[Senate Hearing 106-749]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 106-749



             UNITED STATES ASSISTANCE OPTIONS FOR THE ANDES

=======================================================================

                                HEARING

                               Before the

                            SENATE CAUCUS ON
                    INTERNATIONAL NARCOTICS CONTROL

                                and the

                  SUBCOMMITTEE ON INTERNATIONAL TRADE

                                 of the

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                           February 22, 2000



                   U.S. GOVERNMENT PRINTING OFFICE
67-504                     WASHINGTON : 2000



            SENATE CAUCUS ON INTERNATIONAL NARCOTICS CONTROL
                       one hundred sixth congress

                  CHARLES E. GRASSLEY, Iowa, Chairman
                  JOSEPH R. BIDEN, Delaware, Co-Chair
JEFF SESSIONS, Alabama               BOB GRAHAM, Florida
MIKE DeWINE, Ohio                    DIANNE FEINSTEIN, California
SPENCER ABRAHAM, Michigan
                      Wm. J. Olson, Staff Director
                 Marcia S. Lee, Minority Staff Director


                            C O N T E N T S

                              ----------                              
Opening Statement:
                                                                   Page
    Senator Charles E. Grassley..................................     1
    Senator Joseph R. Biden......................................    18
    Senator Bob Graham...........................................    20

                                PANEL I

General Barry McCaffrey, Director, Office of National Drug 
  Control Policy.................................................    25
    Prepared Statement...........................................    30
Honorable Thomas R. Pickering, Under Secretary of State for 
  Political Affairs, Department of State.........................    44
    Prepared Statement...........................................    49
Mr. Richard Fisher, Deputy United States Trade Representative, 
  Office of the United States Trade Representative...............    60
    Prepared Statement...........................................    63
General Charles E. Wilhelm, Commander in Chief, U.S. Southern 
  Command, Department of Defense.................................    72
    Prepared Statement...........................................    75

                          SUBMITTED QUESTIONS

General Barry McCaffrey, Director, Office of National Drug 
  Control Policy.................................................   117
Honorable Thomas R. Pickering, Under Secretary of State for 
  Political Affairs, Department of State.........................   134
Mr. Richard Fisher, Deputy United States Trade Representative, 
  Office of the United States Trade Representative...............   157
General Charles E. Wilhelm, Commander in Chief, U.S. Southern 
  Command, Department of Defense.................................   160

 
             UNITED STATES ASSISTANCE OPTIONS FOR THE ANDES

                              ----------                              --



                       TUESDAY, FEBRUARY 22, 2000

                  United States Senate,    
 Caucus on International Narcotics Control,
       and the Subcommittee on International Trade,
                               of the Committee on Finance,
                                                    Washington, DC.
    The Caucus and Subcommittee met, pursuant to notice, at 10 
a.m., in room SD-215, Dirksen Senate Office Building, Hon. 
Charles E. Grassley, chairman of the caucus and the 
subcommittee, presiding.
    Present: Senators Grassley, Sessions, Biden, and Graham.
    Senator Grassley.  Even though my colleagues are not here, 
I am going to go ahead and get started because some of our 
witnesses, particularly General McCaffrey, have other 
obligations outside the city today and I want to get started on 
time.
    First of all, I thank particularly our witnesses for 
coming, taking time out of their busy schedules to help us with 
the process of congressional oversight. All of you who are in 
the audience, we thank you for your interest in this issue as 
well.
    The purpose of this hearing is to look at United States 
counter-drug policy for the Andean region. We have a lot of 
ground to cover today. The proposed emergency assistance 
package that the administration has submitted to Congress is 
one of the most significant foreign policy issues put before 
Congress in recent years, and it also marks a very major 
escalation in U.S. counter-drug efforts in Colombia. It comes 
about as a result of a major expansion in drug production and 
trafficking from Colombia.
    The principal target for most of the drugs produced in 
Colombia, of course, is the United States. That expansion has 
occurred despite an already extensive U.S.-supported effort in 
Colombia, and it has happened in large part because Marxist 
guerrillas in that country have aligned themselves with drug 
pushers, becoming in the end drug thugs themselves.
    A high murder rate and endemic violence by narco-
traffickers, guerrillas, and paramilitaries mean that Colombia 
faces unprecedented challenges. The fate of democratic 
institutions and the future of decent government are at risk. 
Clearly, it is in the U.S. national interest to be concerned 
about not only what is happening in Colombia, but what we can 
and must do about the situation there to protect the American 
people from this drug trafficking.
    But it does make a difference how we engage, and the 
purpose of our engagement, of course, is to make a difference. 
This hearing is to look at how the present proposals will 
accomplish important goals that will help Colombia as well as 
help the United States.
    Last year, Senators Coverdell and DeWine and myself 
introduced the Alianza Act. The purpose of that effort was to 
urge immediate and, let me stress, a very thoughtful response, 
as opposed to just an ad hoc, temporizing, piecemeal effort. 
What we asked for in that legislation was for the 
administration to submit a strategy for how to make a 
difference and not just some grab-bag of goodies bundled 
together, because there are serious issues involved that 
require serious consideration.
    Our goal was and still is to see Colombia supported. The 
Alianza Act indeed tries to prime the pump, but we also sought 
to find a coherent, comprehensive, intelligent strategy, not 
just a list of projects. I would like to quote from that Act 
about what Congress wanted then and what we expect now. It is 
not complicated, but it is necessary.
    What we want to see is a plan that lays out priorities, 
describes the actions needed to address the priorities, defines 
the respective roles of the United States on the one hand and 
Colombia on the other, details how the plan will incorporate 
other regional partners, and delineates a time line for 
accomplishing the goals based upon some understandable 
criteria.
    At this point, we have yet to see such a detailed plan. 
What we have seen is various wish lists, and many of these have 
been somewhat vague. Even these wish lists appear uncoordinated 
and divergent. So it is my hope that we can clarify that 
picture today during this hearing. This caucus tried to get 
that clarity in a similar hearing late last year. The 
administration did not seem able to shed much light then, and I 
do hope that they can do better today.
    So let me be clear. I believe that it is important to 
support Colombia, that the situation there is serious and how 
it develops is of direct concern to us. We have an obligation 
to help because by helping we help the United States with the 
drug trafficking that is coming here.
    But it makes a difference how we go about providing that 
help. Poorly conceived and badly implemented programs will do 
more harm than if we did nothing at all. We will have a lot of 
questions today about the issue of just what it is we are going 
to do, how we are going to do it, and what we expect in 
results.
    So I would like to conclude by introducing for the record a 
letter that I received from the General Accounting Office 
detailing some of its recent findings on problems with our 
efforts in Colombia. Members have copies of that communication 
in their packages. So I just want to read a brief paragraph.
    ``. . . the executive branch has proposed a $1.3 billion 
assistance package primarily designed to support Colombian 
military and law enforcement activities, interdiction efforts, 
economic and alternative development, and human rights and the 
rule of law . . . However, at the time of our review, an 
operational interagency strategy for Colombia had not been 
developed. An official with the Office of National Drug Control 
Policy indicated that it is considering developing such a 
strategy, but there is currently no consensus among the 
interagency counter-narcotics community whether an integrated 
strategy should be developed. The official also stated that the 
Office of National Drug Control Policy may not have the 
legislative authority to make such a strategy work.''
    [The letter referred to follows:]

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    Senator Grassley.  So I finish with this commentary on the 
letter. This suggests that we are in the process of considering 
a major support package without a clear idea of what it is that 
we are proposing to do. That was true last year. I am not too 
sure that things are better this year. That is what I hope to 
hear more about today. We need an approach that will take the 
initiative away from the traffickers and their allies. If we 
don't, all we will be doing is playing an expensive game of 
hopscotch, and we will be doing that all over the region and 
that seems to me to be a formula for losing.
    I now call on my colleagues, first Senator Biden and then 
Senator Graham.
    Senator Biden.  Thank you, Mr. Chairman. I want to begin by 
commending you for holding this hearing. It is very important 
that we consider the proposal for U.S. assistance to Colombia 
and other options for the Andes. Though much of the focus of 
the President's supplemental budget request is on Colombia, you 
are correct to emphasize that we need a regional approach to 
combat the drug problem in South America.
    A decade ago, the Bush administration and Congress joined 
in supporting the Andean Initiative, a multi-year effort to 
combat drug trafficking in Bolivia, Colombia, Peru, and 
Ecuador. Over the past 10 years, the United States has provided 
considerable amounts of assistance as well as special market 
access to certain Andean products under the Andean Trade 
Preference Act.
    As we start a new decade, we can look back with some 
satisfaction that our joint efforts with these nations have 
yielded some successes. In Bolivia and Peru, coca cultivation 
is much reduced since 1995. In Colombia, large cartels that 
once dominated the trade have been largely dismantled. Colombia 
has resumed extraditing criminals to the United States, and 
countries which a decade ago appeared to lack any political 
will to combat drugs have become our partners in this effort. 
That is the good news.
    The bad news is that the scope of the problem is still much 
the same. Cocaine continues to flow out of the region at 
extremely high levels. Moreover, the face of the battle in 
Colombia has changed. There, the cocaine trade has become 
decentralized. Large cartels have been replaced by numerous and 
smaller organizations. Colombian traffickers have also moved 
into a new sector which some of us predicted in the mid-1990s--
that is, the cultivation of opium and the trafficking in 
heroin--and are now major players in the eastern United States.
    Finally, Colombia is now a major center for coca 
cultivation, replacing Peru and Bolivia as the leading supplier 
of the coca base. When we started the Andean Initiative and we 
would speak with Colombians, they would basically say it is 
your problem; we don't use it, we don't grow it, it is just 
transshipped through us. Now, they use it. Now, they grow it. 
Now, it is a serious domestic problem for them, beyond the 
corruption that it breeds and the violence, just in terms of 
use.
    In sum, we face a different set of challenges in the region 
today than we did at decade ago. To address the growing crisis 
in Colombia, President Clinton has put forward an ambitious 
proposal designed to support the, quote, ``Plan Colombia'' 
formulated by the Colombian government.
    I agree with the Clinton administration that we must 
significantly increase our assistance to Colombia, and do so 
quickly, and I hope Congress will act promptly on the 
President's request for an extra $1 billion for fiscal year 
2000. But as Congress considers this proposal, we should go in 
with our eyes wide open. Everyone should understand that we are 
entering a new phase in the drug war in the Andes.
    The proposal to train and equip counter-narcotics 
battalions in the Colombian army is not without risk, and some 
significant risk. Because the drug trade and the Colombian 
civil war are intertwined in southern Colombia, it seems to me 
almost inevitable that these battalions we are training will at 
least occasionally become engaged in counterinsurgency 
operations, and we should recognize that reality at the outset.
    But we should guard against being pulled into Colombia's 
guerrilla war. I am confident that the U.S. military doesn't 
want to become enmeshed in Colombia's civil war, but I am not 
so sure the Colombian military wouldn't like the United States 
to become enmeshed in their civil war. We must make clear to 
the Colombian government in our words as well as our deeds that 
although we fight against narcotics trafficking and we view it 
as our fight as well as theirs, their war against the 
guerrillas is their war and their war to win.
    In approving the administration's proposal, we should seek 
transparency--I can't emphasize this enough to the four 
witnesses today--absolute transparency, transparency about the 
number of U.S. forces present in the country, transparency 
about the use of our equipment, transparency about the 
activities in U.S.-funded battalions, transparency as to 
whatever the heck we are going to call those who are training, 
if they are contract folks hired by the military to do the 
training as opposed to uniformed military. There must be 
transparency because when one element of this goes awry, the 
whole house of cards will come down if it is presumed by the 
public or the press that there hasn't been absolute 
transparency.
    Second, we should remain vigilant and seek continued 
improvement in the human rights record of the Colombian 
military. In past years, elements of the Colombian army have 
been guilty of serious human rights violations. President 
Pastrana has made serious efforts to address the problem and he 
appears to be making progress. But we should demand that 
institutional tolerance within the military for atrocities by 
right-wing paramilitaries will cease or we will cease.
    Third, we should consider additional measures to help 
Colombia's neighbors. History, as no one knows better than our 
drug director, General McCaffrey, tells us that pressure in one 
area will cause traffickers to relocate their operations in 
another area--the so-called balloon effect. We have seen it 
when we did, through the military's assistance, such a 
wonderful job in the Caribbean, and we moved everything up 
through Mexico as a consequence of that. We are going to see it 
again if we are successful in Colombia. Not only do Bolivia, 
Ecuador and Peru deserve our continued assistance, but it is 
essential that we maintain progress in those countries on the 
drug war with them.
    And, fourth, it seems to me we must be sure that the 
economic aspects of this proposal receive sufficient emphasis 
and support. If enforcement pressures succeed, we must be ready 
with alternatives for the displaced.
    And, finally, perhaps most importantly, we should all 
understand that although the plan before us is a two-year 
budget, this will be a long-term effort. Patience is not always 
a virtue for which the American political system is known, but 
we should recognize that it will take more than two years to 
make significant progress in turning things around in Colombia 
without making things worse in other parts of the Andes.
    In closing, Mr. Chairman, I want to thank you again for 
this hearing. I also commend the administration for stepping 
forward with this plan. The President and his people have done 
a good job in assembling a comprehensive proposal, and I look 
forward to working with my colleagues and with the people 
before us today to help gain its approval.
    But, again, let me end by saying transparency, 
transparency, transparency. I have been down this road before 
in 28 years in this body. We will make a fatal mistake if it is 
not totally transparent. I am not suggesting it is not. I am 
suggesting, though, that that be a watch word.
    I thank you, Mr. Chairman.
    Senator Grassley. Thank you.
    Senator Graham.
    Senator Graham. Thank you, Mr. Chairman, and I also wish to 
thank you and Senator Biden for holding this joint hearing 
today and giving us an opportunity to learn from the various 
perspectives represented here. I don't believe we could have 
four more knowledgeable people of what the situation is in 
Colombia and what our commitments are being asked to be.
    I recently visited Latin America and I heard a recurring 
question which was similar to what I have heard from people in 
this country, and that is what is different. This combat in 
Colombia has been underway for a long time, over 50 years in 
terms of the guerrilla engagement, and over 30 years in terms 
of serious drug issues. I personally visited Colombia for the 
first time in 1979 to see what the U.S. effort was in terms of 
drug suppression.
    I think there are some significant differences that exist 
today that have not been in place in the past, and which 
justify the kind of U.S. commitment that we are being asked to 
make. Let me just suggest what I think some of those 
differences are.
    First, an enormous increase in Colombian coca cultivation, 
a 140-percent increase in the last 5 years, more than 300,000 
acres of coca currently under cultivation in the jungles and 
mountains of Colombia, with a particular surge in growth in the 
southernmost regions of that country. Actual cocaine production 
in Colombia has risen from 230 metric tons to 520 metric tons, 
a 126-percent increase in the same 5-year period.
    Second, traditional external funding sources for the 
insurgent revolutionary armed forces of Colombia, the FARC, and 
the National Liberation Army, the ELN, the two principal 
guerrilla groups, no longer exists. Since the end of the Cold 
War, their external support from the Soviet Union, Cuba, and 
other sources has largely evaporated. Thus, the FARC and the 
ELN have been transformed from Marxist ideological movements 
into Mafia-like criminal organizations that fund their anti-
government operation with drug trafficking dollars.
    Third, the infusion of narco-dollars allows the FARC and 
the ELN to act with relative impunity as they direct the 
cultivation, processing, and transportation of coca and poppy. 
They also attack oil pipelines and electric power facilities 
and conduct sophisticated kidnapping operations throughout the 
country.
    Next, at the same time, the insurgents' growing involvement 
in criminal activity has greatly reduced their public support 
in Colombia. The most vivid example of that is that a majority 
of Colombians today support the extradition of Colombian drug 
traffickers to the United States for trial in U.S. courts. The 
Colombian people recognize that the most effective way of 
attacking the guerrillas is to cut off their source of economic 
support from narco-trafficking.
    Next, after over 60 years of sustained economic growth, 
Colombia today is struggling with its worst economic recession 
since the 1930s. Unemployment in Colombia is at an historic 
high of over 20 percent. The Colombian economy is suffering 
from three consecutive quarters of negative growth. The 
economic downturn in Colombia has undermined both foreign and 
domestic investor confidence.
    Finally, record numbers of Colombia's best and brightest 
citizens are fleeing the country. In 1998, the United States 
embassy in Bogota processed approximately 200,000 visas. As of 
December 1, 1999, it had already had applications for 340,000 
visas.
    We are at a critical juncture in our relationship with 
Colombia, with our hemisphere's oldest functioning democracy. 
Plan Colombia, developed, as our chairman has indicated, by the 
President of Colombia, demonstrates the commitment of the 
Colombian people to fight the drug traffickers who threaten the 
stability of the entire Andean region, to move the peace 
process forward and to rehabilitate the Colombian economy, and 
recognize the principle of basic human rights for all citizens.
    However, in the face of its diminished economic capacity, 
Colombia cannot complete this important missionalone. Plan 
Colombia is a $7.5 billion initiative, of which Colombia will invest 60 
percent of the necessary funding. The United States, as well as the 
international community, must do its part to assure the successful 
completion of this initiative.
    I have analogized Plan Colombia to a puzzle which has ten 
pieces. The Colombian government is going to be responsible for 
six of those ten pieces, the United States for two, and we will 
look to the international community for the other two. The 
question is how do we construct a plan in which all of those 
ten pieces will fit together and will achieve our goal of a 
stable Colombia, politically and economically, which can resume 
its position as a leading force for democracy in Latin America.
    As we consider this proposal, there are a few additional 
items which I think should be considered, and several of those 
have already been mentioned by my two colleagues.
    First, we must do more to assist Colombia's neighbors who 
are our partners in reducing drug production. Bolivia and Peru 
have drastically reduced coca production and their efforts must 
be recognized and reinforced.
    Second, in the area of alternative development and economic 
assistance, we should consider such things as an early renewal 
of the Andean Trade Preference Act to rebuild confidence in the 
Colombian economy. This Act has been a great success, adopted 
in 1991 when Colombian exports to the United States totaled 
$2.7 billion, while U.S. exports to Colombia totaled almost $2 
billion. So we had a negative balance of payments of $700 
million.
    Nine years after the Andean Trade Preference Act, Colombian 
exports to the United States have increased to $4.7 billion, 
while U.S. exports to Colombia have more than doubled, to $4.8 
billion. So, today, we have a $100 million trade surplus with 
Colombia. Early renewal of the Andean Trade Preference Act will 
signal U.S. support of Colombia's economic reform efforts and 
will boost confidence in both domestic and foreign investors in 
pursuing business opportunities that create jobs and enhance 
international trade with Colombia and the Andean region.
    Finally, we must do more to address the deficiencies in 
tactical intelligence that are at the center of any successful 
counter-drug strategy and are a major contribution of the two 
out of ten pieces of this puzzle which the United States can 
make.
    Plan Colombia is much more than a counter-drug strategy. It 
is a multi-faceted and comprehensive approach to restore 
Colombian national security, reform the institutions of 
Colombia's government, and rebuild a prosperous Colombian 
economy. Today's witnesses reflect the diversity of this 
initiative and I look forward to hearing their testimony.
    Senator Grassley. Thank you, Senator Graham.
    Before I introduce witnesses, I am going to put a letter in 
the record from Fanny Kertzman, General Director of the 
Colombian Taxes and Customs Agency.
    [The letter referred to follows:]

