The New York Times is reporting that the Drug Enforcement Administration is ratcheting up its global war by focusing energy on Western African. “In a significant expansion of the war on drugs, the United States has begun training an elite unit of counternarcotics police in Ghana and planning similar units in Nigeria and Kenya as part of an effort to combat the Latin American cartels that are increasingly using Africa to smuggle cocaine into Europe,” the Times writes. “The aggressive response by the United States is also a sign of how greater attention and resources have turned to efforts to fight drugs as the wars in Iraq and Afghanistan have wound down.”
In a sign that public attitudes on the drug war are shifting, the Times at least acknowledged dissent.
Some specialists have expressed skepticism about the approach. Bruce Bagley, a professor at the University of Miami who focuses on Latin America and counternarcotics, said that what had happened in West Africa over the past few years was the latest example of the “Whac-A-Mole” problem, in which making trafficking more difficult in one place simply shifts it to another.“As they put on the pressure, they are going to detour routes, but they are not going to stop the flow, because the institutions are incredibly weak — I don’t care how much vetting they do,” Professor Bagley said. “And there is always blowback to this. You start killing people in foreign countries — whether criminals or not — and there is going to be fallout.”
American government officials acknowledge the challenges, but they are not as pessimistic about the chances of at least pushing the trafficking organizations out of particular countries. And even if the intervention leads to an increase in violence as organizations that had operated with impunity are challenged, the alternative, they said, is worse.
It’s that bolded sentence that lets you know just how little American drug policy makers have learned 40 years into the war. Yes, it may be possible to push trafficking out of one broken West African nation. But why? What’s the point? So we can chase it to the next country?
The very fact that Western Africa has become a significant stop on the global trade route is evidence in itself of the failure of the drug war, a failure that won’t be straightened out by doubling down on the same strategy. Indeed, drug traffickers are in Africa as a direct result of U.S. pressure on trading routes first in the Caribbean, and then in South and Central America.
It began with a decision in the late 1970s, taken by President Jimmy Carter, to militarize drug policy on the Mexican border, and was expanded first by Reagan, and then by ever president to follow him.
In the book This Is Your Country On Drugs, I wrote about the many factors combining to drive the drug trade to Europe through Africa. After the book came out, a drug trafficker wrote me to say that I had missed one additional factor: The euro, he noted, comes in denominations of 500, which makes smuggling massive amounts of cash much easier than if one uses dollars, which top out at 100. (Besides, euros are worth more: 500 euros today will fetch you 600 dollars.)
How we got to this place — with a U.S. police force fighting in Africa, so that drugs aren’t shipped from Latin America to Europe — is a long story, but one worth telling as we grapple at home with marijuana legalization and abroad with what to do, or not to do, with our military and global cops. Reprinted below, from the book, is some of that story.
Chapter 5: New Coke
Perfect, thought Keith Stroup as he put down the phone after a call from Griffin Smith, a speechwriter for President Jimmy Carter. Smith had invited Stroup to his apartment at the Watergate, where he needed some help composing a presidential statement on drug policy. Stroup was a pro-pot lobbyist running the National Organization for the Reform of Marijuana Laws. Drug culture, it seemed, was about to go mainstream.
“He and I were about the same age and had smoked together,” Stroup recalled from his K Street office, where he still heads the organization. “I said, ‘Whoa,’ and I grabbed my best stuff and headed over there.” Indeed, it was Stroup who came up with Carter’s most memorable formulation of his liberal drug policy: “Penalties against possession of a drug should not be more damaging to an individual than the use of the drug itself.”
“We ended up with a statement that I thought was awfully good,” he said. “Even though they toned the statement down, it is still to this day the best statement any president has had on marijuana.”
The 1977 meeting wasn’t public knowledge, but even if it had been, America’s relationship with drugs was such that the idea of pro-marijuana advocates consulting with the White House would have drawn little protest. Marijuana use had risen steadily through the ’60s, in tandem with the countercultural revolution. “By the time we started going to the antiwar demonstrations, between ’65 and ’68,” said Stroup, “one of the things we noticed was there was a lot of marijuana smoking. It was a way to let the news people covering the protest know that, yes, we were there primarily to protest the war in Vietnam, but there were a lot of other things about the government [we opposed], as well, and one of them was its marijuana laws.”
Drugs were the counterculture’s consolation prize, instead of a quick end to the Vietnam War, a new egalitarian society, or even a Democratic president. President Richard M. Nixon’s war on drugs had been aborted when he resigned, in 1973. Though Nixon had explicitly sought to divide the country along cultural lines in order to rule, his successor made healing the national psyche his highest priority. President Gerald Ford both pardoned Nixon and granted conditional amnesty to draft dodgers, actions that are together the essence of ’70s détente.
Across America, mainstream acceptance–or at least tolerance–of drug use and drug culture was evident. Head shops publicly selling drug paraphernalia, sometimes thinly labeled as “For tobacco use only,” were as common as Auntie Anne’s Pretzels and other mall-based chains are today. News reports gradually became more favorable toward marijuana, and the attitude of the general public and legislators alike trended toward a pro-pot stance. Oregon became the first state to decriminalize pot, in 1973, making possession of under an ounce a civil offense akin to speeding. Two years later, California followed. In 1978, Nebraska made it 11 states that had decriminalized possession of small quantities of the drug.
