DEA Congressional Testimony
April 5, 2006




APRIL 5, 2006

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Mr. Chairman and Members of the Subcommittee:

Good afternoon, and thank you for the opportunity to testify on behalf of the President’s Fiscal Year (FY) 2007 Budget request for the Drug Enforcement Administration (DEA). I appreciate your strong and continued support for the important work of DEA – reducing the availability of illicit drugs in the United States. Every single day, DEA’s brave men and women combat the world’s drug trafficking organizations. We wage the battle on every front. It begins with the cultivation or manufacturing of drugs, complete with the movement of chemicals, carries on through the transit zones and final distribution in our nation’s communities, and concludes with the laundering of the distribution proceeds. Furthermore, the battle extends well beyond our borders into foreign lands and into cyberspace. To this end, DEA continues to be an active partner in the war against global terrorism and protecting the homeland.

While we have made great strides over the years and continue to adapt to the increasingly complex challenges that face modern-day law enforcement, much work remains to be done. The resources that Congress provides are critical to our success and all of us at DEA are grateful for the Chairman’s and the subcommittee members’ leadership.

In my statement, I will summarize some of our important successes of 2005, summarize the President’s request for DEA, and discuss some of the challenges that lie ahead. An attachment for the hearing record that provides additional mission-related data also is included.

Fiscal Year 2005 Accomplishments

Through continuous strategic thinking and planning, DEA is able to meet the ever-changing demands of contemporary drug enforcement. Ours is an organization that has had to be agile and resourceful in order to combat those whose criminal methods become more and more refined and complicated. Our successes in FY 2005 are in those areas that are the agency’s foremost priorities:

Financial and Money Laundering Operations: DEA focuses on the dismantlement of the financial infrastructures of drug trafficking organizations, and the payoff has more than met expectations. In FY 2005, DEA stripped domestic and foreign drug traffickers of nearly $1.9 billion in drug proceeds and revenue denied, which included $1.4 billion in asset seizures and $477 million in drug seizures. This, Mr. Chairman, exceeds DEA’s FY 2005 $1 billion goal for asset and drug seizures by 90 percent. Furthermore, DEA’s seizures nearly match DEA’s FY 2006 enacted appropriation for our Salaries and Expenses Account. We have developed a five-year plan with an ultimate goal of taking $3 billion away from all drug trafficking organizations by FY 2009, and we are committed to meeting our goal. In FY 2006, DEA will transform its current temporary staffing in Dubai, United Arab Emirates, into a permanent presence, with a commitment of four positions (including two agents). These positions will serve as a liaison for all drug enforcement matters, including financial investigations. We also are in the process of standing up a financial investigations team that will be staffed in Bogota and Cartagena, Colombia, and we anticipate establishing a money laundering group in Mexico City. It is our goal by adding offices in these regions, that we will be able to bolster our efforts to take potentially billions in drug profits away from trafficking organizations, and inflict enough damage to leave them unable to reconstitute their operations.

Since the launch of our “Money Trail Initiative” in July 2005, more than $36.2 million in proceeds that traffickers attempted to smuggle from the United States have been seized. An investigation during FY 2005 by a DEA-led multi-jurisdictional Organized Crime Drug Enforcement Task Force (OCDETF) of a Colombian-based money laundering operation resulted in 81 arrests and the seizure of $7.8 million. During FY 2005, DEA continued to be a key leader in the multi-jurisdictional law enforcement effort that targeted the 45 “Most Wanted” drug trafficking and money laundering organizations, commonly referred to as CPOTs (Consolidated Priority Organization Target). As a result of this critical supply reduction strategy, 6 CPOTs have been dismantled and removed from the list of 45, and the operations of another 6 were significantly disrupted. In addition, in FY 2005, 121 CPOT-linked drug trafficking organizations were dismantled and 204 CPOT-linked organizations were severely disrupted.

Fighting Methamphetamine:
DEA has redoubled its efforts to fight methamphetamine and continues to turn the tide against the use, trafficking, and manufacture of the drug. DEA takes a comprehensive approach to combating a problem that poses a unique and deadly threat to communities across America – enforcement, domestic and international precursor chemical control, and the identification and cleanup of the large number of small toxic laboratories. As trafficking patterns have changed, so has DEA. We have shifted our focus from the super labs in the United States, to the small toxic labs that spring up as a result. This is in addition to targeting precursor chemical control and increasing our focus on the Mexican organizations that conduct the vast majority of the methamphetamine trade. In FY 2005, DEA spent an estimated $176 million to combat methamphetamine, including $18.8 million to administer 8,897 clandestine laboratory cleanups.