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    Senator Grassley. I am going to introduce you in the way I 
would like to have you make your presentations. General 
McCaffrey is Director of the Office of National Drug Control 
Policy. Since 1996, General McCaffrey has overseen, among other 
things, the creation and implementation of the Federal Drug 
Control Strategy, the Drug-Free Communities Program, and the 
National Youth Anti-Drug Media Campaign.
    Next, we have Ambassador Thomas Pickering, Under Secretary 
for Political Affairs for the Department of State. He has 
served as Under Secretary since 1997. He is a familiar face 
here on Capitol Hill.
    Ambassador Richard W. Fisher, our third witness, serves 
currently as Deputy U.S. Trade Representative at the Office of 
the U.S. Trade Representative. His primary responsibility is 
covering trade issues for Asia, Latin America, and Canada. 
Given the importance and high profile of this issue to the 
administration and Congress, I had hoped that Ambassador 
Barchevsky would be able to come. But I thank you, Mr. Fisher, 
for filling in.
    Our final witness today is General Charles Wilhelm. He has 
served as Commander-in-Chief of U.S. SouthCom since 1997 and 
has previously served as Commander of U.S. Marine Corps Forces 
Atlantic and Commanding General, Fleet Marine Force Atlantic. 
His decorations include the Distinguished Service Medal and the 
Silver Star.
    All statements will be included in the record. I would ask 
you to summarize. And for the benefit of my colleagues who 
didn't hear me say this, General McCaffrey has to leave at 
11:30. I hope we will be able to do things in the normal 
procedure, but just in case we aren't able to do that, we will 
concentrate maybe our first questioning upon General McCaffrey, 
but I would like to go through all four witnesses first.
    General McCaffrey.

   STATEMENT OF HON. BARRY R. McCAFFREY, DIRECTOR, OFFICE OF 
                  NATIONAL DRUG CONTROL POLICY

    Mr. McCaffrey. Mr. Chairman, Senator Biden, Senator Graham, 
and your colleagues, I very much appreciate the chance to 
appear and to put a statement into the record. We tried to draw 
together our thinking and the data that are needed to 
intelligently discuss the issue in one document, and I commend 
this to your attention.
    Let me also thank the committee for their past support to 
put together and to maintain a sensible U.S. national drug 
policy. I am enormously mindful that in an era of balanced 
budgets that the U.S. Congress has given us an increase of some 
55 percent in our funding for prevention and education 
programs, and a more than 26-percent increase in drug 
treatment, which I believe is going to turn this issue around 
in the coming years.
    Let me also, if I may, acknowledge the presence of the 
senior team from the Government that has hammered out Plan 
Colombia that we will discuss this morning, and particularly 
acknowledge Under Secretary Pickering's leadership. Secretary 
Albright, Mr. Sandy Berger, the President and I really have 
looked to Mr. Pickering's leadership to try and pull together 
the regional thinking about the drug issue, and I think he has 
done an absolutely superb piece of work.
    General Wilhelm is going to have to do the heavy lifting on 
this at the end of the day. As we get into the details of this 
package, it is clear that a good bit of it is a mobility 
package for the Colombian armed forces, and some of it involves 
the training of not only counter-narcotics battalions, but also 
riverine elements and the skillful integration of intelligence 
into that effort. General Wilhelm and U.S. Southern Command 
obviously will have to be the primary agency to face up to that 
in support of the U.S. Embassy in Bogota.
    Then, finally, Ambassador Fisher. I thank him for his 
tutorials on how we should think about the associated economic 
issues that are at stake here.
    Mr. Chairman, with your permission, let me make four points 
and then walk very quickly through some charts. The four points 
begin the following: We have a strategy and it is working. You 
know, I frequently fall back on an old assertion that we should 
never argue about facts. They are either facts or they are not. 
The facts are we have been able to pull together a national 
strategy which has been sent to the Congress. We have consulted 
with leading members of Congress. We have your views and they 
are incorporated in this document.
    There is a classified annex to the National Drug Strategy 
which gives guidance to the intelligence, armed forces, and law 
enforcement agencies to match this public document. We have 
also pulled together in the space of some six months of hard 
work our own understanding of what the Colombians are trying to 
achieve, and that strategy is Plan Colombia.
    We knew we could not substitute U.S. thinking for what 
essentially has to be a Colombian approach, an approach that 
takes into account not just the massive challenges posed by 
25,000 heavily armed narco-guerrillas, but also the concurrent 
problems which President Pastrana must face and for which he 
will be held accountable--the economy which is undergoing such 
difficulties, the peace process, as well as rebuilding 
democratic institutions where they are lacking.
    And then finally, if you will allow me, there is indeed an 
administration proposal that pulls together and analyzes what 
the contributing agency requirements will be to make the U.S. 
support for Plan Colombia work. And I think there was some 
confusion in the GAO report you referenced. There is no 
question that we do have an interagency plan for supporting 
Colombia. There is no question that we have a five-year budget 
approach for the Andean Ridge.
    I think what is quite correct is that we have not yet 
gotten to campaign planning on an interagency basis for the 
region, and I think that is really where you will see us go in 
the coming months and years to flesh out----
    Senator Biden. General, would you mind explaining what you 
mean--I am being serious--by campaign planning?
    Mr. McCaffrey. Yes. To some extent, it is a matter of 
semantics. By ``strategy'' I mean we do have a conceptual 
architecture and we have got resources tied to the concept. So 
we don't just have a notion, we don't just have a shopping 
list. We have got a blueprint and we have tied the resources to 
that blueprint.
    Now, in addition, for Colombia itself we have pretty much 
moved out on developing programs to support the strategy and 
the resources. So, hopefully, if you ask those charged with 
implementing this, whether it is the Department of Justice, 
Treasury, DoD or elsewhere, they will tell you what they are 
trying to achieve with any sub-element of this plan. They will 
be able to explain what we are doing to upgrade four Customs 
aircraft, precisely why you are going about training three 
counter-narcotics battalions, why you chose these helicopters, 
what will be the deployment schedule. All that kind of work 
clearly exists. I would also argue we have got a pretty good 
Andean Ridge concept.
    Now, a campaign plan for the region will take into account 
that all three of these principal nations--Peru, Bolivia and 
Colombia--are linked, and that indeed there has to be an 
explicit linkage to Venezuela, Ecuador, Panama, and the 
Caribbean, and I think the mechanics of that have to be fleshed 
out.
    Senator Biden. Thank you.
    Mr. McCaffrey. To underscore the strategy, though, at the 
end of the day, since 1995 there has been an 18-percent drop in 
the global production of cocaine, period. It went down. This is 
working. Peru and Bolivia have made dramatic achievements; the 
Peruvians, in particular, more than 60-percent reduction. To my 
astonishment, in barely more than 2 years, the Banzer 
administration in Bolivia has reduced production by more than 
50 percent.
    The second point, with your permission, Mr. Chairman, I 
would make is that Colombia is the center of gravity. That is 
where we have to go. It is quite clear that notwithstanding the 
regional successes and the Peruvian and Bolivian country 
successes, we do have a massive U.S. threat posed by cocaine 
and heroin production.
    Eighty percent of the drugs we are seeing in America (in 
terms of cocaine and heroin) either originate in Colombia or 
transit through that country. So if we believe our own 
rhetoric, if we think these numbers we are using are correct, 
this is killing 52,000 Americans a year. This causes $100 
billion in damages. This is actually the cause of much of the 
crime, the violence, the health problems, and the welfare 
problems we have in this country.
    We are going to Colombia to try and support their 
democratic authorities in an attempt to stop the production of 
cocaine and heroin. And I would tell you the figures on cocaine 
are astonishing--520 metric tons in 1999. But we are also 
seeing, according to CIA analysis--and I am so announcing this 
really this morning--a 23-percent increase in opium cultivation 
last year alone. We are now crediting Colombia with producing 
now some 8 metric tons of heroin, and this is another major 
threat to our young people, up and down the East Coast in 
particular.
    Point number three: the programs we will discuss today we 
have been working on for six months. I say this not lightly. 
This has involved many of us in the Departments of Defense, 
Justice, Treasury, State, USAID, and others to pull together a 
coherent plan and then to make sure that it is supportive of 
Colombian thinking.
    A final thought, Mr. Chairman is that this plan must be, in 
my view, viewed as long-range. It will not, in our judgment, 
work to pass a supplemental and not to see that this is a 
multi-year effort to deal not just with Colombia, but also with 
regional problems, and to support it not just in terms of 
police, armed forces, and intelligence, but also in precursor 
chemical control, arms smuggling, money laundering, alternative 
economic development, et cetera. So we think it is long-term 
and it requires bipartisan support.
    Very quickly, let me just show you an overview in map form 
of what we are talking about. There is the problem--Bolivia and 
Peru, with dramatic reductions; concurrent, very definite 
increases in cocaine and heroin production in Colombia.
    Next chart.
    The problem is drugs. I think we can form a very good 
argument that the problems with the economy, with the peace 
process, and with the guerrilla forces are all related to an 
enormous amount of money that flows out of the production of 
cocaine and heroin and into those insurgent groups. I would 
include in that category the so-called paramilitary forces. 
There is no question that they also in many cases are nothing 
more than bandit formations whose arms and whose money comes 
from guarding or in some cases directly taking part in the 
growing or production of drugs.
    Next slide.
    To underscore, we don't think there can be a Colombia-only 
solution. We have to take into account the spillover effect, 
the hijacking of aircraft out of Venezuela, the 1,000 or more 
FARC guerrillas that have moved into the Darien Peninsula, the 
paramilitary forces now following to terrorize the population, 
the impact on Ecuador, the movement of drug smuggling routes in 
many cases from just formerly the fast boats and aircraft out 
of Colombia and into the eastern Caribbean. Now we see a very 
definite tendency to smuggling going out to the eastern Pacific 
ports in Ecuador, Peru, and indeed in Chile, and other drug 
routes now opening up through Brazil and even as far south as 
Argentina.
    And then here is a pie chart (A graphic displayed). We can 
slice this $1.6 billion in many ways, but this gives you a 
quick overview. Let me just summarize it by saying the $1.6 
billion is a 2-year program. It involves a substantial amount 
of support for Peru and Bolivia. They have made incredible 
reductions. We are continuing to maintain support for their 
efforts, and I think you will see about 15 percent of the total 
package goes to those two nations.
    There is additional money intended for Ecuador, Venezuela, 
potentially Brazil, and potentially Panama. A good bit of that 
funding, however, does go to Colombia, some 85 percent. And if 
you look at the Colombia package, half of it goes to support of 
a mobility package for the Colombian armed forces. Essentially, 
it boils down to 30 Blackhawks and 33 UH-1Ns to allow Colombian 
military and police to reinsert democratic control in the 
south.
    In two of those provinces, Putumayo and Caqueta, we have an 
explosion of drug production. In fact, the CNP, the eradication 
program of the Colombian police, has worked. They have had 
dramatic successes out in the east in Guaviare province. The 
production is now concentrated in the south. There are five 
FARC fronts down there. They are heavily armed. 2,500 police 
cannot insert themselves and eliminate drug production, never 
mind have governmental bodies provide the concurrent packages 
of humanitarian support that will be required as some 10,000 
people are moved off this land where they are now involved in 
growing illegal crops.
    We think the mobility package is going to be a huge change 
in the nature of the police ability to intervene in the south. 
I am going to fly to Colombia today. I will be there through 
Thursday. I will see these areas. When you look at the southern 
province, a third of the arable land area is under coca 
cultivation. It is outrageous, and the police simply can't get 
in there.
    If you look at the rest of that package, there is a 
substantial amount--it has gone from about 5 percent last year 
to 20 percent this year--in support for judicial reform, 
alternative economic development, et cetera, so a huge increase 
in the balance of this program. And it does include quite 
specifically $240 million in support for these programs. We 
think it is a balanced package, we think it will make a 
difference, and over time we expect that a sense of support for 
Colombian democratic authorities will save American lives.
    Mr. Chairman, I thank you for the chance to make these 
opening comments and I will look forward to responding to your 
questions.
    [The prepared statement of Mr. McCaffrey follows:]

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    Senator Grassley. Ambassador Pickering.

