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Stratfor: “When the Mexican Drug Trade Hits the Border”

20 April 2009

Here is another insightful article from Stratfor about one of the most important geopolitical dangers to America. 

Summary of previous analysis about Mexico on the FM site (see the links at the end for more information):

(1)  In 2005 the cartels began killing police chiefs (example here), showing that the cartels were growing beyond the government’s control.  In 2007 they began killing Army officers.  Now they torture and kill generals, and the violence has crossed the border into America (see this). 

(2)  The global depression will make things worse, esp later this year when their forward sales of oil expire — and they must live on declining production of $40 oil.  However bad things are in Mexico, the future looks far more grim.  For a snapshot, see “Mexico economy: Sinking deeper“, Economist Intelligence Unit, 31 Mexico 2009.

(3)  As Martin van Creveld said over a decade ago, Mexico might turn out to be the greatest threat to America’s sovereignty that we have even encountered.

When the Mexican Drug Trade Hits the Border“, Fred Burton and Ben West, Stratfor, 15 April 2009 — Posted with permission.

For several years now, STRATFOR has been closely monitoring the growing violence in Mexico and its links to the drug trade. In December, our cartel report assessed the situation in Mexico, and two weeks ago we looked closely at the networks that control the flow of drugs through Central America. This week, we turn our attention to the border to see the dynamics at work there and how U.S. gangs are involved in the action.

The nature of narcotics trafficking changes as shipments near the border. As in any supply chain, shipments become smaller as they reach the retail level, requiring more people to be involved in the operation. While Mexican cartels do have representatives in cities across the United States to oversee networks there, local gangs get involved in the actual distribution of the narcotics.

While there are still many gaps in the understanding of how U.S. gangs interface with Mexican cartels to move drugs around the United States and finally sell them on the retail market, we do know some of the details of gang involvement.

Trafficking vs. Distribution

Though the drug trade as a whole is highly complex, the underlying concept is as simple as getting narcotics from South America to the consuming markets — chief among them the United States, which is the world’s largest drug market. Traffickers use Central America and Mexico as a pipeline to move their goods north. The objective of the Latin American smuggler is to get as much tonnage as possible from Colombia, Peru and Bolivia to the lucrative American market and avoid interdictions by authorities along the way.

However, as narcotic shipments near the U.S.-Mexican border, wholesale trafficking turns into the more micro process of retail distribution. In southern Mexico, drug traffickers move product north in bulk, but as shipments cross the U.S. border, wholesale shipments are broken down into smaller parcels in order to hedge against interdiction and prepare the product for the end user.

One way to think about the difference in tactics between trafficking drugs in Central America and Mexico and distributing drugs in the United States is to imagine a company like UPS or FedEx. Shipping air cargo from, say, New York to Los Angeles requires different resources than delivering packages to individual homes in southern California. Several tons of freight from the New York area can be quickly flown to the Los Angeles area. But as the cargo gets closer to its final destination, it is broken up into smaller loads that are shipped via tractor trailer to distribution centers around the region, and finally divided further into discrete packages carried in parcel trucks to individual homes.

As products move through the supply chain, they require more specific handling and detailed knowledge of an area, which requires more manpower. The same, more or less, can be said for drug shipments. This can be seen in interdiction reports. When narcotics are intercepted traversing South America into Mexico, they can be measured in tons; as they cross the border into the United States, seizures are reported in kilograms; and by the time products are picked up on the streets of U.S. cities, the narcotics have been divided into packages measured in grams. To reflect this difference, we will refer to the movement of drugs south of the border as trafficking and the movement of drugs north of the border as distributing.

Mexican Drug Cartels (from Stratfor)

As narcotics approach the border, law enforcement scrutiny and the risk of interdiction also increase, so drug traffickers have to be creative when it comes to moving their products. The constant game of cat-and-mouse makes drug trafficking a very dynamic business, with tactics and specific routes constantly changing to take advantage of any angle that presents itself.

