Follow-Up Review of the Drug Enforcement Administrationís Efforts
to Control the Diversion of Controlled Pharmaceuticals

Evaluations and Inspections Report I-2006-004
July 2006
Office of the Inspector General


Appendix III
DEAís Response to Draft Report


The text in this Appendix was prepared by the auditee and uncorrected by the OIG.



  U. S. Department of Justice
Drug Enforcement Administration
Executive Policy and Strategic Planning Staff
Office of the Deputy Administrator


www.dea.gov


June 28, 2006





TO: Paul A. Price
Assistant Inspector General
Evaluation and Inspections Division
Office of the Inspector General
 
FROM: Douglas N. Biales, Chief
Executive Policy and Strategic Planning Staff
Office of the Deputy Administrator
 
SUBJECT: DEAís Response to the OIGís Draft Follow-Up Review of the Drug Enforcement Administrationís Efforts to Control the Diversion of Controlled Pharmaceuticals, June 2006
 

The Drug Enforcement Administration (DEA) appreciates the Office of the Inspector General (OIG) for extending this review in order to consider additional briefings and information on the Diversion Control Program.

As your review correctly reflects, DEA has made significant progress since the OIG’s 2002 review. DEA designated the diversion of controlled pharmaceuticals as a top agency priority and communicated this priority throughout DEA and to all U.S. Attorneys nationwide. DEA also formulated a comprehensive Internet strategy to attack the trafficking and diversion of controlled pharmaceutical substances over the Internet. The strategy, which has evolved in step with trafficker operations and the changing threat environment, has guided the execution of major international operations in the last two years and has led to the arrest of some of the nation’s top pharmaceutical traffickers and the closure of significant and dangerous illegal Internet pharmacies. Other milestones and accomplishments of the Diversion Control Program include:

  • Diversion Control was made a Strategic Goal in the FY 2003—FY 2008 DEA Strategic Plan

  • In January 2004, the DEA Administrator announced to DEA offices worldwide the importance and priority of diversion investigations

  • DEA Headquarters was reorganized in 2004 to centralize diversion investigations into one section and to place diversion investigations on par with other DEA criminal investigations

  • A pharmaceutical Internet coordination unit was established at the Special Operations Division in the Fall of 2004

  • DEA established Financial Investigation Groups to target financial crimes and assets associated with drug trafficking that includes diversion investigations

  • DEA established strong partnerships to educate the pharmaceutical industry on the spread of pharmaceutical abuse and to clamp down on on-line Internet trafficking

  • DEA assisted with the development of the OCDETF Fusion Center that is accessible to diversion investigators and used for coordinating complex Organized Crime Drug Enforcement Task Force investigations

  • DEA trained more than half of its diversion investigators via the Internet Telecommunications Exploitation school

  • DEA established a diversion school for special agents and to date has trained approximately 98 special agents

  • From FY 2003 to FY 2005, DEA increased special agent work hours devoted to pharmaceutical investigations by 114 per cent; increased intelligence analyst work hours by 235 percent; and increased the total number of work-hours expended on Internet diversion investigations by more than 71 per cent

  • DEA increased the number of diversion investigations by 23 per cent, from 770 in FY 2002 to 950 in FY 2005

  • From FY 2002 to FY 2005, DEA increased the number of organizational disruptions from 454 to 474 and organizational dismantlements from 474 to 594

  • DEA increased seized assets related to Internet diversion investigations from $1.8 million in FY 2002 to more than $32.4 million in FY 2005

  • DEA requested and received authority to increase the number of diversion investigators by 75 between FY 2004 and FY 2005

Despite these accomplishments, the OIG report makes a number of conclusions with which DEA disagrees. Following are DEA’s views as to its progress and its responses to each of the OIG’s recommendations.

Work Hours Analysis

Much of the report centers on special agent and intelligence analyst assistance to diversion investigations as measured by work hours/years. OIG’s analysis is overly restrictive and excludes key data. Specifically, it excludes the work hours expended under 14 G-DEP identifiers, one of which is pseudoephedrine. DEA believes that for consistency, this review should reflect work hours expended under all relevant G-DEP identifiers just as in the 2002 review. While OIG’s rationale may make sense when looking at only "diversion" cases, it is not applicable when looking at "pharmaceutical" cases (e.g., most would consider ephedrine and pseudoephedrine to be pharmaceuticals). Further, the dynamics of the global drug trade concerning controlled pharmaceutical substances have evolved so profoundly since the 2002 review that to exclude these 14 G-DEP identifiers renders conclusions that are not fully representative of the pharmaceutical drug threat and DEA’s activities.

