DEA WILL TAKE A CLOSER LOOK AT FIRMS HANDLING CHEMICALS

WASHINGTON -- The Drug Enforcement Administration is beefing up its
standards for registering companies that handle chemicals that can be used
in the production of illegal drugs such as heroin and methamphetamine.

Companies applying for a DEA certificate required to manufacture, buy, store
or sell so-called List I chemicals will face more-extensive background
checks, including closer scrutiny of their customer lists, suppliers,
facilities and purchasing agreements. The DEA also will reexamine the
applications of all 3,600 U.S. companies now authorized to handle List I
chemicals, 24 compounds which are precursors in the manufacture of illegal
drugs.

To handle the heightened workload, talks are under way within the agency to
increase the number of people who conduct those investigations. Currently,
there are 400 investigators responsible for the program, along with other
officials who monitor 1.1 million doctors and pharmacists who are authorized
to dispense drugs and write prescriptions.

"The DEA has recently revamped its investigative guidelines concerning new
List I chemical applicants for DEA registration," said Terrance Woodworth,
deputy director of the agency's Office of Diversion Control. The DEA "is
prepared to take all necessary action, whether it be criminal, civil or
administrative" to assure that companies handling List I chemicals don't
divert them for illegal activities.

The changes follow a DEA and Justice Department review that began earlier
this month after 20 authorized companies turned up in an investigation of
suspected trafficking in pseudoephedrine, a List I chemical used in making
nasal decongestants that can be diverted into methamphetamine, or "speed."
Law-enforcement officials describe the companies as small dummy operations
set up to obtain DEA certification to legally import, manufacture or
distribute thousands of cold tablets for use in making methamphetamine.

Authorities said the companies used valid addresses, people with no criminal
backgrounds and fake customer lists pulled from the Internet to apply for
their DEA certificates.

The DEA began registering companies in December 1997 under legislation
requiring it to review and approve all companies that intended to store
large quantities of List I chemicals. Other such drugs include ergonovine,
used in helping women through childbirth, and ergotamine, used in treating
migraine headaches. Both also can be used to produce heroin.

Officials said that as originally implemented, the DEA program required the
agency to grant a permit to a company, even if the investigators were
suspicious, unless they could show an applicant lied on the application, was
a convicted felon or was engaging in criminal activity.

Under the changes, if investigators have questions about an operation but
don't have enough evidence to prove a criminal case, applicants might face
more administrative hearings in which their applications could be denied.

Write to Gary Fields at gary.fields@wsj.com