Front Burner - Who’s responsible for the fentanyl crisis?

Episode Date: October 13, 2023

The U.S is cracking down on fentanyl’s global supply chain by targeting Mexican and Chinese individuals with indictments and sanctions. Officials from those countries insist it’s largely an American problem. What’s actually happening on the ground in China and Mexico? What impact will U.S. retaliation have? Today, journalist Zachary Siegel explains. For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts Transcripts of each episode will be made available by the next workday.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Damon Fairless. We know who is responsible for poisoning the American people with fentanyl. And we know that this global fentanyl supply chain, which ends with the deaths of Americans, often starts with chemical companies in China. That's U.S. Attorney General Merrick Garland speaking last week, Attorney General Merrick Garland speaking last week, announcing the indictments of eight Chinese companies and several executives allegedly involved in the production and distribution

of chemicals used to make the synthetic opioid fentanyl. The Justice Department charged eight companies based in China and 12 of their executives for crimes related to the production, distribution, and importation of fentanyl, other synthetic opioids, methamphetamines, and their precursor chemicals. On the same day, the U.S. Treasury announced sanctions on 25 Chinese companies and individuals for the same reason. And then, later that week, U.S. Secretary of State Antony Blinken traveled to Mexico for talks with Mexico's president, Andres Manuel López Obrador. Together, we are dismantling the criminal organizations that smuggle fentanyl from south to north. And together, we are disrupting the supply chains these cartels rely upon.

The U.S. claims that cartels in Mexico are responsible for manufacturing fentanyl using chemicals supplied by China and then trafficking the drug across the border into the U.S. It's all part of the U.S. government's attempt to deal with the latest and the most lethal phase of the opioid crisis. In Canada, over 38,000 people have died from overdoses since 2016. In the U.S., fatal overdoses have been staggering, nearly 110,000 people just last year. The number one killer of Americans between the ages of 18 and 45 isn't these car crashes. It's not heart disease or murder, but accidental overdoses from fentanyl. It is a disturbing trend we've seen.

Fentanyl deaths have skyrocketed in recent years. An average of 20 Canadians are dying each day from opioid poisonings. This drug, fentanyl, is being laced into other drugs and people may not even know that they're taking it. Every pill of fentanyl is a potential killer. Every shipment of fentanyl is a ticking time bomb. But while the U.S. blames China and Mexico, government officials in those countries say that the source of the problem is the U.S. So today, what's actually happening on the ground in each of these countries when it comes to the fentanyl supply chain? And what impact will these latest U.S. maneuvers actually have?

Zachary Siegel is a journalist, a researcher, and co-host of the podcast Narcotica. He's been covering this issue for years. Hey Zach, thanks so much for coming back on FrontBurner. Happy to be here. Okay, so this is kind of a story about finger pointing. And before we get into that and get into each country's alleged role in the fentanyl crisis, can you just first help me understand how most of the fentanyl on the streets in the US and in Canada end up here? Like, is there an example that can help us understand the basics of the supply chain? Yeah, it's hard to pinpoint one example, but this is to be sure a global supply chain the consensus is right now a lot of the

precursor chemicals used to synthesize and manufacture fentanyl are sourced from chemical companies that originate in china and so that is currently the main source of the fentanyl that will eventually land in North America. Okay. So we've got these companies which originate in China and these are making the building blocks that eventually become fentanyl. And so part of the story is the supply chain of how those get into the eventual end product, the fentanyl here. Let's start with then what the US alleges is the beginning of the supply chain China. The Department of Justice indicted a few Chinese companies claiming they were advertising, manufacturing, and distributing these precursor chemicals.

That was the basis of the sanctions the U.S. recently announced. What evidence do the prosecutors have? Yeah, I think even before getting to the exact evidence listed in the indictments, there's just like this basic idea of drug enforcement in America that I think we will all benefit from understanding clearly, and specifically supply-side drug enforcement. And that is to basically target these big global flows of drugs and chemicals. This will reduce the availability of drugs on the street and drive prices up. And the effect of that will limit consumption and thus reduce the consequences of consumption that we all care about, like addiction and

overdose. And so that's the basic model of supply-side drug enforcement in America. And that gets us to China and to Mexico as the source countries. So the U.S. is trying to get at the source of the supply, and that's what these indictments are claiming to do. And so what a lot of these indictments rely on are this kind of game of cat and mouse between the FBI, DEA, like big federal law enforcement agencies working abroad to understand which companies in China are, yeah, like you said, advertising their wares. And a lot of this is happening online in these kinds of digital storefronts and these kind of Amazon-esque platforms that operate on Facebook or Telegram or really any messaging network. A lot of this is looking like sting operations where buyer is really a law enforcement, but they're acting as a buyer and they are saying you know i will pay you i will

