```

[Senate Hearing 114-749]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-749

            CARTELS AND THE U.S. HEROIN EPIDEMIC: COMBATING DRUG 
                   VIOLENCE AND PUBLIC HEALTH CRISIS

=======================================================================

                                HEARING

                               BEFORE THE

                        SUBCOMMITTEE ON WESTERN
                    HEMISPHERE, TRANSNATIONAL CRIME,
                  DEMOCRACY, CIVILIAN SECURITY, HUMAN
                   RIGHTS, AND GLOBAL WOMEN'S ISSUES

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 26, 2016

                               __________

       Printed for the use of the Committee on Foreign Relations
       
       
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                COMMITTEE ON FOREIGN RELATIONS         

                BOB CORKER, Tennessee, Chairman        
JAMES E. RISCH, Idaho                BENJAMIN L. CARDIN, Maryland
MARCO RUBIO, Florida                 BARBARA BOXER, California
RON JOHNSON, Wisconsin               ROBERT MENENDEZ, New Jersey
JEFF FLAKE, Arizona                  JEANNE SHAHEEN, New Hampshire
CORY GARDNER, Colorado               CHRISTOPHER A. COONS, Delaware
DAVID PERDUE, Georgia                TOM UDALL, New Mexico
JOHNNY ISAKSON, Georgia              CHRISTOPHER MURPHY, Connecticut
RAND PAUL, Kentucky                  TIM KAINE, Virginia
JOHN BARRASSO, Wyoming               EDWARD J. MARKEY, Massachusetts

                  Todd Womack, Staff Director        
            Jessica Lewis, Democratic Staff Director        
                    John Dutton, Chief Clerk        

           SUBCOMMITTEE ON WESTERN HEMISPHERE, TRANSNATIONAL
                  CRIME, CIVILIAN SECURITY, DEMOCRACY,
                HUMAN RIGHTS, AND GLOBAL WOMEN'S ISSUES

                 MARCO RUBIO, Florida, Chairman        

JEFF FLAKE, Arizona                  BARBARA BOXER, California
CORY GARDNER, Colorado               TOM UDALL, New Mexico
DAVID PERDUE, Georgia                TIM KAINE, Virginia
JOHNNY ISAKSON, Georgia              EDWARD J. MARKEY, Massachusetts

                              (ii)        
 

                            C O N T E N T S

                              ----------                              
                                                                   Page

Rubio, Hon. Marco, U.S. Senator From Florida.....................     1

Boxer, Hon. Barbara, U.S. Senator From California................     3

Foote, Daniel L., Deputy Assistant Secretary of State, Bureau of 
  International Narcotics and Law Enforcement U.S. Department of 
  State, Washington, DC..........................................     5

Chester, Kemp, Associate Director for the National Heroin 
  Coordination Group, Office of National Drug Policy, Washington, 
  DC.............................................................     6

Jacobs, Hon. Teresa, Mayor of Orange County, Florida.............    23

Dudley, Steven, Co-Director, InSight Crime, Washington, DC.......    25

              Additional Material Submitted for the Record

Additional Questions Submitted for the Record by Members of the 
  Committee

Responses to Questions Submitted to Assistant Secretary Daniel 
  Foote by Senator Marco Rubio...................................    37

Witnesses Prepared Statements

Prepared Statement of Daniel L. Foote, Deputy Assistant 
  Secretary, Bureau of International Narcotics and Law 
  Enforcement Affairs............................................    40

Prepared Statement of Kemp L. Chester, Associate Director for the 
  National Heroin Coordination Group, Office of National Drug 
  Policy.........................................................    41

Prepared Statement of Teresa Jacobs, Mayor of Orange County, 
  Florida........................................................    45

Prepared Statement of Steven Dudley, Co-Director, Insight Crime..    46

Prepared Statement of Jack Riley, Acting Deputy Administrator, 
  Drug Enforcement Administration................................    49

                             (iii)        

 
   CARTELS AND THE U.S. HEROIN EPIDEMIC: COMBATING DRUG VIOLENCE AND 
                          PUBLIC HEALTH CRISIS

                              ----------                              

                         THURSDAY, MAY 26, 2016

                               U.S. Senate,
               Subcommittee on Western Hemisphere, 
                      Transnational Crime, Civilian
                         Security, Democracy, Human Rights,
                                 and Global Women's Issues,
                                     Committee on Foreign Relations
    The subcommittee met, pursuant to notice, at 9:03 a.m. in 
Room SD-419, Dirksen Senate Office Building, Hon. Marco Rubio, 
chairman of the subcommittee, presiding.
    Present: Senators Rubio, Gardner, Boxer, Kaine, Menendez, 
and Markey.

            OPENING STATEMENT OF HON. MARCO RUBIO, 
                   U.S. SENATOR FROM FLORIDA

    Senator Rubio. Good morning. This hearing on the 
Subcommittee of the Western Hemisphere, Transnational Crime, 
Civilian Security, Democracy, Human Rights, and Global Women's 
Issues will come to order. I thank you for being here today.
    The title of this hearing is ``Cartels and the U.S. Heroin 
Epidemic: Combating Drug Violence and Public Health Crisis.''
    Before we begin the meeting, on a matter of personal 
privilege, I wanted to acknowledge the contributions of a loyal 
and a dedicated staffer because behind every one of us here in 
the Senate, there are loyal and really hardworking people. 
Literally they sit behind us at these meetings, and they do all 
the hard work behind the scenes to make sure that we are 
briefed and prepared to cast votes and advance public policy 
that makes a difference.
    Since 2011, Maggie Dougherty has been an instrumental part 
of our policy team, and she has logged in countless hours 
working on all sorts of complex and important issues for our 
office. She has also logged in countless hours sitting behind 
us here in these committee meetings, but no longer. Today is 
Maggie's last Senate Foreign Relations Committee meeting. In a 
week's time, she will depart our office to even a bigger and 
better opportunity. So I just briefly wanted to thank her for 
everything she has done for us. We are very proud of her work. 
[Applause.]
    Senator Rubio. So the title of this hearing, ``Cartels and 
the U.S. Heroin Epidemic''--we have two panels testifying. The 
first is an official panel that will feature Mr. Daniel Foote, 
the Deputy Assistant Secretary of State for the Bureau of 
International Narcotics and Law Enforcement at the U.S. 
Department of State, and Mr. Kemp Chester, the Associate 
Director for the National Heroin Coordination Group for the 
Office of National Drug Control Policy.
    The second panel will present the Honorable Teresa Jacobs, 
the Mayor of Orange County, Florida, and Mr. Steven Dudley, the 
Co-Director of InSight Crime.
    Thank you all for being here today. We appreciate your 
time. We appreciate your dedication. I would also like to thank 
all of those who worked alongside my staff and making this 
hearing possible.
    Drug cartels operate out of countries in the western 
hemisphere, and they do so by using sophisticated distribution 
systems that move narcotics into and across the United States. 
Heroin supplied by these cartels has created a public health 
epidemic and fueled drug violence across this country.
    The heroin epidemic, drug war, and fight against drug 
violence are, unfortunately, becoming part of everyday events 
in our society. It is our duty to find the best possible 
avenues and allocate resources to provide the best tools to 
equip those on the front lines to fight this public health 
crisis. We need to examine what the United States, Mexico, and 
other regional partners are doing to cooperatively address the 
rise in heroin and in drug trafficking. Promoting the efficacy 
and proper execution of U.S. initiatives to stop the spread of 
heroin and combat the drug cartels should be one of our top 
priorities.
    Here are some facts. One of the primary culprits in this 
fight is called fentanyl. It is a synthetic opiate that is 25 
to 40 times more potent than heroin and it may be used to treat 
pain associated with advanced cancer. While fentanyl is legally 
prescribed in the United States, the CDC states that most cases 
of fentanyl-related overdoses are associated with non-
pharmaceutical fentanyl. It is a type used as a substitute for 
heroin or mixed with heroin or other drugs, sometimes without 
the user's knowledge.
    In 2015, the DEA's National Drug Threat Assessment Summary 
reported that Mexico and China have been cited as the primary 
source country, though some analogs of fentanyl are 
manufactured in China. These supplies are often trafficked into 
the United States across the southwest border or delivered 
through mail couriers. Transnational criminal organizations 
also use Florida as the point of arrival for South American 
cocaine and heroin. Much of the illegally diverted and produced 
fentanyl is found in the same U.S. markets where white powder 
heroin is found.
    According to the Substance Abuse and Mental Health Services 
Administration, the estimated number of individuals who used 
heroin was 914,000 people in 2014.
    In addition, there are about 586,000 individuals, or 
basically .2 percent of the 12 and older population, who had a 
heroin disorder in 2014.
    While there has been an increase in heroin overdoses and 
heroin-related deaths across the United States, the Midwest and 
the Northeast regions have been areas of particular concern. To 
this day despite the administration's efforts, heroin-related 
overdose deaths increased by 244 percent between 2007 and the 
year 2013.
    The U.S. has responded to such findings by launching the 
Heroin Response Strategy, leveraging upon the 15 high intensity 
drug trafficking areas across the country.
    Mexico, our regional partner, has displayed willingness to 
cooperate with U.S. authorities, but despite these operations, 
the International Narcotics Control Strategy Report estimates 
that less than 2 percent of cocaine that comes through Mexico 
is seized by this country's authorities. Under the Merida 
Initiative, Congress has provided billions in funds to the 
Mexican Government to improve security and the rule of law, and 
I applaud the continued efforts of the Mexican Government to 
continue its drug crop eradication efforts and to arrest drug 
kingpins. However, we are still far from the finish line.
    I think the Congress can continue to work in constructive 
ways to promote legislation addressing opiate abuse. I am proud 
to be the cosponsor of the Comprehensive Addiction and Recovery 
Act, a bipartisan bill that overwhelmingly passed the Senate. I 
also applaud the House for working to address this issue, and I 
hope soon we will be able to send this legislation to the 
President's desk.
    It is my hope that today's hearing will shed light on the 
consequences that this epidemic will have in our society and 
future generations if left unaddressed and not given proper 
attention. I am optimistic this hearing will serve as the 
opportunity to learn about the administration's priorities in 
combating the heroin epidemic and drug violence. And I hope you 
will address these issues in your testimony as well.
    With that, I will now turn it over to our ranking member, 
Senator Boxer, for her opening statement.

               STATEMENT OF HON. BARBARA BOXER, 
                  U.S. SENATOR FROM CALIFORNIA

    Senator Boxer. Mr. Chairman, thank you so much for holding 
this important hearing.
    The abuse of illegal and legal drugs in America is an 
absolute crisis, and to fight it, we need to act on many 
fronts.
    Take the case of opioids. These are legal prescription 
drugs that are killing approximately 125 people every single 
day here at home. The CDC says that in 2014, 47,000 people died 
from opioid abuse. Just imagine that.
    We need to do much more than we have done so far to put 
real dollars behind the effort to stop this madness.
    Then there is the issue we will focus on today of illegal 
drugs being transported into this country.
    Recently I visited Costa Rica, and I learned that this 
peaceful country is very alarmed about drug cartels 
infiltrating their population. We must help them stop this real 
threat. And I hope to ask a question about that.
    And while we are working cooperatively with the Mexican 
Government, specifically an initiative called the Merida 
Initiative, and while we have to date seized more than $4 
billion in narcotics and illicit currency, let us face it. That 
is a drop in the bucket. We simply have to address the demand 
in the United States for these lethal products. And I know that 
is not your job, and I am not going to even ask you about that. 
But I am making a statement as a United States Senator. We have 
to address the demand in the United States for these lethal 
products.
    Supply and demand go hand in hand. A long time ago, I was 
an economics major. It is like economics 101. When people 
demand a product, we know what happens. The supply will come. 
And when even more people demand a product, the price will go 
up and it goes around in a circle.
    Years ago, too many to even mention--so I do not even know 
where my chairman was at that time it was so long ago, very 
long--when I first came to Congress, I wrote a bill called 
Treatment on Demand because what I found out, Mr. Chairman and 
members, is that when there is a person in America with a 
terrible addiction, at that time--and it is so true today--they 
wake up one day and they say I have done it, I have had it, I 
need a new life. They cannot get in anywhere. So people say, 
very good, come back in 2 weeks. This is an emergency 
circumstance in many ways, but it is not considered that. So 
they will go in. Maybe they will get a pat on the back. Come 
back in 2 weeks. And by then, maybe they have even overdosed.
    Now, I know we are working with Colombia and Guatemala 
helping farmers develop alternatives to opium production. But 
again, we need to be even more aggressive in our policies 
regarding drug production, trafficking, and consumption here at 
home.
    In California, we have four of those areas that my chairman 
spoke about that are designated as high intensity drug 
trafficking areas by the Obama administration. I am extremely 
grateful to the administration. We had that help under George 
Bush as well. When you identify an area, it means you are going 
to get some attention, some Federal dollars, some Federal help 
because a lot of these local people, our police forces and so 
on, really do need that help. So I am very grateful for that.
    We have also discovered tunnels from Mexico to San Diego, 
which act as conduits for thousands of pounds of cocaine. And 
this points to the continuous challenges we face in dealing 
with these dangerous cartels. They are really good at what they 
do, and they intimidate everyone. And that is why this fight is 
so critical. We need even stronger partnerships with Mexico and 
other countries in the region.
    And I want to say this. Alienating our Latin American 
neighbors and our Latinos here at home is the worst possible 
thing we can do, first of all, on a human level because in my 
view it is prejudice and bigotry. But it does not make sense if 
we are really trying to crack down on these cartels. We need 
our friends to work with us. We do not need to escalate some 
kind of ridiculous debate about walls and all the rest.
    I do want to thank our witnesses for being here today. 
There is a lot of burden on you, and this is very difficult. 
The war on drugs has not been a success. And I think the reason 
is we have not done enough on the demand side or on any side. 
We need to do much better.
    And I want to thank my chairman because I think this is 
really well-timed given what we are facing with the opioid 
crisis. Thank you.
    Senator Rubio. Thank you, Senator Boxer.
    Before we begin with the testimony, I did want to recognize 
the senior Senator from New Jersey, who has done an extreme 
amount of work on western hemisphere issues but also issues 
regarding transnational crime, if he wanted to give any opening 
comment.
    Senator Menendez. No, thank you.
    Senator Rubio. With that, please join me in welcoming our 
first witness, Mr. Foote. Thank you for your testimony before 
us here today.

  STATEMENT OF DANIEL L. FOOTE, DEPUTY ASSISTANT SECRETARY OF 
 STATE, BUREAU OF INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT 
           U.S. DEPARTMENT OF STATE, WASHINGTON, D.C.

    Mr. Foote. Chairman Rubio, Senator Boxer, Senator Menendez, 
Senator Gardner, thank you for this opportunity to appear 
before you to discuss the work of the State Department's Bureau 
of International Narcotics and Law Enforcement Affairs to 
combat the production and trafficking of heroin particularly by 
Mexican-based drug trafficking organizations that are 
responsible for the vast majority of the heroin on America's 
streets today.
    In the United States, we face an epidemic of opioid abuse. 
Well over half of the more than 47,000 American deaths from 
last year were due to either domestically produced controlled 
prescription pain relievers or heroin, which is often combined 
with other deadly drugs such as fentanyl.
    In Mexico, drug trafficking organizations have killed tens 
of thousands of citizens, and these organizations continue to 
foment violence, instability, corruption, and addiction.
    This scourge is broader than just the United States, and we 
will not solve it alone.
    The overwhelming majority of the heroin in the U.S. is 
produced or distributed by Mexican drug trafficking 
organizations. For many years, they have been trafficking not 
only heroin but also much of the cocaine, methamphetamine, and 
other illicit drugs that enter our country. Most of these drugs 
enter through our border with Mexico.
    The United States and Mexico developed the Merida 
Initiative in 2007 with major focus on combating the production 
and trafficking of illicit drugs across our borders. Today the 
Pena Nieto and Obama administrations remain committed to 
Merida's strategic goals. Our Merida partnership, which brings 
together significant investments and capabilities of both 
countries, continues to help build Mexico's capacity to fight 
narcotics trafficking, organized crime, and violence. Together, 
we are aggressively responding to this threat by putting the 
leaders of drug trafficking organizations in jail, by seizing 
their drugs and money, and by dismantling their organizations. 
Today, through Merida, INL is professionalizing and building 
the capacity of Mexican law enforcement agencies, supporting 
the Mexican Government's efforts to strengthen border 
management and security, and helping advance reform across 
Mexico's justice sector.
    Bilaterally we have agreed that targeting the production 
and trafficking of heroin, as well as fentanyl and other 
dangerous synthetic substances, is a top shared priority. To 
that end, INL and DEA are providing training to law enforcement 
officers, investigators, and analysts increasing Mexico's 
ability to identify, investigate, and dismantle clandestine 
heroin and fentanyl labs.
    With our interagency partners, we are also improving 
information sharing between our governments on heroin and 
fentanyl working together to get better assessments on opium 
poppy cultivation and heroin and fentanyl production in Mexico 
and continuing to explore other avenues to enhance our 
bilateral cooperation and effectiveness.
    Building strong, effective Mexican justice sector 
institutions, capable of confronting organized criminal 
enterprises, is a difficult, long-term challenge. This work 
must be sustained, for it is only through a committed, 
coordinated effort that sustainable capacity to deter the 
cultivation, production, and trafficking of illicit drugs will 
be strengthened. The significant investments of both of our 
governments are producing results, and with your continued 
support, this successful collaboration with Mexico will 
continue.
    Thank you.

    [Mr. Foote's prepared statement is located in the 
Additional Material Submitted for the Record section at the end 
of this transcript.]

    Senator Gardner [presiding]. Thank you, Mr. Foote.
    Mr. Kemp Chester, Associate Director for the National 
Heroin Coordination Group, please begin your testimony. Thank 
you.

STATEMENT OF KEMP CHESTER, ASSOCIATE DIRECTOR FOR THE NATIONAL 
  HEROIN COORDINATION GROUP, OFFICE OF NATIONAL DRUG POLICY, 
                        WASHINGTON, D.C.

    Mr. Chester. Chairman Rubio, Ranking Member Boxer, and 
members of the subcommittee, thank you for inviting me here 
this morning to discuss the public health and public safety 
issues resulting from heroin use, the Government of Mexico's 
efforts to reduce the availability of heroin in the United 
States, and U.S.-Mexico cooperation to address heroin issues in 
both countries.
    In 2014, the most current year for which we have data, more 
than 47,000 Americans, or approximately 129 people each day, 
died from a drug overdose. Of the overdose deaths in 2014, 22 
percent involved heroin.
    The threat posed by heroin has continued to grow 
dramatically over the past several years, and since 2007, 
deaths involving heroin have risen 340 percent from 2,402 in 
2007 to 10,574 in 2014.
    Heroin use has spread into suburban and rural communities 
and is growing among most socioeconomic classes, age groups, 
and races.
    Mexico is currently the primary supplier of heroin to the 
United States with Mexican drug traffickers cultivating opium 
poppy, producing heroin, and smuggling the finished product 
into the United States. Poppy cultivation in Mexico has 
increased substantially in recent years, rising from 17,000 
hectares in 2014 to 28,000 hectares in 2015, which could yield 
potential production of 70 metric tons of pure heroin.
    The heroin crisis is being compounded by the reemergence of 
illicit fentanyl, a powerful synthetic opioid more potent than 
heroin. Illicit fentanyl is sometimes mixed with powder heroin 
to increase its effects or mixed with dilutants and sold as 
synthetic heroin. Increasingly fentanyl is being pressed into 
pill form and sold as counterfeit prescription opioid pills. 
The majority of the illicit fentanyl in the U.S. is 
clandestinely produced in Mexico or in China.
    Fentanyl is extremely dangerous and deadly. In 2014, there 
were more than 5,544 drug overdose deaths involving synthetic 
narcotics other than methadone, a category that includes 
fentanyl. This number has more than doubled from 2 years 
earlier.