The only certainties are that drugs and people will move from south to north, and that money and weapons will move from north to south. But the specific nature and corridors of those movements are constantly in flux as traffickers innovate in their attempts to stay ahead of the police in a very Darwinian environment. The traffickers employ all forms of movement imaginable, including:

  • Tunneling under border fences into safe houses on the U.S. side.
  • Traversing the desert on foot with 50-pound packs of narcotics. (Dirt bikes, ATVs and pack mules are also used.)
  • Driving across the border by fording the Rio Grande, using ramps to get over fences, cutting through fences or driving through open areas.
  • Using densely vegetated portions of the riverbank as dead drops.
  • Floating narcotics across isolated stretches of the river.
  • Flying small aircraft near the ground to avoid radar.
  • Concealing narcotics in private vehicles, personal possessions and in or on the bodies of persons who are crossing legally at ports of entry.
  • Bribing border officials in order to pass through checkpoints.
  • Hiding narcotics on cross-border trains.
  • Hiding narcotics in tractor trailers carrying otherwise legitimate loads.
  • Using boats along the Gulf coast.
  • Using human “mules” to smuggle narcotics aboard commercial aircraft in their luggage or bodies.
  • Shipping narcotics via mail or parcel service.

These methods are not mutually exclusive, and organizations may use any combination at the same time. New ways to move the product are constantly emerging.

Once the narcotics are moved into the United States, drug distributors use networks of safe houses, which are sometimes operated by people with direct connections to the Mexican cartels, sometimes by local or regional gang members, and sometimes by individual entrepreneurs. North of the border, distributors still must maneuver around checkpoints, either by avoiding them or by bribing the officials who work there. While these checkpoints certainly result in seizures, they can only slow or reroute the flow of drugs. Hub cities like Atlanta service a large region of smaller drug dealers who act as individual couriers in delivering small amounts of narcotics to their customers.

It is a numbers game for drug traffickers and distributors alike, since it is inevitable that smugglers and shipments will be intercepted by law enforcement somewhere along the supply chain. Those whose loads are interdicted more often struggle to keep prices low and stay competitive. On the other hand, paying heavy corruption fees or taking extra precautions to ensure that more of your product makes it through also raises the cost of moving the product. Successful traffickers and distributors must be able to strike a balance between protecting their shipments and accepting losses. This requires a high degree of pragmatism and rationality.

Local Gangs

While the Mexican cartels do have people in the United States, they do not have enough people so positioned to handle the increased workload of distributing narcotics at the retail level. A wide range of skill sets is required. Some of the tactics involved in moving shipments across the border require skilled workers, such as pilots, while U.S. gang members along the border serve as middlemen and retail distributors. Other aspects of the operation call for people with expertise in manipulating corrupt officials and recruiting human intelligence sources, while a large part of the process simply involves saturating the system with massive numbers of expendable, low-skilled smugglers who are desperate for the money.

The U.S. gangs are crucial in filling the cartel gap north of the border. Members of these border gangs typically are young men who are willing to break the law, looking for quick cash and already plugged in to a network of similar young men, which enables them to recruit others to meet the manpower demand. They are also typically tied to Mexico through family connections, dual citizenship and the simple geographic fact that they live so close to the border. However, the U.S. gangs do not constitute formal extensions of the Mexican drug-trafficking organizations. Border gangs developed on their own, have their own histories, traditions, structures and turf, and they remain independent. They are also involved in more than just drug trafficking and distribution, including property crime, racketeering and kidnapping. Their involvement in narcotics is similar to that of a contractor who can provide certain services, such as labor and protection, while drugs move across gang territory, but drug money is not usually their sole source of income.

Mexico Gang Influence (from Stratfor)

These gangs come in many shapes and sizes. Motorcycle gangs like the Mongols and Bandidos have chapters all along the southwestern U.S. border and, while not known to actually carry narcotics across the border into the United States, they are frequently involved in distributing smaller loads to various markets across the country to supplement their income from other illegal activities.

Street gangs are present in virtually every U.S. city and town of significant size along the border and are obvious pools of labor for distributing narcotics once they hit the United States. The largest of these street gangs are MS-13 and the Mexican Mafia. MS-13 has an estimated 30,000 to 50,000 members worldwide, about 25 percent of whom are in the United States. MS-13 is unique among U.S. gangs in that it is involved in trafficking narcotics through Central America and Mexico as well as in distributing narcotics in the United States. The Mexican Mafia works with allied gangs in the American Southwest to control large swaths of territory along both sides of the U.S.-Mexican border. These gangs are organized to interact directly with traffickers in Mexico and oversee transborder shipments as well as distribution inside the United States.

