Like Oelwein, Ottumwa had for most of its history been a very prosperous place. Also like Oelwein, Ottumwa was a kind of economic outpost, a wealthy waypoint on the trade routes running between St. Louis, Chicago, and Omaha. Thanks to the Des Moines River, which runs right through the middle of Ottumwa, industry and transportation came quickly to the area once it was settled by a land rush in 1843. In 1850, John Morrell and Co. opened a flag-ship, state-of-the-art meat-processing plant in the center of town. By 1888, there were 10,500 miles of railroad track in Wapello County. Fifty-seven passenger trains on seven lines, the Burlington Railroad being the most famous, crossed the county every day. By the turn of the twentieth century, factories in Ottumwa made everything from boxcar loaders to cigars, and corn huskers to violins. By 1950, Ottumwa was home not only to over fifty thousand people but also to the largest air force base in the Midwest. Almost half the working-age men in town were in the employ of Hormel (the modern incarnation of John Morrell’s packing plant) or John Deere, the farm-equipment manufacturer, where workers could hope, at a minimum, to maintain a lower-middle-class existence.
By 1980, though, Ottumwa’s fortunes had, like Oelwein’s, begun to decline. The story was much the same. The railroad’s demise was followed by the closing of the air force base and then, in 1987, by the sale of Hormel to Excel Meat Solutions, a subsidiary of Cargill. Along with layoffs, wages, as they did a few years later at Oelwein’s Iowa Ham plant, fell by two thirds. Like the shrinking workforce, the population of Ottumwa itself dried up like a prairie pothole in a drought, falling by an astounding 50 percent in just twenty-five years. Soon the town, starved of tax revenue and disposable income, was verging on bankruptcy. And, as had happened in Oelwein, methamphetamine moved into the new economic gap. The difference was that Ottumwa, more than any other place, defined the development of the modern American meth business in the Midwest. Meth from Ottumwa first helped to create, and then to sustain, the market not just in Oelwein but also in towns all over Iowa, Missouri, Nebraska, Kansas, and the Dakotas.
How this happened depended in several trends and events that merged seamlessly into one another: emigration routes from the Midwest to California as working-class men and women headed to the coast in search of employment; immigration routes into the heartland as increasing numbers of Mexicans worked against the human tide in order to take low-wage jobs at meat-packing plants; the rise of industrial meth production; the increased lobbying power of pharmaceutical companies; and finally, government apathy, if not disregard, for the very drug war that at the time had been newly declared by First Lady Nancy Reagan.
At the center of it all, back in Ottumwa, stood a woman named Lori Arnold. It was she who was able to weave together these various political, sociological, and chemical threads into the Midwest’s first and last bona fide crank empire, the official moniker for which was the Stockdall Organization, so named for Lori’s second husband, Floyd Stockdall. Lori’s contribution to what at the time was not yet referred to as a “drug epidemic” was that she essentially wrote meth’s gene tic code in the Midwest. With her, the very concept of industrialized meth in places like Iowa was born, and it flourished in relative anonymity for the next ten years. The irony is that, while Lori worked, the Drug Enforcement Administration fruitlessly lobbied for laws that, had they passed, would have prevented Lori from ever going into business.
Lori Kaye Arnold is Ottumwa, Iowa’s most famous daughter. Ottumwa’s most famous son is Lori’s brother, the comedian Tom Arnold, who is perhaps better known as the ex-husband of Roseanne Barr. Lori is forty-five years old, with shoulder-length light-brown hair and a longish, blunt nose, like a skinning knife. With Tom, she shares a toothy, crocodilian smile and the low center of gravity and powerful legs of a middleweight wrestler. Since 2005, I have corresponded with Lori, who’s in federal prison—coincidentally, at the medium-security women’s work camp in Greenville, Illinois, just a few hundred yards from where I met Sean and James during November 2004.
One of seven step-and half-siblings, Lori was born and raised in Ottumwa in a family that she describes as studiously normal and benign. Despite this, Lori dropped out of high school as a freshman and began living in an Ottumwa rooming house where, in the evenings, there was a running poker game. The landlady was also a madame. In exchange for room and board, Lori and her young cohorts could either agree to sleep with the men who played cards or deliver illegally prescribed methedrine pills, an early form of pharmaceutical meth, to the landlady’s clients. Lori chose the latter; thus her career (along with her legend) was born.
