Letter from Sen. Charles Grassley (R-Iowa) to ONDCP Director ("Drug Czar") John Walters, April 26, 2006

For Immediate Release
Wednesday, April 26, 2006

Grassley Concerned About ONDCP Assessment of Effectiveness of Plan Colombia

WASHINGTON --- Sen. Chuck Grassley of Iowa has sent a letter to the Office of National Drug Control Policy asking for clarification about the price, purity and availability of cocaine and heroin in the United States and how this information correlates to Plan Colombia.

“The information we’re getting from ONDCP just doesn’t add up and it’s high time we find out the real story on the coca production numbers in Colombia,” Grassley said.

Here is a copy of Grassley’s letter to Walters.

The Honorable John Walters
Director
Office of National Drug Control Policy
Executive Office of the President
Washington, DC 20503

Dear Director Walters:

I am writing to express my concern and to seek clarification about statements you made last November, and on numerous occasions since then, regarding the price, purity and availability of cocaine and heroin in the United States and how they correlate to the achievements of Plan Colombia. My principal concern is that these statements are based not only on data from sources that were never intended for such purposes, but that they also utilize data from different selected sources to provide a rosier but not necessarily more accurate, picture of the current situation.

While I am very hopeful that the tide is turning in our efforts to combat cocaine and heroin production and exportation from Colombia, I believe that these assumptions may be premature and perhaps even unfounded. Furthermore, these statements raise serious concerns within Congress about our ability to effectively combat the narco-traffickers. For example, ONDCP's April 14th press release regarding coca cultivation in Colombia references an eight percent reduction in those areas in 2005 that also were imaged in 2004. This is potentially misleading since it includes the areas that were heavily sprayed, which likely resulted in growers leaving those areas and moving to others. Research shows that those in the drug trade adapt to pressure to eradicate and interdict their product. This year's news about Colombia's cultivation suggests that areas subject to spraying have witnessed reductions in cultivation, but overall cultivation continues to rise as a likely result of coca being grown in new areas not being targeted by eradication.

Other claims from your office raise questions about how information is used.

1) Last November, you stated, "Today, I wanted to announce that in connection with those efforts we have seen...for the first time a decline in the purity of cocaine in the United States and an increase in price at the retail level." This statement is based only on data from one six-month period. However, during this six month period, the purity levels did not dip to the lowest level shown on the graph - which was in August/September 2003, and the price did not return to the highest level shown on the graph- which was in July 2003. In addition, both changes occurred immediately following a period when the data sets reached their highest (purity) and lowest (price) points. Moreover, long-term STRIDE data shows numerous fluctuations (both increases and declines) in price and purity numbers over the past two decades, but the long-term data is not included in the presentation.

a) Please, first, explain the term "normalized price" as used in the graph on page 2 of the presentation regarding South American price and purity levels. If the prices are not reported in 2002 dollars (as used in the STRIDE data), please explain the change and provide the prices in 2002 dollars.

b) Please provide documentation of the methodology used that led to the determination that the six-month period between July 2003 and September 2005 was a "first time decline" and the cocaine and heroin availability is being "controlled and reduced."

c) Please explain why only two years of data were used for comparison when two decades of data is available in the STRIDE report.

d) Please provide information on any updated or subsequent analysis related to this topic.

2) I am also concerned about the reliability of these statements because, according to the 2004 report "Price and Purity of Illicit Drugs: 1981 Through the Second Quarter of 2003", which is based on STRIDE data and is currently available on the ONDCP website, the price of a pure gram of cocaine during the first two months of 2003 was $106 (for less than 2 grams) and had not been above the $200 mark since 1990. Also according to the STRIDE report, the purity of cocaine during the first two quarters of 2003 averaged 70 percent, but your graph shows the purity in July 2003 to be approximately 60 percent.

a) Please explain the $100 increase in the price of pure cocaine and the 10 percent decrease in cocaine purity for STRIDE reporting purposes between the first and second half of2003.

b) If the prices for the period from July 2003 to September 2005 are not based on 2002 dollars, please explain the change, recalculate and provide the prices in 2002 dollars.

c) Please provide justification for not referencing or explaining the sharp decline in price between April 2004 and September 2004.

d) Please also explain why the significant increase in purity levels between August 2003 and February 2005 were not addressed.

e) If different methodologies were used to determine the both price and purity numbers, please explain the methodologies and provide a single comparison of price and purity numbers from 1981to September 2005 (the most recent data).

