CASHING IN ON THE DRUG WAR | News | Phoenix | Phoenix New Times | The Leading Independent News Source in Phoenix, Arizona


In the spring of 1987, when the antics of Governor Evan Mecham dominated the news, a combination of skillful salesmanship, tough new laws and blind luck was quietly propelling the state to the front lines of the budding national "war" on drugs. Nearly four years later, the drug war is...
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In the spring of 1987, when the antics of Governor Evan Mecham dominated the news, a combination of skillful salesmanship, tough new laws and blind luck was quietly propelling the state to the front lines of the budding national "war" on drugs.

Nearly four years later, the drug war is big news. But there is sharp disagreement--even among law-enforcement officials--about the highly publicized crusade. No one knows exactly how much money is being spent on the war--and there are disputes about even what kind of "drug abuse" should be the target. Chief gubernatorial drug aide Jack ("I am not a drug czar") Moortel makes a "rough estimate" that $40 million to $50 million a year is spent on the drug war in Arizona. He ruefully likens the situation to "playing football without a scoreboard."

But some results are in. In Arizona, the war has succeeded in making hundreds of thousands of dollars for consultants, building a new bureaucracy that has spent tens of millions of taxpayer dollars on police and prosecutors, and forging national reputations for politicians and ambitious law-enforcement officials.

Indisputably, one of the winners so far is John Blackburn, a cop-turned-consultant who made his bureaucratic bones by helping dish out federal funds to Arizona law-enforcement agencies in the Seventies. In 1987, Blackburn was hired by the Arizona Criminal Justice Commission to write the state's strategy for getting drug-war funds and distributing them. Then he was hired by the Maricopa County Attorney's Office to apply to the ACJC for those funds.

Since then, Blackburn--a former campaign aide to Maricopa County Attorney Richard Romley--has netted almost $200,000 in three consulting contracts with the County Attorney's Office, none of which he got through competitive bidding.

For the past couple of years, the ACJC has pumped about $1 million a month of drug-war money into the criminal-justice system, and the Maricopa County Attorney's Office has been a prime beneficiary. Ralph Milstead, the state's former Department of Public Safety director, sneers at Romley's award-winning Do Drugs/Do Time program and its preoccupation with marijuana busts. Milstead calls the drug war a "hoax." But just last week Milstead, who chairs the Arizona Drug Enforcement Task Force, put his formal stamp of approval on plans by the little- known Arizona Criminal Justice Commission to continue waging the war the same way it's been conducted for nearly four years. Inexplicably, no one in Arizona government is taking an overall look at the problem of drug abuse and deciding where to spend the money.

"If we came in with some far-reaching ideas, we'd probably get turned down," Milstead says. "That's not what the feds want. What we were approving is a strategy to get federal money. I may not like it, but we have to pander to the feds."

An undeniably large part of the drug war is nothing more than the usual bureaucratic money grab.

In the Seventies, federal money was doled out in Law Enforcement Assistance Administration grants to police and prosecutors. Under President Jimmy Carter, that well went dry. Now, the magic word is "drugs."

"It's a fact that if we mention the word `drugs' in our applications for this grant or that grant, we have a much better chance of getting our money," says one Arizona criminal-justice bureaucrat. "We would be stupid not to take advantage of that."

Arizona law-enforcement officials pitched their drug war as eventually self-supporting. Now they admit that was merely a sales pitch. Because the war is still dependent on government funding, officials have to try to justify their programs to federal officials and state legislators.

The effectiveness of those programs is impossible to determine.
State law requires the Arizona Criminal Justice Commission, the state agency funneling drug-war funds to law enforcement, to produce an annual report by October 31 of facts and figures about the drug war. But no report was issued for fiscal year 1989. Nor was a report issued for fiscal year 1990, which ended last June. Officials had promised that a two-year report would be published later this month or perhaps early next year. Now, citing Arizona's confused gubernatorial situation, the commission wants to delay that report until February or March, after a new governor is finally elected.

Even when status reports on the drug war are released, the data are often either misleading or meaningless.

To some, the drug war's unaccountable bureaucracy has taken on a life of its own.

"There is the possibility that we've created this monster ourselves," says veteran corrections official Rex Herron, an assistant to Department of Corrections director Sam Lewis. "That monster has to be fed and fed in order to survive. We're creating such a beautiful industry to combat drugs. You have to go out and get fodder for that industry . . . and it's not in the interests of the industry to let you know exactly how much it's pulling in."