STATEMENT OF HON. THOMAS R. PICKERING, UNDER SECRETARY OF STATE 
           FOR POLITICAL AFFAIRS, DEPARTMENT OF STATE

    Ambassador Pickering. Thank you, Mr. Chairman, very much. I 
am delighted to be here. I have a statement I will submit for 
the record. I would like you and the members of the committee 
to know how much I appreciate the opportunity to be with you 
today to discuss our assistance to the Andean region, and what 
I will do in excerpts of my statement is attempt to compliment 
the excellent overview which General McCaffrey has just 
presented.
    I have just come back from a visit to Colombia, Venezuela 
and Ecuador, and some of the testimony I will give today 
incorporates my firsthand impressions. I know that we are all 
very concerned about the impact of the situation in the Andean 
region on our own country. The importance of fighting the 
scourge of illegal drugs is an issue on which we all agree. 
Narcotics have deleterious effects not only on the health of 
the person who consumes them, but they have a corrosive effect 
on democratic institutions and on the economies in the region, 
something that I have just again witnessed firsthand. We look 
forward to working with you, sir, and with the Congress as a 
whole to take the decisive action that is necessary to address 
these questions.
    I want to speak a little more in-depth about Colombia and 
our proposed assistance package to support Plan Colombia, and 
then I will touch briefly on some of the other issues that come 
up in the regional context.
    The U.S. has consulted closely on the key elements that 
make up the Plan with Colombian leaders and their senior 
officials. The Plan ties together many individual approaches 
and strategies that are already being pursued in Colombia and 
elsewhere in the region. It attempts to use the success in 
Bolivia and Peru as road maps to a successful plan. It was 
formulated, drafted, and approved in Colombia by President 
Pastrana and his team, and without the Colombian stamp the Plan 
would not have the support and commitment of Colombia behind 
it, and particularly that of President Pastrana.
    Colombian ownership and vigorous Colombian implementation 
are essential to the future success, and as General McCaffrey 
said, we are now very heavily focused on implementation of the 
Plan, the operational plan, if you would call it, or the 
campaign plan. The U.S. shares the assessment that an 
integrated and comprehensive approach to Colombia's 
interlocking challenges holds the best promise of success.
    Before I go on to describe in a little more detail our 
proposal to assist Plan Colombia, let me remind you that the 
Plan cannot be understood simply in terms of the U.S. 
contribution, which is only a portion, and indeed a minor 
portion of the overall Plan.
    Plan Colombia is at least a $7.5 billion plan, of which 
President Pastrana has said Colombia will commit itself to 
provide $4 billion of its scarce resources to support. He 
called on the international community for help to provide the 
remaining $3.5 billion. In response to this request, the 
Administration is now proposing a $1.6 billion assistance 
package to Colombia of new monies and current funding for the 
first two years of the Plan.
    Our request for new monies includes, as you know, $954 
million in FY 2000 emergency supplemental funds and $318 
million in an FY 2001 funding package. A significant share of 
our effort will go to reduce the supply of drugs to the U.S. by 
assisting Colombia in its efforts to limit production, 
refinement, and transportation of cocaine and heroin.
    Building on current funding of over $330 million, for FY 
2000 and 2001, the administration's proposal includes an 
additional $818 million funded through international affairs 
programs, the Function 150 account, and $137 million through 
Defense programs, Function 050, in FY 2000, and $256 million 
funded through Function 150 and $62 million through Function 
050 in FY 2001.
    We are looking to the European Union and the International 
Financial Institutions to provide additional funding. In this 
regard, the International Financial Institutions, we 
understand, have already committed between $750 million and $1 
billion to Plan Colombia activities.
    The Departments of State, Defense, Justice, and Treasury, 
as well as AID and the Drug Enforcement Administration, and the 
Office of National Drug Control Policy all played major roles 
in proposing and crafting the Plan Colombia two-year support 
package. General McCaffrey has been kind to offer me some 
congratulations on this. I think that all of us on this side of 
the table will accept them when we see Plan Colombia beginning 
to realize some real progress in its objectives. But all of 
these agencies have been instrumental in providing their 
support and backing to the U.S. contribution and all of them 
will play a central role in the interagency implementation 
effort.
    General McCaffrey has explained some of the overall 
problems with production of cocaine and heroin in Colombia. 
There has been an explosive growth in the crop in southern 
Colombia, in the Department of Putumayo, and to a lesser extent 
in the north in the Department of Norte de Santander. Putumayo 
is an area that remains beyond the reach of the government's 
coca eradication operations. Strong guerrilla presence, and I 
would say increasing paramilitary presence from my recent 
visit, and weak state authority have contributed to a lawless 
situation in that Department.
    As our successes in Peru and Bolivia demonstrate, it is 
possible to combat narcotics production in the Andean region. 
The package will aid the government of Colombia in their plans 
to launch a comprehensive step-by-step effort in Putumayo and 
the adjoining Department of Caqueta to concur the coca 
explosion, including eradication, interdiction, and alternative 
development over the next several years.
    In doing this, as you have said yourself, Mr. Chairman, and 
others, we cannot and will not abandon our allies in Bolivia 
and Peru. Their successes are real and inspired, with 60- to 
70-percent reductions in coca production in these countries. 
But they are also tenuous against the seductive dangers of the 
narcotics trade.
    That is why our Plan Colombia support package includes 
nearly $46 million for regional interdiction efforts and 
another $30 million for alternative development in Peru, 
Bolivia, and Ecuador. These countries deserve our continued 
support to solidify the gains that they have worked so hard to 
obtain, and we are not content to allow cultivation and 
production of narcotics to be simply displaced from one Andean 
country to another.
    The various components of the assistance package I would 
like to review in brief. Boosting governing capacity and 
respect for human rights is the first element, and herethe 
Administration proposes funding $93 million over the next 2 years to 
fund AID and Justice Department and Department of State programs to 
strengthen human rights and administration of justice institutions.
    Expansion of counter-narcotics operations into southern 
Colombia is the second element. The world's greatest expansion 
in narcotics cultivation is occurring now as we speak in the 
insurgent-dominated area of southern Colombia. With this 
package, the Administration proposes to fund $600 million over 
the next 2 years to help train and equip two additional special 
counter-narcotics battalions and provide the 33 Blackhawks and 
the 33 Huey helicopters that General McCaffrey spoke about to 
make these air battalions air-mobile and to provide them with 
sufficient intelligence support.
    Alternative economic development is the third element. The 
package includes new funding of $145 million over the next 2 
years to provide economic alternatives for small farmers who 
now grow coca and poppy, and to increase local government 
ability to respond to the needs of their people.
    The fourth element is more aggressive interdiction. 
Enhancing Colombia's ability to interdict air, waterborne and 
road trafficking is absolutely essential to decreasing the 
price paid to farmers for coca leaf and to decreasing the 
northward flow of drugs toward our country and elsewhere. The 
Administration proposes to spend $340 million on interdiction. 
The program includes funding over the next two years for radar 
upgrades to give Colombia a greater ability to intercept 
traffickers, and also to provide intelligence to allow the 
Colombian police and military to respond quickly to narcotics 
efforts. It also includes some of the elements of increase in 
the riverine forces which Colombia has begun already to deploy.
    The fifth element includes assistance for the Colombian 
National Police. The Administration proposes an additional 
funding of $96 million over the next 2 years to enhance the 
Colombian National Police's ability to eradicate coca and poppy 
fields. This requests builds on our FY 1999 counter-narcotics 
assistance of $158 million to the Colombian National Police.
    U.S. assistance to military and police forces will be 
provided strictly in accordance with Section 564 of the FY 2000 
Foreign Operations Appropriations Act, the so-called Leahy 
amendment. No assistance is provided to any unit of the 
security forces for which we have credible evidence of 
commission of gross violations of human rights unless the 
Secretary of State is able to certify that the government of 
Colombia has taken effective measures to bring those 
responsible to justice.
    We are firmly committed to the Leahy amendment and have a 
rigorous process in place to screen those units being 
considered for assistance, and this is just but one of the many 
areas where Senator Biden's admonition on transparency is being 
taken seriously into account and applied.
    Let me now turn to the region. In Bolivia, President Hugo 
Banzer's administration has embarked on an ambitious five-year 
plan called the Dignity Plan to eliminate all illicit coca and 
permanently remove the country from the international narcotics 
circuit. A goal that seemed utopian when it was announced early 
in 1998 is now actually, Mr. Chairman, within reach.
    More than 73 percent of the country's illicit coca has been 
eradicated in less than 50 percent of the allotted time for 
that task. It is vital that the Bolivians consolidate these 
gains by providing alternative development options to the 
farmers who are abandoning the coca trade, while maintaining 
the focus on eradication and interdiction. U.S. assistance has 
been and will continue to be essential.
    In Venezuela, at this particularly important crossroads it 
is important to continue to emphasize the value of staying 
within democratic bounds and establishing precedents for 
transparent, effective, and responsive government in that 
country. We will continue to engage in bilateral cooperation 
with Venezuela in a wide variety of areas, everything from 
flood relief and reconstruction from the various serious floods 
they suffered in December, to counter-narcotics, anti-
corruption, and judicial reform, and the creation of an 
attractive investment and business climate in Venezuela.
    Venezuela is cooperating broadly with Colombia on counter-
narcotics, border protection, and the search for peace in 
Colombia. On my recent trip to Venezuela, I had a full and 
valuable range of discussions with Venezuelan officials on 
various issues, including a central focus on counter-narcotics, 
and I am happy to report that I believe we recorded significant 
progress on the few issues with Venezuela that are now not 
already fully agreed upon.
    In Peru, we enjoy a strong bilateral relationship with that 
country that spans many issues, from counter-narcotics to 
commercial ties. Our assistance seeks to strengthen democratic 
institutions in Peru, enhance the government's ability to 
interdict and disrupt narcotics production and distribution, 
and to reduce poverty and promote economic and social 
development. Our democracy assistance promotes civic and voter 
education, journalism training, and support for press freedom 
organizations, election monitoring, judicial training, 
increased political participation of women, and increased 
citizen participation in local government. Our programs also 
help to strengthen and expand the Office of Human Rights 
Ombudsman, and to support the work of credible human rights 
NGOs. Peru is, of course, a country that is a serious source of 
cocaine, and the value progress that they have made, described 
by General McCaffrey, is indeed important in the continuing 
effort that we are making in the region.
    In Ecuador, while we reject the means by which the recent 
president, President Mahuad, was removed from office, we are 
committed to working with the new Noboa government on the full 
range of issues of mutual interest, including, of course, our 
joint narcotics operations from the Manta forward operating 
location.
    Ex-president Mahuad has since called on all Ecuadorans to 
support the new president, President Noboa. The new president's 
principal challenge will be to address the economic crisis 
rapidly in Ecuador and to restore public confidence. We have 
urged Ecuador to work very closely with the International 
Monetary Fund and to take the economic steps necessary to put 
the reforms in place and put Ecuador on the path to recovery, 
including the urgent need for legislation in the country. The 
Noboa government has put forward a package of necessary 
reforms, and when I was there I strongly urged all of the 
parties in the Ecuadoran congress to pass them.
    The Andean Trade Preference Act, which will be addressed by 
Ambassador Fisher, is also an important instrument for us and 
for our activities in the region, and I believe is something we 
need continually to keep in mind as part of the efforts that we 
are making.
    Thank you, Mr. Chairman, for the opportunity to make this 
presentation, and I look forward very much to your questions.
    Senator Grassley. Thank you, Ambassador Pickering.
    [The prepared statement of Ambassador Pickering follows:]

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    Senator Grassley. Ambassador Fisher.