    U.S.-Mexico engagement regarding heroin has been robust. In 
October 2015, ONDCP Director Michael Botticelli participated in 
a bilateral security dialogue where the importance of increased 
poppy eradication efforts by the Government of Mexico, as well 
as drug interdiction, clandestine laboratory destruction, and 
the disruption of precursor chemical trafficking were all 
highlighted.
    In early March, Director Botticelli, Ambassador William 
Brownfield, the Assistant Secretary of State for International 
Narcotics and Law Enforcement Affairs, and I met with the 
Mexican Attorney General Gomez, and she announced her role as 
the synchronizer of Mexico's efforts to disrupt the production 
of heroin and illicit fentanyl. Importantly, we agreed then to 
jointly develop a focused national plan to concentrate Mexico's 
efforts against heroin and fentanyl.
    The urgent need to sustain progress toward addressing the 
Nation's heroin and fentanyl crisis requires increased 
collaboration between Federal agencies and with our partners 
working at the State, local, and tribal level where the crisis 
is felt most deeply.
    In November 2015, the team that I lead, the National Heroin 
Coordination Group, was created within the Office of National 
Drug Control Policy to form the hub of a network of interagency 
partners who will leverage their home agency authorities and 
resources and to harmonize interagency activities against the 
heroin and fentanyl supply chains to the United States.
    The ONDCP-funded high intensity drug trafficking areas, or 
HIDTA program, the locally based program that responds to drug 
trafficking issues facing specific areas of the country, has 
also been instrumental. In August 2015, ONDCP committed $2.5 
million in HIDTA funds to develop a heroin response strategy. 
This innovative project combines prevention, education, 
intelligence, and enforcement resources to address the heroin 
threat through seven regional HIDTAs covering 17 States and the 
District of Columbia.
    So while we have laid a firm foundation to address the 
heroin crisis, much remains to be accomplished. For example, we 
do have gaps in our capability to detect illicit fentanyl at 
our borders, and our Mexican partners could certainly do more 
in the areas of opium poppy eradication and clandestine 
laboratory identification and neutralization.
    And while my remarks have focused on addressing the supply 
side of the opioid crisis, we must address opioid use disorders 
with a balanced approach that also regards addiction as a 
public health matter, using substance abuse prevention and 
treatment strategies and recovery support services. In his 
fiscal year 2017 budget, President Obama proposed $1 billion in 
new mandatory funding to expand the availability of evidence-
based strategies such as medication-assisted treatment and to 
extend the availability of substance abuse treatment providers.
    ONDCP will continue to work with our international 
partners, Federal Government Departments and agencies, and our 
partners at the State, local, and tribal levels to reduce 
heroin and fentanyl production and trafficking and the profound 
effect these dangerous drugs are having in our communities.
    Thank you for the opportunity to testify today, and I would 
be happy to answer any of your questions.

    [Mr. Chester's prepared statement is located in the 
Additional Material Submitted for the Record section at the end 
of this transcript.]

    Senator Rubio [presiding]. Thank you.
    And I am going to defer my questions because I know members 
need to be in other places, and I will basically be here 
throughout the duration. And so I will turn over to the ranking 
member for her questions.
    Senator Boxer. Thanks. I just have two questions for Mr. 
Foote. So, Mr. Chester, breathe. You are off the hook here.
    Mr. Foote, in 2008, Mexico's Congress passed a series of 
significant reforms to its criminal procedures, new laws to 
promote greater access to justice, and strengthened measures to 
combat organized crime, measures that would make the Mexican 
justice system look a little bit more like our own. These 
reforms were intended to be implemented by 2016. Where does the 
implementation of these judicial reforms stand, and how has the 
United States assisted in this process? And how do you feel 
about whether they are really doing what they committed to do?
    Mr. Foote. Thank you, Senator.
    As you know, Mexico committed and passed legislation to 
implement a new criminal justice system which is an 
accusatorial justice system, much like ourselves. At this 
point, of the 32 Mexican states, 24 have implemented this with 
federal level crimes and I believe 9 have implemented it at 
state level crimes. Obviously, this is a long-term process, and 
some of the states in Mexico will not meet next month's 
deadline.
    We remain committed and continue to work closely with them 
on a number of issues. Thanks to the gracious appropriations of 
Congress, we have dedicated approximately $250 million to these 
efforts between the Department of State and USAID through 
issues such as training judges, prosecutors, courtroom 
personnel, law students. Over 4,000 have been trained to date 
through Department of Justice's OPTAT prosecutorial training 
program. We also have a number of law school and institutional 
exchange programs through the American Bar Association and a 
number of universities here in the United States.
    We are preparing law enforcement for their new roles in the 
accusatorial justice sector. For instance, our Department of 
Justice partners in ICITAP have trained thousands of law 
enforcement in crime scene investigations, provided equipment 
for units and forensics, fingerprinting, and other collection 
there so that Mexico can comply with international standards.
    Senator Boxer. Okay. Thank you. What I am getting from you 
is that there is progress being made, although not everyone 
will meet the deadline. It is an optimistic report.
    And so that leads me to my final question, which I alluded 
to in my statement. As we continue to work with the Mexican 
Government--and that is just critical. We have to. We have to 
work here at home to reduce the demand. We have to work across 
the border to reduce the supply. And that is where the rubber 
meets the road in both of these areas where we need to work 
with Mexico.
    I am concerned about the rhetoric in the presidential 
campaign describing our relationship with Mexico. I know it is 
a tough question for you. I just want you to say what you feel 
in your heart because we need to know. Mexican officials have 
said on the record that some of the proposals mentioned on the 
campaign trail--we know who we are talking about here, a 
candidate who is talking about building a wall, having Mexico 
do it, insulting Mexican Americans here at home--that some of 
the proposals would have a cataclysmic effect on our bilateral 
relations.
    Has this divisive rhetoric affected diplomatic relations 
with Mexico at this point? Has it impacted the United States' 
ability to work with the Mexican Government to combat drug 
trafficking? And are you concerned that that type of rhetoric 
could just completely undermine what we are trying to do here?
    Senator Rubio. Just for the record, she is not talking 
about me. [Laughter.]
    Senator Boxer. I am so not talking about you.
    Mr. Foote. Excellent. Well, I will try to strike a balance 
between answering your question and not entering too deeply 
into our own domestic politics here.
    Senator Boxer. I know it is a tough one, but you know what? 
When people talk, it has real-life impacts, especially 
presumptive nominee.
    Mr. Foote. You have all seen some of the reactions from 
south of the border from our Mexican brothers and sisters. You 
have seen President Vicente Fox's reactions and others.
    From the embassy bilateral level to date, we continue to 
work very closely together. In my personal opinion, I do not 
believe it has gravely affected our ability to do business 
together. Mexico in the last several months has reiterated its 
commitment to continuing with the Merida Initiative. Where the 
populace of Mexico stands on this may be another matter. But we 
continue to be able to work closely together bilaterally on 
all----
    Senator Boxer. So the words have not had an impact on what 
is going on at the very top levels in your opinion on the work 
that you were doing at this point.
    Mr. Foote. Not in their dealings with us.
    Senator Boxer. That is excellent.
    Now we have to make sure that those policies never come 
into effect.
    Thank you very much.
    Senator Rubio. Thank you, Senator Boxer.
    Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman, for calling the 
hearing. It is an important one.
    And thank you both for your service to our country.
    Mr. Foote, how many agencies are involved in interdiction 
and eradication efforts with respect to Mexico's border with us 
in our efforts to stop interdiction, stop flows, use 
intelligence? How many agencies are involved?
    Mr. Foote. U.S. agencies I hope is what you are asking?
    Senator Menendez. U.S. agencies.
    Mr. Foote. Thank you. INL, Department of State. You have 
Department of Justice, DEA, FBI to a certain extent. Department 
of Homeland Security is heavily involved through Customs and 
Border Protection, Immigration and Customs Enforcement, 
Homeland Security investigations. Our military supports some of 
the border efforts of Mexico's military. And then we have some 
ancillary agencies who are based in Mexico City, but while 
their chief focus is not the border, they do peripherally work 
on it such as ATF and the U.S. Marshals.
    Senator Menendez. And if you had to guess how much money 
has been spent on interdiction and eradication efforts in 
Mexico since the start of the epidemic that we are experiencing 
here, would you put it at?
    Mr. Foote. My understanding is $2.5 billion has been 
appropriated, of which approximately $1.5 billion has been 
obligated or committed to specific projects, of which we still 
have at this point new initiatives for about $700 million.
    Senator Menendez. Now, are you speaking just Merida 
specifically?
    Mr. Foote. Pardon me?
    Senator Menendez. Are you speaking just of Merida 
specifically?
    Mr. Foote. Largely.
    Senator Menendez. There is money spent far beyond Merida.
    Mr. Foote. There certainly is, Senator. I am not in a 
position to comment on Department of Justice's appropriation. I 
just do not have the figures. That is something we could get 
for you.
    Senator Menendez. I was not looking just at appropriation. 
I look at all the agencies you mentioned, your own, INL, 
Department of Justice, DEA, FBI, Homeland Security, 
Immigration, military, Alcohol, Tobacco and Firearms. And I 
think to myself it has to be billions collectively. And I was 
one of the architects of the Merida Initiative, which I 
support.
    But $1.5 billion later, billions between all of our 
respective agencies, and what we have is an opioid epidemic. 
And as a policymaker, one has to take a step back and say to 
themselves, what is not working because something is not 
working. If billions of dollars later what you see is a spike 
versus a trend in the other direction, then something is not 
working. So if I were to say to you, what is not working, what 
do we need to change, your answer would be?
    Mr. Foote. First of all, Senator, I think we have in the 
past few years come to the realization that this is a shared 
responsibility between the United States and source countries 
and trafficking countries. I am heartened by the Senate's 
recent passing of the opioid legislation. It is something that 
is going to help us. Certainly Mexico-specific, their 
capacities are far greater than they were when we started the 
Merida Initiative in 2007. Information sharing and 
collaboration has led our own U.S. law enforcement agencies to 
interdict significantly more on our southern border due to 
Mexico cooperation.
    We still do have a way to go. I think we also need to get 
better here in the United States at demand reduction and 
treating the health issues of addicted people. It is a shared 
responsibility and it is no longer just a supply-side issue.
    Senator Menendez. So as I listened to your response, it is 
everything that we are doing except for a more significant 
effort on demand reduction, but it is not suggesting that there 
is anything that we are not doing. And all I can look at and 
say if you are spending billions and instead of the trend going 
the opposite direction, it is rising, you have to raise the 
question what is it that we are either doing wrong or what is 
it that we are not doing that we need to do in order to meet 
the challenge because otherwise we can appropriate billions and 
billions, but still find ourselves in a trend that is 
undesirable.
    So the only thing I heard from you in your response to me 
was doing more demand reduction, which I certainly believe is 
true. But I did not hear about anything else. So you know, you 
have to question whether or not the continuation of this type 
of expenditure in this manner is the right policy.
    Let me ask you this. Do you believe that there is 
sufficient coordination, a seamless coordination between at 
least on our side of the border as it relates to all the 
agencies that you suggested are engaged in this fight?
    Mr. Foote. Senator, obviously, we can always get better at 
everything we do. Department of State kind of works from the 
southern border south. So I do not feel that it is our position 
to comment on interagency coordination north of the border. 
South of the border, we have robust interagency coordination 
through the country team at Embassy Mexico City. We can always 
get a little better there.
    Senator Menendez. Your Mexican partners--are they doing 
everything that they can in order to meet the challenge on 
their side of the border?
    Mr. Foote. During the beginning part of President Pena 
Nieto's administration, there was a pause in Plan Merida as I 
think we did a mutual assessment of the security relationship, 
particularly on their side, and over the past year and a half, 
we have seen much closer collaboration, an unprecedented 
openness and frankness in our bilateral dialogue.
    To answer your question, is Mexico doing everything that 
they can, they could improve. Some of their efforts are not yet 
at the optimal level, but we remain optimistic and positive 
that they are moving in the right direction.
    Senator Menendez. Well, I appreciate the optimism, but I am 
seeking to introduce a little dose of realism into it. And so 
part of the challenge is that you have lawless states in some 
of the northern part of Mexico where I have heard U.S. citizens 
from the region who have come to talk to me say that many who 
had businesses, longtime relationships on the immediate other 
side of the border, that basically cannot operate there because 
the federal government's presence--i.e., the federal government 
of Mexico's presence--is not there. So if you have lawlessness 
and if you have uncontrolled states, then you have the 
opportunity for drug traffickers to avail themselves of that. 
And it seems to me that while I am an incredibly strong and 
have been for 25 years supporter of the U.S.-Mexico 
relationship, we need to be honest in this relationship in 
order to make sure that we are making the progress that we need 
here and for Mexico to be able to regain its sovereignty over 
parts of northern Mexico that it presently does not have.
    Thank you, Mr. Chairman.
    Senator Rubio. Thank you.
    Let me use some of my time that I yielded just to 
interject, to follow up on that.
    Secretary Foote, how would you assess the assertion made by 
a group of experts from the Inter-American Commission on Human 
Rights that there may have been another bus involved in the 
incident in which 43 students disappeared in Guerrero, Mexico 
that was packed with heroin bound for the U.S.?
    Mr. Foote. Senator, thank you for that question. Given that 
we have not seen the results of the final investigation from 
Mexico, I am not in a great position to answer that question 
right now. We would be happy to answer that for the record in 
writing.

    [The material referred to above was not available when this 
transcript went to press.]

    Senator Rubio. Okay.
    Senator Kaine?
    Senator Kaine. Thank you, Mr. Chair, and thanks to the 
witnesses.
    First, to get an idea of the scope of this challenge on the 
Mexican side in terms of the black tar heroin, is the poppy 
production for this heroin still significantly confined to the 
state of Nayarit or is it more broadly distributed? Mexico is a 
big country. So when we talk about a problem in Mexico, I worry 
that we are not being specific enough.
    Mr. Chester. Yes, Senator. Our latest crop estimate that 
was produced about 2 months ago shows two major growing areas 
in Mexico, one in the state of Guerrero and then another in 
what is called the tri-border region up in the northern part of 
the country. Those are the two major growing areas in Mexico, 
with very, very small kind of sporadic spots in other parts of 
the country, but they are basically concentrated in those two 
areas.
    Senator Kaine. And then the fentanyl is made in labs, and I 
gather that most of the fentanyl that comes in is either coming 
in--it is made in China and may be transited in through Mexico 
or also made in labs in Mexico. Are those the two main sources 
for fentanyl?
    Mr. Chester. That is correct.
    And I will tell you that our understanding and our 
awareness of fentanyl traffic has evolved dramatically over the 
last 6 months as we have seen the crisis rise. So in order of 
magnitude, I cannot tell you, but what I can tell you is that 
China is a significant supplier of fentanyl to the United 
States or it is ordered by individuals on the dark web around 
the Internet and then, using parcel post or the Postal Service, 
shipped directly to them.
    We also know that fentanyl is shipped into Mexico in some 
cases mixed with dilutants and smuggled across the Southwest 
border and that there are precursor chemicals that are shipped 
into Mexico that can be used for the production of clandestine 
fentanyl in laboratories in Mexico. So as you look at the 
vectors coming into the United States, those are the two main 
ones that we see for finished fentanyl coming into the United 
States or its manufacture in Mexico.
    Senator Kaine. I want to talk, Mr. Chester, about your 
written testimony. I am sorry I did not get here for your 
entire oral testimony.
    But on page 1, there are several principal factors 
contributing to the current nationwide heroin crisis: the 
increased availability of heroin in the U.S. market, the 
availability of pure forms of heroin that allow for non-
intravenous use, its relatively low price, and a relatively 
small percentage of non-medical users of opioid prescription 
drugs transitioning to heroin.
    I am trying to unpack that statement, and I am wondering if 
your statement puts enough of a finger on the prescription 
opioid problem. I have heard it stated through Michael 
Botticelli and others that 80 percent of those who OD on heroin 
in this country, not fatal ODs but total ODs, started their 
addiction to opioids by being addicted to prescription opioids 
and then transition to heroin because they could get it for a 
lower price. Is that an accurate statement?
    Mr. Chester. No, Senator. And I am glad you asked that 
question. Of the numbers of individuals who non-medically use 
opioids and then transition into heroin, that number is 
actually relatively small. It is about 3.6 percent.
    Senator Kaine. For non-medical use.
    Mr. Chester. That is correct. So the non-medical use of a 
prescription opioid like OxyContin and kind of the traditional 
``got it from the medicine cabinet, got it from friends or 
family members''--the percentage of those individuals who 
transition to heroin use is relatively low. It is about 3.6 
percent.
    But conversely, of individuals who are non-treatment users 
of heroin, 80 percent of them actually abused a prescription 
opioid in the past. So while there is not a direct causation 
between the two, the non-medical use of opioids is a strong 
risk factor for eventual heroin use.
    Senator Kaine. And even the medical use of opioids can be a 
risk factor for eventual heroin use. Correct?
    Mr. Chester. Yes, Senator, that is right. So an opioid in 
and of itself and its effect on the body--obviously, it is a 
very addictive drug and affects the body in unique ways, as an 
opioid. So those individuals who take opioids, whether they get 
them from a doctor or whether they get them from a friend or a 
family member for non-medical reasons are at risk for eventual 
opioid addiction if not used properly. That is correct.
    Senator Kaine. And you cite in the testimony the relatively 
low price of heroin--and that is relatively low compared to 
past trends but also compared to the cost of opioid-based 
prescription drugs. Correct?
    Mr. Chester. That is correct. So the street price of a gram 
of heroin compared to the street price, if you will, of an 
opioid pill or an oxy pill or something of that nature, that is 
correct. That is what we consider to be one of the contributing 
factors. So it is the availability and the general low price 
and then the purity that have all been contributing factors to 
the current crisis that we are in with heroin. That is correct.
    Senator Kaine. Mr. Foote talked about the work that we have 
done in this body and we are trying to harmonize with the House 
in this recent CARA, Comprehensive Addiction and Recovery Act. 
We really believe it here--and I think it is now bipartisan--we 
are seeing in all of our States that if we do not get a hold of 
the culture of over-prescription of opioid-based prescription 
drugs, we are just hollowing out communities, rural, urban, 
suburban, rich and poor. And this was a drug addiction that 
came out of the medicine cabinet. In many instances it was a 
trusted professional in a white coat that was handing somebody 
this prescription saying this is going to do you good and it is 
not going to do you harm, driven by inadequate science, driven 
by frankly marketing scams. And that is inextricably related to 
this heroin issue. And so I think it is kind of hard to deal 
with the heroin issue in the abstract without talking about 
this culture of over-prescription, that hopefully we are 
working together to reel in.
    Last question I want to ask--and it is probably too early 
to know this. But in terms of the growth of the number of 
hectares of poppy production in Mexico, do we have any evidence 
to suggest whether that is at all connected with marijuana 
legalization in the United States? I actually kind of like this 
notion of the States as labs and they can experiment and we can 
see what happens. But I have heard it said--and I do not know 
whether there is any evidence to back it up--that the 
legalization of marijuana in some States that has allowed 
marijuana to be grown has taken hectares of land that were used 
for marijuana cultivation and, well, we do not have a market 
for our marijuana anymore because there is competition, so we 
will switch to something like poppies to produce black tar 
heroin. Is there any evidence of that?
    Mr. Chester. We have actually looked closely kind of at the 
crop transference to see if there is anything there, and I can 
tell you at this time, whether it is too early or whether it 
does not exist, we cannot definitively say that farmers have 
decided to switch from one crop to another in Mexico. We cannot 
say that with any degree of authority at this point.
    Senator Kaine. But that is something that you are going to 
continue to monitor.
    Mr. Chester. It is something that we do watch, yes.
    Senator Kaine. Great.
    Thanks, Mr. Chair.
