When "Drug Wars, Part 1" was first broadcast on October 9, 2000, FRONTLINE mistakenly reported that former U.S. Senator Paula Hawkins was deceased. Senator Hawkins, who had suffered a stroke, called us to say she is very much alive and much better. We apologize for the error.

In that program Oliver North said he had briefed Senator Hawkins on a secret U.S. anti-drug operation in 1984. Shortly thereafter, the operation was leaked to the press. Senator Hawkins says neither she nor her staff leaked that information.

Drug Wars: Part One
Air date: October 9, 2000

Produced by
Brooke Runnette and Martin Smith

Written by
Martin Smith and
Brooke Runnette & Oriana Zill

Senior Producer
Sharon Tiller

Series Reporter
Lowell Bergman

Series Producer
Martin Smith

ANNOUNCER: For over 30 years America has been at war, a war that has cost the U.S. more than $300 billion and has destroyed countless lives. Tonight on FRONTLINE, the inside story of The Drug Wars.

Pres. RICHARD M. NIXON: It must be attacked on all fronts.

ANNOUNCER: In the beginning, in the wake of Vietnam-

Pres. RICHARD M. NIXON: -public enemy number one is drug abuse.

ANNOUNCER: -Nixon launched the war on drugs, targeting heroin addiction.

JEROME JAFFE, M.D., Psychiatrist: For the first time, the federal government was making a commitment to treatment in the community.

UNIDENTIFIED SPEAKER: The crime rate was cut in half. Heroin overdoses almost ended in the city.

UNIDENTIFIED SPEAKER: It was an experiment that worked. Something that I struggle with is how it was lost.

ANNOUNCER: By the late '70s, hard-core drug use was down, but recreational and teenage use had become cool.

KEITH SCHUCHARD, Parent: That's when we got alarmed and said "The party's over.

ANNOUNCER: In the '80s, the war became a moral crusade.

Pres. RONALD REAGAN: This is one of the gravest problems facing us in the United States.

Vice Pres. GEORGE BUSH: Find them, catch 'em, arrest 'em, put 'em away where they belong.

ANNOUNCER: But no matter how many traffickers were stopped at the border-

BILL ALDEN, Special Agent, DEA '73-'93: Twenty-two thousand pounds of cocaine seized had absolutely no impact on the market at all.

ANNOUNCER: -and dealers put in jail-

ROBERT STRANG, DEA Special Agent, '80-'89: Cocaine was really taking over every socioeconomic group.

ANNOUNCER: -the enemy was always one step ahead.

PAUL, Former Crack Addict and Dealer: Colombians didn't know that Americans would take cocaine and make it even more profitable. Crack. That's America.

ANNOUNCER: Tonight on FRONTLINE, the first in a two-part special series in collaboration with National Public Radio. This is the story of the Drug Wars.

NARRATOR: Thirty years ago, the war on drugs began as a war on crime. In the late 1960s, Washington, D.C., was considered the crime capital of America - robberies up 400 percent, murders had tripled - all of this a short distance the White House. Only days into his first term, the new law-and-order president, Richard Nixon, called a young aide into his office.

EGIL "BUD" KROGH, Jr., Nixon White House '69-'73: The president said, "Bud, now, get after that. I want you to cut the crime in the district." And I had my yellow pad, and I wrote down on it, "Cut crime in the district." And I- obviously, that was consistent with what he had campaigned on, so I knew that was my assignment.

NARRATOR: Bud Krogh was an earnest 29-year-old deputy for domestic affairs, who had a reputation as a sort of can-do, fix-it man. At first, Krogh's approach was traditional. He went on driving tours with the D.C. police. He asked for a thousand new cops on the beat, even new street lamps. But it wasn't working.

Then an ambitious young psychiatrist, Dr. Robert DuPont, noticed that many of the men entering the D.C. jails had something in common: heroin addiction.

ROBERT DuPONT, M.D., Director, Narcotics Treatment Admin. '70-'73: Now, the question was, "Well, how big is this problem?" And I got a group of unemployed college students and we went down to the D.C. jail with our urine cups and collected urines from everybody who came into the jail for a one-month period, August of 1969. And when we found that 44 percent of them were positive for heroin, this was remarkable.

BUD KROGH: That study in the D.C. jail, I think, really focused and crystallized our thought that there is a very dramatic correlation between addiction - and it was addiction to heroin - and crimes that were committed to be able to support heroin habits.

NARRATOR: DuPont felt that the solution to the crime problem might be found by treating heroin addiction with methadone.

Dr. ROBERT DuPONT: Methadone is the only kind of treatment that deals with that chronic craving. What it does is, it satisfies the hunger for drugs of heroin addicts. And so what it gives him is a way of getting out of the slavery of heroin addiction.

NARRATOR: Since early 1960s, researchers in the U.S. had been experimenting with the synthetic opiate developed by German scientists in the Second World War which eased heroin addiction. The reasoning was that with free daily doses of methadone, an addict would no longer be compelled to steal. In early 1970, the White House decided to fund DuPont's project to distribute methadone to addicts in D.C., but it was a controversial idea. Many people worried that methadone was no more than a substitute narcotic.

EX-JUNKIE: [congressional hearing] And a lot of people say- a lot of professionals say, like, there's no euphoria behind methadone. But believe me, you can get just as high or even higher off of methadone than you can get off of cocaine and heroin together.

CONGRESSMAN: Have you had methadone yourself?

EX-JUNKIE: I most certainly have.

CONGRESSMAN: And you got a high off of it?

EX-JUNKIE: Yes, sir.

NARRATOR: Opposition to methadone ran deep. Another young staffer working in the Nixon White House was Jeff Donfeld [sp?].

JEFF DONFELD: Many people felt that the introduction of methadone maintenance was nothing more nor less than an effort to subjugate the minority community in America. Because we wanted to keep statistics in order to determine the efficacy of our programs, many of the liberal folks that I came across were absolutely convinced that this was an effort on the part of the law enforcement Nixon administration to gather a data bank of addicts so that they could all be locked up behind bars and never be seen again.

Dr. ROBERT DuPONT: I remember meeting one of the leaders of Washington society, who was a very famous man. I'd seen his name in the news for years, and to meet him and his wife at a reception, I was very proud. I was very much in the news at that time, and so he introduced- he had known me from some context to do with NTA, and he introduced me to his wife. And she spit on me and said she wouldn't talk me, wouldn't shake my hand. And I was dumbfounded by that, and I - "What happened? What- what"- I mean, I'd never met her before. And the answer was that she was really upset about methadone.

NARRATOR: But DuPont was not alone. Many public health experts supported the use of methadone. In 1970, Dr. Beny Primm was running a methadone treatment clinic in New York.

Dr. BENY PRIMM, M.D., Treatment Specialist: I don't characterize methadone as a substitute narcotic. This is a neurobiological problem that changes the body's homeostasis to the extent that it has to be corrected over a long period of time, generally, and maybe even with pharmacological substances. People not willing to accept that.

NARRATOR: However controversial it was, when it came to reducing crime, it seemed to actually work. A year after the methadone centers opened in D.C., burglaries in the district plummeted 41 percent.

BUD KROGH: It was amazing because in three or four months, the results were dramatic. We found that there was an appreciable decline in the index crimes that were related to drug addiction. Now, with that kind of data - and this was in May of 1970 - we felt that we had something solid on which we could then design a national program.

NARRATOR: For such a program, Krogh and Jeff Donfeld would need the help of a top expert in the field, Dr. Jerry Jaffe.

JEROME JAFFE, M.D., Psychiatrist: I think Jeff had seen Bob DuPont's program in Washington, had heard or seen reports of the methadone programs in New York and had begun to believe that treatment could reduce crime.

NARRATOR: In his Chicago clinic, Jaffe had assembled a large amount of data that supported the idea that methadone maintenance could help lower the recidivism rate among addicts. The White House was impressed.

Dr. BENY PRIMM: Jerry was well known as somebody who had worked in addiction for quite a while and had done a wonderful job in Illinois. And so he was brought in and asked by the Domestic Policy Council at that time would he be interested in doing whatever. And he was asked to prepare a paper, and I think he prepared a paper. And the president saw it and suddenly he was knighted as the person to come in to help straighten out the problem.

NARRATOR: Jaffe's paper went well beyond the merits of treatment.

Dr. JEROME JAFFE: There ought to be a national strategy, that- you know, you- that there are lots of interacting pieces. There's law enforcement, and there's, you know, epidemics and drug use and treatment and prevention, and you ought to think them through and how each one affects the other. There ought to be a clear-cut national strategy.

And the other thing we said - and it took some part of the report because Jeff kept asking us to justify it more - was that we felt that, given the extent of heroin addiction and given the evidence that existed, that methadone treatment should not be considered a small research project.

NARRATOR: Krogh and Donfeld presented Jaffe's program to their boss, John Ehrlichman. But Ehrlichman was not ready to agree that the federal government should sponsor a national network of opiate clinics.

Dr. ROBERT DuPONT: And that initial Jaffe proposal was set aside politically. They didn't do anything with it. It just sat there.

MICHAEL MASSING, Journalist/Author: Up until to that point, Krogh had not had much success.

NARRATOR: Michael Massing is a journalist and author. His book, The Fix, was the first to describe the evolution of Nixon's drug policy.

MICHAEL MASSING: Remember, this is the late '60s, early '70s. The Vietnam war is going on. There are huge protests taking place. Nixon is being branded a war criminal by certain sectors. So there was tremendous suspicion that- I mean, what was this Republican law-and-order administration doing purveying this synthetic narcotic and spreading it through the ghetto? Yes, many people felt that was an ulterior plan at work.

NARRATOR: Also, in the view of Nixon's middle-class supporters, the real issue wasn't heroin, it was pot and LSD. The counterculture of the '60s and '70s represented a different kind of challenge for the president.

HIPPY: They said marijuana's the least harmful of all drugs. In fact, alcohol is liable to be more serious of a problem than heroin.

NARRATOR: This was not a crime problem but a cultural revolution. Law enforcement was used to busting street gangs and the Mafia, but not hippies. And though drug agents were chasing large-scale dealers of pot and LSD and even closed the Mexican border at one point to stem the flow of drugs, the Nixon White House was reluctant to get too involved in a war at home.

MICHAEL MASSING: At heart, the Nixon policy staff was very pragmatic. All along, President Nixon maintained his antipathy towards potheads and acid freaks, and so on. I mean, the whole Haight-Ashbury crowd was something that he could use to his great political advantage. But if you look at the policy, in the first term they really did not end up spending much time, in terms of policy, going after those people. Maybe going after these people and putting them in jail was not the best politics.

