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Tijuana has largest percentage of cocaine users in Mexico

1999 United Nations report

— 'It's the worst kind of bullshit!" says Eric E. Sterling. "Preposterous! Totally absurd." He's talking of claims the United Nations makes -- about the Tijuana drug cartel, among others -- in its 1999 Human Development Report issued in July. "That report," he says, "is garbage."

"Organized crime syndicates," says the report, "[are] estimated to gross $1.5 trillion a year -- a major economic power rivaling multinational corporations. The sheer concentration of their power criminalizes business, politics, and government." The report says the Arellano Félix brothers' Tijuana cartel is reaching out to such organizations as "the Six Triads in China...the Mafia in Italy, the Yakuza in Japan...the Cosa Nostra in the United States, and the organizations in Nigeria, Russia, and South Africa." All of these crime syndicates, says the report, "have operations extending beyond national borders, and they are now developing strategic alliances linked in a global network, reaping the benefits of globalization."

Criminals, it seems, are taking advantage of the trends. "Globalization creates new and exciting opportunities, and among the most enterprising and imaginative opportunists are the world's criminals." The report says crime multinationals are not just emulating big business's drive to globalize the world's economy, they are exploiting "the precipitous removal of currency controls, before a proper regulatory environment has been established." In other words, they're operating in money-laundering heaven.

Drugs, the Tijuana cartel's main business, are the biggest growth area, the report says. The Mexican magazine Proceso reported recently that more Mexicans than ever are using drugs, mostly cocaine. Of all Mexican cities, Tijuana has the largest percentage -- 14.3 percent -- of Mexico's 2.5 million drug users. San Diego's figures, provided by SANDAG, show that drug-related offenses accounted for 47 percent of all felony arrests in 1998, up from 32 percent in 1994. The number of juveniles admitted to publically funded drug-treatment centers rose from 393 in 1995 to 1749 in 1998. Worldwide sales are now so huge that the illegal-drug business is bigger than the global auto industry. "There are now 200 million drug users, threatening neighborhoods around the world. In the past decade the production of opium more than tripled and that of coca leaf more than doubled. The illegal drug trade in 1995 was about 8 percent of world trade, more than the share of iron and steel...and roughly the same as textiles (7.5 percent) and gas and oil (8.6 percent)."

The Colombian government has reportedly decided to include their illicit drug business as part of their estimate of the size of their economy. Worldwide illegal drug business alone, says the report, is estimated to be worth $400 billion a year. "$400 billion? Garbage!" says Sterling, president of the Criminal Justice Policy Foundation, a Washington, D.C.-based thinktank. "They say that [total] organized crime revenues are $1.5 trillion. That is the size of the entire United States government budget in a year! The U.S. drug business is maybe $50 billion a year. The United States dominates the world in every area of luxury consumption. If their data's correct, they're saying the U.S. only consumes one-eighth of the world's drugs in volume. That doesn't make any sense. The per capita domestic product around the whole world is about $5000 per year. If you had drug users using $1000 worth of drugs a year, you'd need 400 million drug users to get this $400 billion number. No way does it make economic sense at all when you look at it. How can it be the size of the oil industry? I can't believe anybody takes [the report] seriously."

Srdjan Mrkic, a UN official who helped write the report, admits there's a lot of guesswork involved. "If you don't have influence from the inside [of cartels], all the other information you may run across is mere speculation. We just try to collect information that member states make available to us, to put that together and to pinpoint the possible effects of drug trafficking on the world economy. It is very difficult, because national agencies are not willing to disclose [much of] the information they have."

And Mrkic can't say positively that the Arellano Félix brothers' Tijuana cartel has moved into truly multinational business circles. He says he draws his conclusions by inference, by doing what he calls "very simple" police work. "You can usually find if drugs that are showing up in various areas are of the same origin or not. If [their origin is not] the same, you know the cartel is making deals with other cartels in a kind of profit-sharing agreement. A ship confiscated off Spain recently carried a huge shipment of hard drugs. There were so many drugs put in one place, it was quite evident they did not come from only one source. It means they pulled together to make this big shipment work. And the street value was over $1.2 billion. This kind of quantity, no single cartel could [handle]."

