[Senate Hearing 108-173]
[From the U.S. Government Publishing Office]
S. Hrg. 108-173
NARCO-TERRORISM: INTERNATIONAL DRUG TRAFFICKING AND TERRORISM--A
DANGEROUS MIX
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HEARING
before the
COMMITTEE ON THE JUDICIARY
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
MAY 20, 2003
__________
Serial No. J-108-12
__________
Printed for the use of the Committee on the Judiciary
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WASHINGTON : 2003
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COMMITTEE ON THE JUDICIARY
ORRIN G. HATCH, Utah, Chairman
CHARLES E. GRASSLEY, Iowa PATRICK J. LEAHY, Vermont
ARLEN SPECTER, Pennsylvania EDWARD M. KENNEDY, Massachusetts
JON KYL, Arizona JOSEPH R. BIDEN, Jr., Delaware
MIKE DeWINE, Ohio HERBERT KOHL, Wisconsin
JEFF SESSIONS, Alabama DIANNE FEINSTEIN, California
LINDSEY O. GRAHAM, South Carolina RUSSELL D. FEINGOLD, Wisconsin
LARRY E. CRAIG, Idaho CHARLES E. SCHUMER, New York
SAXBY CHAMBLISS, Georgia RICHARD J. DURBIN, Illinois
JOHN CORNYN, Texas JOHN EDWARDS, North Carolina
Bruce Artim, Chief Counsel and Staff Director
Bruce A. Cohen, Democratic Chief Counsel and Staff Director
C O N T E N T S
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STATEMENTS OF COMMITTEE MEMBERS
Page
Biden, Hon. Joseph R., Jr., a U.S. Senator from the State of
Delaware....................................................... 3
Hatch, Hon. Orrin G. a U.S. Senator from the State of Utah....... 1
prepared statement........................................... 72
Kyl, Hon. Jon, a U.S. Senator from the State of Arizona.......... 6
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont,
prepared statement............................................. 85
WITNESSES
Casteel, Steven W., Assistant Administrator for Intelligence,
Drug Enforcement Administration, Washington, D.C............... 7
Clark, John P., Interim Director, Office of Investigations,
Bureau of Immigration and Customs Enforcement, Department of
Homeland Security, Washington, D.C............................. 14
Johnson, Larry C., Managing Director, Berg Associates,
Washington, D.C................................................ 32
Lee, Rensselaer W., President, Global Advisory Services, McLean,
Virginia....................................................... 30
McCarthy, Deborah, Deputy Assistant Secretary, International
Narcotics and Law Enforcement Affairs, Department of State,
Washington, D.C................................................ 12
McCraw, Steven C., Assistant Director, Office of Intelligence,
Federal Bureau of Investigation, Washington, D.C............... 10
Perl, Raphael, Specialist in International Affairs, Congressional
Research Service, Library of Congress, Washington, D.C......... 28
QUESTION AND ANSWER
Response of Steven C. McCraw to a question submitted by Senators
Biden and Hatch................................................ 45
SUBMISSIONS FOR THE RECORD
Casteel, Steven W., Assistant Administrator for Intelligence,
Drug Enforcement Administration, Washington, D.C., prepared
statement...................................................... 47
Clark, John P., Interim Director, Office of Investigations,
Bureau of Immigration and Customs Enforcement, Department of
Homeland Security, Washington, D.C., prepared statement........ 64
Johnson, Larry C., Managing Director, Berg Associates,
Washington, D.C., prepared statement........................... 75
Lee, Rensselaer W., President, Global Advisory Services, McLean,
Virginia, prepared statement................................... 87
McCarthy, Deborah, Deputy Assistant Secretary, International
Narcotics and Law Enforcement Affairs, Department of State,
Washington, D.C., prepared statement........................... 92
McCraw, Steven C., Assistant Director, Office of Intelligence,
Federal Bureau of Investigation, Washington, D.C., prepared
statement...................................................... 103
Perl, Raphael, Specialist in International Affairs, Congressional
Research Service, Library of Congress, Washington, D.C.,
prepared statement............................................. 107
NARCO-TERRORISM: INTERNATIONAL DRUG TRAFFICKING AND TERRORISM--A
DANGEROUS MIX
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TUESDAY, MAY 20, 2003
United States Senate,
Committee on the Judiciary,
Washington, DC.
The Committee met, pursuant to notice, at 10:02 a.m., in
room SD-226, Dirksen Senate Office Building, Hon. Orrin G.
Hatch, Chairman of the Committee, presiding.
Present: Senators Hatch, Kyl, Sessions, Cornyn, Biden, and
Feinstein.
OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM
THE STATE OF UTAH
Chairman Hatch. Good morning. I want to welcome everyone to
this important hearing to examine the issue of narco-terrorism.
The problems of terrorism, drugs and international
organized crime pose new and significant challenges to our
country. As everyone knows, these problems occur across our
borders and are less and less subject to control by nation
states. Terrorists around the world and in every region appear
to be increasing their involvement in the trafficking of
illegal drugs, primarily as a source of financing for their
terrorist operations.
Narco-terrorists participate directly or indirectly in the
cultivation, manufacture, transportation and/or distribution of
controlled substances. Several terrorist groups provide
security for drug traffickers transporting their products
through territories under the control of terrorist
organizations or their supporters. No matter what form it takes
or the level of involvement in drug trafficking, several
significant terrorist groups are reported to be relying on drug
money as one of several significant funding sources.
In the mid-1990's, I became concerned about the nexus
forming between international organized crime, political
movements and terrorism arising out of certain ungovernable
areas of the world. Senator Biden and others, of course, have
equally participated in this concern.
Terrorist organizations developed relationships with
illicit narcotics traffickers. In areas such as Afghanistan, a
fundamentalist regime became wholly dependant on opium
production at the time it became the host of Osama bin Laden
and Al-Qaeda. In other parts of the world, such as Colombia,
the connection was made through international organized crime,
activities which are inconsistent with the ideological basis
for terrorist activities.
Today, United States and coalition forces have successfully
removed the Taliban from power, but we have not succeeded in
stabilizing Afghanistan. Our policy is to support President
Karzai, but his Tajik-dominated government has alienated the
majority of the Pashtun population, who live in most of the
opium-producing areas of Afghanistan. This alienation of the
Pashtuns has led to instability in Afghanistan that has
resulted in fundamentalist and Al-Qaeda resistance to U.S.
forces and an increase in opium production.
The Bush administration recognizes that the situation in
Afghanistan remains unresolved, and I urge the administration
to maintain its commitment to the future of Afghanistan, if we
are to root out Al-Qaeda and begin to reduce the opium
production there.
The reach of narco-terrorism extends across the globe to
other areas in Asia, the Middle East and Latin America. In
South America, the narco-terrorist threat is well-documented,
including terrorist organizations such as the Revolutionary
Armed Forces of Colombia, or FARC; the National Liberation
Army, or ELN; and the United Self-Defense Groups of Colombia,
or AUC.
Terrorist groups in Colombia rely on cocaine trafficking,
transportation and storage of cocaine and marijuana, as well as
taxing traffickers and cocaine laboratories in order to support
their civil war, terrorist attacks and, of course, the hostage-
taking of Americans, among others.
The connection between Middle Eastern terrorist groups such
as Hizballah and Hamas, and Latin American drug trafficking has
been reported in the Tri-Border area of Argentina, Brazil and
Paraguay, which has long been characterized as a regional hub
for radical Islamic groups which engage in arms and drug
trafficking, contraband smuggling, money laundering and
movement of pirated goods.
I would note that in a recent arrest reported just last
week, the cousin of extremist Assad Ahmad Barakat, head of
Hizballah in the Tri-Border area, was arrested in Paraguay with
2.3 kilograms of cocaine powder which he intended to sell in
Syria to benefit the Hizballah terrorist organization. The
cousin was reportedly a mule hired by Barakat as part of the
narco-terrorist financing operations needed to support Barakat
and Hizballah.