    Senator Rubio. To interject on that point, it is my sense--
and you are both experts at this--that very few people wake up 
in the morning and say I am going to go shoot heroin just for 
the first time. There is a gateway to the heroin use. A lot of 
it is being driven by people that were prescribed prescription 
opiates. They now become physically dependent. The prescription 
opiate is cut off. They are going through severe withdrawal, 
and the only thing that addresses that withdrawal, if they are 
not in treatment, is access to heroin, and that brings all 
sorts of problems.
    Absent that, what is the other gateway? How does someone 
get dependent on heroin minus the prescription drug gateway, 
which we have already discussed?
    Mr. Chester. Senator, it is a difficult question just 
because you are dealing with a number of variables down at the 
individual level as to the reasons why people engage in the 
behavior. We do know a couple things. Heroin in general terms 
is kind of at the end of a trajectory of long-term drug use and 
that a high number of heroin users are actually poly-drug 
users. And so they are not an exclusive heroin user. They get 
the drugs that are available to them, and because of the high 
availability of heroin, a lot of times that is heroin.
    The other thing that we look at--and we do a number of 
surveys to look at this. But what we realize is that youth 
behavior from the ages of about 13 to about 18 is a very strong 
factor in terms of risk-taking behavior, in terms of underage 
drinking, tobacco, marijuana, things of that nature in shaping 
youth attitudes eventually that they carry with them for the 
rest of their lives in terms of risk-taking behavior for using 
other drugs.
    So what we cannot say is that we can put a finger on this 
or that particular reason why a person does something, but we 
do know that the availability of drugs in society obviously 
increases the chances that an individual who is inclined to use 
them is going to intersect them at some particular point. And I 
think that is one of the--with the discussion we had about the 
availability of heroin being the driving factor.
    Senator Rubio. So just to understand your testimony, we 
understand the pill problem that leads to that. But what you 
are basically saying is if someone, especially at some point 
earlier in their life, begins to use a substance, alcohol, 
whatever it may be, an intoxicant of some sort, there now 
starts a potential trend where the next thing is, well, what is 
out there that is better, what is out there that is stronger. 
Once you have crossed that barrier, it could unleash this cycle 
of basically a set of dominoes that ultimately lead you to the 
heroin point.
    Mr. Chester. Yes, sir. And again, it is not direct 
causation, but it certainly is risk-taking behavior and 
patterns of behavior.
    And that is why the prevention strategies, particularly 
through programs like the Drug Free Communities Program that 
ONDCP manages are incredibly important because they are locally 
based, and they allow trusted individuals to be able to speak 
to people at very, very young ages about things just like that 
and their attitudes about drugs and foreign substances in the 
body and things of that nature. So they, through evidence-based 
prevention strategies, are able to talk to people at those 
young ages when they are vulnerable in shaping their ideas 
about drug use that they carry with them for the rest of their 
lives.
    Senator Rubio. Senator Markey?
    Senator Markey. Thank you, Mr. Chairman, and thank you for 
this hearing. I think this is the most important hearing we are 
going to have on our relations with Mexico and with China this 
year in the Congress, and I thank you for it.
    This issue of fentanyl is to my way of thinking kind of the 
most important threat that we have to families in the United 
States at this time. I will just give you some numbers. In 
Massachusetts, in 2015, 57 percent of the opioid-related 
overdose deaths in Massachusetts had a positive screen for 
fentanyl. Specifically of the 1,319 individuals whose deaths 
were opioid-related in 2015 where a toxicology screen was 
available, 754 of them had a positive screen for fentanyl. So 
we can talk about prescription drugs. We can talk about heroin, 
but fentanyl is now the issue.
    And we--that is, New England--are at the epicenter of it. 
It comes up from Mexico to Lawrence, Massachusetts, and then it 
goes out into New Hampshire, other States, but Massachusetts as 
well.
    So the pathway is China into Mexico, then into Lawrence, 
Massachusetts, into Ohio, into Virginia, into Florida. And when 
it is over half of the deaths now in Massachusetts, it is 
clearly a looming threat that is a preview of coming 
attractions to every single city and town in our country.
    So that is why this hearing is so important because it gets 
to the question of what is Mexico doing in partnership with 
China. We will start with that, Mr. Foote. What are 
specifically Mexico and China at the highest governmental 
levels doing in order to interdict this new synthetic formula 
that is lacing heroin with a drug 50 times more powerful than 
heroin, so powerful that the DEA does not even let its dogs any 
longer sniff for fentanyl for fear that the dog will just die 
with the first sniff of fentanyl. 3 grams, 3 equivalent of salt 
grams, could kill a human being if they gained access to it. 
What are Mexico and China doing in cooperation with you in 
order to interdict that drug?
    Mr. Foote. Senator, first, I will touch on Mexico and 
China's bilateral relationship on this. With our support, 
Mexico and China are meeting and discussing fentanyl regularly 
every year. They are both involved in the multilateral side of 
things. Just last month at the U.N. General Assembly special 
session on drugs, they were both there. China--their minister 
of public security led the conclusion statement. They were 
fully on board. And they are a member, both countries, to the 
three international drug conventions.
    We also sponsor in the United States two annual fentanyl 
and precursor chemical conferences with Mexico and China.
    Senator Markey. So how successful is this effort so far?
    Mr. Foote. That is a good question, Senator. Fentanyl is a 
new problem for the Department of State and INL, and it is one 
where we are applying lessons we have learned with other 
substances in other crime areas over the years, and at this 
point we are working as hard as we can to have success but I 
cannot quantify it.
    Senator Markey. Has it been elevated to the highest level? 
In other words, with human rights and copyright infringement, 
is this issue now at the highest level of negotiations with the 
Chinese Government and with the Mexican Government?
    Mr. Foote. It is. Mr. Chester went down in March with our 
folks and spoke to a large interagency group headed by the 
Attorney General in Mexico on this issue. We regularly engage 
with China. Our diplomats are going to China next week at a 
very high level diplomatic engagement where they will raise it. 
We raise it regularly in the joint liaison group on law 
enforcement, which has a counter-narcotics working group that 
meets throughout the year. We have actually seen some positive 
signs from China.
    Senator Markey. What is the evidence? If you were going to 
convict them of doing something, what would the evidence be to 
convict them?
    Mr. Foote. To convict?
    Senator Markey. Convict China of actually doing something 
to block this from coming into Mexico and then into the United 
States. What would the evidence be to convict them of doing 
good?
    Mr. Foote. Of doing good.
    We have seen encouraging progress. There is still plenty to 
do. Last year, their ministry of public security officially 
controlled 116 new substances, including several analogs of 
fentanyl, and they have expressed high receptivity and continue 
to send information on new synthetic substances to help us to 
efficiently control them. So they are doing something. There is 
more that can be done, obviously.
    Senator Markey. Clearly we have the evidence in 2015 in 
Massachusetts, and it is going to be worse this year in 2016. 
There is slim evidence that this thing is being slowed down. In 
fact, it is very clear that it is intensifying and it is going 
to kill. It is going to kill ultimately tens of thousands of 
Americans every year--every year. There is no other threat to 
our country that even matches that. Every single year, fentanyl 
is going to be able to do that. So if we do not stop it, it 
dwarfs every other issue. Every other issue will be a footnote 
compared to the magnitude of the impact on American families.
    Mr. Chester, can we just go to Mexico? What is the level of 
cooperation that you are getting from the Mexican Government in 
interdicting fentanyl coming into the United States? We know it 
is el Chapo and his gang that is responsible for the traffic 
that comes up to Lawrence, Massachusetts, but pretty much for 
the whole country. What is your success level with the Mexican 
Government getting them to understand the magnitude of the 
threat to the American people?
    Mr. Chester. Senator, I would tell you that I personally 
have been down there twice and then have dealt with the Mexican 
Embassy here in the United States. I will tell you that they 
understand how seriously we take this issue in the United 
States. They understand that this is our top illicit drug 
priority, and they also understand that it is not just heroin 
but it is heroin and it is fentanyl.
    In a meeting down there in February, I put fentanyl on the 
table. And I will not say it was a ``first heard'' for them, 
but they were not really familiar with how serious the issue 
was in the United States. By the time we had gone down later 
with Director Botticelli and Ambassador Brownfield, that was 
part of the problem set that they agreed to work with us moving 
forward on.
    So I will tell you that the Mexicans understand the 
importance that we place on this issue. They are very engaged 
on it, and they are willing to conduct a joint planning with us 
on the issues not only of poppy eradication, which addresses 
the heroin issue, but also lab identification and 
neutralization specifically on issues of either fentanyl 
creation or the milling of fentanyl with dilutants and other 
inert matter as it is transported across the border.
    Senator Markey. Well, and it is a little bit disturbing to 
me if, from your testimony, it is a case of first impression 
for the principal law enforcement officials in Mexico, that 
they are just hearing about fentanyl, and it is just getting on 
their radar screen, and it is February of 2016, given the fact 
that more than half of all the people who died last year in 
Massachusetts, opioid-related, had fentanyl in their system. 
That is kind of a little bit disturbing to me. I am going to be 
very honest with you, and I do not like it to have just been 
introduced at that level.
    I would like to have heard that President Obama has raised 
this issue with the president of Mexico, that President Obama 
has raised this issue with President Xi in China just because 
of the incredible level of fatalities all across our country. 
And we know specifically what the source of their death is.
    So do you mind if I just continue a little bit? Thank you, 
Mr. Chairman.
    So give me some hope here that there is an aggressive 
strategy in place on fentanyl and that it has been elevated to 
a level where there is a no-nonsense conversation going on in 
terms of what the expectations of our government is.
    Mr. Chester. Right, Senator. In response to your concern, I 
know that the President did raise this with President Pena 
Nieto--the opioid issue with the Government of Mexico.
    Senator Markey. He raised the fentanyl issue with----
    Mr. Chester. I will check if it was specifically fentanyl, 
but I know the heroin issue was raised and the opioid issue----
    Senator Markey. Well, I am asking about fentanyl here. 
Fentanyl is the epidemic. Fentanyl is the epidemic. It is not 
heroin. It is fentanyl. Fentanyl is 50 times more powerful. 
Fentanyl is what is showing up in a majority of the deaths. So 
you are not sure whether or not he has raised it.
    Mr. Chester. And I need to make sure that fentanyl was part 
of that conversation between the two of them as well.
    Senator Markey. How about you, Mr. Foote? Has the State 
Department specifically raised fentanyl at the highest levels 
with the Chinese Government and the Mexican Government?
    Mr. Foote. We continue to raise it at the highest levels of 
dialogue that we have.
    Senator Markey. What is the highest level?
    Mr. Foote. Next week, our Deputy Secretary will be in 
China, and this is high on the agenda, if not top on the 
agenda. I cannot promise that President Obama raised it with 
President Xi, but certainly Secretary Kerry has raised it with 
the Chinese Government.
    Senator Markey. Thank you, Mr. Chairman.
    Senator Rubio. Thank you.
    Just a couple of points that I wanted to raise. First of 
all, why Lawrence, Massachusetts? Why New Hampshire? Why are 
these communities specifically targeted? In Florida, for 
example, central Florida, how does a community wind up targeted 
by these criminal gangs? What are the characteristics that are 
making them targets as opposed to some other part of the 
country?
    Mr. Chester. Senator, there are a number of variables, one 
of which is the existing structure, the existing trafficker 
structure, that is in place in particular areas. In some cases, 
it is transportation networks. In some cases, the traffickers 
from Mexico have personal or business relationships with 
traffickers in a particular area or that geographically a place 
lends itself to further distribution. There are a lot of 
reasons why a particular----
    Senator Rubio. But the Northeast is far from the U.S.-
Mexico border. I mean, my question is why did they not stop 
somewhere along I-95 and target there. Is it because of these 
existing structures that were there before?
    Mr. Chester. We believe that there is very strong evidence 
that there are, that it is the existing structures that were 
there before.
    When we specifically talk about fentanyl, one of the things 
that we have looked at as we have tracked the fentanyl crisis 
is why the Northeast, why the Eastern United States, why so 
much not the Western United States. And we believe that one of 
the strong contributing factors is the fact that fentanyl is 
more easily mixed into the white powder heroin which was 
preferred in the eastern part of the United States than it is 
in the black tar heroin which was preferred in the western part 
of the United States, and that has traditionally been the 
heroin market in the United States.
    And so fentanyl is being mixed into powder heroin, and 
therefore it landed in the United States. And increasingly we 
are starting to see it be pressed into pill form and sold as 
counterfeit oxy or counterfeit opioids, but fentanyl has found 
a market in the Eastern United States probably because of those 
two reasons.
    Senator Rubio. I spent some time in New Hampshire over the 
last year and from that experience found myself in a lot of 
small townships, not large places, throughout New England that 
faced an overwhelming problem, almost as if they were 
specifically targeted perhaps because trafficking networks knew 
that they had smaller police departments. If you are a small 
township, you are not going to have a 1,000-officer department. 
Is there evidence that some of that is in play for these 
trafficking networks, that in essence, they look to set up in 
places where they can overwhelm local law enforcement with 
numbers and capabilities?
    Mr. Chester. Senator, I do not know. I do not know whether 
the size of a population or the size of law enforcement was a 
particular reason why.
    But to your point, it is a matter of deep concern that you 
find increasing numbers of heroin or fentanyl users in rural 
areas who are starting to use the product alone, and they are 
far from treatment and they tend to be further from first 
responders. Those are all things that make this particular 
crisis particularly pernicious. It is the fact that it has 
moved into a lot of rural areas, which is not something that we 
have seen in previous outbreaks of heroin or----
    Senator Rubio. And I know what I am asking--and perhaps it 
is more appropriate to the second panel--is more of a domestic 
issue as opposed to a transnational one. But some of the stuff 
we used to hear--because the supply is also driving the demand. 
They are interrelated. In essence, the supply meant these 
traffickers, who now had the supply on their hands, had to be 
more aggressive in finding market share. And one of the things 
I kept hearing a lot were that they were specifically targeting 
treatment centers, especially outpatient treatment centers 
where they knew people were getting treatment because of 
addiction, and they were waiting for them outside to tempt them 
to buy, that they specifically were targeting recovering 
individuals for the sale of this. And this is a pernicious, 
disgusting industry that we are dealing with here.
    In that realm, I wanted to ask--you know, since the arrest 
of el Chapo, Secretary Foote, this is part of Mexico's, I 
believe, concerted policy to conduct high profile arrests of 
drug lords. And while it is positive that these organizations 
are being decapitated, have we seen any evidence that the 
arrest of a high profile individual impacts the ability of 
these organizations to continue to function specifically since 
el Chapo's arrest? Is there any evidence that the operation has 
been impacted by it, or is it just one of those things that is 
now functioning the way a corporate entity would, irrespective 
of who is at the top?
    Mr. Foote. Senator, my personal experience is far more 
robust with Colombia where I led our programs several years 
ago. We have seen where the kingpin being arrested does 
certainly affect an organization. The question is how big is 
the structure, how organized is it, and how quickly can it 
recover. That is a question far better posed to our Drug 
Enforcement Administration guys than State.
    Senator Rubio. Let me ask you about Colombia. It is not 
directly related to the opiate issue, but nonetheless cocaine. 
They suspended their aerial eradication program ostensibly for 
fear of the impact that the defoliants would have on the 
population environmentally. There is a counter-argument out 
there that some have made, in which I find some credibility, 
that this is also part of the peace process, that in essence, 
this deforestation effort and the eradication effort was an 
irritant in the peace process with the FARC and other elements.
    As a result, we now see numbers where for the first time in 
a long time there has been a massive increase in the amount of 
cocaine production in parts of Colombia that we had not seen in 
a while, and the assumption is that that cocaine is going to 
get sold. It is going to go somewhere and that we should expect 
at some point within the next couple years to see a spike in 
cocaine sales in the United States.
    Do you have a view, irrespective of the reason why they are 
doing it, of what these new numbers mean for the U.S. in the 
years to come?
    Mr. Foote. We are concerned about the suspension of aerial 
eradication. It is a sovereign decision of President Santos and 
the Colombian Government obviously. We believe while 
eradication and aerial eradication are not magic pills, they 
are valuable tools in any supply-side intervention on 
narcotics. It has long been a big part of our strategy in 
Colombia. We continue to work closely with the Colombians on 
the successor to Plan Colombia, which is Paz Colombia, Peace 
Colombia, and are in close contact to see which direction they 
decide to go if and when President Santos gets the peace 
process resolved.
    Senator Rubio. And here is my final question for the panel. 
And I thank you both for being here and for your testimony and 
for your work. The work you do is important and difficult.
    We now have two separate but interrelated problems, as the 
Senators just pointed out a moment ago, the production of 
synthetic fentanyl, the growth of opiate poppies. My 
understanding is that the amount of poppy-based opiates grown 
in the western hemisphere is a small percentage of the overall 
production in the world. In your view--or do you know this--if 
a poppy-based opiate is produced or fentanyl is produced 
somewhere in the western hemisphere, Mexico or anywhere else, 
what percentage of that is destined for the United States in 
particular?
    Mr. Chester. Senator, we believe that Mexico is the primary 
supplier of heroin to the United States and that the United 
States is the primary customer for Mexican heroin. That 
relationship in the western hemisphere is fairly solid. We do 
not see any widespread evidence of Southwest Asian heroin, 
Afghan heroin, Burmese heroin coming to the United States, 
although the Government of Canada does believe that Southwest 
Asia is its primary supplier of heroin.
    So one of the things that we have discovered is a risk and 
we have identified as a risk is if we are successful against 
the Mexican drug trafficking organizations in bringing down the 
supply of Mexican heroin into the United States, do we open up 
the door for others.
    Senator Rubio. I think it is pretty clear that if you see a 
heroin overdose in the U.S., that heroin or that fentanyl came 
from Mexico or maybe in the case of fentanyl, China through the 
mail. I think that is pretty clear.
    Here is my question. Are the opiates being grown or 
produced in the case of fentanyl in Mexico being sold anywhere 
else in the world or should we basically assume that virtually 
all of it that is being grown there--you can see it from the 
camera--pictures are being taken--all of that is headed to a 
city near you in the United States?
    Mr. Chester. That is the assumption we make, Senator. Yes, 
that is correct.
    Senator Rubio. Well, I want to thank you both for being 
here.
    Did you have a final question, Senator Markey?
    Senator Markey. Thank you so much. Again, for me this is 
the top topic. It does not get any bigger than this, and these 
are the gentlemen responsible for it in the United States. So 
to have them here and to know that they are the principal 
people working on the fentanyl issue I think is absolutely 
central.
    So let me just ask you this, Mr. Chester. Your title is 
Associate Director for the National Heroin Coordination Group. 
Do you think it is time for us to just change the name to the 
National Heroin and Fentanyl Coordination Group? Do you think 
we should change the name just so it advertises correctly what 
is going on to the American people?
    Mr. Chester. Senator, when we began our work this fall as 
the Heroin Coordination Group, and after Director Botticelli 
stood up this group within ONDCP in order to provide focused 
efforts against the heroin and the fentanyl problem. In our 
work what we determined was that we were going to handle heroin 
and fentanyl as part of the same problem set for a lot of 
different reasons. What has evolved over time in our work and 
in our planning and our work with the interagency is that we 
have discovered the incredible importance of fentanyl more so 
than what was identified 6 or 8 or 9 months ago.
    The other important thing about fentanyl that I would like 
to bring up is the fact that the emergence and the visibility 
of fentanyl is driven almost entirely by the postmortem testing 
that is done on individuals in overdose deaths around the 
country. And in those areas where the testing is done and 
fentanyl is tested as part of the toxicology panel, you begin 
to see more. So it leads us to believe that in looking at both 
the heroin and fentanyl problem, we have a significant fentanyl 
problem, as you identified, that we believe was being masked by 
this increased availability in heroin. So we handled both of 
them as part of the same problem set simply because it allows 
us to be able to deal with the trafficking and the supply chain 
and the effects on communities in the exact same way.