In August 2005, DEA wrapped up “Operation Wildfire” – a nationally coordinated law enforcement initiative that was designed to target all levels of the methamphetamine manufacturing and distribution chain in the country. Two hundred cities took part in the operation and the results were unprecedented – 427 arrests and the seizure of 95 kilograms of methamphetamine, 201,035 tablets of pseudoephedrine, 153 kilograms of pseudoephedrine powder, and 224,860 tablets of ephedrine. In addition, 56 clandestine laboratories were seized and 30 children were rescued. A second operation in August, “Operation Three Hour Tour”, resulted in 170 arrests and the dismantlement of three major drug transportation rings with international ties, as well as 27 U.S. distribution groups. We estimate that these groups were capable of transporting enough methamphetamine into the U.S. to provide product for over 22,700 methamphetamine users every month. 1,634 kilograms of cocaine, 159 pounds of methamphetamine, 9 ounces of crack, 7 kilograms of heroin, 216 pounds of marijuana, and 22,000 dosage units of MDMA were seized in the operation.

In addition to these large scale operations, DEA’s Mobile Enforcement Teams (METs) continued their methamphetamine focus. Since 1995, METs have significantly increased the number of methamphetamine deployments. At the end of the first quarter of FY 2006, 66 percent of MET deployments initiated targeted methamphetamine trafficking organizations. This compares to 21.8 percent in FY 2003, 27 percent in FY 2004, and 41 percent in FY 2005.

DEA also has continued its work with our global partners including Canada, Hong Kong, and Mexico to target international methamphetamine traffickers and to increase chemical control efforts abroad. For example, the United States and Mexico have obtained a commitment from Hong Kong not to ship chemicals to the United States, Mexico, or Panama until Hong Kong authorities have received an import permit or equivalent documentation. Hong Kong officials also agreed to provide advance notice to a receiving country before a shipment is made. On the training side, in FY 2005, DEA trained 105 Mexican officials in the areas of chemical control and clandestine laboratory cleanup. In partnership with Mexican law enforcement, DEA targets Mexican methamphetamine manufacturers, distributors and sources of supply based in the western United States and Mexico. One operation that culminated in March 2006, included the seizure of nearly 200 pounds of methamphetamine.

Internet Drug Trafficking: In FY 2005, DEA initiated 100 new internet investigations involving the online sales of pharmaceutical controlled substances. Over the course of FY 2005, DEA arrested 62 individuals and seized $44 million in cash, property, computers, and bank accounts from individuals who had been selling prescription drugs via the Internet. As a result of one internet drug trafficking investigation, Operation Cyberchase, DEA identified approximately 200 web sites that illegally sold prescription drugs and arrested 25 individuals who had been operating in the United States, India, Asia, Europe, and the Caribbean. DEA also led a 21-month OCDETF investigation that concluded with criminal charges against the principal Mexican steroid manufacturers, whose U.S. sales totaled an estimated $56 million annually. DEA has arrested nine individuals, one of whom was the owner of three of the world’s largest anabolic steroid manufacturing operations. Eighty percent of the steroids seized in the United States last year originated from Mexican manufacturers.

War on Terror: DEA is well-placed to identify those threats posed by international terrorism funded by drug proceeds. The case of Afghani Bashir Noorzai, who was arrested in the United States in April 2005, illustrates the link that exists between drug trafficking and terrorist organizations. Noorzai was the leader of the largest Central and Southwest Asia-based heroin drug trafficking organization known to DEA. Noorzai is charged with providing explosives, weaponry, and personnel to the Taliban in exchange for protection for his organization’s opium poppy crops, heroin laboratories, drug transportation routes, and members and associates. Noorzai was also a close associate of a member of the Taliban leadership. During FY 2005, DEA operations also included the deployment of five Foreign-deployed Advisory and Support Teams (FAST) to Afghanistan and the disruption of 8 and dismantlement of 2 terrorist-linked Priority Target Organizations (PTO).

