In a shocking video and series of photos obtained exclusively by RadarOnline.com, Chandler James is seen inhaling crystal meth off of aluminum foil at a pal's party in Austin, Texas, earlier this year.
The troubled teen – the daughter of love rat James, who divorced America's Sweetheart Bullock in 2010 – also regularly huffed keyboard cleaner, known as computer duster, before she sought treatment, a close source said.
"It is an open secret here in Austin that Chandler and her friends party hard and get wired," said the young man, who eye-witnessed Chandler's behavior and recorded the video.
"It was getting pretty out of hand. If she didn't get help, who knows what could have happened."
After learning of the existence of the explicit video, James, the ex-Discovery Channel star, confirmed his daughter's battle to RadarOnline.com, describing it as a "matter that is close to my heart."
"My daughter spent the month of April in a treatment facility getting help for addiction," James told RadarOnline.com, via email. "She is out now and in recovery, actively participating in a 12-step AA (Alcoholics Anonymous) program."
The source – who said he had been at up to six various parties where Chandler had attended – came forward in a bid to expose her out-of-control behavior because it had alarmed those close to her, he said.
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"Usually, when I saw Chandler and her friends, they would be huffing computer duster," he said.
"But lately, they started hanging out with a low level drug dealer named Gavin, who was providing them with more severe drugs, like meth."
Like his daughter, James is also in a 12-step program and recently revealed on his blog that he has been sober for 13 years.
"Everything always seems to come to a head the closer it gets to getting another year clean," he remarked on Facebook.
"But I always see the light at the end of the tunnel. Please do this for me. If you guys gals know somebody that struggles with drinking or drugs or any kind of addiction please just help them, don’t judge them. Just give them help.
"Most times that's all they need. The help you give will never be forgotten and the person that will most likely be effected the most will be you!"
The teenager -- whose mother is James' first wife, Karla -- moved to Austin from California with her custom bike builder dad in 2010, a move that brought them closer to ex-wife Bullock, who has also has a home in Austin and helped raise her ex's children in the past.
"The move to Austin was supposed to make life more low-key for Chandler and away from Hollywood. So no-one would notice her and who he dad is and what he did. But she got mixed up in some bad things," said the source.
During a question and answer session with fans on her formspring.me page, Chandler described loving Oscar winner Bullock, 48, as "like a mommmmmy!"
She admitted she was "conscious of the fact that my life is not normal.
A month before Chandler checked into treatment, James married his fourth wife, 35-year-old Alexis DeJoria, a drag racer and the daughter of billionaire John Paul DeJoria, who is the co-founder of Paul Mitchell hair products.