of the Southwest desert where conventional observation techniques
are readily detected. The high quality video recorded will provide
compelling evidence for use in criminal proceedings. In addition, the
equipment has the ability to down link to mobile ground stations,
providing real-time video surveillance by supervisors in the field. The
HD cameras will enhance command and control capabilities and provide
additional safety for Special Agents on the ground during operations by
allowing supervisors to clearly see the movements and actions of
suspects and law enforcement personnel during surveillance, raids, and
arrests.

As in investigations of all drug types, DEA's Aviation Division provides
mission critical assistance to DEA methamphetamine investigations
including: (1) providing surveillance assistance and capabilities; (2)
providing assistance in investigations where undercover aircraft and
pilots are required; and, (3) by providing logistical support as
required in controlled delivery and other enforcement situations.
Funding for the maintenance contract will provide training, operation,
and maintenance for equipment used along the SWB which supports
initiatives such as Gatekeeper. This funding will be used to cover the
increased cost of operations along the SWB, including air-to-ground
surveillance and tracking, photography, videography, pre-post raid
surveillance and command and control, controlled deliveries, and
transportation of law enforcement personnel. Funding for DEA's Aviation
Operations and Maintenance will allow the Aviation Division to continue
its pivotal role in well-coordinated operations and intelligence
collection efforts.

***[Operations Joint Venture and Archangel]{.underline}**:* DEA requests
\$3,372,000 for ***Operations Joint Venture and Archangel***, which
target radio communications of DTOs, and others involved in illegal
activities along the SWB. The requested resources will purchase five
wire band radio systems and five remotely located radio towers.
Intercepted communications will be transported from these remote sites
to the command center located at EPIC. ***Operation Joint Venture*** is
a proposed multifaceted expansion of the EPIC Tactical Operations
Section mission, which will provide force protection for DEA and other
U.S. personnel assigned to DEA offices and U.S. Consulates in Tijuana,
Nogales, Ciudad Juarez, Nuevo Laredo and Matamoras, Mexico.  This will
provide the U.S. Government and the Government of the Republic of Mexico
with a real-time intelligence collection and analysis operation that can
monitor illicit activities along the United States/Mexico border. In
addition, it will include vetted Agents of the Agencia Nacional
Investigacion (AFI) to the EPIC-based operation.

***Operation Archangel*** teams provide direct support to law
enforcement operations along the SWB by targeting the radio
communications of DTOs. By providing the requested funding, ***Operation
Archangel*** will be able to increase operational deployments which in
turn would enhance enforcement interdiction and apprehension
effectiveness along the SWB. For example, during the fall of 2005, an
***Operation* *Archangel*** team deployed to the Laredo, Texas area in
support of DOJ directed ***Operation* *Border Unity***. The three week
deployment further demonstrated the capabilities of ***Operation
Archangel*** in providing significant coverage of illegal trafficking
activities in the border area and the ability to effectively direct law
enforcement assets to precise locations of cross-border trafficking
activities as they took place, for interdiction action. ***Operation
Archangel*** would be housed under the auspices of ***Operation Joint
Venture***.

*[Satellite Telephones]{.underline}*: DEA requests \$3,100,000 for
improved satellite telephone and maritime tracking resources, as well as
additional linguist funding and data collection capabilities. DTOs rely
on large amounts of precursor chemicals originating in Europe, China or
India to manufacture methamphetamine at Mexican-based \"super labs".
These chemicals are transported via commercial maritime vessels, and
traffickers often use satellite telephones while on the high seas
because they believe that this form of communication conceals their
illegal activities. Traffickers that utilize go-fast boats to transit
the Caribbean also frequently communicate by satellite telephones. While
DEA has used satellite telephone intercepts and maritime tracking
devices to successfully locate and seize vessels laden with drugs,
satellite telephone intercepts are extremely costly. For example, there
are instances where satellite telephone companies are not CALEA
compliant and DEA must engineer an intercept solution to glean
investigative information.

*[Surveillance Equipment]{.underline}*: To effectively combat the
growing levels of methamphetamine trafficking and abuse, DEA needs
efficient investigative tools to effectively collect and disseminate
evidence. Specifically, DEA requests \$2,000,000 in non-personnel
funding for tracking, sensor, and audio/video surveillance equipment.
Surveillance equipment is particularly crucial in an area like the SWB
because it is a major point of entry with few realistic controls.
Surveillance equipment, such as remote cameras, tracking devices, and
alarms, are one of the only ways to cover such an expansive area. DEA
field divisions along the SWB employ a variety of sophisticated audio
and video surveillance equipment including mobile surveillance
platforms, digital equipment with Internet connectivity, mobile x-ray
equipment, microwave automated repeater systems, and scanners for
monitoring radio frequencies. Much of this equipment is a "force
multiplier" because agents do not need to be physically present to
monitor the surveillance, which enables them to be more productively
used elsewhere.

Besides audio and video surveillance equipment, DEA deploys a variety of
tracking and sensor equipment to increase the effectiveness of
methamphetamine investigations along the SWB. This type of equipment
provides DEA the capability to identify and track individuals,
containers, vessels, aircraft, and vehicles. It enables DEA to track and
seize not only methamphetamine and other drugs, but also the proceeds
from these drug sales as the money is smuggled back into Mexico or other
countries of origin. However, tracking such vehicles and shipments
requires use of GPS and satellite tracking devices which DEA can use
only intermittently due to lack of funds to purchase this equipment.

*[Methamphetamine and Southwest Border Intelligence
Sharing]{.underline}*

For FY 2008, DEA requests \$6,071,000 (including \$9,525,000 in
non-personnel funding and \$811,000 in personnel funding to be funded by
the Diversion Control Fee Account) and 11 positions (including 1 Special
Agent, 6 Intelligence Analysts, and 2 Diversion Investigators) to
increase the effectiveness of SWB and methamphetamine investigations
through increased intelligence gathering and sharing. Recent declines in
domestic methamphetamine production have been offset by increased
production in Mexico, which has maintained the distribution of the drug
in established markets and facilitated the further eastward expansion of
the drug in the U.S.[^44] Mexico is the primary foreign source of
methamphetamine and it is estimated that a majority of the
methamphetamine distributed and available in the U.S. is manufactured in
Mexico. Eight (8) of the 46 organizations on the FY 2006 CPOT list (17
percent) are engaged in methamphetamine trafficking and 7 of these 8
CPOTs are located in Mexico. At the end of FY 2006, there were 162
active DEA PTO investigations linked to those 8 CPOTs, of which 32 were
active PTO investigations with methamphetamine as the primary drug type.

This change in production has created a greater need for intelligence
sharing between the United States and Mexico. As a result, DEA and the
Government of Mexico, in May of 2006, agreed to establish specialized
methamphetamine enforcement teams on both sides of the border. In
Mexico, these teams will focus on investigating and targeting the most
wanted Mexican methamphetamine trafficking organizations, while DEA
efforts on the U.S. side will focus on the methamphetamine traffickers
and organizations transporting and distributing finished product being
manufactured in Mexico.

EPIC serves as one of DEA's oldest and most important assets focused on
the SWB. EPIC was initially created to improve the security along the
SWB and is responsible for collecting, analyzing, and disseminating
intelligence information related to drug, alien, and weapons smuggling.
Over time, EPIC's role has broadened beyond the SWB, however, its
strategic and operational importance to SWB activities for DEA and other
federal, state, and local law enforcement agencies remains paramount. A
recent example of DEA's contribution to the understanding of the drug
threat posed by the SWB is EPIC's Gatekeeper Assessment released in
April 2006. The EPIC Gatekeeper Assessment is the first in a series of
reports produced for the purpose of developing a comprehensive
understanding of drug movement through specific entry points along the
United States-Mexico border, including the DTOs which control those
entry points. The analysis of these organizations not only provides a
better understanding of command and control, organizational structure,
and methods of operations, but also serves as a guide for policymakers
to initiate enforcement operations and prioritize operations by U.S.
anti-drug elements.

Beyond targeting those who traffic and manufacture methamphetamine, DEA
pursues those who traffic precursor chemicals used to produce this drug.
While most methamphetamine found in the U.S. is manufactured in Mexico,
the precursor chemicals used to make the drug come from all over the
world. Most methamphetamine produced in Mexico and domestic super labs
is made with precursor chemicals imported from nations which manufacture
bulk quantities of these chemicals and/or export vast amounts of
pharmaceutical products containing these substances. China, Germany, and
India, in particular, have large commercial chemical industries, which
produce significant quantities of ephedrine and pseudoephedrine for the
world market.

In support of addressing these issues of intelligence gathering and
sharing, DEA requests funding to equip EPIC and Airwing with the
resources needed to support DEA and other federal, State, and local law
enforcement efforts along the SWB. DEA also requests DCFA funding to
target the illegal use of precursor chemicals and increase the
effectiveness of international methamphetamine investigations.

*[EPIC Gatekeeper Project]{.underline}:* DEA requests \$612,000 and 6
Intelligence Analysts to continue and expand the EPIC Gatekeeper
Project. The Gatekeeper Project was initiated to research, analyze, and
report information on the Mexican drug-trafficking organizations
controlling entry corridors along the United States-Mexico border. The
assessment released in April 2006, is the first in a series of
publications designed to provide investigative leads and strategic
forecasting. The requested positions will support expanded intelligence
collection efforts along the SWB, conduct briefings and be assigned to
specific entry corridors areas of responsibility.

*[EPIC Image Recognition and Management (IRM) Project]{.underline}:* DEA
requests \$3,423,000 (including \$3,300,000 in non-personnel funding)
and 2 positions to develop the IRM project in support of securing the
SWB. Imagery and textual data from the DEA Fountainhead Project, the
EPIC Fraudulent Documents Project, the National Seizure System, and
available DEA aerial photography will support SWB enforcement by
providing associated imagery and textual data pertaining to the "people"
entity, such as name, date of birth, tattoos, vehicle, arrests,
border-crossings, fraudulent birth certificates and gang-related
information. In addition, the IRM Project will capture imagery and
textual data related to drug packages and drug markings used by
individual organizations as well as aerial images of land information.
The IRM project will be fully integrated into the EPIC Open Connectivity
Project, which continues to expand information sharing and technology
capabilities to provide web-based access to approximately 1,800 Federal,
State, and local partners on an annual basis.

DEA is requesting \$1,800,000 in non-personnel funding to issue a
comprehensive contract to design, develop and implement the IRM to
include integration into Open Connectivity, as well as integration of
Commercial-Off-the-Shelf software and system testing, deployment,
implementation and management. Further, due to the size of the images
being captured, large storage capacity will be needed to house imagery
data in support of this initiative. An additional, \$1,500,000 is
requested to purchase 70 terabytes of storage capacity that will be used
to ensure availability of imagery data.

*[Mexican Methamphetamine Operation]{.underline}*: DEA's goal is to
significantly disrupt the flow of methamphetamine from Mexico into the
U.S. DEA requests \$750,000 in non-personnel funding for a complex,
multi-faceted operation to focus on methamphetamine production,
trafficking, chemical diversion, money flow, and intelligence
collection. An important component of this operation will target the
supply of essential precursor chemicals and equipment utilized by
methamphetamine trafficking and manufacturing organizations to
facilitate their criminal activity.

***[Operation White Fang]{.underline}***: ***Operation Noble Hero***,
based out of the Houston Field Division, will be expanded to
***Operation White Fang*** which will exploit opportunities to impact
the clandestine methamphetamine trade across the entire southwest
border. DEA requests \$325,000 in non-personnel funding for this
operation. The mission of ***Operation Noble Hero***, a Special Field
Intelligence Program (SFIP), was to enhance the collection of strategic,
operational, and tactical intelligence regarding the drug related
violence along the U.S. and Mexico border. The primary objectives of
this operation were to: (1) identify persons directly involved; (2) link
the violence to persons and trafficking organizations for subsequent
prosecution and asset seizure; and, (3) to identify and report current
and expected trends involving violent organizations through the
systematic debrief of cooperating defendants and sources who have
pertinent information regarding violence. This SFIP targeted the two
major Mexican drug cartels (CPOTs) that control the drug trafficking
corridors leading from Mexico into South Texas, namely the Gulf Cartel
(including Los Zetas) and the "Chapo" Guzman Organization. Originally
trained by the Mexican military as a rapid response force to fight
Mexican DTOs, Los Zetas defected to work for the Gulf Cartel. This force
was initially assembled to kidnap and kill rival drug traffickers. More
recently they have been responsible for numerous executions throughout
Mexico, primarily in the border state of Tamaulipas, in efforts to
protect their territory from rival cartels. ***Operation White Fang***
will focus particularly on the groups responsible for the drug related
violence facilitated by the major Mexican cartels operating along the
U.S./Mexico border.

In addition, DEA has identified EPIC as the central intelligence
collection repository for the information collected under this SFIP.
Related to this operation, DEA will develop and maintain a
methamphetamine intelligence collection program at EPIC. The
Intelligence Division will continue to prepare and disseminate survey
instruments that require all domestic field divisions and foreign
offices to answer specific questions related to the manufacture and
trafficking of clandestinely produced methamphetamine in their areas of
operation. This program will identify both the known and unknowns of the
methamphetamine threat as well as identify gaps that need to be filled
by focusing intelligence collection efforts.

***[Operation Knight Moves]{.underline}***: DEA requests a programmatic
enhancement of \$150,000 in non-personnel funding for the collection of
intelligence on the smuggling, transportation, and crossing of narcotics
through Mexico and along the Southwest Border. ***Operation Knight
Moves*** funding provides for payments to Human Intelligence (HUMINT),
investigative travel, and operational expenses.

Over the years, DEA has learned that the development of reliable HUMINT
and the dissemination of actionable intelligence is the foundation of
successful operations. ***Operation Knight Moves*** was initiated in
2002 by the DEA and the Defense Intelligence Agency (DIA) as a regional
HUMINT collection program to develop maritime trafficking intelligence
along the Western Caribbean Corridor and Eastern Pacific areas of
Central America and Mexico. After a hiatus during FY 2004 and 2005, the
operation was revived and expanded to include the collection of
intelligence on the smuggling, transportation, and crossing of narcotics
through Mexico and across the Southwest Border. The revised scope of the
collection effort included intelligence on methods of transportation,
crossing areas, smuggling techniques, stash locations, routes, and
destinations. The program emphasizes the recruitment and development of
HUMINT possessing information on transportation methods, such as
railroad lines, storage yards, and trucking companies with a nexus to
the SWB.