NARRATOR: Meanwhile, Bud Krogh had spent a year lobbying the president in vain to reconsider a national methadone treatment program for heroin addicts. Then something unexpected happened.

ROBERT DuPONT, M.D., Director Narcotics Treatments Admin. '70-'73: Then, in the spring of 1971, they got focused on Vietnam. Two congressmen, Steele and Murphy, went off to Vietnam, and they came back with explosive news, and that was that 10 to 15 percent of the servicemen were addicted to heroin and that they were coming back to the country by the thousands, bringing their addiction back, and that the only solution they could see was to pull out of Vietnam.

Well, now we've got a whole different problem, and that was what moved this issue to the front burner. It wasn't crime. Crime got it started, but what moved it to the front was Vietnam.

NARRATOR: Alarmed by reports of rampant drug use by U.S. soldiers in Vietnam, President Nixon sent his young fix-it man, Bud Krogh. to check it out. For Krogh, a teetotaler, this would be something new.

EGIL "BUD" KROGH, Jr., Nixon White House '69-'73: And I remember going into one firebase- got out of the chopper and I wandered out behind one of these tanks. And there were four guys hunkering down there, and they're smoking a substance that was very aromatic. And they had their peace symbols and their headbands.

And I said to one of them, I said, "I'm here from the White House, and I've been asked to find out about the scope of the drug problem." And one guy looked on and took a big toke out of his cigarette, and then he said, "Well, I'm from Mars." I said, "OK. I'm just interested in knowing. Is drugs- are drugs available?" He said, "Oh, man. What do you want?"

BOB HOPE: [USO Vietnam performance] I don't know how widespread it is, but is it true the MPs are getting flight pay? I think we ought to- instead of taking it away from the soldiers, we ought to give it to the negotiators in Paris.

NARRATOR: Marijuana use, he found, was endemic. But the real problem was heroin.

Rep. ROBERT STEELE: Available information indicates that 10 to 15 percent of all American troops currently in Vietnam - or approximately 30,00 men - may currently be using heroin.

NARRATOR: In April 1971, Congressmen Robert Steele and Morgan Murphy brought back their explosive report.

Rep. MORGAN Murphy: And I can't emphasize how easy it is to pick up heroin on the street. The other night, Congressman Steele and I went for a walk on the street, and we were offered numerous times capsules of pure heroin. And it's an alarming rate. The military is very concerned about it, as are we, and especially the people back home.

GI: Right now- if I wanted to get high right now, I could probably do it in front of every one of you, and none of you would know that I was doing it. By, you know, previously fixing up a cigarette, dumping out half the tobacco in it, putting a little bit of the heroin in it, I could stand right here and smoke it and no one would know what I was doing.

NARRATOR: The skyrocketing heroin use among troops was a condition that the military had first ignored, then prosecuted. A recent amnesty program had done no better. GIs were still using, now more than ever.

GI: These guys are coming in from the bush, and they were already taking it before. And they moved in nine guys, and they had to move them right out again because they were a burden to the company. They were just addicted to it, and they just laid around and slept and got on bad trips and put themselves in danger, you know, just walked around during a rocket attack or something, didn't know what was going on.

NARRATOR: Thirty thousand heroin addicts trained in combat on their way back home was perhaps an exaggerated fear, but the press had a field day.

FATHER: I found my son on a flight line at Miramar [sp?] Naval base in a narcotic stupor in which he was unable to even control his movement, let alone his speech. And my son was at that time on a flight line checking out Phantom jets for the U.S. Navy.

MOTHER: When he went away, he went away a normal, absolutely normal boy. In fact, above average, I think. He was really a great son. And when he came back, he came back a war hero, wounded twice, Purple Heart, but also a drug addict. He was a drug addict.

NARRATOR: For Nixon, it was a political crisis. He ordered his senior staff to make drug abuse their top priority.

BUD KROGH: And the president said, "We have to go after this, and we have to go after this now."

NARRATOR: Nixon called a series of meetings in early June.

Pres. RICHARD M. NIXON: [at meeting] There's a tendency in this whole drug field at this time to zero in on only one phase of the problem, and that is the use of drugs by our forces overseas.

NARRATOR: Within the month, all experiments became policy, all ideas became orders. Interdiction, eradication, treatment, education- everything was hit hard all at once.

Pres. RICHARD M. NIXON: Under the circumstances, this involves getting at the source of supply.

NARRATOR: U.S. ambassadors were called in to get new hard-line orders for dealing with drug-producing nations. Turkey got tens of millions in foreign aid to stop growing illegal poppies.

Pres. RICHARD M. NIXON: [at meeting] -giving you the ultimate weapon. If the ultimate weapon is a bigger subsidy, we will use it. It is worth it. It's worth $50 million this year, if that's what it costs to buy a $3 million crop, if it'll do the job. Now, it may be there'd be social problems and the political problems and the rest, and their embarrassment at home to the job. My guess is that $50 million would do it, but it is worth it to this country. If that will do the job, pay $50 million.

NARRATOR: John Ingersoll, head of the Bureau of Narcotics and Dangerous Drugs, the BNDD, was called on the carpet to account for his agency's activities.

Pres. RICHARD M. NIXON: Well, there are more addicts now than there were, right?

JOHN INGERSOLL, Bureau of Narcotics and Dangerous Drugs: That again is a difficult question to answer.

Pres. RICHARD M. NIXON: We don't have information. We don't know whether there are more addicts? We don't know if there are more drugs available? It seems like our statistics are pretty poor.

JOHN INGERSOLL: Yes, they are. I would guess that there are more addicts because- [crosstalk]

Pres. RICHARD M. NIXON: Then, actually, we've made no progress in the problem. We've just been moving backwards, correct?

JOHN INGERSOLL: I don't think we're making a very big dent in the-

Pres. RICHARD M. NIXON: That's my point.

NARRATOR: But the most unexpected move from the law-and-order president would be the centerpiece of his offensive.

JEROME JAFFE, M.D., Psychiatrist: I was sitting in the cabinet room, and the president was announcing to the congressional leadership that he was going to announce this major initiative on drug abuse. And then he pointed to me - I didn't know why I was sitting there anyway - and said, "And Dr. Jaffe over there is going to run it."

BUD KROGH:: The president basically said, "We're glad you're going to take on this job. We need you. And go out there and," you know, "if you need to kick some tail, you do it." And then, of course, we walked out with Jerry and briefed the White house press that he was going to take on this job.

Pres. RICHARD M. NIXON: [news conference] Ladies and gentlemen, I would like to summarize for you the meeting that I have just had with the bipartisan leaders, which began at-

NARRATOR: For the first and only time in the history of U.S. drug policy, treatment supplanted law enforcement for most of the attention and most of the money.

Pres. RICHARD M. NIXON: America's public enemy number one in the United States is drug abuse. In order to fight and defeat this enemy, it is necessary to wage a new all-out offensive. With regard to this offensive-

BUD KROGH:: In terms of the narcotics programs, this was really D-Day. This is where everything was brought together in one place and launched.

Dr. JEROME JAFFE: For the first time, the federal government was making a commitment to treatment in the community and to supporting it. And for the first time, we were able to say, you know, "We intend to make treatment so available that nobody can commit a crime or nobody can say they committed a crime because they couldn't get treatment."

NARRATOR: A few days after taking office, Jaffe asked his colleague, Beny Primm, to accompany him to Vietnam to set up an ambitious program testing every returning GI for heroin and treating those who tested positive.

SERGEANT: [to GIs] This is, in essence, a message from the United States president, President Nixon. The military, as part of the national effort on drug abuse, will begin identifying personnel who are using heroin. Today you will be required to give a urine sample, which will be analyzed to determine if heroin in present in your system.

NARRATOR: But fear of detection caused many soldiers to immediately break their habits. Only 4.5 percent of the GIs showed up "positive." Here and at home, treatment became widely accepted

Dr. JEROME JAFFE: I don't think it would have been possible without the sense of urgency that came from the heroin use in Vietnam. I think it is easy and it's been easy to stigmatize and marginalize the heroin users in the inner cities and things of this sort, to make it possible to treat them primarily as law enforcement problems. It's a lot harder to do that with people that you've sent as part of the military to fight your battles on foreign soil and to say that, you know, they're not worthy of special consideration.

BENY PRIMM, M.D., Treatment Specialist: What we did in Vietnam, we said these were soldiers, these were good American boys over there fighting a war, red-blooded Americans, who happened to be in a stressful situation and used drugs. We began to find other ways to describe addiction rather than to say, "They're second-class citizens. They're the worst in the world. They're the dregs of the earth." That's how addiction was thought about for many, many years.

NARRATOR: Primm, Krogh and Jaffe reported back to the Western White House at San Clemente in July with their good news, but the president was distracted.

Dr. JEROME JAFFE: [at San Clemente] To date, the cumulative percentage of heroin-positive tests is running around 4.5 percent.

NARRATOR: The formation of the drug treatment office had been upstaged in the news by a leak of classified documents regarding the Vietnam War, the so called Pentagon Papers.

Dr. JEROME JAFFE: What Bud said when we drove from San Clemente to the airport is that he might not have as much time to devote to this program as he had up to this time because he'd just been given a new major assignment by the president.

BUD KROGH:: Yeah. This was the- the end of my life, in many ways. [laughs] But no, right after the meeting that we had in San Clemente with the president, I was given a file by John Ehrlichman, which was the- it contained the information about the release of the Pentagon Papers.

NARRATOR: Krogh's new assignment was to set up a secret intelligence unit in the White House to plug all information leaks. Its nickname: the Plumbers Unit.

By 1972, Richard Nixon had overseen the establishment of a national network of methadone treatment centers. His interdiction and eradication programs seemed to be paying off, as well. Turkey had agreed to stop growing illegal opium. Mexico was cooperating with U.S. law enforcement. The street price of heroin was up, the purity level down, and with it the rate of overdose.

America's drug warriors were pleased.

BOB STUTTMAN, Special Agent, DEA '73-'90: Nixon was clearly the strongest anti-drug president that we had ever seen. Anybody who knows the drug issue will tell you Nixon was the first and probably the last who had the guts to stand up and place drugs above foreign policy.

JOHHNY PHELPS, Special Agent, DEA '73-'97: They did a number of things which, in my opinion now, looking back on it, were the proper things to do to try to stem the flow of drugs in this country.