Lori kept herself housed by delivering and selling “brown and clears,” as pharmaceutical meth was called during the 1970s, when it was prescribed by the millions as a weight-loss aid and antidepression drug. The landlady got most of Lori’s profits, though, and to make ends meet, Lori still had to work six days a week at a local bar. (In Iowa minors can serve alcohol despite being legally unable to buy it.) By fifteen, Lori was married. By sixteen, she was divorced and was attending high school once again. By seventeen, she had dropped out for good; her peers, she says, seemed to her like children. By eighteen, she was married to Floyd Stockdall, who had come to Ottumwa from Des Moines in order to retire, at the ripe old age of thirty-seven, as the president of the Grim Reapers motorcycle gang.
Lori and Floyd moved into a cabin along the Des Moines River outside Ottumwa, where their only child, Josh, was born. Left alone to raise a son while Floyd pursued his retirement hobbies of drinking, playing pool, and selling cocaine, nineteen-year-old Lori became suicidally depressed. The bar, she now realized, had been her lifeline. In addition to the money she made, the people there were her people, the only family of which Lori ever felt a true part. Without the bikers and the factory workers with whom she had all but grown up, Lori felt horribly lost and alone; her life had become an interminable slog. Worse yet, Floyd was an alcoholic, and beat her whenever he drank.
Then one day Floyd’s brother stopped by the cabin. He, too, was a Grim Reaper, and he had with him some methamphetamine, a.k.a. biker dope, which had been illegally synthesized at a lab in Southern California. This was 1984, and the Reapers were just beginning to sell meth whenever they could get it from Long Beach. There, according to DEA, former Hells Angels had gone into business with maverick pharmaceutical company chemists in order to produce saleable quantities of highly pure, powdered methamphetamine. Lori’s brother-in-law cut her two lines on the kitchen table inside her run-down shack on the Des Moines River on a sunny, clear Saturday afternoon. Of the experience, Lori, who was no stranger to narcotics, says simply that she had never felt so good in all her life. The singularity of that feeling is what would soon connect Ottumwa to a nascent California drug empire. In doing so, a major piece of the meth-epidemic puzzle would fall into place.
The first day Lori got high, she went to the bar. She says she’d been given a little meth to sell because Floyd’s brother wanted to see what kind of a market Ottumwa might prove to be. Lori gave away half the meth, knowing intuitively that this would help hook her customers. The other half quickly sold out. In the process, she made fifty dollars. What she found, though, was worth millions, for Lori Arnold knew almost immediately that dealing meth was what she’d been born to do. It was the answer not just to her prayers, but to Ottumwa’s, which for three long years had been pummeled by the farm crisis into a barely recognizable version of its former proud self. Thanks to meth, says Lori, the workers worked and played harder, and she became rich. Within a month, Lori was selling so much Long Beach crank in Ottumwa that she went around her brother-in-law and dealt directly with the middleman in Des Moines. A month after that, she was buying quarter pounds of meth for $2,500 and selling them for $10,000. Unsatisfied with the profit margin, she began dealing directly with the supplier in Long Beach, dispatching Floyd to California once every ten days with instructions to return from the 3,700-mile round-trip with as much meth as he could fit in the trunk of the Corvette Lori had bought him. Lori,
meantime, stashed money in the wall of her cabin. Only six months after she had met Floyd’s brother, the wall held $50,000—nearly twice the median yearly income in Ottumwa today.
By the late 1980s, people like Jeffrey William Hayes and Steve Jelinek of Oelwein were buying massive amounts of dope from Lori and establishing their own meth franchises in Iowa, Illinois, Missouri, and Kansas by selling to the likes of Roland Jarvis, who, yet to start making his own meth, would take what ever he could get in order to work extra shifts at Iowa Ham. Lori, in turn, was dealing directly with what she calls the Mexican Mafia, a somewhat loose group of traffickers who manufactured large amounts of that era’s most powerful dope: P2P. Made predominantly in Long Beach and Orange County, California, in large, clandestine laboratories, this stronger form of meth was more addictive, cheaper, and easier to produce than any other form of the drug available at the time. As such, it increased Lori’s already burgeoning sales manifold.