I want to commend the administration for its continuing
efforts to fight narco-terrorism worldwide. Using tools
provided in the PATRIOT Act, particularly those involving money
laundering and intelligence-gathering, the Bush administration
has demonstrated its commitment to fighting not only
terrorists, but individuals and organizations which provide
critical financing to terrorist groups.
We should make no mistake about it: the impact of global
narco-terrorism on our own communities is significant. In the
District of Columbia, in November 2002, 3 separate indictments
were announced charging 11 members of the FARC with the murder
of 3 individuals, hostage-taking and drug trafficking involving
the distribution of cocaine bound for the United States.
In Houston, Texas, in November 2002, four members of the
United Self-Defense Groups of Colombia, the AUC, were caught
trying to exchange $25 million of cash and cocaine for weapons,
such as shoulder-fired anti-aircraft missiles, 53 million
rounds of ammunition, 9,000 rifles, rocket-propelled grenade
launchers, along with almost 300,000 grenades to be used by AUC
operatives.
In San Diego, California, in November 2002, two Pakistani
nationals and one United States citizen were charged with
attempting to exchange 600 kilograms of heroin and 5 metric
tons of hashish for cash and four anti-aircraft missiles to
supply to the Taliban and Al-Qaeda associates.
Recently, in April 2003, the FBI and DEA disrupted a major
Afghanistan-Pakistani heroin smuggling operation with the
arrest of 16 individuals, in which heroin was being shipped to
the United States, profits from the sale of heroin were
laundered through Afghan and Pakistani-owned businesses in the
United States, and then sent back to finance terrorists.
If we really want to win the war against terrorism, we need
to continue and expand our commitment to cutting off all
sources of terrorism financing, including drug trafficking. By
doing so, we will not only cut off an important source of
funding for terrorists, but we will reduce the amount of
illegal drugs that poison our communities.
So I look forward to hearing from the experts we have
called before the Committee today, today's witnesses.
Now, I want to turn it over to Senator Biden, who is
serving as the ranking minority member, for his opening
remarks. In particular, he and Senator Kyl are great assets to
this Committee, especially in the area of terrorism, and narco-
terrorism at that.
So, Senator Biden, we will turn to you.
STATEMENT OF HON. JOSEPH R. BIDEN, JR., A U.S. SENATOR FROM THE
STATE OF DELAWARE
Senator Biden. Thank you, Mr. Chairman, and thank you for
the nice compliment. The truth is when Steve Casteel and I
started in this business, there used to be an ad, ``This ain't
your father's Oldsmobile.'' This is not your father's
Oldsmobile anymore. I have been doing this for 30 years. I have
been doing it as long as anyone in here, including the panel,
and I have spent a considerable portion of my life trying to
figure out how to deal with the drug problem and international
drug trafficking.
This has morphed into a very different arena now and we
have not yet adjusted, in my view. That is not a criticism; it
is an observation. We have not fully adjusted to the changes
that have taken place, nor in a sense is it reasonable to
expect we would have fully adjusted by now.
Without going through, which I was going to do--I will ask
unanimous consent that my entire statement be placed in the
record, Mr. Chairman, and I will just speak to parts of it.
Chairman Hatch. Without objection.
Senator Biden. Without cataloguing, as you did very well,
the recent arrests, including 16 Afghans and Pakistani
nationals arrested in New York on drug charges, their drug ring
was linked to Al-Qaeda and the Taliban. We know what is going
on.
Since September 11, we have been focused on counter-
terrorism, and rightly so, but we have got to see and respond
to the big picture here and it is going to take a while to get
this right. I want to be realistic about homeland security and
if we take our eye off the ball, we are going to find ourselves
with a problem.
We have to make sure our security priorities don't
undermine our existing law enforcement efforts, which they are
doing right now unintentionally. They must go hand in hand. I
have been worried for some time that the increased focus that
we have on homeland security has lost sight of what is really
happening on our streets, and in drug trafficking in
particular.
If you look at the anti-drug initiatives that are part of
the war on terrorism and understand that, I think we come up
with a slightly different matrix than we now have. The
administration's record here is somewhat mixed, in my view. It
is doing a pretty good job on Colombia and it is doing a
horrible job--and I want to make it clear, a horrible job--in
Afghanistan.
At home here, it has repeatedly proposed slashing or
eliminating law enforcement programs with track records that
reduce crime. The FBI has been forced to shift hundreds of
agents away from counter-narcotics work which they were
involved in, forcing the DEA to do more without sufficient
funding, in my view, to do their job.
Moreover, the administration has left the top anti-
narcotics position at the State Department vacant since
September. It has yet to even nominate a replacement. We have
to be able to walk and chew gum at the same time here, and we
can't separate fighting terrorism from fighting drug
trafficking, given the considerable and increasing linkage
between the two.
Let me just mention two areas that I have already
mentioned, but expand slightly.
Afghanistan: the connection between the warlords, drugs and
terror is as clear as a bell. A lot of us here have talked
about it. I have written reports about it. We have gone to the
area and visited it. We even passed a $1 billion aid package
here for Karzai last year for security, not one penny of which
has been spent. There has been no extension of the security
force beyond Kabul.
The National Security Adviser has said to me personally and
indicated to me generally that we have stability in Afghanistan
and, quote, ``the warlords are in charge.'' When I indicated
that, in Harat, you had a guy named Ismael Kahn, a warlord,
running the show, she said, yes, there is some stability. There
is stability all right. Everybody is back in business.
When I was there a year ago January and spent time with
Karzai, the opium production was way down. We all said, sitting
here, we are not going to let this erupt again, we are not
going to let this happen again, this is not going to become the
single largest opium producer in the world. In a short 2 years,
it is once again the single largest opium producer in the
world. The fact of the matter is you can't stop opium
production when the warlords control the region and when, in
fact, we don't expand security beyond Kabul.
Last year, Afghanistan produced 3,400 tons of opium. That
is more than 18 times the amount produced during the last year
the Taliban was in charge. The value of the harvest to growers
and traffickers was $2.5 billion, more than double the entire
amount of foreign aid given to Afghanistan by all nations in
the world in the year 2002.
It was the power vacuum created by warlords and drug
traffickers that enabled the Taliban and Al-Qaeda to turn
Afghanistan into an international swamp, as the President
called it, the first time, and now we are back in the same
situation again.
In December, President Bush signed the Afghan Freedom
Support Act, which authorizes $1 billion to expand
international peace-keeping outside of Kabul to the rest of the
country. To date, the President has not asked for one dime of
that money to be spent. I sincerely urge the President and
plead with him to seek to expand that force and to spend some
of that money.
In Colombia, the record is a little bit better. The effort
has been consistent. The problem is, in a sense, even more
intractable than it is in Afghanistan. All of us here have been
to Colombia a number of times. We have witnessed the
operations, we have met with the Colombians. We understand the
FARC, ELN and AUC, and how they have gone from being
facilitators to wholly-owned subsidiaries now. They are doing
the job, and doing it very well.
According to recent estimates, 90 percent of the cocaine
consumed in the United States and 75 percent of the heroin used
on the East Coast comes from Colombia. And, boy, it is pure, as
we all know.
I remember when you and I got here, Mr. Casteel, we were
worried about brown heroin from Mexico. God give me back brown
heroin, 6-percent purity. I can go on Aramingo Avenue in
Philadelphia and pick it up at 90-percent purity. You can now
smoke it. You can now get young girls who are 13 years old, who
would no more put a needle in their arm than fly--you can get
them to smoke cocaine, just like the crack epidemic started.
The United States has remained engaged in Colombia and it
is a very difficult problem, and I credit the administration
for its efforts there. But the point I want to make is this:
you all are in an almost--how can I say it--almost impossible
situation.
As we put together these pieces for homeland security and
dealing with international terrorism, we have had to move a lot
of pieces and there is bound to be some dislocation in the
movement. But what concerns me is, with a 40-percent reduction
in funding for law enforcement locally in next year's proposed
budget, with moving 567 strike force and narcotics-related FBI
agents out of that area, without significantly increasing for
DEA a commensurate number of people, without putting security
in Afghanistan, which is a very different way and place and
ability to eradicate crops there than it is in the Amazon, we
are missing real opportunities and creating problems that were
pointed out by the Chairman.