Investigative Work Hours for Pharmaceutical Investigations by Job Series, FY 2003 – 2005

[Chart Not Available Electronically]

In addition, the OIG’s analysis excluded the work hours of state and local task force officers assigned to DEA task forces. Since the 1970s, these task force officers have been an extension of the DEA agent work force, and are federally deputized with equal responsibilities and authorities as DEA agents. Most important, their activities and investigations are directed by DEA priorities. Therefore, DEA maintains that the investigative work hours that these task force officers spent on criminal diversion investigations should be combined with those of DEA special agents.

When calculating all criminal pharmaceutical diversion investigations and 2000-series diversion investigations, as well as the work hours of task force officers, and investigative hours involving the additional 14 G-DEP identifiers, DEA found that:

  • Total work hours for all DEA job series (SA, TFO, DI, IA) rose 43 per cent from 696,832 hours in 2003 to 996,625 hours in FY 2005
  • SA work years increased from 107 in FY 2003 to 161 in FY 2005 (as opposed to the OIG’s analysis that ranges from 14.8 in 2002 to 57.4 work years in 2005)
  • Combined SA/TFO work years increased 37 per cent from 174 in FY 2003 to 238 in FY 2005
  • In FY 2005, special agents spent approximately 5.4 per cent of their total investigative time on criminal pharmaceutical cases

The draft report states that while DEA has increased the amount of its intelligence resources to diversion investigators, intelligence analyst assistance to diversion investigations has remained limited (p. xii). However, DEA analysis shows that intelligence analyst work hours on diversion investigations increased 58 per cent from 25,603 hours in 2003 to 40,517 hours in 2005. Also, the OIG survey shows that:

  • 67 per cent of the 60 respondents report that intelligence analysts always or usually provide a sufficient amount of intelligence support for diversion investigations (question 21)
  • 72 per cent of the 61 respondents were very satisfied or somewhat satisfied with the intelligence support received (question 24)
  • 75 per cent of the 62 respondents reported receiving intelligence for specific investigations when requested (question 22)

DEA is continuing to expand its intelligence support to diversion investigations and is in the process of allocating 41 new intelligence analysts to support the Diversion Control Program.

Sustaining Worldwide Commitments with Resource Constraints

Controlling pharmaceutical diversion continues to be a priority for DEA. While maintaining pharmaceutical diversion as a top priority, DEA must also continue its work uninterrupted around the world—in Mexico, Colombia, Afghanistan and in 59 other countries—and across America to fight cocaine, heroin, methamphetamine, MDMA, and marijuana trafficking organizations.

Following September 11, 2001, many agencies were overhauled and reorganized, and their priorities reordered. DEA underwent the most sweeping realignment in its 33-year history to attack drug-related terrorism and other threats in a post-9/11 environment. DEA has designated diversion control as a top priority through this change and without commensurate resource enhancements to address the growth of this threat.

The fact that DEA is constrained by ongoing budget shortfalls that limit the manpower support the agency is able to provide for the Diversion Control Program was overlooked by OIG. For example, DEA absorbed $108.8 million in base funding offsets and unfunded mandates between FY 2003 and FY 2006. That amount is equal to the pay and benefits of 749 special agents. Still, despite these constraints, DEA has made a significant investment in combating the diversion and abuse of controlled pharmaceuticals, and with substantive results as previously outlined.

DEA Response to OIG Recommendations

  1. Provide diversion investigators with adequate special agent support until the conversion of the DEA diversion investigator position to one with law enforcement authority is fully implemented.

This recommendation is unnecessary and its objective—“to provide adequate special agent support”—is ambiguous. DEA indeed has provided “adequate” special agent support to diversion investigations without the benefit of additional resources and while maintaining its other worldwide enforcement obligations. DEA has realigned its priorities and resources all in an effort to focus DEA, especially its special agents, on diversion investigations. The complete body of DEA’s efforts—its investigations, operations, intelligence support, work hours, organizational arrests, disruptions, and dismantlements—is evidence that DEA indeed has provided adequate, even substantial and effective, special agent support to diversion investigations. Results of the OIG’s questionnaire support this conclusion. A full 82 per cent of the 61 respondents said they believe special agents “always” or “usually” provide sufficient support to diversion investigations (question 6); and 94 per cent said they were “very satisfied” or “somewhat satisfied” with special agent support (question 7). In addition, only one respondent reported not having special agents involved in his or her diversion group’s investigations (question 4).

Another concern is the OIG reports’ misrepresentation of the August 2001 directive by DEA’s Chief of Operations. DEA’s Chief of Operations issued this memorandum instructing Special Agents in Charge to place two special agents in each diversion group in each Division office. This instruction, thought originally to be the permanent solution to diversion investigators’ lack of law enforcement authority, was overtaken by a 2003 decision to instead convert diversion investigators to a series with law enforcement authority. Once the conversion (involving a new “hybrid” position) is complete, DEA will be in a position to provide increased investigative assistance to diversion investigators and carry out more diversion investigations. DEA has requested and has received authorization for additional enhancements in special agent positions in the diversion program. In the interim, DEA will enhance special agent/task force officer support to diversion investigations that require law enforcement assistance and cannot be performed independently by diversion investigators.