Sterling is skeptical that things are as dire as Mrkic's report claims. He says everybody wants to hype drugs, from drug czar General Barry McCaffrey to narcotics officers to Congressman Duncan Hunter (R-El Cajon). "I worked for nine years for the U.S. Congress, for the House Judiciary Committee on drug issues. In the mid-'80s I have this memory of congressman Duncan Hunter talking about San Diego being the 'methamphetamine capital of the country.' But at the same time Congressman Ron Wyden from Portland, Oregon, was saying the same thing about his city. And then Congressman Jim Wright from Fort Worth, Texas, was saying the exact same thing. Each of those cities had serious methamphetamine problems, but they all characterized them as 'the worst in the country,' with a kind of provincialism. Perverted bragging rights!"

Still, Sterling acknowledges how deeply the Arellano Félix brothers' cartel has penetrated and stained the society in which it operates. It's all an argument for legalizing drugs, he says. "It does become an extraordinary problem in places like Tijuana or Juárez. Politicians are drawn to money. If they think that a fig-leaf can be put on the money, they may take it." Or, he says, they may fear not to take it. "What do they call it in Colombia? 'Plata o plomo'? You take the silver or you take the lead -- a lead bullet in the head. And that's one of the problems with enforcing these kinds of laws. My [Criminal Justice Policy Foundation] argues that we cannot solve this problem through prohibition strategies. That this is ultimately a business better addressed by regulation and control. You want to discourage people from using these drugs; you also want to discourage corruption; you want to discourage violence; you want to discourage the spread of disease."

Sterling says he's not proposing that people be allowed to sell cocaine "like bananas, or Chiclets...but legal businesses do not kill people for noncooperation," he says. "Every business that is legal in America is in some sense a regulated business. The plutonium business is a regulated business. You and I can't go out and buy plutonium. It's legal to sell insurance, but you can't just go to a street corner in San Diego and start selling 'Derek's insurance.' It's a highly regulated industry. General Barry McCaffrey has a cartoon image of what legalization is. Is alcohol legal? Yes, but you can't sell six-packs out of the trunk of your car. You'd be arrested for doing so."

Sterling suggests starting the legalizing process with marijuana. "The kind of model you might follow is one of licensing and taxing the producers and distributors, as we do with alcohol. You might also license the users and generate revenue that way. With drugs like LSD and peyote, you'd license people to give guided LSD trips. You'd have to [appoint] a licensed LSD leader. You'd envision a professional association that would establish guidelines for who is accredited and what the criteria are for someone who is going to allow someone to use LSD in their presence. You say, 'Why do people use LSD? What are they trying to accomplish? How do you facilitate that in the safest way you can?'

"For a drug like heroin, if someone is certified as an addict, then you establish legal access to heroin. Clean needles. Require that they meet certain social obligations, whether it's caring for their children, holding down a job, attending school... For stimulant drugs, maybe you could set up some kind of consulting pharmacist, who would be something like a stockbroker. He can't sell John Q. Citizen the riskiest investment. The stockbroker has requirements...that their investor be counseled about what the risks are.

"[In each case] it's a consulting kind of professional relationship. It's not going to eliminate the black market. It's not going to eliminate people who are going to tend to abuse drugs. It may not work. But it is an attempt to license and control -- and manage -- the drug problem. That's the best you can do."

Mrkic does not agree. He points to the example of the Netherlands, where he says marijuana has been legalized, but not hard drugs (where the huge profits are). "What do you mean by 'working?' If 'working' means that you don't have illicit [marijuana] trafficking, yes. Because you can produce and traffic legally. You can buy marijuana in the cafés of Amsterdam. But this also means its use is spreading. A [recent Dutch] national survey of motorists produced a terrifying result: over 75 percent of all the drivers were under the influence of alcohol, or marijuana or some other narcotic. So if you legalize it, you have to be aware that it's going to be much more widely used."

For Sterling, who is skeptical about such negative reports from Holland -- Mrkic admits that "the methodology of the survey was not available, only the results" -- it's a question of solutions appropriate to the problem. "What happens if you have a problem with air and water pollution? You don't have the governor declare a 'pollution-free California,' outlaw the internal-combustion engine and make it a crime to flush the toilet. No. We regulate how much people can pollute! We license pollution.

"The current problem is caused by prohibition. When Congress says, 'These drugs are not legal,' it is saying, 'Organized crime: you run the drug business.' We've given organized crime the franchise to distribute drugs by choosing not to regulate it and not control it." Sterling concedes that among those congressmembers he has lobbied, there's been "extremely little interest in these ideas. Only 'this conversation didn't take place' type of conversations."