    STATEMENT OF RICHARD FISHER, DEPUTY UNITED STATES TRADE 
       REPRESENTATIVE, OFFICE OF THE UNITED STATES TRADE 
                         REPRESENTATIVE

    Ambassador Fisher. Mr. Chairman, Senator Biden, Senator 
Graham, thank you very much for inviting me to talk about the 
trade aspects of this exercise. I also want to share with 
General McCaffrey our gratitude to Under Secretary Pickering 
for pulling our team together as he does so brilliantly.
    I have just returned from a trip to Argentina, Brazil, and 
Uruguay. These countries, of course, are remaining on track in 
their economic recovery despite the recession they have 
experienced and the financial turmoil that recently affected 
South America. I had the opportunity to meet with all three 
presidents of those countries and was struck by the expressions 
of angst that came from them with regard to the Andean region.
    The Andean region is not faring as well obviously as the 
Southern Cone, and as each of you have noted, the scourge of 
narcotics production and trafficking and all the economic, 
social, and security problems associated with that illegal 
activity are particularly intense in the entire region.
    In addition to its general purpose in developing mutually 
beneficial trade and investment bilateral relationships, our 
trade policy in the region has been tailored to give the Andean 
countries greater opportunities to move away from narcotics 
cultivation into legitimate trade.
    I would like to highlight for you our three major 
initiatives in the region: the first, referred to by Ambassador 
Pickering, the benefits created by the Andean Trade Preference 
Act, or ATPA; the second, our strengthening of bilateral trade 
relations with countries in the region which we have 
intensified; and, third, the negotiations toward the Free Trade 
Area of the Americas and how it is relevant to this exercise.
    First, with regard to the special market access program 
created by the Andean Trade Preference Act, known as ATPA, this 
was originally applied to Bolivia and Colombia in 1992, then to 
Ecuador and Peru in 1993, granting these four countries tariff 
benefits comparable to those of the Caribbean Basin Economic 
Recovery Act until the year 2001, in December. Its goal was to 
help generate economic alternatives to drug production and 
trafficking through reduced duty or duty-free treatment to most 
of these countries' exports to the United States.
    The ATPA has indeed been providing benefits to items of 
significant export interest in the region; for example, cut 
flowers from Colombia, Ecuador and Bolivia, totaling about $440 
million annually; precious metals and jewelry products from 
Colombia and Bolivia and Peru, totaling about $210 million 
annually; fish and fish products from Ecuador, totaling about 
$80 million annually.
    This has helped prompt substantial growth in our trade 
relationships, as mentioned by Senator Graham. Bilateral trade 
between the U.S. and the Andean region has more than doubled 
since the passage of the ATPA. The four countries combined have 
increased their exports to the United States by about 80 
percent since 1991, with Colombia gaining approximately 95 
percent and Peru nearly 140 percent.
    In 1999, $1.7 billion in imports from the four relevant 
countries entered the U.S. under the ATPA, $799 million from 
Colombia, $607 million from Peru, $259 million from Ecuador, 
and some $63 million from Bolivia. Our most recent formal 
review submitted per the statute, which requires a review every 
three years, was submitted in December of 1997 and showed that 
ATPA had a positive effect on drug crop eradication and crop 
substitution in the beneficiary countries.
    Our judgment of the success of this program is echoed by 
the beneficiary countries. In October of last year, for 
example, Colombia's Ministerio de Comercio Exterior, their 
foreign minister, wrote that the ATPA has, quote, ``had a 
remarkable socio-economic impact. Net ATPA-related employment 
generation over 1992 to 1998 was 108,000 jobs in Colombia,'' 
end of quote.
    The ATPA program expires in less than two years, as was 
noted by Senator Graham, in December of 2001, as I mentioned 
earlier, which is a rather short time in terms of business and 
investment planning. The Andean community has requested that we 
extend the program for at least several years, and asked us to 
reduce the list of products excluded from preferential 
treatment under the current legislation, and to add Venezuela, 
which is the fifth member of the Andean community as a 
beneficiary country. It has also been suggested that we request 
an early extension of the program before the December 2001 
expiration date, and we are prepared, Senator, to examine all 
these proposals very closely in consultation with you and with 
the Congress.
    Second, as I mentioned in my introduction, we have been 
intensifying our bilateral trade relationships with the Andean 
region. For instance, in May of 1999 we and the five member 
states of the Andean community met in Cartagena, Colombia, for 
the very first meeting of the newly formed U.S.-Andean 
Community Trade and Investment Council. We refer to it by an 
acronym called TIC. The TIC meeting addressed issues such as 
the FTAA negotiations, the intellectual property rights issues 
between us, trade issues under the Andean Trade Preference Act, 
and matters of mutual interest in the WTO and in bilateral 
trade.
    We also have an active program of bilateral investment 
treaties, or BITs, and we have a BIT in force between the 
United States and Ecuador since May of 1997. We signed one with 
Bolivia in April of 1998 that is still subject to Senate 
ratification, and we are in various stages of exploratory talks 
with Peru and with Venezuela on possible bilateral investment 
treaties. During his recent trip to Washington, I proposed to 
President Pastrana that we proceed with a BIT negotiation with 
Colombia, and we are awaiting his reply.
    These treaties, Senator, provide mutual benefits by 
enhancing investor certainty and confidence. They help create 
jobs and long-term growth which are inherently desirable, and 
also help economies diversify away from narcotics.
    The administration has also made the point to the Andean 
governments--and I have personally had the pleasure of meeting 
with all five of the Andean presidents in that meeting around 
the Cartagena meeting--that full implementation of the WTO 
obligations and respect for the rule of law in such areas as 
intellectual property and trade-related investment measures and 
customs valuation are critical to creating favorable business 
climates and to attracting investment into the region.
    Indeed, the Plan Colombia which we have been talking about 
so much today makes a similar point in the section in that plan 
dealing with trade. The Plan also refers to the need to 
implement business facilitation measures agreed to in the FTAA 
negotiations, to promote a favorable environment for electronic 
commerce, and recognize that, as Senator Biden referred to 
earlier, transparency and due process in government procurement 
is essential to achieving greater efficiency and integrity in 
the use of public funds, not just in this country but, of 
course, in the Andean region.
    Third, and finally, in parallel with the special focus on 
the Andean region per se, we and the Andean countries are full 
partners in the construction of the Free Trade Area of the 
Americas. These talks are due to conclude by December 2004. 
They are on track to meet that deadline. These negotiations, 
when concluded, will greatly increase the alternatives to 
narcotics trade in the Andean countries.
    By eliminating obstacles to trade and goods, the Free Trade 
Area of the Americas will create similar new opportunities for 
the Andean countries not simply in the United States, but also 
in the other countries of the hemisphere. Opening markets and 
services will help to strengthen their economies and encourage 
competition, transparency, and impartial regulation of 
financial systems, telecommunications, insurance, and other 
industries basic to a modern, diversified economy.
    The elimination of tariffs and non-tariff barriers 
envisioned by the FTAA will be a powerful stimulus for 
investment in all of our economies, giving Andean nations and 
others further opportunities to diversify away from and develop 
alternatives to narcotics production. And it will strengthen 
the value of openness, accountability, democracy, and the rule 
of law, which themselves make the FTAA possible. These are 
values central to any successful effort to combat narcotics 
trafficking.
    Senator Grassley, a strong trade and investment 
relationship with the Andean region is a vital component of our 
counter-narcotics efforts, as well as a critically important 
goal in its own right. It is not in any sense a substitute for 
the policies directly focusing on narcotics issues, but it 
offers nations afflicted by poverty and by these conflicts 
opportunities to grow and develop healthier, diversified 
economies.
    Thank you, Mr. Chairman.
    [The prepared statement of Ambassador Fisher follows:]

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    Senator Grassley. General Wilhelm, inform me whether or not 
it will take you more than seven or eight minutes. If it does, 
I would like to go to questioning of General McCaffrey before 
we hear from you. But if you can be done in seven or eight 
minutes, I think we will just go ahead with your testimony.
    General Wilhelm. Senator Grassley, I think I will be very 
close to that.
    Senator Grassley. Okay, thank you. Go ahead.

 STATEMENT OF GENERAL CHARLES E. WILHELM, COMMANDER-IN-CHIEF, 
                 UNITED STATES SOUTHERN COMMAND

    General Wilhelm. Chairman Grassley, Senator Biden, Senator 
Graham, I welcome this opportunity to discuss with you United 
States assistance options for the Andean region.
    I know that during this hearing you intend to discuss U.S. 
economic and political assistance policies for the region and 
the Andean Trade Preferences Act. There are distinct linkages 
between these policies and our counter-drug and military-to-
military engagement policies and activities. This morning, I 
would like to comment on these linkages and Department of 
Defense activities in support of Plan Colombia.
    The counter-drug struggle provides the underpinning for 
most of the military engagement activities in the region. With 
regard to Colombia, I am encouraged by the progress that is 
being made. During 1999, we created the first of the Colombian 
counter-narcotics battalions. This 931-member unit is composed 
of professional soldiers, all of whom have been vetted to avoid 
human rights abuses. The battalion has been trained by members 
of the United States Seventh Special Forces Group and is 
designed to interact with and provide security for elements of 
the Colombian National Police during counter-drug operations.
    Tactical mobility has long been the Achilles heel of 
Colombia's armed forces. This battalion will be supported by an 
aviation element consisting initially of 18 refurbished UH-1N 
helicopters provided through a cooperative effort on the parts 
of INL at the State Department and United States Southern 
Command. These new units will focus their operations in the 
southern departments of Colombia which have been the sites of 
recent wholesale increases in drug cultivation and production.
    To assure that combined military and police units 
conducting counter-drug operations have the best, most recent, 
and most accurate intelligence, we have worked closely with 
Colombia while developing the Colombian Joint Intelligence 
Center, or COJIC, as we refer to it, at the Tres Esquinas 
military complex that abuts the southern departments.
    This computerized facility attained initial operating 
capability on the 22nd of December of last year. Deliberately, 
and without fanfare, these new organizations have commenced 
operations. Their two initial forays into drug cultivation and 
production areas near Tres Esquinas resulted in arrests, 
seizures of drugs, destruction of laboratories, confiscation of 
precursor chemicals, and identification and subsequent 
eradication of new cultivation sites. The counter-drug 
battalion and Colombian Joint Intelligence Center were created 
by reprogramming and reprioritizing previously budgeted 
resources during the past year.
    The initiatives that I have just described we refer to 
collectively as Action Plan 99. The follow-on effort, Action 
Plan 2000, builds on these first-phase efforts. During the 
coming year, we will build two additional counter-narcotics 
battalions and a brigade headquarters. With a well-trained and 
fully equipped counter-narcotics brigade consisting of more 
than 3,000 professional soldiers, the Colombian armed forces 
will be prepared to join forces with air mobile elements of the 
Colombian National Police to reassert control over the 
narcotics-rich departments of southern Colombia.
    Continuing to focus on mobility and intelligence, we will 
provide 15 additional UH-1N helicopters, rounding out the 
aviation battalion. These UH-1Ns will ultimately be replaced by 
UH-60 Blackhawks, which have the range, payload, high-altitude 
capability and survivability required by Colombia's armed 
forces to cripple the narcotics industry and bring the 
remainder of the country under government control.
    On the intelligence side, we will continue to develop and 
refine the Colombian Joint Intelligence Center and pursue a 
broad range of initiatives to improve our interdiction 
capabilities. A key component of the interdiction plan is 
first-phase development of the forward operating location at 
Manta, Ecuador. This facility is urgently required to replace 
capabilities lost when we left Panama and closed Howard Air 
Force Base. Manta's importance stems from the fact that it is 
the sole operating site that will give us the operational reach 
to cover all of Colombia, all of Peru, and the coca-producing 
regions of Bolivia.
    Looking beyond 2000, we have engaged the services of the 
Military Professional Research Institute, or MPRI. MPRI has 
assigned hand-picked and highly experienced analysts to assess 
Colombia's security force requirements beyond the counter-drug 
brigade and its supporting organizations. Among other things, 
the contract tasks MPRI to develop an operating concept for the 
armed forces, candidate force structures, and necessary 
doctrines to implement the operational concept.
    I have now served at Southern Command for 28 months. 
Shortly after assuming command and making my initial assessment 
of security and stability conditions in the region, I stated 
that I considered Colombia to be the most threatened nation in 
my area of responsibility. Today, almost two-and-a-half years 
later, I stand behind that assessment. However, I am encouraged 
by what I see in Colombia.
    Served by a first-class civilian and military leadership 
team, Colombia demonstrates a level of national organization 
and commitment that was simply not present two-and-a-half years 
ago. To be sure, the recently reported upsurge in coca 
cultivation and production provides cause for concern, but that 
concern is partially offset by improved performance by 
Colombia's security forces during tactical engagements with the 
FARC, ELN, and others who are aiding and abetting narcotics 
traffickers.
    Cooperation between the armed forces and National Police 
has improved. New levels of competence in air-ground 
coordination have been demonstrated. Intelligence-sharing is on 
the upswing. An aggressive program is underway to restructure 
the armed forces. The armed forces and National Police are 
poised to reassert control over the southern and eastern 
portions of the country, and Plan Colombia provides a 
comprehensive national strategy designed to defeat the narco-
traffickers and correct the ills they have visited on 
Colombia's society.
    On average, I visit Colombia about once every six weeks. I 
am convinced that the second most populous nation in South 
America, with the longest and strongest democratic traditions, 
is turning the corner. With our help, Colombia will succeed.
    In recent months, I have become increasingly concerned 
about Colombia's neighbors. The adverse social, economic and 
political conditions spawned wholly or in part by drug 
trafficking and the other transnational threats that it breeds 
are weakening the fabric of democracy in other nations in the 
region.
    For this reason, while I endorse a Colombia-centric 
approach to the drug problem in the region, I caution against a 
Colombia-exclusive approach. While we assist Colombia in making 
important strides to reassert its sovereignty over its 
territory and to curb growing cultivation, we should also take 
appropriate steps to preserve the noteworthy successes achieved 
by Peru and Bolivia, and be sensitive to emerging needs in the 
bordering countries of Ecuador, Panama, Venezuela and Brazil. 
This is truly a regional problem. As such, we must pursue 
regional solutions.
    In summary, I am convinced that we are headed in the right 
direction and we are pursuing the right options in the Andean 
region, but not a minute too soon. To seize the initiative in a 
struggle which General McCaffrey has testified claims as many 
as 52,000 American lives per year, I urge rapid approval of the 
supplemental and increased support for other nations in the 
region.
    I thank the caucus for the help it has given us in the past 
and I look forward to your questions that will follow. Thank 
you, sir.
    [The prepared statement of General Wilhelm follows:]

