Helen Cox Richardson’s update – fentanyl

According to the DEA official, the Chapitos started the manufacture and trafficking of street fentanyl and are behind the flood of it into the U.S. in the past 8 years. It is a global business. While illicit drugs used to be plant-based, newer ones like street fentanyl are made with synthetic chemicals. The cartels import the chemicals necessary to make fentanyl from China into Mexico and Guatemala. Then they manufacture the drug, distribute it in the U.S., and launder the money, much of it through cryptocurrency.

They have hundreds of employees and are equipped with military-grade weapons. The Department of Justice added that they “allegedly used cargo aircraft, private aircraft, submarines and other submersible and semi-submersible vessels, container ships, supply vessels, go-fast boats, fishing vessels, buses, rail cars, tractor trailers, automobiles, and private and commercial interstate and foreign carriers to transport their drugs and precursor chemicals. They allegedly maintained a network of couriers, tunnels, and stash houses throughout Mexico and the United States to further their drug-trafficking activities…to import the drugs into the United States,” where they kill as many as 200 people a day.

Rather than simply targeting individual traffickers, which would leave the operation intact, the DEA mapped the cartel’s networks in 10 countries and 28 U.S. cities. Its officers identified the cartel’s supply chain and all its leaders, including the people in China and Guatemala supplying them with chemicals to make the illegal fentanyl, the production managers, the enforcers around the world, the trafficker leaders who moved both drugs and guns, and the money launderers.

That information has enabled the Department of Justice to bring new charges against 28 of the cartel’s key figures (some were already facing charges) for fentanyl trafficking, narcotics, firearms, and money laundering. Seven of them were arrested in Colombia, Greece, and Guatemala several weeks ago and are in extradition proceedings. Mexican authorities arrested Ovidio even before that.

At the same time, the State Department increased the reward money offered for information that leads to the arrest or conviction of drug traffickers operating in other countries, and said it is working with partners to disrupt the supply chain for the drug’s manufacture, by which it appears to mean the precursor chemicals and manufacturing equipment coming from China. The White House also released a joint statement from Canada, Mexico, and the United States vowing to work together to stop the inflow of chemicals and manufacturing equipment to Mexico from China, a vow that somewhat gives Mexico a way to deflect blame for the crisis away from the factories in its own country to the supply chains based in China.

The Department of Homeland Security noted today that seizures of illegal fentanyl by U.S. Customs and Border Protection are up 400% since September 2019 and continue to increase. DHS has seized more fentanyl and arrested more traffickers in the past two years than it did in the previous five.This increased interception comes from new inspection equipment to find the drug in vehicles, and also from a focus on finding those incoming chemicals in plane and ship cargoes. It has also focused on catching equipment—pill presses, for example—whose loss stops production.

In March the Department of Homeland Security announced Operation Blue Lotus, which in its first month of operation seized more than 2,400 pounds of illegal fentanyl at U.S. ports of entry—as well as more than 3,500 pounds of methamphetamines and nearly 1,000 pounds of cocaine—and arrested 156 people. CBP has captured another 800 pounds of fentanyl. To build on these operations, the Department of Homeland Security has stationed labs at ports of entry to test substances instantly.

Notably, the Treasury Department added its own weight to this effort. It announced sanctions against two companies in China and five people in China and Guatemala who, they allege, provide the Mexican cartels with the chemicals to make fentanyl. Acknowledging that it’s been hard for U.S. officials to talk to their counterparts in China, administration officials say U.S. diplomats have been working with friends and partners to pressure China to stop the export of the chemicals that make drugs not only because it hurts the U.S., but because it is hurting the world.

Asking for support against drug trafficking on moral grounds is fair enough, but the sanctions against the chemical producers and the money launderers will bite. All properties the sanctioned companies and people have in the U.S. are blocked; their owners cannot do business with anyone in the U.S.

For all that the effort to neutralize the scourge of illegal fentanyl is vital to our country, what jumped out at me about this story was the power of the Treasury Department to disrupt what drug trafficking is really about: money. At the end of the day, for all their violence and deadliness, the Chapitos are businessmen, and the U.S. can cut them off at the knees through our financial power.

But that power is not guaranteed. Today, Sarah Ferris and Jordain Carney of Politico reported that House speaker Kevin McCarthy and House Republicans continue to insist they will refuse to lift the debt ceiling unless they get massive spending cuts and policy changes. These are not normal budget negotiations, which Biden and the Democrats welcome, but a threat to let the U.S. default on its debt. Their willingness to hold the Treasury hostage until they get their way threatens to rip the foundation out from our global financial power.

As I read about the U.S. Treasury sanctions on fentanyl supply chains today and then thought about how Treasury sanctions against Russia have hamstrung that nation without a single shot from U.S. military personnel, I wondered if people really understand how much is at stake in the Republicans’ attack on our financial system.