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49–661—PDF 2007

S. HRG. 110–844

BREAKING THE METHAMPHETAMINE SUPPLY

CHAIN: MEETING CHALLENGES AT THE BORDER

HEARING

BEFORE THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

SEPTEMBER 18, 2007

(

Printed for the use of the Committee on Finance
COMMITTEE ON FINANCE

MAX BAUCUS, Montana, Chairman

JOHN D. ROCKEFELLER IV, West Virginia

KENT CONRAD, North Dakota

JEFF BINGAMAN, New Mexico

JOHN F. KERRY, Massachusetts

BLANCHE L. LINCOLN, Arkansas

RON WYDEN, Oregon

CHARLES E. SCHUMER, New York

DEBBIE STABENOW, Michigan

MARIA CANTWELL, Washington

KEN SALAZAR, Colorado

CHUCK GRASSLEY, Iowa

ORRIN G. HATCH, Utah

TRENT LOTT, Mississippi

OLYMPIA J. SNOWE, Maine

JON KYL, Arizona

GORDON SMITH, Oregon

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

PAT ROBERTS, Kansas

JOHN ENSIGN, Nevada

RUSSELL SULLIVAN, Staff Director

KOLAN DAVIS, Republican Staff Director and Chief Counsel

(II)
(III)

C O N T E N T S

OPENING STATEMENTS

Page

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee

on Finance ............................................................................................................ 1

Grassley, Hon. Chuck, a U.S. Senator from Iowa ................................................. 2

WITNESSES

Siebel, Thomas M., chairman, Meth Project, Palo Alto, CA ................................ 5

Wolfgram, Peter D., president and chief executive officer, Bungalow Drug

Inc., Belgrade, MT ................................................................................................ 7

Kendell, Gary W., director, Iowa Governor’s Office of Drug Control Policy,

Des Moines, IA ..................................................................................................... 9

Rannazzisi, Joseph T., Deputy Assistant Administrator, Office of Diversion

Control, Drug Enforcement Administration, Washington, DC ......................... 11

McCampbell, Christy A., Deputy Assistant Secretary, Bureau of International

Narcotics and Law Enforcement Affairs, Department of State, Washington,

DC .......................................................................................................................... 13

Allen, Matthew C., Deputy Assistant Director, Office of Investigations, Immigration and Customs Enforcement, Department of Homeland Security,

Washington, DC ................................................................................................... 15

ALPHABETICAL LISTING AND APPENDIX MATERIAL

Allen, Matthew C.:

Testimony .......................................................................................................... 15

Prepared statement with attachments ........................................................... 29

Responses to questions from committee members ......................................... 43

Baucus, Hon. Max:

Opening statement ........................................................................................... 1

Crapo, Hon. Mike:

Prepared statement .......................................................................................... 50

Grassley, Hon. Chuck:

Opening statement ........................................................................................... 2

Kendell, Gary W.:

Testimony .......................................................................................................... 9

Prepared statement with attachments ........................................................... 52

Responses to questions from committee members, with attachment ........... 68

Kyl, Hon. Jon:

Prepared statement .......................................................................................... 84

McCampbell, Christy A.:

Testimony .......................................................................................................... 13

Prepared statement .......................................................................................... 86

Responses to questions from committee members ......................................... 96

Rannazzisi, Joseph T.:

Testimony .......................................................................................................... 11

Prepared statement .......................................................................................... 103

Responses to questions from committee members ......................................... 114

Roberts, Hon. Pat:

Prepared statement .......................................................................................... 124

Salazar, Hon. Ken:

Prepared statement .......................................................................................... 125
Page

IV

Siebel, Thomas M.:

Testimony .......................................................................................................... 5

Prepared statement with attachments ........................................................... 126

Responses to questions from committee members ......................................... 138

Wolfgram, Peter D.:

Testimony .......................................................................................................... 7

Prepared statement .......................................................................................... 147

Responses to questions from committee members ......................................... 153

COMMUNICATION

McNeil Consumer Healthcare ................................................................................. 157
(1)

BREAKING THE METHAMPHETAMINE

SUPPLY CHAIN: MEETING

CHALLENGES AT THE BORDER

TUESDAY, SEPTEMBER 18, 2007

U.S. SENATE,

COMMITTEE ON FINANCE,

Washington, DC.

The hearing was convened, pursuant to notice, at 10:05 a.m., in

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus

(chairman of the committee) presiding.

Present: Senators Bingaman, Salazar, Grassley, Crapo, and Roberts.

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE

The CHAIRMAN. The hearing will come to order.

Abraham Lincoln said, ‘‘Always bear in mind that your own resolution to succeed is more important than any one thing.’’ Lincoln’s

words apply in so many areas, in so many ways, especially to the

fight to get rid of methamphetamine.

In my own State of Montana, I have seen methamphetamine

ruin lives, destroy families. Montana State law enforcement and

child protective agencies are struggling to keep up with the influx

of drug-endangered children. A majority of the Montana foster care

placements are meth-related.

In the fight against meth, our resolution to succeed is so important. It is one year after enactment of the Combat Methamphetamine Epidemic Act, and there is evidence that we are making

progress. The Combat Meth Act imposed limits on the sale of medicines containing ephedrine and pseudoephedrine. Those are the

most common chemicals that can be converted into meth. The Act

required that purchasers provide identification and sign a sales log.

Starting last year, retail sellers have been required to keep these

products behind the counter or in locked cases, and retailers have

had to register online. Partly as a result, last year meth lab seizures declined 42 percent nationwide. The Combat Meth Act is disrupting supply, and I am proud to have co-sponsored the law. We

now must do more.

I might say that our first witness, Mr. Tom Siebel, will, I am

sure, explain the efforts that Montana has undertaken, and especially he has undertaken, in a very dramatic way, focused primarily on teens, to reduce first-time use of methamphetamine. We
2

do think in our State, thanks largely to Mr. Siebel and his efforts,

that we are making some progress.

Meth, however, is still the number-one law enforcement problem

in the Nation. The National Association of Counties found that

meth is the number-one illegal drug problem for 47 percent of the

counties in the country; 21 percent said cocaine, 22 percent said

marijuana. More counties cited meth than cocaine and marijuana

combined.

Four out of five county sheriffs report that local meth production

is down, but meth abuse is not. Half of the Nation’s sheriffs report

that the abuse of the drug has stayed the same, and nearly a third

say it has increased.

Meth users are changing. Three-fifths of the Nation’s sheriffs report increased meth use by women, and half the Nation’s sheriffs

report increased use by teens. According to a Methamphetamine in

Montana 2007 report, half of the adults in Montana prisons are

there because of a meth-related crime. Meth is still far too readily

available.

Last September, this committee heard testimony on the significant reduction in the number of local mom-and-pop meth labs, and

that was because of restrictions on the sale of products containing

ephedrine and pseudoephedrine. Today we will continue our conversation about meth education, meth prevention, and compliance

with requirements to keep meth precursors behind the counter.

But now an estimated 80 percent of meth consumed in the

United States originates in Mexico. It is smuggled in. So today we

will hear how Federal, State, and local law enforcement are collaborating to shut down meth smuggling at the border, and we will

hear of efforts to control the legally produced chemicals that are

used for meth production.

The fight against meth is not over. We need to continue meth

education, prevention, and treatment, and we need to redouble our

resolve to break the meth supply chain at the border. In the battle

against meth, we must maintain our resolution to succeed. That

resolution remains vitally important, and, with that resolution, let

us bring to an end the problem of methamphetamine.

Senator Grassley?

OPENING STATEMENT OF HON. CHUCK GRASSLEY,

A U.S. SENATOR FROM IOWA

Senator GRASSLEY. Thank you all for joining us today as we continue to discuss methamphetamine and the problems associated

with this terrible drug. For years, we have heard countless stories

of individuals impacted by meth, either as users or members of the

larger community tasked with repairing the damage meth use inflicts on our society. In addition to the immediate impact of meth

use on families and particularly children, it also strains the resources of the multitude of government agencies forced to respond.

Agencies, ranging from those charged with caring for the children

of meth addicts to those who enforce the law, continue to spend significant resources, and by resources I mean taxpayer dollars, responding to the production and use of meth.

The terrible stories of meth use are all too real, and, as a Senator

from a rural state, I can attest to the disproportionate impact the
3

meth problem has had on rural America, and to the impact it is

having and will have on the rest of the country as meth use continues to spread.

That said, we have had some success in the last few years in reducing the domestic supply of meth. For example, the Combat

Methamphetamine Act (Combat Meth Act) passed by Congress just

a few years ago, has made a real difference by restricting the sale

of the precursor chemicals used to manufacture meth and cutting

off the supply of pseudoephedrine or PSE, the main active ingredient in meth.

The Combat Meth Act gave new Federal tools to prosecutors to

get meth cooks and traffickers off our streets. It provided vital resources to State and local law enforcement officials who are on the

front lines fighting the meth problem. Finally, it provided funding

for the families and children affected by meth.

These new tools have paid off. Since Combat Meth, we have seen

a dramatic decrease in the number of clandestine meth labs and

large ‘‘super labs’’ across the country. Pharmacies and retail stores

have moved products containing PSE behind the counter, and purchasers are now required to show photo identification and sign a

log book to purchase these products.

