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Business at the crossroads of a crisis


By Erin Moriarty
Atlanta Business Chronicle
Updated: 7:00 p.m. ET Jan. 29, 2006


Atlanta is at the crossroads of a major drug epidemic.

The capital of the South has become the main distribution hub on the East Coast for the illegal drug methamphetamine made by Mexican cartels, law enforcement officials say.

Atlanta is attractive to the cartels, officials say, for the same reasons it is attractive to businesses: It's a strategic location with access to major interstate highways.

More than 90 percent of the meth in Georgia now comes from Mexican cartels, the U.S. Drug Enforcement Administration estimates. This indicates the problem has evolved dramatically from the mom-and-pop meth labs that have plagued rural Georgia.

"It's the big Mexican drug organizations that are the heart of the problem and the real long-term threat," said David E. Nahmias, U.S. Attorney for the Northern District of Georgia.

The cartels specialize in "ice," which is a crystallized and more potent form of meth.

The meth epidemic presents not only a social threat, but also an economic peril because businesses will bear much of the burden, say some experts. Meth already is making itself at home in the workplace and eating employers' profits.

Once stereotyped as a drug abused by truck drivers and students who needed to stay up late, meth has become far more mainstream and its use has soared in the workplace. The percentage of American workers who tested positive for amphetamines such as meth nearly doubled from 2001 to 2005, according to data from Quest Diagnostics Inc. (NYSE: DGX), the nation's leading provider of employer drug testing services.

A recent study sponsored by the Wal-Mart Foundation of one county in Arkansas found each meth-using employee costs his or her employer $47,500 a year in terms of lost productivity, absenteeism, higher health-care costs and higher workers' compensation costs.

Meth offenders are saddling Georgia taxpayers with a hefty tab as they bombard local sheriff's departments, squeeze into state prisons and collapse into hospital emergency rooms with a bevy of meth-induced health problems.

The number of people sent to prison in Georgia for meth offenses soared 250 percent from 2000 to 2005, according to the Georgia Department of Corrections. The drug has made such an impact that even if nobody else ever was sent to prison in Georgia for a meth offense it would cost taxpayers $382 million to incarcerate those meth offenders currently in jail, says Brian Owens, assistant commissioner of the Department of Corrections.

Statewide, the number of Georgians being admitted to hospitals or enrolling in community treatment programs for meth jumped 50 percent between 2003 and 2004.

Over the next three weeks, Atlanta Business Chronicle will explore the origins of the new meth epidemic, examine its impact on employers and the workplace, and illustrate the burden it will put on already-strained health-care providers and prisons. We also will show how the demographics of the meth epidemic could evolve in Atlanta in a way that has not been seen in other cities. Then, we will conclude by asking Georgians on the front lines of the epidemic what can be done to attack the problem and protect Georgia from the devastating social and economic impact of the drug.

"Meth is a terribly destructive drug. It ravages the body and has damaging consequences for any community it enters," said John Walters, President George W. Bush's national drug czar. "We need to work together to prevent the spread of this dangerous substance."

Made in Mexico?

In February 2005, the DEA made an alarming discovery in Smyrna -- a "superlab" or a lab that can make 10 pounds or more of meth per batch or per "cook." Such labs are typically only found in Mexico and California.

Three illegal immigrants from Mexico were arrested at the lab, which contained more than 10 pounds of "ice" or crystallized methamphetamine, 39 pounds of meth and empty packets from 240,000 pseudophedrine pills used to make meth.

Then just a month later, in March 2005, the DEA and local law enforcement officers made a record seizure in Lawrenceville of 174 pounds of ice methamphetamine -- the largest-ever meth seizure on the East Coast and the 15th-largest nationwide. An illegal immigrant from Mexico was arrested at a home in Lawrenceville in connection with the drugs, which had a street value of $6.3 million to $17.7 million, according to the DEA.

"The onslaught of methamphetamine and ice in metropolitan Atlanta is unfortunately exemplified with this seizure," said Sherri Strange, special agent in charge of the DEA's Atlanta field division, after the bust. "The gravity of this situation must not be underestimated."