NARRATOR: When it came to drugs, the president was winning everyone over. His 1972 anti-drug legislation passed Congress unanimously.

Pres. RICHARD M. NIXON: [news conference] And signing the bill- as you know, it's a rather unusual bill in one sense. There wasn't a vote against it in either the House or the Senate. There are not many that I sign that are that type, or that any president has the opportunity to sign.

NARRATOR: Federal spending to fight drugs had gone from $80 million to over $600 million in Nixon's first term, and two thirds of that went to drug treatment.

Pres. RICHARD M. NIXON: On the other hand, a program law enforcement alone is not enough because as we succeed in the law enforcement side, we may increase crime- increase crime because of the inability of those who are unable to obtain drugs to feed their habit. And so this means that on the treatment of addicts, we must go parallel with a program which is strong in this field. And here is where the Jaffe office, as we've now call it, comes into play.

Dr. JEROME JAFFE: I had the feeling almost from the first day that this willingness to look at- focus on the demand side, rather than the traditional American law enforcement approach, might be a transient phenomenon, that it might pass and we'd go back to our old ways of more and more law enforcement. We had up to that time, I would guess, about 65 years of a law enforcement approach, and I wasn't certain that the general atmosphere, the general attitudes of the Congress, were totally changed. So it seemed as if every day was an important day in getting things done.

NARRATOR: The 1972 election was approaching, and President Nixon was well aware that it was law and order, not treatment programs, that would win voters.

JOHN MITCHELL, Attorney General: [news conference] I would like to introduce Myles Ambrose and-

NARRATOR: In January of 1972, the President appointed Myles Ambrose, the commissioner of Customs, to head the newest White House drug office. Ambrose had a reputation as a tough cop. And from here on, law enforcement would begin to cast a larger and larger shadow over Jaffe's treatment office.

Pres. RICHARD M. NIXON: [Oval Office meeting] The purpose of this meeting is to get a brief report as to where we are. I don't want any snow job.

NARRATOR: Myles Ambrose brought the president a plan that would both consolidate drug enforcement and appeal to voters.

MYLES AMBROSE, Nixon White House '72-'73: Well, basically, the weakness, Mr. President, has been on the impact on street sellers.

BUD KROGH: I think Myles Ambrose was very persuasive in explaining to the president the need to have more of a federal presence at the local law enforcement level.

NARRATOR: On a campaign trip to New York, Ambrose, Bud Krogh and the president discussed the significance of the drug war as an election issue.

MYLES AMBROSE: We were talking about it, and the question came up of treatment. And Nixon was sitting there, as usual, in his kind of reflective, quiet way. And he looked out the window of the helicopter, and he turned to Bud and me and whoever else was there, and he pointed - we were flying over Brooklyn, I guess - and he said- you know, he said, "You and I care about treatment. But those people down there, they want those criminals off the street." And that was the way he said it.

Pres. RICHARD M. NIXON: [news conference] We've increased the amount of money for handling the problem of dangerous drugs seven-fold. It will be $600 million this year. This is one area where we cannot have budget cuts because we must wage what I have called total war against public enemy number one in the United States, the problem of dangerous drugs.

NARRATOR: Nixon won the 1972 election by a landslide, fueled partly by the politics of his war on drugs. And in March 1973, Richard Nixon authorized the formation of a new law enforcement "superagency" to fight drugs, the Drug Enforcement Administration.

The DEA would combine the narcotics agents from Customs with those from the BNDD, as well other agencies, to make a single entity responsible for drug enforcement. But there was criticism right from the start. The DEA would face charges of being too zealous, employing tactics like forced entry, random searches, IRS audits, and wiretaps.

EGIL "BUD" KROGH, Jr., Nixon White House '69-'73: I think that there were some programs that were initiated that maybe, in retrospect, got too close to breaching the wall of what is not acceptable under the 4th Amendment. I know no-knock authority was one that had been recommended as a way to be able to get in and be able to stop the destruction of evidence before it got flushed or something like that. I think that those kinds of programs can lead to abuses. And I think they have.

NARRATOR: The allegations leveled against the drug war would soon be eclipsed by another scandal, Watergate. By the spring of 1973, it had paralyzed the administration. In May, Bud Krogh resigned, just as the Watergate hearings began on national television. As with the drug war, Watergate revolved around questions of basic constitutional rights.

BUD KROGH: In my own case, dealing with the Pentagon Papers investigation, one of the things that was so serious was that we did not - and I did not - fully understand what the 4th Amendment required of me, in terms of authorizing a surreptitious entry. Without a warrant, it's a crime, and government cannot go there. And unfortunately, we were not sensitive to that at the time and paid a price for it.

NARRATOR: Within the year, Bud Krogh was convicted and sent to jail. Jerry Jaffe resigned, and his treatment office was banished outside the Beltway and soon dissolved. The network of treatment centers would lose their federal funding by the end of the decade. Only the DEA was permanent, a lasting legacy of the Nixon drug war.

While heroin use continued to decline throughout the 1970s, marijuana use was increasing. But it was not a priority for the DEA.

JOHN MARCELLO, Special Agent, DEA '73-'98: No one was watching the store. The emphasis was on heroin.

NARRATOR: John Marcello worked for the DEA in southern California.

JOHN MARCELLO: In that time period, if you worked marijuana cases, people would, basically your evaluations would be punished. And there were a few people around that tried to explain there are more people using marijuana at this time than there are using cocaine and heroin, so therefore there must be bigger profits in the marijuana business than in the cocaine and the heroin business and- but they didn't want to hear it because it was, like, "kiddie dope."

NARRATOR: Scores of adventurous and entrepreneurial young Americans flocked to Mexico. College dropout George Jung narrowly escaped going to Vietnam by getting kicked out of the service for selling pot to fellow soldiers. Placed on probation, Jung skipped to Puerto Vallarta.

GEORGE JUNG, Former Narcotics Trafficker: I spent several weeks there looking for a connection. We couldn't speak Spanish. And we met a young lady in a little yellow Volkswagen beetle, a little American hippy girl. And she said, "I happen to live with a guy who has- a Mexican, who has all the pot you want." So she took us over there, and he was the son of a Mexican general. And that's how that all began.

NARRATOR: Thanks to this son of a Mexican general, George Jung was soon in business.

GEORGE JUNG: He informed us that we could keep the plane at the airport in Puerto Vallarta and then hop over to Point Damia, which was, like, 10 miles away. And the pot would be taken over there across Banderas Bay and loaded onto the plane.

NARRATOR: On each trip, Jung's plane could carry up to 700 pounds of marijuana, with a street value about $48,000. Jung flew his drugs into southern California, then distributed them to college students back East.

JOHN MARCELLO: George Jung was really just a guy from Massachusetts, played high school football, an all-American kid. Got out to California, loved the beaches and the cities out here, started smuggling marijuana. And this was not uncommon here. Many, many young California-based traffickers learned how to fly and learned how to bring loads up.

He'd rent a plane fly down to Mexico, pick up a load, fly it back. I mean, barely- barely had, you know, 30 hours of time on the books when he's flying loads into the United States from Mexico.

GEORGE JUNG: I felt that there was nothing wrong with what I was doing because I was supplying a product to people that wanted it and it was accepted.

I mean, you know, nobody really was making any negative statements about marijuana. People were basically looking the other way or just accepting it as kids- you know, "Kids will be kids," and nobody really stood up to try to stop it. Nobody really came across and said it's evil. And nobody really- I don't think anybody understood it or really knew what the hell was going on, that it was just like a snowball coming down a mountain. And when it got too big, then they didn't know what the hell to do with it.

NARRATOR: By the time Gerald Ford inherited the presidency, the nation's attention was diverted from drug use to inflation, jobs and an energy crisis. Over at the newly formed DEA, agents were left trying to sort out just what was their mission.

JOHN BARTELS, DEA Administrator '73-'75: When Nixon resigned in August, and then President Ford came in, just nobody cared. It was no longer an issue. From a very high, important issue it became nothing almost overnight. Without the perception that the president of the United States cares both about narcotics treatment and narcotic law enforcement, much less gets done. It's just so easy to ignore it.

JOHN CHANCELLOR, News Anchor: A White House study recommended today that the government ease up on enforcement of the laws against marijuana and concentrate on controlling-

NARRATOR: Not only was it ignored, a presidential study recommended the enforcement of the laws against marijuana be given low priority. Robert DuPont himself urged tolerance.

ROBERT DuPONT, M.D., Dir., Nat'l Inst. on Drug Abuse '74-'78: When I came to the White House, Richard Nixon said, "You're the drug expert, not me, on every issue but one, and that's the decriminalization of marijuana. If you make any hint of supporting decriminalization, you are history."

Later on, I of course grew restless under that restriction. And when Gerald Ford was president, the first thing I did as White House drug czar was come out for decriminalization of marijuana.

NEWSCASTER: Recent revelation by the president's 23-year-old son, Jack, that he has smoked marijuana adds the Ford-

Dr. ROBERT DuPONT: And I even went so far as to say that it's not just possession, but also growing small amounts for personal use which ought to be decriminalized.

NEWSCASTER: One fifth of the entire population over age 11 has now tried marijuana.

NARRATOR: In 1976, the United States edged even closer to decriminalization. Candidate Jimmy Carter campaigned on the promise.

JIMMY CARTER, Democratic Presidential Candidate: But I do favor the decriminalization of marijuana.

NARRATOR: When elected, President Carter continued to lobby for a change.

Pres. JIMMY CARTER: I support a change in law to end federal criminal penalties for possession of up to one ounce of marijuana.

NARRATOR: Over at the DEA, agents were dumbfounded.

JOHNNY PHELPS, Special Agent, DEA '73-'97: We were just floored by this. "How could this be, the president of the United States saying something like that?" I had a sense that the Carter administration was either just not aware or had received some very bad information or advice from someone.

BILL ALDEN, Special Agent, DEA '73-'93: It was devastating, the message that people got. It was devastating to us in law enforcement because of what we got out of it. And we were determined to do our job, but it isn't easy to do your job when you don't have the support from the top. And unfortunately, the message to potential victims was, you know, terrible. It was normalized. Drug taking became normalized.

NARRATOR: By 1978, 1 in 10 high school seniors was getting stoned every day, nearly 40 percent getting high once a month.

Not everyone got away with it. By the mid-'70s, marijuana smuggler George Jung had been convicted for dealing a large quantity of pot and was doing time at a federal prison in Danbury, Connecticut. However, the very day he checked in, he learned about a new drug and new opportunities.