I will end by suggesting that you will be able to have all
the terror, as the sophisticated terror operations, from Al-
Qaeda on, fully funded with money left over for vacations by
the profit from narcotics and international narcotics trade now
being controlled by terrorist organizations.
So to suggest that we can deal with terror and not deal
equally with as much emphasis and effort and resources with
international drug trafficking, I think is a glaring, glaring
mistake. Afghanistan is, to me, the most significant case in
point.
And I might add I am fully aware of what you all tell me
that 80 percent of the opium produced--by the way, they are
moving the labs back from Pakistan now into Afghanistan because
it is a secure area. There is nobody to crack down, nobody to
crack down in most of these areas. At least in Pakistan, they
are worried a little bit about the government, a little bit
about the government. So you know things are really doing well
when they are moving the labs back from Pakistan across the
border into Afghanistan.
Eighty percent of it goes to Europe, I understand. Drugs
are like oil; they are fungible, and that means it increases
our problem commensurately with the fact that all the heroin
supply for Europe is coming out of Afghanistan now.
I hope you all are willing to accept more money. I hope you
all are going to be honest enough to tell us what your
shortfall is. I hope you are going to be willing to tell us and
not give us the malarkey that you can do more with less,
because you know you can't and you haven't. And so I hope we
have some candor here because this is a big, big deal.
I yield the floor.
Chairman Hatch. Well, thank you, Senator.
We will turn to Senator Kyl.
STATEMENT OF HON. JON KYL, A U.S. SENATOR FROM THE STATE OF
ARIZONA
Senator Kyl. Thank you, Mr. Chairman. This hearing builds
on one that Senator Feinstein held in the Terrorism
Subcommittee last year. That hearing focused on illegal drugs
and their link to terrorism in two parts of the world,
Afghanistan and Colombia. As that hearing showed and as this
hearing will confirm, there is a growing and significant link
between international drug traffickers and terrorism.
Several terrorist groups benefit directly or indirectly
from drug trafficking activities. The form of such
relationships varies among the groups and areas in the world.
Some terrorist groups are directly involved in the trafficking
of illegal drugs, some are indirectly involved as a financing
mechanism by providing security for or taxing of traffickers
who transport drugs through areas controlled by the terrorist
groups. And some terrorist groups support cultivation of
illegal drugs, such as coca or opium, as a financing mechanism.
There are many examples. Indeed, as Chairman Hatch has
mentioned, the narco-terrorism connection was underscored by a
November 2002 arrest in San Diego of two Pakistanis and one
U.S. citizen for attempting to exchange 600 kilograms of heroin
and 5 metric tons of hashish for cash and 4 Stinger anti-
aircraft missiles to supply Al-Qaeda associates.
We have a very distinguished panel of witnesses here today,
Mr. Chairman, and I look forward to their testimony about the
connection between terrorists and international drug
traffickers.
Chairman Hatch. Well, thank you, Senator.
Senator Cornyn, do you care to make any remarks?
Senator Cornyn. Thank you, Mr. Chairman. I will pass.
Chairman Hatch. Thank you.
Senator Sessions, do you care to make any comments?
Senator Sessions. No, thank you, Mr. Chairman.
Chairman Hatch. Well, we will begin with our panel. We are
delighted to have these tremendous leaders here with us today.
Mr. Steve W. Casteel is the Assistant Administrator for
Intelligence at the Drug Enforcement Administration here in
Washington.
Mr. Steve McCraw, we welcome you here again, Assistant
Director of the Office of Intelligence at the Federal Bureau of
Investigation.
Ms. Deborah McCarthy is Deputy Assistant Secretary of State
in the Bureau of International Narcotics and Law Enforcement
Affairs at the Department of State. Mr. John P. Clark is the
Interim Director of the Office of Investigations in the Bureau
of Immigration and Customs Enforcement in the Department of
Homeland Security.
So we are happy to have all of you here and we will begin
with you, Mr. Casteel.
STATEMENT OF STEVEN W. CASTEEL, ASSISTANT ADMINISTRATOR FOR
INTELLIGENCE, DRUG ENFORCEMENT ADMINISTRATION, WASHINGTON, D.C.
Mr. Casteel. Thank you, Mr. Chairman. Chairman Hatch,
Senator Biden, Senator Kyl, Senator Sessions, good to see you
again, and obviously last but not least, Senator Cornyn. It is
a pleasure to be with you today to discuss a very important
issue and to represent the Drug Enforcement Administration as
the Assistant Administrator of Intelligence.
Prior to September 11, 2001, the law enforcement community
typically addressed drug trafficking and terrorist activities
as separate issues. In the wake of the terrorist attacks in New
York City, Washington, D.C., and Pennsylvania, these two
criminal activities are virtually intertwined. For DEA,
investigating the link between drugs and terrorism has taken on
a renewed importance.
Throughout history, a broad spectrum of the criminal
element, from drug traffickers to arms dealers to terrorists,
have used their respective power and profits in order to
instill the fear and corruption required to shield them from
the law.
Whether a group is committing terrorist acts, drug
trafficking or laundering money, the one constant to remember
is that they are all forms of organized crime. The links
between various aspects of the criminal world are evident
because those who use illicit activities to further or fund
their lifestyle, cause or fortune often interact with others
involved in related illicit activities.
For example, organizations that launder money for drug
traffickers often utilize their existing infrastructure to
launder money for arms traffickers, terrorists and other types
of criminals. The link between drugs and terrorism is not a new
phenomenon.
Globalization has dramatically changed the face of both
legitimate and illegitimate enterprise. Criminals, by
exploiting advances in technology, finance, communications and
transportation in pursuit of their illegal endeavors, have
become what we now call criminal entrepreneurs. Perhaps the
most alarming aspect of this entrepreneurial style of crime is
the intricate manner in which drugs and terrorism may be
intermingled.
The DEA does not specifically target terrorists or
terrorist organizations. DEA's mission is and remains to
investigate and prosecute drug traffickers and drug trafficking
organizations. However, some of the individuals and/or
organizations targeted by DEA may become involved in terrorist
activities. In fact, 39 percent of the State Department's
current list of designated foreign terrorist organizations have
some degree of connection to drug activity.
If the Committee would look to the right there, you will
see two charts outlining that fact. The first chart lists the
36 foreign terrorist organizations currently listed by our
State Department. Those highlighted in red, those 14
organizations, we believe have some link and ties. Often, when
we talk about narco-terrorism, we think of Latin America, too.
And if you look at the second chart, you will see that the
global spectrum covered by these organizations is worldwide.
One does not have to go to the Middle East, however, to
find active terrorist groups. They exist right in our
hemisphere a mere three hours' flight from Miami. The U.S.
State Department has officially designated the ELN, the FARC
and the AUC as foreign terrorist organizations. Based in
Colombia, these groups were responsible for some 3,500 murders
in 2002 alone.
As in years past, Colombia endured more kidnappings last
year than any other country in the world, roughly around 3,000.
Overall, the ELN, FARC and AUC all benefit and derive some
organizational proceeds from the drug trade, as well as illegal
activities such as kidnapping, extortion and robbery.
DEA reporting indicates that persons affiliated with the
AUC, and to a lesser extent the FARC, are now working with
Mexican and Central American trafficking organizations to
facilitate cocaine transshipment throughout the region.
Consistent with these reports, a Government of Mexico official
recently stated that members of the AUC and FARC are carrying
out drug trafficking activities in Mexico.
There have been numerous instances of drugs-for-weapons
exchanges occurring in the region, particularly in Central
America. Drugs are almost becoming the universal currency of
organized crime.
As you see in a chart that has been placed up there now,
this is all too often an occurrence in Central America. A plane
will land, offload a large amount of cocaine. They will throw
on a load of guns and back south it heads. Fortunately, this
plane didn't make it off the ground.