In Iowa, this has proven to be particularly effective. Meth lab incidents have decreased from about 1500 in 2004 when the Iowa

PSE law went into effect to just 89 through July 31st of this year.

While this is significant progress, it does not mean our meth problem has been eliminated or that we should be lulled into a false

sense of security. In fact, a recent National Association of Counties

survey stated that almost half of all county sheriffs surveyed said

that meth continues to be the number one drug problem. What is

clear is that, while Combat Meth has made an impact, we must remain vigilant in the fight against meth and examine areas where

the Combat Meth Act can be improved upon.

For instance, one area that can be improved is updating the logbook requirements to allow for electronic records for more effective

monitoring of PSE sales.

Currently, the Combat Meth Act only requires retailers to keep

paper records that are time-consuming for law enforcement to

search through. That has led to a phenomenon known as

‘‘smurfing,’’ where meth cooks visit multiple stores or provide false

information to obtain enough PSE to make meth.

Recently, I have joined Senator Durbin to close this ‘‘smurfing’’

loophole. The Methamphetamine Production Prevention Act of 2007

would amend the Combat Meth Act to allow for electronic logbook

systems, and create a Federal grant program for States looking to

create or enhance existing electronic logbook systems.

Furthermore, we need to make sure that, when we close one door

for meth production, we do not open another. In fact, one of the

biggest problems with meth today is the importation of high quality foreign meth produced outside our country and smuggled over

our borders.

There have been countless reports about international drug trafficking cartels producing meth and transporting it into the United

States. Further, we are hearing from law enforcement that this foreign meth is stronger and more potent than domestically produced
4

meth, leading to increased overdoses and deaths. I am concerned

that this new stronger meth is now on our streets filling the void

created by the successes of shutting down domestic meth production.

For instance, it is currently estimated that over 80 percent of the

meth on the streets of Iowa comes from Mexico, where it is being

produced in super labs controlled by the Mexican drug cartels. One

disturbing example from my State was a recent bust in Des

Moines, IA. This bust occurred as part of an Organized Crime Drug

Enforcement Task Force sting operation where 17 illegal immigrants from Mexico were recently caught with over 20 pounds of

meth and over $500,000 in cash.

We know from experience that these cartels are ruthless and will

stop at nothing to push their deadly products onto U.S. streets.

This bust is just further evidence that meth is coming in from our

borders, and, if they are getting it to Iowa, they are getting it to

the rest of the country. This is the new face of meth in America.

To address this growing concern, we have witnesses here today

who will discuss what we are doing at our borders to stop meth

from getting in. I am interested to hear what they have to say and

whether they believe there is more Congress needs to do to address

the problems of foreign-produced meth.

For years we have dealt with the problem of drugs being imported across our southern border, but I want to be sure that we

are using all our resources to effectively fight the trafficking of foreign meth. Further, I want to make sure that the administration

is doing everything within its diplomatic powers to work with foreign governments to stop this deadly drug from being produced.

President Calderon has been very tough on the drug traffickers

since taking office, sending Mexican military and police officers

into key areas of the country to combat the drug cartels. I strongly

encourage the administration to provide Congress with the details

of the U.S.-Mexico counter-narcotics agreement as soon as possible.

We must keep the pressure on the cartels from all fronts.

I also look forward to the testimony of Gary Kendell, who is the

director of the Iowa Governor’s Office of Drug Control Policy. I

want to thank Mr. Kendell for taking the time to tell us about the

effects of meth and the Combat Meth Act in Iowa.

So, we have a lot of interesting testimony that will be presented

to us today. Thank you all for joining us, and thank you, Chairman

Baucus, for holding this important hearing.

The CHAIRMAN. Thanks, Senator Grassley.

I would now like to introduce our witnesses. It is my pleasure to

introduce Mr. Tom Siebel, chairman of the Meth Project in Palo

Alto, CA and founder of the Montana Meth Project in Missoula,

MT.

The Montana Meth Project and its hard-hitting media campaign

make a real difference in my home State, and I wish everybody

here could see it. I see many of the witnesses nodding; I think they

have seen it, and I think they will probably agree that, if we could

have that nationwide, I think it would have some effect.

They deserve much credit for the positive shift, those ads do, and

attitudes and behavior about meth, at least in my home State. I
5

commend Mr. Siebel for that effort. Arizona, Idaho, and Illinois

also have Meth Projects.

We will next hear from Peter Wolfgram. Thank you, Peter, for

making the trip. He is president and chief executive officer of Bungalow Drug in Belgrade, MT. He will testify on behalf of the National Association of Chain Drugstores. He also will talk about

compliance with requirements to keep pseudoephedrine products

behind the counter. Thanks again for making the trip.

Following Mr. Wolfgram, we will hear from Gary Kendell, director of the Iowa Governor’s Office of Drug Control Policy, from Des

Moines, IA. He will talk about how the Combat Methamphetamine

Act has had an impact in his home State.

Then we have Joseph Rannazzisi, Deputy Assistant Administrator at the Drug Enforcement Administration. He will speak

about meth law enforcement developments and the interesting diversion of precursor chemicals.

Next, Christy McCampbell. She is the Deputy Assistant Secretary at the State Department’s Bureau of International Narcotics

and Law Enforcement Affairs, and she will discuss international

drug control conventions and trade in meth precursor chemicals.

Finally, Matthew Allen, Deputy Assistant Director of the Office

of Investigations at Immigrations and Customs Enforcement. He

will discuss a recently completed bilateral strategic plan for the

United States and Mexico to expand their cooperation in law enforcement, trade, and border management.

Thank you all for coming, and I would ask all witnesses to summarize their statements in 5 minutes. Their full statements will

automatically be included in the record.

Mr. Siebel, you are first.

STATEMENT OF THOMAS M. SIEBEL, CHAIRMAN,

METH PROJECT, PALO ALTO, CA

Mr. SIEBEL. Thank you, Mr. Chairman, Senator Grassley, members of the committee. My name is Tom Siebel, and I am a businessman. I am also chairman of the Montana Meth Project, a nonprofit organization dedicated to reducing meth use through public

service messaging, public policy, and community outreach. I thank

you for the opportunity to address you this morning.

We started the Montana Meth Project in 2005 with the objective

of significantly reducing methamphetamine use in the State of

Montana. Now, let me remind you, as of September of 2005, Montana was overwhelmed with methamphetamine use.

A few statistics: Montana ranked number five in the Nation in

terms of methamphetamine abuse, according to the Quest research

data. The Montana Attorney General’s Office reported at that time

that 50 percent of the people in the prison system were there due

to methamphetamine, and 50 percent of the children in foster care

were there due to methamphetamine.

Now, beginning in 2005, we commissioned relatively extensive

market research on meth-related attitudes and behavior in the

State of Montana. These research results were used as the basis

for designing a broad-based public outreach campaign.

From September of 2005 through today, September of 2007, the

Meth Project has sustained a large-scale, privately funded State-
6

wide advertising campaign including TV, radio, print, display, billboards, and the Internet. Throughout this entire period of time, we

have been the largest advertiser in the State of Montana. This paid

campaign included 45,000 television advertisements, 35,000 radio

ads, 10,000 print impressions, and 1,000 billboards around the

State.

In the past 2 years, the Montana Meth Project has received 40

advertising industry awards for the quality and effectiveness of

this advertising. These awards include two Effie Awards, 25 Addy

Awards, an award at the Cannes Film Festival for one of the most

successful campaigns, really, in the world, and numerous times our

ads have been listed in the ‘‘Top 10’’ ads in America for effectiveness.

Central to the program is a research-based marketing campaign

that realistically and graphically communicates the risks of meth.

The campaign’s core message, ‘‘not even once,’’ speaks to the

addictiveness of this problem.

Now, our ongoing survey results from 2005 to 2007 tracked a

very large shift in attitudes in young people in the State of Montana. As of today, 74 percent of young people in Montana report

seeing anti-meth ads more than once a week. That compares, by

the way, with 17 percent of young people nationally. These are

teens, aged 12 to 17 years old.

Eighty-four percent of young people in Montana see significant

risk in even giving meth a try. This compares with 66 percent of

young people across the Nation. Eighty-seven percent—gentlemen,

87 percent—of young people in Montana now strongly disapprove

of trying meth, and 79 percent of young people in the State believe

that their friends would give them a hard time if they gave it a

try, so we are stigmatizing use.

At the same time, while much has been done to deal with precursor control and whatnot, 33 percent of the young people in Montana today report that meth is easily available. That is a greater

number than the national number.

Now, from 2005 to 2007, the rate of teen meth abuse across the

United States remained essentially unchanged. This data was just

published by the National Survey on Drug Use and Health released

by the Department of Health and Human Services this month.

Over the same period of time, from 2005 to 2007, meth use in Montana declined, and it declined dramatically.

The results have been very significant. As of September of 2007,

Montana now ranks 39th in meth abuse in the United States. That

is down from 5th 2 years ago. This is according to Quest Diagnostic’s Workplace Drug Testing report.

Adult meth abuse in the State of Montana in the last 2 years has

dropped by 70 percent. Let me compare this with neighboring

States that have the same sort of precursor control: South Dakota,

during the same period of time, meth abuse increased 7.7 percent.