Tens of millions of people were living in places where smoking pot was effectively legal. Half of the high-school seniors polled by the University of Michigan in 1974 said that they had smoked marijuana in the last year, but there was little public outcry about any kind of “epidemic.” As early as 1972, a commission had recommended to Richard Nixon that pot be decriminalized nationwide. He rejected the advice, but three years later, Carter campaigned under a promise to do just that.
“At that time, virtually everyone in the California pot movement thought we’d already won,” recalls Jack Herer in the dedication of the cult classic The Emperor Wears No Clothes: The Authoritative Historical Record of Cannabis and the Conspiracy Against Marijuana…and How Hemp Can Save the World! “They’d begun to drift away from the movement and had gone back to their lives, thinking the battle was over and that the politicians would clean up the loose ends.”
In the midterms following Nixon’s resignation, the American people had elected 49 new Democrats to the House of Representatives, creating a huge majority. Democrats also picked up four Senate seats, meaning that they had gained virtually dictatorial power in Congress. When Carter moved into the White House, they had fully consolidated power. The GOP hollered here and there about rising pot use and the perennial scourge of heroin, but without control of either branch of the government, it was virtually powerless.
It was this context in which Stroup and Smith sat down to craft Carter’s drug policy–and in which, a year later, Peter Bourne, Carter’s top drug official, sat down to blow lines at a 1977 NORML Christmas party with Stroup, Hunter S. Thompson, and an assistant to newspaper columnist Jack Anderson.
It’s no surprise that coke was their drug of choice. Rapidly gaining in popularity among the educated elite, cocaine was in its honeymoon phase–again. And just as in the previous century, its rise was facilitated by circumstances aligning against another drug. This time around, that wasn’t demon rum but rather a substance that American culture was seemingly on the very verge of declaring acceptable: marijuana.
“I clearly fucked up,” Stroup told me. The coke session with the drug czar, which had gone down at a Georgetown home, had been strictly private. But to get to it, Bourne and his companions had had to walk up a spiral staircase in full view of the entire party. Stroup, Hunter Thompson, and the government’s drug man all ascending together made an interesting threesome. Word inevitably leaked out–in fact, Anderson broke the story, with Stroup agreeing to be quoted in the Washington Post. He was subsequently forced out of NORML and not allowed to return until many years later. Carter, deeply embarrassed, never again entertained decriminalizing marijuana or any other liberal drug policies.
Stroup narc’d because he was pissed. While speaking softly about drugs at home, Carter had been vigorously prosecuting the drug war abroad. Well before the scandal broke, Stroup and Bourne had been feuding over a carcinogenic chemical being sprayed on Mexican pot by the DEA. It was supposed to kill the plants, but growers learned that if they harvested their crops immediately after they were sprayed, their pot would still at least appear normal. Pot smokers across the country were getting sick, and as their largest consumer-protection group, NORML lobbied to have the spraying stopped. Bourne refused, and the rejection played some part in Stroup’s outing of him to the Post.
The spraying was part of Operation Condor, a joint Mexican-American venture aimed at eradicating Mexican pot that had been going on since 1975. General José Hernández Toledo, fresh from the 1968 student massacres in Mexico City, led 10,000 soldiers into the hills of Sinaloa, Durango, and Chihuahua. “Tons of drugs were destroyed, production was reduced, prices rose, but drugs continued to flow into the American market, although in lesser quantity of Mexican origin,” writes sociologist Luís Astorga in the paper “Drug Trafficking in Mexico: A First General Assessment.”
The action had several consequences. One, a rise in the price of pot in the United States, was intended. Others weren’t. The growth of domestic marijuana farming might have eased pot shortages slightly during the ’70s, but the industry was hardly the high-tech, high-efficiency bud-producing machine it is today. The encouragement of a shift from pot to cocaine importation among drug smugglers was a much more significant development in the short term. Coke, more valuable by weight and with a less detectable odor, was more profitable and much easier to move. A minor player in the coke trade in the ’70s, Mexico would a decade later come to rival the Caribbean. By the late ’90s, it would dominate the industry.
As domestic pot production began to take off in Northern California, the quality of homegrown marijuana available to Americans was steadily improving. Ken Kesey’s former girlfriend and the future wife of Jerry Garcia, Carolyn “Mountain Girl” Adams, was among the first to grow gourmet bud in Northern California, in the early ’70s. Some Vietnam vets who’d picked up a taste for drugs while fighting Communists and were happy to employ camouflage and booby-trapping skills learned in the Asian jungle in the Northern Californian forest, and as they followed Adams’ lead, U.S. pot farming was allowed to expand with near impunity.
Neither California Gov. Jerry Brown nor the Carter administration was particularly concerned with going after West Coast growers. Brown smoked pot himself, and he was almost brought down by it when, at the behest of federal agents, Timothy Leary’s wife, hoping to free her husband from prison in the ’70s, shared a joint with Brown in an entrapment scheme. (She ultimately decided not to cooperate, saving Brown’s political career.)