The ACJC, whose members consist mostly of law-enforcement officials but no members of the general public, plays a key role in Arizona's drug war. Where does its money come from? Federal and state allocations, plus drug fines. Where does the money go? From its first actual allocations in April 1988 until June 30, 1990, the commission has doled out $25.5 million--almost $1 million a month--to prosecutors, police, courts, prisons and a cluster of antidrug task forces with catchy names like PANT, MANTIS, MAGNET, and BAG.

Other than the state court system, the Maricopa County Attorney's Office has been the biggest recipient of ACJC funding. With its first grant of money, the office, then under County Attorney Tom Collins, established in 1988 a special force of prosecutors headed by then-deputy county attorney Richard Romley. In the current fiscal year, the office, now headed by Romley, is receiving about $1 million. The County Attorney's Office has used that money to pay the salaries of thirteen new prosecutors and support staff--most of its narcotics bureau's personnel costs.

The system works well, says Rex Holgerson, executive director of the ACJC. Law-enforcement agencies use the ACJC to get funding for personnel to, among other things, seize cash and property of alleged drug dealers. Money from the forfeited assets is used by police and prosecutors for operational expenses of conducting the drug war, says Holgerson.

Seized assets in Maricopa County eventually wind up as money deposited in the county's antiracketeering--or RICO--fund, from which each agency takes its share--depending upon its work in either seizing assets or prosecuting cases that have yielded seizures. In the fiscal year ending June 30, the Maricopa County Attorney's Office's transferred $590,000 from the RICO fund to its own account. The pace has stepped up. From July 1 through October 31, the County Attorney's Office transferred $450,000 to its own account.

(Romley would not respond to interview requests or specific written questions from New Times regarding this money or Blackburn's consulting contracts. "Sometime when there's no article, we'll go to lunch and talk," he told a New Times reporter before refusing further comment.)

Does this money do its job of fighting drugs? The ACJC and local law- enforcement agencies perform fancy number crunching, but some of the state's drug warriors freely admit that the statistics they trumpet to plead their cases are often either exaggerated or incomplete.

A preliminary report by the ACJC notes that from April 1988 through June 1990, the agency doled out $7.9 million in grants to police agencies for "apprehension," and the total amount of assets seized during the same period from "drug traffickers" was $31.8 million. Dividing the amount of grants into the amount seized, the report then says: "We find that for every dollar of grant money expended, there is a loss to drug traffickers of $4.02."

Such figures look nice, clean and simple. They're easily digestible for politicians and the public. But they are meaningless. Rex Holgerson calls the estimate of $31.8 million in seized assets "totally unreliable"--as are most estimates of the value of such seized assets as property and cars. A more realistic figure, he says, would be one tenth that amount.

"If you are getting frustrated trying to put all the stats together, it's because that is a nearly impossible task," says Cameron "Kip" Holmes, assistant attorney general in charge of the state's Forfeiture Support Project. Holmes' unit works on seizing assets of suspected drug offenders. "Without all the stats," he adds, "it is difficult, frankly, for the public or the press to dwell on them. What is important here is that we get the job done, not that every number is in exactly the right place."

What constitutes "getting the job done"? No one can say. The drug war's white-collar soldiers sometimes answer that question with another question that they know can't be answered: "What is an `acceptable level' of drug abuse in society?" No one knows when victory can be declared--or even what a victory would be.

"In the bureaucratic world, you do have to try to quantify everything," acknowledges Rex Holgerson, adding, "It's up to you and I to interpret the data."

Interpretation also is the hang-up when it comes to deciding what constitutes "drug abuse." Ironically, it's the law-enforcement officials--not the behavioral-health people--who most often speak of the drug problem in medical terms by calling it an "epidemic."

Social-service, public-health and education agencies tend to consider drugs and alcohol as an inseparable public-health problem of "chemical abuse" or "substance abuse." Law-enforcement types, on the other hand, focus on the crime problems associated with drug abuse. They point out that alcohol is legal--at least for adults--and that police and prosecutors must focus instead on "controlled substances" such as drugs. But which kind of drug abuse gets priority? Marijuana smokers at rock concerts? Crack users in South Phoenix? Big-time dealers?

The target of the Maricopa County attorney's drug war has changed since 1987, when then-County Attorney Tom Collins initially applied to the ACJC for funding.

Originally, the office's Special Narcotics Prosecution Group aimed at "establishing a group of prosecutors . . . who will target and direct their total efforts to the . . . prosecution of major narcotic traffickers and offenders." The "primary goal" was "to reduce the supply" of drugs by "targeting major narcotic dealers-offenders." The "secondary goal" was to use forfeiture and seizure laws against offenders.