Prison gangs such as the Barrio Azteca and the Texas Syndicate reach far beyond the prison fence. Membership in a prison gang typically means that, at one point, the member was in prison, where he joined the gang. But there is a wide network of ex-prisoner gang members on the outside involved in criminal activities, including drug smuggling, which is one of the most accessible ways for a gang member to make money when he is released from prison.

Operating underneath the big gang players are hundreds of smaller city gangs in neighborhoods all along the border. These gangs are typically involved in property theft, drug dealing, turf battles and other forms of street crime that can be handled by local police. However, even these gangs can become involved in cross-border smuggling; for example, the Wonderboys in San Luis, Ariz., are known to smuggle marijuana, methamphetamine and cocaine across the border.

Gangs like the Wonderboys also target illegal immigrants coming across the border and steal any valuable personal items or cash they may have on them. The targeting of illegal immigrants coming into the United States is common all across the border, with many gangs specializing in kidnapping newly arrived immigrants and demanding ransoms from their families. These gangs are responsible for the record level of kidnapping reported in places like Phoenix, where 368 abductions were reported in 2008. Afraid to notify law enforcement out of a fear of being deported, many families of abducted immigrants somehow come up with the money to secure their family member’s release.

Drug distribution is by far the most lucrative illicit business along the border, and the competition for money leads to a very pragmatic interface between the U.S. border gangs and the drug cartels in Mexico. Handoffs from Mexican traffickers to U.S. distributors are made based upon reliability and price. While territorial rivalries between drug traffickers have led to thousands of deaths in Mexico, these Mexican rivalries do not appear to be spilling over into the U.S. border gangs, who are engaged in their own rivalries, feuds and acts of violence. Nor do the more gruesome aspects of violence in Mexico, such as torture and beheadings, although there are indications that grenades that were once part of cartel arsenals are finding their way to U.S. gangs. In dealing with the Mexican cartels, U.S. gangs — and cartels in turn — exhibit no small amount of business pragmatism. U.S. gangs can serve more than one cartel, which appears to be fine with the cartels, who really have no choice in the matter. They need these retail distribution services north of the border in order to make a profit.

Likewise, U.S. gangs are in the drug business to make money, not to enhance the power of any particular cartel in Mexico. As such, U.S. gangs do not want to limit their business opportunities by aligning themselves to any one cartel. Smaller city gangs that control less territory are more limited geographically in terms of which cartels they can work with. The Wonderboys in Arizona, for example, must deal exclusively with the Sinaloa cartel because the cartel’s turf south of the border encompasses the gang’s relative sliver of turf to the north. However, larger gangs like the Mexican Mafia control much broader swaths of territory and can deal with more than one cartel.

The expanse of geography controlled by the handful of cartels in Mexico simply does not match up with the territory controlled by the many gangs on the U.S. side. Stricter law enforcement is one reason U.S. border gangs have not consolidated to gain control over more turf. While corruption is a growing problem along the U.S. side of the border, it still has not risen to the level that it has in northern Mexico. Another reason for the asymmetry is the different nature of drug movements north of the border. As discussed earlier, moving narcotics in the United States has everything to do with distributing retail quantities of drugs to consumers spread over a broad geographic area, a model that requires more feet on the ground than the trafficking that takes place in Mexico.

Assassins’ Gate

Because the drug distribution network in the United States is so large, it is impossible for any one criminal organization to control all of it. U.S. gangs fill the role of middleman to move drugs around, and they are entrusted with large shipments of narcotics worth millions of dollars. Obviously, the cartels need a way to keep these gangs honest.

One effective way is to have an enforcement arm in place. This is where U.S.-based assassins come in. More tightly connected to the cartels than the gangs are, these assassins are not usually members of a gang. In fact, the cartels prefer that their assassins not be in a gang so that their loyalties will be to the cartels, and so they will be less likely to have criminal records or attract law enforcement attention because of everyday gang activity.