The DEA, for its part, had no clue of how much marijuana was being grown in the United States. In 1984, the agency estimated that domestic annual production was 2,100 metric tons and represented only 12 percent of total consumption. Government officials “were still screaming about all these dynamite, superstrength strains of Mexican marijuana, when we had moved on to Canadian or Thai sticks or stuff people grew domestically,” said Stroup. “Their continued preoccupation with imported marijuana gave the domestic industry a chance to get on its feet.”
The American marijuana market, however, remained dependent on imported and outdoor herb, which are both susceptible to shortfalls. Pot grown outdoors is harvested in the fall–meaning that, by summer, supply would be depleted nationwide. Combined with foreign eradication efforts, these seasonal shortages helped open the door for cocaine, as users substituted an available drug for an unavailable one.
“Without question, in the mid- to late-’70s, there were frequently months where even working at NORML we would have a drought,” said Stroup. “But there was never a shortage of cocaine, because it didn’t have anything to do with a growing season….Sometimes I’d go [to my dealer], and he didn’t have any marijuana, but he always had cocaine.”
Federal survey data show that coke use among 18- to 25-year-olds doubled from 1977 to 1979. By the end of the decade, 40 percent of Americans in that age bracket admitted to trying the drug. “If present trends go unchecked,” prophesied a 1979 DEA report, “a vast new youth market for the substance could be opened. High cost, rather than restricted availability, will remain the principal deterrent to regular use among less affluent persons.”
Historian Christopher Lasch’s 1979 book The Culture of Narcissism: American Life in an Age of Diminishing Expectations captures the mood of those who made up this vast new market. “To live for the moment is the prevailing passion–to live for yourself, not for your predecessors or posterity,” he writes. “We are fast losing the sense of historical continuity, the sense of belonging to a succession of generations originating in the past and stretching into the future. It is the waning of the sense of historical time–in particular the erosion of any strong concern for posterity–that distinguishes the spiritual crisis of the ’70s.”
Nothing creates a more narcissistic high than cocaine, and post-Watergate, mistrustful Americans were more inclined to listen to themselves than the government when it came to drug use. They lied to us about pot, the thinking went. Why should we believe them about coke?
Timothy Leary, whose bizarre career trajectory placed him at the heart of the American counterculture for decades on end, popped up again as a defender of the powder. “Obviously, cocaine is the drug of the day,” he told an interviewer in the early ’80s. “It is well-adapted to our times. Of course the narcs who are cracking down on its use rant and rave about the dangers of the miserable substance, which is, in reality, a harmless substance….It’s a drug that causes euphoria, quite pleasant and sparkling like champagne. You feel powerful, as if you controlled the world–and intelligent, much more than you actually are.”
“I’ve never turned down cocaine,” he added, “except after midnight if I want a good night’s sleep.”
The nation’s new enthusiasm for the drug was positively 19th-century. Harvard University drug expert Dr. Lester Grinspoon testified at a 1979 congressional hearing that “people, generally speaking, don’t use cocaine quite as recklessly as they did at the turn of the century and are more sophisticated about their use of it….At present, chronic cocaine abuse does not commonly appear as a medical problem.” Users, he said, were not “very much at risk.” That same year, High Times, which had been solely dedicated to pot, was running ads for “cocaine kits.” The mag showed readers how to heat coke and smoke the vapors. In Colombia, said the ad, “the natives call their Snow Vapor Base. For over 100 years, in every village, it’s been the Toke of the Town!”
Carter’s own top drug-policy official, Bourne, saw little danger in it, writing in a 1976 article that coke “is probably the most benign of illicit drugs currently in widespread use. At least as strong a case could be made for legalizing it as for legalizing marijuana. Short acting–about 15 minutes–not physically addicting, and acutely pleasurable, cocaine has found increasing favor at all socioeconomic levels in the last year.”
In July 1981, Time magazine illustrated its cover story “High on Cocaine” with a shot of a martini glass filled with coke. “Whatever the price, by whatever name, cocaine is becoming the all-American drug,” the piece suggests. “No longer is it a sinful secret of the moneyed elite, nor merely an elusive glitter of decadence in raffish society circles, as it seemed in decades past. No longer is it primarily an exotic and ballyhooed indulgence of high-gloss entrepreneurs, Hollywood types and high rollers, as it was only three or four years ago–the most conspicuous of consumptions, to be sniffed from the most chic of coffee tables through crisp, rolled-up $100 bills. Today, in part precisely because it is such an emblem of wealth and status, coke is the drug of choice for perhaps millions of solid, conventional and often upwardly mobile citizens–lawyers, businessmen, students, government bureaucrats, politicians, policemen, secretaries, bankers, mechanics, real estate brokers, waitresses.”
Time’s Michael Demarest was nearly as good a pitchman for cocaine as Leary: “Superficially, coke is a supremely beguiling and relatively risk-free drug–at least so its devotees innocently claim. A snort in each nostril and you’re up and away for 30 minutes or so. Alert, witty and with it. No hangover. No physical addiction. No lung cancer. No holes in the arms or burned-out cells in the brain. Instead, drive, sparkle, energy. If it were not classified (incorrectly) by the Federal Government as a narcotic, and if it were legally distributed throughout the U.S. (as it was until 1906), cocaine might be the biggest advertiser on television.”