By the time Romley took office in early 1989, the special force, now called the Narcotics Bureau, also aimed to "make the user accountable." The latest statistics, although as open to question as all others in the drug war, indicate that marijuana busts are the most common focus.

Veteran cop Ralph Milstead, who as DPS director chaired the ACJC in 1987 when it produced John Blackburn's drug-war strategy, scoffs at the direction the war has taken.

"You should look at the Criminal Justice Commission and look at the money that's been spent on our local drug war," says Milstead, now a top aide to Governor Rose Mofford. "If you look at those reports, you'll see that most of the arrests are made on marijuana violations. Is marijuana bad? No, marijuana is probably the least dangerous of all the drugs we're talking about. It's just easy to make marijuana arrests.

"The money is there for battling drugs, and it's like pulling teeth to get them to put it into education programs. Most of the effort is going towards marijuana."

Unfortunately, says Milstead, such realistic prevention programs as DARE--the antidrug classes for schoolchildren--often don't get their share of funds. "The DARE program's successful," he says, "but half of the schools aren't even covered."

Where law enforcement is concerned, however, there always will be a flashy cause for which to raise money.

Noting the recent criminal penalties placed on possession of milk crates, Milstead speculates tongue-in-cheek that maybe the Next Big Thing will be "Do Crates/Do Time."

JOHN BLACKBURN IS a "skilled fund raiser--very skilled," says Rex Holgerson. "When I say `skilled fund raiser,' it's a compliment. I hope I am one, too. Although `fund generator' is maybe a more appropriate word. `Fund raiser' has a political-campaign connotation."

chris: this is a fix for FORFEIT feature. thanks, kim

In September, the Arizona Attorney General's Office made headlines.
Early that month, the Attorney General's Office won what it called a major battle in the state's ongoing drug war by securing a judgment against reputed drug kingpin Isidro Ibarra Chaidez. The verdict allowed the state to confiscate $1.8 million in property and cash Ibarra allegedly earned from the sale of cocaine and marijuana.

In fact, Blackburn did work on Republican Richard Romley's successful campaign for county attorney in 1988. Blackburn was paid $79,000 by Romley's office for nine months of consulting work from September 1, 1989, to May 30, 1990. He currently is in his third consulting contract with the County Attorney's Office, working as Romley's "special assistant"; he is scheduled to make $98,000 for a twelve-month period that started this past September. Neither Romley nor Blackburn was "available" for comment on specific questions concerning Blackburn's contracts with the county, according to Romley press aide Bill FitzGerald.

In an earlier interview with New Times, Romley acknowledged that Blackburn's contract "is a hefty amount."

"But I'm gonna tell you straight out," Romley said, "that on all the issues to do with the criminal-justice system, he has such a background--doctoral degree in public administration, highly respected by law enforcement, understands all components of the criminal-justice system."

Romley added, "In this office, if I wanted to take a leadership role, we've got to hire the best. We pay sometimes to get the best . . . but to be quite frank, the county manager makes more money."

However, Romley himself makes less.
Acknowledging that Blackburn worked on his 1988 election campaign, Romley said, "He had faith in me, I guess--and there will be that tag, of course. `Campaign worker gets--.' That's bullcrap. That's not a fair tag. It's fair to perhaps point that out; but to sit there and to imply that, well, I'll tell you on the record: Tom Collins wanted a job here and I told him no. My number one priority is that nobody gets special attention."

Blackburn's contracts have not been put up for competitive bidding--and under county rules they haven't had to be because Romley submitted a special "justification" letter stating "there is no other reasonable alternative source available to provide this specialized service."

Romley's August 15, 1990, letter on behalf of Blackburn is a marvel of bureaucratic jargon about Blackburn's "specialized professional services" and such tasks as "interagency liaison, management analysis, fiscal analysis, and evaluation of the effectiveness of projects and programs."

The contracts have been routinely approved by the county Board of Supervisors. Insiders say the supervisors wouldn't normally interfere with another elected official's plans to hire a consultant as "special assistant"--especially since the assistant is netting millions of dollars in federal and state grants.

The contracts between Blackburn and the County Attorney's Office tout his grant-seeking abilities. But his job is made easier because Romley serves as chair of the Arizona Criminal Justice Commission. In short, Blackburn has been accountable only to the county attorney. Since the beginning of 1989, that person has been Romley, who says, "I'm absolutely confident about John Blackburn. I'm lucky to have him."