The so-called Mexican Mafia with whom Lori dealt was built on the vision of two brothers, Jesús and Luís Amezcua, who’d been born in Mexico and lived in San Diego. For years, according to DEA, the Amezcuas had been nothing more than middling cocaine dealers. Until, that is, they perceived the convergence of two seemingly unrelated events. One was that, aided by former pharmaceutical engineers, the Amezcuas could access an enormous, completely legal, and unmonitored supply of the necessary ingredients to make P2P: ephedrine and phenyl-2-propanone. The Amezcuas’ second insight was that they could move large quantities of the drug throughout California and the West, thanks to the increasing numbers of Mexican immigrants who picked fruit in the Central Valley, cleaned homes in Tucson, Arizona, or built roads in Idaho. Furthermore, the brothers could access the Midwest via the ballooning population of Midwesterners who had been chased off their farms, all the way to Southern California.
During the 1980s, large numbers of people from the corn belt left in what sociologists call out-migration. Within the space of just a few years, many Iowa towns, Ottumwa and Oelwein included, lost from 10 to 25 percent of their residents, many of whom headed for the booming labor markets of Los Angeles and San Diego. Family and social connections became business connections as Iowan, Kansan, Dakotan, and Nebraskan laborers in Orange County, eager to get rich, sent loads of the Amezcuas’ meth back home. Or, like Jeffrey William Hayes in Oelwein and Lori Arnold in Ottumwa, either drove out to get it themselves or sent someone in their stead.
Throughout its hundred-year history, meth has been perhaps the only example of a widely consumed illegal narcotic that might be called vocational, as opposed to recreational. The market for meth in America is nearly as old as industrialization. Poor and working-class Americans had been consuming the drug since the 1930s, whether it was marketed as Benzedrine, Methedrine, or Obedrin, for the simple reason that meth makes you feel good and permits you to work hard. Thanks to the Amezcuas and Lori Arnold, these same people no longer needed to rely on expensive prescriptions and were able to get a stronger form of meth at a much better price—this at a time when the drug’s effects were arguably more useful than ever. That’s to say that as meth’s purity rose, its price dropped. So too did meth become much more widely available at exactly the moment that rural economies collapsed and people left. Under those circumstances, says Clay Hallberg, those who remained felt they needed the drug most.
By 1987, if you wanted meth and you lived in southern Iowa, or northern Missouri, you went to the bar that Lori Arnold now owned, the Wild Side. There, the increasingly beleaguered Ottumwa police, whose numbers were shrinking alongside county and city tax revenues, had little chance of interrupting Lori’s exorbitantly profitable crank business. At that point, says Lori, in addition to Floyd, she had a dozen runners going back and forth to Long Beach to buy meth from multiple so-called superlabs, which could produce up to twenty pounds of meth every thirty-six hours—an astounding amount of crank in those days. Because the cars that Lori’s runners used were a drain on her profits (imagine the mileage accrued by driving nearly four thousand miles every ten days, month after month), Lori bought a car dealership. That way, she could have access to as many vehicles as she needed; she could also have her runners trade the cars and their tags with car dealers in any state along the way, thereby making themselves harder to follow. Then, to house her employees and further launder the money she was making, Lori bought fourteen houses in Ottumwa.
This was just the beginning of the means by which Lori, who had not made it past tenth grade, laundered her drug money at the same time that she moved to fill new markets around the region. In 1989, she bought fifty-two racehorses—and hired the dozen or so grooms, trainers, veterinarians, and jockeys it took to maintain them—along with a 144-acre horse farm from which to run her ever-multiplying, synergistic empires. People from Kentucky to the Dakotas and from Indiana to Colorado race, breed, buy, trade, and sell horses, making it the perfect cover for a narcotics distribution business. Lori’s runners, tooling along in their duallies, a couple of geldings munching hay in the horse trailer, the wheel wells packed tight with crank, became the down-home Dukes of Hazzard version of coke-laden speedboats making the run from Eleuthera to Key Biscayne.