GEORGE JUNG, Former Narcotics Trafficker: I arrived first. I took the bottom bunk. And several hours later, a young fellow walked in. He introduced himself as Carlos Lehder and said he was from Colombia. I figured, well, I was pretty lucky to have somebody, you know, that was kind of mellow and well-mannered. Then he asked me if I knew anything about cocaine, and I told him no. And then he said that, "Did you know it sells for $60,000 per kilo in the United States?" And I said, "No, I had no idea." I said, "How much does it cost down in Colombia?" And he said $4,000 to $5,000.

NARRATOR: In the 1970s, 90 percent of the world's coca was grown in Peru and Bolivia. After harvest, it was hauled to jungle labs, where it was chemically treated and processed into a powder, cocaine hydrochloride. When Lehder and Jung got out of Danbury, they approached Colombian cocaine traffickers and offered to fly their drugs.

Previously, cocaine had been smuggled in small quantities on the person or in the luggage of individual travelers called mules. But now, with America's appetite for the drug rising, it would travel in bulk. The drug business was about to be transformed into something never seen before.

Lehder became the transportation expert. He used a fleet of twin-engine aircraft, shuttled the loads 1,500 miles to deserted islands in the Bahamas, where they could be unloaded and loaded onto even smaller planes for the final 200-mile trip into the U.S.

Carlos Toro was a boyhood friend of Lehder's who had gone off to college in the U.S. and worked as a TV cameraman. Then he was hired by Lehder to help coordinate shipments of cocaine. This is his first interview.

CARLOS TORO, Former Narcotics Trafficker: We would love to have a 747, and boom, one trip, and drop 2,000, 3,000 kilos. That would be ideal. Or the Titanic. But needless to say, it's going to be hard to hide it and not to be obvious with that kind of equipment. So we have to resort for the less visible and, you know, less provocative way of getting caught, which is small aircraft.

NARRATOR: Miami was less than 2,000 miles from Colombia. Every small plane that arrived netted about $20 million. For Lehder and his partners, it was an irresistible business.

CARLOS TORO: Cocaine was seen by us Colombians - producers, transporters - as a harmless drug. I mean, everybody was using it. But we saw cocaine just like we see Colombian coffee, you know, just that Colombian coffee was not as expensive as cocaine, so we went to a higher revenue. That is how we saw it then.

GEORGE JUNG: I thought cocaine was a fantastic drug, a wonder drug, like everybody else. You know, it gave you energy bursts. You could stay awake for days on end. And it was just marvelous.

It became an accepted product, just like marijuana. The movie industry promoted cocaine, the record industry. I mean, if you were well-to-do and you were a jet-setter, it was OK to snort cocaine. I mean, Studio 54 in New York- everybody was snorting cocaine. Everybody was laughing and having a good time and snorting cocaine. And I don't think that the government of the United States had any idea what the hell was really happening until it was too late. [www.pbs.org: Examine his full interview]

RICHARD PRYOR, Comedian: We call it an epidemic now. That means white folks are doing it.

JIM KIBBLE, Special Agent, DEA '73-'98: It appeared to be widespread in the United States. Everybody was using cocaine. I won't say everybody. We weren't. But a lot of people were using-

NARRATOR: Jim Kibble was an agent assigned to the DEA's New York office.

JIM KIBBLE: In the late '70s, DEA's management was focused on heroin. And I'm sure it was driven by some political decision by somebody else other than me. You'd have an informant coming into you and calling up and say, "Hey, I got two kilos of coke." Unless the cocaine was sitting downstairs in a car with the bad guy outside the DEA office, you couldn't work it. They wanted no time expended.

And this went on for a while. Nobody's going after the cocaine people. None of their people are getting arrested. What does that- what does that tell you? More cocaine was coming in. Very frustrating.

NARRATOR: In addition to Carlos Lehder, the transporter, the Colombians who came to dominate the cocaine business were Pablo Escobar, Rodriguez Gacha and the Ochoa brothers. The DEA dubbed them the Medellin cartel.

The cartel was infamous for bribery, extortion and extreme violence. The Ochoa brothers, who come from an established Colombian ranching family, were known as the financial masterminds. In this, their first television interview, we asked Juan David and his brother, Jorge, how and why they got into the cocaine business.

JUAN DAVID OCHOA, Medellin Cartel: [through translator] This was something that happened by accident. We didn't seek it out because our work and the way we were brought up was very different than of those in the business. It all happened because my brother Jorge made a trip to the United States.

JORGE OCHOA, Medellin Cartel: [through translator] I was very young and didn't have any experience, not even in life or anything. And by coincidence, I met a friend who was involved, and we began a small business. He introduced me to a buyer, and we sold him a small quantity.

INTERVIEWER: What did you think when you first learned that Americans were willing to pay so much for cocaine?

JUAN DAVID OCHOA: [through translator] I didn't understand it at all. I've never understood what they saw in it. I don't think there are any positive effects. I don't understand why Americans liked it so much.

JORGE OCHOA: [through translator] It all seemed like a game to us. Nobody here paid any attention to it. Nobody. Nobody.

JUAN DAVID OCHOA: [through translator] I think it's really a stupid thing.

NARRATOR: It may have been stupid, but for the Medellin cartel it was a very good business. Carlos Toro, who worked with Carlos Lehder, thought of the cartel as a Fortune 500 operation.

CARLOS TORO: And we conducted business, cocaine business. Just like General Motors or IBM, we get orders that we have to fulfill. And let's say we have to move 1,000 kilos every month or 2,000 kilos every month. Under the contract with the cartel, we - Carlos Lehder and our part of the organization - were to move the cocaine at a certain frequency out of the country. So we were in charge of transportation and distribution. We will have our distribution centers in California, in New York, in Miami, and the cocaine would go to those people.

So we operated just like any other company in the United States. We were the clearinghouse of the cocaine.

NARRATOR: One to two thousand kilos of cocaine a month could be handled with three to six flights and would total somewhere around $100 million. In the U.S. the money was collected and either laundered through banks, or in the early days, just sent back to Colombia as cash. Lehder and his Medellin partners would use the money, hundreds of millions of dollars each year, to expand operations or for other business investments.

CARLOS TORO: We operated a lot of assets all over the world, including property in Europe, in Germany- buildings, real estate, apartment buildings in Hamburg, real estate in Bogota, Medellin, Armenia, Los Janos, 20, 30 airplanes of different models - Citations, Learjets, helicopters - discotheques, automobile dealerships, apartment buildings, office space for rent, farming equipment, coffee plantations, cattle- everything.

NARRATOR: As the wealth accumulated, the cartel moved its operations to higher and higher levels of sophistication.

GEORGE JUNG: Carlos, unbeknown to me, was researching an island about 210 miles off the coast of Florida called Norman's Cay. While he was doing this, he ran into a fellow called Robert Vesco.

NARRATOR: Robert Vesco, a crooked financier who was a fugitive from U.S. justice, had taken refuge in the Bahamas in the early '70s. Vesco knew how to grease the palms of politicians. He had even tried to buy favor from Richard Nixon with an illegal campaign contribution in 1972. It was Vesco who helped Lehder get settled.

GEORGE JUNG: He convinced him that this would be a base for just planes to fly from Colombia and then shuttle smaller planes into the United States loaded with cocaine and that- he introduced him to Bahamian authorities- Norman Pindling, the prime minister, and what-have-you, and all this, and pay-offs.

CARLOS TORO: The Pindlings were always willing to be part of this deal, and they made it possible for corporations to be formed, for banks to be opened - bank accounts - and for money laundering. And the Pindlings wanted to be part of it.

NARRATOR: From time to time, Prime Minister Linden Pindling would stage a drug bust. According to U.S. law enforcement sources, the Bahamian police would seize a load and photos would be taken. Afterwards the money and drugs would be handed back to Lehder. Although Pindling was investigated by a Bahamian commission, he was never convicted.

CARLOS TORO: This was a facade kind of thing. You know, we- and Mr. Pindling, I discussed it with him. At times he will say to me, "Carlos, we have to make an arrest." I mean, we had the Americans checking on us. And we're getting helicopters from them, and we're getting financial aid, and we got a partnership here. We've got to show that we're doing the job. So he was corrupt. And that is why DEA had a problem getting into Norman's Cay,

TOM CASH [sp?]: Well, of course, it wasn't very easy for the DEA to go in and take him out.

NARRATOR: Tom Cash investigated Carlos Lehder for the DEA.

TOM CASH: Carlos owed a significant part of Bahamian political influence to some payments that he had spread around to various and sundry politicians. Then, of course, he had bought the island. Plus he was in- let's understand, he was in another country. And it certainly was evident- important, but not really that important.

JORGE OCHOA: [through translator] Norman's Cay was a bridge that was used by everyone that was in the business at that time. It was something that helped me and helped a lot of people at that moment.

CARLOS TORO: Norman's Cay was a playground. I have a vivid picture of being picked up in a Land Rover with the top down and naked women driving to come and welcome me from my airplane. And we had a house that we called the "El Volcano" because it had that shape. And there- we partied. We partied. And it was a Sodom and Gomorrah. There was, I mean, tropical weather. Everybody was naked. You would find people in one corner having sex, people sleeping on the floor, plenty of food. I mean, you're talking about sin town, you know? It's wonderful. Drugs, sex, there's no police. You own it, you made the rules, and it was just- it was fun.

GEORGE JUNG: It became something like out of a James Bond movie. I mean, you know, everybody on that island was coke-crazed, people riding around with jeeps and machine guns. It was just a totally out-of-control situation. You know, DEA really didn't have the equipment or the manpower to do anything about it, even if they did know about it, because nobody believed it and nobody really cared.

MALTHEA FALCO, U.S. State Dept. '77-'80: In the 1970s, cocaine was not thought to be the kind of threat that it's since proved to be.

NARRATOR: Malthea Falco was the assistant secretary of state for international narcotics matters during the Carter administration. At that time, few people even in government thought cocaine was addictive. The focus remained on drugs that were deemed a threat to public health.

MALTHEA FALCO: The thrust of our policy during those four years was to try to reduce illicit opium production in order to reduce the availability of heroin in the United States. Cocaine was basically used by a relatively small number of very wealthy- you know, the jet set, the rock stars. It hadn't really penetrated the society the way it did in the 1980s. It was still very expensive.

Dr. PETER BOURNE, M.D., Carter White House, '77-'78: Cocaine is an exciting, euphoria-producing recreational drug, and most of the people who get into difficulty with it, so-

NARRATOR: Dr. Peter Bourne was President Carter's drug czar. He still believes that cocaine is a relatively harmless drug.