    Senator Markey. No, I appreciate that. So that is what I am 
asking. Should we add fentanyl to your title in your opinion? 
Does that make sense given what you now know and given how 
little Mexico, it turns out, knows when you had the 
conversation in February of 2016 about fentanyl? They did not 
have it on their radar. Did we raise it so that they 
understand? The same thing is true for the Chinese. What do you 
think?
    Mr. Chester. The issue being raised to the Chinese----
    Senator Markey. No, no. I am talking about Mexico. I am 
talking specifically here about Mexico right now. They did not 
know in February.
    And by the way, even when I say 57 percent, a lot of 
experts think that is an understated number because of the poor 
reporting that goes on in terms of the total number of deaths.
    And by the way, it is no secret why they do it. It is like 
a 300 percent markup--300 percent markup--in terms of their 
ability to make money off this as opposed to heroin or other 
drugs.
    So again, from my perspective, this is the issue. This 
dwarfs any terrorist threat to the United States. This is what 
is going to kill people, tens of thousands, ultimately hundreds 
of thousands of Americans. It is going to be this fentanyl that 
comes into our country. You are the front line on this. Mexico 
just heard about it. I am not sure the Chinese understand the 
priority that we expect them to deal with this issue.
    Mr. Chester, earlier today in your testimony, you said that 
there are gaps in the interdiction of fentanyl from Mexico 
coming into the United States. Could you explain in more detail 
what those gaps are?
    Mr. Chester. We are speaking primarily about gaps in our 
ability to be able to detect fentanyl at borders, and what was 
brought up earlier is the ability of canines, canines being 
trained in order to be able to detect fentanyl because it is so 
deadly.
    And we work very closely with CBP both in terms of 
intelligence and in terms of policy to address those gaps to 
better detect fentanyl not only at the Southwest border but in 
our air freight locations in the United States whether it is 
U.S. Postal Service or whether it is a commercial company. That 
has been an area of ongoing discussion for us so that we can 
better determine how much fentanyl is getting into the country 
and to be able to detect it when it does arrive, and whether 
that is detecting the chemical, the fentanyl itself, or the 
dilutant with which it is mixed.
    Senator Rubio. Gentlemen, I apologize. We have got to move 
to the next panel because in about 45 minutes, I have to 
preside over the floor and I turn into a pumpkin here. Not 
literally. [Laughter.]
    Senator Markey. If I may just conclude. I would just 
strongly recommend to the administration that when the 
President meets with the president of Canada and Mexico, that 
he raises fentanyl to the highest level with them and lets them 
know that that is a threat to our country. And the same thing 
is true in any communications with the Chinese Government that 
it has to be at the highest level.
    Thank you, Mr. Chairman.
    Senator Rubio. Thank you, Senator Markey. This is an 
important issue in the Northeast and for the country.
    And I thank you both.
    We are going to welcome our next panel.
    As we will say at the end of the hearing, we keep the 
record open for a few days. If you receive any questions in 
writing, if you would respond as quickly as possible so we can 
close the record. We thank you both for being here.
    So as they are getting seated and situated, I am going to, 
once again, reintroduce the members of our second panel. The 
Honorable Teresa Jacobs is the Mayor of Orange County, Florida, 
which we hope, if it has not yet been finalized, will be the 
site of the Pro Bowl in 2017. Right?
    Ms. Jacobs. Yes, it is.
    Senator Rubio. Maybe you can give us an update on that too. 
We are excited about it.
    And, of course, Mr. Steven Dudley, who is the Co-Director 
of InSight Crime.
    Mayor, if you are ready--your testimony has been submitted 
in writing, and we look forward to hearing you as well. Thank 
you for being here.

               STATEMENT OF HON. TERESA JACOBS, 
                MAYOR OF ORANGE COUNTY, FLORIDA

    Ms. Jacobs. Thank you, Chairman Rubio. And thank you for 
calling this very important hearing and allowing me to share a 
local perspective. The conversation this morning has certainly 
been informative for me, as I am sure it has been for everyone 
here.
    First, a little background on Orange County, nothing that 
you do not know, but for the record. Orange County is home to 
the City of Orlando and 12 other municipalities. We have a 
strong economy and an exceptional quality of life. We have a 
population of 1.2 million people that call Orlando home, but we 
also have 66 million visitors on an annual basis and we 
continue to shatter national records for tourism. That is the 
good news.
    The bad news and the very sad news is that we, like too 
many other communities across this country, have seen an 
alarming increase in the number of heroin overdoses and related 
deaths. I say heroin. When I say heroin, I mean opioids, 
opiates, I mean fentanyl, all of them combined. Last year, we 
lost 85 lives to heroin. We lost 62 lives to fentanyl.
    We have heard this morning testimony about the increase in 
deaths related to opioids and opiates of anywhere from 200 to 
400 percent since 2007. In Orange County, we have had a 
staggering 600 percent increase since 2011 alone, and already 
this year we have had 90 reported opioid overdoses, about 1 in 
10 resulting in death.
    Florida's fight against this current wave of opioid 
addiction began about 5 years ago. You may recall that in 2010, 
Florida was known as the ``pill mill capital'' of the country. 
Florida practitioners were prescribing oxycodone at levels that 
exceeded all the other States in our Nation combined. At a 
State and local level, we responded by outlawing unauthorized 
pain clinics. Yet, today the battlefront has moved. Today we 
fight heroin. Today we fight fentanyl.
    Given the dramatic rise in the flow of heroin and fentanyl 
into our community, one can only surmise that drug cartels 
perceived us as a ripe marketplace. Unfortunately, it is nearly 
impossible to accurately assess the size of the heroin threat 
in Florida and across States in our Nation. But there are a few 
things that we do know.
    In Orange County, we know that last year approximately 
2,000 heroin users moved through our county jail alone, and on 
any given day, we treat roughly 200 heroin addicts in our jail. 
We know that in 2015 our county jail housed 100 expectant 
mothers who were addicted, whose babies will most certainly be 
born tragically addicted to heroin. We know that over 60 
percent of overdose patients are uninsured, and yet we have 
only one inpatient facility with 26 detox beds available to the 
uninsured for all four counties in our region, with a combined 
population of 2.5 million people. Simply put, we know that our 
county jail has become the treatment center of last resort for 
far too many people who find themselves addicted to heroin, 
fentanyl, and other opiates and opioids.
    For the good of our citizens, we are fighting back, and 
here is how. Last summer, we convened the Orange County Heroin 
Task Force, chaired by myself and our sheriff. Our joint work 
is having a positive impact, including the passage of the 2016 
Florida legislature, which passed a measure allowing naloxone 
sales without an individual prescription. And while there is no 
single cure or solution, we know there are some universally 
effective approaches, many of which have been discussed here 
today. But I think at the heart of it is that we have to 
recognize that we must address the demand side while we attack 
the supply side, and an either/or policy simply will not work.
    On the demand side, through our task force, we have joined 
forces with our K through 12 public education system, our 
universities, our faith-based communities, our medical 
communities. Together we are launching a social media campaign 
to educate the public on the risks of this highly addictive and 
deadly drug. We are trying to convince our citizens and warn 
them in advance that this is something that they want to avoid 
at all costs.
    We are also not only treating heroin addicts in our jail, 
we are implementing a new medically assisted treatment program 
using Vivitrol. And this is an option for all of our addicts 
that are leaving our jail.
    But we need the Federal Government's help to treat more 
addicts. As I mentioned a few minutes ago, we are woefully 
short on beds and other resources.
    On the supply side, we are also doing our best to arrest 
traffickers on our streets. But our local efforts, no matter 
how highly leveraged and coordinated, are simply no match for 
the drug cartels and organized traffickers coming across our 
country's borders. And that is why we need your help to help 
stop the influx of drugs across our borders.
    To end the crisis, to save lives, to save communities, we 
each have a role to play. Local governments have a crucial role 
to play. The State government does and the Federal Government 
does. But the efforts need to expand beyond government. We need 
every citizen that is a mother or a father or a friend of an 
addict--we need our entire communities engaged. We need 
doctors. We need the clergy. We need counselors. We need 
teachers. We need all of them to be informed. And that is why I 
think that we also need a nationwide awareness campaign.
    And we have talked briefly about fentanyl. It needs to 
include the high risk of fentanyl and the low cost. Quite 
frankly, today it is less expensive for many of our addicts to 
get high on opioids than it is for them to go and get a Happy 
Meal. That is a sad state of reality that has to be addressed.
    Thank you again so much for this opportunity, Mr. Chairman. 
Thank you for your and your committee's continued service and 
leadership on this issue.

    [Ms. Jacobs's prepared statement is located in the 
Additional Material Submitted for the Record section at the end 
of this transcript.]

    Senator Rubio. Thank you, Mayor, and thank you for your 
work on this. You have been involved in this for a while now 
trying to deal with it back when the pill mill problem was 
going on, and we will talk about that in the questioning 
section.
    Mr. Dudley, thank you for being here. We look forward to 
your testimony.

           STATEMENT OF STEVEN DUDLEY, CO-DIRECTOR, 
                INSIGHT CRIME, WASHINGTON, D.C.

    Mr. Dudley. Thank you very much, Chairman Rubio.
    As we know, as U.S. consumption of heroin has increased 
significantly in the last few years, the U.S. portion of the 
world heroin market is quite small by comparison in terms of 
users but really outsized in terms of potential earnings. The 
RAND Corporation estimated in 2014 that U.S. consumers spent as 
much as $27 billion on heroin each year, an increase from $20 
billion in the year 2000.
    Mexican, Guatemalan, and Colombian criminal organizations 
have reacted to these changes by producing more heroin.
    As noted already in the earlier panel, Mexico accounts for 
the bulk of the poppy production in the region.
    Seizure data of heroin along the southwest border also 
indicate that Mexican criminal groups are moving increasing 
amounts of heroin into the U.S. market. Mexican criminal 
organizations are also the key transporters of Colombian heroin 
to the United States, and they manage and purchase the heroin 
produced in Guatemala or buy the opium gum wholesale to process 
it into heroin themselves in Mexico.
    Inside the U.S., the trend appears to be the same. The DEA 
says that Mexican groups are seeking an increasing amount of 
the market share in the distribution business itself, 
displacing other wholesalers.
    In sum, the picture we have is one of an increasingly 
lucrative, vertically integrated market with large Mexican 
criminal organizations managing the product from the point of 
production to the point of sale and seeking a greater market 
share of these sales.
    The reality of the supply chain, however, is much more 
complex. While it helps us to use well-worn monikers when 
talking about these organizations, the truth is that they are 
not nearly as strong or monolithic as they once were. Names 
such as the Tijuana Cartel, the Juarez Cartel, the Zetas, or La 
Familia Michoacana may still evoke fear and sometimes awe, but 
they are not organizations as much as brand names. In many 
cases, the individual parts of the organization have as much 
contact with the bosses as a local Coca-Cola bottling plant 
manager might have with corporate headquarters.
    Even the vaunted Sinaloa Cartel is more horizontally than 
vertically integrated. Take the recent case of the Flores 
brothers in Chicago. Before they were arrested, Pedro and 
Margarito Flores were said to be Sinaloa Cartel distributors in 
Chicago, one of the areas of greatest interest to this 
subcommittee. And they were. But as Federal intercepts of their 
conversations with cartel leaders show, the two brothers 
negotiated independently with each of the top two members of 
the Sinaloa criminal organization, obtaining different prices 
for the product that they were selling. Even after a war 
started between the Sinaloa Cartel and a rival group called the 
Beltran Leyva Organization, the Flores brothers continued to 
purchase drugs from portions of the Beltran Leyva organization 
and the Sinaloa Cartel.
    The Flores case cuts at two different myths about the 
Sinaloa Cartel: number one, that this is one single 
organization; and number two, that it is tightly controlled by 
a single leader or a single group of leaders. The point is that 
as shipments get further and further from Mexico's wholesale 
points, the loyalties become more disperse and in some cases 
completely disappear. This is especially true in the U.S. 
market where violence is not a viable long-term option to 
ensure loyalty, win market share, or become a monopoly.
    The effectiveness of U.S. law enforcement has made violence 
terrible for business and made the distribution chain a more 
democratic, capitalist affair. This is evident in other ways as 
well. While the amount of seizures indicates that there is more 
heroin available in the United States, it is still moved in 
very small quantities. The median seizure for the Los Angeles 
Field Division of the DEA in 2014, for example, was a single 
kilogram. In Denver, a 10- to 12-pound shipment is considered 
large.
    The case of the Laredo brothers, recently indicted in the 
Eastern District of Pennsylvania, is indicative of these 
trends. The Laredo brothers are charged with moving 1 ton of 
heroin over a 6-year period. This is about 14 kilos per month. 
The organization was so subtle and, as one Mexican analyst put 
it, ``mom-and-pop,'' the Mexican authorities were not even 
aware of the group.
    This brings us to Mexico. The horizontal nature of the 
distribution chain makes it a difficult law enforcement problem 
in Mexico as well. As noted, the once monolithic criminal 
organizations are shells of what they once were. This is in 
part due to infighting of the type mentioned earlier but also 
Mexican law enforcement efforts. Many of the fragmented pieces 
have formed their own criminal organizations and brand names.
    The upshot is that the chain of production in Mexico is 
broken into numerous pieces, including small and large 
producers of opium poppy plants, the opium gum producers, and 
processors, the wholesale purchasers, and the transporters. 
Production, transport, and distribution may all be different 
organizations. The Laredo brothers, for example, were 
purchasing opium gum from an independent broker, then 
processing it themselves, and distributing it in those small 
quantities in the U.S. for years without running into trouble 
with the large, supposedly all-controlling Sinaloa Cartel.
    To be sure, violence is still a viable option in Mexico, so 
the pendulum may swing back towards more monolithic criminal 
organizations. But for the moment, the reality is that there 
are literally dozens of small criminal organizations involved 
in this trade from the point of production to the point of 
sale.
    In sum, while the level of control that the Mexican 
production and transport groups exert over the supply chain is 
clear, we are not talking about one or two criminal groups, but 
dozens of interlocking organizations whose alliances are 
constantly shifting. The heroin supply chain appears to be a 
largely horizontal, diversified operation with multiple actors, 
and one that is obedient to market forces rather than one or 
two single vertically integrated distributors.
    The result is that law enforcement efforts are largely 
muted. Whether you debilitate the Sinaloa Cartel or the Laredo 
brothers, you are hindering a small part of the overall 
production and distribution chain. Even if you did slow the 
heroin from Mexico, you would face an insurmountable task: 
stopping the flow from other countries, which would undoubtedly 
fill the void and account for the bulk of worldwide production 
anyway. Canada already gets up to 90 percent of its heroin from 
Afghanistan. And the United States once got all of its heroin 
from the Asian markets that supply the rest of the world.
    Thank you for your time and attention. I look forward to 
your questions.

    [Mr. Dudley's prepared statement is located in the 
Additional Material Submitted for the Record section at the end 
of this transcript.]

    Senator Rubio. Thank you both for being here.
    I want to begin with one of the questions I alluded during 
the testimony, and that is--I cannot prove it. I guess it is 
anecdotal. We do not have a number behind this. But the notion 
that these criminal groups are specifically targeting people 
recovering. In essence, they basically station themselves 
outside of a rehabilitation outpatient center, even an 
inpatient center, knowing that these people are vulnerable and 
enticing them to fall back into addiction.
    Mayor, have you seen evidence of this? Mr. Dudley, have you 
heard about this as a recurring issue, a specific practice at 
the local level of targeting people in recovery for sales?
    Ms. Jacobs. Senator, I have not seen evidence of targeting 
our treatment facilities.
    I will say that it certainly appears on the surface that 
there has been a targeting effort towards which communities to 
infiltrate with heroin, and certainly I look to the increase in 
heroin coming into our communities, the increase of fentanyl at 
the same time that we were restricting access to prescription 
drugs as suspecting that there is a strong correlation between 
those two and a causation between those as well. But I do not 
have direct evidence of it. It just seems hard to imagine that 
there would not be a direct relationship between them.
    Mr. Dudley. Thank you, Senator.
    I also do not have direct evidence of this activity on a 
local level.
    I will say in Mexico that criminal groups have targeted 
recovery facilities, but more as recruitment centers, not 
necessarily----
    Senator Rubio. Recruitment centers for?
    Mr. Dudley. Recruitment centers for them, to basically 
build out their own criminal operations.
    Senator Rubio. You mean for like dealers?
    Mr. Dudley. Not for dealers. Just for membership. So people 
who would participate in the criminal organization. So that has 
certainly happened especially with regard to La Familia 
Michoacana, a very famous group there.
    The upshot of this is to say whether or not they are 
targeting to pushing drugs in certain areas I am not sure is as 
relevant as this sort of whole picture, which is what the Mayor 
alluded to, which is this idea that this is largely driven from 
people who use pharmaceutical drugs, and those people you can 
find all over. And that accounts also for the sort of dispersed 
nature of this epidemic as opposed to sort of the 1970s where 
you had it very concentrated in urban areas. Now we have it 
spread out throughout many different parts of the United 
States.
    Senator Rubio. So I want to share with you an anecdote. 
This weekend, I have a personal friend who is a police officer 
in Miami Dade County, and he recounted a story that he pulled 
up to a car that was kind of pulled over on the side of the 
road. And there was a woman in the driver's seat. She was kind 
of slumped over, and it caught his curiosity. So he pulled over 
and knocked on the window. This was a nice car, by the way. 
Obviously, this is a person of financial means. Knocks on the 
window and the person immediately pops to attention. And he can 
see that in her arm there was a needle. She was basically 
shooting up on the side of the road in a luxury vehicle. Knocks 
on the window. She rolls down the window. They begin to 
interact. Obviously, he had a decision to make about how to 
treat her. This is someone who said 10 years ago he would have 
arrested her and taken her in as a criminal using drugs in the 
street.
    Today his perception has changed because he has had several 
interactions, including this interaction with a person who, by 
the way, is a member of the Florida Bar, is a successful, 
functional attorney whose husband apparently also has a 
problem. The fundamental challenge he faces: he does not want 
to take her to jail. He does not view her as a criminal. He 
views her as someone who has a disease and is in need of 
treatment to overcome it.
    And by the way, her gateway into heroin was the use of a 
pharmaceutical pain killer for a surgical procedure 6 or 7 
years ago, which she lost access to the medicine, and this is 
what has happened.
    And so the concern that I have is twofold, and perhaps you 
can both opine on this.
    Number one, if today you are dependent upon an opiate 
substance, irrespective of how you got there, but let us say in 
the case of this person because of the use of a pharmaceutical 
that led to this point, there is still an extraordinary stigma 
associated with it as if you are a bad person who is doing a 
really bad thing and needs to be punished for it.
    And second, even if that stigma were to change so that we 
can get more people into treatment and accepting the fact that 
I am physically dependent on this substance, in many 
communities there is nowhere to take them. The only place you 
can take them potentially is to a jail where you hope their 
withdrawals are managed but may not be. And in essence, there 
is nowhere for them to go. We have many places. We just do not 
have the capacity to meet that reality.
    Which leads to the third problem, and that is the number of 
people who end up in a jail cell for 15 days, go through 
withdrawal, do not realize they have lost their tolerance, even 
in that short period of time, and when they fall off the 
proverbial wagon, they go back to using the levels they were 
using before they went through withdrawal and it kills them 
because they lost their tolerance for an opiate.
    So given that perspective, I am sure there are hundreds, if 
not thousand of cases like that. What are the impediments to 
getting someone who faces this now who--I do not think so, but 
could be watching C-SPAN at this very moment. Not many people 
watch C-SPAN--but are watching this or are hearing us talk 
about this. What is out there today or what is missing for 
someone who needs this treatment and just does not know what to 
do about it next? Because especially for the uninsured, there 
are not very many options from my understanding.