The ELN, FARC and AUC are not the only terrorist groups in
our hemisphere. As you heard before, the Tri-Border area of
Paraguay, Argentina and Brazil is a Hizballah and the Islamic
Resistance Movement, known as Hamas, action area. DEA
intelligence indicates that they generate a significant income
by controlling the sale of various types of contraband in these
areas, including drugs, liquor, cigarettes, weapons and forged
documents. Our intelligence suggests that large sums of these
earnings from these illegal activities go in support of the
operatives' respective organizations in Lebanon.
Although not in our hemisphere, but of great concern to our
National interest, Afghanistan continues to be a major source-
producing country, producing approximately 59 percent of the
world's supply of opium in 2002. In January 2003, DEA
officially reopened its Kabul office, which is staffed by two
full-time special agents.
With a presence north and south of the Afghan border,
through offices in Uzbekistan and Pakistan, the DEA continues
to work closely with its counterparts to collect intelligence
pertaining to clandestine laboratories, drug stockpiles,
trafficking routes and major regional drug targets.
Afghanistan's neighbors in the Central Asian states may
also be candidates for exploitation by these traffickers. Drug
trafficking groups could potentially utilize their existing
networks within the region to move to market precursor
chemicals and other things to be used in the drug trade.
Presently, the situation is fluid and constantly changing.
Until the situation in Afghanistan stabilizes, the future of
drug cultivation and production within that country or within
that region itself remains uncertain.
Southeast Asia also faces similar obstacles in confronting
the myriad and terrorist organizations who continue to
challenge established governments. The United Wa Army, the
largest heroin and methamphetamine trafficking group in the
area, operates with virtual autonomy, a government within a
government, primarily funded by drug activities. The
overwhelming majority of both heroin and methamphetamine
refineries currently are located in Burma and areas controlled
by the Wa or indirectly in areas controlled by traffickers
paying fees to the Wa.
The terrorist attacks carried out on our Nation on
September 11, 2001, graphically illustrate the need to starve
the financial base of every terrorist organization and deprive
them of the drug revenue that is used to fund acts of
terrorism. Tracking and intercepting the unlawful flow of drug
money is an important tool in identifying and dismantling
international drug trafficking organizations and their ties to
terrorism.
Domestically, one major DEA effort that highlights the
importance of targeting financial networks to the Middle East
is Operation Mountain Express III. This investigation, which
targeted pseudoephedrine suppliers from Mexican methamphetamine
super labs, revealed that proceeds from the sale of Canadian
pseudoephedrine are being funneled through the traditional
hawala underground banking network to individuals in the Middle
East.
The last chart you will see there somewhat illustrates that
fact. What we have is major labs operating on our West Coast
controlled by Mexican organized crime groups. The source or
precursor chemical for that is pseudoephedrine which is
produced in Canada, moves across our borders mainly to Chicago
and Detroit, on then to Las Vegas and Phoenix, and then
ultimately to the big labs.
From a law enforcement perspective, what I find interesting
here is the way we were seizing these pseudoephedrine tablets.
As you see the pictures moving across, when we first started
having this problem, we were seizing all these little bottles
of pseudoephedrine, very small bottles, case after case. Then
we started seizing bigger bottles and bigger bottles, and now
as you can see at the end, we are seizing kegs of this product,
which shows the need for it and the profitability to be
addressed by it.
In recent years, U.S. law enforcement has moved toward a
community policing model. You hear that all the time in the
United States, community policing, community policing.
Internationally, law enforcement has adopted what we call the
transnational policing approach. The DEA is positioned to
support this model because it maintains 79 offices in 58
countries. These offices support DEA domestic investigations
through foreign liaison, training of host country officials,
bilateral investigations and intelligence-sharing. Foreign
operations enable DEA to share intelligence and coordinate and
develop a worldwide drug strategy, in cooperation with our host
countries.
In conclusion, Mr. Chairman, the events of September 11
have brought a new focus on an old problem, narco-terrorism.
These events have forever changed the world and have
demonstrated that even the most powerful Nation is vulnerable
to acts of terrorism. In attempting to combat this threat, the
link between drugs and terrorism has come to the fore. Whether
it is a state, such as the formerly Taliban-controlled
Afghanistan, or a narco-terrorist organization such as the
FARC, the nexus between drugs and terrorism is perilously
evident. DEA, though a single-mission agency, is committed to
our National security through a myriad of cooperative
international and domestic enforcement initiatives and
programs.
Once again, I thank the Committee for the opportunity to
share my insights relative to DEA's role in this critically
important and I will also be happy to respond to any questions
the Committee may have.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Casteel appears as a
submission for the record.]
Senator Kyl. [Presiding]. Thank you very much, Mr. Casteel.
Let me just note that Senator Leahy's and Senator
Grassley's statements will be put in the record, without
objection, and we will leave the record open for one week.
Mr. McCraw.
STATEMENT OF STEVEN C. MCCRAW, ASSISTANT DIRECTOR, OFFICE OF
INTELLIGENCE, FEDERAL BUREAU OF INVESTIGATION, WASHINGTON, D.C.
Mr. McCraw. Thank you, Senator Kyl. With your permission, I
would like to respectfully request that my written testimony be
submitted to the record.
Senator Kyl. Without objection, so ordered.
Mr. McCraw. Also, with your permission, I would like to
depart a little bit from my written testimony and talk to you a
little bit about this serious problem.
Before I began, I want to take this opportunity on behalf
of every FBI man and woman to publicly thank the members of
this Committee, even though Chairman Hatch is not here at this
time, for your tremendous support, and Senator Biden, Senator
Sessions and Senator Cornyn, to the FBI. We are now able to
modernize our information technology system. We are having
agents increased in terms of combatting terrorism analysts, and
also some support professionals, and we very much appreciate
it.
Secondly, I would like to divert just a little bit of time
to talk about what is the most significant threat as we see it
right now. Clearly, it is Al-Qaeda. Also, there are other
Islamic extremist groups. The FBI, along with our State, local
and Federal partners, have identified hundreds of Islamic
extremists and Sunni extremists tied to Al-Qaeda, tied to
terrorists.
The concentrations continue to be Eastern Seaboard, Western
Seaboard and Southwest, in your part of the country, Senator
Cornyn. And it is these threats that certainly keep all of us
up late at night and up early in the morning. Clearly, the
sleeper cells constitute our greatest threat. Those are the
ones that sneak into this country. They capitalize on our
porous borders, our free and open democracy that we cherish so
much as Americans. Once in, they avoid police scrutiny. That is
the trade craft; that is what they do, for good reason.
Clearly, the 19 hijackers exhibited this and we have seen this
like type of action throughout the world recently.
We cannot afford to just focus on Al-Qaeda. We can't afford
to focus on certainly the Islamic extremists. There is
Hizballah, there is Hamas. There are even domestic terrorist
organizations that still constitute a threat to this Nation.
I think Senator Biden's point was right on target that, to
paraphrase, independently each of these terrorism and narcotics
trafficking groups constitutes significant threats to our
country. Together, it grows the threat. Clearly, as we put
additional pressure, which the U.S. Government has, on nations
for supporting and harboring terrorism, they are going to seek
other ways of funding. And I can't think of a more lucrative
way right now than drug trafficking, and it is there. There is
no question about it.
There is no way that we can extract crime from terrorism.
They are inextricably linked, which is one of the things I
noted in my testimony. You recognized this back in the year
2000 when we talked about the convergence of international
crime and terrorism. They depend upon it, and there is a myriad
of violations. I mean, it is like reading a RICO indictment,
from white collar crime, to burglary, to robbery, to homicide,
to smuggling, counterfeiting and drug trafficking, which is the
focus of this testimony today; credit card fraud, white collar
crime fraud.
Mr. Casteel made a great point with the pseudoephedrine,
and a lot of this diversion is happening with some of the
groups that are associated with Hamas and Al-Qaeda and other
Islamic extremists in the U.S. They are diverting this
pseudoephedrine specifically to the drug trafficking market, it
being a precursor to methamphetamine. That clearly is a
problem.