Currently, Afghanistan is not a major heroin supplier to the United States; only about 8 percent of the U.S. supply comes from that country. However, DEA operations in Afghanistan serve a dual purpose – preventing the country from returning as a major supplier of heroin to the United States, as it was in the 1970s and 1980’s, and helping stabilize the Afghanistan government as it battles the powerful drug warlords for control of portions of the country.

Mr. Chairman, I also am very proud to report that the FASTs have played a pivotal role in protecting the lives of both our U.S. military and our coalition partners in Afghanistan. The teams have identified narcotics traffickers involved in targeting U.S. forces with improvised explosive devices (IEDs) and have provided critical information obtained from DEA Human Intelligence (HUMINT) sources to U.S. Special Forces Teams. In fact, on several occasions after DEA shared its source information, the Special Forces have successfully intervened and seized IEDs, other bomb making materials, and weapons caches.

Assisting Local Law Enforcement: This year, we had an additional mission in our longstanding support of state and locals – rescue and cleanup in the Gulf Region following Katrina. Our office in New Orleans sustained some damage and our Gulfport office was uninhabitable. Our operational assets had to be temporarily moved to Baton Rouge. With the funding DEA was provided in the FY 2006 supplemental appropriation, repairs have been made and we have been able to return to our New Orleans office. Currently, we are operating in temporary space in Gulfport until repairs can be made for safe occupancy at our permanent location. In the aftermath of the storm, 251 DEA personnel, including Special Agents, Special Agent pilots, Intelligence Analysts, and other technical and logistical staff were deployed to provide law enforcement and rescue/humanitarian assistance to 13 law enforcement agencies in Louisiana, Mississippi, and Alabama. We established and manned mobile command posts and communications systems, and assisted with the rescue of 3,340 stranded victims using DEA helicopters, which included 70 senior citizens from a nursing home that had been flooded. DEA also assisted with patrol assignments, transported medicine to law enforcement personnel to combat hepatitis, and worked with Texas and Arkansas pharmacy boards on emergency refill procedures to serve Louisiana, Mississippi, and Alabama residents. I am very proud of the many members of the DEA community who gave so selflessly at a time of a national tragedy. You may be sure that we will continue to support the recovery efforts in the stricken areas in any way we can.

In addition to Katrina assistance, DEA remained dedicated to our critical state and local partners. For example, in FY 2005, DEA led 217 State and Local Task Forces, with an on board strength of 2,096 Task Force Officers and 1,253 DEA Special Agents. We also have provided drug enforcement training to 41,000 state and local police officers in FY 2005. DEA’s Jetway Program, which instructs state and local law enforcement officers how to address interdiction issues in airports, bus and train stations, and hotel/motel environments, conducted nine schools in cities across the country during FY 2005. Our Pipeline/Convoy Program, which teaches highway patrol officers how to address commercial and passenger vehicle interdiction issues, conducted 16 seminars in FY 2005. These two important programs trained a total of more than 3,000 officers. DEA has trained drug unit commanders, DEA and other federal, state and local law enforcement intelligence analysts, and international narcotics leaders. Furthermore, we trained 1,100 police officers in the enforcement areas of clandestine labs and diversion.

Outreach and Public Awareness: 9,000 people have received victim, witness, and drug-endangered awareness training in FY 2005. We also launched a public website ( in FY 2005, designed for young people that provides information on topics such as methamphetamine, prescription drugs, drugged driving, marijuana, and drug legalization. Since the launch of the site, there have been an average of 200,000 hits per month, and many Governors have written to the Attorney General to express how useful they have found the website to be and have pledged to publicize the website widely in their states.

Fiscal Year 2007 Budget Request

For FY 2007, the President’s Budget requests $1.9 billion for DEA ($1.7 billion under the Salary and Expenses Account and $212 million under the Diversion Control Fee Account). A total of 9,310 positions, of which 4,066 are Special Agent positions, will be funded. This request represents an increase of $72 million over FY 2006. I would like to call attention to a few highlights of the President’s request.

Salaries and Expenses Account

The request includes a $24.8 million investment to fund two initiatives:

Drug Flow Prevention Initiative ($12.8 million and 10 positions) involves multiple agencies in multiple countries targeting major drug trafficking organizations (CPOTS). This initiative is designed to disrupt the flow of drugs, money, and chemicals between the source zones and the U.S. The strategy DEA employs is to attack the organizations’ vulnerabilities in their supply, transportation systems, and financial infrastructures. The program supports the Department of Justice’s Strategic Goal of preventing terrorism and promoting the nation’s security and enforcing federal laws and representing the rights and interests of the American people.