REX HOLGERSON, A CONGENIAL federal Drug Enforcement Administration agent who found a new career as a key player in Arizona's drug-war bureaucracy, calls his own situation one of those "nicely timed natural things."

Spurred by story after story in the national press about cocaine and its fast-food cousin "crack," Congress in 1986 passed the Anti-Drug Abuse Act, making millions of dollars available to local governments for fighting drugs.

Arizona was in political upheaval in the Mecham Era, but some of the drug trade already had shifted to the Southwest from Florida, and a drug war was the one thing that Governor Mecham, Chief Assistant Attorney General Steve Twist and lawmakers agreed upon during the 1987 session of the Arizona Legislature. As a result, stringent antidrug laws--many people have called them among the nation's toughest--were passed.

Meanwhile, the nation's advertising agencies founded the Partnership for a Drug-Free America. In early 1987, the ad people formally entered the drug war with the first blitz of a $300 million campaign of slickly produced public-service announcements aimed at producing a "consensus of intolerance" regarding drugs.

It was during this time that, after nearly three decades as a federal drug agent, Rex Holgerson was ready to retire. He had persuaded his bosses in the Drug Enforcement Administration to transfer him in 1986 from the agency's D.C. headquarters to Phoenix, where he would work for a year and then leave.

In Holgerson's words, he was "looking for a place to alight." The Mecham Administration obliged him in the spring of 1987. "They approached me," he recalls. "I was ready."

Things started to move quickly. On July 29, 1987, the Arizona Criminal Justice Commission--until that time a very minor state agency--issued "Arizona's Drug Enforcement Strategy," a blueprint to show the federal government that Arizona had a battle plan to fight the war. John Blackburn was the chief consultant on the blueprint; Rex Holgerson also worked on it.

On August 18 of that year, Arizona's strict new drug laws took effect, strengthening the police and prosecutors' hand by increasing penalties and ordering mandatory prison terms.

On August 24, John Blackburn began a ten-week contract with the office of Maricopa County Attorney Tom Collins to apply for funding from the Arizona Criminal Justice Commission. He was to be paid $15,000 from the county's RICO funds.

On October 10, Blackburn submitted the successful grant application to the ACJC for approximately $1 million to set up the special antidrug team under Collins deputy Richard Romley.

Also in October 1987, Rex Holgerson went to work for the ACJC as the drug coordinator. "I figured this was where the money was going to be, and that is what happened," he says. In February 1990, Holgerson became the commission's executive director at an annual salary of $65,000, serving at the pleasure of a board chaired by Romley.

Since the summer of 1987, other fortunate events have happened to Arizona's drug warriors. In September 1989, President George Bush declared war on crack, fueling intensive media publicity and shaking loose federal dollars. Phoenix Police Chief Ruben Ortega was named to Bush's Drug Policy Council. The national press latched onto Maricopa County's Do Drugs/Do Time program as a national model of "user accountability."

Earlier this year, the National Association of Counties honored the Maricopa County Attorney's Office for its drug war. Showy busts such as those at the Paul McCartney concert last April 4 garnered national publicity.

A few days after the McCartney concert busts, national drug czar William Bennett visited Phoenix, full of praise for local officials, who proudly took him on a tour of a warehouse filled with assets seized from suspected drug offenders.

Also last April, New York City adman Jonathan Cohen from the Partnership for a Drug-Free America hit Phoenix on his barnstorming tour of U.S. ad agencies. At a breakfast gathering at Cramer-Krasselt Agency in north Phoenix, Cohen complained that "drug dealers are out-marketing us," adding, "We are uniquely capable of unselling Americans on drugs. America is our client." Cohen declared that the ad campaign already was a success, but that $365 million worth of antidrug ads still were needed to fight the war.

Asked recently how he thought the drug war was going, Superior Court Judge William Schafer III, a longtime prosecutor in the Attorney General's Office, replied: "It's always been `Give us more money, we're gonna beat whatever it is we are fighting.' . . . Every drug bust is the biggest in the county, a myth that the media perpetuate. People tell themselves, `They must be winning something. It was the biggest bust ever.'"

ARIZONA'S ANTIDRUG STRATEGY, formulated in 1987, is still a thing of beauty to Rex Holgerson. But it may not be a joy forever.

"Czar Bennett, when he was here, said Arizona had one of the best strategies of taking money and quickly putting it to use," Holgerson recalls.

Now, however, Bennett is leaving his job, having declared a victory of sorts, and the fever of war may be cooling off.

Even veteran warriors like Holgerson are thinking of changes in terminology.

