Questions about that movie Blow with Johnny Depp

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I just saw that movie Blow with Johnny Depp, and wow! I don't know how I missed that one before. He was even a good actor back in the day too. Anyways, that movie is setup to make it seem like it's based on a true story. Does anyone know if it is, or is it just one of those movies that the production company thought would 'sell' or 'view' better if it was made like that? There's also a scene in that movie where Johnny Depp is introduced to Pee Wee Herman (that's the only name I know him by-lol) in the hopes to 'score' some marijuana. Before Pee Wee Herman gets down to business he asks Johnny Depp if he's a cop, and if he's a cop he has to admit so. This isn't the first time I've heard this. Granted, every time I have heard it, it's come from Hollywood, rather, the movies; but, if that were true, there's no way any cops would ever be sucessful in an undercover role. Right? So why do movies keep putting that little tidbit in their movies?