wire you ten thousand dollars in crypto to get uh you know x amount of these precursor chemicals and in the encrypted messaging apps and there's really no like code or slang being used. It's very upfront that the chemical companies selling these precursors are very aware of what the buyers are using the chemicals for. Well, according to the U.S. Department of Justice, one of the biotech companies was advertising a quote, Mexico hot sale on some of the fentanyl precursors was guaranteeing a hundred percent stealth shipping. And it was even posting on its website documentation of shipping chemicals to the region of Mexico where the Sinaloa cartel is as a kind of, I guess, you

know, marketing copy in some ways. Yeah. Yeah. You're right. And another like very kind of flagrant example is that they will say like, we will disguise this, like it's going to look like, like an everyday household cleaning product or, or something like that. Right. And if you're a legitimate buyer looking for a legitimate chemical, why would you want deceptive packaging? looking for a legitimate chemical, why would you want deceptive packaging? Why would you be trying to evade detection and secretly pass through customs? So it's all fairly blatant and obvious in the exchanges between the buyers and the companies. And yet China's denied this, right?

It says that the U.S. is scapegoating. But I mean, there's been a lot of reporting on what these firms do and their role in getting fentanyl to North America. So what do we know? I'd just like some more detail about how these chemical firms work. I think what gets lost in a lot of these conversations is that this illicit economy and the illicit and illegal drug trade operates, lot of chemicals, like a lot of those everyday household cleaning supply type of chemicals that are produced in China on the cheap and mass and shipped all over the world. And so without that infrastructure in place for global trade, then the global trade of illicit drugs would be much, much more difficult to pull off. What is so messy about this is that a lot of the precursor chemicals we are talking about here are not necessarily banned substances, and they're not necessarily

on the list of tightly controlled chemicals. So what makes fentanyl such a beast compared to, say, heroin or cocaine and these drugs that have fueled historical drug epidemics is that so many everyday chemicals can be used as the building blocks can be used as the precursor to manufacture fentanyl right so so we're talking about you know fairly innocuous potentially innocuous potentially uh not illicit chemicals that are you know created after all of these things are, you know, are gathered into something that can be quite deadly. So then tell me who's buying these precursors, these chemicals and how are they trafficked? Yeah. So this, I think we like the, this kind of triad between the U S China and Mexico comes into form here. And so there are drug trafficking

organizations in Mexico that broker these deals with the Chinese chemical companies. And so these brokers in Mexico, they're making deals with the salespeople in these elaborately structured companies in China. The only hard limit on fentanyl production is how much of the precursor you can get. And so there's a lot of buyers in Mexico working for these organizations that are trying to get boatloads and tons and tons and tons of these chemicals. So that trade is kind of always happening. And I don't know if you're familiar with Breaking Bad or that. Yeah, exactly. Like the whole game in synthetic drug production, in that case, methamphetamine is getting the precursor chemical.

Once the right chemist or the right cook has the right chemicals, there's no limit on how much can be produced. And that's what makes this, once again, such a staggering and terrifying situation we're in because the supply is essentially limitless. Yeah. And I should mention that in addition to the indictments and sanctions that the U.S. has announced against China, at least one Canadian company has been subject to the U.S. sanctions. The details of that aren't clear yet. But as you say, it's a worldwide issue affecting us here in Canada too. us here in Canada too. Yeah, exactly. And I think these indictments are just kind of the latest development in this decades-long cat and mouse game between federal drug enforcement and federal law enforcement authorities with drug traffickers and all these organizations. And it creates this game of whack-a-mole where they can indict seven, eight, 20 Chinese chemical companies. And because these companies are kind of fake in the first place, there's an easy vacuum and void that gets filled over and over again. And so it's

really hard to say what effect, if any, these kinds of sanctions and indictments ultimately have. Back in 2019, China, in a cooperative mood with the US, did ban the production of fentanyl and did ban fentanyl analogs. And here we are several years later dealing with the same thing over and over again. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization. Empowering Canada's entrepreneurs through angel investment and industry connections. some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo, 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Couples. financial vision together. To listen to this podcast, just search for Money for Cops. So I'd like to focus for a moment on Mexico. The U.S. has accused Mexico of being involved in the supply chain. Now, Mexico's President Andres Manuel López Obrador, or AMLO, has

basically said what the Chinese officials have been saying, that the fentanyl crisis is a U.S. problem. He's also said that fentanyl isn't being produced in Mexico. Can you give me a sense of what's actually happening on the ground there? Yeah, the statements coming out of Mexico are contradictory and often quite baffling to make sense of. AMLO has said exactly what you mentioned, that there is no fentanyl actually being made in Mexico. And then other Mexican officials will say, well, actually, Mexico is more of a trans shipping point where already made fentanyl just passes through. And, you know, both like the, the latter statement could be true, but I've, I myself have seen documentary and photographic evidence of fentanyl being made

in Mexico. So there is, is little doubt that, that clandestine labs in certain territories controlled by these drug trafficking organizations like Sinaloa. They do exist, and these labs do produce mountains of fentanyl that get shipped north to the U.S. So it's quite confusing to make sense of the statements coming out of Mexico, and knowing a bit more internally of Mexico's domestic politics kind of shows what's going on there. Like AMLO, in these public statements that get sent around, there's always this kind of muscular nationalism. And it kind of paints America as violating Mexico's sovereignty and this kind of bully on the playground. Mexico's sovereignty and this kind of bully on the playground. We are not going to permit any foreign government to intervene in our territory.

