ILLICIT METH LABS DEVELOP NEW SOURCE OF INGREDIENTS

Cold Pills Being Stolen From Pharmaceutical Firms

For drug traffickers, the thefts were the equivalent of strolling out the
gates of Fort Knox with sacks full of gold. As many as 20 barrels of a
common over-the-counter cold pill - coveted by those who can easily cook it
into methamphetamine - vanished from a pharmaceutical plant in Vacaville
before authorities caught on in 1998.

That same year, more than 4 million similar pills - enough to produce half
a ton of pure meth - were stolen from a health-products company outside Los
Angeles in a still-unsolved heist.

Both cases received almost no attention publicly, but privately drug war
officials were worried.

Thanks to the 1996 Comprehensive Methamphetamine Control Act, illicit
chemists are no longer able to buy the pills in bulk from so-called
"rogue'" pseudoephedrine dealers or over the counter at local drug stores.
Instead they are going to a larger and in some ways easier target: drug
companies where large supplies of the pills may be largely unsecured.

Methamphetamine, often called the poor man's cocaine, has been the nation's
fastest-growing drug problem during the past 10 years. In California,
police raided more than 1,000 meth laboratories in 1998. And in recent
years a powerful recipe for cooking pseudoephedrine into meth has become
easily available on the Internet and in bookstores.

Because pseudoephedrine is an over-the-counter medication, companies that
handle it are not subject to federal Drug Enforcement Administration
inspections or background checks, and federal authorities do not have a say
about security as they would with controlled substances such as
prescription drugs.

"The whole crux of the matter goes back to the fact that these are not
controlled substances and the fact that the chemical industry has fought
this tooth and toenail to stop the control of this," said William Davis, a
drug diversion officer in the Sacramento office of the DEA.

"There are very minimal, if any, security requirements," Davis said. "There
are minimal record-keeping requirements. The whole issue could be taken
care of by making it a controlled drug."

LOOSE SECURITY AT PLANT

In 1998, pseudoephedrine was apparently not under much control at the large
plant in Vacaville operated by drug giant Alza Corp. The plant, the
second-largest private employer in Vacaville, with more than 500 workers,
is the company's only site where pseudoephedrine is manufactured into cold
remedy tablets.

The company had been reporting to authorities thefts of large quantities of
the drug. During a joint DEA- Vacaville police undercover operation,
assisted by private detectives hired by Alza, officers learned that at
least two men, one a former company employee, the other still working at
the plant in the hazardous waste division, were moving the drugs out of the
plant and selling them to a variety of meth manufacturers in the Bay Area.

The pills contained pseudoephedrine, a chemical cousin of meth just a few
molecules different from the illegal drug. The pills stolen in Vacaville -
188-milligram tablets of Ephidac 24 - were showing up at drug labs in
Solano, Sacramento, Contra Costa and San Joaquin counties as late as last
summer.

Each barrel was enough to make as much as 80 pounds of pure meth, although
authorities do not know how much was ultimately converted into street drugs.

According to police reports obtained by The Chronicle, as many as 20
barrels were stolen and sold to clandestine chemists for $100,000 to
$150,000 each.

"From what I understand, before that investigation was under way, security
was so lax, it was difficult to even tell you how much was being stolen,"
said DEA agent Ed Kittrell, who worked the case.

RAMPANT THEFT

Kittrell and his fellow investigators soon learned that theft was rampant
in the plant. Although Alza issued coveralls without pockets to employees
to discourage theft, workers were filling their gloves with pills and even
used their lunch boxes to scoop the tablets out of bins, he said.

The thieves were also reportedly taking pills that had been incorrectly
labeled and were slated for destruction.

"Alza was destroying this stuff almost like trash, and people were just
pulling pills out of the compactor,'" Kittrell said. "When the company
learned about it, they were appalled that their people who worked there
stole this stuff."

Suspects Derrick Williams, who had been fired from Alza that same year for
disciplinary problems, and Thomas Ross, who still worked at the plant, were
arrested in December 1998 after authorities learned that the two men were
working together to move pseudoephedrine out of the plant.

PLEA BARGAIN

Williams, who said he became addicted to meth before he was fired, agreed
to help prosecutors and testified against Ross - whose case is still
pending - in return for a 10-year federal prison term.

In an interview earlier this year at the Sacramento County Jail, Williams
said he had recruited Ross to help him take pseudoephedrine out of the
plant and admitted stealing at least six barrels of the drug in the summer
of 1998.

Williams acted as the middleman, receiving just a few thousand dollars as
he set up buys for the valuable tablets. Most of it was apparently sold to
a Richmond motorcycle gang.

The thefts took place in the middle of the day with Williams coming to the
plant and loading the barrels into his pickup out of a smaller warehouse
nearby. Security was almost nonexistent.

"They put security cameras in in 1995, but it was a joke," Williams said.
"The security guards used to sleep on the job. It wasn't clear if all the
cameras worked. As far as I'm concerned, there was easy access to a lot of
stuff."