Again, additional funds, and these funds that they generate
are used for two reasons, either direct support in terms of
funding of operations, and certainly there is that facilitation
model. When we see a lot of convergence and overlap between the
criminal world and the terrorist world, unfortunately often--or
I will say fortunately, we will take down investigations, some
would argue prematurely.
But there is a new paradigm and we can't afford--you know,
unlike baseball where batting .700 will put you in the Hall of
Fame, what we are faced with today, the intelligence community,
the law enforcement community and the FBI together--it only
takes one act of terrorism and there is a failure, and we can't
afford that.
So you will notice in a lot of our investigations that we
will take down things that normally we might let continue on
for a period of time to identify and be able to conclusively
tell you that those links exist. The San Diego case is a
perfect example that the Chairman spoke of earlier.
Thank you. I look forward to answering any questions that
you might have and I appreciate the opportunity to be here
today.
[The prepared statement of Mr. McCraw appears as a
submission for the record.]
Senator Kyl. Thank you very much, Mr. McCraw. I also want
to make sure that we will have some time later to get into a
little bit more detail, to the extent you can, on that last
case. I think that will be very important for people to
understand.
Mr. McCraw. Yes, sir.
Senator Kyl. Ms. McCarthy.
STATEMENT OF DEBORAH MCCARTHY, DEPUTY ASSISTANT SECRETARY,
INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS, DEPARTMENT
OF STATE, WASHINGTON, D.C.
Ms. McCarthy. Thank you, Mr. Chairman, members of the
Committee. Thank you for the opportunity to speak today on
behalf of the State Department. I am accompanied today by Mr.
William Pope, the Principal Deputy Coordinator of the State
Department's Office of Counter-Terrorism. I am going to request
that my written statement be included in the record and I am
going to do some extracts from it today.
As you know, well before September 11 the INL office of the
State Department has been working to combat narcotics
production, trafficking, international money laundering, cyber
crimes and theft of intellectual property rights. For fiscal
year 2003, Congress appropriated INL more than $900 million to
advance these objectives. S/CT has the lead in the Department
for coordinating our activities in the war on terrorism. INL
supports these efforts through counter-narcotics activities,
anti-money laundering and crime control activities.
To counter the increasing linkage and overlap among
terrorist, drug and other criminal groups, INL has begun
integrating counter-narcotics and anti-crime programs. We do
this through initiatives to build up law enforcement and
justice systems in key foreign countries. In other words, we
also help other countries develop their border control
enforcement.
The terrorist interdiction program developed by S/CT
installed powerful computer databases at airports and other
ports of entry in friendly countries to enable immigration
officials to cross-check passports and visas of arriving
persons. We also work to develop stronger international law
enforcement and financial regulation standards. We also have
programs to fight corruption which are also part of our anti-
crime efforts.
The sources of funds may vary between terrorists and other
criminals and drug traffickers, but the methods used by
terrorists and drug traffickers to transfer funds are similar.
Illicit finances are of special concern and we have focused a
number of activities against the programs that they use.
In the past, state sponsors provided funding for
terrorists. In recent years, however, as state sponsorship of
terrorism has come under increased scrutiny, terrorist groups
have looked increasingly at drug trafficking and other criminal
activities as sources of revenue.
Fighting money laundering and terrorist financing, which we
engage in, provides a particularly clear example of the need
for interagency and international cooperation across crime-
fighting and counter-terrorism disciplines. This is not to say
that fighting crime and fighting terrorism are synonymous.
There are important areas in law, policy, diplomacy and program
management where the two must be treated separately. Law
enforcement is one key tool among several in counter-terrorism.
In Colombia, however, the links between drugs and terrorism
are of particular concern. Since the date of our previous
testimony, a good deal has changed. A new president has come
in, setting Colombia firmly on the course of strengthening its
military and police forces to defeat the narco-terrorist
threat.
In Colombia, we have mentioned the three main groups that
receive revenue from narcotics cultivation, taxation and
distribution. They provide at least half the funding that the
FARC and the AUC rely on. We estimate that the ELN derives less
of its support from drug trafficking.
Drug money facilitates terrorist operations. As the FARC
has expanded urban operations, they may also be reaching out to
international terrorists and additional technical expertise.
The ongoing trial of the alleged IRA operatives arrested in
Colombia in 2001 is but one example.
I will not go into the details of the various groups, as I
think most people are familiar with them. I want to mention
also that this Andean-produced cocaine and heroin passes
through Central America, the Caribbean and Mexico, and we have
noted the connection between the groups that pass the drugs.
The situation in Afghanistan, of course, is of note. We
have ample evidence that the Taliban condoned and profited from
the drug trade when it was in power. Since the Taliban was
forced from power, we have seen reports that they and other
groups seeking to undermine the regime of President Karzai used
drug trafficking to arm their militia and mount operations
against the government. Two other groups are worth mentioning,
the Peruvian terrorist group Shining Path and, in addition, the
Islamic Movement of Uzbekistan.
In addition to trying to curtail the flow of funds to
terrorists from drug trafficking, we also have a number of
other programs; as I mentioned, comprehensive anti-money
laundering and counter-terrorist financing programs, but we
also try to empower our allies to detect, prevent, disrupt,
prosecute and seize the financial assets.
We now recognize the close relationship between money
laundering and terrorist financing, as noted in our recent
INCSR. We note also that we train people in a number of law
enforcement areas to increase our capability to prosecute and
apprehend and investigate the cases.
INL works closely with a number of multilateral agencies,
and in particular we have some new initiatives within the group
of G-8 countries, which I refer to a little bit more in my
testimony.
Thank you.
[The prepared statement of Ms. McCarthy appears as a
submission for the record.]
Senator Kyl. Thank you, Ms. McCarthy.
Finally, Mr. Clark.
STATEMENT OF JOHN P. CLARK, INTERIM DIRECTOR, OFFICE OF
INVESTIGATIONS, BUREAU OF IMMIGRATION AND CUSTOMS ENFORCEMENT,
DEPARTMENT OF HOMELAND SECURITY, WASHINGTON, D.C.
Mr. Clark. Good morning, Mr. Chairman, distinguished
members of the Committee. It is a pleasure and privilege to be
here today to discuss the efforts undertaken by the Bureau of
Immigration and Customs Enforcement, BICE, in its role in
investigating international drug smuggling and money laundering
as it relates to narco-terrorism.
Prior to beginning my specific testimony, I would like to
take some time to provide background on our new bureau.
With the creation of the new Department of Homeland
Security, the investigative and intelligence functions of the
former U.S. Customs and Immigration and Naturalization Service
have been merged to form the Bureau of Immigration and Customs
Enforcement under the Department of Homeland Security. In
addition, the bureau includes the Air and Marine Interdiction
Division, the detention and removal program, and the Federal
Protective Service.
BICE utilizes the broad legal authorities of its legacy
components to investigate and enforce violations of the law as
they did previously, and under BICE will continue to protect
the United States and its citizens from the dangers posed by
criminal organizations, including those linked to narcotics
trafficking and terrorism.
BICE has the authority to investigate numerous violations,
including violations of immigration law, export laws, money
laundering, smuggling, fraud and cyber crimes, including child
pornography. BICE investigations have led to the
identification, penetration and prosecution of individuals and
groups who are identified as being members of or linked to
designated terrorist organizations such as the FARC and the
AUC.
Furthermore, BICE, with its formidable money laundering and
counter-narcotics programs and initiatives, has disrupted and
dismantled narcotics smuggling organizations and the financial
mechanisms utilized to launder their criminal proceeds.
It is one of our top priorities to identify, investigate
and dismantle the criminal organizations that specialize in the
transportation and smuggling of contraband and illegal aliens.
The title of this hearing today, ``Narco-Terrorism:
International Drug Trafficking and Terrorism--A Dangerous
Mix,'' is, in essence, the challenge faced by BICE agents on a
daily basis.