Especially not a foreign government's armed forces. Of course we don't accept that. And so there's this political posturing that seems to be happening with AMLO's manufacturing or the fentanyl trafficking. So what exactly are they accused of? Yeah, there's also like just more contradictions and more confusion when it comes to this crew. Through their lawyer, they put out a statement that fentanyl is not in their business portfolio and that they want nothing to do with it. And in fact, that they don't manufacture fentanyl. And then more recently, there were these banners and flyers, uh, expressing a purported ban of fentanyl manufacturing in some of these Mexican territories. And it's, uh, like as far as I can tell, I have

no idea what those banners mean or if they're really kind of sanctioned or authorized by the, the actual organization. But, and I should just point out too, for people who haven't seen them. I mean, these are like big roadside banners, like big, you know, several square meter banners saying essentially that the Sinaloa cartel isn't involved in fentanyl manufacturing, doesn't support it, that it's, uh, so to speak kind of off brand for them.

If that, if that's fair to say, I didn't even really know what to make of those, to be honest. Can you help me kind of what that was about? Me too. It's very confusing. What that was about? There's always been a cocaine and marijuana and heroin trade that's lasted decades shipping between Mexico and the U.S. But never ever has there been such massive amounts of casualties. They could be trying to signal that like maybe they're feeling that pressure. Maybe they're actually trying to change their practices. And I just think there's no way for us to know

until there's a change in the actual supply. And so I would not take the word of banners posted on the street and would actually look at the very real material conditions on the ground, which, to my knowledge, suggests that there is an endless supply of fentanyl available, and many, many people are still dying from overdoses. You're saying that these banners are part of them feeling, that the cartel, the Sinaloa cartel, feeling pressure. Where's that pressure come from? Has Mexico been cracking down at all domestically on them for this?

The state and the relationship with the drug trafficking organizations, and we call them cartels, it's really incestuous. And I think there's this idea that these cartels are a monolithic, organized corporate structure, when in reality, I think this is a very splintered and very fractured and very siloed environment with maybe a lot of freelancing going on. And I don't think that what we call the Sinaloa cartel is as monolithic and as organized as maybe we like to think. Martels have a lot of power in Mexico, and it's very unclear how the state is currently dealing with them and what kind of agreements and cooperation there are between these organizations and the state. And that AMLO himself has said that these kind of violent confrontations and the kind of oldschool drug war tactics do not work. And so I don't quite know what that means. And again, I just look to the conditions on the ground. And if suddenly the supply begins to change and there's less fentanyl or there's pure heroin coming in, then we know that there's actually something happening. But for now, I think there's a lot of rhetoric, a lot of politicking,

a lot of talking, and it's really unclear what is actually changing on the ground. So you've got Mexico and China painting this all as a mainly U.S. and to some extent Canadian problem. And you also have Mexico and the U.S. pointing to China as the source of the supply for these precursor chemicals. And then there's all the pressure on Mexico to do something about the cartels there. And I should say there have been efforts in all these countries, Mexico, China, the US, Canada, to curb illicit fentanyl production and distribution. But big picture, what's the impact of all this finger pointing? Like I said, I think it's very unclear

what effect any of this is having on the actual conditions that we all care about. And we don't want to see people living lives suffering from addiction. We don't want to see people dying premature deaths due to overdoses. And where I spend a lot of my time reporting and doing research is on the demand side, because it does feel like even though it's a lot of it is propaganda, Mexico and China do have a point. I think there is this ravenous demand for substances in America, and it is important for us and for our leaders to understand what's driving that. Why are teenagers and young people buying fake pills on the internet and then suddenly dying because they unknowingly took fentanyl? These are all very real social and political problems that America, I think, very much has to deal with. And it just seems like the supply side focus takes up a lot of the conversation when, in my mind, it seems like we, as Americans, can have much more control and much more effect if we get a grip on some of those questions I was just asking. And that means we can build better healthcare, higher quality addiction treatment. And I just think that is the big, big problem that America has struggled with. All right, Zach, we'll leave it there for today.

Thank you so much. I really appreciate it. Yeah, sure thing. Thanks for having me. That's all for now. This week, Front Burner was produced by Rafferty Baker, Joyita Sengupta, Matt Muse, Lauren Donnelly, and Derek Vanderwyk. Our sound design was by Mackenzie Cameron and Sam McNulty. Our music is by Joseph Chabison. Our senior producer is Elaine Chao. Our executive producer is Nick McCabe-Locos. And I'm Damon Fairless. Thanks for listening.

FrontBurner will be back on Monday. For more CBC Podcasts, go to cbc.ca slash podcasts.