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Enron Style Accounting Hides Real Costs of the Drug War

Taking a page from the Enron Accounting Manual, the drug czar is blatantly underreporting some costs while inflating others to make the drug war seem less expensive and punitive.
 
 
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John Walters must be desperate to be so deceptive. Only a desperate man could keep a straight face while claiming that the prosecution and incarceration of drug offenders is not a cost of the drug war.

Walters, the Bush administration's drug czar, recently announced that the nation's new drug war budget is not going to count the cost of prosecuting, sentencing or incarcerating drug offenders. It also will not count the cost of military personnel working on drug enforcement. However, the cost of alcohol treatment will be included in the budget -- even though the Office of National Drug Control Policy (ONDCP), Walter's agency, has no jurisdiction over alcohol.

Why the Enron-like accounting tricks? Through these fiscal manipulations, Walters can claim that the split in his budget between law enforcement/military costs and treatment/prevention costs is nearly 50-50, rather than what it really is -- about 70-30. In other words, Walters can now back up the claim that he is taking America into a new era of the drug war, where treatment and prevention -- strategies that the public overwhelmingly supports -- outweigh punitive measures.

Drug war advocates realize that the cost of the expensive law enforcement and military programs are a political liability. And they know they've lost fourteen state-based political battles over the last three election cycles -- the public has repeatedly voted for medical marijuana, treatment instead of prison, stopping police forfeiture abuse and even marijuana decriminalization. They've seen the polls showing that the same percentage of the public that believes the drug war is winnable believes that Elvis is alive. So the ONDCP is hiding the expenditures on these costly, unpopular and ineffective programs.

These reporting revisions will take some of the enforcement costs "off the books" and artificially reduce the cost of the drug budget from $19.2 billion to just over $11 billion. The new drug budget is a transparent attempt to fool the public into believing the Bush Administration is putting less into law enforcement and finally putting more money into treatment and prevention.

ONDCP will falsely reduce the reported expenditures on the law enforcement while actually spending record amounts on enforcement. The Department of Justice will cut its drug budget by $5 billion by not counting the cost of prosecution and incarceration of drug offenders. Three billion alone will come from the cost of incarceration. While drug warriors have always understated the human costs of mass incarceration, we certainly did not expect them to hide the massive economic costs of incarcerating hundreds of thousands of drug offenders.

On the military side, the U.S. is increasing its involvement in the Colombian drug war -- sending active duty troops and civilian military contractors to the Andes -- but the drug budget will underreport Defense Department spending in several ways. One significant item that will continue to not be counted is the cost of military personnel. That's right -- military personnel fighting the drug war are not a cost of the drug war. We don't know how many troops are involved in the drug war worldwide, but in Colombia there are up to 800 U.S. troops and "private military contractors" on Uncle Sam's payroll.

By including the cost of alcohol treatment as part of their drug budget, ONDCP can chalk up an apparent increase of over $500 million in treatment funding -- without the Feds spending a penny more to help people. Sadly, real increases in funding for treatment are desperately needed, not misreporting of alcohol treatment expenditures in the drug treatment budget.

Admittedly, these latest accounting shenanigans only add to an existing problem of inflating figures for drug treatment. A 1998 review by the Rand Corporation found that the Department of Veterans Affairs, the Department of Education and the Substance Abuse and Mental Health Services Administration overstated their actual spending on treatment and prevention programs by $1 billion. For example, under current reporting procedures, if a Vet who use drugs breaks his leg and needs medical care, the Veterans Administration counts it as drug treatment. So far, the drug czar has not announced any plans to correct this problem.

It may seem like a dark moment in drug policy history, but actually, reformers should take heart. The ONDCP wouldn't blatantly risk its credibility unless reform was making progress. They know that in the midst of a recession, with deficit spending returning to the federal budget and with the costly demands of the terrorism war, they risk losing support of policy makers if they continue to spend tens of billions of dollars on a drug strategy that does not work. Hopefully, this desperate act will come to the American public's attention and escalate the erosion of support for the drug war. If so, our elected officials may finally realize that we can no longer afford the war on drugs.

Kevin Zeese is the president of Common Sense for Drug Policy. A complete copy of Common Sense's Research Report, "Revising the Federal Budget: Changing Methodology to Hide the Cost of the Drug War?" is available at www.csdp.org.