Within 30 days after the issuance of the final OIG report, the DEA Deputy Administrator will issue a memorandum and worldwide teletype restating that diversion and trafficking of controlled pharmaceuticals, to include Internet trafficking, remain a top DEA priority and that Special Agents in Charge are to enhance special agent assistance to criminal diversion investigations. Additionally, 23 special agents are being allocated to support diversion groups and the diversion program.

  1. Ensure that DEA special agents who frequently assist with diversion investigations attend the week-long diversion training school.

Concur. DEA’s Office of Training will continue to identify and offer training to all special agents and task force officers who are assigned to DEA’s Tactical Diversion Squads, or who assist with diversion investigations. The one-week training course will provide students with an in-depth understanding of diversion investigations, focusing on the Controlled Substances Act as it pertains to regulated pharmaceuticals, methods of diversion, pharmacology, addiction, and the investigative techniques used in diversion investigations. Dependent upon funding, special agents and task force officers will be identified and trained during FY 2007.

  1. Provide training to intelligence analysts on topics that would effectively support diversion investigations.

Concur. DEA’s Office of Training will develop a training course for intelligence analysts to ensure their full and effective analytic support to diversion investigations. The Office of Training will conduct an assessment to determine the precise analytic needs of diversion investigators and investigations. The assessment will determine the necessary tasks, standards, analytic skills, knowledge, and abilities that intelligence analysts must possess to support diversion investigations effectively. The assessment will then be used as a baseline to design a course and curriculum for analyst training. Dependent upon funding, the Office of Training will develop the curriculum by October 1, 2006 and commence training in FY 2007.

  1. Update the diversion control training video used in the special agent and intelligence analyst training academies to include current issues such as diversion using the Internet.

Concur. DEA’s Office of Training is currently in the process of developing a new training video specifically for pharmaceutical diversion. The video, being developed especially for special agents and intelligence analysts, as well as for diversion investigators, will contain the latest information on diversion threats, trends, methods, and techniques. It will also contain specific training material on Internet-based drug trafficking, technical investigative techniques, methodologies, resources, and financial investigations. The Office of Training anticipates completing the new training video by September 30, 2006.

  1. Ensure that diversion investigators receive training in skills necessary for conducting Internet investigations, such as financial investigations.

Concur. The Special Operations Division (SOD) has developed the Internet Telecommunications Exploitation training curriculum for diversion investigators, special agents, and intelligence analysts. To date, over 50 per cent of all diversion investigators have attended this training. Dependent upon funding, DEA will increase the number of diversion investigators who attend this school in FY 2007. In addition, DEA’s Office of Training offers courses in financial investigations, asset forfeiture, complex conspiracy, and FinCEN/Gateway training. DEA will increase the number of diversion investigators in these courses as well. Further, the Office of Training will conduct a needs assessment to determine the necessary job tasks/standards as well as the knowledge, skills, and abilities needed for diversion investigators to effectively conduct Internet investigations. As needed, DEA will modify existing courses or develop new ones to meet the needs of diversion investigators. The Office of Training expects to complete its needs assessment by November 2006.

  1. Fully implement the program to provide undercover credit cards to diversion investigators.

Concur. DEA has made effective progress toward fully implementing an undercover credit card program for the Diversion Control Program. To date, DEA has approved the program, tested it, and issued guidelines. Seven of DEA’s 21 Field Divisions have already received and are using the undercover credit cards. The remaining divisions are in various stages of processing and having banks issue the undercover cards. DEA anticipates completing the program’s full implementation by December of 2006.

In summary, DEA has made solid strides in dealing with the ever-changing threat of pharmaceutical diversion, trafficking, and abuse. DEA continues to identify, target, disrupt, and dismantle individuals, practitioners, and those criminal drug organizations that traffic controlled pharmaceuticals and constitute the greatest threat to the American public. The major cases cited in the draft review (Operations Cyber Chase, CybeRx, and Gear Grinder) clearly reflect the growing complexity of these cases and the resources needed to execute them, as well as DEA’s commitment to combating pharmaceutical diversion.

Finally, DEA appreciates the OIG’s cooperation and the level of commitment it has invested in this review, as well as for its willingness to extend it in recent weeks to consider additional information not previously captured by the OIG review team.

Attachments
      - Action Plan
      - Specific Editorial Comments





SPECIFIC EDITORIAL COMMENTS

  • On page viii, first paragraph, please insert the Phoenix Field Division and review to read: “…implemented in the Atlanta, Phoenix, Los Angeles, and Miami Field Divisions." Again, please make the same change on page 25, first full paragraph.

