INTERVIEW WITH JUSTICE DEPARTMENT ATTORNEY WAGNER

Mount Shasta, Calif. - Benjamin Wagner, the US Department of Justice
United States Attorney for the eastern district of California, gave a
wide ranging interview in Mount Shasta on Aug. 24 that included forest
issues, medical marijuana, abortion and constitutional issues, and
financial crimes.

Wagner said his area of responsibility ranges from the Oregon border
to the Los Angeles county line. He represents the Attorney General's
office within the DOJ currently headed by Attorney General Eric Holder.

The DOJ oversees more than 60 agencies including the Office of the
Attorney General, Federal Bureau of Investigations, Drug Enforcement
Agency, Bureau of Alcohol, Tobacco, Firearms and Explosives, Civil
Rights Division, Federal Bureau of Prisons and Criminal Division.

Wagner said the visit to Siskiyou County was to establish personal
relationships with District Attorney Kirk Andrus and Sheriff Jon Lopey
and attend the California State Sheriff's Association general meeting.

"We intersect a lot," Wagner said of his meetings with Andrus and
Lopey. "They work in task forces we work in. They refer cases to us. A
good working relationship is very important."

Forest fires

Wagner said the DOJ contains a civil department that pursues forest
fire litigation in cases where negligence has caused the fire.

"We are most well known for our criminal prosecutions, but we have a
whole civil side," Wagner said. "One of the most active things we do
is in forest fire recovery litigation. We can sue to recover both fire
suppression costs the federal government takes on when they fight
fires, but also the damages and loss to federal lands."

Wagner noted that recovery costs can include not only timber, for
example, but ecological restoration costs as well. He noted that PG&E
was found negligent in a fire for not properly maintaining wires that
ignited trees and the department recovered $102 million in damages.

Medical Marijuana: not interested in the ‘truly sick'

Wagner said his meetings with Andrus and Lopey were not to coordinate
a raid of the area's marijuana dispensaries. "That was not the purpose
of our meeting," Wagner said.

He responded to the confusion the public has over the Obama
administration's position on medical marijuana. Memos released
initially after taking office seemed to indicate that President Obama
was directing the Justice Department to leave medical marijuana alone,
while recent memos appear to contradict that position. Wagner was
clear that state laws on marijuana do not supercede federal law.

"There should be no ambiguity on the Justice Department's position on
this," Wagner said. "There has been some confusion. The position
really is that it is illegal as a matter of federal law. It's not
medicine. It's not recognized. There is no medical marijuana defense
for federal prosecution under the Controlled Substances Act. Where we
are going to concentrate our resources as federal prosecutors is not
on people who are truly sick. By truly sick we mean not people who say
they have anxiety or a bad back."

Wagner said that the use of marijuana for conditions such as AIDS,
cancer or glaucoma, while illegal, would be considered a low priority
for prosecution.

"Their use of medical marijuana is still illegal under federal law,
but as matter of prosecutorial discretion in using our resources that
is not of interest to us," Wagner said. "The Ogden memo made it clear
that we were not going to prosecute seriously ill patients and their
caregivers. It's not an efficient use of our resources. By caregivers,
we didn't mean dispensaries that call themselves caregivers but are
really in the marijuana business and label themselves caregivers. We
are, however, pursuing investigations against dispensaries and against
cultivators of medical marijuana. We want to send a message. Our goal
is not to prosecute every possible person in the state, but to try and
establish a real federal law enforcement presence."

Wagner had no directions for sick people to obtain medical marijuana
under California's Proposition 215 that allows dispensaries and the
use of medical marijuana.

"I understand there is a divergence between federal and state law,
but I really can't give people advice on that. The DEA just denied a
request to reschedule it from Schedule 1," Wagner said. "It's just not
recognized by the FDA as medicine. I realize that some people are
taking it as medicine. I don't make the rules I just enforce them.
While I realize there is a divergence between federal and state, my
position and my job is to enforce federal law. We're not going to
prosecute everybody, but we have to have the flexibility to enforce
federal law on a case by case basis."

The DEA maintains a drug Schedule list that is generally understood as
a declining list of perceived danger from Schedule 1 as the most
dangerous, that lists heroin and marijuana, to Schedule 5, that lists
codeine based cough medicine.

Schedule 2, for example, lists crack cocaine and methedrine below
marijuana, leaving the perception that the federal government believes
marijuana is more dangerous than crack or meth. A petition to move
marijuana off Schedule 1 was recently denied by the federal government.

Wagner said the Schedule takes into account more factors than toxicity
and danger to the public.