*[Long Beach, California Port]{.underline}*: To further combat the
diversion of precursor chemicals, DEA requests \$337,000 in personnel
funding and 2 positions (including 1 Special Agent and 1 Diversion
Investigator, both to be funded by the DCFA). These positions will work
closely with the Department of Homeland Security's Customs and Border
Patrol (CBP) to identify shipments of precursor chemicals from source
countries destined for Mexico that are transiting the Long Beach,
California facility. It has been determined that a considerable amount
of the containerized cargo being shipped from the U.S. to Mexico
transits the port of Long Beach. As such, smuggled illegitimate
shipments of precursor chemicals will be targeted for further
investigation and enforcement action, including controlled deliveries.

*[Foreign Diversion Investigator]{.underline}*: In FY 2008, DEA requests
\$474,000 in personnel funding and 1 Diversion Investigator to be
located in Panama City and funded by the DCFA. Placing additional
resources in Panama to target the smuggling of essential precursors will
be invaluable since much of the containerized cargo transiting Central
America passes through that country.

[Impact on Performance (Relationship of Enhancement to Strategic
Goals)]{.underline}

This program enhancement directly supports the Department of Justice's
Strategic Objective 2.2: "Reduce the threat, trafficking, use and
related violence of illegal drugs." Additionally, it directly supports
DEA's overall goal of reducing the availability of illicit drugs in
America by disrupting or dismantling the most significant DTOs. It will
enable DEA to work with domestic and foreign counterparts to identify,
target, investigate, and disrupt or dismantle DTOs across the globe.

With additional resources in FY 2008, DEA will be better prepared to
fight the spread of methamphetamine. As the production of domestic
methamphetamine slows, Mexican methamphetamine production is increasing.
DEA requires additional staffing and operational resources to strengthen
and expand programs and attack the drug flow at its source. Since the
inception of the PTO program in FY 2001, DEA has disrupted 286[^45] and
dismantled 279 PTOs with methamphetamine as the primary drug type. With
additional resources in FY 2008, DEA will have increased capabilities to
pursue methamphetamine PTO investigations.

Furthermore, as the drug trafficking threat has increased along the SWB
border, DEA has responded by increasing the number of agents in support
of the SWB. Currently, DEA is authorized 62 Special Agents, 19
Intelligence Research Specialists, and 2 Diversion Investigators to work
full-time in Mexico. Additionally, DEA is authorized 1,214 Special Agent
positions to work in domestic offices along the SWB, representing
approximately 23 percent of DEA's total authorized Special Agent
positions. However, additional resources are required on the border due
to the convergence of three transnational threats: drug trafficking,
alien smuggling, and terrorism. Terrorists could attempt to enter the
U.S. or smuggle WMD across the SWB by exploiting established routes and
methods used by drug traffickers. Additionally, according to EPIC drug
seizure data, most of the cocaine, marijuana, methamphetamine, and
Mexican-source heroin available in the United States is smuggled into
the country across the SWB from Mexico. Preliminary analysis of the data
from the Consolidated Counterdrug Database (CCDB) reveals that
approximately 90 percent of the cocaine that departed South America for
the United States in 2005 transited the Mexico/Central America
Corridor.[^46]

The manufacture, transport, distribution, and sale of illicit drugs and
drug precursors have become an increasingly sophisticated and
multinational enterprise. As a result, the criminal organizations that
manage and operate these illegal enterprises are making use of advanced
communications and control networks and cooperating with a variety of
nationalities to move multiple illicit substances. To effectively
counter these networks, DEA must carry out well-coordinated operations
and intelligence collection efforts. DEA must also utilize more advanced
communications intercepts, like satellite telephones, multi-platform
surveillance devices (audio, video, tracking, and others), and aviation
support. DEA's request includes resources that would enhance its overall
investigative capabilities along the SWB by making surveillance and
collection of evidence more effective. For example, the helicopters and
high definition cameras requested would enhance command and control
capabilities and provide additional safety for Special Agents on the
ground during operations. Further, the cameras would enable captured
images to be transmitted in real-time to lab top monitors being manned
on the ground.

Surveillance equipment is critical to not only apprehending drug
traffickers and their wares, it also can also allow for the seizure of
their illegal proceeds. Bulk currency is the most widely used method of
moving drug proceeds from U.S. markets to Mexican sources of supply.
Current estimates by the National Drug Intelligence Center (NDIC)
indicate that between \$8.3 billion and \$24.9 billion are returned
annually to DTOs in Mexico. With increased cooperation from Mexican
authorities, DEA has allowed money to travel back across the SWB to
identify the criminal organization from where the money originated in
the US, and follow it through the transient zone to the ultimate
destination in Mexico. Following the money back to its source allows DEA
to identify key links in DTOs. DEA works with Mexican counterparts to
target organizations in Mexico through conventional investigative means
and wire intercepts after the money trail has helped shed light on the
DTO.

Since May 2006, DEA has recruited and paid HUMINT, and several seizures
have been credited to these sources. For example, ***Operation Knight
Moves*** played a role in a recent seizure of 7 tons of cocaine in
Panama and a recent methamphetamine seizure in Guadalajara, Mexico. In
the future, the performance of the operation will be measured by the
number of sources recruited and by seizures resulting from information
provided by HUMINT. The operation's performance will also be measured by
the number of reports generated by the Department of Defense after
interviewing DEA HUMINT. After these reports are vetted by DEA, they are
disseminated throughout the Intelligence Community.

The SWB of the United States is the principal arrival zone for most
illegal drugs smuggled into the United States. Increasingly, the
methamphetamine distributed in the United States is smuggled from Mexico
across the SWB. Drug smuggling is conducted using hidden compartments in
cars and trucks, tunnels and aqueducts, backpackers on foot, lightweight
aircraft and gliders, All Terrain Vehicles, package delivery services,
motorized launches, and floating rafts across the Rio Grande.
Furthermore, the large volume of illicit drug proceeds, to which this
translates to, is smuggled back into Mexico in the form of bulk
currency. Huge illicit trafficking profits flow back to Mexican DTOs
across our common border as frequent as the illicit drugs that are
smuggled in. Currently, Mexico and the U.S. lack the resources to
provide effective control of the 2,000 mile land border, as well as the
maritime and air terminals that directly feed U.S. ports of entry. To
effectively address these challenges, DEA proposes this initiative to
attack the major Mexican based trafficking organizations on both sides
of the border simultaneously by employing enhanced intelligence and
enforcement initiatives and cooperative efforts with the Government of
Mexico.

**Funding**

![](media/image19.wmf){width="6.450694444444444in"
height="8.99236111111111in"}

**Item Name: Counterterrorism and Intelligence Sharing**

Budget Decision Units: Domestic Enforcement

Foreign Enforcement

Strategic Goals & Objectives: Goal II; Objective 2.2

Organizational Program: Intelligence Division

Operations Division

Operational Support Division

Program Increase: Pos: [7]{.underline} Agents: [1]{.underline} FTE:
[4]{.underline} Dollars: [\$7,124,000]{.underline}

[Description of Item]{.underline}

DEA requests 7 positions (including 1 Special Agent and 2 Intelligence
Analysts) and \$7,124,000 (including \$6,123,000 in non-personnel
funding) to improve information sharing with the Intelligence Community
(IC) and other law enforcement agencies in order to enhance our Nation's
efforts in reducing the supply of drugs, protecting our national
security, and combating global terrorism; establish base-funding for
DEA's ***Operation Breakthrough***; and support the Department of
Justice's new national anti-gang task force.

[Justification]{.underline}

In February 2006, the Attorney General and the Director of National
Intelligence (DNI) signed a joint memorandum designating the Office of
National Security Intelligence (NN) in DEA's Intelligence Division as a
member of the Intelligence Community (IC). IC membership, while mostly
formalizing an existing relationship, will help ensure that DEA is fully
committed to doing everything it can to contribute to the protection of
our nation from all matter of threats. DEA is committed to sharing
intelligence with members of the IC and other law enforcement agencies
to enhance efforts to reduce the flow of drugs into the United States.
Further, with DEA's leading role in the OCDETF Fusion Center, its
Special Operations Division and EPIC, and its State and Local Task Force
Program, the need for expansive information sharing networks has never
been greater.

In order to further develop DEA's classified IT infrastructure; be able
to better collect, analyze, and predict drug production; and be included
in the National Gang Targeting, Enforcement, and Coordination Center
(GangTECC); DEA is requesting the following FY 2008 programmatic
enhancements.

*[Merlin]{.underline}*: DEA requests a programmatic enhancement of
\$5,970,000 in non-personnel funding for DEA's classified
infrastructure. Merlin is the primary component of DEA\'s classified
infrastructure and provides the single point of connectivity between DEA
offices for rapid transmission of, and access to, classified
investigative and intelligence information. This ability is critically
important to all domestic and foreign DEA offices. Merlin is the gateway
to the classified infrastructure within DEA that enables the
Intelligence Analysts and Special Agents to perform their duties in a
secure environment. Merlin will provide DEA's National Security Section
(NN) with the secure communications infrastructure that is required to
communicate IC requests to both domestic and foreign DEA Field Offices
in a classified environment. Merlin also provides DEA users with their
only access to a variety of systems and tools that are widely used to
support DEA investigations and intelligence programs.

Currently, base funding only supports a technical refresh cycle of 5 to
6 years for Merlin, not including essential supporting equipment such as
encryptors, switches, and plotters. For example, Merlin has experienced
poor communications over the past 2 years, in part because the
encryptors that the system relies on are over 6 years old, and no longer
supported by the manufacturer. The requested enhancement will address
both technology refresh to ensure that every office is upgraded every
four years, as well as the shortfall in O&M costs.

***[Operation Breakthrough]{.underline}***: DEA requests a programmatic
enhancement of \$950,000 (including \$153,000 in non-personnel funding)
and 6 positions (including 2 Intelligence Analysts) to establish
permanent base-funding for ***Operation Breakthrough**.* Because change
is the only constant in the drug trade, ***Operation Breakthrough***
requires resources to study new coca and opium poppy growing regions
that emerge, as well as study established growing areas that have been
previously denied to researchers due to security risks and resource
limitations.

DEA's ***Operation Breakthrough*** provides the U.S. government with a
science-based methodology for estimating potential drug crop yields and
drug laboratory efficiencies. Since 1993, ***Operation Breakthrough***
has: interviewed over 2,100 coca farmers and 1,000 opium farmers; taken
biomass measurements from over 1,500 coca harvests and 600 opium poppy
harvests; interviewed 274 cocaine processors and 160 heroin processors;
collected over 12,000 coca leaf and opium samples for DEA forensic
analysis; and conducted multi-week laboratory simulations in Bolivia,
Colombia, Peru, and the United States. In addition, DEA currently is in
the initial stages of conducting a feasibility assessment for an Afghan
heroin laboratory efficiency study. The first step of this multi-year
project will be to identify, recruit, and interview at least 60 sources
of information experienced in Afghan heroin processing.

***Operation Breakthrough*** teams are composed of DEA Intelligence
Analysts, Forensic Chemists, Diversion Investigators, and local
scientists under contract to DEA. These teams collect and analyze coca
leaf and soil samples to determine coca leaf alkaloid content, conduct
coca field surveys to measure coca leaf yields per hectare, and
interview coca farmers to record crop yields and farming techniques
throughout the Andean Region. ***Operation Breakthrough*** performs a
minimum of 6 deployments each year to assess the crops in the region.
Each deployment lasts a minimum of one week.

[*National Gang Targeting, Enforcement, and Coordination Center
(GangTECC):*]{.underline}

DEA requests one Special Agent position and \$204,000 for the Department
of Justice's (DOJ) new national anti-gang task force, which is comprised
of multiple DOJ components and aimed at facilitating law enforcement
strategies and operations across agency lines. In February 2006, the
Attorney General (AG) unveiled the Department of Justice's strategy to
combat gang violence across America, bases on both focused prevention
programs and strict enforcement policies.

Gangs have become an increasing and pervasive threat to our nation's
security, as well as the safety of our communities. The 2006 National
Drug Threat Assessment articulates a nexus between organized gangs and
drug trafficking: gangs commonly use drug trafficking as a means to
finance their criminal enterprise. Many gangs have evolved from
turf-oriented entities to profit-driven, organized criminal enterprises
whose activities include not only retail drug distribution but also
other aspects of the trade, including smuggling, transportation and
wholesale distribution.[^47]

Per the Attorney General's direction, GangTECC represents a unified
federal effort to help disrupt and dismantle the most violent gangs in
the United States. GangTECC assists in initiating gang-related
investigations, coordinating gang-related investigations and
prosecutions, developing a refined understanding of the national gang
problem and proposing appropriate countermeasure strategies, and
supporting the National Gang Intelligence Center. The Deputy Attorney
General has directed several DOJ law enforcement components to assign
agents to GangTECC, and DEA is directed to assign at least one
experienced agent to this effort.

[Impact on Performance (Relationship of Increase to Strategic
Goals)]{.underline}

Information sharing initiatives, such as Merlin, will allow DEA to
improve the flow of information to and from other federal, state, and
local law enforcement agencies. Intelligence Analysts need accurate and
timely information to link individuals, money, and drugs to the higher
level PTOs and CPOTs. These links will allow DEA to identify, dismantle,
and disrupt these drug trafficking organizations. Furthermore, the
efficiencies of these tools will allow DEA to redirect resources spent
on administrative tasks to drug enforcement activities.

Resources are needed to maintain the current intelligence analysis
capabilities of Merlin, and to ensure that all Merlin workstations
properly support the advanced software and intelligence tools available.
Since its deployment as DEA's delivery tool for classified information,
Merlin has significantly improved the speed at which information is
shared among users. Prior to Merlin, the transmission of one 3-page lead
took 15 minutes to fax using a secure line. Approximately 10 leads were
faxed per day, for a total of 150 minutes faxing time. When the
15-minute typing time for the retrieval forms at both the sender and the
receiver are calculated, the total time required to send 10 leads was
7.5 hours. By distributing leads through Merlin, the same 10 leads are
currently delivered in less than 3 minutes.