As part of this program, $7.5 million is requested for our very valuable FAST operations. With this request, DEA has the necessary resources, coupled with Department of Defense funds, to permanently support the five FAST teams now operating in Afghanistan. In addition, one new team will be created whose initial focus will be on Western Hemisphere operations. Under the Drug Flow Prevention program, 10 positions and $5.3 million also are requested to expand a successful multi-agency cocaine interdiction program known as “Operation Panama Express.” Since its inception in February 2000, Operation Panama Express has seized 356 metric tons of cocaine, which averages almost 4 ½ tons per month for the past six years. The Country Offices in Venezuela, Guatemala, Honduras, and Ecuador and the Caribbean Field Division would receive additional Special Agent positions. Resources will be used to recruit additional HUMINT sources to provide information to DEA regarding drug smuggling operations involving the transit of drugs through Central America, and the Caribbean and Eastern Pacific zones. The information from these sources will provide an early warning against narcotics and terrorist threats, which will ensure that our southwest border strategy has a defense-in-depth capability.

I would add, Mr. Chairman, that this initiative follows a successful DEA 2005 international Drug Flow Prevention initiative (“Operation All Inclusive I-2005”) that targeted the Eastern Pacific and Western Caribbean transit zones of Central America and the Central America land mass. By concentrating law enforcement efforts in this corridor, multi-ton bulk drug shipments were interdicted before reaching Mexico. All Inclusive’s success with respect to seizures was unprecedented. Over 46 metric tons of cocaine was seized in transit zones during the 65-day operation, and included the largest EASTPAC seizures for the month of August in JIATF South’s history, 21.3 metric tons. At the same time, DEA’s domestic seizures decreased by 29 percent compared to the 65-day period prior to the operation. DEA’s domestic cocaine seizures for the three-month period following the operation decreased by 27 percent compared to the three-month period preceding the operation, and by 36 percent compared to the same three-month period in 2004. Although other explanations are possible, preliminary analysis suggests that All Inclusive may have resulted in a temporary reduction in the availability of cocaine in the United States. Other All Inclusive seizures included: the largest ever cocaine seizure in Belize – 2,376 kilograms; the largest ever currency seizure in Nicaragua – $1.2 million; 3.9 metric tons of cocaine and $5.7 million in currency seized in Panama; 21 metric tons of marijuana seized in Mexico. Furthermore, as a result of All Inclusive, we found that traffickers were forced to delay or suspend their drug operations, divert their routes, change their modes of transportation, and even jettison loads.

Intelligence and National Security ($11.9 million and 57 positions – including one Special Agent and 42 Intelligence Analysts). In February of this year, Director of National Intelligence John Negroponte and Attorney General Alberto Gonzales signed a joint memorandum designating an element of DEA’s Intelligence Division to be a member of the Intelligence Community (IC). IC membership will allow DEA to expand and strengthen its existing relationships with our nation’s intelligence agencies. With 86 offices in 62 countries – the largest law enforcement presence abroad – DEA is poised to make valuable and lasting contributions in the intelligence arena. In DEA, intelligence drives enforcement strategies and operations. This approach has yielded impressive results: since the terrorist attacks of September 11, 2001, DEA’s Special Operations Division has produced 26,499 counterterrorism products for United States law enforcement agencies with counterterrorism missions; during FY 2005, the El Paso Intelligence Center responded to more than 260,000 counterterrorism inquiries from federal, state, and local law enforcement agencies, of which 12 percent were directly related to counterterrorism. Moreover, as of December 31, 2005, DEA has identified 48 percent (21 of 44) of the organizations on the Department of State’s Foreign Terrorist Organizations list as having possible ties to the drug trade.

