Local D.C. Author Outlines Ways Current Drug Policy is Harmful to Business


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Eric E. Sterling, president of the Criminal Justice Policy Foundation and director of the Business Council for Prosperity and Safety.

For the past two decades, Eric E. Sterling, J.D. has been trying to unravel drug policy legislation he helped write while working on Capitol Hill. Sterling was counsel to the U.S. House of Representatives Committee on the Judiciary from 1979 to 1989. As part of the Subcommittee on Crime’s staff, he was a principal aide in developing the Comprehensive Crime Control Act of 1984, the Anti-Drug Abuse Acts of 1986 and 1988, and other laws. “The work that I was involved in in enacting these mandatory sentences is probably the greatest tragedy of my professional life,” Sterling said.

As president of the Criminal Justice Policy Foundation and director of the Business Council for Prosperity and Safety, Sterling believes many people think private prison contractor revenues and the payrolls of correctional officers are the sole measure of the criminal justice system’s economic impact. There is another aspect most people ignore that businesses fall victim to everyday.

In a recent booklet titled, “Eleven Ways the War on Drugs is Hurting Your Business,” Sterling points out that the profound impacts of drug prohibition policy on business and the economy is rarely evaluated. Sterling believes drug prohibition shrinks the customer base, increases taxes, creates crime, raises costs, and reduces profits of business owners. He presents the following facts:

* Businesses have fewer customers because the war on drugs reduces purchasing power. According to Sterling, over the last 20 years more than 7 million Americans have received felony convictions for possessing or selling drugs. Tens of millions of others have criminal records for arrests or misdemeanor drug convictions. “Many of these people are drug-free, but struggle to find a job and a regular paycheck. Ex-felons are rarely hired for responsible jobs. Typically, they are underemployed, if employed at all,” said Sterling.

* Potential customers can’t buy your products because the war on drugs has deprived them of credit. “Ex-felons’ applications for credit are often rejected, even if they have regular jobs. In many neighborhoods, a significant number of the men and women walking by your business can’t buy or order your goods or services by Internet or telephone,” Sterling said.

* Fewer customers walk by your business due to drug prohibition crime. “The goal of drug prohibition is not to control drugs or [the use of drugs], but to make it scarce and thus drive up the price. Conflicts in the illegal drug business are not resolved in court, but with violence in the streets. Crime and disorder outside drives potential customers away,” said Sterling.

* Business overhead is higher because insurance premiums and security costs are increased. “If drugs were legal and controlled, and addicts had better access to treatment, maintenance, and harm reduction services, addicts would not be driven to crime,” Sterling pointed out.

* Health insurance premiums are higher because prohibition does not protect public health. One of the major costs to American business is the contribution to the health insurance premiums of its employees. “When drug users present themselves for treatment of legitimate medical conditions, they are rejected. Their untreated medical problems become major, expensive problems we all pay for,” Sterling said.

* The housing business is further depressed and real estate taxes are higher because of prohibition crime. “It makes many neighborhoods unattractive, which significantly depresses residential and commercial real estate values. Housing is frequently abandoned and lenders won’t issue mortgages on such properties. The real estate tax base is depressed and your tax expense for municipal services is higher,” Sterling said.  He explains his theory even further. “The unanticipated consequences of drug prohibition cost hundreds of billions of dollars in losses annually. The American system of private enterprise balances incentives and regulatory tools such as legal markets, courts, insurance, professional ethics, licensing, regulation, and proper taxation for every aspect of our economy. It is time to use these tools to take the profits of the drug trade,” Sterling said.

Controversial, at best, the issue of the impact of drug policy is evolving in many ways. “Currently, the Chamber does not have a position on this issue,” said Harold Wingo, president and CEO of the DC Chamber of Commerce. “However, we do want to engage all of our citizens to the maximum extent possible in the city economic opportunities. That’s why workforce development is so important to me as the new president of the Chamber. Part of the workforce development includes supporting efforts to integrate returning citizens in today’s economy.”

The Office of Returning Citizens Affairs (ORCA) represents thousands of ex-offenders faced with problems on both sides of the issue. “ORCA believes that all residents of the District of Columbia, including returning citizens who have paid their debt to society, should have full participation in improving their economic status, and in turn, help to build the District’s economy,” Doxie McCoy, spokeswoman for D.C. Mayor Vincent Gray, said.

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