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    Senator Grassley. I suggest for my colleagues that on this 
first round, so we can each get General McCaffrey if we want to 
ask him questions, five minutes, and then we will take a longer 
period of time after he leaves if other members want to follow 
up with other people.
    I am going to start with you, General McCaffrey, but maybe 
this is also appropriate for Ambassador Pickering. I got the 
point that you made that perhaps the General Accounting Office 
was somewhat confused whether or not there was a detailed 
strategy on the part of the administration. I kind of laid out 
what I thought the detailed strategy ought to have, laying out 
priorities, describing the actions needed to address those 
priorities, defining the respective roles of the U.S. and 
Colombia, details of how the plan will incorporate other 
regional partners, and finally delineating a time line for 
accomplishing the goals based on some understandable criteria.
    Is there a document that you could place in front of us 
that would have that information in it? Or is my presumption 
wrong, if you want to take exception to my presumption that we 
ought to have such a document? This is something that Senator 
Coverdell and I and others were pursuing last September when we 
introduced our legislation.
    Mr. McCaffrey. First of all, let me just reiterate there is 
a conceptual architecture. There has been enormous, extensive 
involvement by the entire interagency in coming together not 
just with the concept but with the resources that will support 
the concept. So all of that is available.
    I think what is also true is that the implementing plan 
behind this architecture is still evolving and requires 
continuing leadership. Ambassador Pickering may wish to address 
our understanding that we had to do something differently. We 
were barely managing a $150 million a year program. Now, we are 
talking a multi-year effort that is not just $1.6 billion for 
the United States, but as Secretary Pickering talked to, it is 
$7.5 billion for the Colombians.
    So in no way would I suggest that the decisionmaking 
apparatus that now exists is yet adequate for the task ahead of 
us. That has to be built. We are going to put together a high-
level team here in Washington to be the mechanism, the 
secretariat of this. We have established a new deputies 
committee and we will expect the Colombians to do the same 
thing.
    Senator Grassley. Before Ambassador Pickering responds, is 
it wrong for me to assume that we ought to have this 
information before Congress makes a decision of moving ahead on 
spending the $1.3 billion, or whatever it is, that we are going 
to be spending?
    Mr. McCaffrey. No. I think we do have on the table a well 
thought out, competent conceptual outline of what we are trying 
to do with the resources, and we can explain to you why we 
arrived at those conclusions. I do believe the documentation 
and the professionalism of the people that built this should be 
adequate to reach a decision.
    Senator Grassley. Ambassador Pickering.
    Ambassador Pickering. I just support what General McCaffrey 
has said. I think that priorities are contained in the National 
Drug Policy of the United States, plus Plan Colombia. The 
actions taken to support those and defining the respective 
roles, I think, are very clearly in the congressional 
presentation document that you have got before you.
    The role of the other regional parties is in the 
congressional presentation document and the time line is being 
prepared, but there is a rough time line already indicated in 
the congressional presentation document about how and in what 
way we will commit our funding for various objectives. And I 
believe that we could provide you with a briefing on that time 
line in a little more detail if you or your staff would like to 
have that.
    Senator Grassley. The second question is in regard to part 
of the Alianza Act, the $410 billion that goes to support the 
regional anti-drug interdiction and eradication programs. 
According to reports by Occidental Petroleum Corporation, not 
only are pipeline attacks at the highest rate of incidence, but 
there is significant activity for new crop cultivation along 
the Colombian-Venezuelan border.
    Given the fact that the threat is not limited to the south, 
what plans are there to address the northern regions of 
Colombia, if you consider that a problem like these reports 
seem to indicate it is a problem?
    Mr. McCaffrey. Well, I don't think there is any question 
but that to include the production of heroin, which you didn't 
mention--it is now up to 8 metric tons--many of these 
activities that are in Plan Colombia don't relate just to the 
regaining control of the south element. That is the three 
battalions, some riverine forces, intelligence support, as well 
as associated alternative economic development and humanitarian 
aid for people displaced by that action. But a lot of this 
program goes to prison reform.
    By the way, in a 3-year period, we are talking about $450 
million-plus assistance provided to the Colombian National 
Police. These are substantial resources that are on the table 
now, not just for aircraft, but training and operations, et 
cetera. So I think it does apply Colombia-wide. The piece of 
it, the mobility package, is in the south.
    Senator Grassley. If Congress were to fully fund the 
President's emergency supplemental, what changes in cocaine 
prices and purity could we expect to see, and when should those 
changes begin to occur?
    Mr. McCaffrey. Well, we have seen an 23-percent reduction 
in hectares under cultivation. We have seen an 18-percent drop 
in total tonnage produced in the Andean Ridge, and that came 
primarily out of moving Peru from the dominant source of 
cocaine to a distant number two, Colombia now being about 75 
percent of it. It is our collective judgment that this plan 
will work and that in the coming 2 years to 5 years we should 
expect to see substantial reductions in the production of drugs 
in Colombia.
    Senator Grassley. According to the 1999 National Drug 
Control Strategy measures of effectiveness, your office is 
responsible for reporting on the outflow of drugs from source 
countries. What changes of outflow of drugs from Colombia would 
you see?
    Mr. McCaffrey. Well, I think in the coming years, as we get 
at the coca- and opium-producing regions, you will see an 
almost immediate reduction in the production of these drugs as 
they impact on the United States. Again, in my view, this is a 
2-year plan we are now talking about, but this is clearly a 2- 
to 5-year effort we are facing up to.
    Senator Grassley. The CIA says that we have had a 12.7-
percent reduction since 1996 in coca production. How much of a 
reduction of coca production do you expect to see as a result 
of the aid package?
    Mr. McCaffrey. Well, again, it gets at the point, can we 
turn things around in the center of gravity, which is Colombia. 
We assess that we can and as we have seen in Guaviare Province 
where the Colombian National Police aerial eradication program 
was enormously successful. It serves as witness that it will 
work.
    How do we get the Colombian National Police back into the 
south so that eradication can take place and displaced people 
can be cared for? Again, Senator, I would suggest the answer is 
probably in the coming two to five years we will see a dramatic 
impact.
    Senator Grassley. What is the U.S. plan for how to deal 
with the implications if our current package gets us more 
involved in confrontation with the guerrilla forces?
    Mr. McCaffrey. Well, I think this will not be U.S. service 
men and women involved in this. This is a Colombian problem. It 
must be a Colombian strategy; it must be their police, their 
armed forces, their prosecutors and judges that face up to 
this. I think that is what they plan on doing, so I would 
anticipate U.S. military elements will not be involved in 
counter-drug operations.
    Senator Grassley. Senator Biden.
    Senator Biden. Thank you very much.
    General, I wish you luck on your trip. I would like to 
focus on two things. While I have you here, as well as General 
Wilhelm, I would like to talk about one part that--I was going 
to say ``concerns,'' but I am not sure it concerns me; I want 
to make sure I understand it. I would like to talk about the 
mobility package here.
    Having spent a fair amount of time becoming acquainted with 
the issue of mobility in the Balkans and watching Apache 
helicopters and their movement into a region and the difficulty 
that that took and the command and control problems that were 
involved, it seems to me--and you have spoken to me about this 
briefly, General McCaffrey--that there is going to be a need 
for a serious presence on the ground of someone with more than 
a couple of bars on their shoulder down in Colombia, as well as 
some high-level State Department personnel assigned to the 
embassy to make sure that this significant transfer of mobility 
in terms of Hueys and Blackhawks--that is a big deal in terms 
of maintaining them, locating them, getting them there, et 
cetera. Can you tell me a little bit about what the deal is, 
how you have worked that out?
    My dad has an expression I won't quote precisely, but being 
the oldest in a family of four, when he and my mother would 
leave they would say, you are in charge, and point to me. And I 
would say why me? He would say, you are the oldest and I want 
to know who to hold responsible if something goes wrong.
    Well, who do we hold responsible, who specifically? Are we 
going to have a name of an individual who is the guy or the 
woman on the ground making sure that this equipment, these 
helicopters actually get in place, actually are put in the 
position to be able to be used, actually are able to get up off 
the ground? I mean, how are you going to do that practically?
    Mr. McCaffrey. Well, I am sure CINC South will want to 
respond. There is no question in my mind who is responsible. 
Number one, it is the U.S. ambassador. We have got a 
substantial team on the ground.
    Senator Biden. But as good as they are, they don't know a 
damn thing about helicopters.
    Mr. McCaffrey. Right.
    Senator Biden. They don't know a damn thing about how to 
move them.
    Mr. McCaffrey. We are going to have say the ambassador is 
responsible. The Secretary of State is responsible. They can't 
do it unless CINC U.S. Southern Command wakes up every morning 
and views themselves as being primarily in support of the U.S. 
embassy effort.
    We do have to rethink who is in Colombia, the kinds of 
skills they have, the numbers, et cetera. And I don't think 
that process has been finished, and CINC will, I am sure, want 
to respond. I think even more importantly, there is no question 
in our own mind--and Under Secretary Pickering and the NSC and 
I have discussed it--we need to change business as usual here 
in Washington. We can't get by with the normal interagency 
process when we ramp up to this level of support.
    So we have discussed and we are moving to implement a 
separate deputies committee steering group for policy 
decisions, and we will put together a secretariat of some form 
with a person full-time who is going to be our quarterback to 
make sure the policy implications are considered.
    Senator Biden. General.
    General Wilhelm. Yes, Senator Biden. If I could pick up 
where General McCaffrey left off, the General correctly, of 
course, traced the hierarchy of responsibility. But I will tell 
you I feel the weight of responsibility on my shoulders on the 
military side. I think that is appropriate. I think that is 
what you pay me to do.
    We are trying to do this in a very thoughtful way. There is 
a lot more to helicopters than air frames.
    Senator Biden. You got it.
    General Wilhelm. There is maintenance, there is training, 
there is life cycle management, and there is intelligent 
employment of assets and their preservation. We are keenly 
mindful of all of those things. I am trying to do the very best 
I can to provide Ambassador Curt Kamen the best advice that I 
can, and work very closely with Rand Beers, sitting in the 
audience in back of me, because since day one this has been a 
shared Department of State-Department of Defense enterprise.
    As you know, Senator, the $388 million that is in the 
supplemental to buy the 30 Blackhawks are State Department 
dollars. But we view ourselves at Southern Command as very much 
partners in this enterprise. Where we have started, sir, is to 
look first at an intelligent, well-integrated, well-thought-out 
basing arrangement. We have come up with three bases.
    We will use Tolemeida, which is a well-developed facility, 
as our main operating base; Lorandia, another very well-
developed facility currently used by the Colombian National 
Police, as our forward operating location. And then we will 
actually marry the airplanes up with the troops who will embark 
on them at Tres Esquinas as we push to the south.
    We have already invested $600,000 well-spent on improving 
force protection at Tres Esquinas, which is----
    Senator Biden. That was going to be my next question.
    General Wilhelm. Yes, sir. That is the branch furthest out 
on the tree. Just a ``gee whiz'' number, 15,000 rolls of 
concertina wire alone. I have troops on the ground right now, 
and have since January, conducting not only an assessment of 
the security conditions on the ground at Tres Esquinas, but 
fixing the broken things just as rapidly as they find them. We 
have a dedicated air base ground defense force drawn from the 
Colombian Air Force. They are receiving blue-ribbon training 
from a special forces A team.
    So, sir, it could go on and on, but I think you can see 
there are a collection of activities which involve, I think, an 
intelligent appreciation of the geography, attention to force 
protection. And I would add in conclusion I have proposed--this 
is not anything that is in the bag right now, but I would very 
much suggest that it would be appropriate for us to increase 
the throw-weight of our MIL group commander in Colombia from a 
colonel to a general officer, and I am pursuing that with the 
joint staff in the embassy right now.
    Senator Biden. Well, let me just say I have been a 
champion--that sounds like the wrong word; it sounds like there 
is some value to it. I have been a strong, strong supporter of 
the State Department, but I hope the hell they get out of your 
way here. Once the policy is made, once the judgment is made, I 
hope everybody understands they don't know any more than this 
committee knows about how to do whathas to be done, and you do.
    Once the policy has been made, once the judgment has been 
made that this is a basing arrangement and this is how many 
helicopters are going to do it, this is the training, this is 
the way in which it is going to be done, I hope to goodness 
that we don't get into any bureaucratic malarkey here.
    Once we have agreed on an objective, once we have agreed on 
the strategy and the tactics as to where the deployments will 
take place, and how, and how many people, et cetera, I for one 
want to make it real clear that if I, one Senator with 
diminishing influence in the minority here, find out that you 
all are running into any difficulty, I will do all I can to 
make it hell for whoever gave you any trouble because this is 
serious logistical stuff that only gets done with guys with 
those shiny little stars who have spent their whole careers 
figuring out how to do it, not anybody like me who allegedly 
knows something about foreign policy and makes the larger 
judgment of whether we should or shouldn't be there. I don't 
anticipate that difficulty, but we have been down this road 
before over the last 20 years or so, never with this 
concentration of hardware, and it is a big deal.
    The last question I have--I don't know whether that light 
is out for me or not; I think it is still green--is that you 
have had remarkable success, General, or the Ecuadorans and the 
Peruvians have had remarkable success, and Ambassador Pickering 
has been, as I understand it, kind of the quarterback for what 
has been going on here.
    But my question is it seems to me the remarkable success 
relates not in small part to the fact that there is no 
significantly well-organized, well-armed counter-insurgency in 
those other two countries. The reason why there has been such 
movement to cultivation in Colombia is the existence of this 
insurgency, well-armed and well-entrenched.
    And it is not merely the fact that the ground is more 
suitable and it is out of the Andes and it is in lower areas 
that it can be cultivated, but it is not an accident that it is 
where the guns are, it is where the guerrillas are. So I want 
to know whether or not I am making too much of a leap here in 
assuming that there is an absolute, direct correlation between 
the ability to increase production in Colombia and the decrease 
in production in the other two neighboring countries and the 
existence of this counter-insurgency.
    And if that is true, then don't we get to the point where 
we aren't going to have significant success until there is 
success against the FARC and the counter-insurgency movements? 
That is a mouthful, but could you respond to it, General, since 
you are going to be the one leaving shortly, and anyone else 
the chairman permits to respond?
    Mr. McCaffrey. Well, I think I would certainly agree the 
three countries are all enormously different. They don't face 
the same political, economic, counter-insurgency and drug-
related threats at all, although it is equally clear that the 
Sendero Lumiroso, MRTA, and other insurgent groups in Peru were 
devastating in their savagery, and also clearly involved in 
coca production in Peru.
    It is quite different in Bolivia. Bolivia certainly makes 
an interesting contrast with Colombia. Bolivia accomplished 
much of what it has done through a national dialogue 
implemented by the Banzer administration in which they 
convinced the people in the country that it was David versus 
Goliath, and David was the people and Goliath was the drug 
cartels. There has been much less violence there. There have 
been 9-some-odd people killed. There has been sniping, but 
there wasn't a huge mass of insurgents.
    In Colombia, clearly the Colombians faced 25,000 people 
with machine guns, mortars, planes, helicopters, wiretap 
equipment, huge amounts of corrupting money targeted on their 
journalists, their legislature, and their mayors. It is a very 
different thing.
    I don't believe there is any chance that the FARC, the ELN, 
and the paramilitaries will walk away from the millions of 
dollars they generate out of drug production unless there is a 
reward and a punishment that forces them to do that. I see no 
way for these brave Colombian policemen to intervene in the 
south and cut down cocaine and heroin-producing areas that 
threaten their own children and ours unless the military 