The transportation organization that is paid to smuggle
cocaine today may very well be contracted to smuggle
instruments of terror or terrorists tomorrow. It is clearly
evident that the illicit narcotics trade generates enormous
profits for criminal organizations. These organizations thrive
on their ability to amass huge sums of money.
BICE utilizes a multi-pronged approach to investigate these
organizations. In an effort to disrupt and dismantle these
organizations, BICE focuses not only on the inbound smuggling
of contraband, but also the outbound flow of criminal proceeds.
BICE's authority to conduct financial investigations has
been derived from a variety of laws. BICE began conducting
financial investigations after the enactment of the Bank
Secrecy Act, the BSA, in 1970, and expanded their
investigations with the enactment of the 1986 Money Laundering
Control Act, the Anti-Drug Abuse Act of 1988, and the 2001
PATRIOT Act.
In addition, various memoranda of understanding between the
Secretary of the Treasury, the Attorney General and the
Postmaster General have been executed regarding the conduct of
money laundering investigations. These MOUs delineate the
specific unlawful activity and investigative authorities in
which BICE has jurisdiction.
Since its inception, BICE has had the authority to enforce
anti-smuggling statutes, to include 18 USC 545. This authority
allows BICE the ability to investigate the unlawful importation
of any contraband. With Title 21 cross-designation, BICE has
been authorized by the Department of Justice, and more
specifically the Drug Enforcement Administration, to
investigate narcotics smuggling organizations.
Enforcement of Title 8 of the U.S. Code allows BICE to
target individuals or groups of individuals who are attempting
to or have entered the United States for illicit purposes.
These authorities, combined with our broad border search
authority, place BICE in an ideal position to fully investigate
smuggling of contraband and humans by sophisticated smuggling
organizations, while also targeting the financial mechanisms
utilized by these elements to launder their illegal proceeds.
One such laundering mechanism is the Black Market Peso
Exchange, BMPE, a trade-based money laundering system. The
Exchange allows drug traffickers to transfer their U.S. profits
from dollars to pesos without moving cash across borders.
BICE has an ongoing, aggressive investigative approach
concerning the BMPE which includes utilizing investigative
techniques such as undercover investigations, Title 3 wire
intercepts, intelligence-gathering, international coordination
and training of our international law enforcement counterparts.
BICE undercover operations directed at the peso brokering
system have resulted in the seizure of more than $800 million
in cash and monetary instruments over the last 8 years.
Undercover investigations conducted by BICE have targeted
hundreds of Colombian brokers, accounts and domestic money
laundering and drug trafficking cells operating in U.S. cities,
Central and South America, as well as Europe and Asia.
A few case examples: Operation Wire Cutter was a major
joint money laundering investigation conducted by BICE, the
Drug Enforcement Administration, personnel assigned to the U.S.
Embassy in Bogota, Colombia, and Colombian law enforcement
authorities that targeted high-level Colombian drug trafficking
organizations and their cells.
The primary defendants in Operation Wire Cutter were eight
senior money brokers located in Bogota, Colombia. Each of these
money brokers had distinct organizations that provided money
laundering services to several drug cartels on a contract
basis. Subsequently, undercover BICE agents picked up drug
money from operatives of the money brokers in New York, Miami,
Chicago, Los Angeles and San Juan, Puerto Rico.
At the same time, the Colombian authorities conducted a
parallel investigation on the BMPE money brokers and their
associates in Colombia. Operation Wire Cutter marked the first
time that U.S. authorities were able to combine undercover
pickups of drug proceeds in this country with the investigative
efforts by Colombian authorities to target BMPE money brokers.
Operation Wire Cutter resulted in the arrest of 37
individuals, 29 in the U.S., 8 in Colombia. U.S. authorities
also seized more than $8 million, as well as 400 kilograms of
cocaine, 100 kilograms of marijuana, and 6.5 kilograms of
heroin. To date, five money brokers in Colombia have been
extradited to the United States. This represents the first time
that a money broker has been extradited from Colombia to the
United States.
As I mentioned previously, the transportation organization
that is paid to smuggle cocaine today may very well be
contracted to smuggle instruments of terror tomorrow. By using
internal conspiracies, criminals utilize corrupt personnel
within the seaport and airport environments to introduce
contraband or implements of terrorism into otherwise legitimate
cargo or conveyances, and to remove it prior to examination by
the Bureau of Customs and Border Protection.
In an ongoing investigation targeting internal conspiracies
at one major U.S. seaport alone, BICE special agents have
uncovered the endemic practice of contraband being removed from
international cargo prior to the entry process. Utilizing a
variety of investigative techniques, including undercover
operations and controlled deliveries to successfully infiltrate
the internal conspirators, hundreds of individuals have been
arrested and convicted, thousands of pounds of cocaine have
been seized, and hundreds of pounds of heroin as well.
Another significant internal conspiracy investigation
conducted by BICE agents in conjunction with the Drug
Enforcement Administration was Operation Ramp Rats. Ramp Rats
targeted corrupt employees working at Miami International
Airport and resulted in more than 70 indictments and arrests.
Thirty of those arrested were employees of a major domestic
airline. Those arrested in this investigation were charged with
various violations of Federal narcotics laws, such as
conspiracy to import cocaine into the United States and
conspiracy to possess cocaine.
Both of these investigations have targeted corrupt
employees in the transportation industry, resulting in the
facilitation of smuggling schemes used by criminal
organizations. BICE is aggressively implementing programs to
address these weaknesses that include the assignment of
additional investigative personnel, the utilization of
improving technology, and the combination of various law
enforcement and security components to counter these threats.
Recently, BICE drug trafficking and money laundering
investigations have highlighted the link between drug
trafficking and terrorist organizations. An adjunct of these
investigations is the link between the drug trafficking
organizations and Colombia's illegal armies.
In October 2002, BICE arrested Libardo Ernesto Florez Gomez
after he arrived at Miami International Airport. Upon arrival,
he declared over $180,000 in U.S. currency. A subsequent
secondary examination revealed multiple financial records,
blank pre-signed checks, a DEA seizure letter, and a document
that alleges his links to the FARC. Florez Gomez admitted that
the funds declared were not his. On April 4 of this year, 2003,
Florez Gomez pled guilty to one count of 18 USC 1960 for his
involvement in operating an unlicensed money transmitting
business and is currently awaiting sentencing.
Currently, BICE is participating in a highly successful
joint organized crime drug enforcement task force with the Drug
Enforcement Administration and the Federal Bureau of
Investigation that is targeting the maritime transportation of
multi-ton shipments of cocaine belonging to the Colombian drug
cartels.
This investigation has led to indictments against several
ostensibly high-ranking members of the AUC. These individuals
were indicted for involvement in the maritime transportation of
over 12 tons of cocaine. As a result of the investigation, a
direct link between drug trafficking and known terrorist
organizations has been established. Narco-terrorism will
continue to be a top priority of BICE.
In conclusion, I would like to thank the distinguished
members of this Committee for the opportunity to speak before
you today and will be glad to address any questions you may
have.
[The prepared statement of Mr. Clark appears as a
submission for the record.]
Senator Kyl. Thank you very much, Mr. Clark.
One of the common threads throughout your testimony suggest
to me a question about sharing of information not only among
the Federal agencies, but also with local authorities.
Mr. McCraw, I wanted to ask you this question. Would it be
your view that there are at least possibly some legislative
changes needed to provide more information to State and local
officials, particularly information gathered through grand jury
investigations? Do you have any comment on that?
Mr. McCraw. Well, Senator, I have to get back in terms of
specifics before I wax on about what we need or don't need.
However, it is a topic near and dear to my heart, and the
Director's as well, as to how much information we can push out
because the army out there is the State and locals. I mean, it
is their job. They have got the public safety mission right up
on the front lines.
To the extent that we can use whatever we can in terms of
statutory authorities--and, frankly, the PATRIOT Act has helped
much--and also to get key individuals within the local law
enforcement community their security clearances because some of
this information, as you well know, is classified for good
reason--yet, no longer can they work in a vacuum.
