Welcome, Biscuit.
I wanted to take a minute to point out the positives in your situation. First, both the boy's mother and father are aware that this behavior is unacceptable and willing to take steps to give him consequences. At least all of you are on the same page. That gives me hope for his future.
I support your decision not to allow the girlfriend to treat your home like a hotel room (perfect description). It's a pity that the girlfriend's mother allows him to stay over. I'm also pretty shocked that some of your son's friends have apartments at 16. Obviously, those parents are not understanding about boundaries. You can't really control who you son chooses as friends, though.
If you and your wife decide, you can stop giving him money. If he is going out to do drugs and party, then he should find his own way to pay for that. You can also stop paying for a cell phone, cable service, any other bonuses that he likes but has not earned. As a child, he is entitled to food to eat, clothes to wear and a place to sleep. You and your wife own all those other wonderful goodies. You can choose to keep him from enjoying those things since he is not getting good grades or working.
My son used to break things in anger. Every time he did, I made him pay to replace whatever it was.
I also want to mention that your wife will be extremely sad and upset that her son is behaving so badly. She may cry a lot. Remember that she is grieving for the loss of the dreams that she had for her baby. Be patient with her sorrow.