intervenes and provides security for them. So to some extent, I 
think you are quite correct.
    Senator Grassley. General McCaffrey, can you accommodate 
Senator Graham and Senators Sessions yet or do you have to go?
    Mr. McCaffrey. Yes, sir.
    Senator Grassley. Senator Graham.
    Senator Graham. Was that a yes to the first or the second 
question?
    Mr. McCaffrey. I am trying to make a 1:00 plane out of 
National and it would be terrible if I missed it, but I would 
be glad to respond to your questions, Senator.
    Senator Graham. In light of that, General, I will restrict 
myself to one area of questioning and that is during a recent 
visit to Mexico, you were reported as stating that drug 
traffickers were returning to the Caribbean and their old 
traditional routes of getting drugs into the United States. I 
assume that in part that is due to some of the difficulties 
that the new Colombian drug cartels, as outlined by Senator 
Biden, are having dealing with the Mexicans, as well as the 
softness that has occurred in some areas of the Caribbean, 
specifically Haiti.
    I would like your thoughts as to how Plan Colombia relates 
to the next phase of the strategy, and that is the interdiction 
in the routes between Colombia and the United States, with 
specific concern about the allegations that Haiti has become a 
major transport center within the Caribbean.
    Mr. McCaffrey. Senator, I spent three days in Mexico and 
was enormously impressed by the growing, deliberate momentum of 
the Mexican efforts in the south. I think it is going to work 
over time. They have just begun. It is a $520 million equipment 
acquisition, it is $1 billion in operating money, it is 15,000 
people. And I was looking at real machinery, some first-rate 
deep-water Mexican Navy efforts that have resulted in three 
gigantic drug seizures, in cooperation with the U.S. Coast 
Guard; a pretty good amphibious commando effort by the Ganfi 
forces in the Mexican Army; new counter-drug x-ray technology.
    It is going to pay off, and these drug criminals are 
watching what is happening in front of their eyes. They have 
not stopped. They are still out in the eastern Pacific as the 
principal drug threat to America, but we are seeing some 
response. We also saw the Coast Guard with a brilliant air-sea 
interdiction effort that has started to work against fast 
boats.
    So I think what we are seeing now is the beginnings of a 
change in drug criminal smuggling. They are going to Haiti, 
they are going to the Dominican Republic, they are going to 
Jamaica. They are using now direct air landing strips in drugs 
in Haiti, among other things, and we are going to have to 
follow them.
    The entire Colombian package, though, again--and I think 
CINC's notes had an interesting statement. When you look at the 
interdiction piece, the Caribbean-Eastern Pacific-Central 
American is an area the size of the United States. This is 
huge, hundreds of miles of empty ocean out there in the eastern 
Pacific.
    The interdiction effort in Colombia is a fairly definable 
place. We take satellite photographs of coca fields. We know 
where they are, and this riverine-army-police effort will 
directly interdict those drugs. So I think it is going to help 
south Florida, the Gulf Coast States, the four border States, 
quite directly in the coming years.
    Senator Graham. Could you comment about the issue of Haiti 
and its increasing use as a transport center?
    Mr. McCaffrey. Senator, it is a disastrous situation and I 
am not sure we have a grand idea of what to do. We have upped 
our DEA presence substantially. We are doingfirst-rate work 
with the Dominican Republic to try and seal that border.
    We need to stand behind U.S. Coast Guard efforts to 
interdict at sea. There has been first-rate work by the U.S. 
Customs Service in south Florida, the Port of Miami, trying to 
get at these tramp steamers coming out of Haiti. But it looks 
to me as if the Haitian law enforcement, judicial system, 
political system in terms of confronting the drug cartels is in 
a state of rapid collapse, and they have become a preferred 
target which we will have to deal with really externally to 
Haiti. I think that is where it is headed.
    Senator Graham. Thank you.
    Senator Grassley. Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    General McCaffrey. General Wilhelm said, I believe, in 1998 
that the Colombian armed forces were incapable of defeating the 
guerrillas, which are Marxist-dominated and funding themselves 
in large part from narcotics trafficking.
    What percentage of Colombia is now held by guerrilla 
forces, the land mass, the land area?
    Mr. McCaffrey. Senator, it is probably a deceptive 
statement. The figure we use is that the FARC, ELN, and 
paramilitaries may have enormous influence over as much as 40, 
50 percent of the country. I think there are probably 200-or-so 
communities where their presence, according to Colombian 
published reports, is omni-present. But they don't control 
anything but the despeje. The Colombian police and the 
Colombian armed forces have not conceded or written off 
anything in the country.
    Senator Sessions. Well, you have a great record of combat 
and experience in the armed forces. If Colombia gets its act 
together and acts with determination and a full commitment, is 
there any doubt in your mind they could defeat the guerrilla 
forces and take that country back?
    Mr. McCaffrey. Senator, the key question is political will. 
Does the Colombian leadership, the Colombian people, want to 
turn their future over to these ferociously well-armed and 
savage insurgent forces, fueled by drug money and production? 
The answer is they don't. The political will is there.
    I agree with the CINC's assessment. Both their political 
and their military leadership and the police leadership now 
gives us an unusual opportunity for them to defend themselves. 
So our collective view is that this program we are advocating 
will work and protect not only the United States but regional 
partners.
    Senator Sessions. Well, you just said it, though. The 
question is political will. Lincoln had it. He faced a more 
formidable situation, I suppose, than the country of Colombia 
faces today. He recognized the future of his nation was at 
stake and he led with relentless commitment to a goal to taking 
back that country.
    Don't you think that those of us who have the money here to 
support Colombia ought to ask whether or not the Colombian 
government is sufficiently committed to this enterprise before 
we continue to pour money into an operation? Shouldn't we 
insist that the Colombian leadership state unequivocally that 
they intend to end this occupation and to defeat the drug 
dealers and Marxist guerrillas?
    Mr. McCaffrey. Well, I would suggest that Plan Colombia, 
the product of the collective leadership of Colombian 
democratic institutions, does represent a collective will to 
confront this problem. I find it very credible.
    Senator Sessions. Well, what is the story about if you have 
a high school degree, you can't go into combat? Would you 
explain that to me? Is that consistent with a nation that is 
committed to victory?
    Mr. McCaffrey. I think the Colombians recognize that that 
is a product of inadequate political will. I think it is a 
disastrous statement to their own people. They have to face up 
to that. They said they will. They are going increasingly, as 
General Wilhelm can talk to, to a professional military, 30 to 
40,000 people and a rapid reaction force. They had an old 
system that doesn't suit the new threat to their stability.
    Ambassador Pickering. Barry, could I just make a point? I 
talked to the Colombian defense minister on Friday about that. 
He made it very clear that they were going to change that, and 
that was something they hoped to do very shortly.
    Senator Sessions. Well, I think that is a beginning signal. 
Ambassador Pickering, is it the position of the State 
Department that we are neutral in this war, this effort, this 
guerrilla fight in Colombia?
    Ambassador Pickering. It is our position, Senator, that we 
should do everything we can to fight this nexus between 
narcotics trafficking and insurgency. The focus is on the 
narcotics trafficking. That is what affects us.
    Senator Sessions. Well, all right.
    Ambassador Pickering. That is the centerpiece of our 
effort. The interesting thing is you go down to Colombia and 
you find that that nexus is increasing. It is hard to find 
places, frankly, where the FARC, the ELN, and the 
paramilitaries, I have to emphasize, in all the briefings I 
received, in all of the areas of highest production of 
narcotics, are not all intimately involved.
    Senator Sessions. Well, what I am concerned about is these 
guerrillas are not democrats, they are not believers in 
democracy. They are Marxists, they are connected to the drug 
industry, and we have got one of the oldest democracies and one 
of the finest countries in the world in Colombia that is on the 
ropes. We don't have a choice on whose side we are on?
    Mr. McCaffrey. With your permission, Mr. Chairman, may I 
withdraw?
    Senator Grassley. Yes. Thank you, General, for coming. Good 
luck.
    Mr. McCaffrey. Yes, sir.
    Senator Sessions. Whose side are we on, or do we have a 
side?
    Ambassador Pickering. We have a side. We are clearly on the 
side of the government in their fight against narcotics 
trafficking and everything at all that contributes to that.
    Senator Sessions. Then are we publicly committed, or are we 
not, to the Colombian democratic government defeating the 
guerrilla forces in Colombia? Do we support that effort?
    Ambassador Pickering. We are, insofar as those guerrilla 
forces are involved in narcotics trafficking. That is the 
centerpiece of our effort. It is the centerpiece of the 
Colombian government's effort in Plan Colombia.
    Senator Sessions. Well, I think you have just answered the 
question that you don't have confidence in the integrity of the 
Colombian government sufficient to support it, and now we are 
asked to spend over $1 billion on drug trafficking fighting, 
which to me sounds pretty hopeless if we can't take back that 
territory from the Marxist drug traffickers.
    Ambassador Pickering. I think that the focus is on the drug 
traffickers, whether they are Marxists, republicans, democrats, 
anarchists, whoever they might be. That is the focus we are 
putting on it.
    Senator Sessions. Well, it may not make a difference to 
you, but it makes a difference to me whether a Marxist group 
takes over Colombia or not. Does it not make a difference to 
the State Department?
    Ambassador Pickering. It certainly makes a difference to 
all of us, and it makes even more difference because they are 
intimately involved in the drug trafficking, and that is the 
focal point of the Plan. It is the focal point of our support 
mechanism for the Plan.
    Senator Sessions. Well, it just seems to me, Mr. Chairman, 
that I have a strong belief that Colombia is a nation of good 
people and it has a great democratic tradition. I remember 
distinctly when I was prosecuting amajor drug smuggling case in 
Mobile, Alabama, when I was United States Attorney and we had a young 
policeman who came and testified against them. And I remember asking 
him about his personal safety and how he was willing to come to the 
United States and testify against these people, when so many people 
have been assassinated who do so. And he was just courageous and he was 
a believer in his country's government, and I remember that.
    I just don't know how we can proceed with a policy that 
doesn't understand fundamentally who we ought to be supporting. 
I think this government of Colombia has not gotten its act 
together. I do not believe that they have committed with 
sufficient will, as General McCaffrey said, to win this war. 
And if they have the will, they can win this war. And if they 
have the will, we ought to support them. But just to pour more 
money in an attempt to reduce drug trafficking while we don't 
deal with the fundamental political insurgency that is going 
on, I think is doomed to failure and I am very dubious.
    I thank you for having this hearing and raising these 
issues.
    Senator Grassley. We will go to a second round of 
questioning. I have just one question for Ambassador Fisher, 
and also one for Ambassador Pickering--well, I have two 
questions for Ambassador Fisher. Let me pick up something that 
came up since you testified.
    Your testimony mentions that you will examine proposals to 
extend ATPA in consultation with the U.S. Congress. Will the 
administration do more than just examine proposals and actually 
send a specific proposal to extend ATPA to Congress?
    Ambassador Fisher. Senator, ATPA expires in December of 
2001, as I mentioned earlier. We are eager to find ways to deal 
with the uncertainty that that creates. That is a major concern 
that Colombia and the other Andean countries have.
    We had some consultations last year with the Senate Finance 
Committee staff. I consulted with a couple of the members of 
this committee just informally. There didn't seem to be an 
appetite to put something ahead of the road early before that 
year. It seems to me that some of this interest has now 
intensified, in part, around these hearings and also around the 
Plan Colombia. And we would be willing to contemplate this if 
indeed we have a sense that the Congress, the Senate, are 
interested in the subject matter.
    The key to ATPA, it seems to me, is to provide certainty. 
It is interesting. If you look at these countries, they also 
have a choice of GSP treatment. That is on-again, off-again 
program, and they prefer to go down the ATPA route because 
there is a longer period of certainty for investors, and in 
this case it was a 10-year program.
    I would just make one other comment, Senator, on this 
subject. We are in the midst of preparing the negotiations of a 
Free Trade Area of the Americas. The reason I referenced it in 
my testimony is because if we look to an extension, whether it 
is early or upon maturity in 2001, of the ATPA program, it 
seems to me we want to structure it so that we incentivize 
particularly the Andean countries to participate actively in 
the Free Trade Area of the Americas effort which leads to a 
broad liberalization throughout the hemisphere and that they 
have a vested equity in that process.
    Senator Grassley. There is some sensitivity because of the 
concern that Congress is giving to the Caribbean Basin 
Initiative and whether or not in one sense we are concerned 
about the economic development there and not enough concerned 
about the economic development of the Andean nations. You don't 
have to comment on that. I guess I just need to express that to 
you.
    Ambassador Fisher. We have been working very hard on trying 
to get the CBI and ATPA initiative through.
    Senator Grassley. And it is not exactly easy, I know.
    Ambassador Fisher. Yes, sir.
    Senator Grassley. I know, I know.
    In regard to the International Trade Commission study about 
ATPA--and this was September of 1998, and I quote, ``It has 
been important in promoting diversification in Colombia's 
economy since the early 1900s.'' We are putting together a 3-
year, $15 million program to focus on alternative economic 
development, and this obviously is to reduce public 
participation in illicit drug production and moving workers 
into alternate jobs.
    What is the administration's plan to implement the issue of 
this development as an alternative to the production of drugs?
    Ambassador Pickering. Maybe I should answer that. I think 
that is more in the area that I deal with, Mr. Chairman. I 
think that you have to look at this in two particular phases. 
Phase number one or part number one has to do, frankly, with 
the very close linkage between the government's regaining 
control and dealing with the people protecting the narcotics 
trafficking, whether they are guerrillas or paramilitaries, and 
the laboratory structures, and the ability to eradicate the 
crops.
    Once you begin to eradicate the crops, the Bolivian model 
is a very germane one, and the Bolivian model has an 
intensified effort. $15 million may be the money for this year, 
but it will be larger in the supplemental, as explained in the 
presentation documents, and it will require a very significant 
effort to find alternative crops.
    There are some important ideas to locate the areas where 
those crops can be grown and to aid the individuals who will 
agree under the Plan, or if they don't agree their cocaine will 
be fumigated, to go into the alternative crop activities. Those 
who are on land that cannot be used in alternative crops are a 
more complicated situation. We will have to find alternative 
land for them elsewhere in Colombia and move it ahead.
    Could I make just one other point? Senator Biden raised an 
important question about the military focus of this activity. 
And there is; there is a huge military focus. And I can tell 
you, Senator, having been involved now for the last 8 or 9 
months, there is no daylight between the Department of State 
and the military in making that happen.
    I have to tell you, however, this is a team effort covering 
a wide range of activities. If you look at overall Plan 
Colombia, the $7.5 billion program, less than 50 percent, in my 
view, will end up being military and the rest will be 
developmental, justice reform, human rights. It is an area 
where we all have to play on one team and where that team has 
to work together and where, happily, in my experience over the 
last six months, we have a strong team and that team can work 
together.
    If one piece of this falls out, the whole thing can go to 
hell. If, in fact, we don't have the alternative development 
activities engaged as the military regains control of the 
countryside and the planted areas in the south, we will have a 
bust. We will not have a success, and those people will move 
off into other areas of Colombia or Ecuador or Peru and start 
moving again back into this particular area, and we will see 
the balloon phenomenon.
    So I am in Colombia and here preaching a strategy of 
cooperation and integration. It has got to be political, it has 
got to be military, it has got to be police, it has got to be 
development, it has got to be justice, it has got to be 
civilians and the uniformed people all in the same room working 
on the same plan and carrying out the same sort of effort, each 
doing their part, or it won't work.
    That is why it was successful in Bolivia and Peru, and I 
think that is why it can be successful in Colombia. But I 
wanted to make that set of points both in connection with your 
question, Senator Biden, and with the chairman's question 
because I think it is germane.
    Senator Grassley. Ambassador Pickering, you mentioned that 
the plan deals with guerrillas--and I think these are your 
words--insofar as they do drugs. But the plan suggests major 
