How we fought and lost; Almost a tenth of world trade is in illegal narcotics. It is the nightmare of our age. We investigate the men, the money, and how we let the enemy win the battle
FOR MORE than 25 years the United States and its Western allies, including Britain, have waged the first world war on drugs. That war is now lost. The most powerful nation on earth, which put a man on the moon and defeated communism, has not been able to beat the drug barons of small third world countries.

The unpalatable truth is that despite the longest war in American history, today's world is awash with drugs. The breaking of the pounds 1bn heroin ring announced with such pride by Scotland Yard last week makes scarcely a dent - three-quarters of all drugs still get through.

The major change in the past 25 years is that drug-taking has become an established practice in Western culture. A staggering 97 per cent of London clubbers have taken drugs and 57 per cent do so regularly. Ecstasy, an illegal drug, is a pounds lbn-a-year industry, and kids spend as much on it as the whole nation spends on tea and coffee.

But this is peanuts compared with the United States, where 85 million Americans have tried an illegal drug and where today they spend nearly $70bn (pounds 42m) a year on drugs-including $38bn on cocaine, about $10bn on heroin, and $7bn on marijuana.

They have said yes to drugs. In keeping with the first of the two defining principles of the 20th century, free will and the free market, they have claimed their right to take whatever they like - arguing that it does not harm anyone else - and have declined to recognise the moral authority of the state.

Nor do they seem concerned about health risks - as the US comedian Jerry Seinfeld says, "Tobacco, alcohol, drugs. The only warning anyone takes any notice of is the 'dry clean only' label."

To meet this demand for drugs, world production of cocaine has more than doubled in the past 10 years and of heroin more than tripled. This makes the production and distribution of drugs an integral part of the global economic system.

The United Nations Drug Control Programme (UNDCP) says that the world drug trade is now a bigger industry than either iron and steel or motor vehicles. It estimates the annual turnover in drugs to be at least $400bn, about 8 per cent of total international trade. The accumulated profit from drugs (the mark-up on cocaine and heroin is about 20,000 per cent) just floats around the world banking system. No one knows how much it amounts to, but estimates put it at $500bn.

This is one reason why the war was lost - the Allies could not buck the market. As Joseph D McNamara, the former police chief of San Jose, says, "All the cops, armies, prisons and executions in the world cannot impede a market with this kind of tax-free profit margin."

THE BORDER between the United States and Mexico is about 2,000 miles long; it is the only border in the world shared by a highly-developed country and a Third World one. It is here that the fight goes on to stop heroin and cocaine entering America.

This has been the front line in the world's drugs war, and if anti-drug forces were to have any chance of success, this was a battle they had to win. Yet reports from the front have been remarkably few - for the simple reason that the US administration has been too embarrassed to admit what has been happening.

In truth, the border between Mexico and the United States has, to all intents, disappeared. Drugs pour across it day and night. Cartels that span Mexico, Bolivia, Colombia and Peru have corrupted American customs officials. Drugs that do not get through by road, do so by air (some are flown in Latin American military jet fighters) and by sea (on container ships and in shrimp boats).

Peter Lupsha, who is professor emeritus of political science at the University of New Mexico and one of the leading Latin-American experts in the United States, has specialised in what he calls the "narco-democracy" of Latin America and the links between Latin American politicians and drug barons.

He says bluntly, "The United States is now facing a military elite in Latin America that is deeply involved in the narcotics business and has the resources - men, planes, ships, and communications. They have Americans on their payroll, sometimes former members of American special forces, who know how to tap telephones, do code encryptions, and who have the communications skills to put them on the level of a nation state."

THE MAIN BORDER crossing point into the United States for the huge trucks bringing goods from the maquilladora factories of Mexico's free trade zone is Otay Mesa, next door to Tijuana. Compared with Tijuana, where the day-tourists and the holiday-makers shuttle back and forth with little formality, the security at Otay Mesa is formidable - with good reason. This is where much of the cocaine and heroin from Latin America enters the United States.

It would be a difficult area to police at any time. The North American Free Trade Agreement (Nafta) removed all duties on cross border trade, encouraging American, Japanese and Korean companies to set up factories in Mexico, where labour is cheap, to manufacture goods and components for sale in the United States. Trucks from these factories enter America in a never-ending, 24-hour-a-day stream.