***Operation Breakthrough*** has revolutionized the U.S. government's
collective understanding of the illicit drug production threat in the
Andean Region, and has provided policy makers and the counter drug
intelligence community with the hard data needed to accurately assess
the drug flow to the United States. The success of ***Operation*
*Breakthrough*** in the Andean Region has led DEA and its counterpart
agencies to expand the program to Central Asia.

Gangs have become an increasing threat to our nation's security and the
safety of our communities. The 2006 National Drug Threat Assessment
cites a nexus between organized gangs and drug trafficking. The 2005
National Drug Threat Survey data indicate that the percentage of state
and local law enforcement agencies reporting that street gangs were
involved at some level in drug distribution in their jurisdictions
increased from 44.6 percent in 2003 to 51.9 percent in 2005; for outlaw
motorcycle gangs, the increase over the same time period was from 29.8
percent to 34.7 percent. Overall, 31.6 percent of respondents to the
2005 National Gang Threat Assessment indicated that gangs were highly
involved in drug distribution at the retail level, while 28.6 percent
indicated at least moderate involvement.

**Funding**

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height="6.048611111111111in"}

**Item Name: Online Investigations**

Budget Decision Unit: Domestic Enforcement

Strategic Goal & Objective: Goal II; Objective 2.2

Organizational Program: Office of Investigative Technology and Digital
Evidence Laboratory

Program Increase: Pos: [0]{.underline} Agents: [0]{.underline} FTE:
[0]{.underline} Dollars: [\$3,020,000]{.underline}

Description of Item

DEA requests \$3,020,000 in non-personnel funding to support Internet
investigations. This enhancement provides funding for Internet intercept
capabilities and computer forensics support.

Justification

DEA's successful efforts at targeting Internet traffickers have been
highlighted by recent takedowns of Internet pharmacies in ***Operation
Cyber Chase*** and ***Operation Cyber RX*** and Internet steroids
traffickers in ***Operation Gear Grinder***. However, rogue online
pharmacies are not the only example of Internet facilitated drug
trafficking. There are increasing instances where traditional drug
trafficking organizations rely on the use of the Internet to facilitate
their drug trafficking and money laundering activities. The analysis of
Southwest Border investigations indicates that CPOTs in Colombia and
Mexico are using Hotmail, Yahoo, and other e-mail accounts. Traffickers
are also switching to advanced Internet communications such as Voice
over Internet Protocol (VoIP), wireless handheld devices, instant
messaging, and encrypted e-mail.

During a recent DEA investigation, ***Operation Holdfast,*** one of the
targets utilized e-mail to communicate with organizational members in
the United States and Colombia. The targets used e-mail to pass
telephone numbers and logistics information related to maritime vessels
used by the drug trafficking organization to transport drugs from
Colombia into the Caribbean for transshipment into the United States.
Intercepts of Internet communications, including e-mail and VoIP, led to
the seizure of 2.2 tons of cocaine and identification of more than a
dozen organization members. Internet targeting enabled DEA and its
foreign law enforcement counterparts to initiate wire intercept
investigations in five countries, including the United States.

In order to remain on the forefront of technological changes used to
traffic illicit narcotics, DEA needs to invest in improving and
expanding its Internet investigative technologies. For FY 2008, DEA
request the following enhancements in order to increase Internet
investigations:

*[Combating Emerging Internet Capabilities:]{.underline}* DEA requests
\$1,000,000 in non-personnel funding to improve and expand its Internet
investigative technologies to combat the evolving methods used by drug
trafficking organizations. DEA's Office of Investigative Technology, is
responsible for the design, development and implementation of technical
solutions for the lawful intercept of Internet facilitated
communications utilized drug trafficking organizations. The complexity
and costs of a single data network intercept is often overwhelming for
law enforcement. Additionally, the use of encrypted communications by
drug trafficking organizations is becoming more prevalent. Traditional
technologies available to law enforcement for data network intercepts
are vulnerable to organizations that utilize multiple access points for
data communications or encrypt their communications using high level
encryption protocols.

This funding will be used to develop and purchase intercept solutions
for emerging Internet technologies, including data intercept solutions
that can be placed on a targeted computer to covertly capture all
communications authorized by a Title III court order. Since the
intercept solution actually resides on a subject's computer, mobility of
a target that accesses the Internet through multiple service providers
can be overcome. Also, encrypted communications can be intercepted as
the software is able to capture communications in their unencrypted
state, rather that when they are in transit and secure.

This tool will provide DEA with the technical capacity to address
certain types of communications that can not be intercepted through
conventional methods. There are several ongoing investigations that have
been adversely impacted by the use of encryption by the targeted
organizations. The inability to address these encrypted communications
has allowed the criminal organizations to operate with impunity and
prohibited the intercept from realizing its full investigative
potential.

*[Permanent Connectivity of DEA Field Divisions to Major
ISPs]{.underline}*: DEA requests \$1,500,000 in non-personnel funding to
provide operational funding for Internet intercept capabilities. In
order to intercept e-mail or other Internet communications for Pen Traps
or Title IIIs, DEA must connect to the target's ISP. This funding will
allow DEA's Office of Investigative Technology to connect DEA Field
Divisions to major Internet Service Providers (ISPs) using a secure,
dedicated network. This network will facilitate the collection of
Internet communications pursuant to Pen Traps and Title III intercepts.
DEA has met with leaders in the data communications industry who have
embraced the idea of creating a secure network to facilitate court order
requests, rather than continue on the current path of creating a new
connection for every court order. The creation of this network will
expedite the implementation time required for each intercept as well as
eliminate the need for repetitive travel to install network intercept
equipment.

*[Computer Forensics]{.underline}*: DEA requests \$520,000 in
non-personnel funding for computer forensics support. This type of
support is critical to the successful outcome of Internet
Investigations. Investigations involving Internet communications and
remote server data storage are technically complex and are often time
sensitive, requiring deployment at multiple locations simultaneously.
Without additional resources, DEA will experience significant delays in
supporting Internet-related investigative prosecutions. The current
backlog for exhibit review averages 4 months, with the oldest case being
9 months behind schedule. As of the end of the first quarter of FY 2007,
81 cases (434 exhibits) remain in the backlog. Digital evidence exhibit
submissions to the DEA increased by 96 percent Digital Evidence
Laboratory in FY 2006. The trends shown in the chart below make it
imperative that the additional resources be provided to avoid any
further increase to the current backlog.

![](media/image21.wmf){width="5.166666666666667in" height="3.4375in"}

This funding for computer forensics support, along with funding from the
Diversion Control Program, will be used for two purposes: 1) the
installation of a 40 terabyte Storage Area Network (SAN) and 2) the
purchase of blade servers to replace the desktop units each examiner
currently uses to examine evidence. Once installed, the SAN will allow
immediate access to archived copies of stored digital data from
computers, servers, cell phones, Personal Digital Assistants (PDAs), and
other devices and the resulting investigative data recovery.
Approximately 50 percent of all computer forensics submissions originate
from Internet web hosts, rouge Internet pharmacies, or other businesses
and consist of enormous databases containing terabytes of e-mail,
financial, and business information. A SAN is necessary for the timely
examination of these extremely large databases. Additionally, a SAN will
allow DEA to provide electronically stored digital evidence to other law
enforcement organizations if necessary, maintain digital evidence data
redundancy in cases of local or national emergency, and enhance overall
evidence control and accountability through automated data access
mechanisms.

Impact on Performance (Relationship of Increase to Strategic Goals)

DEA focuses its resources to disrupt and dismantle the largest drug
trafficking organizations. As the use of Internet-based communications
rises, so does the use of these communication methods by drug
trafficking organizations. The use of Internet-based communications is
growing exponentially. For example, the Telecommunications Industry
Association estimates that the use of VoIP (one method of making phone
calls over the Internet) is growing at 44 percent each year and will
reach 18 million residential subscribers by 2009.[^48]

![](media/image22.wmf)

It is anticipated that the Internet-related caseload will continue to
increase as more drug trafficking organizations expand their online
activities and the use of Internet facilitated communications. It is
imperative that DEA remain at the forefront of the latest Internet
technology and training in order to address the increasing caseload. It
is also important that DEA continue to use the latest intelligence
gathering techniques to address the demands of Internet-related
investigations already underway.

As DEA moves to increase Internet-based investigations, more equipment,
training, and support are needed to sustain this effort. Internet
investigations, by nature, are complex and multifaceted. Effectively
addressing the need for resources requires enhancement of several
different areas. The areas of investment will allow for greater
connectivity for SOD-coordinated investigations, enhance undercover
capacities, and implement technologies that agents have been trained to
use, but currently lack in many field offices.

The Online Investigations Initiative will allow DEA to address current
caseload requirements as well as future anticipated growth in this
rapidly expanding field. Moreover, DEA will expand its coordination
capabilities, centralize important functions currently done on an
individual case or division basis, and enhance the investigative focus
on disruption and dismantlement of major trafficking organizations. Only
recently have tools that effectively address the criminal activity on
the Internet become available to law enforcement, and DEA needs to
capitalize on these improvements in technological investigations to
ensure agency-wide coordination of criminal and diversion enforcement
activities. These investments in technology and staffing will save DEA
from future financial burdens of centralizing functions and addressing
investigative shortcomings as drug traffickers continues to expand their
operations and communication through the Internet.

**Funding**

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height="4.975694444444445in"}

#### 

#### 

#### c. Results of Program Assessment Rating Tool (PART) Reviews

Please refer to page 8 in the Overview.

**C. State and Local Assistance**

> ![](media/image24.wmf){width="6.498611111111111in" height="2.3125in"}

1\. Program Description

Through its expertise and leadership, DEA continues to support State and
local efforts with specialized programs aimed at reducing the
availability of drugs. In FY 2008, DEA will provide direct assistance to
State and local law enforcement through its State and Local Law
Enforcement Officer Training program. Further, DEA will provide
assistance on a reimbursable basis to State and local agencies through
the Office of Justice Program's (OJP's) and DOJ's Assets Forfeiture
Fund's (AFF's) Domestic Cannabis Eradication/Suppression Program
(DCE/SP).

As the nation's preeminent drug law enforcement organization, DEA has
the responsibility to respond to the drug enforcement training needs of
the U.S. law enforcement community. Each law enforcement officer trained
to conduct narcotics investigations contributes to the nationwide
counterdrug effort. By teaching others the methodologies and techniques
of drug enforcement, DEA is able to expand drug enforcement across the
United States in a very cost-effective manner.

The DCE/SP is a nationwide law enforcement program exclusively targeting
marijuana. DEA administers the program through Reimbursement Agreements
with OJP and AFF. The program funds operational plans for eradication
campaigns and suppression programs.

In addition to the three programs cited above, DEA currently provides
assistance to State and local agencies through its Demand Reduction
program.

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height="6.502777777777778in"}![](media/image26.wmf){width="9.397222222222222in"
height="2.6166666666666667in"}

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**3. Performance, Resources, and Strategies**

The State and Local Assistance decision unit contributes to DOJ's
Strategic Goal II: "Enforce Federal Laws and Represent the Rights and
Interests of the American People." Within this Goal, the resources
specifically address DOJ's Strategic Objective 2.2: "Reduce the Threat,
Trafficking, Use, and Related Violence of Illegal Drugs."

#### a. Performance Plan and Report for Outcomes

DEA's State and Local Assistance decision unit consists of three program
areas: State and Local Law Enforcement Officer Training, DCE/SP, and
Demand Reduction. Since each program area has identified unique
performance measures related to their specific activities, they are
addressed separately below.

[State and Local Law Enforcement Officer Training]{.underline}

DEA's State and Local Law Enforcement Officer Training program has one
primary performance measure -- the number of State and local law
enforcement officers trained. Based on an analysis of prior year
performance data, existing training capacity, and available funding, the
FY 2006 annual target for the number of State and local officers trained
was 36,605. As of September 30, 2006, DEA trained 41,313 State and local
officers; therefore, exceeding its target established for FY 2006. In
fiscal years 2007 and 2008, DEA expects to train 37,000 State and local
officers each year.

DEA offers an array of classes to State and local officers to include
drug diversion training, drug enforcement unit commander training
(DUCA), law enforcement intelligence training at the Federal Law
Enforcement Analysis Training (FLEAT), and narcotics supervisory
leadership training. DEA continues to conduct one of the most critical,
specialized training programs offered to State and local law enforcement
officers in the area of Clandestine Laboratory Training. With the
increase in the number of "small toxic lab" seizures throughout the
country, there has been a corresponding escalation in the problems
confronting State and local agencies that are called to the scene of
these laboratories. Often, it is the State and local police who first
encounter these "small toxic labs" and must ensure that they are
investigated, dismantled, and disposed of appropriately.

DEA offers three Clandestine Laboratory Training courses (State and
Local Clandestine Laboratory Certification, Clandestine Laboratory Site
Safety, and Clandestine Laboratory Tactical training). The first two
courses provide detailed information regarding Occupational Safety and
Health Administration (OSHA) regulations and standards. Officers are
informed of the hazards that they are likely to encounter and how to
handle these hazards. For example, during training, officers become
familiar with the personal protective equipment that must be worn when
dismantling a clandestine lab. During the third course, officers are
taught the difference between traditional drug investigations and
clandestine laboratory investigations.

In FY 2004, Congress approved the use of DEA's prior year unobligated
balances for the design, construction, and ownership of a clandestine
laboratory training facility to continue the support of Clandestine
Laboratory training. Since FY 2000, DEA has trained a total of 8,445
State and local law enforcement officers in identifying and processing
clandestine laboratories. Teaching others the techniques used to
investigate and dismantle small toxic labs acts as a force multiplier
for DEA.

The table below shows the number of State and local officers DEA's
Office of Training has trained from FY 2000 through FY 2006.