As the DEA had noted, though, coke’s high price tag kept its use somewhat in check–at least until President Ronald Reagan revived the war on drugs in earnest. As the ’70s closed out, the nation reacted against what came to be known as the “excesses” of that decade and the ’60s. Drug use was certainly among them. As gas lines, stagflation, and a hostage crisis brought, as as Carter famously put it, a “malaise” to the nation, news reports on pot turned negative.
Pot smoking, according to survey data, began to tail off. Nebraska would be the last state to decriminalize marijuana possession.
“We’re making no excuses for drugs, hard, soft, or otherwise,” pronounced Reagan on June 24, 1982. A veteran of many pitched pissing matches with the counterculture while governor of California in the late ’60s, he was eager to take it on again when he became president. “Drugs are bad, and we’re going after them. As I’ve said before, we’re taking down the surrender flag and running up the battle flag. We’re going to win the war on drugs.”
Reagan redoubled efforts at curbing imports, further militarized drug policy, and brought about mandatory-minimum sentences for minor drug offenses. In 1980, the FBI’s Uniform Crime Report lists fewer than 100,000 arrests for heroin and cocaine, which are tabulated together. By 1989, that figure had jumped to more than 700,000.
But the first battle Reagan would fight in his war was against marijuana, which required laying siege to the once-ignored base of liberal resistance, Northern California. His Campaign Against Marijuana Production began in the harvest season of 1983. U-2 spy planes and military helicopters flew over the Golden State looking for green crops. (By the fall, corn, wheat, soybeans, and the like have turned brown, making cannabis easy to spot from the sky.) The DEA reported seizing 64,579 plants at an estimated value of $130 million. Federal-law-enforcement figures marched in the streets chanting, “War on Drugs! War on Drugs!” The opposition printed bumper stickers demanding, “U.S. Out of Humbolt County.”
The 1984 haul was three times larger. Nationally, pot plant seizures rose from about 2.5 million in 1982 to more than 7 million in 1987. Reagan even began to go after “ditchweed,” a wild variety of hemp that has no potential to get a user high. The first year that the White House kept data for ditchweed eradication, it claimed to have uprooted about nine million plants. That number was up to more than 120 million by 1989 and reached half a billion in 2001.
Unsurprisingly, such sustained effort drove up the price of marijuana. The DEA closely tracks drug prices and purity, although it doesn’t often make the data available publicly. It did so most recently in 2004, and the numbers include a startling, if misunderstood, observation. “The marijuana price trends…are not highly correlated with trends in prices of other drugs over time,” the report reads. “While the price of powder, heroin, and, to a lesser extent, crack were falling during the 1980s, the average price of marijuana generally rose.” An eighth of an ounce of pot in 1981 was going for $25. It stayed roughly the same in 1982. By 1986, it was up to $53, and it hit a high of $62 in 1991, a 150 percent rise over 10 years. Coke, meanwhile, become much more affordable. It cost nearly $600 a gram in 1982. As Reagan directed resources toward the pot battle, coke’s price began to tumble. By 1989, it was down to $200 a gram, cheaper in real terms than it had been during the last national coke binge a century earlier. At the same time, average purity nearly doubled.
Clearly, the price trends are highly correlated, but the correlation is a negative one: In the ’80s, price increases in marijuana drove demand toward other drugs. The war on drugs hard, soft, or otherwise helped persuade pot smokers to put down the bong and pick up the pipe, the mirror, or the needle.
Pot smoking plummeted under Reagan. About half of 12th graders in 1979 told the University of Michigan researchers they had smoked pot that year, the same as five years before. The numbers fell through the ’80s, and dwindled to a fifth of 12th graders in 1992. The use of other drugs either stayed the same or increased as people started looking for a different cheap high. Reported use of inhalants nearly doubled, from 4 to 7 percent between 1981 and 1987. Cocaine, heroin, and meth use also rose in the ’80s.
Heroin dropped in price by a third between 1981 and 1988. By 1996, it had dropped by two thirds. The price of crack was falling, as well. The DEA started tracking it only in 1986, around the time the drug’s use became widespread. Its price fell by about half over the next five years. In rural areas, the price of meth fell by a quarter from the early ’80s to the middle of the decade. The stated goal of U.S. drug policy is to lower demand by increasing price. Reagan’s drug war did precisely the opposite.
While the president focused on pot in California, cocaine was exploding in Florida.
Miami was the perfect base for large-scale drug smuggling. As the countercultural wars petered out, hippies who didn’t drop back in or go back to the land went south to Miami. Coconut Grove was bursting with hippies by the mid-’70s, the type of smart, anti-authoritarian trouble-makers that make the perfect smugglers. Business makes strange bedfellows. The Carter administration had pulled back on the effort to overthrow or assassinate Cuban leader Fidel Castro. The move left South Florida with an idle army of well-trained, mostly Cuban-American adepts of dark arts that would become valuable in the coke business: how to acquire and use weapons, how to hide money, how to surreptitiously pilot planes and boats. A speedboat could zip through any one of the Everglades’ hundreds of little waterways to find a hidden place to unload or dock elsewhere along Florida’s more than 3,000 miles of coastline. That was mostly unnecessary throughout the ’70s, however, because smugglers could dock at almost any marina, back up a truck, and drive off. Interdiction was not a major concern.