Wyoming, the same period of time, meth abuse increased 6 percent.

So there is something different going on in Montana.

The Montana Department of Justice reports that meth-related

crimes have decreased by 53 percent in the past 2 years, and the

Center for Disease Control and the Montana Office of Public In-
7

struction will announce this afternoon that teen meth use in Montana has declined dramatically in the last 2 years.

According to the Attorney General of the State of Montana, ‘‘The

Meth Project is simply changing the nature of crime control in

Montana. As of 2005, the Montana criminal justice system was

overwhelmed by the consequences of meth. If we are able to continue to make the progress we have seen in the past 2 years, methamphetamine will have changed from a crisis to a manageable

problem.’’

The CHAIRMAN. I am going to have to ask you to summarize.

Mr. SIEBEL. All right. We are now replicating the project in Arizona, Idaho, and Illinois.

So, in conclusion, Montana has a problem very similar to the rest

of the country. I respectfully submit that the people of the United

States would be well-served if the Congress would consider providing funding to extend the Meth Project to other States.

I commend the committee for continuing to shed light on this

dark issue. We want to particularly thank Chairman Baucus and

his staff for their leadership in driving methamphetamine from the

State of Montana. We also want to thank Director Walters and the

staff of the Office of National Drug Control Policy (ONDCP) for assisting us in what we have been doing.

The CHAIRMAN. Thank you, Mr. Siebel, very much. It is quite a

success story, and we are all very proud of your contribution and

your help.

[The prepared statement of Mr. Siebel appears in the appendix.]

The CHAIRMAN. Mr. Wolfgram?

STATEMENT OF PETER D. WOLFGRAM, PRESIDENT AND CHIEF

EXECUTIVE OFFICER, BUNGALOW DRUG INC., BELGRADE, MT

Mr. WOLFGRAM. The National Association of Chain Drugstores

appreciates the opportunity to testify before the Senate Finance

Committee to share our perspectives on meth production and retailer compliance with State and Federal pseudoephedrine sales restrictions. Thank you, Senator Baucus and members of the committee, for inviting me to speak today.

I am Peter Wolfgram, president and CEO of Bungalow Drug,

based in Belgrade, MT. Bungalow Drug is a family-owned home

town pharmacy chain, and I have been a practicing pharmacist

since 1972. My family has resided in the Bozeman area since 1974,

and I have worked as a pharmacist for both chain and independent

pharmacies.

We purchased Bungalow Drug in 1989, and since that time we

have owned up to five pharmacies and a card and gift store. We

currently have three locations, employ 24 people, including 8 fulland part-time pharmacists. We provide pharmacy services for approximately 3,000 people in both urban and rural areas of Montana: Driscoll Drug in Butte, Castle Mountain Drug in White Sulfur Springs, and Townsend Drug in Townsend.

My company has been a member of the NACDS since 2002. The

NACDS represents the Nation’s leading retail chain pharmacies

and suppliers, helping our members better meet the challenge of

serving their customers. NACDS members operate more than

35,000 pharmacies, employ 108,000 pharmacists, fill over 2.3 bil-
8

lion prescriptions yearly, and have annual sales of over $700 billion. Other members include a thousand suppliers of products and

services to the chain drug industry.

Our membership is deeply concerned about the problem of meth

production and abuse and has worked to develop solutions to this

devastating problem. Even before the introduction of State and

Federal legislation, a majority of the chain and community pharmacies had taken proactive steps to reduce theft and illegitimate

use of meth precursors, that is, products containing pseudoephedrine or ephedrine.

We took these steps because we understand the importance of

addressing the meth problem, despite the potential that instituting

access barriers to these products may have led to complaints and

reductions in sales.

NACDS member companies placed these products behind pharmacy or sales counters, limited access to these products in their

stores, initiated voluntary sales limits, participated in voluntary

education such as Meth Watch, voluntarily eliminated consumer

self-access to PSE products in their stores in those geographic

areas where meth abuse has been a problem. We participated in

youth anti-meth education efforts, and we educated our employees

about the meth abuse to prevent questionable sales of these products. Lastly, we worked with our local law enforcement by reporting suspicious activity.

Moreover, our members have worked closely with the Drug Enforcement Administration and State and local law enforcement

since 1995 to stem the tide of meth production in communities

across the United States. Before the Federal Government passed

legislation, many States acted on their own to address the meth

problem. The Montana legislature acted in 2005 to pass legislation

that has had a significant impact on meth production in my State.

I testified on behalf of this legislation, S. 287, which is similar

to the Federal Combat Methamphetamine Epidemic Act. There is

a nine-gram-per-30-day limit. The purchaser must show photo ID

and sign a log book, and PSE products must be placed behind the

counter.

The number of meth labs in Montana is on the decline, as we

were hearing is the trend across the country. In 2004, Montana law

enforcement seized 64 labs, while in 2006, only 16. The Combat

Methamphetamine Act expanded on the differing State requirements to create a national standard for retailers to follow for limiting access to meth precursors.

NACDS worked closely with Congress in drafting the Combat

Methamphetamine Act in the last Congress, and we appreciate

your willingness to continue this excellent working relationship.

We also commend this committee for continuing the congressional

focus on this troubling issue surrounding meth production and its

importation.

One national standard for retail availability is important, because a patchwork of requirements is confusing to consumers, law

enforcement, and retailers. For chain pharmacies which operate in

practically every State, city, town, and county in this country, it is

complex and costly to create and update different policies, procedures, and employee training programs for each pharmacy outlet.
9

The Combat Methamphetamine Act has become a national standard for retail availability of meth precursors. This has streamlined

our members’ operations and has allowed for quicker and better

compliance nationwide. We believe the Combat Methamphetamine

Act is helping to significantly reduce domestic production, that is,

the numerous mom-and-pop meth labs that have become the

scourge of rural America.

Across the U.S., DEA recorded over 17,000 meth lab incidents in

2004; by 2006, this number had dropped to just over 7,000. Now

that the domestic meth production problem is being addressed, we

support the congressional efforts to focus more keenly on eradicating meth importation.

With the recent steep decline in domestic meth production, the

availability of foreign meth sources is filling the void. Despite the

success of the Combat Methamphetamine Act in working to eliminate domestic lab production, far too many people remain locked in

this deadly addiction.

Compliance with the Combat Methamphetamine Act was challenging for the chain pharmacy industry. We had to train our employees to the requirements of the Act, and we had to certify with

the DEA that we completed such training and received acknowledgement from the DEA that each pharmacy location had been certified.

The DEA provided us with final rules only 2 weeks before the

compliance deadline. Though it was not seriously difficult for my

pharmacies to comply within the 2-week timeframe, I understand

that some of my larger pharmacy chain colleagues had difficulty coordinating internal efforts to comply with the deadline.

The CHAIRMAN. I am going to have to ask you to summarize,

please, Mr. Wolfgram.

Mr. WOLFGRAM. However, we thank the DEA for their help.

Before I conclude my remarks, I would like to add that many

manufacturers have reformulated their products to replace pseudoephedrine. A comprehensive approach is necessary to effectively address the meth problem, although State legislatures and Congress

have passed comprehensive legislation that has sharply reduced

domestic meth production.

The problems of meth importation, use, and addiction are still

with us. We urge this committee to take the appropriate measures

to stem the flow of meth from abroad, and we will continue to work

with Congress to help curb the illicit use.

The CHAIRMAN. All right. Thank you very much, Mr. Wolfgram.

[The prepared statement of Mr. Wolfgram appears in the appendix.]

The CHAIRMAN. Mr. Kendell?

STATEMENT OF GARY W. KENDELL, DIRECTOR, IOWA GOVERNOR’S OFFICE OF DRUG CONTROL POLICY, DES MOINES,

IA

Mr. KENDELL. Mr. Chairman, Ranking Member, members of the

committee, I appreciate the opportunity to be here this morning

and speak with you about what is happening in Iowa with regard

to methamphetamine.
10

The number of methamphetamine labs seized by law enforcement in Iowa reached its peak in 2004, with an average of 125

methamphetamine labs seized by law enforcement each month.

With the passage of pseudoephedrine controls, first on the State

level and then on the Federal level with the Combat Methamphetamine Epidemic Act, the fever finally broke with regard to domestic production of methamphetamine in Iowa.

The decline continues in 2007, with a year-to-date average of

about 12 meth labs per month that are being seized currently. This

is certainly something to celebrate and be happy for in Iowa, but

the problem remains. Twelve a month is still too many meth labs,

in my opinion, and we continue to work to try to reduce those further.

We have had significant reductions in the number of methamphetamine-related child abuse and endangerment cases. We

have had significant reductions in the amount of money—public

money—expended by the University of Iowa Hospital’s burn unit

for burns associated with meth production.

It is also important to note the almost incalculable benefit to the

environment from the reduced damage caused by these methamphetamine labs, keeping in mind that for every pound of methamphetamine manufactured, 5 to 7 pounds of hazardous waste is

also produced.

According to the Substance Abuse & Mental Health Services Administration, Iowa still ranks third in the United States in treatment admissions for methamphetamine per 100,000 population. In

addition, we rank 8th in the United States for overall admissions

for treatment for methamphetamine.