escalations and the potential for confrontation with narco-
trafficking guerrillas and paramilitaries. Where is the 
discussion for dealing with this potential and what are the 
possibilities? For instance, what if the paramilitaries and 
their involvement in drugs--what is the plan for dealing with 
those?
    Ambassador Pickering. Precisely the same as it is for the 
guerrillas. I was in Colombia last week. I was briefed on the 
presence of growing numbers of paramilitaries in the southern 
departments of Colombia. The government has an obligation to 
take back control of its own country. Those people on both 
sides, guerrillas and paramilitaries, are clearly involved in 
protecting, fostering, and sometimes actively engaged in drug 
trafficking, taking taxes, setting prices, making sure that 
individuals deliver, fostering the increase in the cropping of 
coca. All of those things go on.
    The government will have to take back control in order to 
eliminate those crops. Whoever they have to take control from, 
they are, under Plan Colombia, obligated to do that and they 
are committed to do that in the discussions I have had down 
there. And I believe that there is no distinction in Plan 
Colombia between dealing with whoever, left, right, or the 
middle, protects or fosters or carries out narcotics 
trafficking or production.
    Senator Grassley. A last question and then I will go to my 
colleagues. There was a story today in the Boston Globe saying 
that there has been 50,000 acres cleared for coca in northern 
Colombia. Does this support package have anything to address 
that or the potential spread of coca cultivation?
    Ambassador Pickering. This support package has as its first 
and primary endeavor on dealing with activity in the south 
because that is the area where we have seen the greatest 
expansion. We have had a 65-percent success rate in two 
departments of the south in aerial eradication. The real 
problem is that the growth in planting and production has 
exceeded the capacity now of the Colombians to take back 
control of their own country and to protect the aircraft and 
the ground-based eradication efforts that have to go on. So the 
next piece will be to go where the production and the increase 
has been greatest.
    But I can assure you that all of us have very much in mind 
in other areas of Colombia, as General McCaffrey said, the $400 
million-plus support in the package and previously for the 
Colombian National Police is to be effective all over their 
country, wherever that is necessary, and to be backed up by the 
military if it is necessary for the military to deal with well-
armed, heavy-weaponed, if I could put it this way, guerrilla or 
paramilitary forces when the police run up against it.
    It is a combined and, I think, very significant set of 
activities to deal with it. The strategy is to go where the 
growth in production has been greatest most recently, but then 
to go on from there into the other areas.
    Senator Grassley. Thank you, Ambassador Pickering.
    Senator Biden.
    Senator Biden. Thanks very much.
    Mr. Ambassador, thank you for illuminating more your view 
of the coordination, but let me make clear what I mean. You are 
not going to have anybody from CINC working on justice. You are 
not going to have anybody from CINC working on development. No 
one from you guys should be working on helicopters. That is all 
I am saying. Let's stop this State Department-speak.
    Ambassador Pickering. Well, we fund helicopters and we 
obviously have an obligation to the Congress to make sure that 
that money is well-spent. We do it in coordination with the 
military.
    Senator Biden. We trust these guys.
    Ambassador Pickering. Actually, the military sets the 
production guidelines for when we can get the helicopters off 
the line.
    Senator Biden. That is right.
    Ambassador Pickering. So we are very dependent on the 
military and the full cooperation.
    Senator Biden. That is not the point I am talking about. I 
am talking about when they get in-country, not offthe line. We 
trust them more than we trust you--not you personally, the State 
Department--about whether or not these helicopters are being used in an 
efficacious way, okay?
    Ambassador Pickering. Wherever they are used in a military 
function, Senator, of course, we have to have that.
    Senator Biden. Well, that is the only function they are 
going to be used in. They are not for tourism.
    Ambassador Pickering. Some are for police and some are for 
eradication purposes.
    Senator Biden. And you mean you guys are going to be 
running that show?
    Ambassador Pickering. The police are going to run it.
    Senator Biden. And who is going to be coordinating that, 
you?
    Ambassador Pickering. No. The coordination in-country, in 
my view, has to be a combined effort. If the military and the 
police and the civilians in Colombia cannot sit down and do 
this themselves and make it happen, with each one doing their 
mission in conjunction with the others, it won't work.
    Senator Biden. I guarantee you they can't; absolutely, 
positively guarantee you they can't. They do not have the 
capacity now to absorb this kind of materiel and know what to 
do with it and how to use it for the next couple of years. You 
know it and I know it. That is the only point I am making. So 
these guys are the guys who are going to make that work. They 
don't even know how to fly the suckers yet. I mean, come on.
    Ambassador Pickering. Well, Senator, they already have a 
large number of Blackhawks and there will be more coming. There 
is, in my view, no argument between us on the role of the 
military and how they should play it. I think we are a hundred 
percent agreed on that. I don't want to pick a fight, 
respectfully, on an issue that I think is all understood 
between us. The point I was making only is that if it isn't 
coordinated and integrated, it isn't going to work.
    Senator Biden. I agree with that, by the way. The way this 
is going to come undone real quickly is not when the next 
minister of justice is shot, not when the court system 
continues to be riddled with problems. It is when you lose four 
Blackhawks.
    Ambassador Pickering. Yes, I agree.
    Senator Biden. That is when it is going to come undone. You 
have been around this town long enough.
    Ambassador Pickering. And when we lose troops, and we all 
see that, and police.
    Senator Biden. That is when it happens, that is when it 
happens.
    Ambassador Pickering. Yes.
    Senator Biden. And on the point raised by my friend from 
Alabama, who is quoting Lincoln, which I found interesting----
    Senator Sessions. Killed my great granddaddy at Antietam.
    Senator Biden. Well, no. I am amazed.
    Senator Sessions. And got the country back together in the 
course of it, however.
    Senator Biden. I have been here 28 years. This is the first 
time I have ever heard a Senator from Alabama talking about 
Lincoln pulling the country back together again. I thought that 
was a war of Northern aggression that was fought, but anyway I 
won't get into that.
    Senator Sessions. Victors write the description of the war. 
We need to have a victory in Colombia is what we need.
    Senator Biden. A la Lincoln. You heard that, General.
    General Wilhelm. Yes, sir.
    Senator Biden. I want you to know that. I don't know where 
the hell you are from, but don't tell me. I don't want to know.
    Senator Sessions. Southern Command.
    Senator Biden. All kidding aside, there is a distinction 
with a difference, in my view, between whether or not we say we 
are engaging U.S. military trainers, men and women in uniform 
and military contract personnel, in another country for what 
purpose. If we state that the purpose is to defeat the 
guerrillas, in my view, big nations can't bluff.
    It is not sufficient to put ourselves in the position that 
we are going to put ourselves in with as little U.S. military 
force in-country and say we are doing this to defeat the 
guerrillas. It arguably is sufficient in terms of material and 
personnel to train Colombian personnel to defeat the drug 
trafficking.
    And this is fungible, in a sense. If they have a couple of 
battalions who are focusing on this, as I said in my opening 
statement, there is no question that they are going to be 
engaged in--I can't imagine there being a circumstance where 
the commanding officer for the Colombian military a year from 
now is on an eradication mission in the high Andes going after 
the opium crop and hearing that there is a large concentration 
of the FARC in a particular place that if they moved right away 
they could get--I can't imagine the drug eradication not 
becoming the second priority at that moment, at that day, with 
that person.
    So the idea that we think we are going to be able to parse 
out controlling the Colombian military, these battalions you 
are training, and the use of those helicopters only for the 
purpose of interdicting and eradicating drug trafficking, I 
think is not reasonable. They are going to be used 
interchangeably at some point once they are trained.
    But I do think it does make a difference whether or not--
and this is where I do agree with Ambassador Pickering's 
description of our role. Words matter here, and in this case to 
suggest that our purpose in providing this military equipment 
and this aid is to deal with the narco-trafficking in these 
areas--and incidentally, to the extent that it takes out any, 
all, or part of the counter-insurgency, that is fine, but that 
is not our first purpose.
    If that is our first purpose, we are making a commitment in 
terms of our credibility that far exceeds the commitment we are 
making relative to attempting to deal with drugs. If we wish to 
do that, then I think the Senator from Alabama and others 
should so move, should move on the floor of the Senate to 
suggest that. And we should debate whether or not we want to do 
all that need be done militarily to aid the Colombians in 
regaining control of their country from Marxist insurgents.
    But I think it is a distinction with a difference that 
needs to be made here as to what our purpose is. And if we wish 
to go further, General, I am going to want you to have a whole 
hell of a lot more than 60 more helicopters that you are not 
going to be flying. I want you to have a whole hell of a lot 
more in terms of us going down to aid the Colombians.
    Now, that does not mean that we could not in a separate 
package unrelated to this provide military aid to the 
Colombians for purposes of going after the guerrillas, if you 
want to do that. But that is not the function here, although 
incidentally it has to be part of the solution. But I do think 
it matters how we say it, and that is the only point that I 
wish to make.
    I have no further questions.
    Senator Grassley. Senator Graham.
    Senator Graham. Thank you, Mr. Chairman.
    I would like to talk some about the international aspects 
of Plan Colombia beyond the United States. I understand that 
President Pastrana has been in Europe recently discussing the 
prospects of European cooperation both financially and in the 
peace process. I know that there will be a meeting in Madrid 
shortly of potential friends of Colombia.
    Ambassador Pickering, could you outline where that process 
is? Specifically, how close is Colombia to getting the balance 
of the funding package committed? And, second, what will be the 
role of other countries besides the United States in attempting 
to move the peace process forward?
    Ambassador Pickering. First, Senator Graham, essentially 
what you have said is a good resume of what hasbeen going on. 
Let me just recapitulate a little bit. The plan is estimated at $7.5 
billion for 3 years. $4 billion coming from Colombia is a very 
important contribution. That will be probably more predominantly non-
military, but there will be a very significant military and police 
component to that.
    There will be, in addition to that, already committed 
probably $750 million to $1 billion from the international 
financial institutions, the IBRD, the IMF, and the various 
regional banks in Latin America. That will be to cover the very 
significant share of the civilian component.
    Senator Graham. Is that part of the $4 billion that 
Colombia----
    Ambassador Pickering. No. That is part of an add-on to the 
$4 billion. There will be, in addition to that, of course, 
depending on the will of Congress and your decision, the money 
proposed from the U.S. side. There will be, in my view, because 
both President Pastrana, then his foreign minister, then now 
his foreign minister and the coordinator of the plan are 
currently in Europe talking to the Europeans--the idea is to 
have, as you said, a meeting in the summer, I hope early 
summer, in Madrid. The Spanish have agreed to host that.
    There is a target to fill in a very considerable amount; I 
would say less than $1 billion, but more than $500 million, we 
would hope, as a good target for the Europeans. That will 
cover, I think, the bulk of the financing for the plan, 
depending, of course, on what we do in the third year which is 
not yet, I think, a reality by any means, but something that we 
would clearly want to follow up the present package with.
    There is, in addition to all of that, a commitment beyond 
Plan Colombia for development and macroeconomic currency 
stabilization and other financing. Recognizing the general good 
health of the Colombian economy and recognizing that it is a 
country with lots of resources, that can, as a backdrop to the 
plan but not focused on the plan, provide an enormous amount of 
support essentially in the economic, the non-military area.
    And this, I understand, has attracted up to perhaps as much 
as $7 billion in international support, outside of Plan 
Colombia. Some of it may be in Plan Colombia. Let's say $6 
billion outside of Plan Colombia, at least, which will be 
enormously important for the future of that country. You can't 
obviously separate everything in Colombia to Plan Colombia and 
non-Plan Colombia. There will be a symbiotic and mutually-
reinforcing relationship for those, and that is the commitment 
of those institutions over, I think, the next three to five 
years. So we have to keep that in perspective.
    As a result, I think that we are optimistic, given 
President Pastrana's determination and commitment, given the 
support that he has begun to receive and the work that he and 
his people are putting in to deal with not only Europe, but I 
would expect that we will see some of the wealthier countries 
in other parts of the world in Asia, in particular, to round 
out the funding commitments that are now still outstanding.
    And we will, I hope, by the summertime be able to give you 
a lot clearer view as to are there gaps still and where should 
they come and how does that feature or fit into our thinking as 
we come into the 2002 budget year. We are working obviously now 
on the current supplemental and 2001.
    Senator Graham. The second part of the question had to do 
with the internationalization of the peace process. I know that 
some of the guerrilla organizations in Colombia, the FARC 
specifically, have had longtime relationships with European 
countries in Scandinavia and elsewhere. Has there been an 
effort to try to get some of those nations engaged in the peace 
process to encourage a more conciliatory attitude by the FARC?
    Ambassador Pickering. Yes, there has been, and that is 
really now beginning to show up, if I could put it that way, on 
the scope. There are several things that should be mentioned. 
One that is very important is that with the help of the Swedes, 
with the help of the Norwegians, and now of other countries in 
Europe, including Italy and the Vatican and Spain and others, 
there is a joint delegation of FARC and government and non-
government people going through those countries to give the 
FARC, I think, something they need very badly--they have been 
40 years in the bush and they are clinging to doctrinal and 
other ideas that now have been discarded almost everywhere else 
in the world--and they have very little understanding of how 
the world at the beginning of the 21st century is working--to 
give them a real sense of the fact that they have been in many 
ways passed by by time and by circumstances and that there is a 
significant imperative for them to engage in a clear way and in 
an accurate way in a process of ending the conflict and 
bringing peace to the region, obviously, on terms and 
conditions which will preserve democracy in Colombia and on 
terms and conditions which will not in any way at all allow any 
opportunity for permission to engage in drug production or drug 
trafficking. Those are absolutely sine qua nons.
    The government of Colombia is also cooperating very closely 
with the Venezuelan government. They had a recent meeting on 
Friday on the frontier involving all the military, all of their 
intelligence people, and all of their senior foreign affairs 
people to coordinate strategy. And I believe from my 
conversations with the Colombian government they have found 
Venezuelans have been cooperative and helpful not only in 
reestablishing control over the border which, as you point out, 
is a place where there have been incursions back and forth to 
the detriment of the interests of both countries, but also 
helpful in promoting meetings in the context of making progress 
bilaterally between the government and their guerrilla 
opponents. The Venezuelan government can be useful and helpful, 
and I believe has been in the eyes of the Colombian government, 
whose judgment on this I think we have to respect.
    Senator Graham. A final question on the alternative 
development plan. Based on the Bolivian experience, there seem 
to be some principles that are important to effective 
alternative development. It has to be part of a dual structure 
or strategy--law enforcement pressure, economic development. 
One won't work without the other.
    There is a tendency to think of alternative development as 
if it has to be agriculture. In fact, some of the most 
significant job opportunities in economic development are 
outside of agriculture.
    There has to be a focus on labor intensity even within 
agriculture. Fresh flowers in Colombia employ ten people per 
hectare. Cattle-raising might employ one person per ten 
hectares. So it is important to keep the focus on providing 
employment opportunities that will be of a sufficient level 
that they will attract people away from illicit coca 
production.
    My question is how refined is our alternative development 
strategy and what proportion of those persons who are going to 
be displaced from their current illicit activity will it 
provide economic opportunities for?
    Ambassador Pickering. These are extremely important 
questions, and another criterion obviously is the people doing 
it have to make a living. They have to be in a position, if not 
competing with the high rates of return they made on coca, they 