The infrastructure for this multibillion-dollar import business wasn’t created solely for cocaine or even for marijuana before it. South Florida had a long history of smuggling coffee, tobacco, and any other product subject to tariffs. A “mothership,” either from the Caribbean or directly from Colombia, would anchor near the shore, though not close enough to be seen from land. Yachts or cigarette boats–named for the vessels that smuggled bootleg tobacco–zipped out to the off-shore vessel to load up with coke. The drug also came in by air. In the late ’70s and early ’80s, customs officials estimated that more than 80 cocaine-laden planes landed in the United States every night, mostly in Florida. The Customs Service in 1980 seized 200 cigarette boats and 50 airplanes, one of which was a World War II-era bomber. It had previously been used by customs agents investigating drug operations.
“The best thing about Miami is how close it is to the United States,” goes one favorite local saying, and for a while, the rest of the country really did behave as if the Florida coke trade were happening overseas. Criminologist Paul Goldstein, who focuses on cocaine, says that the nation essentially ignored Miami’s gradual takeover by cocaine because it wasn’t happening up north, even though the city was America’s murder capital throughout the ’70s. “Then when crack came [to Washington and New York] in the ’80s, you couldn’t pick up your paper without seeing a story about it. It led people to say, ‘Crack is so much worse. We’ve never had this problem before.’ Well, they had that problem in Miami,” he told me.
Miami residents today talk of the ’70s and ’80s in almost wistful terms. There’s a certain pride in having lived through the insanity that was the uncontrolled drug trade. In a 2005 memoir for the alternative newsweekly the Miami New Times, Carlos Suarez De Jesus, a former waiter at notorious dealer hangout the Mutiny Hotel, writes of how cocaine took over:
Around town the lure of easy cash was leading friends to dabble in the drug trade’s quick-strike opportunities. Guys I knew who were perennially broke and literally stealing food from the backs of parked Holsum bread trucks weeks earlier would drop by my job in brand-new BMWs, waving their Rolexes in the air. Some had been driving coke shipments to New York or Chicago for their employers, others had been unloading boats by moonlight. It was remarkable how they shrugged off the risks and bragged only of the money. Almost everybody at work was using drugs in some form or another, and if brass was aware, they didn’t act on it. It was a price they paid to keep the wagons rolling. I recall being astonished how coke seemed to permeate everything. It was the rare hospital where I didn’t party with orderlies, nurses, or interns on duty. It was everywhere.
Weapons were everywhere, too. More than 200,000 guns were sold in Miami in the late ’70s. In 1980, nearly a quarter of the city’s murders were committed by machine gun. That year, Fidel Castro opened up his prisons and asylums, flooding South Florida with refugees known as Marielitos, immortalized in the movie Scarface. The Cubans went to war with the locals and the Colombians for control of the state’s drug trade, quickly relegating most of their homegrown competition to marijuana dealing. That was no small consolation, but the marijuana market paled in comparison to the coke trade. In 1980, police seized 3.2 million pounds of pot worth more than $1 billion in South Florida. They also seized 2,353 pounds of coke worth nearly $6 billion.
John Spiegel, now an attorney, was a homicide detective during coke’s heyday, and he remembers the corruption and the depravity of the criminality. “I saw several of my colleagues get into major trouble after they elected to dabble in the business themselves,” he recalls. One victim was blown to pieces to prevent identification–but the killers, men working for trafficker Ricky Cravero, Spiegel says, forgot to remove the guy’s driver’s license, which landed nearby. That case was solved, but by 1980, three of the FBI’s top-10 crime-ridden cities were in South Florida: first-place Miami, West Palm Beach, and Fort Lauderdale. In response, Dade County added 1,000 new cops to its then-1,700-person force. Many were immediately corrupted. Starting salaries were just shy of $18,000. One night running a cigarette boat could net $50,000.
Miami was flooded with dollar bills. Around a fifth of all real-estate transactions in Miami were paid in cash, the New York Times reported in the late ’80s. The underground economy was estimated in a study by a Florida International University professor to be $11 billion, a third of Miami’s economic output. The Federal Reserve branch in the city built up a currency surplus of $5 billion, mostly in 50s and 100s, as crooked banks deposited dirty money. The surplus was greater than at all other Federal Reserve banks combined. Miami’s U.S. Attorney, Dexter Lehtinen, told a reporter that $220 million in cash was spent on cars in Miami between 1986 and 1989, many times more than in other cities.
This new local industry couldn’t have come along at a better time. It’s become commonplace to say that cocaine fit the mood of a decade whose affluence was bracketed by recessions. Even Leary indulged in this cliché: “It’s the drug of the ’80s because this decade is facing the fact,” he said at the time. “We’re in an age of realism and toughness.” Robert Sabbag, in his 1976 book Snowblind: A Brief Career in the Cocaine Trade, suggests that cocaine was a way to restore a fading American spirit. “[C]ocaine’s presence in the blood, like no other drug, accounts for a feeling of confidence that is rare in the behavioral sink of post-industrial America,” he writes.