If American customs officers were to stop and search every truck for drugs, the system would grind to a halt and the roar of complaint from the factories and importers would be heard all the way to Washington DC. So they rely on random searches, tip-offs from informers and suspicious behaviour, all the while knowing that, according to the Drug Enforcement Administration (DEA) some of their colleagues in the customs service are corrupt.

In an attempt to minimise this corruption, all the interior walls of the customs offices at Otay Mesa - and along the entire border - have been torn down so that everyone can see and hear what everyone else is doing and saying. A customs officer on duty at one lane will suddenly find himself switched to another, so as to prevent any prior arrangement with the driver of a truck carrying drugs. Huge x-ray machines housed in a lead-shielded building like a giant car-wash peer intotrucks which senior US customs officers pull at random from the waiting lines.

And still the drugs pour in, for the simple reason that the drug barons have let it be known that they are prepared to pay any US customs officer $50,000 in cash for each truck he is able to wave through - just a small slice of the $7bn the drug barons' budget each year for bribery and corruption.

When President Nixon first declared war on drugs, the Nobel prize-winning economist Milton Friedman predicted, "Since immense sums are at stake it is inevitable that some relatively low-paid police and other government officials - and some high-paid ones as well - will succumb to the temptation to pick up easy money." He has been proven right.

The DEA has been warning for some time that customs officers policing the US-Mexico border had succumbed to temptation and that the authorities had underestimated the extent to which Mexican drug barons had corrupted Americans. A senior US customs official in San Diego was quietly retired and the anti-corruption measures described above were introduced, but to little noticeable effect.

Mexican and American journalists who write about the drug trade - and there are not many because of the fear of being shot- say that the drug cartels responded by buying into the trucking companies that operate the Nafta run and by setting up elaborate warning systems.

"Spend a couple of hours at Otay Mesa," one US radio journalist told me, "And you'll notice a lot of guys on either side of the border just hanging around, chatting a lot of the time on their cell phones. They're spotters for trucks on drugs runs. They tip off the driver about what time to come, which lane to use, what to say, and the DEA can't tap into their calls because they all have encryption or scrambler devices."

But can it really be beyond the enterprise, skill, devotion and undoubted bravery of the American law enforcement agencies to stop Latin American gangsters from flooding the streets of the United States with narcotics? To understand why they have failed we have to look at who the new drug barons are, and the role they play in the US economy.

Those Americans waging the war on drugs used to comfort themselves that they had a last line of defence in Latin America - the military. No longer. A loose alliance of senior military officers in Colombia, Bolivia, Peru and Mexico have become the new tsars of the narcotics business. Their connections go back to military academies.

Peter Lupsha says, "There are day-to-day military collegial links between these people, particularly from the military colleges of Peru which both the Bolivians and the Mexicans consider to be excellent. This new military elite runs these countries and they all have deep narcotics connections.

"They are the ones who brought in former American military specialists to help organise the drug trade on military lines. This is why we find air force planes from these Latin American countries used to fly out drugs. The Latin American drug barons are no longer just gangsters. They are formidable opponents with political protection."

BUT DOES not this situation - an alliance of drug producers, military elites and politicians in at least four Latin American countries, one of which, Mexico, has a border with the United States - offer the "clear and present danger" to American national security that would justify a powerful response from the political establishment?

"This analysis in unacceptable in Washington. It is unacceptable to the drug enforcement community in Washington - not with the field people, not the DEA agents and the customs in the field," says Professor Lupsha. "But the hypocrisy in Washington is that it says it is waging a global war on drugs when it knows that there are more important issues on the American agenda than the drugs war."

What could possibly be more important?

"Banking and free trade. The banking community, the business community and Wall Street have deep connections and investments in Mexico and would not want those investments disturbed by allegations that the political elite in Mexico is involved in narcotics. You have to face facts. The narcotics business in Mexico is worth between $27bn and $32bn a year. Mexico cannot afford to lose that from its gross domestic product. But neither can the United States or Wall Street investors."

So the drugs war is a sham'?

"Absolutely. If Washington was serious about the drugs war it would hit the drug barons where it hurts - in their pockets. It would use the Federal Reserve system and the Chips electronic money transfer system in Washington to cut off the transfer of illegal monies.

"At the same time you would have to eliminate all off-shore banks, all off-shore tax havens, as legitimate hide-outs for capital. If you did that I believe you could minimise this tremendous flow of drugs. But you can't do that because legitimate business in the United States does not want the off-shore tax havens closed. Stalemate."