We continue to pursue additional measures to help further reduce meth labs in our State. Earlier this year, with congressionally

directed funding, we successfully completed a program where we

locked up the anhydrous ammonia tanks in all 99 Iowa counties.

Scientists at Iowa State University in Ames, IA have developed

a chemical lock using calcium nitrate, which, when added to anhydrous ammonia, basically renders it useless in the production of

methamphetamine. We are in the process of exploring and trying

to identify funding for this program which would allow us widespread implementation of this very valuable tool.

Finally, we are working on the State level to achieve passage of

legislation that would allow us to implement a real-time electronic

tracking system for the pseudoephedrine sales which would help to

reduce the loophole that Senator Grassley referred to in his remarks, where we have the smurfing going on in Iowa now, where

they go from pharmacy to pharmacy, buying their limit at each

pharmacy until they have a sufficient quantity to make their cook.

That is something that we will continue to push for on the State

level.

In addition, due to the reduction in domestic production, we are

now faced with the reality that 90 to 95 percent, probably, of the

methamphetamine in Iowa is coming from the southwestern United

States and Mexico, and it is all primarily ice at this point. The

crackdown on domestic labs led the trafficking organizations to

step right in and fill that demand, so by no means has our meth

problem gone away.
11

The ice being seized in Iowa is averaging approximately 42 percent purity, with some large seizures in the 90-plus percent purity

range. In Des Moines, IA, an ounce of ice is selling for approximately $1,200. In Fort Dodge, IA, with a population of about

25,000 people, an ounce of ice will sell for $900. So, we have essentially a wholesale market in Iowa. There is plenty of it for everyone.

I am so thankful for the efforts of the Senate and the House of

Representatives to fund programs for State and local law enforcement, and drug enforcement specifically. I know many of you and

your colleagues recognize the importance of these programs and do

everything you can to fund them at the level absolutely possible.

These funding streams are vital to drug enforcement efforts on

the State and local level, which directly impact drug enforcement

on the Federal level. I want to take this opportunity to encourage

you and your colleagues to fully fund programs like this, Byrne

Justice Assistance Grants (Byrne-JAG) and Community Oriented

Policing Services (COPS), to name two.

An excellent example was mentioned by Senator Grassley also of

the cooperation between State, local, and Federal law enforcement,

and that is Operation Ice Age, which was just recently announced

by the U.S. Attorney for the Southern District of Iowa. It involved

22 individuals who were indicted for methamphetamine trafficking

in Des Moines, IA.

Methamphetamine is a national problem in the United States,

but some of the best and most likely success that we can have is

through local and State implementation of successful prevention

programs like we have heard about and treatment that works, but

also State and local law enforcement and fully funding Federal programs that help them to do their jobs to help the Federal authorities as well.

Thank you for allowing me to speak to you this morning. Thank

you for your attempts to provide as much funding as you can for

local and State law enforcement. I thank you for your service to the

country.

The CHAIRMAN. Thank you, Mr. Kendell.

[The prepared statement of Mr. Kendell appears in the appendix.]

The CHAIRMAN. Mr. Rannazzisi?

STATEMENT OF JOSEPH T. RANNAZZISI, DEPUTY ASSISTANT

ADMINISTRATOR, OFFICE OF DIVERSION CONTROL, DRUG

ENFORCEMENT ADMINISTRATION, WASHINGTON, DC

Mr. RANNAZZISI. Good morning, sir. Chairman Baucus, Ranking

Member Grassley, and distinguished members of the committee, on

behalf of DEA Administrator Karen P. Tandy, thank you for the

opportunity to testify today on the domestic and international

methamphetamine situation and DEA’s role in enforcing the Combat Methamphetamine Epidemic Act.

Through our law enforcement partnerships across the country

and around the world, DEA is aggressively attacking drug organizations responsible for trafficking methamphetamine and its precursor chemicals and seizing their illicit proceeds.
12

Methamphetamine consumed in the U.S. originates from two

sources. Most is produced by Mexico and California-based Mexican

traffickers whose organizations control super-labs. The majority of

methamphetamine used in the United States comes from these

larger labs, which we believe are increasingly operating in Mexico.

The second source of methamphetamine is small toxic labs that

produce relatively small amounts and are not generally affiliated

with major trafficking organizations. Last year at this time, small

toxic labs were responsible for about 20 percent of the methamphetamine consumed in America.

However, with the passage of State legislation and then the

Combat Methamphetamine Epidemic Act, DEA has seen a significant decline in the number of clandestine labs across the U.S. It

has been through the framework provided by the administration’s

2006 Synthetic Drugs Strategy that DEA and contributing agencies

have been able to chart these milestones in achieving domestic and

international progress against methamphetamine and other synthetic drugs.

One goal of the strategy was to reduce the number of domestic

methamphetamine labs by 25 percent over 3 years. We have exceeded this goal, with a 41-percent reduction in 2006 from the previous year. This has resulted in fewer children exposed to lab hazards, a reduction in toxic waste sites, and increased availability of

law enforcement resources previously dedicated to clandestine lab

investigations.

Methamphetamine is unique because the production of the drug

requires no specialized skill or training, and its recipes are readily

available on the Internet. The precursor chemicals associated with

this drug also have historically been easy to obtain and inexpensive

to purchase. These factors contributed to methamphetamine’s rapid

sweep across our Nation.

In March 2006, to combat the devastating national impact of

methamphetamine’s manufacture, Congress enacted the CMEA.

The Act established a system to monitor and regulate the importation, production, and retail sales of non-prescription ephedrine,

pseudoephedrine, and phenylpropanolamine products, common ingredients found in over-the-counter cough, cold, and allergy products.

These chemicals and drugs are key precursors used in illicit

manufacture of methamphetamine or amphetamine. This legislation provided law enforcement and regulators with invaluable tools

to contain the production of methamphetamine.

These tools allow law enforcement to make an impact on domestic methamphetamine production; however, law enforcement faces

challenges with some areas of the CMEA’s implementation. First,

there is an inability to completely examine all entries relative to

the retail logbook purchases requirement provision. This is largely

due to the lack of connectivity between reporting elements, both

intrastate and interstate.

Second, despite an extensive public awareness campaign, it is

difficult to identify and to ensure that all sellers of pseudoephedrine and ephedrine products are complying with the self-certification process mandated by the CMEA. While Federal and State

legislation has reduced the number of clandestine laboratories,
13

methamphetamine abuse continues unabated and poses a significant threat to citizens.

A recent survey conducted by the National Association of counties showed that more teens, women, and minorities are abusing

the drug. This trend is worrisome, as it shows that methamphetamine abuse is spreading to a wider range of people.

To stop the organizations responsible for this menace, DEA is

successfully disrupting and dismantling significant methamphetamine trafficking organizations. DEA is fighting the diversion of

ephedrine and pseudoephedrine, both through enforcement operations and international agreements.

Our continued work with our international partners to identify

suspicious shipments of precursor chemicals has been both rewarding and challenging. DEA is working shoulder-to-shoulder with the

Government of Mexico to address the illicit manufacture and shipments of methamphetamine into the U.S.

Since last year, the Government of Mexico has taken steps to

enact new controls to better control imported methamphetamine

precursor chemicals. DEA is also extensively training Mexican law

enforcement and regulatory counterparts, as well as personnel,

from several other countries.

DEA will continue to fight methamphetamine by targeting largescale drug trafficking organizations and depriving them of drug

proceeds, their lifeblood. We are fully committed to meeting international threats by working cooperatively with our foreign and domestic counterparts.

Thank you, sir. I would be happy to answer any of your questions.

The CHAIRMAN. Very good. You are right on time. Thank you.

[The prepared statement of Mr. Rannazzisi appears in the appendix.]

The CHAIRMAN. Ms. McCampbell?

STATEMENT OF CHRISTY A. McCAMPBELL, DEPUTY ASSISTANT SECRETARY, BUREAU OF INTERNATIONAL NARCOTICS

AND LAW ENFORCEMENT AFFAIRS, DEPARTMENT OF STATE,

WASHINGTON, DC

Ms. MCCAMPBELL. Yes. Thank you, Chairman Baucus, Senator

Grassley, and other members for the opportunity to speak to you

here today on behalf of the State Department’s bureau of International Narcotics and Law Enforcement Affairs.

I have to say that the production, trafficking, and abuse of meth

have been areas of particular interest to me because formerly, before I came here to Washington, I was the chief of the Bureau of

Narcotics Enforcement for the State of California.

I spent a great deal of time as a law enforcement officer out in

the field, seeing what methamphetamine did to the neglect of little

kids, seeing what it did to our law enforcement officers, and seeing

what it did to our environment as I watched mounds of the residual effects of methamphetamine going down the rivers while the

cows were drinking the water right out of the streams in Fresno,

CA.

Therefore, when I came to INL last year I was pleased that thenAssistant Secretary Anne Patterson asked me to come to the de-
14

partment to work on the efforts to curb the international production and trafficking of meth.

Synthetic drugs such as meth present a unique challenge to law

enforcement here. The production of meth is not tied to any specific

geographic area like cocaine and heroin is, so confronting the

spread requires broad international cooperation. The effort is further complicated in that the chemicals used to produce meth—

ephedrine and pseudoephedrine—can be legitimate pharmaceutical

products traded throughout the world.