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height="3.3881944444444443in"}

[Domestic Cannabis Eradication/Suppression Program (DCE/SP)]{.underline}

DEA uses the DCE/SP to address marijuana cultivation in the United
States. DEA's current performance measure for the DCE/SP is:

-   Number of Marijuana Plants Eradicated (Including Plants Cultivated
    Indoors and Outdoors)

In DEA's FY 2007 Congressional Budget submission, the following two
additional Performance Measures were reported for the DCE/SP:

-   Number of Arrests Directly Related to Investigations and Eradication
    of Domestically Cultivated Marijuana, and

-   Dollar Amount of Seizures Directly Related to the Investigation and
    Eradication of Domestically Cultivated Marijuana.

In a Department-wide effort to streamline performance reporting, these
two measures were eliminated from the Performance and Resources Table;
however, these measures will continue to be tracked for internal
reporting.

Prior to FY 2006, DEA administered the DCE/SP through a series of
Letters of Agreement (LOA), which were grant-like funding contracts
between DEA and participating State and local law enforcement agencies
to fund operational plans for eradication campaigns and suppression
programs. For calendar year (CY) 2005, DEA entered into 111 LOA's with
State and local agencies. Beginning in FY 2006, the resources associated
with the DCE/SP were transferred to the Office of Justice Programs (OJP)
with DEA continuing to administer the program on a reimbursable basis.
Therefore, DEA receives reimbursable resources from OJP to continue
oversight of the marijuana eradication program.

Since eradication is based on the growing season, all DCE/SP performance
data is collected and reported on the calendar year with performance
weighted towards the end of the year. Domestically cultivated marijuana
is dependant on climatic conditions, therefore, extreme circumstances
such as flood, drought, and fire can dramatically impact the amount of
product cultivated and therefore seized. Taking these uncontrollable
factors into consideration, DEA estimated that in CY 2006, 3,600,000
cannabis plants would be destroyed, 8,700 individuals would be arrested
as a direct result of the investigation and eradication of domestically
cultivated marijuana, and \$27 million in assets would be seized. As of
October 31, 2006, DEA exceeded its CY 2006 targets for the number of
plants eradicated with 5,029,317 eradicated and the number of assets
seized at \$65 million. However, arrests fell short of the FY 2006
target with 6,931 individuals arrested as a result of marijuana
investigations.

DEA has established the target of 3,600,000 marijuana plants eradicated
and will work to meet or exceed this target in CY 2008.

[Demand Reduction]{.underline}

Throughout DEA, efforts are underway to measure the impact of its
programs. Over the past few years, DEA's Demand Reduction Program has
been elevated to include participation on the Governors' Prevention
Councils, Mayors' councils, and state-wide summits. Therefore, DEA has
established a performance measure that reports the percentage of total
demand reduction activities that have a demonstrable impact.
Specifically, this measure is:

-   Percent of total demand reduction-related activities that result in
    demonstrable changes in policies, impact the allocation of
    resources, increase public awareness on a large scale, produce
    long-term sustainable initiatives, and/or are high-visibility or
    regularly occurring activities in the targeted state, city, or
    region. (Levels I and II)

DEA began collecting performance data to support this new measure on
October 1, 2004. Therefore, FY 2006 represents the first year for which
a target was established at 45 percent for Levels I / II impact. As of
September 30, 2006, DEA exceeded this target with 57 percent of demand
reduction activities conducted resulting in demonstrable changes (Levels
I / II Impact). In FYs 2007 and 2008, DEA proposes to reduce the Demand
Reduction Program by 50 percent; therefore, FY 2007 and FY 2008 targets
have been reduced accordingly.

DEA uses its expertise to complement enforcement efforts through its
Demand Reduction Program. DEA's Demand Reduction Coordinators (DRCs)
assist existing prevention groups and community coalitions at the
national and local levels by providing a law enforcement perspective in
the development and assessment of anti-drug strategies and initiatives.
DEA provides briefings and shares information regarding current and
emerging drug trafficking trends to assist these groups.

DEA's DRCs ensure that:

-   Activities are conducted at levels that impact statewide prevention
    planning.

-   Intelligence is integrated into prevention planning.

-   Community coalitions receive the unique support that only DEA can
    provide.

DEA's DRCs are highly visible Special Agents with expert knowledge of
DEA policies, drug trafficking trends, drug enforcement operations,
community processes, and drug prevention concepts and models. In
addition, DRCs are required to have strong presentation skills and the
ability to work collaboratively with outside organizations and
communities at national, regional and local levels.

#### b. Strategies to Accomplish Outcomes

To fulfill the critical mission of reducing drug availability in the
United States, DEA devotes the resources necessary to assist State and
local agencies with drug enforcement efforts. Workload varies based on
the specific program activity, such as State and local law enforcement
officer training and MET. The outcome measure and its respective
performance measures are discussed earlier and serve as indicators of
the overall drug-related assistance provided to State and local
organizations.

Part of DEA's overall strategy is to complement State and local efforts
with specialized programs aimed at reducing the availability of drugs
through DEA's expertise and leadership. To achieve this goal, DEA:

-   Improves the capabilities of State and local enforcement efforts
    with specialized training programs that will improve their abilities
    to enforce State drug laws; and

-   Assists local law enforcement officers in conducting investigative
    activity against the specified drug trafficking individuals and
    organizations in locations which request DEA help.

The following strategies outline DEA's plan to achieve the State and
Local Assistance objectives:

1.  **[State and Local Training:]{.underline} Provide training to State
    and local law enforcement officers to improve the capabilities of
    State and local law enforcement agencies and their ability to
    enforce state drug laws.**

The DEA Training Academy currently offers the following training
opportunities for State and local law enforcement officers:

-   Clandestine Laboratory Investigative Training

-   One-week regional Diversion State and Local Training

-   State and local training through its Domestic Field Division Offices
    / DTCs

-   Two-week training at DEA's Drug Unit Commander Academy (DUCA)

-   Intelligence training at FLEAT

-   A one-week Narcotics Supervisory Leadership Program

2.  **[Domestic Cannabis Eradication/Suppression Program:]{.underline}
    Assist local efforts to control the production of cannabis and
    methamphetamine.**

The DCE/SP assignments include providing operational and training
assistance to the State/local agencies, monitoring activities, and
acting as a conduit for intelligence and information with DEA
Headquarters. This assistance and joint cooperation allows for the
enhancement of already aggressive eradication enforcement activities
throughout the nation. However, the success of the DCE/SP is directly
attributed to the decision of the participating agencies to share
intelligence, technology, and manpower.

> **This page intentionally left blank**

[Program Offsets]{.underline}

**Item Name: Mobile Enforcement Teams (MET)**

Budget Decision Unit: State and Local Assistance

Strategic Goal & Objective: Goal II; Objective 2.2

Organizational Program: State & Local Assistance

Program Reduction: Pos: [-83]{.underline} Agents: [-80]{.underline} FTE:
[-80]{.underline} Dollars: [-\$20,578,000]{.underline}

[Description of Item]{.underline}

DEA proposes to eliminate the MET program, which would provide a FY 2008
savings of \$20,578,000.

[Justification]{.underline}

Mobile Enforcement Teams are currently deployed on a temporary basis to
assist State and local law enforcement in areas that have been overrun
with drug-related violent crime. In FY 2006, the MET program initiated
31 deployments, of which 23 (74%) focused on methamphetamine trafficking
organizations. To better support DEA's mission and fund higher priority
initiatives, DEA proposes to eliminate the MET program.

[Impact on Performance (Relationship of Offset to Strategic
Goals)]{.underline}

Eliminating the MET program will enable DEA to focus its efforts towards
disrupting or dismantling Priority Targets. By targeting the drug
trafficking organizations having the most significant impact on the
United States, DEA will be better able to reduce the availability of
illicit drugs in the U.S.

> []{.mark}

[]{.mark}

**Funding**

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height="4.381944444444445in"}

#### c. Results of Program Assessment Rating Tool (PART) Reviews

Please refer to page 8 in the Overview.

> **This page intentionally left blank**

**D. Diversion Control Fee Account**

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1\. Program Description

DEA's Diversion Control Program is designed to achieve the mandates of
the Comprehensive Drug Abuse Prevention and Control Act of 1970, also
known as the Controlled Substances Act (CSA), and the Chemical Diversion
and Trafficking Act (CDTA). Thus, the mission of the Diversion Control
Program includes responsibility for all activities related to the
regulation and enforcement of controlled substances and chemicals.

The Diversion Control Program provides regulatory guidance and support
to over one million legitimate handlers of controlled substances and
chemicals. Keeping legitimate importers, exporters, manufacturers,
retailers, and practitioners compliant with CSA and CDTA regulations
contributes significantly toward the reduction in the diversion of
controlled substances and chemicals. Diversion Control's regulatory
protocols mandate reporting and accounting practices that track and
monitor the production and distribution of licit drugs, precursor
chemicals, and their analogues among all of its registrants. Any
organization or individual operating outside of this closed system of
regulation is in violation of the law and is therefore subject to
administrative, civil, and criminal action.

Diversion Control's goal is to prevent, detect, and eliminate the
diversion of pharmaceutical controlled substances and chemicals into the
illicit market while ensuring adequate supplies are available to meet
legitimate medical, scientific, industrial, and export needs. In order
to achieve this goal, Diversion Control focuses its investigative
resources on identifying, targeting, disrupting or dismantling diverters
of licit controlled substances and chemicals at the domestic and
international level. These efforts include:

-   drug and chemical diversion complaint and criminal investigations

-   cyclic investigations of CSA non-practitioner (Type B) and List 1
    Chemical registrants

-   pre-registrant investigations of manufacturers, distributors and
    list 1 chemical registrants

-   operational support activities essential to the operation of the
    above priorities including registration and regulatory support,
    Diversion Investigator recruitment, training, and drug/chemical
    surveys

-   drug and chemical liaison with international representatives, State
    and local officials and industry

The diversion and abuse of pharmaceutical controlled substances have
long been a problem, but these problems have become more acute in recent
years. Most diversion of legitimate controlled substances occurs at the
retail level as a result of illegal or improper prescribing,
prescription forgery, or "doctor shopping." The DEA is also seeing a
rise in the number of individuals who divert controlled substances by
placing orders via the Internet without establishing a legitimate
doctor/patient relationship. Another factor contributing to the abuse
problem has been the introduction of increasingly potent opioid
medications. As efforts to publicize and ameliorate the under treatment
of pain have increased, the availability of these products for both
legitimate and illicit uses has also increased.

In 2004, the DEA joined the ONDCP and the Food and Drug Administration
(FDA) in launching a comprehensive, multi-faceted *Prescription Drug
Strategy* that focuses on all areas of concern and all sources of
diversion. The *Prescription Drug Strategy,* a component of the
*National Drug Control Strategy,* was updated in 2005 and emphasizes the
importance of State-level Prescription Drug Monitoring Programs (PMPs)
in detecting and deterring the diversion of prescription controlled
substances, including OxyContin^®^ and Vicodin^®^.

In recognition of the potential for criminal entities to use the
Internet to purchase pharmaceuticals without a valid prescription,
obtain drugs that are illegal to possess in the United States, and
bypass traditional means established to protect consumers against the
harmful use of controlled substances and chemicals, DEA has implemented
the cyber crime initiative known as the Internet Online Investigations
Project (OIP). The OIP detects, attacks and dismantles the
infrastructure of those organizations or entities that use electronic
media (e.g., the Internet) to covertly bring drugs into the United
States or divert licit drugs domestically. The OIP has established a
state of the art system that searches the Internet to locate websites,
identify information of interest, and store the information in a data
warehouse regarding the diversion of controlled substances.

Through the Electronic Commerce (E-Commerce) Initiative, which consists
of two major systems, Diversion Control complies with the Government
Paperwork Elimination Act of 1998 by providing alternative information
technologies to improve efficiency and responsiveness to the public.
Working with over one million legitimate handlers of controlled
substances and chemicals, Diversion Control initiatives, such as the
Controlled Substances Ordering System (CSOS), will improve data quality
and offer a higher degree of security and integrity to replace manual
paper versions of required documents to transfer licit drugs.
Furthermore, in support of Diversion Control's mission to ensure an
adequate and uninterrupted supply of controlled substances to meet
legitimate medical and scientific needs, Diversion Control is developing
a system and standards to authenticate prescriptions electronically.
This initiative, known as Electronic Prescriptions for Controlled
Substances (EPCS), will reduce the opportunity for and ability of
criminal elements to forge, alter or submit stolen prescriptions.

The transfer of the Drug and Chemical Diversion Control Decision Unit
activities from the Salaries and Expenses (S&E) appropriation to the
Diversion Control Fee Account (DCFA) was completed in FY 2006. The
consolidation of activities under the DCFA will simplify numerous
financial management issues and comply with a legal mandate to fully
recover the necessary costs associated with the Diversion Control
Program. Furthermore, the transfer will help to improve the coordination
of Diversion Control Program's regulatory and enforcement activities and
provide better services to registrants, thereby encouraging increased
compliance with the CSA and CDTA.

All of the aforementioned goals, strategies and initiatives supported by
the Diversion Control Program will deter the diversion of pharmaceutical
controlled substances and chemicals and enhance public safety by
building greater accountability and qualitative reporting requirements
into its network of compliance indicators.

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height="6.183333333333334in"}

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height="5.861805555555556in"}

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height="4.429166666666666in"}

3\. Performance, Resources, and Strategies

The Diversion Control decision unit contributes to DOJ's Strategic Goal
II: "Enforce Federal Laws and Represent the Rights and Interests of the
American People." Within this goal, the resources specifically address
DOJ's Strategic Objective 2.2: "Reduce the Threat, Trafficking, Use, and
Related Violence of Illegal Drugs." Diversion Control resources ensure a
strong deterrence against the diversion and illegal prescribing of
controlled substances and chemicals. In addition, the Diversion Control
Program is mandated by the CSA and CDTA to ensure that adequate supplies
of pharmaceutical controlled substances and chemicals are available to
meet legitimate medical, scientific, and industrial needs, while
preventing, detecting and eliminating the diversion of these substances
to illicit markets.