Vacaville police Detective Nathan Benevides said he also is not sure how
much was stolen from Alza.

"I know what was reported to our department was less than what was taken,"
he said. "From what was told to me by Mr. Ross and Derrick Williams, it
seemed to be more than what was reported to the police, and that concerned us."

Along with the drugs, Williams said, tools, computers and other equipment
routinely disappeared. In waste disposal, no proper system was in place to
track which materials were to be destroyed. "They just depended on us to
move the stuff out," Williams said.

ADVANCE WARNING OF TESTS

And although annual drug tests were required for employees, they were not a
problem for Williams, who said he always knew a few days ahead when he
would be tested and never tested positive for meth while working for Alza.
His bosses were apparently unaware of what a lucrative business ripping off
the pills was.

"I just don't think management knew what this stuff could be used for,"
Williams said.

Last year, drug officers began finding some of the stolen pills or meth
believed to have been made from them. Three pounds of the finished drug was
found at a lab in Suisun City. Nine pounds of pseudoephedrine was located
in Sacramento. Last August, police in Stockton recovered 54 pounds of pure
pseudoephedrine stolen from Alza, Kittrell said.

There have been no reports of further thefts in Vacaville, but the 1998
case was so troubling that the DEA and Alza remain concerned that the plant
will be singled out again by meth makers.

SECURITY TOUGHENED UP

Janne Whissel, vice president for operations at Alza, said security has
been significantly improved at the Vacaville plant during the past three
years to the point that pseudoephedrine is now handled as carefully as any
drug on the DEA's schedule of controlled substances.

"We have taken it upon ourselves to voluntarily treat pseudoephedrine as if
it were a (controlled) drug," Whissel said. Police agree that Alza's
security has gotten much better.

But Whissel disputed police reports that Alza employees were stealing the
drug using their gloves or lunch boxes. She said the company discovered
that several security cameras had been tampered with, but Whissel rejected
claims that as many as 20 barrels of pseudoephedrine were stolen.

"We don't believe that 20 barrels were taken," she said. "There's a problem
with talking about barrels. Barrels can be filled with all sorts of things."

But while the company says it treats pseudoephedrine as a serious drug,
Alza and the rest of the pharmaceutical industry are not ready to concede
that it should be subject to federal controls - a move that would require
consumers to get a doctor's prescription for a common cold pill.

OTHER FIRMS VICTIMIZED

Alza is just one of a growing list of companies that have become easy prey
for illegal drug makers, including Leiner Health Products of Carson (Los
Angeles County), which lost more than 4 million pills in October 1998.

"There's definitely a market for it," said Ron Gravitt, the special agent
in charge of clandestine drug labs for the state Bureau of Narcotics
Enforcement. "There's probably more diverted from the manufacturing
companies than we actually realize.

"Unfortunately, the pharmaceutical manufacturers aren't regulated by us. We
don't have any knowledge of what their security procedures are."

According to Leiner, investigators could not identify any employee who
might have been responsible for the missing drugs, which were reported to
the DEA. The case is still unsolved.

Like Alza, Leiner improved its security, including DEA-approved storage
facilities and restricted access to pseudoephedrine.

Warner-Lambert, the New Jersey company that markets the best-selling cold
remedy Sudafed, says it has not had security problems with pseudoephedrine.

But the company has been concerned enough about its product being used for
meth manufacturing that, according to some reports, it has considered
introducing additives into the tablets that would make them harder to cook
into meth. The DEA will not comment on what is being done in the laboratory
to try to prevent cold pills from being turned into illicit drugs.

OTHER NECESSARY CHEMICALS

Anti-drug officials say the attempt to control the chemicals that are used
to convert pseudoephedrine into meth - substances typically used in
agriculture or manufacturing - is succeeding.

The purity of the drug that makes it to the street has dropped from 60
percent a few years ago to about 27 percent now.

That illicit chemists are turning to outright theft is a sign the supply of
pseudoephedrine is drying up.

"No chemicals equals no drugs," said DEA Special Agent Guy Hargreaves,
based in Washington, D.C. "Aside from marijuana, methamphetamine is the
only widely abused drug that people can make themselves. We're seeing more
thefts, and to me that tells me these controls are working."

But without better security for guarding pseudoephedrine, the pills will
continue to show up at thousands of small to medium-sized meth labs found
each year in California and around the nation. Police in Fresno recovered
40 cases of the drug - 144,000 pills - at a bust just last week.

And in 1997 alone, enough pseudoephedrine was "diverted" - either stolen or
illegally purchased - to make 29 tons of meth, according to the DEA.

Officials say that for every business like Alza or Leiner that learns its
lesson, many other companies remain unaware that these chemicals are highly
prized by illicit drug makers.

"Ignorance is bliss, that's the best defense in the world at the
companies," said Davis, the Sacramento DEA officer. "For the criminals,
it's a gold mine."