The State Department plays a key role in ensuring that these

products are not diverted from legitimate international trade by

working through the multilateral institutions such as the United

Nations, such as the International Narcotics Control Board, the

INCB, and the Inter-American Drug Abuse Control Commission,

which is a little bit better known as CICAD, which comes out of

OAS, the Organization of American States.

Back in March of 2006, the U.N. Commission on Narcotic Drugs

adopted a U.S.-sponsored resolution that requests that countries

provide estimates of their legitimate requirements to the INCB.

This information allows that the board can work with governments—other governments—in determining if the shipments of the

chemicals are warranted or if there is potential diversion for these

chemicals taking place.

Since 2006, the Department of State has doubled its annual financial contributions to the INCB to ensure that it has the resources necessary to effectively implement the resolution that was

passed last year at the UN Commission on Narcotics Drugs (CND).

My office is also coordinating the international provisions of the

Combat Methamphetamine Epidemic Act, another effective tool in

focusing on international attention to this problem. The very first

report under the Act was made on March 1, 2007, not too long ago,

as part of what we call the INCSR, or the International Narcotics

Control Strategy Report.

By incorporating the data that we are getting through the CND

resolution, the data has been coming in through INCB over the

past year, and we expect that next year’s report in March of 2008

will provide even greater insight on this global issue.

In Mexico, our department is also actively engaged in confronting

meth production, the principal foreign source of meth coming into

the United States being Mexico. As domestic controls on meth precursors improve, we have anticipated that production will increasingly shift to Mexico, as it has already, as we have seen.

With a serious meth abuse problem of its own, Mexico is taking

this issue very seriously. Mexico has imposed tight restrictions.

They are beginning to impose much tighter restrictions over the

importation, transportation, and retail sales of meth precursors.

Just recently, the Mexican Attorney General has announced that

Mexico is planning to ban all importation of these chemicals beginning in January 2008. This is an unprecedented step that DEA orchestrated and the State Department supports.

In addition to more general law enforcement and border control

assistance to Mexico, INL has supported a number of programs

specifically targeting methamphetamine. In partnership and in collaboration with DEA, we have helped established Clandestine Lab-
15

oratory (CLANLAB) response teams. Also, we are supporting a new

methamphetamine profiling program which tracks manufacturing

trends and precursor usage to compare cases and potentially create

investigative leads. That is more of a scientific-type program.

We are also supporting the new Federal Police Corps in Mexico,

their special investigative units, with equipment, vehicles, and

computers. We also provide technology that allows scanning of

cargo containers and passenger luggage looking for contraband,

and yet it still facilitates legitimate commerce of these precursor

chemicals.

Methamphetamine is truly a global problem. The U.N. reports

that 15 million people consume meth worldwide, and that over 100

countries reported seizures of amphetamine-type stimulants back

in 2005. Meth is prevalent in Asia, where many countries are

struggling with high rates of abuse and addiction.

While the U.S. is not the primary target of these drugs coming

in from Asia, Asian consumption and trafficking undermine government institutions and provide illegal revenue that could potentially

be exploited by both terrorists and regional insurgencies.

The Department of State, therefore, is providing law enforcement

training, focusing on meth, environmental clean-up assistance, and

demand reduction assistance.

And finally, I would just like to note that the department has

made considerable progress in focusing international attention on

this issue, and yet we know that more needs to be done. We will

continue to work with our interagency partners and international

partners to control the production and the trafficking of methamphetamine and to bring greater transparency to the international trade of these precursor chemicals. Thank you.

The CHAIRMAN. Thanks, Ms. McCampbell, very, very much.

[The prepared statement of Ms. McCampbell appears in the appendix.]

The CHAIRMAN. Mr. Allen?

STATEMENT OF MATTHEW C. ALLEN, DEPUTY ASSISTANT DIRECTOR, OFFICE OF INVESTIGATIONS, IMMIGRATION AND

CUSTOMS ENFORCEMENT, DEPARTMENT OF HOMELAND SECURITY, WASHINGTON, DC

Mr. ALLEN. Thank you. Chairman Baucus, Ranking Member

Grassley, distinguished members of the committee, my name is

Matthew Allen, and I am the Deputy Assistant Director for Financial, Narcotics, and Public Safety Investigations at ICE.

I would like to thank you for the opportunity to testify about ICE

efforts and the challenges and successes we are having in breaking

the methamphetamine supply chain at our borders.

To combat the smuggling of methamphetamine and precursor

chemicals, ICE takes a layered approach that focuses on the criminal organizations that smuggle these drugs into the U.S.

To give you a sense of the scope of this problem from the DHS

perspective, during fiscal year 2004, ICE and Customs and Border

Protection seized 4,920 pounds of methamphetamine nationwide, in

2005 we seized 6,377 pounds, and last year we seized 6,114 pounds.

The southwest region of the United States has become the primary entry point for methamphetamine produced in Mexico, and
16

the primary smuggling method is the use of concealed compartments in passenger vehicles. The vast majority of seizures occur at

ports of entry in California and Arizona, and, in recognition of this

threat, ICE efforts have been focused in these two areas.

In San Diego, the DHS established its fourth Border Enforcement Security Task Force in 2006. As with all of our BEST task

forces, ICE brings together representatives from Federal, foreign,

State, and local law enforcement agencies to focus on the issues

most important to their region. In San Diego’s case, that is methamphetamine smuggling.

ICE agents focus on identifying the smuggling organizations and

targeting their transportation and distribution networks. One investigation in Arizona highlights this strategy. Operation Red

Dragon targeted a criminal organization operating a website in the

United Kingdom that offered red phosphorus, iodine crystals, and

other precursor chemicals used in the manufacture of methamphetamine.

Operation Red Dragon identified a criminal organization using

their website, KNO3.com, to sell these precursor chemicals to individuals all over the world. Customers accessed this website directly

or were linked to it through a popular website which also detailed

the process for making methamphetamine, and I have some screen

shots and some slides of the website.

Once a purchaser accessed the KNO3 website, they simply added

the chemicals to their shopping cart and paid for the items and

shipping with a credit card. The precursor chemicals were then

shipped through the mail to the United States. The co-owners of

the KNO3.com website would purposely mislabel the mailed packages as ‘‘iodine for medical works’’ or ‘‘red metal for iron works’’ to

try to avoid detection by Customs and Border Protection.

Our agents in Phoenix coordinated six undercover purchases of

red phosphorus and iodine crystals from the website. Agents also

executed search warrants on the server and hosting company, resulting in the identification of thousands of transactions for the

purchase of precursor chemicals.

Analysis of the information resulted in leads to High Intensity

Drug Trafficking Areas (HIDTA) Clandestine Lab Task Forces

throughout the United States and several foreign countries. In analyzing these transactions, we identified correspondence between the

purchasers and the website operator that often provided valuable

evidence and revealed the purchaser’s knowledge that the chemicals that were being purchased were intended to be used for methamphetamine and were illegal. Examples of some of these exchanges are depicted on one of these slides, and the last one is actually my favorite: ‘‘It is very illegal to do without a license.’’

As a result of the information shared in this investigation, 122

methamphetamine laboratories were dismantled throughout the

United States and another 14 labs were dismantled in Germany,

the United Kingdom, and Australia.

On January 30, 2007, Central Scotland Police and the U.K.’s Serious Organized Crime Agency arrested the two heads of the organization on international arrest and extradition warrants. Officers

also executed search warrants in the U.K. that led to the seizure

of 47 different chemicals, including 1,075 kilograms of red phos-
17

phorus and 478 kilograms of iodine crystals used to manufacture

methamphetamine.

Operation Red Dragon is not our only international effort, however. To target the illicit gains of those organizations that smuggle

and distribute drugs and other illicit items, ICE, in conjunction

with CBP and officials in Mexico, Ecuador, Panama, and Colombia,

implemented a joint strategic Bulk Cash Smuggling initiative, Operation Firewall.

This operation targets illicit cash that has been successfully

smuggled from the United States into Mexico and is often destined

for Colombia and other Central or South American countries. ICE,

in partnership with CBP, provides hands-on training and passenger analysis techniques and concealment methodologies that

have proven effective in the U.S.

Since inception, Operation Firewall has resulted in the seizure of

about $96 million and the arrest of 248 individuals. Sometimes our

Firewall operations pay additional dividends. Recently, as part of

Operation Firewall in Mexico, our office in Mexico City assisted the

Mexican Customs Service in the seizure of approximately 884 kilograms of pseudoephedrine, and in February of this year Operation

Firewall resulted in the seizure of 3.4 tons of pseudoephedrine in

Mexico, both of which had been brought in from Germany.

As another example of the cooperative efforts, on August 13th of

this year, Assistant Secretary Myers and Customs and Border Protection Commissioner Basham signed a bilateral strategic plan

with Mexican Customs that will further enhance cooperation between our two countries.

Under the auspices of the agreement, ICE and Mexican Customs

will be establishing a bilateral enforcement task force and a bilateral trade fraud subgroup that will contribute greatly to the fight

against methamphetamine and precursor smuggling, and other associated cross-border activity.

In closing, I believe our agents and officers are working aggressively to attack the smuggling of methamphetamine precursor

chemicals and the proceeds that are derived from these activities.