This request will fund DEA’s entry into the IC. $4 million and 20 positions (including one Special Agent and 9 Intelligence Analysts) will create a National Security Intelligence Section (NN) within DEA’s Intelligence Division. Through DEA’s newly designated element, DEA will pass to the IC any counterterrorism or national security information it obtains during the course of its Title 21 drug enforcement mission. The NN objective will be to maximize DEA’s contribution to national security, while protecting the primacy of the agency’s law enforcement functions. $7 million and 37 positions (including 33 Intelligence Analysts) will fund the development of a Central Tasking Management System (CTMS)1 at DEA. The CTMS will track the acquisition of law enforcement investigative information and the dissemination of this information to other law enforcement and IC elements; establish policies and procedures for information acquisition and dissemination; produce acquisition plans, and establish an interface with acquisition management elements in the law enforcement community. Finally, $1 million will establish base funding to continue the Reports Officer Program, which began as a pilot project in June 2004. The Reports Officers have proven beneficial in extracting and passing in a timely manner, DEA law enforcement information that is relevant to IC requirements. Specifically, the Reports Officers review DEA law enforcement intelligence reporting and develop reports based on that information which responds to IC taskings.

Program Offsets

In order to fund the Drug Flow Prevention and Intelligence and National Security initiatives, the President’s Budget includes the following three offsets:

Regional Enforcement Teams (RET): DEA proposes to eliminate the RET program, for a reduction of $9 million and 34 positions (23 Special Agents). DEA’s remaining resources would continue to target the drug trafficking organizations having the most significant impact on the U.S. RET was seen as a program that did not tie as closely to DEA’s core focus on international drug trafficking organizations.
1 The CTMS is formally the “Collection Requirement Management System (CRMS) as discussed in the FY 2007 President’s Budget.

Demand Reduction Program: DEA proposes to eliminate all positions dedicated to this program for a reduction of 40 positions (including 31 Special Agents) and $9.2 million. This proposal would allow DEA to focus on its core mission of drug law enforcement. When possible, however, Special Agents would participate in demand reduction activities on a collateral duty basis.

Mobile Enforcement Teams (MET): DEA proposes to reduce by 151 (including 132 Special Agents) the number of positions dedicated to the MET program, for a reduction of $30.2 million. The remaining $20.5 million and 83 positions (including 80 Special Agents) would continue to support the MET program, with priority focus on methamphetamine investigations. In addition to MET deployments targeting methamphetamine organizations, in the areas of the county where the number of clandestine labs has declined but methamphetamine use still remains high, I have directed DEA’s Clandestine Laboratory Enforcement Teams (CLET) to begin investigating U.S. domestic networks that are distributing Mexican produced methamphetamine. At the same time, CLETs will continue their investigations of synthetic drug labs and will continue to assist state and local law enforcement agencies with laboratory, precursor, and distribution investigations. Finally, DEA would continue to administer funds from the Community Oriented Policing Services (COPS) program for clandestine laboratory cleanups.

Diversion and Control Fee Account (DCFA)

As I stated earlier, the President’s request includes $212 million under the DCFA, a $10.4 million increase over FY 2006. Of the total requested amount, DEA proposes funding of $3.4 million for DCFA program improvements. This funding would allow DEA to boost intelligence support (33 Intelligence Analysts) needed for diversion investigations. This request is a continuation of the FY 2006 Diversion Intelligence Initiative, whose goal is to place one Intelligence Analyst in every Field Division Diversion group.

Base Transfer

Since 2002, the Federal Bureau of Investigation (FBI) has annually reimbursed DEA approximately $6 million to DEA for providing counterterrorism related information to multiple federal agencies. The President’s Budget proposes that these resources (which fund 45 positions, including 11 Special Agents) would be permanently transferred from the FBI to DEA.

Opportunities Ahead

Mr. Chairman, DEA continues to make steady progress in all facets of its mission and has seen some encouraging trends, particularly as it relates to drug use among our nation’s children. In fact, the Office of National Drug Control Policy reports that since 2001, teen drug use is down by 19 percent and on track to decline by a total of 25 percent by 2007 to meet the President’s drug use reduction goals. We are a key partner in the effort through the DEA mission to reduce the drug supply in America. Drug prevention will not take hold and treatment will not succeed if Americans are surrounded by cheap and plentiful drugs. DEA implements the President’s National Drug Control Strategy by disrupting the supply of illegal or diverted drugs, through national and international attacks to dismantle the entire infrastructure of the most significant drug trafficking and money laundering organizations that supply our nation’s illicit drug market.