  • On pages 7 and 8, please revise to read "The Special Operations Division also responds to requests from the field for intelligence information pertaining to specific web sites as part of its DEA's Online Investigations Project (OIP)."

  • Organization chart on Page 6 -- should be caveated that this is a subset of the overall DEA organization chart. For example, they only mention two offices under the Intelligence Division (NS and EPIC) and there are more offices than the two mentioned

  • On Page 31, there is mention of the Houston SAC closing the Ft. Worth office for CyberRX. Please revise to show the Dallas SAC dedicated the entire Ft. Worth office for CybeRx.

  • Pages V, 11, and 16 say, "In the FY 2006 budget, the DEA received 41 additional intelligence analyst positions and 23 special agent positions that will be dedicated to diversion control." DEA received 40 intelligence analysts; the other position is a support position at Special Operations Division.

  • At the first use of the term “organization” when referring to disruption and dismantlement, please insert a footnote that reads:
    “ Includes CSA registrants, applicants, and organizations.”

 



DEA Action Plan
OIG Review of the DEA Diversion Control Program
June 2006

Recommendation

Action Plan

Projected Completion Date

  1. Provide diversion investigators with adequate special agent support until the conversion of the DEA diversion investigator position to one with law enforcement authority is fully implemented.

Twenty-three special agent positions are in the process of being allocated to the diversion groups and the Diversion Control Program. The DEA Deputy Administrator will issue a memorandum and worldwide teletype restating that the diversion and trafficking of controlled pharmaceuticals remains a top DEA priority and that Special Agents in Charge are to enhance special agent assistance to criminal diversion investigations.

Within 30 days after the issuance of the final OIG report.

  1. Ensure that DEA special agents who frequently assist with diversion investigations attend the week-long diversion training school.

DEA’s Office of Training will continue to identify and offer training to all special agents and task force officers who are assigned to DEA’s Tactical Diversion Squads, or who assist with diversion investigations, dependent upon funding. The one-week training course will provide students with an in-depth understanding of diversion investigations, focusing on the Controlled Substances Act as it pertains to regulated pharmaceuticals, methods of diversion, pharmacology, addiction and the investigative techniques used in diversion investigations.

Additional special agents and task force officers will be identified and trained during FY 2007.

  1. Provide training to intelligence analysts on topics that would effectively support diversion investigations.

DEA’s Office of Training will develop a training course for intelligence analysts to ensure their full and effective analytic support to diversion investigations. The Office of Training will conduct an assessment to determine the precise analytic needs of diversion investigators and investigations. The assessment will determine the necessary tasks, standards, analytic skills, knowledge, and abilities that intelligence analysts must possess to support diversion investigations effectively. The assessment will then be used as a baseline to design a course and curriculum for analyst training.

Dependent on funding, the Office of Training will develop the curriculum by October 1, 2006 and commence training in FY 2007.

  1. Update the diversion control training video used in the special agent and intelligence analyst training academies to include current issues such as diversion using the Internet.

DEA’s Office of Training is currently in the process of developing a new training video specifically for pharmaceutical diversion. The video, being developed especially for special agents and intelligence analysts, as well as for diversion investigators, will contain the latest information on diversion threats, trends, methods, and techniques. It will also contain specific training material on Internet-based drug trafficking, technical investigative techniques, methodologies, resources, and financial investigations.

The Office of Training anticipates completing the new training video by September 30, 2006.

  1. Ensure that diversion investigators receive training in skills necessary for conducting Internet investigations, such as financial investigations.

Dependent on funding, DEA will increase the number of diversion investigators who attended SOD’s Internet Telecommunication Exploitation training in FY 2007. In addition, DEA’s Office of Training offers courses in financial investigations, asset forfeiture, complex conspiracy, and FinCEN/Gateway training. DEA will increase the number of diversion investigators in these courses as well. The Office of Training will conduct a needs assessment to determine the necessary job tasks/standards as well as the knowledge, skills, and abilities needed for diversion investigators to effectively conduct Internet investigations. As needed, DEA will modify existing courses or develop new ones to meet the needs of diversion investigators.

The Office of Training expects to complete its needs assessment by November 2006.

  1. Fully implement the program to provide undercover credit cards to diversion investigators.

DEA has made effective progress toward fully implementing an undercover credit card program for the Diversion Control Program. To date, DEA has approved the program, tested it, and issued guidelines. Seven of DEA’s 21 Field Divisions have already received and are using the undercover credit cards. The remaining divisions are in various stages of processing and having banks issue the undercover cards. DEA anticipates completing the program’s full implementation by December of 2006.

DEA anticipates completing the program’s full implementation by December of 2006.

 



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