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— 'It's the worst kind of bullshit!" says Eric E. Sterling. "Preposterous! Totally absurd." He's talking of claims the United Nations makes -- about the Tijuana drug cartel, among others -- in its 1999 Human Development Report issued in July. "That report," he says, "is garbage."

"Organized crime syndicates," says the report, "[are] estimated to gross $1.5 trillion a year -- a major economic power rivaling multinational corporations. The sheer concentration of their power criminalizes business, politics, and government." The report says the Arellano Félix brothers' Tijuana cartel is reaching out to such organizations as "the Six Triads in China...the Mafia in Italy, the Yakuza in Japan...the Cosa Nostra in the United States, and the organizations in Nigeria, Russia, and South Africa." All of these crime syndicates, says the report, "have operations extending beyond national borders, and they are now developing strategic alliances linked in a global network, reaping the benefits of globalization."

Criminals, it seems, are taking advantage of the trends. "Globalization creates new and exciting opportunities, and among the most enterprising and imaginative opportunists are the world's criminals." The report says crime multinationals are not just emulating big business's drive to globalize the world's economy, they are exploiting "the precipitous removal of currency controls, before a proper regulatory environment has been established." In other words, they're operating in money-laundering heaven.

Drugs, the Tijuana cartel's main business, are the biggest growth area, the report says. The Mexican magazine Proceso reported recently that more Mexicans than ever are using drugs, mostly cocaine. Of all Mexican cities, Tijuana has the largest percentage -- 14.3 percent -- of Mexico's 2.5 million drug users. San Diego's figures, provided by SANDAG, show that drug-related offenses accounted for 47 percent of all felony arrests in 1998, up from 32 percent in 1994. The number of juveniles admitted to publically funded drug-treatment centers rose from 393 in 1995 to 1749 in 1998. Worldwide sales are now so huge that the illegal-drug business is bigger than the global auto industry. "There are now 200 million drug users, threatening neighborhoods around the world. In the past decade the production of opium more than tripled and that of coca leaf more than doubled. The illegal drug trade in 1995 was about 8 percent of world trade, more than the share of iron and steel...and roughly the same as textiles (7.5 percent) and gas and oil (8.6 percent)."

The Colombian government has reportedly decided to include their illicit drug business as part of their estimate of the size of their economy. Worldwide illegal drug business alone, says the report, is estimated to be worth $400 billion a year. "$400 billion? Garbage!" says Sterling, president of the Criminal Justice Policy Foundation, a Washington, D.C.-based thinktank. "They say that [total] organized crime revenues are $1.5 trillion. That is the size of the entire United States government budget in a year! The U.S. drug business is maybe $50 billion a year. The United States dominates the world in every area of luxury consumption. If their data's correct, they're saying the U.S. only consumes one-eighth of the world's drugs in volume. That doesn't make any sense. The per capita domestic product around the whole world is about $5000 per year. If you had drug users using $1000 worth of drugs a year, you'd need 400 million drug users to get this $400 billion number. No way does it make economic sense at all when you look at it. How can it be the size of the oil industry? I can't believe anybody takes [the report] seriously."

Srdjan Mrkic, a UN official who helped write the report, admits there's a lot of guesswork involved. "If you don't have influence from the inside [of cartels], all the other information you may run across is mere speculation. We just try to collect information that member states make available to us, to put that together and to pinpoint the possible effects of drug trafficking on the world economy. It is very difficult, because national agencies are not willing to disclose [much of] the information they have."

And Mrkic can't say positively that the Arellano Félix brothers' Tijuana cartel has moved into truly multinational business circles. He says he draws his conclusions by inference, by doing what he calls "very simple" police work. "You can usually find if drugs that are showing up in various areas are of the same origin or not. If [their origin is not] the same, you know the cartel is making deals with other cartels in a kind of profit-sharing agreement. A ship confiscated off Spain recently carried a huge shipment of hard drugs. There were so many drugs put in one place, it was quite evident they did not come from only one source. It means they pulled together to make this big shipment work. And the street value was over $1.2 billion. This kind of quantity, no single cartel could [handle]."