As you know, the devastation of drugs knows no bounds and takes an enormous toll on both human lives and our country’s economy. Moreover, we are seeing that the global drug trade continues to be an evolving national security threat to Americans at home and to our interests abroad. To address these disturbing facts, DEA takes a proactive and aggressive approach. In addition to the FY 2007 initiatives I have outlined, we will use our existing resources to focus on the following areas during FY 2006:

(1) Establishing a Methamphetamine Task Force. The FY 2006 Department of Justice Appropriations Act directs the Attorney General to establish a Methamphetamine Task Force (MTF) within DEA. The purpose of the Task Force will be to improve and target the federal government’s policies related to the production and trafficking of methamphetamine. The MTF is comprised of three DEA Special Agents, two Diversion Investigators, one Program Analyst, and attorneys from DEA’s Office of Chief Counsel, and the Justice Department’s Office of Legal Policy and the Criminal Division’s Narcotics and Dangerous Drugs Section. These are veteran personnel with extensive experience and knowledge in the field, who will acquire and analyze investigative and intelligence information from numerous sources. Their analysis will focus on trends in: chemical trafficking and manufacturing methods; clandestine laboratory cleanup issues; changes in trafficking routes and patterns; regional abuse and distribution patterns; chemical and equipment sources and methods of procurement; foreign and domestic precursor sources, and smuggling and methods of financing. The MTF will propose recommendations for addressing issues identified from the analysis, and forward them to the National Synthetic Drugs Interagency Working Group for review and action.

(2) Implementing the Combat Methamphetamine Epidemic Act of 2005. As you know, President Bush recently signed the USA PATRIOT Improvement and Reauthorization Act of 2005, which includes the provisions of the Combat Methamphetamine Epidemic Act. These provisions provide law enforcement with the necessary tools to address the spread of methamphetamine manufacture and abuse across the country and the devastating effects that this drug is having on society. With these much needed chemical control measures, clandestine laboratory operators will have more difficulty in obtaining large quantities of pseudoephedrine and ephedrine products at retail outlets for use in methamphetamine manufacture. The Act also closes a loophole that allowed importers to sell pseudoephedrine to companies that were not identified on the original import notice, and enhance criminal penalties for methamphetamine traffickers. These measures are part of a comprehensive national approach toward controlling this growing problem and protecting our nation’s children.

(3) Increasing Internet investigations and halting the diversion and abuse of legal controlled substance pharmaceuticals. The Internet has increased the opportunities for diversion and is the means by which many abusers are now purchasing Schedule III and Schedule IV drugs. DEA’s plan to target and dismantle online pharmacies, builds on the successes of our online pharmacy strategy, which combines enforcement, regulatory, and technological efforts to detect and prevent diversion. The strategy calls for DEA to coordinate its Internet investigations with federal, state, and local agencies, and provide training for investigators, prosecutors, the pharmaceutical industry, and DEA registrants. We have supported legislative and regulatory initiatives aimed at curtailing and preventing online diversion of controlled substances. Finally, DEA has taken a leadership role in the development and use of new technologies as investigative tools.

(4) Improving the measures of effectiveness for DEA programs and operations. DEA is developing a management information tool, the Drug Enforcement Strategic Target Analysis Review (DrugSTAR), to establish links between a Priority Target’s disruption or dismantlement and its impact on drug availability. It will be a key component of the agency’s overall strategic management system. Using DrugSTAR, DEA will be able to identify our challenges and best practices, focus on performance and accountability, and demonstrate results in compliance with the Office of Management and Budget’s management requirements.

Under DrugStar, DEA also has been piloting the Significant Investigation Impact Measurement System (SIIMS), which collects and analyzes enforcement, public health, and social service statistics both before an organization is taken down and for the six months that follow. This analysis will determine whether DEA targeting and enforcement operations had real impact and, if not, enable DEA to redirect resources and revise operations to achieve great impact. The SIIMS system has generated assessments of three takedown operations in 2005. For example, a SIIMS assessment of a successful New Orleans operation involving pain clinics and pharmacies revealed that the operation had significant impact on the availability of diverted drugs in that area, lasting for months after the enforcement operation. Specifically, SIIMS analysis revealed that, among other things, there were no seizures by DEA New Orleans of three illegally prescribed medications in the two months following the operation. This type of information can be useful when evaluating DEA’s performance in reducing drug availability and for reporting purposes for the Attorney General, Congress, and the Office of National Drug Control Policy.

Mr. Chairman, this concludes my remarks. I would be pleased to answer any questions.