In October, the DEA arrested 28 people allegedly involved in a Mexican drug organization that the DEA says was distributing cocaine and meth to metro Atlanta, as well as Florida, the Midwest and Mid-Atlantic states.

As Georgia and many other states have clamped down on local meth labs and restricted sales of the ingredients used to make meth, Mexican crime organizations have seized the opportunity to supply the inexpensive and highly addictive drug.

The cartels make it in superlabs in Mexico and slip it across the border, but they also covertly set up superlabs in suburbs like Smyrna and manufacture it right here.

The Mexican cartels now supply 65 percent of the meth used illegally in the United States, according to DEA estimates. Georgia's concentration is much higher, at more than 90 percent.

Just like a corporation looking for a strategic location, the Mexican drug cartels have staked out Atlanta as a prime place for doing business and an ideal distribution hub.

"Atlanta has taken on such an important strategic role to the Mexican organizations," Strange said. "We're in a strategic location where you can get anywhere on the East Coast from here."

Steve Whipple, acting assistant special agent in charge for the DEA's Atlanta field office, says the major cartels have hustled to make inroads in Atlanta.

"Atlanta has become so important that you are not considered a player in Mexico unless you have a presence in Atlanta," Whipple said.

Strange, who oversees 22 DEA offices in four states from Atlanta, says Atlanta has been the source for shipments going to Miami and New York. "It seems like recently almost every case we touch has some link back to Atlanta," she said.

To veterans of the war on drugs, it seems odd that Atlanta now supplies drugs to Miami, which once was considered America's cocaine capital.

"Right now Atlanta is the source city for drugs going to Miami," said Phil Price, special agent in charge of the regional drug enforcement office that covers North Georgia for the Georgia Bureau of Investigation.

Price said drug traffickers choose Atlanta because of interstates such as Interstate 20 and the convenience of Hartsfield-Jackson Atlanta International Airport.

"There are a lot of benefits to feeding into Atlanta," Price said. "The thing that people tend to forget is that this is a business ... you have a product going from point A to point B, and you have money that has to go back."

Further, Atlanta's booming Hispanic population has made it easier for the cartels to settle into Atlanta inconspicuously, say police and the DEA.

Atlanta's emerging role has caught the attention of those at the very top of America's anti-drug efforts.

"It's a new threat for Atlanta," said Walters. "It's rooted in the fact that Mexican criminal mafias have over the last five years increasingly used Atlanta as a distribution hub."

Seeking solutions
Nationally, drug enforcement experts have been working to cut off the supply of the ingredients used to make meth, such as pseudophedrine and ephedrine. Last year, U.S. authorities signed an agreement with several countries, including Mexico, to monitor sales of pseudophedrine products, Walters said. They're working on similar agreements with the Czech Republic, Germany, India and China, he said.

Meanwhile, the U.S. Congress is considering proposed legislation to combat meth. The meth problem also has caught the attention of state leaders. Georgia Gov. Sonny Perdue has proposed creating a $1 million meth task force with 15 agents from the Georgia Bureau of Investigation for fiscal year 2007.

The DEA's Strange, who began her career in California in the 1980s, has seen meth take its toll on communities as it has moved gradually from west to east.

"It's been like a wave coming across the country," said Strange, who has served 25 years with the DEA.

Some veteran narcotics investigators say the battle against Mexican meth is perhaps more challenging.

"Back in the 'Miami Vice' days, the people who dealt were pretty obvious. They had 100 Rolexes, nice homes and cars and they dealt in a lot of cash," said GBI veteran Price. "What we're seeing now is the [Mexican] dealers here look like they don't have two nickels to rub together. It's a different challenge."

Atlanta's meth trade also is different in that it hasn't made headlines in connection with deadly shootings, like crack did in the inner cities and powder cocaine did in Miami.

Price believes Georgia already has more meth-related violence than people realize -- especially among Hispanic immigrants.

"There's a tremendous amount of violence there that goes unreported," Price said. "You've got a built-in victim society because they're afraid of our government and police ... they don't understand that we're not like law enforcement in Mexico."

And Price fears more blood will spill.

"I think it's a given that it's going to become very violent -- there's a lot of money and there's a lot of conflict," Price said. "I think we'll see more of that and I think that Atlanta is prime for that."