The collapse of American manufacturing left more than a psychic need, however. It also left a vacuum in the economy, which the non-goods-producing service industry rushed to fill. According to a 1992 New York Times story, “There were more jobs created within New York City in the 1980′s–overwhelmingly high-skilled, high-paying managerial, professional and technical jobs–than there are people in Buffalo, the state’s second largest city.” We became a nation of middle managers, of bankers and bureaucrats, of adjusters, accountants, and waitpeople.
And drug dealers–from the importer to the distributor to the guy on the corner.
Peter Reuter, the University of Maryland professor who helped me with my original LSD article, has made a career out of examining the economics of illegal businesses. One of his most startling observations is that the coke trade–indeed, the entire drug trade–is essentially a service industry, because the street price of a dose of cocaine is many, many times higher than the cost of merely manufacturing it. As with any other retail good, some of the excess covers the seller’s profit. Some covers what accountants call transportation-in costs. But much more goes toward reducing the risk of product seizure and employee arrest, the principal perils of providing an illegal service.
Those perils became less significant the more the South Florida coke industry became entrenched. As cocaine’s price fell throughout the decade, it became available to consumers of more moderate means. It trickled down, so to speak, spreading across the country in both powder and crack form.
During its high-priced heyday, however, coke was known as a professional’s drug–as Suarez De Jesus Despite notes, employees of the legal service industry benefited from this product of the illegal service industry as they worked long hours in their burgeoning sector of the economy. Its exclusivity evoked a cloistered world that both the upwardly mobile and the severely impoverished dream of being a part of.
Unemployment had climbed in the late ’70s as plants shut down and American cities crumbled. Stagflation meant that wages and job growth were falling while prices were rising–a phenomenon that some economists had thought impossible. By the close of the decade, inflation was approaching 15 percent and interest rates had risen above 20 percent. To lasso the beast, Reagan severely tightened monetary policy, cutting the money supply and intentionally driving the country into a recession. The Reagan Recession, as it became known, hit hard in the summer of 1981 and persisted for the next year and a half. The president’s approval rating bottomed out in the mid-30s, and, in the 1982 midterm elections, Democrats picked up more than two dozen congressional seats.
America was no longer a place where things are made; it was a place where things are shuffled around. Cocaine slotted nicely into the new economy. The Reagan Recession had disproportionately impacted urban blacks and Latinos, and American cities were teeming with unemployed men eager to earn a living distributing the drug, cutting it, or defending territory for it to be sold in. Suarez De Jesus describes one of the coke trade’s typical recruits:
A childhood friend named Celia was dating one of the city’s rising dealers. His name was Manolito and he was a ruthless thug who’d been the leader of a local street gang, the Utes, and had a reputation for being trigger-happy. He once fired a shotgun into a crowd of Hialeah rivals during a quince party in Miami Beach.Manolito, who was in his early twenties, was working for an uncle in the “shrimping business” and apparently had been involved in major trafficking. Suddenly the guy was driving a new Corvette and picking up tabs all over town. Celia showed off a shiny new Volvo and diamond tennis bracelet he’d given her for her birthday.
Both people like Manolito and the economy needed the pick-me-up that selling coke provided. The banking industry had been banged up by the recession, and it was glad to have the influx of capital brought by the cocaine biz. The Economist reported that 44 Miami banks were given international charters in 1982, compared to 10 in 1978. Another 36 foreign banks opened branches in Miami during that period. At least 40 city banks refused to report cash deposits of more than $10,000, as required by law, throughout the ’70s and into the ’80s. And at least four banks, authorities estimated, were bought and controlled by drug dealers. As their trade spread across the country, dealers found still other banks eager to deal in cocaine cash. Much of the money that went to foreign producers ended up back in the American economy, too, laundered through the Panamanian branches of U.S. banks.
By the late ’80s, a few banks had begun to come under suspicion as their money laundering became too blatant. But the penalties were so laughably small that even when the banks did get caught, they often still benefited from the transaction. A Beverly Hills branch of the American Express Bank was caught laundering $100 million belonging to Juan Garcia Abrego, operator of a notorious cartel with close connections to the then Mexican government. In a 1994 congressional hearing, Chairman Henry Gonzalez, a Texas Democrat, noted that the $950,000 fine–less than 1 percent of the laundered cash–meant that the bank still profited from the exchange. Citibank, which since the 1950s had been the most active U.S. financial institution in Mexico, was in a perfect position when cocaine trafficking moved from the Caribbean westward. Mexican playboy Raul Salinas was discovered to have laundered hundreds of millions through Citibank. His brother, President Carlos Salinas, a prominent ally in the U.S. drug war, was estimated to have made off with some $5 billion himself.
In two and a half years of investigation beginning in 1986, Sen. John Kerry’s committee looking into links between the CIA and the Contras also turned up ties between drug cartels and the banking industry. One hearing involved the Medellin cartel’s top accountant, Ramon Milian Rodriguez, who’d been busted laundering billions through New York-based bank First Boston. A committee member suggested that he “must be very clever” to have cleaned up so much cash. “Well, First Boston paid a fine of $25,000 and I’m doing 42 years,” Rodriguez responded. “Who do you think is cleverer?”