We are working cooperatively with both our domestic and foreign

law enforcement partners, regardless of which side of the border

they are working from.

I would be happy to take any questions that you have.

[The prepared statement of Mr. Allen appears in the appendix.]

The CHAIRMAN. Thank you all very, very much.

It seems to me that there are really only three more areas to

fight with methamphetamine. One is demand, to get the demand

down. Another is law enforcement, to get the bad guys and stop

them. Third, is rehabilitation. I think that is part of the solution

here. In that respect, we have in Montana, and also in some other

States, drug courts. They are a little expensive, but I think they

do help in that area.

But it sounds like, at least in Montana, the demand is coming

down, at least among that certain population group, teens and so

forth. I am not sure of the degree to which demand is coming down

with other population groups in Montana, but in at least one area

there is progress, and that is with teens.
18

So this is kind of a free-ranging discussion here among all of the

six of you. But the basic question is, in all those areas, which are

the most effective and where do we need more resources? How can

this committee help in providing the resources or passing legislation to help address each of those components?

It sounds a bit like there are a lot of super-labs in Mexico, but

it also sounds like Mexicans are going to institute a zero import

policy of precursors, which is very helpful. But as we all know in

life, when we push on the balloon someplace, it tends to pop up

someplace else.

So I would like you to kind of just look at the big picture so we

are not wasting a lot of time. That is, what do we really need to

do, cutting through a lot of bureaucracy and cutting through a lot

of stuff to cut down meth?

I will start with you, Mr. Siebel, because you have lots of experience in getting demand down in Montana. I know what you are

going to say in part is we just need a lot more money, some Federal

money, to help buy these ads around the country, which is probably

true. But if you could still just tell us what you think.

Mr. SIEBEL. Well, as you know, Senator, the Meth Project has

been entirely a privately funded effort. To date, we have spent

about $18 million on this project. In Montana, going forward

through the help of you and others, in 2008 and beyond it will receive some public funding.

The bottom line is, adult meth use is down 70 percent, teen meth

use is down dramatically, meth crime is down 53 percent. For $40

million a year, I believe that we could achieve the same results in

the—what are there, 10 States represented by the committee members on this committee? For $48 million a year, I believe we can

achieve the same thing in those States.

The CHAIRMAN. All right. Other general thoughts? I was intrigued with the Mexican component here, the international component. Mexico is making a major effort, it seems. Yet, we have Internet sales. How do we get a handle on imports coming into the

United States? Labs are down locally. That is good. We have law

enforcement and legislation limiting precursors. Putting them behind the counters helped. But how do we address this international

dimension more effectively?

Mr. RANNAZZISI. If I may start, first, when we started looking at

Mexico as a source country for meth, and we went back 2 or 3

years ago, one of the things they were lacking was training. Mexico

is where we were in the 1970s with clandestine labs. We had a lot

of law enforcement officers looking at biker labs, and no one was

trained.

With the help of INL and an influx of INL money, we got to train

about 2,100 law enforcement officers and regulatory personnel in

Mexico. That training was the foundation for their lab operations.

We now have five task forces, or SAUs, operating labs in the

hotspots: Mishoacan, Sinaloa, Sonora, Jalisco, and Baja Norte.

Those are finding the labs. They are actually going out there and

looking for the labs. That was not happening before this training,

so my hat is off to State for coming up to the plate with the money

necessary to train those officers.
19

But it does not end there. Without the chemicals, methamphetamine cannot be produced: no chemicals, no drugs. So we have to

work internationally. We have to prevent the chemicals from going

into Mexico, and to do that we have to work with the exporting

countries and the INCB. Ms. McCampbell is right, Mexico did cut

off their imports, I believe. In January of 2009, all pseudoephedrine

will be out of their pharmacies.

The CHAIRMAN. And if that happens, how much of a difference

will that make?

Mr. RANNAZZISI. As far as what they are doing now with their

import restrictions?

The CHAIRMAN. I mean, if that happens, if they are able to prevent the imports essentially of all the precursors into Mexico, that

is one country, one effort, and that is very commendable. How

much difference will that make?

Ms. MCCAMPBELL. Senator, let me take that one from a personal

perspective out of California. We had all the super-labs there about

5 or 6 years ago. When we started working with Canada to restrict

the chemicals that were coming in and we created these new laws

where these guys could not go in and take the pills off the shelves

and start making cooks and things like that, when we started

doing that it made a huge difference.

It literally has almost stopped all the super-labs in California.

They are way down. We have pushed them back to Mexico. I do not

know how good that is, but it has certainly helped in keeping it out

of one State, out of California. It is because we took that initiative

to make it happen and we changed these laws.

Another thing. I want to mention, what do we do? I think it is

really important that we use international forums to make these

countries aware, because not all of them understand what we are

going through. I was down in Guatemala not too long ago. They did

not even really know about methamphetamine. That is not an issue

that they deal with. But we are warning them that it is on its way

because it is easy to make.

Coming up also in a couple of weeks, the U.N. is having their

General Assembly meeting. We plan to make this an international

forum to talk about meth and controlling meth, using the Combat

Methamphetamine Act and reporting chemical shipments to the

INCB so we can use that information.

The CHAIRMAN. My time is way over. Thank you very much.

Senator Grassley?

Senator GRASSLEY. Thank you, Mr. Chairman, and to all of you

for your testimony. Mr. Siebel, I am glad to know that your program is working. A couple of years ago you came in and briefed me

on it. I appreciate that very much, and I am glad to have the follow-up today.

Mr. SIEBEL. Thank you.

Senator GRASSLEY. Mr. Kendell, I want to get your opinion about

the block grant and the cutting of the COPS and Byrne-JAG program. I remain concerned that these proposals keep coming up that

are going to limit these vital grant programs.

The first question is, should the funding be pulled and the

Byrne-JAG grant program be dissolved? What sort of impact would

this have on drug enforcement task forces in our State?
20

Then, if you could also give me a rough idea—and you may not

be able to do this—but what percentage of arrests and prosecutions

would you attribute to the funding provided by these programs in

our State?

Mr. KENDELL. Byrne-JAG funding is vital to the drug enforcement effort in Iowa, and I think that is the case in many States.

Without that funding, we are not going to have a multi-jurisdictional task force program. I think we have seen that over the last

5 years. The money has actually been cut in the neighborhood of

50 percent to Iowa over the last 5 years. What we have left is a

skeleton crew, basically, of multi-jurisdictional task forces.

What you see in Iowa is, that is the grass-roots level of drug enforcement. Seventy-four percent of the cases filed by the State Division of Narcotics Enforcement originated as multi-jurisdictional

task force cases, and the majority of DNE’s cases get adopted for

Federal prosecution. So it really does, in Iowa in particular, start

at the grass-roots level in the communities.

This is really the only way that those communities can have any

kind of coordinated drug enforcement effort. It allows them to

share resources. We have some communities in Iowa that have a

3-person police force. Between 24/7 coverage of their streets, they

do not have time to do drug enforcement. So, it is absolutely vital.

Senator GRASSLEY. You were going to answer my next question.

Mr. KENDELL. I was just going to say, as far as the percentage

of arrests, I provided some materials in my written testimony. I do

not have the numbers in my head, but we laid out our State fiscal

year 2007 arrest numbers for drug task forces in Iowa.

Senator GRASSLEY. All right.

Now, what effect, Mr. Kendell, is the pure form of meth having

on users and our State’s attempt to reduce addiction rates?

Mr. KENDELL. With the reduction in the labs, we have had about

a 1-percent decrease in the number of people admitted to treatment

for methamphetamine as their primary drug, from like 14.6 percent

of admissions down to 13.6 percent. It is almost a nominal decline.

The purity level just makes it that much harder for them to be

faced with the situation that they want to change, that they can

change, and that they can make a different track in their life.

That is where the prevention programs that we have heard about

are good. ONDCP has one going recently that provides a message

of hope. I think that is important also in the prevention programs

that we do, that there is hope for people addicted to methamphetamine, that treatment can work.

Senator GRASSLEY. Ms. McCampbell, on August 7, the Washington Post ran an article entitled, ‘‘U.S. Anti-Drug Aid Would Target Mexican Cartels.’’ It stated that the administration was close

to securing a multi-year deal to provide anti-drug aid to Mexico,

similar to Colombia. The article states that the deal would likely

involve training and gear to Mexico to help root out drug cartels.

However, while the article provides some information on this proposed agreement, it is short on details.

I have another hat as co-chairman of the Senate Caucus on

International Narcotics Control, and I am interested in any agreement that would provide foreign aid for international control. So,

given that you are here to testify on current issues dealing with
21

methamphetamine and the border, can you provide us with some

details on this agreement and how it would help curb the importation of high-quality meth from Mexico?

Ms. MCCAMPBELL. Yes, Senator. When the President met in Canada just recently with President Calderon, they did have extensive

talks about, what can we do, what can the United States do, with

Mexico to act as partners, not to come in and just give aid but to

work as partners, because the drug trafficking and the gangs, the

meth, it is all affecting both of our countries. We believe that President Calderon has made extensive efforts to try to curb this problem. When he speaks, he seems like he is on our side and we have

a common mission together.