Dr. PETER BOURNE: In 1978, seven people in the U.S. died from the effects of cocaine. Two of them were people who'd swallowed- who were smuggling, who'd swallowed condoms full of cocaine as they were coming to the U.S. so that it wouldn't be detected, and the condoms had then broken in their stomachs, and they'd had a massive dose of cocaine that killed them.

But to me, it's probably on a par with skiing. If you're a skier, you enjoy the excitement and the thrill, but you can break your leg skiing if you're not careful. If you're very unskillful or unlucky, you may run into a tree and kill yourself. But cocaine is comparable to that. It's not a greater health threat than that. It's not a great, horrendous health problem. And you know, if I wrote something similar to that in 1974, I still believe that. [www.pbs.org: Read more of his interview]

KEITH STROUP, President, NORML: I admired Peter Bourne, I liked him, he seemed like a real gentleman.

NARRATOR: Keith Stroup was president of NORML, the National Organization for the Reform of Marijuana Laws. He considered Bourne an ally, but in retrospect, he thinks cocaine helped killed the marijuana legalization movement.

KEITH STROUP: There've been many people who've made the point, and I don't disagree, that the biggest enemy of marijuana legalization was when cocaine became popular. So long as the only recreational drug that people were really dealing with was marijuana, our arguments were forceful and effective. And the evidence was pretty strong that you could smoke marijuana and still be a successful business man or business woman. It just wasn't a big deal.

NARRATOR: One August evening in 1976, in a suburb of Atlanta, society's tolerance for recreational drug use would hit its limits. That night, Keith Schuchard's daughter was celebrating her 13th birthday at a party in their backyard.

KEITH SCHUCHARD, Parent: We saw flickering lights, but we thought they were cigarettes. And that was enough to alarm us because we, you know, didn't want 7th-graders smoking in our backyard. They were stoned, but we didn't realize at the time- the red eyes, the kind of foggy expression, kind of clumsily pushing each other around, et cetera, going right past us as though we didn't exist. And that's when we got alarmed and said, "The party's over. Call your parents to come get you."

NARRATOR: Schuchard talked to her neighbor, Sue Rusche [sp?], the next day.

SUE RUSCHE: It was just stunning that kids from an academic and professional community, where there weren't any divorces yet, there weren't- there were few, if any, women working, none of the indices that suggested children might be at risk, or anybody might be at risk, applied to these kids, and yet there they were in the middle of it. And we were disbelieving when they came to tell us about it. It seemed so shocking.

KEITH SCHUCHARD: We ran into a great variety of reactions-some parents, absolute denial - "Not my kid," - you know, or quite hostile in response, other parents kind of upset but couldn't believe it.

What educated us was buying High Times and Head and all those drug-culture magazines. Once we started reading them, we began to learn what all this stuff was all about and began to spot the cocaine razor blade hanging on, you know, some adults'- around their neck, or all the marijuana emblems on things, et cetera.

NARRATOR: Faced with this crisis, Schuchard decided to go to the library. But she found almost nothing to substantiate her fears about the effects of recreational drugs such as marijuana on children. Instead she found an article by Dr. Robert DuPont of the National Institute on Drug Abuse.

KEITH SCHUCHARD: And so I fired off a letter directly to him at NIDA, very badly typed - I'm embarrassed to even look at it now - and just told him how upset we were about what seemed to be an undermining by governmental positions of what parents were trying to do.

ROBERT DuPONT, M.D., Dir., Nat'l Inst. on Drug Abuse '74-'78: And I looked at that letter, and I said, "She's right and I'm wrong." A very simple point she made, which is- I still think it's very profound. She said, "When we're talking about marijuana, let's distinguish between marijuana use for kids and marijuana use for adults."

She also made very clear that this support for decriminalization was seen as being pro-pot, and that that had a very negative influence. That had a negative influence in her life, a negative influence in people's families' lives across the country. And I was personally responsible for that, and that really hit home.

NARRATOR: DuPont was a convert. But his friend, the drug czar, was much less sympathetic.

Dr. PETER BOURNE: What they were saying was both ill-formed and so antithetical to the strategies that we were pursuing. They'd make a lot of noise, and they'd say, you know, "Carter's too liberal on drugs. We don't want treatment, we want more aggressive law enforcement," and "These people aren't sick, they're criminals, and we want to lock them all up and put them in prison," and "Heroin isn't the issue," you know, "it's marijuana smoking by suburban white kids, our children, that we're worried about."

And quite frankly, Carter and I had regarded these people as pretty inconsequential gadflies that you sort of see in politics but are really of no particular consequence, and we essentially ignored them.

NARRATOR: In late 1977, Bourne came to Atlanta to give a speech. Schuchard arranged to meet him. She brought along what she and the other parents called the "bong show."

KEITH SCHUCHARD: Bourne really didn't understand the kid drug scene. He- you know, he'd worked in heroin addiction and all kinds of things and really believed that's where all our focus should be. And so I found him quite dismissive and rude when I met him. And I just all of a sudden started pulling out of my shopping bags all the bongs and the comic books and the paraphernalia and said, "Dr. Bourne, this is going on right here now. This is kids we're talking about."

NARRATOR: Bourne's days were numbered. In July 1978, he was caught writing a fraudulent prescription for Quaaludes for a member of his staff. And soon thereafter Keith Stroup started getting calls from the press about a NORML party that drug czar Bourne had attended.

KEITH STROUP, President, NORML: I began to get calls from The New York Times, The Washington Post, everybody, saying, "We heard that Peter Bourne snorted cocaine at your party. Is that true or not?" Initially, I took the usual route of saying "No comment. I don't have any idea," whatever.

NARRATOR: Then, in a sudden reversal, Stroup told the reporters to go ahead with their story.

KEITH STROUP: I made what I think was without question the stupidest decision in my life, and I said to them, "You won't get sued. I don't contradict what you're saying."

NARRATOR: Bourne denied it, but the damage was done. President Carter could not afford the embarrassment.

Dr. ROBERT DuPONT: And poof! The guy is gone from the scene. It was in 36 hours of the time the original Washington Post story broke. It was just very dramatic.

Dr. PETER BOURNE: I don't want to sort of seem so egocentric that the whole- suggest that the whole world revolves around me, but I think the real turning point in this was the moment that I left the White House. It ended the era of the focus on dealing with drugs as a public health issue. And from the point after I left, it then became a political, law enforcement, moral issue.

NARRATOR: Once Peter Bourne was gone, the parents worked closely with the DEA on a national law to ban the sale of drug paraphernalia. They worked with the White House drug office to revise or replace government publications that they felt might be construed as favorable to drug use. And Robert Dupont asked Keith Schuchard to write a new pamphlet about marijuana for the National Institute on Drug Abuse Information. By 1980, the Parents Movement had established more than a thousand chapters nationwide.

KEITH STROUP: We very much underestimated the power of that movement. And that movement, in my opinion, is what led to the next 20 years of the war on drugs. The last political victory we won was when we decriminalized marijuana in Nebraska in, I think, '78. And for the next 20 years, we didn't win a single significant political victory in this country.

REPORTER: Mr. President, in light of what appears to be a growing concern about the drug abuse problem especially among teenagers, what will your priorities-

NARRATOR: In 1981, a new President was settling into the White House.

REPORTER: -White House policy on drug abuse?

Pres. RONALD REAGAN: Yes, I do. And in fact, it can be stated as clearly as this. I think this is one of the gravest problems facing us internally in the United States. I've had people talk to me about-

NARRATOR: At first, President Reagan pledged to focus his administration on consumption or demand reduction. Interdiction, he said, wouldn't work.

Pres. RONALD REAGAN: With borders like ours that, as the main method of halting the drug problem in America, is virtually impossible. It's like carrying water in a sieve. It is my belief, firm belief, that the answer to the drug problem comes through winning over the users to the point that we take the customers away from the drugs, not take the drugs necessarily. Try that, of course. You don't let up on that. But it's far more effective if you take the customers away than if try to take the drugs away from those who want to be customers.

NARRATOR: Perhaps the reality of the drug war had not set in yet. At the time Reagan took over, the United States was already spending more on law enforcement than on demand reduction, a reversal of the Nixon formula. And a crisis was unfolding in the streets of Miami that would pressure the White House to get even tougher. A business that once pretended to be fun and games had turned deadly.

POLICE OFFICER: When the shooting began, the two guys that entered the store were firing .45-caliber Ingram sub-machine guns inside the store. Once they started firing, they-

GEORGE JUNG, Former Narcotics Trafficker: I began to wonder a lot what the hell it was really all about. I mean, especially, they say that the marijuana business is done with a handshake and the cocaine business is done with a gun. All the violence that was taking place surrounding this business- I mean, it was distasteful as hell to me.

CARLOS TORO, Former Narcotics Trafficker: The bloodshed of the cocaine industry was not created by the cocaine itself. The bloodshed and the violence and the assassinations and the many families and debts and dead bodies and all these things that we saw from 1980 to '84 were a product of our doing, not the drug, not the effect of the drug. It was the law enforcement of collecting monies. It was the typical war of one group versus another fighting for territory, fighting for transportation routes and distribution.

NARRATOR: The killings were over money. The vast sums of illegal cash, billions and billions of dollars, took law enforcement by complete surprise.

MIKE McDONALD, Former Agent, IRS, Criminal Investigation Div.: Miami very quickly became not only the import capital of the United States for marijuana and cocaine, but it became the financial center for it. And that was evidenced by-

NARRATOR: Mike McDonald was a young IRS agent assigned to the Miami area. He worked the money side of the drug business.

MIKE McDONALD: Well, Treasury had done an analysis of the flow of currency going into the Federal Reserve system, coming out, and showed that in 1978 and 1979, the entire currency surplus of the United States was attributed to south Florida. Billions and billions of dollars of currency was taken out of the economy into the banking system, put back into the Federal Reserve, cash shipped back to the Federal Reserves in San Francisco, New York, Chicago, to go back into- that's when I looked at that and said, not "Ah-ha," but "Oh, my God! This is beyond any imagination, what we're dealing with here."

It was unbelievable how much money was going into these banks in cash. We had people walking in with rope-handled shopping bags and deposit slips going into banks. We had 12 individuals in Miami who were depositing $250 million or more annually into non-interest-bearing checking accounts. And no reports were being filed, or very few reports were being filed.