Along with the consolidation of its drug and chemical activities under
the DCFA in FY 2006, Diversion Control has elected to streamline and
consolidate its workload and performance measures in a commensurate
manner. The consolidated reporting of drug and chemical measures will
help to condense and simplify the presentation of Diversion Control's
regulatory and enforcement efforts to prevent the diversion of
pharmaceuticals and chemicals, provide better services to registrants,
and ensure increased compliance with the CSA and CDTA. In addition,
Diversion will continue to independently track and monitor each of its
individual programmatic elements internally in order to foster greater
managerial accountability and enhance its ability to meet qualitative
reporting requirements now and into the future.

a\. Performance Plan and Report for Outcomes

The Total Number of Drug and Chemical Registrants and Applications
Processed are the overall workload determinants for the Diversion
Control Program. In FY 2006, these four workload measures were
consolidated into two workload measures:

-   Total Number of Registrants Processed; and

-   Total Number of Applications Processed.

As illustrated in the preceding Performance and Resource Table, the
performance outcome measure for this decision unit is the Adjusted Type
B Registrant Compliant Indicator.

[Adjusted Type B Registrant Compliant Indicator]{.underline}

The workload determinants on the drug side of the Diversion Control
Program consist of two distinct groups: Type A registrants/applicants
(retailers) and Type B registrants/applicants (wholesalers). While the
majority of DEA registrants are Type A registrants (e.g., pharmacies,
hospitals, and practitioners), the Type B registrants (e.g.,
manufacturers, distributors, importers and narcotic treatment programs)
are considered the sources of supply for controlled pharmaceutical
products; and, therefore represent a higher level of risk. Due to the
enormous quantities of controlled substances that Type B registrants
handle, their level of compliance with DEA regulations significantly
impacts the integrity of the closed system of distribution. A compliant
Type B registrant ensures, as best as possible, that their products
remain within the legitimate distribution chain, while a non-compliant
Type B registrant has the potential of allowing millions of dosage units
of finished product or raw material into the illicit market. A scheduled
investigation of a Type B registrant that results in no action indicates
that the registrant is compliant with DEA regulations.

A component of Type B Registrants that is closely monitored is Adjusted
Type B Registrants. Adjusted Type B Registrants exclude researchers and
analytical labs because the amount of controlled substances maintained
or supplied to these Type B registrants is minimal, and the risk to
public safety is nominal relative to the vast amount of controlled
substances handled by manufacturers, distributors, importer/exporters,
and narcotic treatment programs. Adjusted Type B registrants are often
referred to as the wholesale population or bulk handlers of controlled
substances.

Therefore, the outcome measure, Adjusted Type B Registrant Compliant
Indicator, which is defined as the adjusted number of compliant Type B
registrants divided by the total number of adjusted Type B registrants,
provides a good measure of DEA's regulatory activity and effectiveness
among its registrants who pose a higher risk to public safety. This
performance measure tracks the percentage of the wholesale population or
"bulk handlers" of controlled substances who are compliant with the CSA
and it represents a key measure of the agency's effort to safeguard the
public.

General compliance among Diversion Control Program registrants is very
high. The potential explanation for such high levels of compliance is
rooted in the fact that each registrant functions as a business entity,
and as such, has federal, State and local licensing requirements that
criminal entities circumvent. When the Diversion Control Program first
reported its Adjusted Type B Compliance Indicator in the spring of 2003,
it reported FY 1999 compliance at 93.37 percent. Thus, only seven
percent of Adjusted Type B registrants were found to have had some CSA
compliance issue that warranted action by the Diversion Control Program.

The degree of noncompliance and the corresponding action taken by the
Diversion Control Program runs the gamut. However, at the most egregious
level, the violators are subject to administrative, civil, and criminal
sanctions. These sanctions include, but are not limited to, civil fines,
administrative hearings, letters of admonition, restricted use,
suspensions, surrender for cause, revocations, and denials. At the end
of FY 2004 and FY 2005, the Diversion Control Program reported 96.83
percent and 97.04 percent compliance respectively among its Adjusted
Type B registrants. In FY 2006, the Diversion Control Program reported
95.66 percent compliance among its Adjusted Type B registrants. The
Adjusted Type B Compliance Indicator is a "negative" or "inverse"
measure that demonstrates DEA's effectiveness in identifying the
diversion of controlled substances and applying sanctions against CSA
violators. While the goal is to ensure 98 percent CSA compliance among
its registrants, 95.66% compliance indicates that approximately 4% of
the registrant population have been identified and sanctioned for CSA
violations, and as such these violators have been either temporarily or
permanently denied access to controlled substances. This continues to
demonstrate a consistent and significant change over the past 3 year
period that is indicative of Diversion's increased vigilance and success
against the most prevalent threats (e.g., the diversion of OxyContin^®^
and its analogues) and other pervasive violators (e.g., illegitimate
online pharmacies).

The Diversion Control Program has established a Goal of 98 percent
compliance among its bulk handlers of controlled substances in DEA's FY
2003 -- FY 2008 Strategic Plan. Institutional knowledge among drug
enforcement officials has determined that 100 percent CSA compliance is
an unrealistic goal or expectation. Nevertheless, data from FY 2003
through FY 2006 clearly demonstrate the relatively small, temporal
fluctuations in the level of CSA compliance that can be expected as CSA
violators are identified, sanctioned and eventually removed from the
registrant population. The data also show that the combined enforcement
and regulatory efforts of the Diversion Control program successfully
ensure a high degree of compliance (\>95 percent) among its registrant
population. While it is anticipated that the compliance percentage will
continue to oscillate within 1 or 2 percent of the strategic goal as
more disruptions and dismantlements are accomplished, DEA expects to
ultimately achieve and maintain its goal of 98 percent CSA compliance.

[Impact on Drug Availability]{.underline}

In an effort to evaluate DEA's impact on drug availability, DEA is
currently piloting the *Significant Investigation Impact Measurement
System* (SIIMS) to assess the impact that the disruption or
dismantlement of major drug trafficking organizations has on a wide
range of variables such as drug availability, crime statistics and other
quality of life factors. Under SIIMS, DEA collects and analyzes
enforcement, public health and social service statistics before the
takedown of the targeted organization and for six months afterwards.
This information can be used by the Administrator to report on DEA's
performance to the Attorney General, Congress, and ONDCP.

[]{.mark}

In 2005, DEA completed an assessment of ***Operation Cookie Dough***,
which resulted in the closing of "script mill" pain clinics and
pharmacies, the arrest of three doctors and the owner for illegally
prescribing of controlled substances, and the seizure of \$10 million in
assets. The investigation, conducted by DEA New Orleans, concluded on
April 12, 2005. The SIIMS assessment identified the following impact
associated with ***Operation Cookie Dough***:

-   There were no seizures of hydrocodone, alprazolam, and carisoprodol
    by DEA New Orleans in the two months following the operation.

-   Domestic DEA seizures of hydrocodone decreased 53 per cent and
    alprazolam decreased 93 percent.

-   The Louisiana State Legislature passed new legislation making it a
    crime for a health care practitioner to prescribe or dispense
    controlled substances in a fraudulent manner and required all pain
    management clinics to be owned and operated by a physician certified
    in pain management.

[Additional Performance Measures]{.underline}

Additional performance measures have been included in the Performance
and Resources Table, which are indicative of the overall regulatory and
enforcement activity supported by the Diversion Control Program. These
additional measures are: 1) Number of Complaint, Criminal, & Scheduled
Investigations Worked; 2) Number of Administrative/Civil Sanctions
(Disrupt); 3) Number of Administrative/Criminal Sanctions (Dismantle);
4) List 1 Chemical Regulatory Investigations for CSA Compliance
Initiated as a Percentage of Non-Supervisory Diversion Investigators
On-Board; 5) Percentage of Adjusted Type B Regulatory Investigations for
CSA Compliance Initiated; 6) Number of Registrations Processed per FTE;
and 7) Percent of CSA and CDTA Registrations (Applications and Renewals)
Processed Electronically. Due to the overwhelming number of Type A
registrants (compared to Type B registrants), it is important to note
that Type A activity contributes the most to the abovementioned
performance measures. Note -- Additional Performance measures that were
categorized as either Drug-related or Chemical-related in previous
fiscal years have been consolidated in FY 2006. Also because, DEA
recently determined that the number of investigations "worked" versus
investigations "initiated" during a fiscal year is a much better
indicator of regulatory and enforcement activity, the corresponding
performance measure \[above\] has been changed to reflect cases against
which investigative work hours have been charged. Finally, the
performance measure for the Number of On-Line Controlled Substances
Ordering System/Electronic Prescribing of Controlled Substances
(CSOS/EPCS) Digital Certificates Issued has been eliminated from the
Performance and Resources Table in FY 2006 since it represented a
milestone measure of systems development and not a true performance
measure.

[Diversion Disruptions and Dismantlements]{.underline}

The Diversion Control Program operationally defines the disruption and
dismantlement of CSA and/or CDTA violators in the following manner:

[Disruption]{.underline} - Violators of the CSA and/or CDTA who, after
due process, receive Administrative/Civil sanctions. In other words,
these violators are temporarily denied access to controlled substances
and chemicals. These sanctions may include, but are not limited to:
civil fines; administrative hearings; letters of admonition; suspended
registrations; and, restricted registrations.

[Dismantlement]{.underline} - Violators of the CSA and/or CDTA who,
after due process, receive Administrative/Criminal sanctions. In other
words, these violators are permanently denied access to controlled
substances and chemicals. These sanctions may include, but are not
limited to: registrations surrendered for cause; revoked registrations;
and, registrations denied.

DEA fell short of its FY 2005 targets for the number of disruptions and
dismantlements imposed on both its chemical and drug
registrants/applicants. Disruptions among chemical and drug
registrants/applicants fell short of the FY 2005 targets by 37 percent
and 7 percent, respectively. Similarly, dismantlements among chemical
and drug registrants/applicants fell short of the FY 2005 targets by 32
percent and 7 percent, respectively. This is a result of DEA's increased
focus on criminal investigations involving the diversion of licit drugs
via the Internet and the manufacture of illicit drugs such as
methamphetamine, which lead to the arrest of individuals and/or entities
outside of the registrant population. Statistics on these "unregistered"
violators are not captured among the sanctions that are levied on
registrants/applicants, therefore causing an artificial under
representation of Diversion's performance. However, these activities are
captured in the performance measures that report the number of chemical
and drug complaint, criminal and scheduled investigations initiated.
This explanation is supported by the fact that the number of chemical
and drug complaint investigations exceeded their FY 2005 targets by 43
percent and 6 percent, respectively.

At the same time, the number of open diversion investigations is
decreasing as DEA focuses its resources on fewer, yet more complex
trafficking organizations, and the financial entities (money launderers,
financial institutions, etc.) that support them. Collaborative
enforcement efforts among federal, State, and local law enforcement
agencies and collateral increases in federal and State sponsored
legislation that target and close loop holes in the law that have been
exploited by chemical and drug diverters, have all but driven the most
egregious elements out of the registrant populations. Furthermore, the
heightened activity by DEA has had an added deterrent effect on
"would-be" violator applicants. For example, the overall chemical
registrant population has decreased by approximately 16 percent over the
past two years from a high of 3,386 in April 2003 to a low of 2,843 at
the end of FY 2005. As a result of all of these factors and the fact
that the Diversion Control Program fell short of the FY 2005 targets,
DEA has adjusted its targets for FY 2006 through FY 2008 as indicated in
the Performance and Resources Table for the following measures:

-   Number of Chemical Registrants and Applicants processed

-   Number of Administrative/Civil Sanctions (Disrupt) -- Chemical and
    Drug

-   Number of Administrative/Criminal Sanctions (Dismantled) -- Chemical
    and Drug

With the adjustment of its FY 2006 through FY 2008 targets in FY 2005
and the consolidation of its drug and chemical performance measures
during the third quarter of FY 2006, the Office of Diversion Control
reported 501 administrative/civil sanctions (disruptions) or 96% to
target (520) for FY 2006. Although Diversion failed to meet its FY 2006
target by a nominal margin, this year's result supports DEA's readiness
to set realistic, yet ambitious programmatic goal. On the other hand,
Diversion reported 711 administrative/criminal sanctions (dismantlments)
or 111% to target (640) and thereby exceeded its target for the same
period

It should be noted that as a direct result of DEA's mandate to pursue
the "ill gotten gains" or assets of traffickers and diverters of
controlled substances and levy more serious, permanent
administrative/criminal sanctions, the number of dismantlements has
dramatically increased. Given the abovementioned mandate, the number of
disruptions have also increased, but at a much slower rate. It is
anticipated that Diversion will continue to meet its annual targets for
both disruptions and dismantlements.

[Implementation of the E-Commerce and Modernization Customer Service
Initiatives]{.underline}

The E-Commerce Initiatives are being implemented to facilitate the
business-to-business electronic communications among DEA registrants and
the Office of Diversion Control. DEA registrants are businesses and
health care providers who use controlled substances in legitimate
commerce. This is a highly regulated field with laws and regulations
that require registrants to account for the transfer and use of
controlled substances purchased or produced. DEA's E-Commerce
Initiatives will allow registrants to document the exchange of drugs in
an electronic medium through CSOS. CSOS became operational on August 8,
2005. In addition, DEA is working to develop regulations and procedures
to provide for the electronic transmission of prescription information
through EPCS.

EPCS promises to directly impact prescription fraud by reducing the
opportunity for and ability of criminal elements to forge, alter, or
submit stolen prescriptions. The actual number of attempts to forge,
alter or submit stolen prescriptions is currently unknown, because most
attempts at passing forged, altered or stolen prescriptions are detected
at the pharmacy level. EPCS provides additional safeguards against
unwarranted and unauthorized use/access to the system. EPCS is projected
to be ready for implementation by the industry on or before the end of
CY 2008.