Cartels invest quite a bit in training these hit men to operate in the United States. Often they are trained in Mexico, then sent back across to serve as a kind of “sleeper cell” until they are tapped to take out a delinquent U.S. drug dealer. The frequency and ease with which Americans travel to and from Mexico covers any suspicion that might be raised.

The Gaps

The U.S.-Mexican border is a dynamic place, with competition over drug routes and the quest for cash destabilizing northern Mexico and straining local and state law enforcement on the U.S. side. Putting pressure on the people who are active in the border drug trade has so far only inspired others to innovate and adapt to the challenging environment by becoming more innovative and pragmatic.

And there is still so much we do not know. The exact nature of the relationship between Mexican cartels and U.S. gangs is very murky, and it appears to be handled on such an individual basis that making generalizations is difficult. Another intelligence gap is how deeply involved the cartels are in the U.S. distribution network. As mentioned earlier, the network expands as it becomes more retail in nature, but the profit margins also expand, making it an attractive target for cartel takeover. Finally, while we know that gangs are instrumental in distributing narcotics in the United States, it is unclear how much of the cross-border smuggling they control. Is this vital, risky endeavor completely controlled by cartels and gatekeeper organizations based in Mexico, or do U.S. gangs on the distribution side have more say? STRATFOR will continue to monitor these issues as Mexico’s dynamic cartels continue to evolve.

Afterword

Please share your comments by posting below.  Per the FM site’s Comment Policy, please make them brief (250 words max), civil, and relevant to this post.  Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).

For information about this site see the About page, at the top of the right-side menu bar.

Other reports about Mexico

  1. Mexico: On the Road to a Failed State?“, George Friedman, Stratfor, 13 May 2008
  2. Mexico: Examining Cartel War Violence Through a Protective Intelligence Lens“, Stratfor, 14 May 2008
  3. Crime and Punishment in Mexico: The big picture beyond drug cartel violence“, posted at Grits for Breakfast, 18 May 2008
  4. After Action Report – Vistit Mexico“, General Barry R McCaffrey USA (Ret), 29 December 2008
  5. Mexico Security Memo – Year-end Wrap-up“, Stratfor, 5 January 2008
  6. The Long Arm of the Lawless“, Fred Burton and Scott Stewart, Stratfor, 25 February 2009

For more information from the FM site

To read other articles about these things, see the FM reference page on the right side menu bar. Of esp relevance to this topic:

Posts about Mexcio:

  1. Is Mexico unraveling?, 28 April 2008 — summary of Stratfor’s warnings about Mexico.
  2. “High Stakes South of the Border”, 13 May 2008
  3. Stratfor: the Mexican cartels stike at Phoenix, AZ, 6 July 2008
  4. “Drug cartels ‘threaten’ Mexican democracy”, 24 July 2008
  5. Stratfor reports on Mexico, news ignored by our mainstream media, 19 August 2008
  6. Nonsense from StrategyPage: Iraq is safer than Mexico, 17 December 2008
  7. New reports about Mexico, the failing state on our border, 9 January 2009
  8. Stratfor writes about “the third war” in Mexico, 15 April 2009
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12 Comments leave one →
  1. kenneth alonso permalink
    20 April 2009 2:53 pm

    Drug trafficking is a businesss. Who is laundering the money? Why is there no interest at the federal level to seize those banks engaged in this type of illegal behavior? Could it be that the conspiracy theorists are not incorrect in their analysis of the use of the drug trade by governments/intelligence agencies?
    .
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    Fabius Maximus replies: Your premise is false. There is a massive effort to stop money laundering. This has been a major priority of the Federal government since 2001. The government has required banks and brokers to build a large infrastructure (both people and systems) to detect this activity. In the opinion of some observers, this has become a serious infringement of privacy — financial institutions operating as de facto government agents, since they have so much information about their customers.

    We must have realistic expections about results. Moving drugs themselves has proven impossible to stop — and money is inherently more difficult to monitor and control.

  2. senecal permalink
    20 April 2009 3:33 pm

    A highly articulate and thorough report, which reminds me of the FBI anti-communist propaganda films of the fifties. I don’t mean to minimize the problem, though, only point out how conveniently it implies that the only solution is a massive federal program, with strong surveillance and military dimensions. The report creates the same reaction as if we were watching a new, even deadlier AIDS virus breeding in Africa, and suddenly saw it begin to move across the Atlantic.