Lori’s true stroke of genius, though, was to build under a series of military tents hidden in the wooded hills of her horse farm what for almost two decades would be the only meth superlab ever known to be in production outside the state of California. By then, she was in such good graces with the Amezcua brothers, the California “Kings of Crank,” that they let her borrow a chemist, whom Lori flew to Iowa to teach her associates how to make meth in ten-pound batches every forty-eight hours: a state-of-the-art, up-to-the-minute operation. The effect was remarkable, for up until now, Lori had controlled sales of meth in Iowa and other parts of the Midwest while still having to rely on the Amezcuas for her product. Once Lori opened her own superlab, she was in control of the entire value chain: manufacture, distribution, and retail. And while she still bought meth from the Amezcuas, principally to maintain good relations, Lori had no real competition to speak of. In just the two years between 1987 and 1989, an unassuming high school dropout from little Ottumwa, Iowa, had succeeded in cornering part of what was becoming one of the world’s most lucrative narcotics markets. What’s more amazing is how close she came to never getting started.
According to several former agents, back in 1987, there was deep institutional ambivalence within the Drug Enforcement Administration (DEA) toward methamphetamine. Meth was seen as a biker drug, strictly falling under the purview of losers who didn’t have enough financial sense to put together a large-scale operation. These were the Reagan eighties, and as tastes ran for big, deregulated corporate successes, so ran America’s taste for drugs. Cocaine was king. As such, DEA, whose job is to curb the excesses of the period as they are embodied by America’s choice in narcotics, wasn’t interested in anything aside from the Cali and Medellín cartels, drug-trafficking organizations run like multinational corporations capable of exceeding their host nation’s GDP. Who could have imagined the business being built by two lowly coke-dealer brothers in the part of L.A. called the Inland Empire, or that this business would be connected with a kind of narcotic principate in Ottumwa, Iowa?
Only one person, it turns out: Gene Haislip, the deputy assistant administrator in DEA’s Office of Compliance and Regulatory Affairs. Haislip knew that large amounts of ephedrine, which was imported in bulk to make nasal decongestants, were being redirected to the Amezcua organization with no oversight. Ephedrine processing took place in only nine factories around the world, all of them in India, China, Germany, and Czech Republic. To Haislip, the narrow processing window posed a perfect opportunity to siphon off the meth trade; all that was required was the cooperation of those nine factories, along with the pharmaceutical companies that depended on the ephedrine made in them. What Haislip proposed in 1985, two years before Lori Arnold went into large-scale meth production, was a federal law allowing DEA to monitor all ephedrin
e imports into the United States.
According to a 2004 investigative article written by Steve Suo in Portland’s Oregonian newspaper, Haislip got the idea based on his earlier work on the illicit U.S. trade in Quaaludes, a legal sleeping pill widely available on the black market. The manufacture of Quaaludes depended on the synthesis of another legal drug, methaqualone, which was predominately produced in Germany, Austria, and China. What Haislip noticed was that an enormous proportion of the methaqualone from these nations was being shipped to Colombia. There, the Cali and Medellín cartels were making it into an illegal form of Quaalude, which they sold in tandem with cocaine in the same market—one as an upper, one as a downer—in the same way that meth markets today are often saturated with Oxycontin, a prescription painkiller that smooths out the impending “tweak” of a meth high. In 1982, Haislip visited the nations whose factories made methaqualone and asked for their help in monitoring its sale. Congress then banned the use of prescription Quaaludes, which were manufactured by only one American company. By 1984, according to DEA’s annual narcotics threat assessment, Quaaludes no longer constituted a significant danger to the illicit U.S. drug market. With meth, Haislip simply hoped to keep organizations like the Amezcuas’ (and to a lesser extent, people like Lori Arnold) from legally procuring ephedrine without hurting the production and sale of cold medicine of licit companies like Warner-Lambert, the makers of Sudafed. Haislip’s idea took the form of language inserted into the Controlled Substances Act, which would be debated by Congress in the fall of 1986.
What’s important to understand is that, despite the fact that Haislip’s job was to write legislation, DEA is not a political entity. According to the cliché, one of which most DEA agents seem proud, the administration occupies a place that is all but outside the law. While FBI agents stereo typically tail potential bad guys in their sedans, and CIA agents listen to phone conversations, DEA agents are supposedly assassinating major narco-figures in the world’s more inhospitable environments. Whether or not this is a fantasy is unclear. What it suggests is an institutional frustration regarding the governmental process: it’s easier to shoot people in other places than to write legislation here, which must then be tailored to the concerns of members of Congress and the lobbyists who influence them.
Nick Reding Page 7
