U.S. Chemical Companies Face Few Legal Risks, and the Cartels Bank On It
Taminco illegally sold enough MMA for Mexican narcos to make $3.2 billion worth of methamphetamine. For that, it paid a fine of just $1.3 million—in one of the only prosecutions of its kind ever.
December 1, 2020, 10:00 AM GMT
bloomberg.com
One November morning in 2015, a lawyer named Clark Jordan rose sheepishly from his chair to face the judge in a federal courtroom in eastern Pennsylvania. Jordan, then 51, had spent most of his adult life in corporate law, but this day was different. As a vice president of Eastman Chemical Co., he was appearing for Eastman’s board of directors to enter a guilty plea in a drug case. The six-count criminal information charged that an Eastman subsidiary, Taminco U.S. Inc., had knowingly violated federal narcotics laws. Before that morning, Jordan had thought this would be “no big deal,” he later recalled. But in the solemnity of the courtroom, the gravity of the moment sank in.
Taminco, which Eastman had acquired 11 months earlier for $2.8 billion, was one of the world’s top producers of a chemical called monomethylamine, or MMA. Legally used to make pesticides and pharmaceuticals, it’s also an essential ingredient for Mexican cartels cooking the cheapest and most potent methamphetamine ever sold on American streets. Federal drug laws contain a set of crimes for U.S.-based companies that fail to control the sale and distribution of every liter they make. Requirements include verifying the legitimacy of any customer worldwide. Even contractors that pour the chemical into barrels must be licensed by the Drug Enforcement Administration.
Taminco was pleading guilty to illegally selling more than 22,000 gallons of MMA to two shadowy Mexican companies without conducting even basic checks of their bona fides. One of the companies may have never existed; the other was controlled by Taminco’s own Mexican sales rep, who was selling to himself before reselling to unknown buyers. In the first six months of 2010 alone, Taminco sold the two Mexican companies enough MMA to make nearly 100,000 kilograms of meth, or more than 11 times the total amount of the drug seized by U.S. law enforcement that year.
As Bloomberg Businessweek has reported, narcos have easily tapped the operations of American chemical companies to keep the cartels’ heroin, meth, and cocaine labs humming, despite a 30-year-old system of international drug laws designed to prevent the diversion of the chemicals. The price has been steep for Americans. For U.S. chemical companies, it’s been nominal. The prosecution of Taminco is likely the only one of its kind in the past decade. For those 22,000 gallons of MMA—enough to make about $3.2 billion worth of methamphetamine—Eastman paid a total of $1.3 million, which represents roughly an hour and 13 minutes’ worth of sales that year. Here’s another perspective: Aiding and abetting the distribution of just 50 grams of meth brings a mandatory federal sentence of at least 10 years in prison. More than two million times the 50-gram threshold could be made with the MMA sales covered by Taminco’s sentencing agreement. No one connected to the case would spend a day behind bars.
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