OF COURSE this penetration of the drugs industry into legitimate business applies in Britain as well. In international financial circles, London is known as the money laundering capital of the world, and, although City financial institutions will never admit it, a lot of the money laundered has its origins in drugs.

THE FIRST war against drugs was fought on two fronts - against the suppliers and the consumers. We have seen how it has failed in the supply front, but what happened to all the effort the authorities put into convincing us to "Say no to drugs?" This has not worked either, and, like the US, we are now a nation of drug-takers.

A Home Office study, "Tackling Local Drug Markets", estimates that there are 30 million drug deals each year in London alone. No longer is drug- taking confined to those on the social fringes. A cursory study of the people mentioned in drug-related stories in the national press turned up the following trades and professions: plumbers, photographers, psychiatrists, doctors, journalists, receptionists, accountants, actors, dancers, chefs, waiters, investment bankers, TV executives, models, airline cabin crew, solicitors, barristers, and even police officers.

The Grampian police force random tests its officers to make certain that they have not been taking drugs. The Law Society helpline says that there is "an alarming level" of cocaine and heroin addiction among solicitors and barristers. The British Medical Association says that 13,000 doctors have a drugs problem. A former Daily Mail journalist has revealed what happened when the Princess of Wales was scheduled to visit Northcliffe House in Kensington. A senior executive announced that bomb squad officers would first check the building using dogs which could sniff out explosives and "other substances". There was a stampede as journalists raced to empty their desk drawers. The habit among journalists is not confined to the Daily Mail.

NO LONGER is it possible to claim that adolescent drug-takers come from socially-deprived families. The case of the son of the Home Secretary, Jack Straw put paid to that idea and the president of the Police Superintendents' Association, Brian Mackenzie, says that when he headed a drug squad he was surprised at how many young people involved in drugs come from "excellent families".

When Noel Gallagher, star of the rock band Oasis, said that taking drugs was "like having a cup of tea", he was pilloried. Yet that is how an enormous number of young Britons now regard drugs. In Notting Hill, where heroin, cannabis, cocaine and Ecstasy are as readily available as antiques from little shops or food from the street market, people told Home Office researchers that they liked getting their drugs there "because they could do their weekly shopping at the same time or have a cup of coffee while waiting for the dealer".

It should be clear from the above that when Britain's first drug squad was launched in Oxford back in 1966 and the then Chief Constable, Clement Burrows, ordered it to "Crush the heroin problem in two years," he did not know what he was taking on. In Oxford 30 years on the heroin problem is still there and getting worse, as it is elsewhere in Britain.

A growing number of the "great and the good" have recognised this. The Daily Mail, a newspaper which has - despite the tastes of some employees - traditionally been strongly against drugs, published an editorial on 3 January this year saying, "Manifestly, the battle against drug abuse is being lost. There were only 33 registered addicts in Britain in 1958. Today there are more than 25,000; and for countless youngsters, substances like cannabis, Ecstasy and LSD are simply part of the culture."

The Mail's stablemate, the London Evening Standard, had already decided last year that drug use had become socially acceptable, that the present anti-drugs policy was bankrupt, and that its only achievement had been to drive up the price.

Brian Iddon one of Labour's Bolton MPs, has called for a Royal Commission to consider drug legalisation. The Liberal Democrats have long advocated a review of the drugs law. Lord Young of Dartington, an influential educationalist, says that current anti-drug measures are bound to fail and that "it is only a question of when defeat will be accepted".

Even the police have their realists. The nature of their work means they are not the most radical of people, so we should take note when senior officers such as Commander John Grieve of Scotland Yard say that they recognise that the anti-drug laws are not working, and call for change. There are probably many who agree with him, but public debate among officers has been discouraged.

So PC George Evans, who is serving with Greater Manchester Police, was probably speaking for many others when he wrote in Police Review, "We fail to understand that drug use has been part of human culture for centuries... Relaxing of the laws on drugs would result in large financial savings which could be used for education and treatment.

"Criminals would be hit as selling illicit drugs would become unprofitable. Instead we continue down the same well-trodden path which we know does not work. We continue to delude ourselves that this is the right thing to do. The truth is that we are frightened and lack the political will."

Some would say that if Britain had been tougher from the start - heavier penalties, longer sentences, zero tolerance - then drug taking would not have become an epidemic. But nowhere else in the world has the war against drug-takers been fought on such relentless terms as in the United States. And its failure there, too, has been spectacular.