NARRATOR: And not just Miami was affected. George Jung was now making huge sales in Hollywood.

GEORGE JUNG: There was a tremendous market there. I mean, it was unbelievable. To sell 50 or 100 kilos in a matter of a day was nothing, and bring back the cash.

INTERVIEWER: How much?

GEORGE JUNG: Pardon?

INTERVIEWER: How much are we talking about?

GEORGE JUNG: As far as a hundred kilos? Five million dollars.

INTERVIEWER: Overnight?

GEORGE JUNG: Right.

It became more of a problem to start- to count the money and stack it. I mean, it took hours upon hours and hours to count it and recount it and go over it and over it again. It was tedious as hell. You know, money became an obstacle. You know, it started to take the fun out of the whole thing, believe it or not.

INTERVIEWER: How rich were you, at this point?

GEORGE JUNG: Oh, probably, at that time, maybe $50 million or $60 million.

CARLOS TORO: We were selling cocaine at $72,000 a kilo. It cost us- it cost us- each kilo, to produce it, to bring it, our final cost of production of that kilo of cocaine went down to maybe $1,500. Now, so, I mean, the profits were, I mean, in the thousands and millions of dollars.

INTERVIEWER: How much money did you make from trafficking in cocaine?

JUAN DAVID OCHOA, Medellin Cartel: [through translator] I can't really tell you because I never really had it added all up, but it was a considerable amount.

INTERVIEWER: One million?

JUAN DAVID OCHOA: [through translator] More than that.

INTERVIEWER: Two million?

JUAN DAVID OCHOA: [through translator] More than that.

INTERVIEWER: Ten million?

JUAN DAVID OCHOA: Mas que eso!

INTERVIEWER: Twenty million?

JUAN DAVID OCHOA: Maybe, maybe. Quizas.

INTERVIEWER: Twenty-five million?

JUAN DAVID OCHOA: [through translator] Around that. I really couldn't tell you exactly.

INTERVIEWER: The DEA would tell me that you made as much as $500 million or maybe a billion dollars in the business.

JUAN DAVID OCHOA: [through translator] I wish that were true. They're wrong about that. They're really wrong about that.

INTERVIEWER: How much money had you made? How much were you worth?

JORGE OCHOA, Medellin Cartel: [through translator] Oh, I don't know. We had a lot. But when there's talk about money or sex, it's usually only half true. This business, as much as you produce, you spend just the same. It's an illusion. It's a myth.

NARRATOR: The business was not a myth. Back in south Florida, cocaine was the not just the fastest growing business around, it was threatening to take over.

NEWSCASTER: Local economist Charles Kimball predicts if the drug trade continues at the present rate for 10 more years, the state will be economically dependent on drug dollars, not to mention-.

NARRATOR: In late 1981, Miami citizens had seen enough. They began holding town meetings to bring national attention to what was happening.

MIAMIAN: [town meeting] -covering up what's really wrong here. You can't change the image if you don't get rid of the problem.

NARRATOR: Two days after Christmas, 1981, Miami's city leaders came to Washington and forced the administration to scrap a proposed 12 percent budget cut at DEA and Customs. They were assured that Washington would help.

MIAMIAN: [news conference] If the federal government is not going to give any additional resources to south Florida, our situation will remain critical. What has happened now is that the public in south Florida has basically lost confidence in the criminal justice system. This is a federal problem. We're involved in a war against drugs.

NARRATOR: On January 28, 1982, the administration announced the formation of the South Florida Drug Task Force. Several hundred DEA, Customs, Coast Guard and Treasury officers were reassigned to the area. Vice President George Bush was tapped to head the task force.

Vice Pres. GEORGE BUSH: [news conference] For those that come in here with their automatic weapons and their Learjets and their boats all for petty cash kind of cost of doing business because the profits are so big, put 'em away. Find them, catch 'em, arrest 'em, put 'em away where they belong.

NARRATOR: As arrests increased, so did the need for more judges and prosecutors. Assistant U.S. Attorney Dick Gregorie was one of the prosecutors brought in to deal with the situation.

DICK GREGORIE, U.S. Dept. of Justice, '72-'00: Things had gotten so bad down here, you'd had the cocaine cowboys, the shootout in the shopping mall. You had criminals coming from all sides. And the office here in Miami had something like 40 assistant United States attorneys and were totally incapable of dealing with it.

The DEA was a quarter of the size of its present allotment. The FBI and the other agencies were just overwhelmed. They couldn't conceivably handle it. Just to take the seizures of narcotics that were occurring here, and finding someplace to burn them, required them to put it on trucks and truck it all the way up to north Florida to a burn site to be able to destroy the drugs they were seizing.

Pres. RONALD REAGAN: Arrests in the area covered by the task force are up 27 percent. Drug seizures are up about 50 percent.

NARRATOR: In late 1982, the president who had said interdiction could never work now declared the task force a big success.

Pres. RONALD REAGAN: And the street value of all these drugs is estimated at more than an incredible $3 billion.

NARRATOR: The problem was that despite all the arrests and all the seizures, the amount of cocaine and marijuana flooding into south Florida was still rising. The drug warriors were mobilized, but they were still losing the war. The president's critics called it grandstanding.

DICK GREGORIE: But unfortunately, this was a lot of politics. There were a lot of photographs taken with drug seizures, money seizures, but there really wasn't an organized effort. And don't get me wrong, seizures were being made. It was a matter of putting dope on the table, but not really attacking the root of the problem.

NARRATOR: For the DEA, the root of the problem was the Medellin drug cartel in Colombia. For the first time, the federal government was spending $1 billion on drug law enforcement, much of it on interdiction and street-level arrests.

ROBERT STUTMAN, Special Agent, DEA '73-'90: Twenty years ago, I read a study in DEA - I'll never forget it - done by our Intelligence Division, a very well-documented study that said the average drug-trafficking organization - meaning from Medellin to the streets of New York or to the streets of wherever - could afford to lose 90 percent of its product and still be profitable.

Now think of the analogy. G.M. builds a million Chevrolets a year, doesn't sell 900,000 of them and still comes out profitable. That's a hell of a business, man. That's the dope business.

The problem is that, generally, the majority of dollars that the U.S. government spends in dealing with the drug issue is interdicting the drug traffic. Well, hell, even if you are wildly successful, you are not going to stop drug trafficking in the United States.

NARRATOR: America's drug warriors and the world's drug traffickers were locked in a rapidly escalating war. As the flow of drugs increased, the cost of fighting them soared. Yet as far as the traffickers were concerned, there was little fear that the Americans would ever be able to put them out of business.

CARLOS TORO: We felt on top of the world. We were invincible. We were totally untouchable. When the Medellin cartel was in full power, from 1978 to 1983, what I call the cocaine bonanza, DEA was there, just like the sun is there every single morning. We have to live with it, but we are not that afraid of it.

We knew they were there. We knew there was intelligence. We knew there was surveillance. But we were scoring every single day. We score and we score and we score. And the ratio to scoring to failure was so fantastic that DEA became at times insignificant, really. We had good intelligence, maybe just as good or better than the DEA in those days.

NARRATOR: While law enforcement did not affect overall traffic much, they did win many battles. In 1981, they had convinced Prime Minister Linden Pindling of the Bahamas that Lehder's highly visible Norman's Cay operation had to go. Operation Caribe resulted in the arrest of several of Lehder's men.

CARLOS TORO: Norman's Cay and Carlos's empire was lost because of his own doing. Carlos became too confident and too cocky in what he was doing on his operation. He developed this attitude that he no longer made it a secret or denied his activity with drug dealers that he was a cocaine producer, that he was a member of the cartel. And from the last months in Norman's Cay, he made the Bahamas his playground in a way that it offended the Pindlings. And the Pindlings were fed up and sick with him.

INTERVIEWER: Yeah, but they were making money off the-

CARLOS TORO: Oh, they were making money off it, but now they were suffering the pressure of the Department of Justice and the international community. They wanted to clean their act. They were about to lose- they were being driven out of office, and they wanted a legacy.

NARRATOR: Norman's Cay was shut down by 1982, and was left littered with the wreckage of failed drug flights. Lehder's old partner, George Jung, had been cut out of the operation a few years earlier. Lehder himself escaped back to Colombia.

GEORGE JUNG: He had intentions of going back to Colombia and taking over the country. You know, he idolized Che Guevera, and he was intent on the revolution. And as he stated, cocaine was the atomic bomb, and he was going to drop it on America. You know, he basically began to lose his mind at that time.

NARRATOR: By late 1982, the DEA began to spend more effort on Colombia itself. At first they knew very little about how and from where the Medellin cocaine cartel operated. U.S. efforts focused mostly on grants to the Colombian police to eradicate Colombian marijuana fields. This focus left the DEA unaware of what was going on deep in the southern reaches of Colombia. The smugglers had established a huge complex of cocaine laboratories here. It was so remote and peaceful, they called it "Tranquilandia."

JUAN DAVID OCHOA: [through translator] We had a part in that lab, and it was very important because there we could very easily process cocaine. It was in the middle of the jungle.

NARRATOR: Newly assigned to Colombia, DEA agent Johnny Phelps suspected that there might be large laboratories, but he didn't know where. Then he had an idea.

JOHNNY PHELPS, Special Agent, DEA '73-'97: We developed a program and an idea, a concept of trying to actually follow chemicals being used in the laboratories to an actual laboratory site. In one case in particular, we were able to determine that the chemicals had reached a destination which we believed to be a cocaine laboratory site. Working with the Colombian national police, the plan was developed to transport national police officials, accompanied by DEA agents, to this site to investigate, to determine if, in fact, it was a cocaine-producing laboratory.

NARRATOR: The bust took place on March 10, 1984. These pictures were taken by a DEA cameraman. Undetected by law enforcement for nearly two years, Tranquilandia produced as much as $15 billion of cocaine.

JOHNNY PHELPS: To our surprise, it was a huge complex, not a single laboratory but a series of laboratories. It was an industry.

NARRATOR: DEA Agent Bill Alden had just taken a job at DEA headquarters in Washington. He remembers his superiors gloated over the news.

BILL ALDEN, Special Agent, DEA '73-'93: We were gratified by that seizure, and there was a lot of self-congratulation. Because that was such a huge amount, we actually thought that we may have had an impact on cocaine-trafficking. In fact, later that year or later that spring, I made a presentation to the California Narcotic Officers Association in San Diego, and I remember alluding the Tranquilandia and insinuating that we might have turned a corner.