3) In addition, the primary source of information for changes in price and purity of South
American cocaine used in the November 17, 2005 press release is based on "IDA analyses of STRIDE, July 2003 to Sept 2005, Nov 2005." However, according to Table 4 that ONDCP provided to GAO for the November 2005 report entitled, "Agencies Need to Plan for Likely Declines in Drug Interdiction Assets, and Develop Better Performance Measures for Transit Zone Operations," STRIDE data should not be used as the primary source of price and purity information for the following reasons: the "data cannot be generalized to the United States"; STRIDE is "designed as an inventory system for drugs turned into DEA by its agents and informants and other law enforcement agencies"; and STRIDE "trends could reflect law enforcement patterns rather than drug availability patterns." Moreover, it is my understanding that STRIDE data is based only on a sampling of the total amount of drugs that the DEA sends to the labs for analysis.

a) Please explain the reason for using data which was already determined by ONDCP to be unacceptable as a primary source.

b) Please explain why data that "cannot be generalized to the United States" was used for that very purpose in the November 17th press statement.

c) Please explain how drug collection limitations listed by DEA were utilized to determine changes in price, purity and availability of South American heroin in Boston.

d) Is it an acceptable practice to extrapolate price per gram by multiplying the price per milligram by 1000, as you did in the November 2005 presentation? If so, please explain why STRIDE price per gram numbers are half that of what were used for the same period.

4) In response to a September 18, 2005 Boston Herald article entitled, "Effective Action Against Heroin in Boston," David Murray wrote, "The same goes for heroin and Boston. Fears of rising purity, falling prices, and greater availability of South American heroin (the purest and most common heroin found in the eastern United States), have been directly contradicted by the most recent data. The latest analysis of heroin price and purity by the Drug Enforcement Administration (DEA) revealed that between 2003 and 2004, nationwide average South American heroin purity declined by 22 percent while average price rose by 30 percent. In Boston, purity has fallen even more."

For this statement, your office relied on data and analysis from the DEA's 2005 Domestic
Monitoring Program (DMP). However, included in the comments on Page 4 of the Domestic Monitoring Program, the DEA states, "Heroin availability in metropolitan Boston was common in 2004. Extensive availability and relative affordability ofthe drug supports its continued popularity in the city and the surrounding region." Moreover, the Executive Summary of the DMP provides the following conclusions regarding increased prices of South American heroin, "[P]ossible factors contributing to these changes may include: enhanced federal/state/local law enforcement efforts, increased market competitive pressures, geographical expansion of the market area, and deliberate attempts to increase profit margin by increasing total weight with additional diluents."

a) Please explain why Mr. Murray's statement directly contradicts DEA comments in the DMP regarding the availability of heroin in Boston.

b) Please also explain why ONDCP used DMP data for statements about heroin price and purity when STRIDE also contains data on heroin price and purity.

c) Please explain how the other market factors listed by DEA (including enhanced federal/state/local law enforcement efforts, increased market competitive pressures, geographical expansion of the market area, and deliberate attempts to increase profit margin by increasing total weight with additional diluents) were utilized to determine accurate changes in price, purity and availability of South American heroin in Boston.

4) Just recently, the Federal Government released the 2005 Colombia coca cultivation report that has production up by 26 percent over the previous year. The 144,000 hectares cultivated matches the 2002 cultivation number and is only exceeded by 2001, the highest cultivation ever. In addition, there has been an increase in cultivation in both Peru and Bolivia, and the Morales Government in Bolivia has thus far brought a halt to eradication efforts in Bolivia which will most likely result in even larger increases in production this year.

a) What steps are being taken at ONDCP to fix the problem with the CNC numbers? We have been concerned about the accuracy of the numbers for years due to their methodology. How do we even know that these numbers are accurate?

b) In 2002, ONDCP made a number of recommendations to improve the coca cultivation data provided by both the Crime and Narcotics Center (CNC) and the Office of Aviation in Colombia. Were these recommendations followed? If not, why not? And, why are further modifications being made just three years after changes were supposedly made to improve the process of determining cultivation numbers?

c) How will this new cultivation data impact the data for cocaine flows to the US and the upcoming IACM which, from my understanding, must also be reworked this year because precise data for last year's report was unavailable?

d) How will the increase in cultivation alter the allocation of transit zone aerial and maritime assets, given that the estimates for overall potential production for 2005 will likely increase, and will change comparisons to exportation and seizure totals during last year?

e) In addition to Colombia coca cultivation, what is ONDCP's strategy for addressing the possible "massive" increase in coca cultivation in Bolivia, and possibly in Peru, due to political changes in those countries?

f) How does ONDCP reconcile the apparent disparity in the information being reported about cultivation and cocaine price/purity with the trends in cocaine consumption, as reported in the National Survey on Drug Use and Health?

Thank you, in advance, for responding to these questions in writing by May 5, 2006.

Sincerely,

Charles E. Grassley