DEA's E-Commerce Initiatives are aligned with both DEA and DOJ's
strategic objectives to develop and implement an IT architecture that
provides common, standards-based infrastructure; ensures
interconnectivity and interoperability; and provides adequate safeguards
against unwarranted and unauthorized use of the systems. The E-Commerce
Initiatives directly support the President's Management Agenda and will
improve DEA's data quality, agency efficiency, and responsiveness to the
public in carrying out its mission of enforcing the CSA. Specifically,
it will:

-   reduce the paperwork burden on small businesses

-   reduce the opportunity for and ability of criminal elements to
    forge, alter, or submit stolen prescriptions;

-   provide authenticity of the prescribing or ordering party;

-   reduce processing time

-   increase overall security

Initially, the performance measure for the E-Commerce Initiative was the
Number of On-line CSOS / EPCS Digital Certificates Issued. In FY 2006,
with the implementation of CSOS and the anticipated delivery of EPCS,
this measure were removed from the Performance and Resources Table in FY
2006 since it represented a milestone measure of overall system's
development. However, because DEA is able to track the impact that the
E-Commerce and Modernization Customer Service Initiatives are having on
the registration process, specifically the reduction in the time
required to process new applications and renewals, it is able to assess
the added benefit of its service initiatives. For example, online access
to registration and order forms has significantly reduced the amount of
processing time for renewals from 6 weeks to 5 days.

In FY 2005, the Department mandated that DEA establish efficiency
measures that are associated with its core programmatic activities.
After considerable input from all of the program areas and rigorous
evaluation of the available data, DEA established the following two
Diversion Control efficiency measures:

-   Number of Registrations Processed per FTE

-   Percent of CSA and CDTA Registrations (Applications and Renewals)
    Processed Electronically

In FY 2005, Diversion Control reported 23,846 registrations processed
per FTE. In recognition of the savings and efficiencies achieved as a
function of its contractor positions, DEA attempted to adjust the
existing performance measure from the Number of Registrations Processed
per FTE to the Number of Registrations Processed per Position in its FY
2006 submission to the Office of Management and Budget. However, a
subsequent review of the workload indicated that measuring activity by
FTE versus position was more relevant for evaluating the processing of
registrations (applicant and renewal) and thereby more adequately
reflects the overall efficiency or savings achieved. Having made the
correction, Diversion reported 27,974 registrations processed per FTE
which represented a 17.3 percent increase over the previous year, but it
still fell short of the FY 2006 target of 29,000. Given that
observation, Diversion concluded that the projection of its FY 2006
target may have been overly ambitious due to the absence of sufficient
empirical data to support a more robust methodology for establishing
annual targets. As a result, Diversion has subsequently adjusted its
targets for FY 2007 and FY 2008 to 28,000 respectively as it attempts to
flesh out all of the potential factors and confounders which can be used
to develop a more robust methodology for projecting its out-year
targets.

Moreover, it is anticipated that the measures for FY 2007 and FY 2008
will continue to demonstrate more modest efficiencies of no more than
approximately two percent annually through FY 2008 which is Diversion's
justification for its prudent targeting for next two fiscal years which
takes into account the potential fluctuation in its workforce.

In addition, Diversion reported that 40.9 percent of its registrations
were processed electronically in FY 2005. At the conclusion of FY 2006,
56 percent of Diversion Control's registrations were processed on-line
and thereby exceeded it target by 12 percent which also represented an
increase of approximately 37% over the previous years mark. It seems
evident that more and more of the registrant population are benefiting
from the convenience of on-line registrations which is also encouraging
from the stand point of efficiency and cost savings. While the Diversion
Control program anticipates that it will reach its targets for FY 2007
and FY 2008, it has decided to increase those targets to 57 and 58
percent, respectively because of the convenience and customer friendly
environment it provides to its on-line users and because it recognizes
an increased level of comfort with on-line applications as well as an
inherent level of technical sophistication amongst its emerging
registrant population.

**b. Strategies to Accomplish Outcomes**

Diversion Control Program's mission is to reduce the illegal use/abuse
of pharmaceutical controlled substances and chemicals within the United
States, ensure that adequate supplies of pharmaceutical controlled
substances and chemicals are available to meet legitimate medical,
scientific, and industrial needs, and prevent, detect, and eliminate the
diversion of these substances to illicit markets.

To achieve this mission, the Office of Diversion Control does the
following:

-   Identifies and targets those responsible for the diversion of
    pharmaceutical controlled substances and chemicals through
    traditional investigative and cyber crime initiatives; and,

-   Supports the DEA Diversion Control registrants with improved
    technology, including E-Commerce and Modernization Customer Service
    Initiatives.

The following strategies outline DEA's plan to achieve these objectives:

**1. Investigate and prepare for prosecution, violators of chemical and
pharmaceutical controlled substances laws at the international,
national, State, and local levels while maintaining cooperation,
support, and assistance from the regulated industry.**

The production of methamphetamine continues to be a major problem
throughout the United States. DEA's success in eliminating the
importation of bulk pseudoephedrine through enforcement efforts such as
the Letter of No Objection Program and the issuance of Orders to Show
Cause has decreased the number of List I chemical registrants and
removed a number of distributors of "grey market" products from the
marketplace. Consequently, the number of super labs seized in the U.S.
has decreased, and the operators, mostly Mexican nationals, have shifted
their production to Mexico. The remaining small toxic labs have begun to
rely heavily on obtaining cold and asthma drugs, the requisite precursor
List I chemicals, from traditional outlets such as chain drug stores,
big box stores and other retail facilities.

In order to thwart increased production of methamphetamine and further
deny would be traffickers and diverters access to these precursor
substances, Congress passed the USA Patriot Act Reauthorization. The
reauthorization includes the Combat Methamphetamine Epidemic Act of 2005
(CMEA). The retail provisions of the CMEA, which requires all regulated
sellers of over-the-counter medications containing pseudoephedrine,
ephedrine, and phenylpropanolamine to complete a required training and
self-certification process, went into effect across the United States on
September 30, 2006. Ephedrine, pseudoephedrine, and phenylpropanolamine
are common ingredients in cough, cold, and allergy products and are also
used in the illicit manufacture of methamphetamine or amphetamine.

Retail outlet are now required to keep all non-prescription products
containing pseudoephedrine, ephedrine, and phenylpropanolamine behind
the counter or in a locked cabinet, and consumers are required to show
proper identification and sign a logbook for each purchase. The logbook
contains the customer's name, address, date and time of sale, name and
quantity of the product sold, and the purchaser's signature. The Act
also implements daily sales limits and monthly purchase limits of these
products.

In addition to these new requirements, in order to comply with federal
law, regulated sellers are mandated to complete a self-certification
process that includes training their employees on the new regulations
and procedures. The final stage in the self-certification process
requires regulated sellers to complete an on-line application on the DEA
Diversion Web Site. Once this application is submitted, DEA will send a
confirmation email, which will generate a self-certification
certificate.

Some aspects of the Combat Methamphetamine Epidemic Act of 2005 have
already become effective. On April 8, 2006, the following requirements
became effective:

-   The daily sales limit of 3.6 grams per purchaser, regardless of the
    number of transactions.

-   The requirement that all nonliquid forms (including gel caps) of
    products containing pseudoephedrine, ephedrine, or
    phenylpropanolamine be packaged in blister packs, each blister
    containing not more than two dosage units, or where blister packs
    are technically not feasible, products may be packaged in unit dose
    packets or pouches.

-   The requirement that persons distributing products containing
    pseudoephedrine, ephedrine, or phenylpropanolamine through the U.S.
    Postal Service or private or commercial carriers must confirm the
    identity of the purchaser prior to shipping the product.

The retail provision outlined in the regulation became effective
September 30, 2006. Congress specified this date in the statute itself,
and the DEA has no discretion regarding its implementation. DEA is aware
of the short period of time available for retailers to come into
compliance with the regulations and as such, it continues to work with
industry to provide compliance assistance to ensure that retailers are
able to sell covered medications in accordance with the requirements of
the law. DEA has established both online and customer service resources
to answer questions and to help guide retailers through each step of the
self-certification process. CMEA has provided significant tools to
enhance law enforcement efforts against the production and distribution
of methamphetamine both domestically and internationally.

The Dangerous Drug and Chemical Section within the Office of Diversion
Control has initiated and actively participated in several ongoing,
multi-national operations to prevent, detect, and eliminate the
diversion of chemicals and other precursor substances across global
markets. On the Domestic front, the Dangerous Drug and Chemical Section
has liaison and outreach programs with the chemical industry to improve
cooperation and compliance with new and on-going initiatives implemented
to reduce the amount of diversion.

The availability of List I chemicals on the Internet has provided
chemical traffickers an almost unlimited supply of chemicals necessary
to manufacture illicit substances. This trend almost mirrors the
availability of pharmaceutical products on the Internet. In order to
meet this challenge, the Dangerous Drug and Chemical Section needs to
aggressively identify and shut down these Internet sites. With new
technically advanced tools like WebCrawler, and system enhancements to
the Controlled Substances Information System (CSIS II) and the
Automation of Reports and Consolidated Orders System (ARCOS), the Office
of Diversion Control will have greatly improved its ability to detect,
investigate, and apprehend CSA and CDTA violators.

Diversion Control plans to focus its deployment of Diversion
Investigator positions to domestic field offices in areas experiencing
dramatic increases in clandestine methamphetamine production. Diversion
Investigators are uniquely qualified to assess production capabilities,
assess chemical trafficking patterns, and develop leads on individuals
and businesses engaged in the diversion of chemical precursors.

Internationally, with the success of ***Project Prism***, Diversion
Control is actively engaged in persuading both Taiwan and The People's
Republic of China to provide Pre-Export Notifications (PENs) for
shipments of pharmaceutical preparations containing ephedrine and
pseudoephedrine.

At the same time, Diversion Control is working to increase its efforts
to conduct and improve overseas liaison by providing international
chemical control training to foreign law enforcement officials. The
resultant trainings have enabled our foreign counterparts to improve
their ability to detect and identify clandestine shipments of banned
chemical imports thereby denying source country traffickers the
requisite precursors and reagents necessary to refine and produce
illegal drugs.

**2. Enforce the provisions of the CSA as they pertain to import/export,
manufacture, distribution and dispensing of legally produced controlled
pharmaceuticals and chemicals by creating a strong deterrence against
the diversion of these substances through the development and
implementation of new technologies (e.g., cyber crime initiatives) that
will allow for the rapid and effective detection of potential diversion
via the Internet.**

Prescription Drug Monitoring Programs (PMPs) assist States in
identifying diversion trends as they emerge. State PMPs collect
prescription information electronically from pharmacies and analyze it.
This data is then provided to State agencies to assist in the
identification of "doctor shoppers" and over-prescribers, which can
result in effective investigations. In addition to law enforcement and
regulatory activities, the information collected and analyzed by a State
PMP may be utilized to assist in identifying patients whose drug usage
is increasing and who may benefit from a referral to a specialist or to
substance abuse treatment; to assist prescribers in making appropriate
treatment decisions for their patients; and to assist pharmacists in
providing pharmaceutical care.

DEA's goal is to work with all interested parties to identify the best
means available to facilitate the establishment or enhancement of PMPs
to ensure that prescription data pertaining to controlled substances is
collected from the largest possible segment of pharmacies and other
dispensers in the most cost-effective manner while assuring patients and
their healthcare providers that these programs do not negatively impact
the legitimate practice of medicine and that the confidentiality of
collected data will be protected.

A concerted effort is being made by the Integrating Justice Information
Systems (IJIS) Institute, in cooperation with State agencies and the
DEA, to develop a technological solution that will facilitate
information sharing between State PMPs. The data elements currently
collected by State PMPs would have to be standardized and federal
legislation would have to be implemented to authorize a national PMP.
Data integration, data analysis, and the tracking of results would be
very challenging on a national level due to the volume of data collected
and the limited resources available on a national level for
investigations and educational outreach programs. The legal and
logistical complexities of implementing a national PMP database make
such an effort prohibitive in the near future. To facilitate information
sharing between State PMPs, the National Alliance of Model State Drug
Laws worked with several States and the DEA to develop a *Model
Interstate Agreement* for the Sharing of Information among State PMPs.

The Department of Justice is actively promoting PMPs that help prevent
and detect the diversion and abuse of pharmaceutical controlled
substances, particularly at the retail level where no other mandated
automated information collection system exists. As of August 22, 2006,
33 States have enacted legislation that requires PMPs.

To further its efforts against the diversion of increasingly potent
opioid-based, pain medications, including OxyContin^®^ and Vicodin^®^,
DEA implemented the National Action Plan in April 2001.

The Internet is rapidly becoming a more popular source for the sale and
distribution of pharmaceuticals and chemicals. Many legitimate online
pharmacies make it easier and more convenient for consumers to obtain
the pharmaceutical controlled substances they need. However, by using
the Internet, violators are able to purchase pharmaceuticals without a
valid prescription and chemicals without the appropriate DEA
documentation. They may even bypass the safeguards to protect consumers
against the harmful use of controlled substances and obtain drugs that
are not legal in the United States. This undermines the safety and
health of the consumer and increases the potential for diversion of
pharmaceutical controlled substances.

In October 2004, the Online Investigations Program (OIP) was transferred
to the Office of Special Intelligence (NS) and became operational in
March 2005. The OIP uses a proprietary application that enables DEA
personnel to conduct "Web Checks". This process involves a search of the
World Wide Web in the public domain to locate websites, identify
information of interest and store the information in a data warehouse.
The OIP enhances DEA's ability to systematically target, investigate,
and ultimately prosecute the owners, operators, and others who illegally
profit from rogue pharmacies. The OIP is accessed via requests made
through the Pharmaceutical and Chemical Internet Intercept Coordination
Section (OSI) of SOD. OSI, which was created in November 2004 to
coordinate pharmaceutical and chemical Internet intercept
investigations, acts as a liaison between the field and NS by forwarding
requests for information and returning completed products to the field.
Further, the basic role of OSI is to provide investigative direction,
deconfliction, and support to the field as it pursues the highest level
of pharmaceutical and chemical Internet traffickers. OSI assists the
field to identify domestic and foreign websites, email addresses, and
phone numbers of major pharmaceutical and chemical trafficking
organizations. In addition, OSI provides case coordination to ensure
that investigations have the greatest impact on targeted organizations.