Carter and Reagan, for different reasons, had both ignored cocaine as it grew in popularity in the late ’70s and early ’80s. The market had become so flooded that the price of a gram of coke plummeted from $600 in 1982 to $400 in 1984. The coke industry pulled itself out of this apparent death spiral through an innovation that helped it reach thousands of new consumers: crack. Cheap and packing a quick punch, crack was the perfect $5, five-minute escape. It began to spread throughout the nation, especially in poor African-American communities.
Since the ’80s, skeptics have cast doubt on the severity of the crack epidemic. In 1984, when coke use peaked in the United States, around 18 percent of people between ages 18 and 25 had used cocaine, but the numbers for crack were much more modest. Monitoring the Future first began to break out crack in 1986, when it found that 4.1 percent of high-school seniors had used it in the last year. In 1987, the number was down to 3.9 percent. That year, the survey broke use down by race and found that white kids were twice as likely as black students to have used crack–with Latinos leading everyone at 5.5 percent. Use was concentrated, according to the survey, in the Northeast and West and in big cities. A survey of 19- to 28-year-olds found that only 6.3 percent admitted to ever having used crack; 1 percent had used it in the past 30 days.
For obvious reasons, surveys have some difficulty reaching hard-core drug addicts, which is why they’re better at measuring trends than establishing absolute figures. But they do show that during the peak of the ’80s cocaine panic, the number of people using the drug recreationally remained relatively small. Critics of the Reagan-era response to drugs see this data as proof that the cocaine hysteria was cooked up by politicians and the media. It’s easier to blame poverty and urban decay on drugs and lock up the people than it is to treat the problem, goes the argument. And while there was certainly no shortage of scapegoating, the rise of cocaine in those years was a very real phenomenon. Although occasional use was declining–as it was for all drugs at the time–the number of people using an awful lot of the drug was increasing.
Two studies, both done by NIDA’s Division of Epidemiology and Prevention Research, reflect this. The first looked at nonlethal and lethal cocaine overdoses in hospitals between 1976 and 1985 and then from 1984 and 1988. In the first study, nonlethal overdoses increased five times over the decade in question, while lethal ones went up six times. From 1984 to 1988, the height of the panic, nonlethal overdoses jumped another five times and lethal ones by only two-and-a-half times, presumably because the community of users had become experienced enough to know exactly how much coke will kill you. Though the crack boom was exaggerated, it can’t be said not to have existed.
The introduction of the new drug came, predictably, with violence, as rival organizations struggled to control territory and competition. Miami in the late ’70s and early ’80s was mirrored by Los Angeles, Washington, D.C., and New York in the mid-’80s. Murders committed by African-Americans surged beginning in 1984, rising from just over 30 per 100,000 people to more than 50 in the early ’90s, according to Justice Department statistics. Meanwhile, just under 30 black people per every 100,000 were killed in 1984; by the early ’90s, that number had risen to 40. Black males aged 14 to 24 were particularly hard hit, with their murder rate doubling post-1984 before falling in the early ’90s. Indexes that measure social misery–infant mortality, children in foster care, arrests for violent crimes or gun possession, incarceration rates–all worsened significantly during the same period.
In September 1989, a record 64 percent of respondents to a New York Times-CBS News poll said that drug abuse was the United States’ most pressing problem. By August 1990, that number had dropped to just 10 percent, where it more or less remained for the rest of the decade.
Coke use steadily fell throughout the late ’80s and leveled off toward the end of the decade. It’s stayed fairly flat since, although the DEA sporadically claims big victories in disrupting supply. The most recent chest-pounding began in August 2007. Drug Czar John Walters began making the press rounds, which included riding up New York Avenue NE to the compound of the Washington Times, tucked away in a postindustrial wasteland on the outskirts of the District. The paper often provides the most receptive audience for a GOP administration’s messengers. Walters came with a small staff and a stack of glossy pages making the case that the war on drugs was being won, said a source who was at the meeting. Prices for cocaine, he said according to a person in the meeting, were rising fast. That can only mean a decline in supply, he explained.
Congress was in the midst of a debate over a controversial $1.4 billion aid package intended to help Mexico wage its own drug war. With Plan Mexico, as it was called, on the table, the news couldn’t have come at a better time for the White House. The drug czar, however, had a credibility problem: In the past, he’d pointed to several other price increases and supply drops that quickly reversed themselves and left him and the media looking silly. A Times editorial staffer said that the reception to Walters’ presentation was fairly cool. It took more than a month for anyone to bite. (Although the Times did tout the benefits of the Plan Mexico). USA Today finally took the bait, making the price increase its lead story in a September paper. From there, word spread that there was a shortage of coke out there.
The administration gave itself the credit, citing increased Mexican cooperation, Colombian eradication efforts, and a number of high-profile seizures for the alleged supply downturn. “Drug kingpins are having a harder time moving illegal drugs and chemicals and pocketing the illicit proceeds because they are up against the full-court press of sustained, joint initiatives by a historic three-way partnership among Colombia, Mexico, and the United States,” said DEA Administrator Karen P. Tandy at a press conference staged in Colombia when the numbers were officially released. “This rock-solid, international lineup has disrupted the world’s highest level narco-traffickers, made illegal drugs costlier and less pure, forced traffickers into an uncertain reactive mode, and formed the linchpin to greater stability throughout the Western Hemisphere.”