As far as details, the reason it is not in the paper is because we

do not have the details down yet. We have sent a number of teams

down to Mexico trying to determine, what is it that we can do to

help them, what kind of equipment can we give them, what kind

of training we can provide. So we do not have the details yet. The

President has said, or at least our legislative folks are preparing

to come and meet individually with Congress.

Senator GRASSLEY. Would you brief me in my capacity as chairman of the International Narcotics Control Caucus when you have

those details?

Ms. MCCAMPBELL. Absolutely.

Senator GRASSLEY. All right.

Senator Bingaman?

Senator BINGAMAN. Thank you very much, Mr. Chairman.

Mr. Siebel, congratulations to you on your success with your

project up in Montana.

Mr. SIEBEL. Thank you, sir.

Senator BINGAMAN. I am interested in knowing, I saw the release

that you put out from the Meth Project about the ONDCP adopting

some of the ads that you used in Montana, and they are going to

use those now, as I understand it, in eight States. Eight additional

States.

Mr. SIEBEL. Yes, sir.

Senator BINGAMAN. How much do they have budgeted for that?

Mr. SIEBEL. I believe that the Congress passed legislation to set

aside 10 percent of their $100 million prevention campaign in

methamphetamine, and they took about $9 million of that. Is that

about right? They took about $9 million of that and kind of sprinkled together some Partnership for a Drug-Free America ads, and

a few of our ads that they are running around in difference places

in the country. That is a little different than what we did in Montana and what we are doing in your neighboring State of Arizona,

which is kind of a sustained, consistent, high-reach level for a couple of years.

Senator BINGAMAN. If we were to do a sustained level for a year

nationally——

Mr. SIEBEL. In the State of New Mexico.

Senator BINGAMAN. Not just New Mexico, but nationally.

Mr. SIEBEL. All right. Here is how I will answer the question.

The State of New Mexico would cost $2.5 million. To sustain it at

the same level that we are sustaining it in the State of Montana,
22

to do it nationally would cost about $300 million a year, just for

methamphetamine.

Senator BINGAMAN. All right.

If you did not do as sustained an effort as you have done in Montana, but did do a significant effort at raising awareness——

Mr. SIEBEL. In fairness, sir, I think that if we look at some of

our larger media markets, some of our larger media markets are

the places that do not have the most significant methamphetamine

problems. So on a per capita basis, the expensive media markets,

New York, L.A., Chicago, this is not where the methamphetamine

problem tends to be—and I will defer to experts here—but when

we get into more rural areas, the Central Valley in California,

Montana, New Mexico, downstate Illinois. And when I say $300

million, that assumes taking out the most expensive media markets. The problem really is more concentrated in the least-expensive media markets.

Senator BINGAMAN. So what would you guess or estimate would

be the cost of going into those areas where the problem is worse?

Mr. SIEBEL. I believe that for $100 million a year, we could reduce methamphetamine use by 50 percent in the United States.

Senator BINGAMAN. Do you know what ONDCP is planning to request in the way of a budget next year?

Mr. SIEBEL. No, sir. But my understanding is that their requirements are a little bit broader and methamphetamine is one of a—

I mean, they have to deal with the whole issue of illegal substances.

Senator BINGAMAN. Right.

Mr. SIEBEL. So they have a much bigger issue to address.

Senator BINGAMAN. All right.

Mr. SIEBEL. But I believe that their budget is on the order of

$100 million for all drugs.

Senator BINGAMAN. Let me ask about this decision by Mexico to

ban the importation of precursor drugs. I thought I understood you,

Ms. McCampbell, to say that was effective the 1st of January,

2008, and I thought I heard Mr. Rannazzisi say it was 2009. Which

is it?

Mr. RANNAZZISI. The way we understand it, discussing it with

our counterparts in Mexico, I believe they have just instituted

pharmacy-only sales for pseudoephedrine. They will stop the importation of pseudoephedrine into the country in January of 2008, January 1, 2008. They will deplete all of their stores of all the pseudoephedrine products, so by January of 2009 there will be no product

left in the country, pseudoephedrine.

Senator BINGAMAN. All right. So as quickly as the supply is sold

out, it will be impossible to legally obtain pseudoephedrine. Is it

other precursors, or just pseudoephedrine?

Mr. RANNAZZISI. Pseudoephedrine and ephedrine, the way it was

explained to me. We have not seen it in writing yet, but pseudoephedrine and ephedrine products. Again, all the stores will be depleted by January. That is what they are estimating, January of

2009. But they said, by law, it has to be done by January of 2009.

Senator BINGAMAN. All right.

I have one other question, Mr. Chairman. Should I go ahead with

that?
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Senator GRASSLEY. Why don’t you go ahead?

Senator BINGAMAN. Let me just ask one other question. On these

super-labs, I keep hearing about how all the methamphetamine

that is coming into the country now is coming from super-labs in

Mexico. Do we know where those labs are located, and do the Mexicans know where those labs are located?

Mr. RANNAZZISI. The Mexican government, with our assistance,

has identified hot spots, again, in Mishoacan, Jalisco, Baja Norte,

Sonora, and Sinaloa. Those five are where there is a lot of meth

trafficking and meth manufacturing activity. But as it is in this

country, it is very difficult to identify the exact locations, so the police officers are being trained or have been trained in how we identify here. It is a long process.

If you went back in the history of clandestine labs, we were actually looking for them. 2002, 2003, and 2004, everybody was just

stumbling over them. I mean, 1,700-plus lab incidents in 2004. We

had police officers who were telling us, we were on the way to one

lab and we find a dump site on the way to that lab. Those numbers

have since gone down. I think in 2006, we only had a little over

7,000 labs, probably 8,000 when it is all over with. This year, it

will go down quicker.

So they are in the same boat that we are in. They are basically

looking for the labs now because they do not have the numbers

that we have, the gross numbers that we have, but the labs they

do have are very large and very well hidden.

Senator BINGAMAN. I will stop with that.

Thank you very much, Mr. Chairman. Thank you all for being

here.

Senator GRASSLEY. I will ask a couple of questions that I was not

able to ask. Also, Senator Roberts informed me that he would be

back to ask questions.

Mr. Rannazzisi, Ms. McCampbell, or Mr. Allen, maybe one or all

of you, I want to ask about candy-flavored meth. I think you probably know better than I do that this is a problem. In the past year,

law enforcement officials have been finding a greater presence of

this meth on the West Coast and in the Midwest. So far, 13 States

have documented arrests on candy-flavored meth-related charges.

Is candy-flavored meth part of the Mexican drug cartels’ efforts to

get children addicted to their product or is this emerging trend

largely more home-grown? All of you, or one of you. Whoever can

answer it.

Mr. RANNAZZISI. While we have identified cases where there have

been candy-flavored, Strawberry Quick meth, or whatever you are

talking about, I do not know if we could tie it to one particular organization or a Mexican organization. That is something we would

have to get back to you on, sir. But I promise, once we get done

here, we will go back and look at all of our files to determine that.

Senator GRASSLEY. All right.

Is that the same for the rest of you that I was going to ask?

Ms. MCCAMPBELL. I do not have specific knowledge on it either.

The only thing I can say is, we did see some candy-flavored meth

coming up from the mom-and-pop labs, the smaller labs that were

in the rural areas. But I do not know that we have seen any of it

in large amounts.
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Senator GRASSLEY. All right.

Mr. ALLEN. And I would say that, at the smuggling level, we

have not, to my knowledge, seen meth that has had flavoring

added to it, mostly because what we see is not really packaged for

street-level distribution. But we would also take it back and take

a look at what we have submitted to the DEA labs to get a sense

of whether or not there are those kinds of additives.

Senator GRASSLEY. All right.

To the same three of you, the success of the Combat Methamphetamine Act causes us now to turn our attention to our largest outside supplier, as we have said here, Mexico. What legislative

changes would you propose to reduce the amount of Mexican meth

coming into the United States? What non-legislative changes are

needed to help stop the flow of meth coming from Mexico? If we

stop the production and trafficking of meth from Mexico, do you believe that somebody would find some other way to get it into the

country?

Mr. ALLEN. I will start out. I would say, one non-legislative or

a hybrid of a legislative and a non-legislative fix is that, at the

point at which we come to an agreement with the Government of

Mexico on how we can assist them with the problem, I think we

will need a lot of congressional support to make that happen. I

think we found a very willing partner in the new president there,

and he has done all the right things so far.

I think when that time comes, we will need to work as a unified

government to make it happen. I think, to take your second point,

as we have talked about a couple of times, as we work to reduce

the manufacturing and movement of meth from Mexico, I think we

are going to have to keep our eye on the ball and see how both the

smuggling of precursors changes, and assist the Government of

Mexico to focus on whether or not those labs do leave Mexico or

whether or not the smuggling of precursor chemicals becomes a

challenge for them that we can assist them with, and then also

look to other countries where we might see meth production shift

to and take the place of Mexico.

Senator GRASSLEY. Is the answer the same for you other two?

Ms. MCCAMPBELL. Yes, in essence. I would say, Senator, that as

soon as the details are worked out—which should be very soon; I

think they are at the tail end of coming up with how we are going

to go about this security package to Mexico—we can get it to you

and start informing you of the details, and I think you will be

pleased about the efforts between our two countries.