I really always wanted to go back and apologize for that later on because what we thought is, if we carefully watched the price, the purity, for the next few months, we would see probably a drop in purity, an increase in price, because we affected availability and we really had an impact.

Wrong. There was no impact. There was absolutely no- 22,000 pounds, 12- almost 12 tons of cocaine seized had absolutely no impact on the market at all, on availability, purity. It continued just as it did, as ferocious as it did before. And then we really began to realize how big it really was.

JORGE OCHOA: Tranquilandia was one of the five or six big laboratories that existed at that time in that region. But I don't think it affected traffic much because there were many labs like Tranquilandia all over the country, in many places.

NARRATOR: At the U.S. embassy in Bogota, U.S. officials knew that to make any real progress against the Medellin cartel. they needed to do much more than burn down labs. Alex Watson was deputy chief of mission.

ALEX WATSON, U.S. Embassy, Bogota: Our whole idea was that you were not going to have a successful effort in Colombia against either marijuana or cocaine unless you had some sort of political consensus that this was an issue on the national agenda which needed to be dealt with. Just the Americans talking about it alone was not enough.

And the most potent weapon, from the perspective of the narcotics traffickers, was their extradition to the United States because there was a feeling that, given their power and their money, that they could probably avoid being punished inside Colombia.

NARRATOR: Extradition was a hard sell. At their peak of power and influence, the leaders of the Medellin cartel were able to command a certain level of legitimacy in Colombian society.

Pablo Escobar posed as a sort of Robin Hood. He built neighborhoods for the poor and bought one of Colombia's most popular professional soccer teams. He ran for political office and won a seat to the Colombian parliament in 1982. Drug dollars, billions annually, were pouring into Colombia's economy, causing a building boom in several cities.

The cocaine bonanza made the dealers heroes. When Carlos Lehder campaigned for political office, he openly admitted he was a trafficker. When threatened with extradition, these men were able to use their power and popularity to fight what was already a very unpopular idea.

ALEX WATSON: The extradition of nationals is a very sensitive theme around the world. And many European countries will not sign an extradition treaty - I think it's the French still have this - that permits the extradition of one of their nationals to another country.

COLOMBIAN DEMONSTRATORS: Extradition es treason! Extradition es treason! Extradition es treason!

ALEX WATSON: And so there was a lot of pressure on the Colombians not to extradite Colombian nationals to the United States. And the Colombian traffickers did everything they could, including spreading money around the political class, making arguments that it was unpatriotic to allow this to happen.

CARLOS LEHDER, Medellin Cartel: [anti-extradition rally] [through translator] North American imperialism came, the Peace Corps came and planted drugs and corrupted Colombia and planted cocaine. Now, when the Colombians become enmeshed in their system and their dollars, we are then hauled off to the United States to be arrested. The treaty of extradition is a trick!

[in English] I know that the United States will never do that to any American, like send him to someone else's jail to get punished, especially to a Colombian jail. So same thing for us. I'm fighting for the rights of my people.

JUAN DAVID OCHOA: [through translator] Look, for us extradition was something very serious. If you were extradited, it would be like being buried alive. We respected extradition very much.

JORGE OCHOA: [through translator] We worked through the courts against extradition. Pablo took another road, which was violence.

NARRATOR: Colombian Justice Minister Rodrigo Lara Bonilla supported extradition. In April of 1984, the DEA learned that the cartel had pooled half a million dollars to kill him.

Carlos Toro remembers meeting with Pablo Escobar in Haiti.

CARLOS TORO: I was in Haiti to meet Carlos Lehder. And Pablo showed up, and we were having an afternoon lunch, and they - Carlos and his attorneys - started talking about the situation with the minister being an obstacle to the whole interests of the cartel. And Pablo said it quite clearly that the minister had to be dealt with somehow.

ALEX WATSON: And I saw him at the- at a reception of- a National Day reception at the Dutch embassy, I believe it was. And I was chatting with him, as I often did whenever I saw him. And I said, "You know, Rodrigo, we're all ready whenever you want to come to the U.S. and take a little breather and get away from all this. We're ready to put you up. It's all set up." And he said to me, "No, Alec. I got a few more things I want to do. I want to stay a few more weeks before I go."

And it was that night at about 8:00 when the motorcycles drove up beside his car as he as going home, and they machine-gunned him to death.

NARRATOR: In a country used to violence, this killing shocked everyone. Among the assassins were teenagers. The president imposed a state of siege and ordered the army to go after and arrest all the drug traffickers they could find.

Back in the United States, cocaine use was still rising. Ironically, the administration's major focus was not on cocaine but on marijuana. The Parents' Movement was driving the administration's policy. [www.pbs.org: A chart on drug use trends]

MALTHEA FALCO, U.S. State Dept. '77-'80: When Ronald Reagan came into the presidency, he made a very clear public statement that marijuana was going to be made a top priority because he believed- he and his wife believed that it was the spread of marijuana among middle-class kids that was really the drug threat.

KEITH SCHUCHARD, Nat'l Fed. of Parents for Drug-Free Youth: In prevention terms, it's still- marijuana's the keystone because it is- you know, it is the gateway drug - and NIDA finally officially agreed with that - into the drug culture, so that if you prevent the usage of marijuana, you really have very little chance of other drugs being used.

NARRATOR: In 1984, first lady Nancy Reagan launched her "Just Say No" campaign and became an unofficial spokeswoman for the Parent's Movement.

MARCHERS: Just say no! Just say no!

NARRATOR: The campaign focused mostly on white, middle-class kids who had not yet tried drugs, and the campaign relied heavily on private and corporate donations. The Reagan administration actually reduced the percentage of money spent on treatment and prevention by a third between 1981 and 1986.

NANCY REAGAN: If someone offers you drugs, what will you do?

KIDS: Just say no!

NARRATOR: While the focus continued to be on marijuana and kids, by 1984 an estimated 6.5 million Americans used cocaine at least once a month.

Back in Colombia, the killing of the justice minister had pressured the government to try to arrest and extradite the country's major traffickers. But powerful and rich, they retaliated. Over the next six years, the country lived through a nightmare of death and destruction. The cartel targeted judges, journalists, politicians, policemen, anyone that they believed posed a threat. They also financed random bombings designed to wear away public morale.

The United States maintained the extradition policy would work if the Colombians would just persist a little longer. Chief of the DEA Jack Lawn came down to Colombia to defend the policy.

JACK LAWN, DEA Administrator '85-'90: [news conference] I think that it is effective, and I maintain the belief in its effectiveness because of the tremendous outcry on the part of the drug traffickers against extradition.

I can say that the authorities in Colombia were trying to do what was the very best for drug law enforcement and what was the very best for their own government. But the impact clearly was one that the United States, in effecting the extradition treaty, did not anticipate.

ALEX WATSON: The fact that there was a violent reaction to it indicated that it was perceived to be a really powerful weapon in this- in this struggle. And dropping it- I don't see what you gain by dropping it. You're yielding, then, to the traffickers. I'm not saying that it's not important to try to save lives. But on the other hand, that means that if, you know, when someone puts a gun to your head, you just yield all the time, you know, it's going to happen.

NARRATOR: In one of the boldest attacks against the Colombian government, anti-government guerrillas acting in partnership with the Medellin cartel attacked the Colombia Supreme Court in 1985. All files containing pending extradition requests were destroyed. Eleven Supreme Court justices were killed. In total, more than 200 people died.

By 1986 there was no end in sight to the violence and no extraditions of the Medellin drug lords.

JACK LAWN: I believe that the cartels, by using their muscle, by using terrorist tactics, clearly won the day. They succeeded in forcing individuals and the government of Colombia to back away from what could've been a very effective policy. That being said, the officials who made that decision were in the line of fire, and they did the prudent thing.

Was it a wise policy? It was a good policy. It was applied effectively. The results of the policy were bad.

NARRATOR: With the violence raging inside Colombia and more pressure on their old routes through the Bahamas, the Medellin drug lords played a kind of hemispheric shell game, deftly moving their cocaine operations to places like Cuba, Mexico, and in 1984 to Nicaragua, where the Sandinista government gave them sanctuary.

DICK GREGORIE, Asst. U.S. Attorney: They were going to fly the cocaine paste to Nicaragua to process it and then fly it out from there. We were ready to indict that and, in fact, had very-

NARRATOR: In the U.S., Dick Gregorie was preparing a major indictment of the cartel. But Gregorie was frustrated that the Colombians couldn't extradite the cartel leaders. Working with the DEA, Gregorie helped devise an elaborate trap. But the drug war was about to collide with the Cold War.

JUAN DAVID OCHOA: [through translator] There was a time when the Sandinista government of Nicaragua offered to cooperate and help us traffic drugs. Pablo Escobar went personally to Managua in order to strike a deal which involved Barry Seal. But it was a fiasco because Barry Seal was already twisted, as we say.

NARRATOR: Barry Seal was a former TWA commercial pilot who by the mid-'80s had made an estimated $25 million flying cocaine for Pablo Escobar and Jorge Ochoa. Unknown to them, however, Seal had been arrested and had cut a secret deal with Dick Gregorie and the DEA to help bring in Escobar and Ochoa. Seal was now working for the U.S. government.

DICK GREGORIE: Barry Seal had flown to Nicaragua and had seen that they were opening plants to start producing the cocaine there and that they were going to fly it to the U.S., and we were going to be able to prove the full circle.

NARRATOR: A plan was hatched to have the CIA rig Barry Seal's plane with hidden cameras in order to collect photographic evidence of drug smuggling. Then Seal would lure Escobar and Ochoa to a third country, where they could be arrested and extradited to the U.S.

DICK GREGORIE: We had hoped that this was going to bring down the cartel lock, stock and barrel. And we had hoped that it was going to have a major effect on the process.

NARRATOR: The flight to Nicaragua went off perfectly. The cameras worked. They caught these shots with Pablo Escobar and a Nicaraguan official, Federico Vaughn, loading Seal's plane with 750 pounds of cocaine. That's Escobar on the left, Seal on the right. This was astounding evidence, and it flashed to the highest levels in Washington.

The very day that Seal returned to Florida with his load of cocaine, Ronald Reagan's national security adviser, Oliver North, jotted in his notebook, "Photos show Vaughn and Nicaraguan troops, 750 pounds of cocaine."

Within a few weeks, while law enforcement agents were still in the process of laying their trap, the operation was leaked to the press.

DICK GREGORIE: And the next thing we knew, we had the radio making a public announcement that this was what was happening. And we had to call Barry Seal back from in the air, because he was flying down there to accomplish this mission, and tell him that he better return home, that we were afraid we were going to lose our star witness.