"It's not necessarily a ranking of how dangerous or how addictive the
drug is. There are a lot of factors that go into it. What they look at
is whether or not there are any potential uses of the drug or
substances within the drug that can be used for different controlled
circumstances. The ranking really is the degree to which the substance
can be used for any recognized purpose," Wagner said. "If you put it
on Schedule 2 or 3, it may have some industrial purpose or medical
purpose or some other purpose that the schedule defines the degree of
control over that substance by the DEA. It's not just 1 is the worst
and 5 is the least worst. It's very complicated and a lot of it is
that most people look at it as a law enforcement issue, but the
scheduling really is a product of overall regulation of
pharmacological products, how they are used, how they are treated as
an administrative matter by the DEA and FDA."

Wagner noted that the process by which drugs are scheduled is not done
by the DEA and that the recent denial of a petition to move marijuana
off Schedule 1 involved several agencies including the Department of
Health and Human Services and the Food and Drug Administration.

"It's done by HHS and the FDA plays a role. They review all the
literature. They determine if there are any scientifically proven
uses, what are the costs and benefits of those uses, what are the long
term dangers versus the short term dangers, how does it affect young
people, addiction issues and what is the potential to be diverted,"
Wagner said. "All of those factors go into it. Ultimately, HHS
determined that while there is some scientific evidence that it has
some medical properties and some benefit there are also a lot of
studies that show it has a negative effect. It is a very complicated
substance. We don't currently have a scientifically proven basis in
which to classify it as a lower schedule drug that has medical benefits."

The decision to deny the rescheduling says in essence that marijuana
"has no currently accepted medical use in treatment in the United States."

For the complete denial response from the government, visit the
Federal Register website at www.gpoaccess.gov and search for medical
marijuana.

There is disagreement within the medical and legal community on the
medical uses of marijuana.

A 1988 decision by DEA administrative law judge Francis Young, for
example, concluded that "The evidence in this record clearly shows
that marijuana has been accepted as capable of relieving the distress
of great numbers of very ill people, and doing so with safety under
medical supervision."

Americans for Safe Access, an organization that supports medical
marijuana, recently gave the Obama adminstration an "F" on its annual
government report card for medical marijuana. ASA claims the
administration is ignoring a large body of scientific evidence that
supports medical marijuana. For more information, visit the website at
www.safeaccessnow.org.

Abortion and Constitutional Issues

Roe vs Wade established the constitutional right of a woman to have an
abortion under certain broad guidelines. Several states have passed
laws further restricting the right to and the conditions under which
women may obtain abortions. Wagner said the Attorney General's office
is limited on where it can intervene in constitutional cases.

"It would really depend on the context under which it came up. We
don't have free floating authority to start a lawsuit on any
constitutional issue. We have to have some sort of federal interest,
and abortion is a very uniquely personal and private matter. There has
to be a case or controversy," Wagner said. "If we say, for instance,
we don't like that law in Kansas, we think it's unconstitutional, the
courts are not going to entertain a lawsuit that says the US says the
law is unconstitutional and the state says it's not. There has to be
some actual aggrieved person, some actual harm. What can happen is
that an individual in the state of Kansas who is denied her rights
under Roe v Wade sues the state of Kansas and we can file an amicus
brief that says we support the plaintiff."

Wagner explained that an amicus brief is a support of the plaintiff,
not a party to the suit. Where a federal interest may be involved,
such as federal funding or a clear federal function, then the
government could be an active party to a suit. Wagner said the recent
federal suit against the stringent Arizona immigration laws was such a
case where the federal government has a clear constitutional mandate
to secure the borders.

Financial crimes

Wagner said the Department of Justice has broad authority over
financial crimes such as securities, investment and mortgage fraud. As
the country is geographically divided for investigation and
prosecution purposes, Wagner said he has not been involved in the high
level Wall Street investigations.

"I'm responsible for what occurs here in California. My efforts have
been focused in the mortgage fraud area," Wagner said. "We have done
tons of mortgage fraud prosecutions against real estate professionals,
people like appraisers, mortgage brokers and bank employers who were
complicit in mortgage fraud. In the last two years we have charged
probably 100 people in the mortgage fraud area."

Although not directly involved in the Wall Street investigations,
Wagner said "there is a lot of understandable frustration and anger at
companies that were engaged in high finance."

"There have been some very significant prosecutions, but in the
criminal realm there is a very significant difference between
wrongdoing as a general matter and a provable criminal fraud offense,"
Wagner said. "Trying to show that is difficult when you are talking
about executives that are well advised by counsel, surrounded by
experts, economists, lawyers and others every step of the way. Trying
to show a criminal act is going to be difficult. Part of what got us
into this mess was a lot of reckless behavior on Wall Street that was
not necessarily criminal. That's not to say we're not looking at them.
The outrage that people have is understandable, I share it, but it
doesn't necessarily mean there will be a head on the wall at the end
of the day."

For more information on the activities of the Department of Justice,
visit the website at www.justice.gov .