    Ms. Jacobs. Thank you, Mr. Chairman. I think that is a key 
part of addressing the demand side. Part of it is to educate 
people and help them make the right choices to avoid overuse of 
prescription drugs, but the other part is how do we provide the 
resources to treat people that are addicted. And the treatment 
options are very limited. For the uninsured, as I pointed out, 
26 beds for 2.4 million people. Our jail alone, one out of four 
jails in the region, we have on average 200 people that we are 
treating for withdrawal symptoms and offering them a treatment 
program when they leave. We need more treatment facilities.
    When you ask me the question are traffickers, are dealers 
preying on people coming out of treatment centers, the reality 
is we do not have enough treatment centers to prey on.
    Senator Rubio. You said in your testimony--and I do not 
want to interrupt, but you said in your testimony you believe 
that Florida was specifically targeted because they knew we had 
the pill mill problem, and once that was cut off, these folks 
were going to need----
    Ms. Jacobs. Exactly. That is what I believe. I do not have 
empirical evidence. What I have is the evidence of the increase 
in the flow of heroin and the increases in deaths related to 
heroin in correlation to our cutting off the pill mills.
    Let me also say that while we were dispensing more 
oxycodone than the rest of the country combined out of Florida, 
most of that was leaving our State. And most of these pill 
mills--you could drive up and you could look in the parking 
lots. The parking lot would be full and only a small percentage 
of those were local license plates. So the cartels may have 
misjudged the appetite, but they, no question, have flooded us 
with very, very cheap drugs.
    And the number of youth that I have seen that are 
struggling with addiction and have turned the corner and have 
had the good fortune and the money to find treatment, the 
insured portion of that population, to see that there actually 
is life after heroin addiction is very encouraging. But what is 
very discouraging is that most people that are addicts have no 
idea there is life, and most people that are addicts have no 
opportunity to get to those treatment centers.
    Senator Rubio. Just to fill in the gaps for those who may 
not be fully aware of the Florida pill mill problem, we had 
these facilities. You just basically pulled up and said my neck 
hurts or my back hurts, and by routine, they would give you a 
package of prescriptions. It was not just, by the way, oxy. 
They also put some other stuff in there. And people knew this, 
and you would have busloads of people actually come in 
sometimes. It was a huge problem. The Florida legislature 
closed that loophole that was allowing this to happen. So just 
to be fair, we are not talking about the oxy prescriptions 
being driven by a doctor at his or her office. It was these 
specific facilities that drove it.
    Did you want to add something on the treatment part of it? 
Because I had one more question. I know that Senator Kaine----
    Mr. Dudley. Just very quickly. I mean, this is obviously 
framed as a law enforcement debate. And certainly I was asked 
to talk about the criminal organizations.
    But as you rightly pointed out, this is a public health 
issue. At the heart of it, this is a pharmaceutically driven 
epidemic, and it is a public health issue. And that is really 
the difficulty in facing up to this is that it is not 
necessarily strictly law enforcement. We are not talking about 
throwing people into jails. We need to be talking about how to 
get them better treatment.
    Senator Rubio. And my sense on the human side of it is I do 
not believe anyone wakes up in the morning and says today is 
the day I become a heroin addict or an opiate addict. It is not 
something somebody wants to happen. You just see growing 
evidence. People do not realize the power of this. There is no 
responsible way to use this, and its impact on everybody is a 
little different. We know some people are more sensitive or 
susceptible to addiction than others, but it basically 
restructures the brain's chemistry in a way a disease would and 
it has to be treated as that.
    I look at these statistics, for example, in Florida as just 
an example. Orlando had 83 heroin deaths in 2014. Other 
communities have large numbers with West Palm Beach at 51, 
Miami at 60, Sarasota at 55. But that number pops out at you as 
a place that has been specifically targeted.
    And then you see the rise in deaths and kind of the spike 
we have seen across the country in heroin and opiate deaths 
where the takeoff point is the introduction of fentanyl which, 
as we have already seen from testimony today, is an incredibly 
powerful and lethal substance, which in fact from my 
understanding is not prescribed outside of a hospital setting 
to begin with on the pharmaceutical side and is now being laced 
into----
    I want to go to Senator Kaine. So I wanted to leave with 
this thought. I read the other day a report where someone who 
was a former--he is now a recovering addict--was asked about 
this and said, you know, when you hear that someone has died 
from an overdose that was sold by a particular dealer, it makes 
you want to buy from that particular dealer because you know 
what they are selling is the strong stuff. Now, maybe that is 
just one interview, one line somebody said. But it just kind of 
tells you the point we have reached here where it is a very 
difficult and debilitating condition that we have to try to 
understand here. And I think one of the keys is to remove the 
stigma associated with it.
    And I think many of us would be very surprised at the 
number of people we interact with on a daily basis that at some 
level have a dependence problem, maybe not through street 
heroin, but of some sort as a result of what we have seen 
happen in this country. And hopefully we can make advances in 
pharmaceuticals so that we can draw the line and we will be 
able to treat pain effectively in this country without putting 
people at risk.
    Senator Kaine?
    Senator Kaine. Thank you, Mr. Chair.
    And thanks to each of you. I am sorry I missed your opening 
testimony, although I read your written testimony.
    And, Mayor, I will start with you. I was a mayor too in 
Richmond. And it was only when I was mayor that I really fully 
grasped the depths of the demand side of this challenge. You 
know, you can arrest a dealer and arrest another dealer and 
arrest another dealer, but if the demand for drugs is so 
potent, if it has its hooks in people so deeply, the next 
dealer will appear tomorrow.
    We had a really tough problem in Richmond, and a lot of 
drug-related homicides were taking place in this little 
neighborhood near where the church that I go to is. And the 
number of stories that would appear on the front page of the 
paper about somebody from the suburbs coming in to buy drugs 
and getting shot at the corner of 2nd and Maryland or wherever, 
and you would think about five of those stories, people would 
quit driving in to buy drugs there. But, no, they would keep 
driving in to buy drugs.
    And that just was evidence of how powerful addiction is, 
that you would have all this objective evidence that, wow, this 
is really going to be dangerous for me to go, but much less 
that the drugs could be dangerous, I could get shot, but the 
need is so intense that I am still going to go. And it sounds 
like you have seen that in your community. I was a mayor 20 
years ago. The drugs were different. But it is the same thing 
of this addiction. And that is why the treatment issues are so 
important.
    And the other thing we used to hear anecdotally--I am not 
an expert in this field, but when somebody who is under the 
grip of an addiction says I want treatment, that is a window 
that opens where the treatment, if it is not there, the window 
can close. And in a month from now when the bed opens up, the 
individual may be past the point of wanting treatment, may have 
ODed or may have lapsed back into behaviors not desiring 
treatment. So I do appreciate what the chair was saying and you 
were saying too about the need for treatment.
    I am curious if you can talk about as a mayor the way to 
solve some of these challenges is definitely through how the 
partnership, State, Federal--talk a little bit about what you 
have done in your county on the partnership side. Do you have 
the right stakeholders around the table? Are there things we 
can do from a Federal level to ensure that if we are issuing 
funds, that we do it in a way that requires regional 
cooperation or multi-level stakeholder cooperation?
    Ms. Jacobs. Thank you, Senator. In Orlando, one of the 
things that I think we have done very effectively is regional 
cooperation and collaboration. I think that that is crucial on 
tackling any large issue such as this. And so one of the 
reasons that we pulled together the task force that we did is 
we brought in so many different disciplines to make sure that 
we could attack this problem from all angles.
    It is so important. We have limited resources at all 
government levels, and it always seems like the demand for 
resources outpaces supply. So it is important that programs are 
structured in a way that the funding is put to its best use.
    And I do think that collaborative effort is important. We 
have a Metropolitan Bureau of Investigation that pulls together 
our FDLE, FDA, our local law enforcement, our police officers, 
our sheriff, our State attorney's office. That has been very 
effective for us on the enforcement side of this.
    In terms of your comments about that window of opportunity 
for addicts, I cannot understand it either because I have never 
experienced a feeling of needing something so badly that I am 
willing to risk my life to have it. But I do understand that is 
the reality. I know enough people. Once we formed the task 
force, enough people came forward, literally walked up to me on 
the street. You know what it is like being a local mayor. 
People recognize you. They come up and they pour their heart 
and soul out to you. And it is a blessing to be at that level 
where you can really heard firsthand. And I have seen young 
people that you would never in your wildest imagination have 
thought were heroin addicts tell me their stories.
    And what I also saw--I think I mentioned before you walked 
in here--was I also saw the other side. I saw that they came 
out the other side of heroin addiction, and they are living 
full lives and they are getting college degrees and they are 
going to be productive members of society.
    And I think that most heroin addicts do not believe that is 
a possibility, and if they have that moment, if it is 15 
minutes, if it is 2 hours, if it is 2 days, where they say, 
gosh, I want to kick this, reality is they are not going to be 
waiting for 2 weeks or a month. They are going to be waiting a 
lot longer in most of our communities to get into a treatment 
facility unless they have got a substantial amount of money. 
And that is a huge problem.
    And as I said in my testimony, the best option is our 
county jail right now, and that is a lousy option. Not to say 
we have a bad jail. We do our best. But having a record does 
not help the situation.
    So we really need to have options available. We need to 
have education. We need to have hope. We need to have whole 
communities that are engaged. And as you point out, it is 
destroying more than lives. It is destroying entire 
communities.
    Thank you, sir.
    Senator Kaine. We had, Mr. Chair, a chart recently placed 
before us at another hearing about opioid-based ODs per capita, 
the 50 States arrayed. It was unlike any chart I have ever seen 
ever. If you look at a chart that is usually about some kind of 
problem or crime or social breakdown, high income States will 
be at one part of the chart and low income States will be at 
the other part of the chart. If you looked at the top 10 most 
affected States, they included some of the poorest States in 
the country and some of the richest States in the country. And 
if you looked at the bottom 10 affected States, they included 
some of the poorest States in the country and some of the 
richest States in the country. This is really unlike any sort 
of similar epidemic or law enforcement problem I have ever seen 
in the traditional demographic data, not at all a predictor. It 
is rural over the suburban. It is all regions.
    I went to a drug court graduation. Kind of the founding 
drug court in Virginia is in the Roanoke area, and the judge 
who founded it, who was this super, farsighted thinker about 
the need for drug courts, had a child who many years later was 
killed in a drug-related incident. And after I spoke at the 
graduation, one of the probation officers who helps the court 
run and has done so as a spectacular advocate for many years 
came up to me and said this is my second drug court graduation 
this week. I said, did you have another class? He said no. I 
went to my son's graduation in a community about 2 hours from 
here.
    This affects every level, and that is why we are now 
spending the time that we are. But we have not spent time in 
this committee on it, and it is really important that we do so 
because this is not--just like it does not have demographic 
borders, this is not a problem that even has national borders. 
And we have got to grab a hold of some of the dimensions, 
Mexico, China, the other nations that are experiencing this, 
and build those partnerships not even in a metropolitan region, 
but we have got to build law enforcement and other partnerships 
internationally.
    Thank you for being here, for your testimony.
    Thank you, Mr. Chair.
    Senator Rubio. Thank you, Senator.
    And I just wanted to ask you, Mr. Dudley, about these 
transnational groups that are targeting us. I think in your 
testimony you talked about this. So I just want to reiterate 
it. Whether it is fentanyl being produced synthetically or 
poppy-based opiates being grown in the Western Hemisphere, in 
particular in Mexico, they are coming here. This is the almost 
exclusive market for these trafficking networks. Is that 
correct?
    Mr. Dudley. That is correct, absolutely. There is a small 
market, local market that they can satisfy, but it is minimal.
    Senator Rubio. Because you would think--so logically they 
are crossing the border, you would think the easiest from a 
logistical point of view is for them to flood it into Texas or 
flood it into California or into a border State. But you are 
hearing where the outbreaks are. And this is a national 
problem. There is no community in the country that does face it 
to some level, but you see these outbreaks in the Northeast in 
New Hampshire and Massachusetts and in places like central 
Florida. So it is not even I-10 alone where you would think 
they would come across.
    What is your view of how is it winding up in these pockets? 
What are the distinguishing characteristics? You heard the 
previous testimony of the government witnesses. What in your 
view are the distinguishing characteristics that turn a 
community into a high-propensity, high-risk area?
    Mr. Dudley. You know, it is such a new phenomenon because 
it is so disperse. But the fact that it is so disperse is 
really what leads to the criminal organizations being so 
disperse. And the notion that we have one single, all-
encompassing enemy that is called the Sinaloa Cartel and once 
we incarcerate Chapo Guzman, then everything will be resolved 
is just simply not correct just because of the disperse nature 
of the market and the way in which these criminal organizations 
will satisfy that market.
    It is an odd thing because in a way there are certain 
elements of this epidemic that we are victims of our own 
success. The fact that you would create ways so you cannot 
tamper with OxyContin, for example, you cannot store it 
anymore, the way in which it is distributed, well, then that 
makes it less available to people so then they start to search 
out other things.
    The way in which the Mexican Government, in conjunction 
with the United States Government, has captured or killed 
several of the larger leaders of the larger criminal 
organizations has led to a fragmentation of these groups. So 
you have groups like you referred to Guerrero earlier. There is 
a Guerrero Unidos group, which was the group responsible for 
the massacre or supposed massacre of those 43 students that 
disappeared, 43 students currently still. You know, this is a 
group that was an offshoot of a larger group, the Beltran Leyva 
organization, and there are several like them.
    So in order to wrap your hands around this as a law 
enforcement issue, it is incredibly difficult because the 
terrain is so much more horizontal than vertical. And even when 
you take out the larger leaders, what you are left with is a 
fragmented criminal landscape, and a landscape that does not 
necessarily--as in the cocaine market, they might depend on 
getting product from another country. In fact, they do from the 
Andes region. They need to get their product from other 
criminal organizations. But they do not have that dependency 
when it comes to the poppy production which is local and the 
heroin production which is local. So they can produce all of 
this themselves, which makes it much more difficult to wrap 
your hands around as well.
    Senator Rubio. Well, do you have anything further Senator?
    I want to thank both of you for being here, for sitting 
through the previous testimony. I hope that was insightful as 
you go back and continue your work. And I want to thank you for 
coming here today and being a part of this hearing as well. 
This is an important issue. There has been a lot of debate 
about what is being done domestically on this issue. I am glad 
we touched on it.
    I think this has to be dealt with. There is not like one 
law we can pass that deals with this. It has to be dealt with 
comprehensively whether it is on the treatment side for people 
to recover, on the prevention side, but also by targeting these 
organizations who are in the business of murder basically, 
which is what this ultimately is, and not just murdering each 
other for territory, but the direct murder of Americans by 
targeting us with the distribution of these products in our 
country.
    So I want to thank all of you for being here.
    I also want to ask consent to enter a statement for the 
record of Jack Riley, who is the Acting Deputy Administrator of 
the Drug Enforcement Administration. And without objection, I 
show that ordered.
    [Mr. Riley's statement is located in the Additional 
Material Submitted for the Record section at the end of this 
transcript.]
    Senator Rubio. The record for this hearing is going to 
remain open until the close of business on Tuesday, May 31st. 
You might receive some questions in writing. If possible, I 
would ask you to respond just so we can close the record on 
this.
    And with that I thank you both for being here, and this 
meeting is adjourned.
    [Whereupon, at 10:55 a.m., the hearing was adjourned.]

                              ----------                              

              Additional Material Submitted for the Record

                Additional Questions Submitted for the 
                   Record by Members of the Committee

             responses to questions submitted to assistant 
             secretary daniel foote by senator marco rubio

    Question 1.  Mexico has been a very good partner but systemic 
corruption and other issues, including issues of trust, persist. What 
is the U.S. government's assessment of Mexico's commitment to truly 
stopping the Sinaloa cartel, in particular, and the flow of illicit 
narcotics to the U.S.?

    Answer. Our partnership with the Government of Mexico on 
counternarcotics has led to enhanced collaboration on this important 
issue. The State Department's Bureau of International Narcotics and Law 
Enforcement Affairs (INL), under the Merida Initiative, is working with 
the Government of Mexico to help build the capacity of Mexico's law 
enforcement and rule of law institutions to disrupt drug trafficking 
organizations (DTOs) and to stop the flow of drugs from Mexico to the 
United States, including augmenting their ability to coordinate with 
U.S. law enforcement agencies. Through Merida, we have provided the 
Mexican government with the communications equipment and technical 
assistance to enable the Department of Homeland Security's Customs and 
Border Protection (CBP) and the Mexican Federal Police to conduct 
coordinated patrols of our shared border. Merida-supported 
implementation of the Cross Border Secure Communications Network and 
Cross Border Coordination Initiative provides direct communication 
between CBP Sector Offices and Mexico's Federal Police and State 
Command and Control Centers at ten locations along our shared border. 
INL also is working in partnership with CBP to provide training to 
Mexican Federal Police officers assigned to the northern border region.
    The United States and Mexico are working to increase communication 
and information sharing on combating the production and trafficking of 
heroin and methamphetamine. In addition to discussions at the high 
level Security Cooperation Group meetings, in the last year INL 
supported U.S. Drug Enforcement Administration-led bimonthly 
counternarcotics meetings, which bring together experts from both 
countries to share information and strategies. These efforts to 
increase cooperation are paying off. Federal and state police in one of 
Mexico's northern border states recently arrested two suspects and 
seized 630 kilograms of methamphetamine, 80 kilograms of heroin, 48 
kilograms of cocaine, one semi-automatic weapon, and two AK-47 assault 
rifles after acting on real-time intelligence provided by U.S. law 
enforcement. The federal police unit involved in the operation 
participates in the bimonthly counternarcotics meetings.
    In recent years, the Government of Mexico has taken active steps to 
reduce corruption and other illegal activities in police forces and 
government institutions by vetting public officials through its Control 
de Confianza system. INL seeks to strengthen and accredit Mexican 
vetting institutions by establishing and deploying uniform standards 
for polygraph administration, background (socio-economic) 
investigations, and psychological assessments.

    Question 2.  Mexico has adopted a policy of high profile arrest of 
drug lords. While it is positive that these organizations are being 
decapitated, has the drug trade run by the cartels been impacted by 
these arrests in the way envisioned?

    Answer. Capturing and successfully prosecuting high profile 
traffickers who have committed serious crimes and have operated with 
relative impunity is essential to maintaining the rule of law. High 
profile drug lords are responsible for the deaths of tens of thousands, 
and their sophisticated organizations create violence, generate illegal 
earnings and influence, and ultimately harm U.S. citizens and interests 
through cross-border flows of illicit drugs, goods, and people. We 
refer you to the U.S. Drug Enforcement Administration for additional 
details on the potential impact on the drug trade resulting from 
Mexico's high profile arrests.
    Recognizing, however, that targeting high profile traffickers alone 
will not solve Mexico's security dilemma, the State Department's Bureau 
of International Narcotics and Law Enforcement Affairs (INL) supports 
Mexico's security and law enforcement efforts more broadly. Combating 
transnational criminal organizations requires a comprehensive approach 
that disrupts illicit financial and trafficking networks, combats 
government corruption, strengthens the rule of law, bolsters judicial 
systems, and enhances transparency. Under the Merida Initiative, INL 
focuses not only on disrupting organized criminal groups, but on 
institutionalizing rule of law, strengthening border security, and 
building strong and resilient communities in Mexico. INL's efforts to 
enhance state-level law enforcement professionalization, support 
Mexico's efforts along its northern and southern borders, and assist 
Mexico's transition to an accusatory justice system all augment the 
capacity of Mexico to effectively provide security, disrupt organized 
crime, and manage its borders.

    Question 3.  Since the arrest of Joaquin ``El Chapo'' Guzman, has 
there been a noticeable drop in narcotics trafficked by his 
organization? Specifically heroin?

    Answer. At this time, the effect of El Chapo's arrest on the amount 
of narcotics trafficked by the Sinaloa Cartel is unclear. We refer you 
to the U.S. Drug Enforcement Administration for additional information 
on shifts in the trafficking of narcotics, including heroin.
