CANADA TOP SOURCE FOR DRUG CHEMICAL

U.S. Meth Labs Make Illicit Use Of Ingredient Found In Cold Medicine

WASHINGTON -- Canada has become the top source of smuggled chemicals used
to produce illegal methamphetamine at clandestine U.S. labs -- a problem
highlighted by a seizure last month of a 10-ton shipment in California.

The illicit imports of pseudoephedrine, a common ingredient in cold and
allergy medicines, are attributed mainly to a loose-knit network of people
of Middle Eastern origin. Federal agents have attempted to determine
whether profits are funneled to terrorist groups in the Arab world.
Millions of dollars have been traced to banks in the Middle East, but
investigators say they have no evidence of terrorist involvement.

The Canadian smuggling, documented in a joint reporting effort between USA
TODAY and Channel One News, a TV news network for young people, has vast
implications for efforts to crack down on domestic production of
methamphetamine, a powerful stimulant especially popular in the western and
southeastern USA. Law enforcement officials are cracking down aggressively
on the pseudoephedrine imports, which make their way to illicit
methamphetamine labs operated in California and the Southwest by Mexican
cartels.

Similar initiatives are ongoing in Canada, which is poised to adopt
regulations to give its border agents more authority to confiscate
undocumented shipments of the chemicals.

Robert Pennal, commander of the Fresno (Calif.) Methamphetamine Task Force,
says evidence of Canadian smuggling emerged in 1999, and the flow has grown
steadily ever since. "By March 2001, it was apparent that the vast majority
of pseudoephedrine we were finding was coming from Canada," he says, and
last month's seizure "really shows the problem's magnitude."

Production, distribution and bulk sales of pseudoephedrine are tightly
regulated under U.S. law, but Canada has virtually no restrictions on the drug.

U.S. officials note that Canadian imports of pseudoephedrine -- mostly from
China, India and Germany -- have jumped about 1,400% since the mid-1990s.
The officials say they believe much of that was smuggled into the USA.

The seizure in California last month, involving pseudoephedrine shipments
in Anaheim and San Jose, was the latest in an escalating series.

Since April 2001, when the U.S. Customs Service grabbed about 12 tons of
pseudoephedrine from a tractor-trailer crossing the Ambassador Bridge from
Canada to Detroit, shipments of Canadian origin have been captured from
Oklahoma to California on a near-monthly basis.

"It comes on big rigs, in vans and U-Hauls, even on planes, generally
through Michigan, Chicago and across the U.S." says Craig Hammer, a
supervisor of methamphetamine interdiction for California's Department of
Justice.

Canadian officials expect to have new regulations in place by the end of
2002 to restrict bulk sales and exports of pseudoephedrine.

In addition, Canadian Customs "is ready to do inspections (for the drug) as
soon as it is declared a controlled substance," says Collette Gentes Hawn
of the Canadian Customs Service. "Right now, we have no right to seize it
or do anything with it."

Methamphetamine, which retails for up to $200 a gram, is relatively easy to
produce by cooking pseudoephedrine with ingredients purchased at a hardware
or drug store.

Until the early 1990s, most methamphetamine labs were small operations
controlled by motorcycle gangs. In 1994, however, Mexican criminal
organizations entered the business. They set up "super labs" in the western
USA that produced large volumes of meth using pseudoephedrine from rogue
U.S. distributors.

All that changed in August 2000, when a huge federal dragnet dubbed
Operation Mountain Express rounded up 189 people and shut down most of the
U.S. distribution network for pseudoephedrine. Now, officials say, the
Canadian connection is filling the void.