Sterling is skeptical that things are as dire as Mrkic's report claims. He says everybody wants to hype drugs, from drug czar General Barry McCaffrey to narcotics officers to Congressman Duncan Hunter (R-El Cajon). "I worked for nine years for the U.S. Congress, for the House Judiciary Committee on drug issues. In the mid-'80s I have this memory of congressman Duncan Hunter talking about San Diego being the 'methamphetamine capital of the country.' But at the same time Congressman Ron Wyden from Portland, Oregon, was saying the same thing about his city. And then Congressman Jim Wright from Fort Worth, Texas, was saying the exact same thing. Each of those cities had serious methamphetamine problems, but they all characterized them as 'the worst in the country,' with a kind of provincialism. Perverted bragging rights!"

Still, Sterling acknowledges how deeply the Arellano Félix brothers' cartel has penetrated and stained the society in which it operates. It's all an argument for legalizing drugs, he says. "It does become an extraordinary problem in places like Tijuana or Juárez. Politicians are drawn to money. If they think that a fig-leaf can be put on the money, they may take it." Or, he says, they may fear not to take it. "What do they call it in Colombia? 'Plata o plomo'? You take the silver or you take the lead -- a lead bullet in the head. And that's one of the problems with enforcing these kinds of laws. My [Criminal Justice Policy Foundation] argues that we cannot solve this problem through prohibition strategies. That this is ultimately a business better addressed by regulation and control. You want to discourage people from using these drugs; you also want to discourage corruption; you want to discourage violence; you want to discourage the spread of disease."

Sterling says he's not proposing that people be allowed to sell cocaine "like bananas, or Chiclets...but legal businesses do not kill people for noncooperation," he says. "Every business that is legal in America is in some sense a regulated business. The plutonium business is a regulated business. You and I can't go out and buy plutonium. It's legal to sell insurance, but you can't just go to a street corner in San Diego and start selling 'Derek's insurance.' It's a highly regulated industry. General Barry McCaffrey has a cartoon image of what legalization is. Is alcohol legal? Yes, but you can't sell six-packs out of the trunk of your car. You'd be arrested for doing so."

Sterling suggests starting the legalizing process with marijuana. "The kind of model you might follow is one of licensing and taxing the producers and distributors, as we do with alcohol. You might also license the users and generate revenue that way. With drugs like LSD and peyote, you'd license people to give guided LSD trips. You'd have to [appoint] a licensed LSD leader. You'd envision a professional association that would establish guidelines for who is accredited and what the criteria are for someone who is going to allow someone to use LSD in their presence. You say, 'Why do people use LSD? What are they trying to accomplish? How do you facilitate that in the safest way you can?'

"For a drug like heroin, if someone is certified as an addict, then you establish legal access to heroin. Clean needles. Require that they meet certain social obligations, whether it's caring for their children, holding down a job, attending school... For stimulant drugs, maybe you could set up some kind of consulting pharmacist, who would be something like a stockbroker. He can't sell John Q. Citizen the riskiest investment. The stockbroker has requirements...that their investor be counseled about what the risks are.

"[In each case] it's a consulting kind of professional relationship. It's not going to eliminate the black market. It's not going to eliminate people who are going to tend to abuse drugs. It may not work. But it is an attempt to license and control -- and manage -- the drug problem. That's the best you can do."

Mrkic does not agree. He points to the example of the Netherlands, where he says marijuana has been legalized, but not hard drugs (where the huge profits are). "What do you mean by 'working?' If 'working' means that you don't have illicit [marijuana] trafficking, yes. Because you can produce and traffic legally. You can buy marijuana in the cafés of Amsterdam. But this also means its use is spreading. A [recent Dutch] national survey of motorists produced a terrifying result: over 75 percent of all the drivers were under the influence of alcohol, or marijuana or some other narcotic. So if you legalize it, you have to be aware that it's going to be much more widely used."

For Sterling, who is skeptical about such negative reports from Holland -- Mrkic admits that "the methodology of the survey was not available, only the results" -- it's a question of solutions appropriate to the problem. "What happens if you have a problem with air and water pollution? You don't have the governor declare a 'pollution-free California,' outlaw the internal-combustion engine and make it a crime to flush the toilet. No. We regulate how much people can pollute! We license pollution.

"The current problem is caused by prohibition. When Congress says, 'These drugs are not legal,' it is saying, 'Organized crime: you run the drug business.' We've given organized crime the franchise to distribute drugs by choosing not to regulate it and not control it." Sterling concedes that among those congressmembers he has lobbied, there's been "extremely little interest in these ideas. Only 'this conversation didn't take place' type of conversations."

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