From March 11, 2005 through September 30, 2006, Web Checks have been
performed on 2,452 website and email addresses in response to 471
requests from SOD. In addition, from March 11, 2005 through September
30, 2006, Formal Products have been performed on 693 website and email
addresses in response to 30 formal requests from SOD.

In addition, DEA plans to update the CSIS II developed in 1988. CSIS is
a law enforcement-oriented, encyclopedic database of information on over
1,500 controlled substances and the chemicals associated with their
manufacture.

**3. Coordinate E-Commerce and Modernization Customer Services
Initiatives with other Federal, State and local law enforcement and
regulatory agencies, as well as developing and implementing a
fully-integrated, IT architecture necessary for external E-Commerce
application, which requires interaction with or standards for regulated
industries.**

Through the E-Commerce Initiatives, DEA will satisfy the requirements
set forth in the Government Paperwork Elimination Act of 1998 by
implementing CSOS and EPCS. In conjunction with the deployment of CSOS,
DEA is developing an electronic version of the DEA order form that will
offer a similar or higher degree of security and integrity than the
current paper version. The DEA order form is legally mandated for the
purchases of all Schedule II controlled substances, except by the
consumer via prescriptions. The EPCS will enable the safe electronic
transmission of prescription information from the physician to the
pharmacist***.***

[CSOS]{.underline} - The final regulations to implement CSOS were
published and became effective June 1, 2005. CSOS became operational
August 8, 2005. In the first quarter of FY 2007 (October - December
2006), 5,167 digital certificates were issued, bringing the cumulative
total (August 2005 - December 2006) number of digital certificates
issued to 28,024.

[EPCS]{.underline} - DEA is currently working with OMB and the Dept. of
Health and Human Services to resolve outstanding concerns associated
with the Notice of Proposed Rulemaking (NPRM), which introduces the
regulations for implementation of Electronic Prescribing of Controlled
Substances (EPCS). DEA is also trying to develop one or more pilot
projects to test the feasibility and applicability of the proposed
rules. Work on the system infrastructure and the identification of
subordinate or cross-certification authorities is expected to lag behind
the regulatory process due to technological challenges. Even so, EPCS is
projected to be ready for implementation by the industry on or before
the end of CY 2008.

Other DEA reengineering and modernization efforts include:

-   Enhancing IT systems to link the current, established call center
    with an Oracle CSA database that will interface with an Interactive
    Voice Response telephone system. CSA application forms received
    electronically will eliminate manual data entry, thus reducing data
    entry error rates, enabling support staff to provide more timely
    registration and re-registration, allowing for more expedient action
    on routine application processing, and providing a monitoring and
    training system to ensure the optimum in customer service to the
    registrant community. These efforts are ongoing.

-   Ongoing effort to enhance ARCOS and the CSA Program. This will allow
    DEA to modernize the registration system, provide registrants with
    the ability to report mandated information through electronic data
    interchange, maintain the Diversion Control website, which is a
    major conduit for information to the regulated communities, develop
    and enhance a network with State and local regulatory and
    enforcement counterparts, and establish a data warehouse of all
    diversion information for use by field investigators.

**4. Ensure adequate and interrupted supply of controlled substances and
chemicals to meet legitimate medical, scientific and industrial needs
without creating an oversupply.**

Establishing quotas and monitoring imports of narcotic raw materials are
critical to ensuring an adequate and uninterrupted supply of legitimate
medicines containing controlled substances without creating an
oversupply. Developing meaningful ways to measure this is extremely
difficult. Quotas and imports are based on information provided by
industry (e.g. import permits and declarations, sales, distributions,
inventory, manufacturing schedules, losses, and product development
needs) and corroborated by consumption of these substances (e.g.
prescriptions, distributions to retail levels, and input from the
Federal Drug Administration (FDA) on new products and indications).
Quota and import estimates for individual substances can either go up or
down in a given year, depending on any number of factors.

On October 22, 2004, the President signed into law the Anabolic Steroid
Control Act of 2004 which added 59 steroids, some of which are currently
sold in the dietary supplement market, into Schedule III of the CSA. To
date no seizures of the abovementioned 59 eligible steroids or analogues
has been reported.

Moreover, Diversion Control continues to provide scientific and
technical support in the following manner:

-   Compiling, analyzing and reporting specific information on the
    production, distribution, consumption, and estimated needs of all
    narcotics, psychotropic substances, chemicals and their
    preparations;

-   Providing general scientific guidance and support to DEA, State and
    local agencies and international organizations regarding drug and
    chemical control issues and the biological sciences;

-   Examining all CI research protocols;

-   Serving as or identifying appropriate expert witnesses in criminal,
    administrative and other proceedings;

-   Identifying information needs, initiating actions/studies, and
    alerting enforcement and public health entities on newly identified
    patterns of use/abuse on controversial substances like Anabolic
    Steroids in conjunction with the National Institute on Drug Abuse
    (NIDA) and the National Forensic Laboratory Information System
    (NFLIS -- the NFLIS database contains over 5 million entries and
    also including STRIDE data from the DEA lab system); and,

-   Preparing periodic reports mandated by treaties.

To achieve these strategies and objectives directly related to DEA's
Strategic Plan, DEA requires programmatic enhancements to the Diversion
Control decision unit.

[Program Increases]{.underline}

**Item Name: Online Diversion Investigations**

Budget Decision Unit: DCFA

Strategic Goal & Objective: Goal II; Objective 2.2

Organizational Program: Special Operations Division, Office of
Investigative Technology, Digital Evidence Laboratory, and Chief Counsel

Program Increase: Pos: [12]{.underline} Agents: [0]{.underline} FTE:
[6]{.underline} Dollars: [\$4,011,000]{.underline}

Description of Item

DEA requests 12 positions and \$4,011,000 (including \$3,005,000 in
non-personnel funding) to support online diversion investigations. This
enhancement provides operational funding, improved Internet intercept
capabilities, computer forensics support, and specialized legal support.

Justification

The illicit trafficking of controlled pharmaceuticals has been
facilitated by the wide use of the Internet and the anonymity it
provides. The existence of readily available drugs on the Internet is a
great concern because of the potential for abuse and the potential
safety issues that revolve around what is largely an unregulated
process. A July 2006 DOJ OIG report states, "The increase in the
diversion of controlled pharmaceuticals has coincided with the emergence
of the Internet as a significant source for diverted pharmaceuticals.
Hundreds of Internet pharmacies have been established through which
large amounts of pharmaceuticals can be easily purchased with a credit
card and without a prescription."[^49] Much of the problem revolves
around third-party businesses operating websites that facilitate a
doctor's ability to write and a pharmacy to fill numerous prescriptions
without a face-to-face visit.

The growing problem of drug trafficking over the Internet was
highlighted in ***Operation Cyber Chase***, which culminated on April
20, 2005. This investigation targeted international Internet
pharmaceutical traffickers who had operations in the United States,
India, Asia, Europe, and the Caribbean. This network shipped controlled
substances to buyers of all ages across the globe, and used over 200
Internet websites to take orders. Since July 2003, the network
distributed approximately 2.5 million dosage units per month of
controlled substances (including Vicodin^®^), anabolic steroids, and
amphetamines. This investigation has resulted in 26 arrests, the seizure
of 5.8 million dosage units of Schedule II -- IV controlled substances,
105 kilograms of Ketamine, and \$8.6 million in U.S. currency.

In December 2005, DEA announced the results of ***Operation Gear
Grinder***, which targeted eight major steroid manufacturing companies,
their owners, and their trafficking associates. The Mexico-based
organizations produced animal steroids that were diluted for human
consumption. The traffickers utilize veterinary websites and e-mail
accounts to sell the steroids to customers without a medical evaluation
or valid prescription. The steroids were smuggled into the United States
via couriers to shipping facilities which in turn shipped the steroids
via U. S. Mail, FedEx, and UPS directly to customers world-wide. Alberto
Saltiel Cohen, the majority owner of the three largest anabolic steroid
manufacturing companies in Mexico, was arrested upon his arrival in San
Diego.

For FY 2008, DEA request the following enhancements to support Internet
pharmaceutical and chemical diversion investigations:

*[SOD Support of Online Diversion Investigations]{.underline}*: DEA
requests \$1,250,000 in non-personnel funding for DEA's Special
Operations Division's (SOD) support of online diversion investigations.
SOD provides coordination and operational support for
multi-jurisdictional and high-level diversion operations. SOD support is
critical during online pharmacy investigations such as ***Operation
Cyber Chase***, which targeted international Internet pharmaceutical
traffickers in the United States, India, Asia, Europe, and the
Caribbean. Drug traffickers are using an array of the latest
communication technology devices, which requires coordinated phone and
Internet Title III investigative techniques to properly build a case
against them. Additional resources will allow SOD to support increases
in Internet pharmaceutical investigations. In just one year,
SOD-supported Internet pharmaceutical investigations have increased by
approximately 200 percent, from 16 in FY 2004 to 49 in FY 2005. This
additional funding will be used for travel, equipment, technical costs
associated with T-III intercepts, and other operational and
investigative requirements that are unique to online diversion
investigations.

*[Permanent Connectivity of DEA Field Divisions to Major
ISPs]{.underline}*: DEA requests \$1,500,000 in non-personnel funding to
enable DEA's Office of Investigative Technology to connect DEA Field
Divisions to major Internet Service Providers (ISPs). In order to
intercept e-mail or other Internet communications for Pen Traps and
Title III investigations, DEA must establish a connection to the
target's ISP. Currently, a new connection must be made at an ISP for
each court order. The new network will allow DEA to retrieve Internet
communications data from major ISPs during Pen Traps and Title III
intercepts conducted during Diversion investigations. A permanent,
secure network will facilitate court order requests, minimize the time
required to implement each intercept, and eliminate the need for
repetitive travel, and associated costs, to install network intercept
equipment. In addition to intercepting targeted Internet communications
used by narcotic trafficking organizations, this network supports a
major Diversion initiative by targeting illegal online pharmacies.

*[Computer Forensics]{.underline}*: DEA requests \$766,000 (including
\$255,000 in non-personnel funding) and 7 positions to provide evidence
collection and examination support to the growing number of Internet
diversion investigations being carried out by DEA's Digital Evidence
Laboratory. The requested non-personnel resources will fund a portion of
a storage area network (SAN) installation that is necessary for the
timely analysis of evidence obtained during online pharmacy
investigations. One-third of cases submitted to the computer forensics
laboratory are diversion cases. Investigations involving Internet
communications and remote server data storage are technically complex
and are often time-sensitive, requiring deployment at multiple locations
simultaneously.

DEA's Digital Evidence Laboratory examiners played an important role
during ***Operation Cyber Chase*** by examining seized servers,
databases, and other computer systems. Findings provided by the
examiners to case agents included customer database information and web
page content which included scheduled drugs. This information helped the
Philadelphia Field Division attain guilty pleas for six defendants and
guilty verdicts for two other defendants. During another online pharmacy
investigation, ***Operation Pharmacom***, over 2,000 work hours were
spent analyzing over 80 exhibits. One exhibit contained 30 servers
containing approximately 3 terabytes of data. Computer forensic
examiners recovered gigabytes of data containing patient information,
e-mail correspondents, financial information, and other evidence.

Without the additional staff and resources, DEA will experience
significant delays in supporting online pharmacy investigations and
prosecutions. The current backlog for exhibit review averages 4 months,
with the oldest case being 5 months behind schedule. As of December 29,
2006, 81 cases (434 exhibits) remain in the backlog. In FY 2006, digital
evidence exhibit submissions increased 96 percent.

DEA utilizes Immediate Suspension Orders when attacking illegal Internet
pharmacies. The use of these Orders requires DEA and the government to
provide due process to these businesses. As such, it is imperative that
the analysis and forensic examination of computers and associated data
is done expeditiously. If it is not the prosecution of these cases and
the ability to suspend DEA registrations will be jeopardized.

*[Legal Support:]{.underline}* DEA requests \$495,000 and 5 positions to
provide legal clarification and support for online diversion
investigations. While DEA does not directly prosecute cases, it does
provide litigation support for Internet prosecutions, and it issues
Orders to Show Cause and Immediate Suspensions (OTSCs/ISs) to revoke DEA
registrations of physicians and pharmacies involved in illicit Internet
operations. As Internet-related cases increase, so does the number of
OTSCs/ISs administrative proceedings. During a recent online pharmacy
investigation, ***Operation CyberRX***, DEA attorneys supported agents
and diversion investigators from multiple field divisions and Assistant
United States Attorneys from several jurisdictions. This operation led
to the issuance of 11 ISs of DEA registrations and issuance of an
additional 33 OTSCs. Based on the ***Operation CyberRx*** workload and
the volume of Internet cases currently under investigation, DEA
anticipates that Internet cases will increase the case load of attorneys
supporting diversion investigations by approximately 75 percent for the
foreseeable future.

Additionally, the rise of Internet investigations has led to increased
demand for legal support in other areas. Because of the sophisticated
technologies involved, and the international nature of the Internet and
rogue Internet pharmacy operations, Internet investigations raise
complex legal issues involving privacy, search and seizure, information
collection and sharing, investigative authority, and international law.
Currently, DEA does not have enough attorneys to support the
exponentially expanding rise in Internet prosecutions.

Impact on Performance (Relationship of Increase to Strategic Goals)

Diversion Control Program performance measures include the number of
administrative, civil, and criminal sanctions taken against DEA
registrants and non-registrants who illegally divert controlled
substances or listed chemicals. More and more Controlled Substance Act
(CSA) violations are occurring through websites or with the assistance
Internet-based communications. DEA requires sufficient Internet
capabilities in order to locate, investigate, and take administrative,
civil, or criminal action against these CSA violators.

As DEA increases online pharmacy and other Internet-based diversion
investigations, more equipment, training, and support are needed to
sustain this effort. Internet investigations, by nature, are complex and
multifaceted. Only recently have tools that effectively address the
criminal activity on the Internet become available to law enforcement,
and DEA needs to capitalize on these improvements in technological
investigations to ensure agency-wide coordination of criminal and
diversion enforcement activities. Even with these tools, Pen Traps and
Title IIIs of e-mails and Internet traffic result in the collection of
large amounts of data that require extensive resources for data
minimization and analysis.

