Pubdate: Tue, 13 Aug 2002
Source: Globe and Mail (Canada)
Copyright: 2002, The Globe and Mail Company
Contact:  http://www.globeandmail.ca/
Details: http://www.mapinc.org/media/168
Page: A1
Author: Colin Freeze

CANADIAN DRUGS FUND TERRORISM, OFFICIAL SAYS

A top U.S. official says violent Middle Eastern groups are reaping the 
profits of an illicit cross-border drug trade -- one involving a 
cold-medication ingredient that is bought legally in Canada before it is 
cooked up into illegal street drugs south of the border.

The head of the U.S. Drug Enforcement Administration, Asa Hutchinson, said 
a North American methamphetamine racket is financing terror in the Middle-East.

"It's the first time we've seen drug proceeds going back [from the United 
States] to a terrorist organization," Mr. Hutchinson told The Washington 
Post in remarks published yesterday.

In recent interviews, Mr. Hutchinson has singled out Hezbollah, the radical 
Lebanon-based group responsible for hundreds of bombing deaths, as a prime 
benefactor. By some accounts, millions of dollars have been moved overseas 
to fund terrorism. Mr. Hutchinson did not put a precise figure on the 
amount of money involved in the cold ingredient.

Canada figures in the alleged scheme because, compared to the United 
States, it has relatively lax controls on a chemical called pseudoephedrine.

In recent years, huge amounts of the ingredient -- what law enforcement 
calls a "precursor chemical" -- have been confiscated at the border. U.S. 
officials said much of the ingredient reaches California and Mexico, where 
it is mixed with other chemicals to form methamphetamine, also known as speed.

In the United States, evidence of a conspiracy involving more than 100 
people to import the ingredient to make speed has been outlined in criminal 
complaints. Mr. Hutchinson said the Middle Eastern men accused of being 
behind the scheme are funnelling money to Hezbollah.

Some observers -- especially defence lawyers -- said Mr. Hutchinson's 
remarks are inflammatory and way off base.

The RCMP said it has not found evidence of such a conspiracy.

After intense U.S. lobbying, Canada is reining in the pseudoephedrine 
trade. The government expects to have stricter controls in place by 
January, with Health Canada licensing firms that have legitimate interests 
in producing the substance.

The pressure has also affected the private sector. U.S. officials named two 
Quebec companies, Frega Inc. and Formulex Inc., as major sources of legally 
bought but illegally imported pseudoephedrine.

Contacted yesterday, a spokeswoman for Formulex said the company was 
unaware of the problem. "We altogether dropped making pseudoephedrine," she 
said.

In January, U.S. officials named Canada as a source of the ingredient while 
announcing the arrests of dozens of suspects in a methamphetamine 
investigation called Mountain Express III. At the time, police said many of 
the charged men were of Middle Eastern origin but were ordinary criminals.

By April, Mr. Hutchinson appears to have re-evaluated the situation. He 
told a Los Angeles Times reporter that some of the methamphetamine money 
had been sent to the Middle East to support terrorist organizations such as 
Hezbollah.

Defence and prosecution sides in California, where more than 35 men have 
been indicted in the scheme, have expressed skepticism about terrorist 
links. Nothing in the formal criminal complaint mentions Hezbollah or the 
Middle East.

Citing unnamed officials, The Washington Post reported yesterday that "Arab 
gangs in Canada" are said to be responsible for trucking the 
pseudoephedrine into the United States.

A spokesman for the RCMP said yesterday that the force has seen no evidence 
of this -- not least because the movement of the controversial ingredient 
is uninhibited.

"It's not illegal in Canada.

"The illegal activities probably happen at the border or on the U.S. 
ground," said Corporal Benoit Desjardins.
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MAP posted-by: Keith Brilhart