I asked the DEA for price data for the years 2005 and 2006 but the agency declined to provide it. I filed a Freedom of Information Act request and was told in a letter that there was no “public benefit” to releasing the data.
So did the DEA really have the cocaine cartels in retreat? Quite the opposite, actually: Coke exporters were simply finding more lucrative markets than the economically stricken United States.
Producers are “not going to see a significant impact [from a decline in American consumption] because they’ve seen huge increases in demand, and therefore profit, from Europe,” André Hollis, who was the senior counternarcotics adviser to Pentagon chief Donald Rumsfeld from 2001 to 2003, told me. Just a few years prior, he explained, Americans were doing about five times more blow than their Old World fellows. Today, coke-consumption levels in the United States and Europe are roughly equal. It’s hard to confirm his claim statistically. But United Nations surveys have shown rapid rises in cocaine use in Western European countries during the ’00s. And press accounts from across Western Europe have talked about a continental coke binge similar to America’s in the ’80s.
True, the U.S. government can point to a number of high-profile seizures, including one that landed more than 20 metric tons of coke in Mexico. Tighter border enforcement as a result of efforts to curb terrorism and immigration have likely played a small role in shrinking the American coke trade, too. But the biggest factor is probably the rise of the euro and the concomitant decline of the dollar, which has made it less profitable to sell cocaine to Americans. “The euro has replaced the dollar in the Western Hemisphere as the currency of choice among these traffickers, which is an extraordinary shift,” said Karen Tandy, head of the DEA, at an anti-narcotics conference in April 2007 in Spain. “As cocaine use has declined in the U.S. dramatically, in the European market it has risen.” Officials at the conference said that a kilogram of coke that would fetch $30,000 in the United States was worth $50,000 in Europe–and the dollar has fallen further against the euro since then. On April 1, 2007, a dollar was worth about 0.74 euros; a year later, it was worth only 0.63 euros. Because of this price differential, it’s now a theoretically profitable enterprise to smuggle cocaine out of the United States.
Donald Semesky, the DEA’s chief of financial operations, has noted that 90 percent of the 1.7 billion euros that were registered as having entered the United States in 2005 came through Latin America, “where drug cartels launder their European proceeds.” As the cocaine market has shifted, use along its new trade routes has grown. A UN report notes increases in use not only in South and Central America but also in Africa, where seizures jumped ten-fold from 2003 to 2006 and then doubled again between 2006 and 2007. West African nations, which make Colombia and Mexico look like models of transparent governance, have become important stopping-off points for coke traffickers on the way to Europe. Out of work African youth make cheap foot-soldiers and drug runners with expensive equipment and weaponry have little to fear from airports barely electrified and cops cars. with empty gas tanks. “Africa is under attack,” warned the UN’s Office on Drugs and Crime executive director Antonio Maria Costa in a Post op-ed in 2008. “States that we seldom hear about, such as Guinea-Bissau and neighboring Guinea, are at risk of being captured by drug cartels in collusion with corrupt forces in government and the military.” From West Africa, the coke heads to Spain and Portugal. Spain, according to the UN, had levels of coke use equivalent to those in the United States for the first time ever in 2006.
From the drug cartels’ perspective, the beauty of shifting exports to Europe is that the resulting decline in shipments to the United States does indeed lead to an increased price here. While expanding their business elsewhere, the cartels are getting more money per unit of American product. That increase in wholesale cost has led U.S. coke retailers to take action–by diluting their wares, the easiest way for drug dealers to pass on increases in cost. The DEA found a 15 percent decrease in U.S. cocaine purity in the first six months of 2007.
What’s the real-world impact, then, for your average American coke user? As with sentencing, it depends on who you are. “There are no crackheads going without crack,” Dale Sutherland, a narcotics investigator with the Washington, D.C., police department, told me. “But the white guy from the suburbs may be paying a little more.” Here’s why: A typical crackhead knows more dealers than a casual user. If one dealer raises prices or too heavily cuts his product, an addict can find another seller across the street–meaning that in order to keep addicts as customers, a dealer will have to accept less profit while stepping on the product just a little. Casual users, however, tend to have only one dealer and are less willing to go shopping around for the best price. And that dealer isn’t very concerned about losing their business by selling them inferior product–they don’t buy much, anyway.
There’s data that backs up this market logic. To support its assertion that supply is down, the DEA has cited a survey that measures the number of people who fail workplace drug-testing for cocaine. By the end of 2007, a third fewer workers were failing coke tests, a rather remarkable decline. Because drug addicts have some difficulty holding steady jobs, it’s safe to assume that this sample includes mostly casual users–exactly the sort most likely to decrease their consumption in response to a price increase.
The ultimate goal of the war on drugs, of course, is to reduce addiction, and there are signs that raising the price of coke hasn’t done it among hardcore users. Up-to-date data is tough to come by, but some cities have begun drug-testing folks who get arrested. Here, we can presume a much higher number of regular users.
In D.C., where the practice began in 1984, a little more than 40 percent of arrestees tested positive for cocaine in January 2007. That percentage barely budged as the price rose. Eventually, though, the price increase seems to have taken a toll: By the end of the year, the number of arrestees testing positive had indeed dipped–to just below 40 percent.
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