Dreamland: Part 1: We Realized This Is Corporate Summary & Analysis

Dr. Gary Oxman, who was hired by the Multnomah County Health Department in 1984, observeed how LA’s 1980s crack market traveled north to Portland and caused a syphilis outbreak. Oxman recalls the syphilis outbreak when, in 1999, he and Sharron Kelley, a Multnomah County commissioner, discuss how to pay for the hepatitis C outbreak caused by an increase in heroin usage in Portland. In brainstorming methods of treating the outbreak, Kelley cites the community’s lack of treatment services before directing Oxman’s attention to a community advocacy group called RAP, run by recovering addicts. She requests that Oxman perform “an epidemiological study” on the Recovery Association Project (RAP).

RAP was funded by Central City Concern (CCC), a nonprofit that runs detox facilities for addicts and alcoholics. According to Ed Blackburn, the director of CCC, Portland was experiencing a decline in addicts by the mid-1990s; however, this changes very suddenly in 1996-1997 as a result of new Xalisco Boys activity. Blackburn responds to the surge of heroin usage by recruiting former addicts to push for public action. With the aid of a federal grant, Blackburn hires recovering addicts to work at a detox center, as well as to aid in recruiting others.

Alan Levine is one of these recruits. By 1998, after five years of being a Xalisco customer, Levine is disillusioned with the system. Having witnessed the massive increase in high school heroin addicts, he compares the Xalisco customer service strategies to “Joe Camel” cigarette ads aimed at minors. As heroin became purer, it became more deadly; disturbed by a surge in overdose deaths, Levine starts to speak out.

In a mid-1990s Portland climate of “anesthetized and politically correct language,” the RAPsters are course and unruly, speaking with “blunt, uncensored” language; RAPsters tell their stories of addiction and pain honestly. RAP also establishes a “mentor system,” pairing newly-released addicts with more established former addicts to help the new releases acquire basic necessities and stay clean. Blackburn asserts that the number of sober former addicts “skyrocketed” as a result of RAP’s mentor system and its philosophies of honest communication among addicts. RAP’s success in communicating the urgency of politicians’ support to raise the budget to combat the heroin epidemic results in Sharron Kelley tasking Gary Oxman with studying the cause of Portland’s heroin problem in 1999. 

In his study, Dr. Gary Oxman researches death trends at Oregon’s Vital Records Department and is surprised to see that the department hasn’t recorded a disproportionately large number of overdoses. Eventually, he discovers that his unexpected findings are based largely on “inconsistent language”: while some doctors describe heroin overdoses as “acute intravenous narcotism,” there is no standardized way to record overdose statistics. Once Oxman realizes this, he is able to count over 100 heroin overdoses annually since 1996. In addition, Oxman finds that deaths increased steadily for a decade, and that no one had noticed. In 1991, Multnomah County recorded 10 heroin deaths; by 1999 (after the arrival of the Xalisco Boys) there were 111 recorded deaths.

Oxman’s report to the county commission describes  Portland’s heroin problem as an “epidemic.” Further, it claims that Portland’s heroin “ha[s] never been cheaper, more available, or more potent.” Lastly, Oxman’s report outlines a transformation in dealers’ “market strategy,” noting that heroin is no longer sold at a high price to a few addicts, but rather at a lower price to a larger market of addicts.

Cops like Dennis Chavez and Ed Ruplinger observe developments in the heroin market that are similar to Dr. Oxman’s. They see that the Xalisco Boys’ system of distributing exclusively small amounts of heroin is actually “more ominous” than larger distribution rings because it means that dealers are deported, rather than arrested, and these franchise-like cells can effectively avoid attention-catching large seizures and continue their businesses nearly unscathed: generally, U.S. narcotics divisions prefer to prosecute large-scale drug seizures.

Paul “Rock” Stone, an FBI agent operating out of Portland, becomes consumed by the Xalisco heroin system. In 1999, he witnesses a case wherein street dealers are selling heroin that is 80 percent pure. Stone is shocked: street drugs are never this pure, as drugs are typically “stepped on” as they make their way down “from wholesalers through middlemen down to street dealers.” Stone tracks calls from phones confiscated from street dealers and finds that they made calls to all parts of the country. These outwardly small-scale heroin traffickers are in fact part of a larger, heavily connected distribution system.

Stone compiles a task force between the DEA and the Portland PD who tap dealers’ phones and pagers. With the help of informants, the task force discovers the codes that dispatchers page to drivers, which contain instructions for where to meet clients. Informants also reveal why the Xalisco heroin is so pure: “it’s because they’re salaried […]. They didn’t care what the potency was; they made the salary no matter how much they sold.” Salaried employees are very atypical of the underground drug business, which leads Stone and his task force to “[realize] that this is corporate.”

Stone learns more about the opium produced and harvested from families of the Xalisco Boys in Nayarit and compares the Xalisco system to “an amalgam of wholesalers and retailers, each cell a small business, producing its own heroin, and sending it to the United States […] controlling their own distribution from flower to arm.” Stone eventually deduces that these “small business” cells are grossing $150,000 per kilogram of heroin. Taking into account what it costs to produce the drug and pay each salaried worker, the cells’ per-kilo profits exceed $100,000. Such high profits mean that cells can afford to sell a pure, quality product for cheap prices; competition among cells drives the price down even more. Just as Gary Oxman witnessed during the syphilis outbreak of the 1980s, “a relatively small group of people is creating a major drug plague.”