    I would like to know who the end-users are. If they are mainly inner-city, ghetto dwellers, one solution might be to get rid of those ghettos. The other solution — if the problem is this widespread — would be to legalize the drugs.
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    Fabius Maximus replies: Considering the vast cost (both monetary and in lost civil liberties) of the war on drugs — and its long-term failure — I find it astonishing that partial legalization recieves so little attention.

  3. pluto permalink
    20 April 2009 8:54 pm

    I can’t help but wonder what will happen if the US dollar weakens seriously. Will the drug lords start to shun the US or will they put on a full court press to get the maximum value from existing routes? Or will they be immune to the effect because all of their economies are dollar based? Only time will tell…

  4. mclaren permalink
    20 April 2009 10:03 pm

    Isn’t it fascinating that no one ever discusses the massive U.S. involvement in trafficking drugs from Mexico into the United States?
    .
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    Fabius Maximus replies: Of course it’s not discussed. You must not upset the proles! That would be cruel, shattering their illusions — like showing photos of McDonald’s to steers on the feedlot.

    For some dribs of coverage about this incident:

    * “Plane crash in Mexico involved Colombian cocaine“, US News and World Reports, 27 September 2007
    * “Drugs on crashed plane belonged to Mexico’s biggest dealer“, McClatchy Newspapers, 28 September 2007
    CRASH JET HAD AIR OF MYSTERY“, New York Post, 1 October 2007

  5. anna nicholas permalink
    20 April 2009 10:34 pm

    Obama has just appointed you BFoC. (Bigcheese For Control of drugs.) You must work at least 2 yr to retire on the $2B pa pension , your health is A1 and your family prefer to see less of you. You are going to do… what?
    .
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    Fabius Maximus replies: Legalize all substantially non-narcotic drugs. Exactly what that means I’ll leave to experts. Cocaine is not a narcotic. I don’t know about crack.

    I suspect the results would be similar to the 1933 repeal of Prohibition.

  6. electrophoresis permalink
    21 April 2009 4:33 am

    Senecal mentions: I would like to know who the end-users are.

    The current president and the president who just vacated the White House, among others.

    “Pay attention to what I say, not to what I do…”

  7. Pete permalink
    21 April 2009 6:59 am

    Fabius Maximus is absolutely correct that partial legalization of drugs is the answer to the problems posed by “the war on drugs.” Epidemic drug use is a public health problem more than a criminal problem. While drug use is not entirely a victimless crime, it is certainly no worse than alcohol, whose use we allow. How many years has the government funneled money, people and resources into this fruitless crusade? Thirty years? Forty? To what end?

    Ultimately, reducing recreational drug use will depend on character and willpower, just as kicking alcoholism does. Working on the drug problem from the supply side of things has been, pardon the pun, a bust. Our only hope is to influence the demand side, via education, rehabilitation, and more research into the neurological mechanisms of addiction. Human beings have self-medicated for eons, practically since first appearing on the planet. There are definitely strong biological underpinnings to this phenomenon. Until those are better-understood, the tool we have will have to do. Legalization or partial legalization should be enacted post-haste, over the objections in the law enforcement community and others who have profited from the WOD. LE resources are badly needed elsewhere than in this latter-day prohibition which has failed completely.

  8. Financial Crisis permalink
    26 April 2009 6:27 am

    I’m wondering about the possible connections between the increasing medicalization of deviance and the state of affairs described in this post.

    The DSM continues to grow. In recent years such ‘ilnesses’ as ADHD, selective mutism, even Operational Defiance Disorder (or ODD) have been ‘discovered’. Increasingly, pharmaceuticals are used to treat these conditions and the pharmaceutical industry is of course huge. Given this state of affairs I would expect it, like the DSM, to grow.

    So that what we have are lots of people looking to feel better through the use of products designed to do just that. Now, we know that the economics of illegal drugs are fueled by profit and necessity, and that thereby criminals and cops enter into a reciprocal relationship (no careers/profit for criminals without illegality, likewise no careers for law enforcement without illegality). And we have all these people that grew up taking such things as ritalin so that they would feel better about themselves and the world. And they were told that their behavior was a disease (in the past checked by informal controls).