    The United States is fully committed to working with Mexico to 
combat the production and trafficking of illicit drugs. Over the past 
year, our bilateral dialogue, specifically on heroin, has reached an 
unprecedented level of openness and coordination and we are continuing 
to work closely with Mexico to increase these efforts.

    Question 4.  What successes can the U.S. government point to in 
cooperation with the Mexican government that have yielded concrete 
results?

    Answer. For the past eight years under the Merida Initiative, the 
U.S. government has worked closely with the Government of Mexico to 
advance our shared security objectives and these efforts are 
demonstrating results, including:

    Criminal Intelligence and Analysis Program: To support the 
Government of Mexico in improving criminal investigations to hold drug 
traffickers and other criminals accountable and boost public confidence 
in the rule of law, INL is supporting the professionalization of 
criminal intelligence analysts throughout Mexico. Initial programming 
has focused on equipping and training analytic units along the Mexico-
U.S. border to serve as the primary state-level liaison with U.S. law 
enforcement entities to develop intelligence related to drug 
cultivation and trafficking, extortions, kidnappings, and homicides.
    INL has trained and equipped five analytic units that have 
contributed to 1,900 investigations/citizen complaints resulting in 
more than 200 arrests as of the end of 2015. The units in the cities of 
Chihuahua and Ciudad Juarez provided intelligence that led to the 
arrest of a principal leader of the Sinaloa cartel. The Chihuahua unit 
also assisted in the identification and apprehension of two suspects 
responsible for an attack on a Ciudad Juarez television station, in 
addition to six kidnappings and five homicides. This unit also aided 
the apprehension of suspects responsible for the murder of the sons of 
two prominent Mexican journalists. The Sonora unit developed tactical 
intelligence, which led to the arrest of four suspects, identified as 
former Mexican military and enforcers for the Sinaloa Cartel. It also 
worked with ICE/HSI on an investigation that resulted in the seizure of 
five weapons, one grenade, three vehicles, and 450 kilograms of 
marijuana in Nogales, Sonora in 2015.

    Anti-Money Laundering: To assist Mexico in disrupting transnational 
criminal organizations (TCOs), INL provided over $16 million in 
hardware, software, servers, and technical assistance to Mexico's 
Financial Intelligence Unit (UIF), a division of Mexico's Secretariat 
of Public Finance and Credit responsible for receiving, analyzing, and 
disseminating information on suspicious financial transactions. This 
assistance enhanced the Government of Mexico's ability to combat 
financial crimes and money laundering activity, resulting in the 
following successes:

   In 2014 alone, the UIF froze 761 suspicious accounts.

   Between March 2014 and May 2015, the UIF froze approximately $41 
        million in suspicious assets.

   The UIF reports it collected as much data in 2015 as in the 
        previous six years combined due to new IT platforms and 
        additional data storage capacity principally provided by INL.

    Corrections:  Since 2008, the Department of State's Bureau of 
International Narcotics and Law Enforcement Affairs (INL) and the 
Government of Mexico have partnered to create a more effective, 
transparent, and humane prison system, including through accreditation 
by the American Correctional Association (ACA), which has helped to 
reduce escapism and mitigate the ability of imprisoned cartel members 
to fuel organized crime from behind bars. As of May 2016, a total of 30 
Mexican correctional facilities have achieved ACA accreditation: six 
federal prisons, 22 state prisons, one state central office, and the 
federal training academy. INL plans to work toward having all federal 
prisons and one quarter of state prisons ACA-accredited by 2021. In a 
recent National Human Rights Commission (CNDH) evaluation of more than 
150 federal and state prisons, ACA-accredited prisons received 
significantly higher average scores than non-ACA-accredited facilities. 
Of the top ten facilities, eight are either accredited or seeking 
accreditation, and none of the ten lowest scoring facilities in the 
CNDH evaluation are ACA-affiliated.

   The state prison system in Chihuahua is an example of the program's 
        success. In 2010, 216 prisoners in Chihuahua died as a result 
        of prison violence, and the state reported more than 17 
        escapes. After achieving INL-sponsored ACA accreditation in 
        2013, there have been only three violent prison deaths, and no 
        escapes from any accredited facility.

    Question 5.  I believe we should continue to expand military to 
military cooperation with the Mexican government as long as the 
Mexicans welcome our contributions. Maritime cooperation between our 
navies and coast guards seems like an underdeveloped area. Perhaps U.S. 
Northern Command should look at a role for Mexico to play in NORAD. The 
U.S. should also work to bring Canadian law enforcement into closer 
cooperation with Mexican law enforcement to stem illicit trafficking. 
What other opportunities exist where cooperation between the U.S. and 
Mexican governments can be improved?

    Answer. We have an excellent relationship with the Mexican 
government and together we are continuously assessing our security 
relationship and working on ways to improve and enhance our 
cooperation.
    The biannual ``Security Cooperation Group'' meeting, co-chaired by 
the National Security Council and Mexico's Center for Investigation and 
National Security (CISEN), serves as the primary forum for our senior 
policy makers to work with their Mexican counterparts to devise 
strategies to combat our shared security threats and identify and 
reassess strategic priorities, such as continuing the fight against 
organized crime, enhancing counternarcotics efforts, and jointly 
managing our 2,000 mile shared border. There are also multiple venues 
and working groups that facilitate operational and tactical security 
cooperation, including through the 21st Century Border Management 
Initiative, bilateral border violence prevention protocols, and other 
coordination mechanisms.
    Specific to our military relationship, U.S. Northern Command works 
with Mexico on initiatives that not only assist in mitigating the 
current Transnational Criminal Organization (TCO) threat, but also 
focus on capacity building. They work with the Mexican Navy (SEMAR) and 
Army (SEDENA) to build specific capabilities, enhance our bilateral and 
regional engagement, and prioritize joint activities through programs 
in aviation, communications, and civil-military operations. SEMAR's 
participation in exercises, combined and multilateral, is increasing 
and planning is underway for joint U.S.-Mexican exercises next year 
that will increase interoperability with U.S. Naval Forces and bolster 
regional security.
    The North American Leaders' Summit, to be attended by President 
Obama, Mexican President Pena Nieto, and Canadian Prime Minister 
Trudeau, will take place in Ottawa on June 29. The discussion of the 
effective exchange of information and coordination among law 
enforcement authorities will remain essential. We will also discuss 
continued coordination to pursue areas of cooperation to counter drug 
trafficking, trafficking in persons, and other illicit trade.

    Question 6.  Please summarize any progress that has been made as a 
result of the bilateral talks that have been occurring over the past 
year on how the U.S. and Mexican government can address heroin 
cultivation and production in Mexico.

    Answer. Over the past year, our bilateral dialogue with the 
Government of Mexico on heroin has reached an unprecedented level of 
openness. This has led to enhanced U.S.-Mexico collaboration on this 
critically important issue, including increased communication and 
information sharing on heroin. In March 2016, Office of National Drug 
Control Policy Director Michael Botticelli and the State Department's 
Bureau of International Narcotics and Law Enforcement Affairs (INL) 
Assistant Secretary William R. Brownfield participated in meetings 
hosted by the Mexican Attorney General's Office with high-level 
officials from each of the Mexican federal government agencies involved 
in drug enforcement to discuss U.S.-Mexican collaboration on heroin and 
potential new areas of assistance. INL continues to increase the 
capacity of law enforcement and justice sector institutions to detect 
heroin distribution networks and prosecute those involved. INL has 
hosted seminars with several Mexican agencies to increase information 
sharing on heroin, and has facilitated a study trip with Mexican 
officials to Guatemala and Peru to examine poppy eradication best 
practices. The United States has provided more than $130 million in 
non-intrusive inspection equipment, maintenance, technical assistance, 
and capacity building to enhance the capabilities of Mexican officials 
at internal checkpoints and points of entry along Mexico's northern and 
southern border. INL is also working with the U.S. Drug Enforcement 
Administration (DEA) to provide training to augment Mexico's ability to 
identify, investigate, and interdict clandestine heroin labs, and 
better prepare Mexican officials to dismantle them.
    This year, the Government of Mexico is expected to finalize its 
National Drug Control Policy Plan, and to lay out protocols for poppy 
eradication. Mexico is also working with the United Nations Office on 
Drugs and Crime (UNODC) on a yield study that will enable more accurate 
estimates of potential heroin production. Initial reports outlining 
baseline poppy cultivation estimates will be completed this year. These 
reports will provide a greater understanding of how Mexican eradication 
and interdiction responsibilities will be organized going forward, and 
will help shape the best areas for U.S. assistance. INL will continue 
to work closely with Mexico to increase efforts to combat heroin.

    Question 7.  How would you assess the assertion made by a group of 
experts from the Inter-American Commission on Human Rights, that there 
may have been another bus involved in the incident in which 43 students 
disappeared in Guerrero, Mexico, that was packed with heroin bound for 
the U.S.?

    Answer. We strongly support the work of the Interdisciplinary Group 
of Independent Experts affiliated with the Inter-American Commission on 
Human Rights and commend the assistance they have provided to the 
Government of Mexico with respect to the investigation of the September 
2014 disappearance of 43 students in Iguala, Mexico. We have encouraged 
Mexican authorities to incorporate the experts' findings into the 
ongoing official investigation.
    In the reports released in September 2015 and April 2016, the 
experts noted the organized crime group alleged to be involved in the 
attack on the students and their disappearance is connected to drug 
trafficking to the United States and, specifically, to a case before a 
federal court in Chicago. The experts hypothesized that the extreme 
violence against the students and the alleged ``missing'' fifth bus 
might be related to this drug trafficking--i.e., that unknown to the 
students who seized several buses, one of those buses could have 
contained drugs or drug money, which in turn led to the violent attacks 
of September 26, 2014. The Department of State is not in a position to 
evaluate the merits of that hypothesis.

                               __________

                     Witnesses Prepared Statements

  prepared statement of daniel l. foote, deputy assistant secretary, 
     bureau of international narcotics and law enforcement affairs
    Chairman Rubio, Senator Boxer, and distinguished Members of the 
Subcommittee: thank you for the opportunity to appear before you to 
discuss U.S. government efforts to combat the production and 
trafficking of heroin and the violence and instability it brings to our 
communities, our citizens, and the world in which we live.
    The flow of illicit narcotics across our shared border with Mexico 
threatens citizen security in both countries. Recognizing that we have 
a shared responsibility to address common challenges, in 2007, the 
United States forged a comprehensive security partnership with Mexico. 
Through the Merida Initiative, we work in partnership with Mexico to 
build the capacity of Mexican institutions to counter organized crime, 
uphold the rule of law, and protect our shared border from the movement 
of illicit drugs, money, and goods.
    The need for effective collaboration is now more important than 
ever. Heroin and fentanyl-laced heroin is a public health crisis in the 
United States, and Mexican drug trafficking organizations are the 
primary suppliers of heroin to the United States. We must aggressively 
respond to this growing threat in concert with our broader work through 
the Merida Initiative to counter all illicit drugs and to end the 
impunity with which trafficking organizations are able to operate, 
putting their leaders in jail, seizing their weapons, drugs, and money, 
and dismantling their illicit businesses.
    To date through the Merida Initiative, the United States government 
has provided nearly $1.5 billion worth of capacity building assistance 
to our Mexican partners. This includes training and equipment which 
complements the significant resources the Government of Mexico has 
dedicated to our shared security goals. Today there are more than $700 
million in bilaterally agreed upon projects with the Pena Nieto 
administration, which fully support the Merida Initiative's strategic 
framework that underpins the basis of our security cooperation. Most of 
these projects fall into three priority areas: professionalizing and 
building the capacity of Mexican law enforcement agencies; supporting 
the Government of Mexico's efforts to strengthen border management and 
security; and helping advance reforms across Mexico's justice sector.
    In partnership with the Department of Justice, INL is building the 
skills of prosecutors, investigators, and forensic experts in Mexico 
and preparing them for their responsibilities under the oral accusatory 
system, the transition to which is well underway throughout Mexico. 
This includes helping enhance the technical capacity of courtrooms 
throughout the country to host oral trials. We are also assisting in 
the training of the next generation of Mexican attorneys as they learn 
crucial oral trial skills in Mexican law schools.
    Through Merida, INL is enhancing federal, state, and municipal 
policing capacity throughout Mexico. These programs provide a full 
range of professionalization activities including: the development of 
enforceable police standards; basic training and academy accreditation; 
continuing and leadership education programs; law enforcement vetting 
programs; and the development of effective internal affairs units. The 
continued professionalization of Mexican law enforcement will result in 
a greater observance of and accountability for civil and human rights, 
increasing trust in these institutions by the people of Mexico, and 
making them better partners for other law enforcement organizations 
both within Mexico and with the United States. This is vital to any 
effort to stem drug trafficking and reduce the capabilities and 
influence of drug trafficking organizations.
    Strengthening border security capacity on Mexico's borders is a 
priority for both our nations. Our governments have committed to 
further enhancing Mexico's ability to interdict illicit narcotics, 
arms, and money. INL has provided more than $125 million in inspection 
equipment and more than 340 canine teams deployed at ports of entry, 
border crossings, and internal checkpoints throughout Mexico. In 
Mexico's northern border region, INL has provided equipment and 
technical assistance to improve communications between the Mexican 
Federal Police and U.S. Customs and Border Protection (CBP). We are 
working in conjunction with CBP to provide training to Mexico's Federal 
Police who will be deployed to the northern border region, advancing 
cooperation between our countries along our shared border.
    Through Merida, we continue to make progress with Mexico in 
targeting heroin production and trafficking. We work with the U.S. Drug 
Enforcement Administration to provide training to augment Mexico's 
ability to identify, investigate, and interdict clandestine heroin 
labs, and better prepare Mexican authorities to dismantle them. We are 
improving information sharing between our governments on heroin and 
fentanyl, working together to better assess poppy cultivation and 
heroin production in Mexico, and with our interagency partners, 
continuing our high-level focus on exploring other avenues to enhance 
our bilateral cooperation when it comes to heroin.
    At the last high level Security Cooperation Group held in Mexico 
City in October 2015, heroin was the group's highest priority. We 
agreed to continue working in partnership on a bilateral approach for 
combating the cultivation, production, and trafficking of heroin and to 
determine how U.S. assistance can best support Mexico's efforts in this 
area.
    Building strong, effective justice sector institutions in Mexico 
capable of confronting organized crime and the violence and corruption 
for which it is responsible is a difficult, long-term challenge. Our 
work across numerous institutions and sectors must be sustained, for it 
is only with a concerted, committed effort that the capacity to deter 
the cultivation, production, and trafficking of heroin and other 
illicit drugs in Mexico will be strengthened. Past investments by the 
American people in this partnership have produced results, and with 
your continued support, our collaboration with Mexico on this important 
work will continue.

                               __________

   Prepared Statement of Kemp L. Chester, Associate Director for the 
   National Heroin Coordination Group, Office of National Drug Policy

    Chairman Rubio, Ranking Member Boxer, and members of the 
subcommittee, thank you for inviting me to discuss the public health 
and public safety issues resulting from heroin use; the Government of 
Mexico's efforts to reduce the availability of heroin in the United 
States; and the U.S.-Mexico cooperation to address heroin issues in 
both countries.
                               background
    In 2014, more than 47,000 Americans, or approximately 129 people 
each day, died from a drug overdose. Opioids--a category of drugs that 
includes heroin and prescription pain medicines like oxycodone, 
oxymorphone, hydrocodone, and fentanyl--are having a considerable 
impact on public health and safety in communities across the United 
States. Of the overdose deaths in 2014, 61 percent (28,647) involved an 
opioid, 44 percent (20,808) involved prescription pain medicines, and 
22 percent (10,574) involved heroin.\1\ The threat posed by heroin has 
continued to grow dramatically over the past several years. Since 2007, 
deaths involving heroin have risen 340 percent, from 2,402 in 2007 to 
10,574 in 2014.\2\
---------------------------------------------------------------------------
    \1\ An opioid-related death may involve more than one type of 
opioid.
    \2\ Centers for Disease Control and Prevention, National Center for 
Health Statistics. Multiple Cause of Death, 1999-2014 on CDC WONDER 
Online Database, released 2015.
---------------------------------------------------------------------------
    There are several principal factors contributing to the current 
nationwide heroin crisis: the increased availability of heroin in the 
U.S. market,\3\ the availability of purer forms of heroin that allow 
for non-intravenous use,\4\ its relatively low price, \5\ and a 
relatively small percentage of non-medical users of opioid prescription 
drugs transitioning to heroin.\6\ The purity of retail-level heroin has 
increased since the 1990s while prices have remained low.\7\ Further 
increases in purity since 2010 have enabled heroin use by a variety of 
means including snorting or smoking which broadens the drug's appeal to 
a large population that is disinclined to inject the drug 
intravenously. Heroin's relatively low price makes it a viable 
alternative to many prescription opioids which command higher prices on 
the street.\8\ Heroin use has spread into suburban and rural 
communities and is growing among most socioeconomic classes, age 
groups, and races.\9\
---------------------------------------------------------------------------
    \3\ Drug Enforcement Administration, El Paso Intelligence Center, 
National Seizure System, 2008-2014.
    \4\ Drug Enforcement Administration. Strategic Intelligence 
Section. 2015 National Heroin Threat Assessment. DEA-DCT-DIR-039-15.
    \5\ Drug Enforcement Administration. System to Retrieve Information 
from Drug Evidence (STRIDE), Price and Purity Data, 2015.
    \6\ Muhuri PK, Gfroerer, JC and Davies, MC. (2013). Associations of 
nonmedical pain reliever use and initiation of heroin use in the United 
States. Substance Abuse and Mental Health Services Administration.
    \7\ Drug Enforcement Administration. System to Retrieve Information 
from Drug Evidence (STRIDE), Price and Purity Data, 2015
    \8\ Drug Enforcement Administration. Strategic Intelligence 
Section. 2015 National Heroin Threat Assessment. DEA-DCT-DIR-039-15.
    \9\ Cicero, T., Ellis, MS, Surratt, HL, Kurtz, SP. (2014). The 
changing face of heroin in the United States: A retrospective analysis 
of the past 50 years. JAMA Psychiatry, 71(1): 821-826.
---------------------------------------------------------------------------
    The Administration recognizes that the heroin threat is a global 
issue; however, Mexico is currently the primary supplier of heroin to 
the United States, with Mexican drug traffickers cultivating opium 
poppy and producing heroin in Mexico, and smuggling the finished 
product into the United States.\10\ Opium poppy cultivation in Mexico 
has increased substantially in recent years, rising from 17,000 
hectares in 2014, with an estimated potential pure heroin production of 
42 metric tons, to 28,000 hectares in 2015 with a potential production 
of 70 metric tons of pure heroin.\11\
---------------------------------------------------------------------------
    \10\ Drug Enforcement Administration. Strategic Intelligence 
Section. 2015 National Heroin Threat Assessment. DEA-DCT-DIR-039-15.
    \11\ U.S. Department of State, Bureau of International Narcotics 
and Law Enforcement Affairs. International Narcotics Control Strategy 
Report--2015 [INCSR] (March 2015) for data from 2013-2014 and 
unpublished U.S. Government Estimates.
---------------------------------------------------------------------------
    The reemergence of illicit fentanyl, a powerful Schedule II 
synthetic opioid more potent than morphine or heroin, exacerbates the 
heroin crisis.\12\ Illicit fentanyl is sometimes mixed with powder 
heroin to increase its effects or with diluents and sold as ``synthetic 
heroin,'' with or without the buyers' knowledge.\13\ Increasingly, 
illicit fentanyl is pressed into pill form and sold as counterfeit 
prescription opioid pills. Illicit fentanyl comes from several sources. 
The majority of the illicit fentanyl in the U.S. market is smuggled 
into the country after being clandestinely produced in Mexico or 
China.\14\
---------------------------------------------------------------------------
    \12\ Zuurmond WW, Meert TF, and Noorduin H. (2002). Partial versus 
full agonists for opioid-mediated analgesia--focus on fentanyl and 
buprenorphine. Acta Anaesthesiol Belg, 53(3):193-201.