Senator GRASSLEY. I may have some questions I want to submit

in writing, but that is all I am going to ask vocally.

The CHAIRMAN. Thank you, Senator.

Senator Roberts?

Senator ROBERTS. Thank you, Mr. Chairman. I am out of breath,

I apologize. Thank you for doing a song and dance so I could at

least get back and ask some questions.

The CHAIRMAN. Senator, I will be right back, but you are in

charge now. [Laughter.]

Senator ROBERTS. I am going to move S. 551. [Laughter.] Without objection, it is passed by the full committee for the third time.

[Laughter.]
25

The CHAIRMAN. Without objection, so ordered. [Laughter.]

Senator ROBERTS. Thank you.

I have a glowing statement here that reflects the concern and the

fine testimony of the witnesses, and I would ask that it be put in

the record at this point. Without objection, it is so ordered.

[The prepared statement of Senator Roberts appears in the appendix.]

Senator ROBERTS. I am starting to like this. [Laughter.]

Anyway, they said that a Senator was supposed to be in two

places at the same time over half of the time. A real funny thing

occurs when they discover that they are in the wrong place. This

is the Agriculture Committee, right? [Laughter.] All right.

Mr. Kendell, are you a Hawkeye or are you a Cyclone?

Mr. KENDELL. Cyclone. My wife went to Iowa State, so I am a

Cyclone. I actually grew up a Badger, so I hope that does not get

me——

Senator ROBERTS. I am just going to compliment you on your

field goal. That has nothing to do with it, but I just thought I

would toss it out.

Mr. Siebel, I am just absolutely amazed. Not amazed, but this is

quite a record. Montana used to rank fifth in the Nation for per

capita meth abuse. Then you launched this tremendous advertising

campaign, 15 million bucks, financed entirely by the private sector.

Your suggestion is we spend $40 million of the taxpayers’ money

in Montana, Iowa, Arkansas, New Mexico, Washington, Mississippi, Arizona, Idaho, obviously most of it in Kansas, and then

Nevada. This was all basically an advertising program.

The thought occurs to me, being an old newspaper guy, that is

very, very impressive if advertising could do that. There was someplace in your comments where you said that if you asked a youngster, would they be inclined to use meth for the first time, I do not

know how that was put to them, but 84 percent said ‘‘no.’’ The

thought occurs to me, I do not know why anybody would say ‘‘yes.’’

Mr. SIEBEL. When we started, Senator, before we began doing

any advertising, we did a baseline survey. Sixty-seven percent of

the young people said methamphetamine was readily available at

the time; 44 percent of young people in the State saw significant

benefit in using meth: increased energy, euphoria, weight loss,

what have you. Twenty-five percent of young people saw no risk in

giving it a try. So if you look at availability, perceived benefit, little

down side of risk, that was a recipe for disaster.

Senator ROBERTS. How long has your public service messaging

been in effect so that you could overcome that attitude?

Mr. SIEBEL. We began the first week of September of 2005, sir,

so it has been exactly 2 years.

Senator ROBERTS. Two years, and you have been able to do that?

Mr. SIEBEL. Yes, sir.

Senator ROBERTS. That is significant. I was trying to figure out

if there was another criteria for law enforcement people to back

that up, other than simply polling. And I am not trying to perjure

that by any means. But that is unique. That certainly is one way

to do it. I know that the Chairman mentioned demand, rehabilitation, and law enforcement. I would put advertising in there, too.

Mr. SIEBEL. We are focusing on the demand side.
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Senator ROBERTS. On the demand side.

Mr. SIEBEL. We are reducing demand.

Senator ROBERTS. That is amazing.

And then in your surrounding States, it went up. Not by a lot,

but it went up by some.

Mr. SIEBEL. In Wyoming and South Dakota, meth use went up

in the same period of time. In Oregon, it went down.

Senator ROBERTS. I think in Kansas it probably went up.

Ms. McCampbell, you have probably the most impressive resume

of anybody I have ever read about in your chosen field. You are the

recipient of the Jack Kerrigan Award. You have a B.S. degree in

Criminal Justice, a Master’s degree, Juris Doctorate degree from

San Francisco Law School. We will forgive you for that. A graduate

of the FBI National Academy. I do not see anything here that you

have not done. I have a question for you, but first I have a question

for you, Mr. Kendell.

Mr. Kendell, you have 99 counties in Iowa, and you have really

beefed up on your security. You indicate that there is some Federal

Justice funding. What percent of that funding of that security program that you have—maybe that is the wrong way to put it—is

based on Federal funding? Can you just give me a ballpark figure?

Mr. KENDELL. This year we put the largest percentage—so I am

going to say 70 percent—of our Byrne-JAG award into the multijurisdictional drug task force. We combined that with a State appropriation this year of approximately $1 million, and then there

is a 25 percent local match of local dollars.

Senator ROBERTS. So it is a million bucks?

Mr. KENDELL. That is the State appropriation.

Senator ROBERTS. Oh, I am sorry.

Mr. KENDELL. $2.9 million, I believe, is our Byrne-JAG money.

Senator ROBERTS. So it is about $3 million.

Mr. KENDELL. Right.

Senator ROBERTS. And you are seeing some real improvement

with that program, obviously?

Mr. KENDELL. Well, actually it is something that has been cut

over the past 5 years. We have had a 50-percent cut in the Federal

funds available for that program, so really right now it is a skeleton of what it was 5 years ago.

Senator ROBERTS. But the skeleton has been effective.

Mr. KENDELL. It has been effective. The locals continue to do

more with less.

Senator ROBERTS. But with more funding, you could be more effective.

Mr. KENDELL. Absolutely.

Senator ROBERTS. All right. That is pretty much understood by

everybody who comes to Washington.

I have a bill, S. 551. It is co-sponsored by Mr. Nelson, Mr. Hagel,

Mr. Isakson, Mr. Cochran, and Mr. Salazar, but he does not know

it yet. [Laughter.] It would provide a tax credit to improve security

measures at sites where agriculture chemicals are stored. Qualified

chemical security expenditures include tagging, locking tank

valves, and chemical additives to prevent theft of specific agricultural chemicals or to render such chemicals unfit for illegal use.
27

Businesses eligible for the tax credit include those that sell agricultural products, including specific agricultural chemicals that retail predominantly to farmers, ranchers, or businesses that manufacture, formulate, distribute, or aerially apply agricultural chemicals.

My question to you, Mr. Kendell, Mr. Director: do you think this

legislation would assist in further reducing the number of meth

labs? The answer is ‘‘yes.’’ [Laughter.]

Mr. KENDELL. Yes. I think it definitely would. That is one of the

things that Iowa has done over the last 4 years, taken congressionally directed funding and used it to purchase tank locks for anhydrous tanks. I think that, combined with the precursor chemicals—

I mentioned that our reduction of meth labs is right around 90 percent right now, and that is higher than the national average. I

think there is clearly something more going on than the precursor

controls in Iowa. I think programs like the tank lock program and

calcium nitrate are part of that.

Senator ROBERTS. Well, if we are getting a lot of pressure on the

budget in one way with regards to the grants, et cetera, et cetera,

with the $40 million that Mr. Siebel would like to have, it seems

to me, I do not know if we give a tax credit—I know this committee

is very hesitant to go down that road, because once you go down

it, why, you keep going down it. But it seems to me that that would

work, at least in regards to security.

I am going to ask Ms. McCampbell what she thinks about that.

In other words, it is coming in. You are going to try to stop it, and

you are doing a better job of stopping it. Once it gets here, from

a legal standpoint, if we could lock it up and secure it so that people could not have access to it, it seems to me that that would be

a benefit.

Ms. MCCAMPBELL. Well, no doubt, I agree with you. I mean, controlling what is here, the imports, the exports——

Senator ROBERTS. Exactly.

Ms. MCCAMPBELL. Yes. We have to do that, and we are on the

right track with that with the Combat Methamphetamine Epidemic

Act. That is what that whole thing was about, was to first of all

determine who is sending it here and who is getting it, and how

do we control it. I think we need to continue the next steps forward

on the Combat Methamphetamine Epidemic Act.

As far as controls, I personally think a lot of this is awareness.

There are foreign countries that we are getting it from. It is coming

from India, Germany, and these other places. I think an awareness

program is essential to make sure they understand what we are

getting and what it is doing.

I will tell you, one of the things that I run into is in Bolivia—

which is not one of the countries we are talking about here. But

they are on a mission to try to legalize coca because they are trying

to build an economy on it. They do not care whether or not it is

producing cocaine in this country or allowing cocaine in here.

Our starting point is to make them understand what it is it is

doing. You have little coca farmers out there, and they just see a

plant. They do not think it is any big deal, and then it ends up in

our country. I think we have to take that same route with the
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Combat Methamphetamine Epidemic Act and continue to make

these countries know what is occurring.

Senator ROBERTS. Well, the bill is S. 551. The same thing would

apply to Afghanistan, too. We are having a lot of problems there,

too.

But thank you for all of your work, and thank you, all of you,

for taking time out of your valuable schedule and informing the

committee on this important issue.

And as Chairman of the committee, I will now deem that this

committee is through with its deliberations, and we thank you and

we adjourn at this particular time. Thank you so much.

[Whereupon, at 11:32 a.m., the hearing was concluded.]
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