    Consider a person who attempts to find relief for their pain. If they can’t find the right doctor they’ll find another one. And if they can’t, and they actually do need the relief, there’s a good chance they’ll find themselves on the street looking to “score” something without the permission of the authorities. Here there are two possible outcomes: 1.) they score something reliably and for long enough to become an addict. Or, 2.) they are picked up by the authorities. It seems to me that EITHER WAY they benefit suppliers of drugs in one form or another owing to the aforementioned feedback loop between criminals and cops and because they simply have to pay court costs (etc, etc).

    So, how could we get rid of our war on drugs? The potential for profit for some at the expense of others is too great. Furthermore there are entire areas of industry and study which support drugging people up more and more.

    And the fact that the DSM flies at all in the world of academia suggests that profits (biases, really) in some sense shape ‘science’ – which has ramifications for climate change as well.
    .
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    Fabius Maximus replies: You raise an issue I’ve wondered about, but lack the data or knowledge to analyze. As the fraction increases of our society who take powerful mood-altering drugs (e.g., cocaine, antidepressants), does our society change? The way it operates, its balance, its OODA loop?

    Take this speculation once more step. Many people making excess use of alchol or drugs are self-medicating for mental illness or some psychic pain. Might increased drug use (not just in frequency but medical efficacy) be self-medication due to stress on our society?

  9. Financial Crisis permalink
    26 April 2009 7:10 am

    I think that self-medication has almost always existed. I would also argue that ‘we were better off that way’. I bet our society does change the more that people are medicated, and I of course also lack the data and knowledge to analyze the ramifications.

    That “one more step” I think leads us into the realm of the relationship between microcosm and macrocosm which is I believe one of life’s great mysteries. I think people want to escape but that they don’t know what to escape from – themselves or their environment (both?).

    These issues are highly interconnected, which is one of the things that draws me to your blog – trying to make sense out of the whats and hows and whys.
    .
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    Fabius Maximus replies: Magnitudes matter. We have always self-medicated, but tobacco and booze are far different than coke and Prozac.

  10. Charles Read permalink
    27 April 2009 9:06 pm

    FM: “We have always self-medicated, but tobacco and booze are far different than coke and Prozac.”

    Are if fact they really different? Tobacco kills tens of thousands of people a year. Booze, my god look at the costs to society of alcoholism. No doubt that cocaine and prescription antidepressants also cause problems. But are will the problems be greater than tobacco and booze. I wonder.

    Those who over self medicate GREATLY cease to be a factor at all, just a statistic, head count as it were. Those who overmedicate just less than that is a drag on society as someone has to support them.

    But as we see in Hollywood a lot of substance abusers lead very profitable lives. Not lives that you and I would like to live but the money would be nice. They can afford all of the drugs they want. They seldom kill themselves, and if they do so what? Their choice!

    I suspect that the costs to society would be more than paid for by the taxes generated and enforcement costs saved if drugs were legalized. Of course if you want to really want to stop illegal drug use in the United States make it a capital crime. “One Joint One Jolt” from old sparky! You would get rid of repeat offenders for sure.
    .
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    Fabius Maximus replies: You raise good points about booze and smokes. But I prefer incremental change, rather than bold theories and big policy changes. Doing legalization in two phases seems a reasonable approach IMO.

  11. 2 May 2009 11:29 am

    The Japanese are experimenting with involuntary mass drugging: Lithium in water ‘curbs suicide’, BBC, 1 May 2009 — Excerpt:

    “Researchers examined levels of lithium in drinking water and suicide rates in the prefecture of Oita, which has a population of more than one million. The suicide rate was significantly lower in those areas with the highest levels of the element, they wrote in the British Journal of Psychiatry.”

    I say legalize everything and let the chips fall where they may.
    .
    .
    Fabius Maximus replies: They studied naturally occuring lithium in drinking water. There was no “experimenting with mass drugging”.

  12. joe permalink
    27 May 2012 6:51 pm

    This “drug war” is a failure! More problems come from the prohibition than the actual usage!

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