have to be able to feed their families, see a future for 
themselves and move ahead, which means that the choice of 
alternative crops also has to be wise. The Colombians have 
begun looking at things that have a market value not in 
Colombia but as export crops that will be important because 
those can generate higher returns to the individuals.
    The effort is first to obviously base ourselves on the 
lessons that we have all learned in Peru and Bolivia and then 
try to apply those. In Colombia, they have an alternative 
development agency called PLANTE which has begun already in 
Colombia to design the programs, to work on Colombian 
experience. And we consulted with them last week in our 
planning meetings in Colombia and they clearly, as you have, 
distinguished between places in Colombia wherepeople could 
actually go into alternative development and places where the soil 
conditions are so poor, the future is so sparse that those places 
probably ought to return to forest land.
    In fact, the Colombians have also thought about the 
environmental consequences of what they are engaged in as ways 
to protect that and find alternative employment in those kinds 
of activities, as well as, I would hope, moving people to areas 
where there is good land available, some of it confiscated from 
drug cartels, that could be exploited and developed by people 
to either move into agriculture or into light manufacturing, 
whatever can be done in terms of investment in the country.
    These are hugh problems for Colombia, one of the reasons 
why we have moved from 5 percent of our assistance to 20 
percent of our assistance is to take into account the fact that 
they will require resources, planning, and additional support 
to be able to do it. I think the raw material is there and I 
think the principles are there and I think there are the right 
people working on it. The coordination is what I am most 
concerned about and that has to be put in place.
    Senator Grassley. Senator Sessions.
    Senator Sessions. You know, I think the Colombians' 
argument they made 20 years ago that the problem is more an 
American consumption problem than a production problem for 
drugs is, as time has gone by, more plausible to me than it 
used to be as a Federal prosecutor.
    I think the way for the United States to defeat drug use in 
America is to reemphasize what we do within this country with a 
strong will, which at one time we had which I sense is now 
being undermined. I was a part of the effort. I prosecuted 
hundreds of cases, many involving Colombian importation cases. 
I have read about the underground empire and all the books at 
that time about that. I chaired a committee in the Department 
of Justice on narcotics.
    But I do not believe we are going to solve America's drug 
problem by stopping production in South America. We have been 
trying to do that, and we have heard testimony and this 
committee has heard testimony for over 25 years, probably, that 
somehow we are going to solve the problem by getting the 
Peruvians, the Bolivians and the Colombians to stop producing 
it. So from that point of view, I have real doubts about the 
overall effectiveness of this effort. It would have some 
positive impact, but not much, in my opinion.
    As soon as the source gets shut down in one area, it pops 
up in another country. We have seen that over and over and over 
again. Now, I wish it weren't so. I wish we could do it that 
way. It just has not worked, so I have serious doubts about 
that.
    I believe fundamentally, though, that we will never have a 
major reduction in drug production in Colombia until the nation 
is in charge of its territory. As General McCaffrey said, 40 to 
50 percent of the country is controlled by the guerrilla forces 
who are providing protection to drug dealers and making money 
off the drug trade. Not only that, but they are totalitarian 
Marxists who want to destroy Colombian democracy. So I don't 
know what to say about it. I am stunned that we continue to 
push the peace process.
    Ambassador Pickering, isn't it fair to say that in these 
matters if you don't make progress on the battlefield, you 
can't make very much progress when the State Department starts 
the negotiation process? Aren't you troubled by the fact that 
the United States is encouraging Colombia to negotiate with 
these insurgents? Isn't that the wrong thing for us to do as a 
Nation? Shouldn't we encourage them to fight for their nation 
and their democracy?
    Ambassador Pickering. Let me address a couple of the 
problems. First, General McCaffrey ought to address the 
domestic issue and the demand reduction, but I have to do it 
because when I go to Latin America or elsewhere to talk to 
people about their part in the program, I have to keep pointing 
out to them that only 3 percent of the many multi-billion-
dollar national budget of the United States goes to foreign 
supply reduction. The other 97 percent--and this is in the 
multiple billions, tens of billions of dollars--goes to deal 
with all of the aspects of the problem in the United States 
that you as a prosecutor are so familiar with.
    Senator Sessions. You are counting State and local law 
enforcement, I guess.
    Ambassador Pickering. Yes, including demand reduction.
    Senator Sessions. That is a fair analysis.
    Ambassador Pickering. And I believe, and General McCaffrey 
has the figures, that we can see serious impacts in a positive 
way in demand reduction at least in some of these areas. 
Unfortunately, I understand in synthetic drugs it is not nearly 
as successful as it has been in cocaine and heroin use in the 
United States. I am not the expert on that, but I have to talk 
about it, so----
    Senator Sessions. I know the numbers on that. I can share 
them with you.
    Ambassador Pickering. You know the numbers on that.
    Senator Sessions. They are not quite as good as you 
suggest.
    Ambassador Pickering. Well, I think they are a lot better 
than many of us thought five years ago we would see, and I 
think that we can continue to do better in that area and it 
proves that it isn't hopeless.
    Secondly, I think that you yourselves have answered the 
question you keep asking me because on every occasion when you 
raise the question of helping Colombia, you mention the drug 
problem and I mention the drug problem, and that is the central 
focus of the reason why we are helping Colombia.
    Now, the third point is the question of bringing an end to 
the insurgency. I agree with you a hundred percent, and I have 
told this to President Pastrana and so have all of the senior 
American officials who have met with him, that you cannot end 
the insurgency through a negotiating process that is not backed 
up with all of the effort of the Colombian government in 
whatever area to pursue that particular effort against a 
position of strength and a position of continuing to make it 
clear to the guerrillas that you are not going to permit them 
to engage in this huge amount of money production for 
themselves which just feeds the insurgency by continuing to 
engage in narco-trafficking, and that the government is not 
going to gird itself up in every area, in better human rights 
performance, in judicial reform, in all those things that 
strike at the heart of what it is these people, deeply engaged 
as they are in narco-trafficking, are in a sense looking for.
    Secondly, I don't believe the negotiating process is at all 
a bad idea. I was associated with it in El Salvador. I watched 
it in Guatemala. It ended up ending for all intents and 
purposes the armed insurgencies in both of those countries, but 
it only proceeded under the conditions that you have set out 
and that I fully agree with that the government has to make a 
major effort.
    In this particular case, the nexus between all of these 
organizations that wish to see the end of the government, 
whether they are paramilitaries for their own purposes or 
straight-out criminals or guerrillas who are engaged in narco-
trafficking--the unifying theme for the United States is their 
engagement in the narcotics effort, and that is the central 
focus of the supplemental that we are providing and that is the 
reason why we have this support package for Plan Colombia.
    Senator Sessions. Well, I believe the nation is not going 
to prevail until there is more national will on the 
battlefield. And if they start prevailing on the battlefield, 
they will be in a position to negotiate some sort of settlement 
perhaps in the future, but I don't see that now.
    The Scandinavians and Swedes and Italians--if they want to 
go down there and preside over an international peace process 
right now, I would say let them put their money in it, not 
ours. I do not believe we are ready to do that, and I think we 
ought not to be having our policy with Colombia substantially 
affected by that kind of thinking, just because other nations 
may have an interest. I just have serious doubts.
    General Wilhelm, with regard to the status of the military 
there, has there been any success of significance in the 
military battle between the guerrillas and the government in 
the last year, six months?
    General Wilhelm. Senator Sessions, I would say that 
absolutely there have been some significant successes. I think 
we only have to go back as far as the nationwide offensive that 
occurred in July of last year. I have been to Colombia and 
visited with the military leaders. I have viewed the 
intelligence analysis and I have viewed the photographs of the 
aftermaths of the contacts which were nationwide.
    Sir, I can tell you as a matter of certainty the Colombian 
armed forces emerged with the upper hand, and this was the 
first occasion after a series by my count of ten of what I have 
referred to as stinging tactical defeats. This then carried 
forward into the month of November, when again both the FARC 
and the ELN embarked on widespread engagements where they 
attacked isolated garrisons, both national police and military. 
Once again, at the end of the day the Colombian armed forces, 
in my judgment, emerged with the upper hand. And that is more 
than wishful thinking on my part. Again, I looked at the 
evidence. I looked at the hard evidence, to include the aerial 
photography of the battlefields.
    What has changed? Answer: a number of things. One, the 
military is behaving much more professionally on the 
battlefield. We are seeing levels of air-ground integration 
that we haven't seen before. In General Velasco, the Colombian 
Air Force has a first-class tactical commander who spends his 
time on flight-related and target engagement business, which is 
awfully important.
    We are seeing much better integration between the Colombian 
National Police and the armed forces. Small garrisons are no 
longer being left on the limb where they can wither and die. 
There is, in fact, a reinforcement plan. Quick-reaction forces 
have been formed. Quick-reaction forces have been provided some 
mobility means. This will improve markedly if we execute our 
support plan for Plan Colombia as it is framed right now.
    Intelligence preparation of the battlefield was woefully 
lacking when I went to Southern Command two-and-a-half years 
ago. The most fundamental assessments of terrain and weather 
weren't being made. It shouldn't come as any great surprise if 
your main advantage is air power that your adversary is going 
to take you on during periods of low visibility, rain, and 
other inclement weather. These things are all being thought 
through now.
    So, sir, the answer to your question is, yes, we have seen 
a change in the military's fortunes, and it has nothing to do 
with luck. They created their own luck by good leadership, 
thoughtful intelligence preparation of the battlefield, and 
thoughtful integration of combat systems.
    Senator Sessions. Well, that is good to hear, and I have 
heard some things to that effect previously, but we have got a 
good way to go. Two things trouble me. If we are beginning to 
get our military act together and they are beginning to be 
effective, are we assisting them effectively if we are 
encouraging peace negotiations in the middle of military 
success? I have doubts about that.
    To me, I am not sure we would have served Lincoln well if 
we tried to get him to negotiate a peace settlement while the 
war was going on. There were plenty of opportunities and people 
wanted to do that. He saw that a nation can't compromise away 
its territory. Victory is in this circumstance essential, it 
seems to me, and I am just not sure we are in the right frame.
    I want to help Colombia. I do not want to be involved in a 
civil war in Colombia. I think what we ought to do is tell the 
Colombian government, and the President of the United States 
needs to tell him, you show leadership, you go out there and 
start showing that you can effectively prevail against these 
insurgents and we will try to assist you, both because we have 
a special interest in drugs and because we believe in democracy 
in the world. And we would like to see you prevail and bring a 
united nation together again in Colombia.
    Mr. Chairman, I am just real troubled about a proposal that 
has got international peace process members who want to cut 
deals while we give billions of dollars in an area, in my view, 
that has just got to be won on the battlefield.
    Senator Grassley. Ambassador Pickering.
    Ambassador Pickering. The difference, Senator Sessions, 
with respect, is that I believe President Pastrana is committed 
to principles, that he is not going to close off the 
opportunity for the guerrillas to come and accept his 
principles and to push them very hard on both fronts, on the 
struggle front particularly focused on the counter-narcotics 
struggle which affects them directly because it is their 
livelihood--that is where they are getting all the money, that 
is where they are getting the new uniforms and the radios, and 
that is how they are paying for the arms. All of that has to 
obviously be part of the effort, and I agree with you fully on 
that. I don't think we disagree on that.
    I think the opportunity to work on the guerrillas' heads in 
a negotiating process to come back into Colombia's life in the 
mainstream, to accept democracy, to accept where the country is 
going to go, to be part of the future, is also something that 
is extremely important. Psychologically, it helps to build the 
strength of his own country, and I don't think he ought to be 
afraid of the negotiating process and I don't believe he is.
    I think he can manage that with clear command. That is the 
direction in which he wants to go, and I believe that those are 
all part of the same effort of getting these guys out of the 
narcotics business, out of the anti-democracy business, 
whatever you want to call it, and having an option of becoming 
part of the future of the new Colombia or being made 
irrelevant.
    Senator Sessions. Well, I know General Wilhelm knows nobody 
wants to be the last guy to die on a battlefield before the 
commander-in-chief cuts a deal. To me, President Pastrana needs 
to make clear that he has certain standards he will accept. He 
would be glad to welcome these people back into his government 
under certain terms, and then he is prepared to wage war until 
he gets those terms and be fair and generous about it.
    But these negotiations have the ability to undermine the 
strength of the domestic support, the will of the people of 
Colombia, and these negotiations strengthen the will of the 
guerrillas. When the Scandinavians and the United States are 
saying negotiate with these people, it encourages them and 
discourages the people in Colombia.
    Isn't that true, Ambassador Pickering?
    Ambassador Pickering. I want to be very careful and I want 
to be very clear. The United States is supporting President 
Pastrana's initiative to negotiate on the terms and conditions 
that President Pastrana has made clear to his own people and to 
the guerrillas themselves.
    Senator Sessions. We have encouraged that, have we not?
    Ambassador Pickering. No. We have adopted a policy of 
supporting President Pastrana's initiative. He was the one who 
during the political campaign leading up to his election as 
president found, in fact, that this was what the public wanted 
him to do. And he agreed to go ahead and do it and he was 
elected on that basis and he has promised to carry it out. But 
he hasn't promised to carry it out on the basis that you assume 
that every negotiation is going to mean a defeat for the 
government involved in the negotiation.
    Quite the contrary, he assumes, in fact, that he can pursue 
his efforts to bring about change, reform, permanent democracy, 
and end drug trafficking by both methods, and that he can find 
a way to articulate those as others have successfully in the 
past to the advantage of the future he sees for Colombia.
    I don't believe that it is right for the United States to 
undermine that, and I believe President Pastrana--I have talked 
to him many times--is fully committed along those lines, and 
that our support for that effort, but it was his initiative, is 
important to keep that process moving.
    Senator Grassley. Can I ask one question and then we will 
quit, and that is some update on the black market peso 
exchange, the extent to which U.S. companies are being used as 
conduits for money laundering, what we are doing to encourage 
our companies to cooperate with that effort, and what 
assistance are we doing, if anything, with the Colombian police 
on that matter.
    Ambassador Pickering. I would like, because it goes into a 
range of detail that I am not personally familiar with, to 
provide you a written answer to that for the record.
    Senator Grassley. Yes, okay.
    [The information referred to follows:]

    [GRAPHIC] [TIFF OMITTED] T7504A.066
    
    [GRAPHIC] [TIFF OMITTED] T7504A.067
    
    Senator Grassley. Let me close with one final comment, 
then, and this is based on what I have heard today and what I 
kind of surmised before we opened our hearing. It would seem 
that we do have an outline for a strategy, but that an outline 
is not a strategy, and that is especially true when we are 
talking about more than $1 billion we are going to spend. That 
is real money.
    I think it is something that really commits Colombia and 
the United States to a very major new engagement both in depth 
and in breadth. And so I caution us that this requires that we 
be very thoughtful in our efforts. The Colombians have a 
planning document. I am concerned that we don't have one, and I 
hope that we can see one before we are asked to vote on it. And 
I think maybe a place to give us more detail and more in 
writing is maybe when this issue is brought before the Foreign 
Relations Committee later on this week.
    I thank you all very much for your cooperation. The hearing 
is adjourned.
    [Whereupon, at 12:36 p.m., the caucus and subcommittee were 
adjourned.]

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