JACK LAWN, DEA Administrator '85-'90: I was outraged. This was an ongoing investigation by the Drug Enforcement Administration, and the information was leaked for reasons that had nothing to do with drug law enforcement.

No one had previously contacted us to ask our help, to solicit our cooperation, to even ask about whether we had undercover activities or undercover agents who might be in jeopardy. It was done solely as a political agenda.

OLIVER NORTH, National Security Council Staff '81-'86: Well, as the world now knows, I was deeply involved, by that point in time, in assisting the Nicaraguan resistance and various policy initiatives in Central America.

NARRATOR: It has long been suspected that Oliver North was responsible for leaking the story. Until now, he has always denied it.

OLIVER NORTH: It became public as a result of a briefing to Congress. That's how the whole thing actually came out.

INTERVIEWER: What do you mean?

OLIVER NORTH: Well, there was a briefing given to a United States Senator, as a matter of fact, and it was shortly thereafter that this whole operation became a public matter, and it was after the operation was ongoing, involving the coordinated activities of various government agencies.

INTERVIEWER: Did you brief the senator?

OLIVER NORTH: I did.

NARRATOR: What North told FRONTLINE is that he was directed by, quote, "his bosses on the National Security Council to brief Senator Paula Hawkins of Florida." Hawkins was a staunch supporter of the Contras, or the Nicaraguan Resistance.

INTERVIEWER: And it was after that it appeared in the Washington Times?

OLIVER NORTH: It did indeed.

NARRATOR: Senator Hawkins remembers the briefing but insists that neither she nor any member of her staff leaked the information.

DICK GREGORIE, Asst. U.S. Attorney: I was always under the impression that there were interests at work other than the narcotics war. The narcotics war was never the priority of the U.S. government. They were more concerned about fighting the godless communist conspiracy and the spread of communism in Latin America than they were about the extent of the narcotics trade.

NARRATOR: At the time, Nicaragua was a major Cold War battlefield, a major focus of Reagan foreign policy.

Pres. RONALD REAGAN: They are our brothers, these freedom fighters, and we owe them our help.

NARRATOR: The Reagan administration was supporting and directing the Contras in an effort to topple the Cuban-backed Sandinista government of Nicaragua.

Pres. RONALD REAGAN: You know the truth about them. You know who they're fighting and why. They are the moral equal of our Founding Fathers and the brave men and women of the French Resistance. We cannot turn away from them.

NARRATOR: While the Sandinistas were profiting from the cocaine business, there were charges that the Contras were doing the same and that the CIA was aware of and condoned Contra cocaine smuggling to help raise money for the cause.

HECTOR BERRELLEZ, Special Agent, DEA '73-'96: I've never known of a CIA employee to carry drugs in a suitcase across the border, but I have known other contract employees who have brought tons of cocaine into the United States.

NARRATOR: Hector Berrellez is a former DEA supervisor stationed in Los Angeles during the 1980s. He is one of a number of DEA field agents who believe that CIA contractors were involved.

HECTOR BERRELLEZ: I believe that elements working for the CIA were involved in bringing drugs into the country. And I more than believe it, I know specifically that some of the CIA contract workers, meaning some of the pilots, in fact, were bringing drugs into the U.S.

NARRATOR: But in 1998, the CIA published a report by its independent inspector general which stated that while there were many allegations in their files, there was no credible evidence of CIA drug smuggling.

FREDERRICK HITZ, Inspector General, CIA '90-'98: We concluded that there was no institutional involvement by CIA and there was no individual CIA case officer involvement in drug trafficking in the Contra operation during the period in which we reviewed the records.

NARRATOR: But the Hitz report did state that not all allegations were thoroughly investigated. It also revealed this letter of understanding between the Department of Justice and the CIA, which fails to list drug trafficking among those crimes CIA field agents must report to U.S. law enforcement.

FREDERRICK HITZ: Yes, there is a letter to the agency, but that doesn't forgive your responsibility and your- you know, the responsibility of your officers in the field to report criminal activity when they encounter it. So it was a mixed message. [www.pbs.org: More on the CIA-drugs question]

NARRATOR: Questions regarding CIA involvement in drug smuggling may never be fully resolved, but what is clear is that throughout the 1980s, Central America was awash in drugs and drug money, and despite political rhetoric at home, fighting drug trafficking was not always the U.S. government's number-one priority.

Pres. RONALD REAGAN: I know every American parent concerned about the drug problem will be outraged to learn that top Nicaraguan government officials are deeply involved in drug trafficking. This picture, secretly taken at a military-

NARRATOR: Two years after the aborted Nicaraguan operation, the pictures of Barry Seal were still being used as propaganda against the Sandinistas.

Pres. RONALD REAGAN: -to which the Sandinistas will not stoop. This is an outlaw regime.

NARRATOR: For many in the DEA, the use of the pictures would symbolize the longstanding clash between drug law enforcement and politics. The leak may have also cost DEA informant Barry Seal his life.

In February of 1986, Seal was assassinated in Baton Rouge, Louisiana, by paid gunmen of the Medellin cartel. The youngest Ochoa brother, Fabio, has been accused of masterminding the murder.

Just last year, along with 27 others, Fabio Ochoa was arrested and charged with conspiracy to traffic heroin and cocaine. The U.S. government has requested his extradition to face those charges and the murder of Barry Seal. Fabio's not guilty, says his brother Jorge.

INTERVIEWER: So who was responsible for the murder of Barry Seal?

JORGE OCHOA: [through translator] I don't know. I don't know who.

NARRATOR: Today Jorge and Juan David Ochoa say they are out of the drug business. In 1991 they negotiated surrender agreements with the Colombian government and served short jail terms. They were released in 1996. They were allowed to keep most of their land and money. Their old business partner, Pablo Escobar, was gunned down by the police in 1993.

The only major kingpin who has ever been arrested and extradited is Carlos Lehder, who is now serving a life sentence in the U.S. In 1985, his Danbury bunkmate, George Jung, was caught with 660 pounds of cocaine. He agreed to testify against Lehder in exchange for a reduced sentence. A few years after his release, he was caught again with 400 pounds of marijuana and sentenced to another 20 years.

The Medellin cartel held on to its market share into the mid-'80s, but everything was about to change dramatically. In places like the Bahamas, a new, super-potent form of smokable cocaine first appeared. It became known as crack.

DAVID ALLEN, M.D., Drug Treatment Clinic, Bahamas: The first time I saw crack was in 1983. What struck me was the fantastic high that these young men and women talked about. They described it as having a thousand Christmases. Another description was having a hundred orgasms at one time.

JACK PERCENTIE, Former Crack User: A smoke of cocaine, in 8 to 10 seconds, it goes straight to the body, straight to the brain. And immediately you get that feeling, the instantaneous feeling of being in a different world.

Dr. DAVID ALLEN: But the other thing was it produced a powerful ethical fragmentation. People from very good families who had no qualms about stealing, no qualms about selling their body, no qualms for any kind of sexuality, from bestiality to what have you.

JACK PERCENTIE: I thought of myself as being too good to go to work. I didn't need to go to work. As a matter of fact, the money derived from crack sales, that was sufficient to sustain me. But little did I know that the same crack was going to bring me to my knees.

Dr. DAVID ALLEN: There was one particular cocaine dealer, as well as user, and he was admitted to the hospital because he also had diabetes. He went into a diabetic coma. And I remember sitting with him as he died, and his last words to me was- and this is in '85. He said, "Doc, when the world knows about this drug, there's going to be a lot of hell out there."

Drug Wars: Part One

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ANNOUNCER: Tomorrow night on Drug Wars, crack comes to America.

ROBERT STUTMAN, DEA Special Agent-in-Charge, '85-'90: It started in Harlem, and then we started seeing it move downtown.

PAUL, Former Crack Addict and Dealer: Crack. That's America. Colombians didn't know that Americans would take cocaine and make it even more profitable.

ANNOUNCER: And Mexico becomes the major pipeline for drugs.

WILLIAM ALDEN, DEA Asst. Administrator, '86-'93: The trail led all the way down to government officials being involved.

UNIDENTIFIED SPEAKER: Mexico has been bought off.

ANNOUNCER: The stakes are higher than ever.

JACK LAWN, DEA Administrator, '85-'90: When the system becomes so corrupted, then nothing is safe.

ANNOUNCER: In the end, it all comes down to money.

GREGG PASSIC, DEA Special Agent, '71-'95: We've got the Fortune 500 involved in the drug money laundering.

ANNOUNCER: Getting it-

UNIDENTIFIED SPEAKER: Five hundred billion dollar business.

ANNOUNCER: -spending it-

JACK LAWN: If there's money available, agencies will say, "Well, we're going to form a drug unit." Now there are some 50 agencies involved.

ANNOUNCER: -getting rid of it-

JUAN MIGUEL PONCE EDMONDSON, Director of Interpol, Mexico: The money goes from place one to place two to place three. And suddenly- disappeared. Off-shore magic.

ANNOUNCER: -and killing for it.

STAN PIMENTEL, FBI Mexico '91-'96: I wouldn't go to Tijuana unless I had a battalion-size force.

ANNOUNCER: How do we stop an illegal business that's making so many people rich?

UNIDENTIFIED SPEAKER: Money and power and drugs. Everybody's getting a piece of the action.

ANNOUNCER: Drug Wars, a FRONTLINE special series in collaboration with National Public Radio. And don't miss the Drug Wars series from NPR News airing this week on All Things Considered.

This report continues at FRONTLINE's Web site, with special reports on the CIA, drugs and the conspiracy theory, an inside look at a Silicon Valley trafficking operation and the Hank family of Mexico. You can also link to NPR's Web site and listen to the special reports on the war on drugs from NPR News.

Plus, go inside the world of top narco-traffickers, who tell how they set themselves up in business. Find out how much Americans spend on drugs and where that money goes. And examine more about drug users, addiction and treatment. Finally, watch a recent national symposium on the drug war with top-level officials. It's all at pbs.org or America Online keyword PBS.

Educators and educational institutions can purchase this tape from PBS Video by calling 1-800-328-PBS1. [$99.95]

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Funding for this program was provided by the John D. and Catherine T. MacArthur Foundation, the Florence and John Schumann Foundation, and by the Corporation for Public Broadcasting.

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Tonight's program was funded in part by the Corporation for Public Broadcasting. FRONTLINE is made possible by contributions to your PBS station from viewers like you. Thank you.

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