I mean, there is information that happens overseas that
affects the chief of police in Tucson, the chief of police in
San Antonio, and they need that information. We are involved in
a number of information-sharing initiatives right now where we
can use technology to push information to them, as well as to
our intelligence community partners.
Senator Kyl. Would you do me a favor? If you could
communicate with others in the Bureau or with the Department of
Justice to get an answer to that question, I would appreciate
getting that for the record.
Mr. McCraw. Yes.
Senator Kyl. But just to the rest of you now, are there any
other issues with respect to information-sharing that you think
is important to bring to the attention of the Committee?
Yes, sir, Mr. Casteel.
Mr. Casteel. It is interesting. Information-sharing has
become my life for the last 3 years, so I would like to comment
on a couple of things, if I could.
Number one, when we talk about intelligence and when I
speak before the intelligence subcommittees, I often point out
in the back of the room our seal doesn't appear there. We are
not part of the IC world and so we look at intelligence a
little bit differently. We think there are two models for
intelligence. One is the IC model, but one is a law enforcement
model, and they are two different things. When you talk to the
local chiefs of police, they may not understand the IC world,
but they recognize what they want and what they need.
To sum up the two models in two words perhaps, the IC model
is based on getting to know something. The law enforcement
model is based on being able to do something with that
information. So I do see at times from a law enforcement
perspective a concern that we are going down this IC road model
for the development of intelligence-sharing and that may not be
the correct road to go down. We need to recognize who the
customer is and what they want.
The second thing within intelligence is within our model
you have the first responder. And you have heard that term used
a lot, ``first responder.'' Well, they have an important role
also in intelligence. Unlike the IC world, in law enforcement
we have no collectors. Our collectors are those first
responders out there every day of the week collecting
information, and information is of value.
We just recently closed one of our offices in Pakistan, not
because of something we received from the IC community, but two
local police officers there catching the people stepping off
the distance to our front door to plant the bomb. The first
responder has a role here.
As we are looking at this, we are also putting a tremendous
amount of money into technology, data-mining, terms like that.
We have to remember there are two other parts to this.
Technology is one answer, but the first responders need to be
trained. They need to recognize what they do for a living is
important for intelligence. You need more analysts on the other
end to look at that intelligence.
And last but not least, I have been a policeman for over 30
years. I only do what benefits me. If I don't get information
back, then as a police officer I am not going to want to be
part of this system. So I do think we do need to look at that.
Last but not least, Lord knows we have made enough mistakes
in the drug arena when it comes to information-sharing. But
over 30 years, we have tried to overcome many of these mistakes
and I think we have learned a lot. I think we have learned a
lot that would make a good template. Rather than reinvent a lot
of things, move that template over into the terrorist arena.
I go to meetings and I hear people say, you know, we need
to be able to give more tactical information to the State and
locals. Well, we have done that. We have got EPIC that has been
there for 28 years, getting tactical information to that police
officer on the side of the road halfway between Omaha and
Lincoln at three o'clock in the morning.
I hear them say the military and law enforcement have to be
commingled in their information-sharing better so they both can
take action. We do that already in JATF East, now called JATF
South, where information from law enforcement overseas is given
to the military, who takes action that leads to evidence that
we put back in our court system. So that model is very
important, sir.
Thank you.
Senator Kyl. Any other comments on that?
Go ahead, Ms. McCarthy.
Ms. McCarthy. I just want to make one comment that without
the cooperation that we get among other law enforcement
agencies, INL could not do its work, and I will point to the
eradication effort in Colombia. To send the planes out to get
the crops, we have to work with agencies to find out where the
crops are. But also more importantly, we have to work with
other agencies to get the information to find out where the
guerrillas are so our planes don't go out and get shot down and
it results in more hostages.
Senator Kyl. Thank you.
Mr. Clark.
Mr. Clark. This is the fifth week of five very long weeks
in my life, having just reported up here from Miami. On a good
note, I would say, though, that there are positive improvements
in terms of information-sharing, first, on the Federal level.
In the five weeks I have been here, I have had the
opportunity to sit down with representatives from both the Drug
Enforcement Administration as well as the FBI, and we are
working on improving our coordination and intelligence-sharing
in many aspects.
On a State and local level, first responder level, in my
previous life I was the special agent in charge for customs
investigations in Miami. I know we are taking very positive
steps in terms of working with the first responders. We have a
blue lightening operations center down in Miami which has
always incorporated State and locals. It works under the HIDTA,
High Intensity Drug Trafficking Area intelligence center.
We have incorporated that operation now to work on
operations at our borders that address terrorist threats, as
well as drug trafficking. Through that operation, we are able
to share a lot of information that is not classified with the
State and locals to give them a sense of ownership of what we
are doing and enlist their assistance in helping us at the
borders. So there are some positive improvements along those
lines.
Senator Kyl. Well, you can see that is an emphasis of ours
and we just need to have you identify any institutional or
legal impediments to that sharing if they exist.
Senator Biden.
Senator Biden. Thank you very much, Mr. Chairman.
I want to focus on three areas to just sort of give you a
heads-up here. One is what our targeting priorities are. Two is
what knowledge and detail we have about the impact of actual
funds in the hands of terrorist organizations. And, three, the
allocation of our resources domestically, the Federal budget,
how we allocate those resources and whether we could do it
better.
Now, I, like all of you and the Chairman, have spent a
great deal of time dealing with the Andes, and Colombia in
particular. But I want to make a point here. The very existence
of that democracy is at stake and whether or not it becomes a
narco state or whether or not it is able to gain control. That
is consequential to us short-term and long-term, but it is not
nearly as consequential to us as whether or not Al-Qaeda has an
extra $200 million to spend.
None of you has talked about priorities here. We talk about
terror like all terrorists are created equal. All terrorists
are not an equal threat to us. Nobody from the AUC is attacking
directly the United States of America. We spend hundreds of
millions of dollars aiding and assisting the Colombian
government to deal with the AUC. We have trained their
military. We have trained them explicitly to try to deal with
the internal problems of the Colombian military.
If we took all the money we were spending in Colombia and
if we spent it all we could cut off all narcotics funding to
Al-Qaeda, the American people in a heartbeat would say stop it
all for everything else and take care of Al-Qaeda. My dad, who
just died, used to say if everything is equally important to
you, nothing is important to you. The reason I wrote the drug
czar law in the first place was we didn't prioritize.
My question to you is this: from each of your different
perspectives, how are you charged? What is your number one
priority? What terror organization, not generically--and if it
is generic, then I think we have a serious problem. What is the
bulk of your focus?
Some of us are beating the living devil out of, with good
reason, the Saudis for not having cut off quickly enough,
directly enough and profoundly enough, not having changed their
banking system, not having used their authority to get their
billionaire cousins to stop funding indirectly and directly Al-
Qaeda and their madrases.
What good does that do? We are risking, with good reason, a
relationship that has profound consequences for us, including
whether these lights go on or not and how much it costs to turn
them on. In fact, the amount of money that Al-Qaeda may be
getting through Afghanistan alone may make up for all the lost
revenue. I don't know. It may.
So my question to you is, starting with the State
Department--and my first question for you, Ms. McCarthy, is why
don't you have a boss? I am not being facetious. What is the
reason, what is the inside skinny? Why have we not had this as
a priority? Why don't you have somebody running the show there?
That is my first question.
Ms. McCarthy. I believe we should have some information on
that very soon, Senator.
Senator Biden. That is kind of an unfair question to ask
you, actually.
Ms. McCarthy. We would be happy to have a boss.
Senator Biden. I should withdraw the question. There is no
way you would know. It is above your pay grade, and mine maybe
as well. But it is a reflection, in my view, of the lack of it
being a priority.
Number two, do you have a priority list internally as to
where the focus should be in this nexus between terrorist
organizations and drug trafficking? The State Department first.
Ms. McCarthy. For the INL bureau, our top priority
continues to be the Andean region and counter-narcotics
activities there. Approximately 80.9 percent of our 2003 funds
go to that area, Panama, and a couple of other countries.