During ***Operation CyberRX***, Pen Trap efforts resulted in the
collection of nearly 7 gigabytes of packet data (IP headers) and e-mail
header data. This is equivalent to nearly 280,000 pages of information.
The Title III portion of the operation, when all the data was collected
(not just the headers), resulted in the collection of approximately 29
gigabytes of IP and e-mail data. This is equivalent to approximately 1.2
million pages of data. To date, ***Operation CyberRX*** has been the
largest collection of data done on an Internet pharmacy website, and it
is anticipated that the volume of this collection may be an indicator of
the volume of data that will be collected in future Internet
investigations.

DEA has been aggressively investigating and prosecuting individuals
involved in the illegal sale of prescription drugs over the Internet.
Over the past year, DEA has increased the number of Internet diversion
investigations, and these efforts have produced positive results.

-   During FY 2006, DEA initiated 96 online pharmaceutical and steroid
    investigations. This is an increase of 7 percent from FY 2005 when
    90 online pharmaceutical and steroid investigations were initiated.

-   In FY 2006, 14.7 percent of Diversion Control Program (DCP) case
    work hours were for Internet cases. This is an increase of 26.7
    percent from FY 2005 when 11.6 percent of DCP case work hours were
    for Internet cases.

-   In FY 2006, as a result of Internet investigations, DEA seized
    nearly \$29 million in cash, bank accounts, property, and
    computers.[^50]

It is anticipated that the Internet-related caseload will continue to
increase as more drug trafficking organizations establish an online
presence, or continue to further expand their online activities. It is
imperative that DEA remain at the forefront of the latest Internet
technology and training in order to address the increasing caseload. It
is also important that DEA continue to use the latest intelligence
gathering techniques to address the demands of Internet-related
investigations already underway.

Computer forensics support is vital to online pharmacy investigations.
Since FY 2003, the number of cases submitted to DEA's Digital Evidence
Laboratory has remained fairly constant. However, a larger number of
exhibits with a larger amount of data are being submitted for each case.
In addition, the percentage of diversion cases submitted for analysis
continues to grow. Diversion case submission to the lab increased by 28
percent between FY 2004 and FY 2005, and 57 percent in FY 2006. The
following graph illustrates the number of diversion, enforcement, and
Office of Professional Responsibility (OPR) cases submitted to the
Digital Evidence Lab:

![](media/image34.wmf){width="5.114583333333333in"
height="2.9270833333333335in"}

These enhancements will allow DEA to address current caseload
requirements as well as future anticipated growth in this rapidly
expanding field. Moreover, DEA will expand its coordination
capabilities, centralize important functions currently done on an
individual case or division basis, and enhance the investigative focus
on disruption and dismantlement of major trafficking organizations.
These investments in technology and staffing will save DEA from future
financial burdens of centralizing functions and addressing investigative
shortcomings as drug traffickers continues to expand their operations
through the Internet.

**Funding**

> ![](media/image35.wmf){width="5.998611111111111in"
> height="5.258333333333334in"}

**Item Name:** **Conversion of Diversion Investigators**

Budget Decision Unit: DCFA

Strategic Goal & Objective: Goal II; Objective 2.2

Organizational Program: Diversion Control Program

Program Increase: Pos: [0]{.underline} Agents: [0]{.underline} FTE:
[0]{.underline} Dollars: [\$11,588,000]{.underline}

[Description of Item]{.underline}

Pending approval by the Office of Personnel Management, DEA will begin
converting Diversion Investigators (DI) to criminal investigative series
positions. The conversion process will be phased in between FY 2007 and
FY 2016. DEA requests \$11,588,000 to fund the FY 2008 cost of DI
conversions.

[Justification]{.underline}

The current DI workforce assigned to DEA's Diversion Control Program
performs periodic audits and inspections of DEA registrants, such as
pharmacies, physicians, and wholesale or retail drug outlets, to assure
compliance with regulatory requirements for the handling of controlled
substances. As diversion started occurring at the retail level, the
majority of DI investigations are initiated as a result of intelligence
concerning actual diversion rather than through cyclical or unscheduled
audits. Between 65 and 75 percent of the DI investigations are
criminal/complaint investigations.

DIs are limited in the type of activities they can perform. When
front-line law enforcement activity is required during a diversion
investigation, Special Agents must become involved to perform the
enforcement functions needed to develop evidence of criminal violations.
Such a requirement can result in delays in developing cases for
prosecution, and quality of the investigation can suffer because Special
Agents may lack experience in conducting diversion investigations.

DEA believes that the best use of Diversion Control Program resources
would be to establish a hybrid occupational series. The duties of the
current DI position include maintaining liaison with all levels of the
drug and chemical registrant population, conduction regulatory
investigations, and conduction criminal investigations with the
assistance of Special Agents. The new series would combine key aspects
of the DI (GS-1801) and Criminal Investigator (GS-1811) positions. The
new hybrid position would be a law enforcement officer position with law
enforcement duties and benefits. The expertise required of the hybrid DI
position includes knowledge of the CSA, criminal investigative
techniques, arrest authority, and the ability to give Miranda warnings,
issue search warrants, and conduct undercover work.

Once the new series is established, qualified GS-1801s would be
converted to the new hybrid Diversion Investigator series, and future
GS-1801 vacancies would be filled using the new hybrid DI position. Over
the next 10 years, DEA projects the number of hybrid DI positions to be
approximately 472. It is expected that only 18 to 20 percent of the
current DI workforce would both qualify and be eligible for placement in
the new hybrid positions. Those who chose not to (or are ineligible to)
move to the new series would remain in the GS-1801 series performing
regulatory work. To be eligible to convert to the new hybrid position,
employees must meet the maximum entry of a law enforcement officer
position, which the Department established as age 37. Additionally,
employees must meet the physical requirements for law enforcement
officers.

In the first year of implementation, or FY 2007, 70 of the current
on-board DIs would be converted to the new series, with preference given
to those who are with one year of their 37^th^ birthday. The DIs would
be required to attend one of the two law enforcement officer training
courses during the fourth quarter of FY 2007. In FY 2008, an additional
42 on-board investigators plus 40 new DIs would be hired in the new
series. In FY 2009 and beyond, 40 DIs would be hired in the new series
based on the historical attrition of DIs.

The Justice Management Division's Budget Staff, in conjunction with DEA,
determined the overall costs of implementing the new series, including
the impact on the Diversion Control Fee Account. The total supplemental
cost to hire DIs in the new series is approximately \$13 million over FY
2007 and FY 2008. This enhancement funds the FY 2008 cost of DI
conversions. Hybrid DI/law enforcement positions will require additional
funding for law enforcement pay, LEAP, and law enforcement benefits. In
addition, converted positions will require law enforcement training and
the proper supplies and equipment to conduct investigations.

[Impact on Performance (Relationship of Increase to Strategic
Goals)]{.underline}

Diversion Control Program performance measures include the number of
administrative, civil, and criminal sanctions taken against DEA
registrants and non-registrants who illegally divert controlled
substances or listed chemicals. Between 65 and 75 percent of the DI
investigations are criminal/complaint investigations. Law enforcement
authority is necessary to conduct criminal diversion investigations and
ultimately take criminal sanctions against those violating the law.

**c. Results of Program Assessment Rating Tool (PART) Reviews**

Please refer to page 8 in the Overview.

> **This page intentionally left blank**

[^1]: FTE amount does not include an anticipated 1,448 reimbursable FTE
    (including 1,067 Special Agents) for FY 2008.

[^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.

[^3]: A dismantlement occurs when the organization's leadership,
    financial base, and supply network are destroyed, such that the
    organization is incapable of operating and/or reconstituting itself.

[^4]: RPOTs operate domestically and pose a major threat to a particular
    region(s) of the United States. The RPOT lists are created annually
    by the OCDETF member agencies as part of the regional strategic
    plans submitted by each of the nine OCDETF regions. The first RPOT
    lists for the nine OCDETF regions were developed in November 2002.

[^5]: While there are 46 CPOTs on the FY 2007 CPOT list, 48 individuals
    are included in the number of CPOTs as 2 targets are brothers.

[^6]: Information from El Paso Intelligence Center (EPIC) Clan Lab
    Seizure System (CLSS). The number of super labs seized in the U.S.
    has dropped from 143 in CY 2002, to 35 in CY 2005.

[^7]: U.S. Department of Justice, National Drug Intelligence Center.
    National Drug Threat Assessment (2006).

[^8]: National Commission on Terrorist Attacks. [The 9/11 Commission
    Report: Final Report to the National Commission on Terrorist Attacks
    upon the United States]{.underline}. W.W. Norton & Company (2004).
    Page 80.

[^9]: The PART's four sections include: Program Purpose and Design,
    Strategic Planning, Program Management, and Program Results.

[^10]: Executive Office of the President. (2005). [FY 2006 Budget:
    Analytical Perspectives]{.underline}.

[^11]: In its January 2003 report, [Major Management Challenges and
    Program Risks for the Department of Justice]{.underline}, the
    Government Accountability Office (GAO) acknowledged DEA's
    significant progress and commitment to developing measurable
    performance targets for reducing illegal drugs.

[^12]: Executive Office of the President. Office of National Drug
    Control Policy. (2005). [National Drug Control Strategy
    2005]{.underline}.

[^13]: Current drug use means use of an illicit drug during the month
    prior to the NSDUH survey interview.

[^14]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration (2006). [Results from the 2005
    National Survey on Drug Use and Health: National
    Findings]{.underline}.

[^15]: Executive Office of the President, Office of National Drug
    Control Policy. (2004) [The Economic Cost]{.underline} [of Drug
    Abuse in the United States, 1992-2002]{.underline}.

[^16]: In CY 2003, a total of 28,723 persons died of drug-induced causes
    in the United States. The category "drug-induced" includes not only
    deaths from dependent and nondependent use of drugs (legal and
    illegal use), but also poisoning from medically prescribed and other
    drugs. It excludes unintentional injuries, homicides, and other
    causes directly related to drug use. Also excluded are newborn
    deaths due to mother's drug use. Source: Centers for Disease Control
    and Prevention, "Deaths: Final Data for 2003," [National Vital
    Statistics Report]{.underline}, Vol. 54, No. 13, April 19, 2006.

[^17]: DEA's Enforcement-Based Domestic Drug Threat Assessment map
    provides a snapshot, as of July 2006, 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),
    and information on PTOs. This assessment identifies the primary
    illicit drug distribution patterns and the major organizations
    involved, as identified through DEA enforcement and intelligence
    collection activities.

[^18]: 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.

[^19]: "Super labs" are those labs that are capable of producing at
    least 10 pounds of methamphetamine per cycle.

[^20]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration. (2006). [Results from the
    2005 National Survey on Drug Use and Health]{.underline}.

[^21]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration. (2002). [National Household
    Survey on Drug Abuse: Vol 1. Summary of National
    Findings]{.underline}.

[^22]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration. [Detailed Emergency
    Department Tables from DAWN: 2004]{.underline}. April 2006.

[^23]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration. (2006). [Results from the
    2005 National Survey on Drug Use and Health]{.underline}.

[^24]: Ibid.

[^25]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration. [Detailed Emergency
    Department Tables from DAWN: 2004]{.underline}. April 2006.

[^26]: U.S. Department of Justice, National Drug Intelligence Center.
    (2006). [2006 National Drug Threat Assessment]{.underline}.

[^27]: Ibid.

[^28]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration. (2006). [Results from the
    2005 National Survey on Drug Use and Health]{.underline}.

[^29]: A visit to the emergency room is referred to as an episode, and
    every time a drug is involved in an episode it is counted as a
    mention.

[^30]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration. [Detailed Emergency
    Department Tables from DAWN: 2004]{.underline}. April 2006.

[^31]: Drug Availability Steering Committee, [Drug Availability
    Estimates in the United States]{.underline}, December 2002.

[^32]: Executive Office of the President, Office of National Drug
    Control Policy. [What Americans Spend on Illegal Drugs
    1988-1998]{.underline}. December 2000.

[^33]: In FY 2003, DEA developed a 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.

[^34]: The Library of Congress, Congressional Research Service. *Illicit
    Drugs and the Terrorist Threat: Causal Links and Implications for
    Domestic Drug Control Policy* (April 20, 2004).

[^35]: Ibid.

[^36]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration. (2006). [Results from the
    2005 National Survey on Drug Use and Health]{.underline}.

[^37]: U.S. Department of Health and Human Services, Substance Abuse and
    Mental Health Services Administration. (2002). [National Household
    Survey on Drug Abuse: Vol 1. Summary of National
    Findings]{.underline}.

[^38]: The FY 2008 President\'s Budget uses the FY 2007 President\'s
    Budget language as a base so all language is presented as new.

[^39]: "National Drug Threat Assessment 2006", National Drug
    Intelligence Center, January 2006.

[^40]: "Gatekeepers", El Paso Intelligence Center (EPIC), April 2006.

[^41]: "National Drug Threat Assessment 2006", National Drug
    Intelligence Center, January 2006.

[^42]: Source: EPIC.

[^43]: Source: EPIC.

[^44]: "National Drug Threat Assessment 2006", National Drug
    Intelligence Center, January 2006.

[^45]: Data as of 12/31/05. Disruptions include PTOs disrupted pending
    dismantlement, which DEA began to track and report in FY 2003.

[^46]: The CCDB is a U.S. military, Intelligence Community, and U.S. law
    enforcement database used within the Interagency Assessment of
    Cocaine Movement (IACM) to measure transshipment of cocaine through
    the transit zones. The complete IACM for 2005 was published in May
    2006.

[^47]: National Drug Threat Assessment 2006, National Drug Intelligence
    Center, US Department of Justice.

[^48]: Telecommunications Industry Association's 2006 Telecommunications
    Market Review and Forecast

[^49]: *Follow-Up Review of the Drug Enforcement Administration's
    Efforts to Control the Diversion of Controlled Pharmaceuticals*.
    DOJ, Office of the Inspector General, July 2006.

[^50]: Includes GDEP Level "Z" cases and other SOD-coordinated Internet
    investigations.