"I believe `drug war' is getting to be in the buzzword-passe area," says Holgerson. "Law enforcement is still using it. The problem is still there."

And it has been for decades, say people like Ed Zborower, a behavioral-health official in the state Department of Health Services, which last fiscal year allocated about $9.7 million in state and federal money for programs to fight drugs. That compares with about $11.7 million in the fight against alcohol abuse. How much money is spent overall by DHS on the drug war? The situation is complicated because DHS funnels federal and state money to private agencies instead of operating the programs itself. In addition, the DHS also allocated about $4.8 million last fiscal year to "prevention" programs, which primarily deal with substance abuse.

Spurred by such grim statistics as the high rate of teen suicide in Arizona, legislators recently have increased spending on children's services. In the last fiscal year, Zborower says, almost $15 million was allocated in that area. "You can't say it's all mental health or all drug or alcohol," he says.

In Maricopa County, the DHS allocates money to three main private agencies--CODAMA, CCN, and the East Valley Behavioral Health Association--that in turn dole the money to smaller firms that actually provide counseling, treatment or other programs. In many instances, the private agencies put up matching funds from local governments, client fees, insurance or donations. Zborower says the highly publicized fight against drugs has had a "good impact" as far as freeing up more federal money. But Zborower chuckles when asked about the "drug war." "Are people still using that term?" he says. Zborower prefers to view drug abuse as "a continuing health problem that has waxed and waned over the past century," with the drugs of choice changing from generation to generation.

Such cops as Ralph Milstead agree, and history bears them out. Twenty years ago, newspapers and police in Arizona warned of a widespread drug problem, based on a spiraling number of arrests. According to a 1970 report, roughly a third of all court cases filed by the Maricopa County Attorney's Office in 1969 involved drug-related offenses. That's the same proportion that caused a stir in the late Eighties.

"There's been lots of federal money thrown at the drug problem--in eradication, interdiction and arrests--and it has little effect on the drugs available," says Milstead. "There's an ebb and flow. The drugs change. I've been following it for thirty years."

Holgerson, perhaps because he's a former DEA agent, sees it a little differently. "Maybe drugs of choice come and go," he says, "but I don't think the `fad' has ever come before where you have a thirteen-year-old addict standing on a corner with a machine gun. Yes, he's a public-health problem, but he's also a danger to society."

Holgerson says it may be true that, as others say, cocaine use actually peaked in 1979. But he contends that there is a "growing hard-core" of serious cocaine abusers who represent a growing crime problem. As usual in the paperwork of a drug war, Holgerson must justify that suspicion with statistics if he wants to keep the money coming in.

Federal funding into the commission's Drug Enforcement Account increased from $5.8 million in fiscal year 1990 to $6.2 million in the current fiscal year, and Holgerson bravely says he expects next year's appropriation to be "at least at this level."

In any event, Holgerson knows the law-enforcement side of the drug war is not self-supporting, as he and others publicly hoped a few years ago that it would be. "That was a good selling point for us," he says. "But I don't think there was any illusion in anyone's mind that this is building a permanent bureaucracy."

The commission's current survey of drug use, which is scheduled to be released later this month, could help decide what the scope of the drug problem is in Arizona. But Rex Holgerson already knows the arguments for continuing the drug war regardless of the survey's findings.

If the results show that drug use is about the same, Holgerson says, the funding levels should stay the same. If they show a decline, the funding still should stay the same, he contends, figuring that two or three years of such encouraging results would be needed.

Such reasoning--with figures to back it up--is an "an occupational disease" among bureaucrats, says Holgerson.

But not every drug warrior suffers from the mania to juggle figures. Kip Holmes, who leads the Forfeiture Support Project for the Arizona Attorney General's Office, explains his view of accountability this way:

"If you accept the terms we have been given, if you are thinking in terms of a war, which is how the drug situation has been formatted, then oftentimes you have to accept some of the conditions of a war, which means that not all the information is readily available or kept consolidated and tidy for consumption.

"That's not to say there doesn't need to be accountability--there does. But in a war, counting up every single bullet as it is used is not the first priority."

"We were approving a strategy to get federal money. I may not like it, but we have to pander to the feds," says Ralph Milstead.

Arizona law-enforcement officials pitched their drug war as eventually self-supporting. Now they admit that was merely a sales pitch.

Some of the state's drug warriors freely admit that their statistics are often either exaggerated or incomplete.

"What is important here is that we get the job done, not that every number is in exactly the right place," says prosecutor Kip Holmes.

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