    \13\ Drug Enforcement Administration. Strategic Intelligence 
Section. 2015 National Heroin Threat Assessment. DEA-DCT-DIR-039-15.
    \14\ Drug Enforcement Administration. Strategic Intelligence 
Section. 2015 National Heroin Threat Assessment. DEA-DCT-DIR-039-15.
---------------------------------------------------------------------------
    Illicit fentanyl is extremely dangerous and deadly. In 2014, there 
were more than 5,544 drug overdose deaths involving synthetic narcotics 
other than methadone, a category that includes fentanyl. This number 
has more than doubled from two years earlier (2,628 in 2012).\15\ 
Moreover, overdose deaths involving opioids like illicit fentanyl are 
likely undercounted. Of deaths where drug overdose is cited as the 
underlying cause of death, approximately one-fifth of the death 
certificates do not list the specific drug(s) involved in the fatal 
overdose.\16\
---------------------------------------------------------------------------
    \15\ Centers for Disease Control and Prevention, National Center 
for Health Statistics. Multiple Cause of Death 1999-2014 on CDC WONDER 
Online Database, released 2015. Data are from the Multiple Cause of 
Death Files, 1999-2014, as compiled from data provided by the 57 vital 
statistics jurisdictions through the Vital Statistics Cooperative 
Program.
    \16\ Rudd, RA, Aleshire, N, Zibbell, JE, and Gladden, RM. Increases 
in Drug and Opioid Overdose Deaths--2000-2014. Centers for Disease 
Control and Prevention: Mortality and Morbidity Weekly Report. Jan. 1, 
2016. 64(50);1378-82.
---------------------------------------------------------------------------
    There are several reasons why it is important that we address 
concerns regarding heroin and illicit fentanyl in a single problem set. 
First, traffickers who add illicit fentanyl as an adulterant to boost 
the effect of their heroin, or mix it with diluents to sell as 
synthetic heroin, likely utilize the same supply chains and 
distribution mechanisms for both drugs. Moreover, both heroin and 
fentanyl belong to the same class of opioid drugs that have similar 
effects making their illicit user populations one and the same. Second, 
both heroin and clandestinely-produced fentanyl can be manufactured by 
the same drug trafficking organizations that can bring both drugs into 
the country using the same trafficking routes. And finally, addressing 
both illicit drugs together allows us to address the heroin crisis 
while avoiding unintended uptick in illicit fentanyl use. If we move 
too quickly in reducing the availability of heroin without 
simultaneously addressing illicit fentanyl availability, it could 
increase the price of heroin, and risk driving more people to use 
illicit fentanyl-thereby creating the prospect of an additional and 
potentially more deadly opioid drug threat.\17\ \18\
---------------------------------------------------------------------------
    \17\ National Institute for Health Development, Infectious Diseases 
and Drug Monitoring Centre. 2014 National Report to the EMCDDA by the 
REITOX National Focal Point. Tallinn, Estonia.
    \18\ European Monitoring Centre for Drugs and Drug Addiction. 
Fentanyl in Europe EMCDDA Trendspotter Study: Report from an EMCDDA 
expert meeting 9 to 10 October 2012. Lisbon, Portugal.
---------------------------------------------------------------------------
    The dramatic increase in the availability and use of heroin and 
illicit fentanyl is a national security, law enforcement, and public 
health issue, and it has become the highest priority illicit drug 
threat to the Nation.\19\ Addressing this complex problem demands 
significant effort, creativity, and interagency collaboration.
---------------------------------------------------------------------------
    \19\ The White House, Strategy to Combat Transnational Organized 
Crime, 25 July 2011.
---------------------------------------------------------------------------
                          the federal response
    The National Heroin Coordination Group. In November of 2015, the 
National Security Council (NSC) Transborder Security and Western 
Hemisphere Directorates Interagency Policy Committee (IPC) on Mexico 
Security Priorities directed the formation of the National Heroin 
Coordination Group (NHCG) within the Office of National Drug Control 
Policy (ONDCP). The NHCG is the hub of a network of interagency 
partners who leverage their home agency authorities and resources to 
synchronize interagency activities against the heroin and illicit 
fentanyl supply chains to the United States. I serve as the Director of 
the NHCG, which ensures that Federal counterdrug efforts focused on the 
heroin problem complement the NSC's ongoing work related to Mexico 
security priorities, and that the NHCG connects the actions taken on 
the front end of the supply chain with the effects on the domestic 
market and user population.

    Bi-lateral Engagement. U.S.-Mexico engagement regarding heroin has 
been robust. In October 2015, ONDCP Director Michael Botticelli 
participated in a U.S.-Mexico Security Cooperation Group dialogue that 
included heroin as the first security cooperation agenda topic. The 
importance of increased poppy eradication efforts by the Government of 
Mexico, as well as drug interdiction, clandestine laboratory 
destruction, and disruption of precursor chemical trafficking were all 
highlighted as crucial issues to be addressed.
    Director Botticelli and I traveled to Mexico in early March 2016 
with Ambassador William Brownfield, Assistant Secretary of State for 
International Narcotics and Law Enforcement Affairs (INL), to engage on 
heroin and illicit fentanyl issues specifically and to impress upon our 
Mexican partners the urgency with which the United States is addressing 
the heroin problem. We met with Mexican Attorney General Gomez and 
senior members of her staff, as well as with senior officers from the 
Mexican Army, the Mexican Navy, and the Secretariat of the Government. 
Attorney General Gomez announced her role as the synchronizer of 
Mexico's efforts to disrupt the production of heroin and illicit 
fentanyl including poppy eradication and the identification and 
neutralization of production laboratories.
    Importantly, we agreed to conduct joint planning and to develop a 
simple and focused national strategy to direct and concentrate Mexico's 
efforts against heroin and illicit fentanyl. We expect this plan to 
delineate responsibilities, identify gaps, and help synchronize heroin 
and illicit fentanyl efforts across the Mexican government. This plan 
will be beneficial for both countries and we look forward to 
collaborating on its development. The country team at the U.S. Embassy 
in Mexico City has led efforts to foster partnerships within the 
Government of Mexico, and increased information sharing continues to 
enhance this relationship. The United States continues to work with the 
Government of Mexico on important efforts under the Merida Initiative, 
a joint effort to fight transnational criminal organizations and reduce 
associated violence. Building upon the Mexican Government's own 
investment in equipment and border security infrastructure, the Merida 
Initiative will continue to strengthen border security that facilitates 
the flow of legitimate commerce and travel, while reducing the movement 
of illicit narcotics, currency, weapons, explosives, black market 
goods, and undocumented migrants.
    U.S. Federal law enforcement agencies are aggressively addressing 
the heroin and illicit fentanyl issue both here and abroad. The Drug 
Enforcement Administration and other agencies have co-located Special 
Agents with international partners in Mexico and throughout Latin 
America to assist in criminal investigations targeting drug trafficking 
organizations, and to help their international counterparts develop 
their capacity to conduct the full range of narcotics interdiction 
activities within their countries to target both heroin and illicit 
fentanyl. Our Federal law enforcement agencies, in conjunction with the 
Department of State, are working with the countries who supply illicit 
fentanyl and the precursor chemicals used in its manufacture to stem 
the flow of these dangerous chemicals to the Western Hemisphere.

    Interagency Partnerships. Our ability to bring together, 
contextualize, and synchronize the strategies and partnerships 
currently taking place at the Federal, state, local, and tribal levels 
to reduce the availability of heroin in the United States is critical 
to our overall efforts. The urgent need to sustain progress toward 
addressing the heroin crisis, combined with the expanding and dynamic 
nature of the problem itself, requires increased collaboration among 
Federal agencies, and with our partners working at the state, local and 
tribal level where the crisis is felt most deeply and where there is an 
enormous amount of energy and innovation. This cooperation will allow 
for greater situational awareness to provide more comprehensive 
understanding of expected changes in the domestic environment related 
to interagency heroin/illicit fentanyl supply reduction efforts.
    The ONDCP funded High Intensity Drug Trafficking Areas (HIDTA) 
Program is a locally-based program that responds to the drug 
trafficking issues facing specific areas of the country. Law 
enforcement agencies at all levels of government share information and 
implement coordinated enforcement activities; enhance intelligence 
sharing among Federal, state, local, and tribal law enforcement 
agencies; provide reliable intelligence to law enforcement agencies to 
develop effective enforcement strategies and operations; and support 
coordinated law enforcement strategies to maximize available resources 
and reduce the supply of illegal drugs in designated areas. In August 
2015, ONDCP committed $2.5 million in HIDTA funds to develop a strategy 
to respond to the heroin crisis in the United States. This 
unprecedented project combines prevention, education, intelligence, and 
enforcement resources to address the heroin threat across 17 states and 
the District of Columbia. The effort is carried out through a unique 
partnership of seven regional HIDTAs--Appalachia, Michigan, New 
England, New York/New Jersey, Ohio, Philadelphia/Camden, and 
Washington/Baltimore. The HIDTA heroin response strategy will foster a 
collaborative network of public health-public safety partnerships, 
sharing best practices, innovative pilots, and identifying new 
opportunities to leverage resources.
    Along our Southwest border, U.S. Customs and Border Protection 
(CBP) continues to detect and interdict illicit narcotics entering the 
United States. CBP reports seizing 1,121,411 kilograms of illegal drugs 
in 2015. Of that amount, CBP seized 2,745 kilograms of heroin, 25 
percent more than CBP seized in 2014.
    The Department of Justice's Organized Crime Drug Enforcement Task 
Forces (OCDETF) partnered with the Federal Bureau of Investigation, 
Homeland Security Investigations, and the Drug Enforcement 
Administration target, disrupt, and dismantle international drug 
trafficking organizations that manufacture, transport, and distribute 
heroin and illicit fentanyl destined for and distributed across the 
United States. In addition, OCDETF's National Heroin Initiative, 
launched in December 2014, seeks to coordinate innovative regional 
approaches that improve information sharing and data collection to 
support multi-agency, multi-jurisdictional enforcement actions.
                               challenges
    While we have worked tirelessly to address the heroin crisis and 
have laid a firm foundation for future efforts, much remains to be 
done. We have gaps in our capability to detect illicit fentanyl at our 
borders and in our air freight package locations, and our Mexican 
partners could certainly do more to strategically dismantle criminal 
organizations and conduct opium poppy eradication and clandestine 
laboratory identification and neutralization.
    We are working to close information gaps. Although it is abundantly 
clear that the number of overdose deaths involving illicit fentanyl 
nationwide has increased dramatically, it is likely that the overdose 
numbers underreport the actual number of deaths due to heroin and 
illicit fentanyl. The ability to detect illicit fentanyl in overdose 
victims, and the standard inclusion of illicit fentanyl in overdose 
death toxicology screening, varies widely among localities. This likely 
results in the undercounting of heroin and illicit fentanyl-related 
deaths and actual numbers of heroin-related overdoses are probably much 
higher. In localities where detailed toxicology screening is performed, 
information suggests higher numbers of illicit fentanyl-related 
overdose.
    We look forward to working with our Federal and state government 
partners, as well as our international counterparts, to address these 
problem areas.
                               conclusion
    We cannot forget that the epidemic of opioid use and overdose 
deaths is fundamentally a public health problem that is exploited by 
criminal organizations, and addressing it adequately requires substance 
use prevention and treatment strategies and recovery support services. 
Law enforcement officials are increasingly becoming public health 
partners, linking individuals with opioid use disorder to treatment.
    For this reason, in the FY 2017 budget President Obama proposed $1 
billion in new mandatory funding over two years to expand the 
availability of opioid use disorder services, target areas of highest 
need, and allow states to implement evidence-based strategies that best 
meet local needs, such as medication-assisted treatment and expansion 
of the availability of substance abuse treatment providers (through 
enhanced loan repayment for healthcare providers that offer medication-
assisted treatment). Such efforts will help individuals seek treatment, 
successfully complete treatment, and sustain recovery.
    ONDCP will continue to work with our Federal government departments 
and agencies, partners at the state, local and tribal levels, and 
international counterparts to reduce heroin and illicit fentanyl 
production and trafficking and to combat the profound effect these 
dangerous drugs are having in our communities.
    Thank you for affording me the opportunity to testify today and for 
your commitment to this important issue.

                               __________

  Prepared Statement of Teresa Jacobs, Mayor of Orange County, Florida

    Chairman Rubio, Ranking Member Boxer, members of the committee, 
thank you for calling this important hearing, and for allowing me to 
share a local perspective on the terrible threat that heroin poses for 
cities and counties throughout our country.
    First a bit about Orange County: We're home to the City of Orlando 
and 12 other municipalities, with a population of 1.2 million people, a 
strong economy and an exceptional quality of life. In 2015, we 
shattered national tourism records, hosting more than 66 million 
visitors.
    No doubt you know us as the vacation capital of the world, but 
tragically, like too many other states and communities, Orange County 
has seen an alarming increase in the number of heroin overdoses and 
related deaths. Last year, we lost 85 lives to heroin--a staggering 
600% increase since 2011. Already this year we've had more than 90 
heroin overdoses in the county, with about one-in-ten resulting in 
death.
    Florida's fight against this current wave of opioid addiction began 
about five years ago, in the midst of our battle against the pill 
mills.
    You may remember the shocking statistics from 2010, when it was 
discovered that Florida practitioners purchased more than 41 million 
oxycodone pills in the first six months of that year--more than the 
other 49 states of the union combined.
    Like countless cities, towns and counties across the U.S., we 
worked to outlaw unauthorized pain clinics and provide resources for 
breaking opioid addiction.
    In Florida, the pill mill ``legacy'' has impacted us beyond 
measure. I can't prove it, but I think it's very likely that cartels 
took notice of what they perceived to be a ripe ``marketplace.'' Today, 
predatory drug dealers are targeting us with heroin, as well as cheap 
and deadly strains of fentanyl. Unfortunately, it's nearly impossible 
to accurately assess the threat in Florida, since no statewide 
databases exist. Instead, numbers are captured by individual agencies 
and municipalities--there is simply no mechanism for synergy or 
sharing.
    What we do know? We know that last year, approximately 2,000 heroin 
users moved through our Orange County jail. Many of those were arrested 
not for heroin possession, but for other offenses related to heroin 
addiction.
    We know that in 2015, we housed 100 expectant mothers tragically 
addicted to opiates or heroin, as our Jail has become the treatment 
center of last resort for so many people.
    For the good of our citizens and our community, we are fighting 
back.
    Last summer I convened the Orange County Heroin Task Force, and 
asked our sheriff to Co-Chair the effort. Our joint work is having a 
positive impact, including passage in the 2016 Florida Legislature of a 
measure allowing Naloxone sales without an individual prescription.
    We know there is no single solution, but there are some universally 
effective approaches:

   Enforcement is critical. In a world of increasingly sophisticated 
        technology, our local efforts--no matter how highly leveraged 
        and coordinated--are simply no match against organized 
        traffickers.

   Equally important, and in keeping with what we learned with pill 
        mills, we must be tireless in educating people that addiction 
        is an illness. An illness that requires treatment and support 
        not only for the addict, but also for the families who are 
        ravaged by addiction.

    In closing, I respectfully ask for your help:

   Help to stop the influx of drugs across the border. We've got our 
        hands full at the local level, and are simply not equipped to 
        fight the cartels. This is where we really need your help--to 
        stop these deadly drugs before they cross our borders.

   Help to treat more addicts. With a regional population of 2.5 
        million, we have one Addictions Receiving Facility with 26 
        detox beds serving four counties for the uninsured.

   Help to raise awareness so more people will choose not to try this 
        deadly drug in the first place.

    To end this crisis and save lives, we all need to be engaged. Thank 
you for your attention to this critical issue and thank you for your 
leadership and your service.

                               __________

    Prepared Statement of Steven Dudley, Co-Director, InSight Crime

    Chairman Rubio, Ranking Member Boxer, and members of the 
subcommittee: I am grateful for the opportunity to appear before you on 
behalf of InSight Crime and the Center for Latin American and Latino 
Studies at American University to discuss the criminal dynamics 
connected to the illegal opiate market, specifically the heroin market 
in the United States related to poppy production in Mexico.
                    mexico's increased market share
    U.S. consumption of heroin has increased significantly in the last 
few years. The reasons for this are complex but have to do with the 
increase of prescription drugs in the United States, a rise in prices 
of these prescription drugs and their black market counterparts, and 
the subsequent safeguards on this prescription medicine market, 
specifically OxyContin.
    The U.S. portion of the world heroin market is small by comparison 
in terms of users, but outsized in terms of potential earnings. The 
Rand Corporation estimated in 2014, that U.S. consumers spend as much 
as $27 billion on heroin each year, an increase from $20 billion per 
year in 2000.\1\ Only the marijuana market is worth more in the U.S.\2\
---------------------------------------------------------------------------
    \1\ Beau Kilmer, et al., ``How Big is the U.S. Market for Illegal 
Drugs,'' Rand Corporation (2014).
    \2\ Ibid.
---------------------------------------------------------------------------
    Mexican, Guatemalan and Colombian criminal organizations have 
reacted to these changes by producing more heroin. Only a small 
percentage of the world's opium poppy is cultivated in this hemisphere, 
but after it is processed into heroin, almost all of it is sold in the 
United States where the number of consumers for the drug has more than 
doubled since the early 2000s.
    Mexico accounts for the bulk of poppy production in the region. 
According to estimates by the Drug Enforcement Administration (DEA), 
the production of poppy, the raw ingredient for the production of 
heroin, increased from 10,500 hectares in 2012 to 17,000 hectares in 
2014, giving the groups the potential to produce 42 metric tons, up 
from 26 metric tons in 2012.\3\ By comparison, the DEA says Colombia 
produces only two metric tons per year.\4\
---------------------------------------------------------------------------
    \3\ Drug Enforcement Administration (DEA), ``National Drug Threat 
Assessment 2015,'' p. 34.
    \4\ The United Nations' most recent estimate for global heroin 
production is 526 tons. See: UNODC, ``World Drug Report 2015,'' p. 41. 
Av.
---------------------------------------------------------------------------
    Seizure data of heroin along the southwest border also indicate 
that Mexican criminal groups are moving increasing amounts of heroin 
into the U.S. market. Mexican criminal organizations are also the key 
transporters of Colombian heroin to the United States, and they manage 
and purchase the heroin produced in Guatemala or buy the opium gum 
wholesale to process it into heroin themselves in Mexico.
    Inside the U.S., the trend appears to be the same. The DEA says 
that Mexican groups are seeking an increasing amount of the market 
share in the distribution business itself, displacing other 
wholesalers. In sum, the picture is one of an increasingly lucrative, 
vertically integrated market, with large Mexican criminal organizations 
managing the product from the point of production to the point of sale 
and seeking a greater market share of these sales.
                 the reality of the heroin supply chain
    The reality of the supply chain is much more complex. While it 
helps us to use well-worn monikers when talking about these 
organizations, the truth is that they are not nearly as strong or 
monolithic as they once were. Names such as the Tijuana Cartel, the 
Juarez Cartel, the Zetas, or La Familia Michoacana may still evoke fear 
and sometimes awe, but they are not organizations as much as brand 
names. In many cases, the individual parts of the organization have as 
much contact with the bosses as a local Coca-Cola bottling plant 
manager might have with corporate headquarters.
    Even the vaunted Sinaloa Cartel is more horizontally than 
vertically integrated. Take the recent case of the Flores brothers in 
Chicago. Before they were arrested, Pedro and Margarito Flores were 
said to be Sinaloa Cartel distributors in Chicago, one of the areas of 
greatest interest to this subcommittee. And they were. But as federal 
intercepts of their conversations with cartel leaders show, the two 
brothers negotiated independently with each of the top two members of 
the Sinaloa criminal organization, obtaining different prices with 
different leaders and managing shipments separately.\5\ Even after a 
war started between the Sinaloa Cartel and the Beltran Leyva 
Organization, the Flores brothers continued to purchase drugs from 
portions of the Beltran Leyva Organization and the Sinaloa Cartel.
