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much-decorated Vietnam and Gulf War veteran, McCaffrey has brought a new
sense of optimism to his optimism to his mission. He says he does not
believe the federal government is spending too much, given the annual
toll that illegal drugs inflict - 14,OOO dead from crime, overdoses and
illnesses and $67 billion in social, health and criminal costs,
according to federal studies.
    But McCaffrey concedes that the federal effort has troubling gaps
and overlaps, and that coordination needs improvement. "Getting the U.S.
government to do anvthing is like herding ducks with a broom," he said
in an interview.
    Many law enforcement officials concede that the drug war has not
made a substantial dent in the drug trade, but they argue that without
it, the problem would be even worse. "No law enforcement agency can
arrest a city out of a drug dilemma," says Thomas C. Frazier, police
commissioner of Baltimore, where violent crime is down but the heroin
supply remains high. "But we have an obligation to our neighborhoods and
our residents to do whatever we can."
    ILLEGAL DRUGS ARE A CLASSIC THIRD World product: cheap to
manufacture, easy to transport, and sold on street corners at a huge
markup. "It costs $100 at most to produce a kilo of cocaine and you can
sell it for anywhere from $14,000 to $30,000," DEA administrator Thomas
A. Constantine told Congress in March. "The markup is so big [that]
drugs are overproduced for the demand probably by 2 to 1 or 3 to 1."
    A year's heroin supply for U.S. users can be made from poppies grown
on just 20 square miles of farmland. A year's cocaine supply can be
stashed in 13 truck trailers. The United States has 88,633 miles of
shoreline, 300 ports of entry and more than 7,500 miles of border with
Mexico and Canada. Federal agents and their counterparts abroad are
seizing between 200 and 300 metric tons of cocaine each year but that's
just one-third the amount the DEA estimates is being-produced. The U.S.
drug trade produces $50 billion to $60 billion per year in illegal
profits, the DEA estimates.
    There's no doubt that the federal effort has increased the risk of
dealing and using illegal drugs. Arrests for drug crimes now exceed 1
million per year, and the number of people imprisoned has doubled in a
decade. Drug offenders comprise more than 60 percent of the federal
prison population and nearly 25 percent of state prisoners, according to
the latest Bureau of Justice Statistics report.
    But with profits so high, the drug networks have few problems
recruiting, say law enforcement officials. They use a common comparison:
Arrest a murderer and that's one less murderer on the streets. Arrest a
drug dealer and that's a job opening.
    Jim Moody, a veteran FBI agent who retired recently as a deputy
assistant director for organized crime, recalls his harsh introduction
to cocaine economics back in 1988. Federal agents had scored three major
hauls in one week, seizing almost a dozen tons of the drug. From his
desk in Washington, D.C., Moody waited for the street price to climb. It
never did. The cartels had so much cocaine warehoused, they quickly made
up for the depleted street supply. "We saw no impact at all," Moody
recalls. "It said to me they had not only made the market but they
controlled the market."
    J Edgar Hoover wanted nothing to do with narcotics enforcement,
fearing contact with drug money might corrupt FBI agents. But Hoover had
been dead for a decade by the morning of June 24, 1982, when President
Ronald Reagan gathered 18 federal agency heads at the White House to
rally them for a new federal war on drugs.
    "We're taking down the surrender flag that has flown over so many
drug efforts," Reagan proclaimed. "We can fight the drug problem, and we
can win."
    It was not the first time a president had declared war on drugs -
Richard Nixon had done so in 1973 when he created the DEA and numerous
other efforts were focused on stopping the flow of illegal narcotics
from overseas. But the Reagan administration was the first to commit
major new resources and to enlist the FBI to lead the effort. Attorney
General William French Smith announced that the head of the DEA would
report to FBI Director William H. Webster.
    They were two very different agencies. The DEA was small and
close-knit, with one mission-taking drugs off the street. Its
aggressive, street-smart agents were trained to act as "instigators" as
well as investigators. They saw the FBI as a deskbound bureaucracy, but
one with a sharp set of elbows.
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    THE OLD JOKE AROUND THE DEA WENT LIKE THIS: What happens when you
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