---------------------------------------------------------------------------
    \5\ Michelle Garcia, ``Court Docs Raise Questions about Mexico 
Sinaloa Cartel Narrative,'' 12 November 2013.
---------------------------------------------------------------------------
    The Flores case cuts at two different myths about the Sinaloa 
Cartel: 1) that this is one single organization; 2) that it is tightly 
controlled by a single leader or a single group of leaders. The point 
is that as shipments get further and further from Mexico's wholesale 
points, the loyalties become more disperse, and in some cases 
completely disappear. This is especially true in the U.S. market where 
violence is not a viable long-term option to ensure loyalty, win market 
share or become a monopoly.
    The effectiveness of U.S. law enforcement has made violence 
terrible for business and made the distribution chain a more 
democratic, capitalist affair. This is evident in other ways as well. 
While the amount of seizures indicates that there is more heroin 
available in the United States, it is still moved in very small 
quantities. The median seizure for the Los Angeles Field Division of 
the DEA in 2014, for example, was a kilogram.\6\ In Denver, a 10 to 12 
pound shipment is considered large.\7\
---------------------------------------------------------------------------
    \6\ DEA, op. cit., p. 37.
    \7\ Ibid.
---------------------------------------------------------------------------
    The amount of profits reaped by these Mexican criminal 
organizations also raises questions about how much control they exert 
in the United States. The Rand Corporation estimated in 2010 that 
Mexican criminal groups earn in the range of $400 million per year from 
their heroin exports and possibly another $700 million for transporting 
Colombian heroin to the U.S. market.\8\ While this has undoubtedly 
increased, there is still the question of where the rest of the over 
$20 billion spent on heroin in the U.S. annually goes.
---------------------------------------------------------------------------
    \8\ Kilmer, et. al., ``Reducing Drug Trafficking Revenues and 
Violence in Mexico: Would Legalizing Marijuana in California Help?,'' 
Rand Corporation (2010), p. 30.
---------------------------------------------------------------------------
    The case of the Laredo brothers, recently indicted in the Eastern 
District of Pennsylvania, is indicative of these trends. The Laredo 
brothers are charged with moving one ton of heroin over a six-year 
period. This is about 14 kilos per month. The organization was so 
subtle and, as one Mexican analyst put it, ``mom-and-pop,'' the Mexican 
authorities did not even know it existed.\9\
---------------------------------------------------------------------------
    \9\ Alejandro Hope, ``The Laredo DTO and what it says about the 
heroin trade,'' 19 April 2016.
---------------------------------------------------------------------------
    This brings us to Mexico. First, it is important to note that, 
unlike the cocaine market, Mexico is not dependent on other countries 
for its product. It is home grown. Second, the horizontal nature of the 
distribution chain makes it a difficult law enforcement problem in that 
country as well. As noted, the once monolithic criminal organizations 
are shells of what they once were. This is in part due to in-fighting 
of the type mentioned earlier but also Mexican law enforcement efforts. 
Many of the fragmented pieces have formed their own criminal operations 
and brand names.
    The most well-known is arguably the Guerreros Unidos, the criminal 
group held responsible for the disappearance of the 43 students in 
Mexico in 2014. The Guerreros Unidos used to be under the umbrella of 
the Beltran Leyva Organization. When the Beltran Leyva Organization 
fell to pieces during their war with the Sinaloa Cartel, the Guerreros 
Unidos became independent, as did several other criminal groups in the 
embattled state of Guerrero, which is one of the centers of opium 
cultivation, heroin production, wholesale and transport. Indeed, the 
mystery of what happened to those students, may hinge on whether the 
Guerreros Unidos were using commercial buses to move heroin to 
Chicago.\10\
---------------------------------------------------------------------------
    \10\ Elyssa Pachico, ``Four Questions about the '5th Bus' in Case 
of Mexico's Missing 43,'' 27 April 2016.
---------------------------------------------------------------------------
    The upshot is that the chain of production in Mexico is broken into 
numerous pieces, including small and large producers of opium poppy 
plants, the opium gum producers, the processors, the wholesale 
purchasers, and the transporters. Production, transport and 
distribution may all be different organizations. The Laredo brothers, 
for example, were purchasing opium gum from an independent broker then 
processing it themselves and distributing it in those small quantities 
in the U.S. for years without running into trouble with the large, 
supposedly all-controlling Sinaloa Cartel.
    To be sure, violence is still a viable option in Mexico, so the 
pendulum may swing back towards more monolithic criminal organizations. 
But for the moment, the reality is that there are literally dozens of 
small criminal organizations involved in this trade from the point of 
production to the point of sale.
                   impact on law enforcement efforts
    In sum, while the level of control that the Mexican production and 
transport groups exert over the supply chain is clear, we are not 
talking about one or two criminal groups, but dozens of interlocking 
organizations whose alliances are constantly shifting. The heroin 
supply chain appears to be a largely horizontal, diversified operation 
with multiple actors, and one that is obedient to market forces rather 
than one or two single vertically integrated distributors.
    The result is that law enforcement efforts are largely muted. 
Whether you debilitate the Sinaloa Cartel or the Laredo brothers, you 
are hindering a small part of the overall production and distribution 
chain. Even if you did slow the heroin from Mexico, you would face an 
insurmountable task: stopping the flow from other countries, which 
would undoubtedly fill the void and account for the bulk of world-wide 
production. Canada already gets up to 90 percent of its heroin from 
Afghanistan.\11\ And the United States once got all of its heroin from 
the Asian markets that supply the rest of the world.
---------------------------------------------------------------------------
    \11\ UNODC, op. cit., p. 46.
---------------------------------------------------------------------------
    Thank you for your time and attention. I look forward to your 
questions.

                               __________

    Statement for the Record Submitted by Jack Riley, Acting Deputy 
             Administrator, Drug Enforcement Administration

                              introduction
    Chairman Rubio, Ranking Member Boxer, and members of the 
subcommittee, on behalf of the approximately 9,000 employees of the 
Drug Enforcement Administration (DEA), thank you for the opportunity to 
discuss the issue of Cartels, the U.S. heroin epidemic, and DEA's 
response to combating the drug violence and public health crisis.
    Today, Mexican Transnational Criminal Organizations (TCOs) remain 
the greatest criminal drug threat to the United States; no other group 
can challenge them in the near term. These Mexican poly-drug 
organizations traffic heroin, illicit fentanyl, methamphetamine, 
cocaine, and marijuana throughout the United States, using established 
transportation routes and distribution networks. They control drug 
trafficking across the Southwest border (SWB) and are moving to expand 
their share of U.S. illicit drug markets, particularly heroin markets.
    National-level gangs and neighborhood gangs continue to form and 
expand relationships with Mexican TCOs. Many gangs rely on Mexican TCOs 
as their primary drug supply source, and Mexican TCOs depend on street-
level gangs, many of which already have a customer base, for drug 
distribution. Additionally, gangs profit through drug transportation 
activities, enforcement of drug payments, and by securing drug 
transportation corridors from use by rival gangs.
    Mexican TCOs exploit a user population struggling with the disease 
of addiction. Drug overdoses are the leading cause of injury-related 
death in the United States, eclipsing deaths from motor vehicle crashes 
or firearms.\1\ There were over 47,000 overdose deaths in 2014, or 
approximately 129 per day, over half (61 percent) of which involved 
either a prescription opioid or heroin.\2\ These are our family 
members, friends, neighbors, and colleagues.
---------------------------------------------------------------------------
    \1\ Centers for Disease Control and Prevention, Web-based Injury 
Statistics Query and Reporting System (WISQARS) [online], (2014).
    \2\ Rose A. Rudd, Noah Aleshire, Jon E. Zibbell, R. Matthew 
Gladden. Increases in Drug and Opioid Overdose Deaths--United States, 
2000-2014 Morbidity and Mortality Weekly Report, 2016;64:1378-1382.
---------------------------------------------------------------------------
    The DEA's focus is targeting the most significant, sophisticated, 
and violent trafficking organizations that profit from exploiting 
persons with substance use disorders. DEA's strategic priorities 
include targeting Mexican Consolidated Priority Organization Targets 
(CPOTs) and Priority Target Organizations (PTOs), which are the most 
significant international and domestic drug trafficking and money 
laundering organizations.
                    current assessment of the threat
    Based on active law enforcement cases, the following Mexican TCOs 
are operating in the United States: the Sinaloa Cartel, Beltran-Leyva 
Organization (BLO), New Generation Jalisco Cartel (Cartel de Jalisco 
Nueva Generacion or CJNG), Los Cuinis, Gulf Cartel (Cartel del Golfo or 
CDG), Juarez Cartel Michoacan Family (La Familia Michoacana or LFM), 
Knights Templar (Los Caballeros Templarios or LCT), and Los Zetas. 
While all of these Mexican TCOs transport wholesale quantities of 
illicit drugs into the United States, the Sinaloa Cartel remains the 
most active supplier. The Sinaloa Cartel leverages its expansive 
resources and organizational structure in Mexico to facilitate the 
smuggling and transportation of drugs throughout the United States.
    Mexican TCO operations in the United States typically take the form 
of a supply chain system that relies on compartmentalized operators who 
are only aware of their own specific function, and remain largely 
unaware of other operational aspects. In most instances, transporters 
for the drug shipments are independent third parties who work for more 
than one Mexican TCO. Since operators in the supply chain are insulated 
from one another, if a transporter is arrested the transporter is 
easily replaced and unable to reveal the rest of the network to law 
enforcement.
    Mexican TCOs in the United States utilize a network of extended 
family and friends to conduct their operations. Families affiliated 
with various Mexican TCOs in Mexico vouch for U.S.-based relatives or 
friends that are deemed trustworthy to run various aspects of the drug 
trafficking operations in the United States. Actual members of Mexican 
TCOs are usually sent to important U.S. hub cities to manage stash 
houses containing drug shipments and bulk cash drug proceeds. While 
operating in the United States, Mexican TCOs actively seek to maintain 
low profiles and avoid violent confrontations between rival TCOs or 
U.S. law enforcement.
    Mexican TCOs transport illicit drugs over the SWB through ports of 
entry using passenger vehicles or tractor trailers. Illicit drugs are 
typically secreted in hidden compartments when transported in passenger 
vehicles or comingled with legitimate goods when transported in tractor 
trailers. Once across the SWB, Mexican TCOs will initially utilize 
stash houses in a number of hub cities to include Dallas, Houston, Los 
Angeles, Atlanta, and Phoenix. The illicit products will then be 
transported via these same conveyances to distribution groups in the 
Midwest and on the East Coast. Mexican TCOs also smuggle illicit drugs 
across the SWB using other methods including tunnels, maritime 
conveyances, and aircraft.
                 heroin availability to the u.s. market
    There are four major heroin-producing areas in the world, but 
heroin bound for the U.S. market originates predominantly from Mexico 
and, to a lesser extent, Colombia. The heroin market in the United 
States has been historically divided along the Mississippi River, with 
western markets using Mexican black tar and brown powder heroin, and 
eastern markets using white powder, which over the last two decades has 
been sourced primarily from Colombia. The largest, most lucrative 
heroin markets in the United States are the white powder markets in 
major East Coast cities: New York City and the surrounding metropolitan 
areas, Philadelphia, Boston and its surrounding cities, Washington, 
D.C., Baltimore, as well as Chicago. Given the growing number of 
individuals with an opioid use disorder in the United States, Mexican 
TCOs have seized upon a business opportunity to increase their profits. 
Mexican TCOs are now competing for the East Coast and Mid-Atlantic 
markets by introducing Mexican brown/black tar heroin, as well as by 
developing new techniques to produce highly refined white powder 
heroin.
    Poppy cultivation in Mexico increased 160 percent between 2013 and 
2015, resulting in an estimated 70 metric tons of potential heroin. 
Cultivation in Mexico is located primarily in the state of Guerrero and 
the Mexican ``Golden Triangle'' which includes the states of Chihuahua, 
Sinaloa, and Durango. The increased cultivation and trafficking from 
Mexico to the United States impacts both of our nations by supporting 
the escalation of heroin use in the United States, as well as the 
instability and violence associated with drug trafficking in Mexico.
    The majority of Mexican and Colombian heroin bound for the United 
States is smuggled into the United States via the SWB, and heroin 
seizures at the border have more than doubled, from 1,016 kilograms in 
2010 to 2,524 kilograms in 2015.\3\ During this time, the average 
seizure at the Border also increased from 2.0 kilograms to 3.5 
kilograms. Most heroin smuggled across the border is transported in 
privately-owned vehicles, usually through California, as well as 
through south Texas. In 2014, more than half of U.S. Customs and Border 
Protection (CBP) heroin seizures at the SWB were in the southern 
California corridors of San Diego and El Centro. The distribution 
cells, and the Mexican and South American traffickers who supply them, 
are the main sources of heroin in the United States today. In Mexico, 
the threat of these organizations is magnified by the high level of 
violence associated with their attempts to control and expand drug 
distribution operations.
---------------------------------------------------------------------------
    \3\ Drug Enforcement Administration, Unclassified Summary, 2015 
National Drug Threat Assessment, Pg. 35.
---------------------------------------------------------------------------
    DEA has become increasingly alarmed over the addition of fentanyl 
into heroin sold on the streets as well as the use of fentanyl 
analogues such as acetyl fentanyl. The more potent opioids like 
fentanyl\4\ present a serious risk of overdose death for a user. In 
addition, this drug can be absorbed by the skin or inhaled, which makes 
it particularly dangerous for law enforcement, public safety, or health 
care personnel who encounter the substance during the course of their 
daily operations. On March 18, 2015, DEA issued a nationwide alert to 
all U.S. law enforcement officials about the dangers of illicit 
fentanyl and fentanyl analogues and related compounds. In addition, due 
to a recent spike in overdose deaths related to the use of acetyl 
fentanyl, on July 17, 2015, DEA used its emergency scheduling authority 
to place acetyl fentanyl in Schedule I of the CSA.
---------------------------------------------------------------------------
    \4\ Centers for Disease Control, Emergency Response Safety and 
Health Database, FENTANYL: Incapacitating Agent, accessed March 19, 
2015; U.S. Department of Justice, Drug Enforcement Administration, 
Office of Diversion Control, Drug & Chemical Evaluation Section, 
Fentanyl, March 2015.
---------------------------------------------------------------------------
                   dea response to the heroin threat
DEA'S 360 Strategy
    DEA is rolling out the 360 Strategy to address the opioid, heroin, 
and violent crime crisis. The strategy leverages existing federal, 
state, and local partnerships to address the problem on three different 
fronts: law enforcement, diversion control, and community relations. 
The strategy is founded upon our continued enforcement activities 
directed at the violent street gangs responsible for feeding the heroin 
and prescription drug abuse epidemic in our communities.
    While law enforcement plays a central role in the 360 Strategy, 
enforcement actions alone are not enough to make lasting changes in our 
communities. The 360 Strategy, therefore, also focuses on preventing 
diversion by providing education and training within the pharmaceutical 
community and to pursue those practitioners who are operating outside 
of the law. The final component of the strategy is a community effort 
designed to maximize all available resources to help communities turn 
around the recurring problems that have historically allowed the drug 
and violent crime problems to resurface after enforcement operations.
Additional Resources in Fiscal Year 2017
    DEA plays an important part in the U.S. government's drug control 
strategy that includes enforcement, treatment, and prevention. While 
there are complex issues affecting spikes in heroin use and overdoses, 
including prescription drug abuse, the same significant poly-drug 
trafficking organizations responsible for other illicit drug threats 
are also responsible for the vast majority of the heroin supply. 
Additionally, drug trafficking has a proven linkage to gangs and other 
violent criminal organizations. The FY 2017 President's Budget request 
provides $12.5 million and 42 positions, including 32 special agents, 
to create new enforcement groups in DEA domestic field divisions.
Heroin Task Force
    As directed by Congress, the Department of Justice joined with the 
Office of National Drug Control Policy (ONDCP) to develop strategies to 
confront the heroin problem and curtail the escalating overdose 
epidemic and death rates. DEA and more than 28 Federal agencies and 
their components participated in this initiative. The task force 
provided its Report to Congress on December 31, 2015.
International Enforcement: Sensitive Investigative Units
    DEA's Sensitive Investigative Units (SIU) program, nine of which 
are in the Western Hemisphere, helps build effective and vetted host 
nation units capable of conducting complex investigations targeting 
major TCOs. DEA, with funding support from the Department of State, 
currently mentors and supports 13 SIUs, which are staffed by over 900 
foreign counterparts. The success of this program has enhanced DEA's 
ability to fight drug trafficking on a global scale.
International Enforcement: Bilateral Investigations Units
    Bilateral Investigations Units (BIUs) are one of DEA's most 
important tools for targeting, disrupting, and dismantling significant 
TCOs. The BIUs have used extraterritorial authorities to infiltrate, 
indict, arrest, and convict previously ``untouchable'' TCO leaders 
involved in drug trafficking.
Special Operations Division
    Established in 1994, the Special Operations Division (SOD) is a 
DEA-led multi-agency operations coordination center with participation 
from Federal law enforcement agencies, the Department of Defense, the 
Intelligence Community, and international law enforcement partners. 
SOD's mission is to establish strategies and operations to dismantle 
national and international trafficking organizations by attacking their 
command and control communications. Special emphasis is placed on those 
major drug trafficking and narco-terrorism organizations that operate 
across jurisdictional boundaries on a regional, national, and 
international level.
El Paso Intelligence Center
    The El Paso Intelligence Center (EPIC) is a national intelligence 
center focused on supporting law enforcement efforts in the Western 
Hemisphere with a significant emphasis on the SWB. Through its 24-hour 
watch function, EPIC provides law enforcement officers, investigators, 
and analysts immediate access to participating agencies' databases. 
This function is critical in the dissemination of relevant information 
in support of tactical and investigative agencies, deconfliction, and 
officer safety. EPIC also provides significant tactical, operational, 
and strategic intelligence support to state and local law enforcement 
agencies, especially in the areas of clandestine laboratory 
investigations and highway interdiction.
Cooperation with Mexico
    The DEA's presence in Mexico represents our largest international 
footprint. The ability to have DEA Special Agents assigned to 11 
different offices throughout Mexico is a reflection of the level of 
cooperation that we continue to enjoy with our Mexican counterparts. 
DEA supports bi-lateral investigations with the Government of Mexico by 
providing information and intelligence to develop investigations that 
target leaders of TCOs throughout Mexico.
    We view our working relationship with the Mexican Authorities as 
strong, and getting stronger. In 2014, Mexican law enforcement 
officials arrested cartel leaders Hector Beltran-Leyva, Servando Gomez-
Martinez, and Omar Trevino Morales. These actions represent significant 
successes for both the United States and Mexico in our shared struggle 
against TCOs. The arrests struck at the heart of the leadership 
structure of the Knights Templar Cartel, the Beltran-Leyva 
Organization, and the Los Zetas Cartel; and highlight the continuing 
cooperation between Mexican and U.S. law enforcement. The United States 
and Mexico have established a strong and successful security 
partnership in the last decade and, to that end, the U.S. government 
stands ready to work with our Mexican partners to provide any 
assistance, as requested, to build upon these successes.
                               conclusion
    Mexican TCOs remain the greatest criminal drug threat to the United 
States. These Mexican poly-drug organizations traffic heroin, 
methamphetamine, cocaine, and marijuana throughout the United States, 
using established transportation routes and distribution networks. They 
control drug trafficking across the SWB and are moving to expand their 
share of U.S. illicit drug markets. Their influence up and down the 
supply chain, their ability to enter into new markets, and associations 
with domestic gangs are of particular concern for the DEA. DEA will 
continue to address this threat domestically and abroad by attacking 
the crime and violence perpetrated by the Mexican-based TCOs which 
inflict tremendous harm to our communities.

                               __________

                                  [all]
```