Our crime programs, which include money laundering and
others, on which we work with a priority list of countries who
have been designated as of special significance, accounts for a
very small portion of our budget. So in terms of what INL does,
again, to build up law enforcement, build up capacities, as
opposed to going after groups specifically--it continues to be
the Western Hemisphere, and particularly the Andean Ridge.
Senator Biden. Now, I want to make it clear we urge you to
do that, so I am not being critical. We, the Congress, and past
administrations and this one have had that as a focus. But I
just want to make the point that 81 percent of all your effort,
money and funding has nothing to do with the organizations that
create the greatest immediate threat to the citizens of the
United States of America here and abroad--nothing, zero,
nothing to do with it.
Now, let me ask the question of each of you. DEA?
Mr. Casteel. We have both, I would say, Senator, long-term
and short-term goals here. Let's talk about short term because
I think it addresses your question better than others.
Obviously, as you said in your opening remarks, we have
focused on Latin America for a long time because that is where
the majority of actual drug availability on the street comes
from.
Senator Biden. It still does.
Mr. Casteel. But I want to assure you that we are not just
focusing simply on that in the short term, and let me give you
two examples. One month after 9/11 occurred, we held a meeting
in Turkey and we brought together almost 30 countries of the
world to address what we called Operation Containment.
We recognized that Afghanistan is a bit like holding sand
in the palm of your hand; the tighter you squeeze, the more it
kind of gets out through your fingers.
Senator Biden. I disagree with that metaphor, if I
understand it.
Mr. Casteel. What I mean by that is if you just focus on
that one country and say, okay, we are going to fix everything
in Afghanistan, and think you can build a perimeter around it
and fix the drug problem there, I think you are wrong.
I go back again to your opening remarks. You and I were
around when Nixon coined the phrase ``war on drugs,'' and the
first approach was build big borders around the United States
and that was how we were going to solve it. With Afghanistan,
yes, you have to create a capability within that country to
address that problem, but then you build rings around it,
fences around it. That was the goal of Operation Containment.
We brought groups together, countries with equal concerns, and
we have had some degree of success building these rings, these
fences, around Afghanistan.
Senator Biden. Give me an example of success because I see
none.
Mr. Casteel. We seized 1.2 tons of heroin crossing the
border in Turkey at three o'clock in the morning at a small
border checkpoint.
Senator Biden. Well, you have done that before. You have
scores of examples of that.
Mr. Casteel. We identified a group there that we didn't
know about before, a group that had connections to other
interests in the region.
Senator Biden. This is not a general little deal here. What
other interest in the region?
Mr. Casteel. It was a group that we had found that were now
moving their heroin laboratories into that region of Turkey to
produce large amounts. We seized that. That led to the--
Senator Biden. Was that group connected in any way--this is
about terror, this hearing in particular, not just drugs
generically, but terror. Was that group connected in any way
with Al-Qaeda, the Taliban or any other terrorist organization,
as we define here?
You could argue that every international drug cartel is a
terrorist organization. What my folks back home mean by
terrorists is people who load planes up and crash them into
buildings. What they mean is people are getting money to go out
and buy highly-enriched uranium to try to build a bomb. They
mean people who are going to go out and build a dirty bomb.
They mean people who are going to go purchase botulism. They
mean people who are going to go out and do those bad things
that Governor Ridge talks about all the time and we worry a
great deal about. So let's get it real straight what I am
asking about here and what the focus of this hearing is, at
least for this Senator.
What is the connection between these trafficking
organizations you are interdicting--and you are doing a good
job at interdicting them--and the organizations that are the
ones that are going to use weapons of mass destruction and/or
catastrophic actions to cause significant numbers of deaths in
the United States and Americans abroad? That is what this is
about.
Now, please tell me whether or not the interdiction you had
on the Turkish border or the movement of laboratories into
Turkey which I mentioned in my opening statement--whether or
not that has any direct relationship with the funding of
terrorist organizations who are seeking to create significant
numbers of American deaths as a consequence of their actions.
If you don't know, that is okay.
Mr. Casteel. I don't know other than to say that opium
originated in Afghanistan. The people who are controlling it
Afghanistan are one of two groups, the tribal organized crime
groups that have existed there that have a relationship with
the Taliban or the Taliban. So, indirectly, it all goes back
there.
Let me give you another example, though, that might be a
little closer to the point about prioritizing the targeting
efforts toward terrorism. Last week, I was in Australia. I was
sitting in Australia with five other nations of the world, to
include the UK, Canada and the Australian Federal Police.
What we did there was to begin a targeting process to
identify drug trafficking organizations that affect each and
every one of our countries. Now, DEA was the only agency
sitting there at the time that doesn't have terrorist
responsibilities. If you are in Australia, the Australian
Federal Police has a priority on that. If you are in Canada,
the RCMP has a priority on that. If you are in the UK, the same
thing.
As we sat down and started to approach these priorities,
obviously those other countries represented there put terrorism
as their number one reason for wanting to target these. So
there are processes going on. This transnational policing
approach requires this type of collaboration and partnership.
Senator Biden. I agree with you.
Mr. Casteel. So there are targeting approaches going on
within DEA that tie to terrorism.
Senator Biden. Let me give you a specific example, and I
don't want to get any of your agents in trouble. For 30 years,
as I traveled to countries, as you probably know, I find your
agents and I sit with them. This has been a passion of mine for
my entire career.
Sitting at Bagram Air Force Base and dealing with your
agents, there are no stovepipes there anymore and so you have a
DEA agent sitting next to an FBI agent, sitting next to a CIA
agent, sitting next to Defense Intelligence Agency personnel,
sitting next to the commander of special operations all around
a big table.
Your guys were telling me exactly what was going to happen.
They laid it out. Unless we established security in the
provinces, the mayor of Kabul can't do a damn thing. There is
nothing Karzai can do to follow up his edicts--zero. We have
8,000 forces there no longer pursuing with the same--well,
officially no longer pursuing the Taliban and Al-Qaeda in the
same way we did before, but not out in the countryside. We have
200 forces out in the countryside in these--what we were going
to call them? What were these things called, instead of
expanding?
Come on, somebody on the staff. There is a name for it.
There is a great little acronym for these forces that were
going to go out for reconstruction in the countryside. So you
go out to build a dam and we were going to provide ``x'' number
of military to go with the agency building the new sewer system
or whatever. It has a name and I am amazed my staff doesn't
know it. I am amazed I don't know it.
But having said that, we have got 200 folks out in the
field in uniform. Now, your guys told me, hey, Joe, do you
think we are going to be able to stop poppy production on a
grand scale if we cannot secure the region?
Karzai sends out an edict and what happens? Ismael Kahn
says, yes, okay, the mayor had something to say; I don't know
what it was. The Pashtun, which he is part of, say, oh. He has
no authority, no authority.
What bothers me about your collective testimony, not any of
you individually, is everybody knows that is for sure one of
the revenue streams for the Taliban, particularly in the
Pashtun area, and in turn Al-Qaeda, although we don't know for
certain. None of you know enough to tell me. The intelligence
community doesn't know enough to tell me. We don't know even
what we don't know. So my frustration, as you can tell, is not
with any one of you; it is our allocation of resources and the
prioritization.
Mr. Clark, you have been here for five weeks. You have done
a great job and you are going to do a wonderful job because you
did a hell of a job in Miami. You have got your hands full with
this new outfit. It has sprawling jurisdiction.
But you never once mentioned, not once, the only thing that
concerns Americans right now, any terrorist organization that
is likely to send in the phone call taking credit for a bus
stop in Buffalo, a building in Wilmington, Delaware, a tower in
Chicago, a discotheque in San Francisco or anywhere else.
I am not picking on you; I really am not. But I am trying
to point out that we don't have our act together yet. We do not
have our act together yet and it is worrisome. So at some point
maybe we should have a classified hearing with the intelligence
agencies, and you included, to tell us what you actually know
about following the dollar from the time the farmer plants the
poppy in Afghanistan or anywhere else to the moment that a bank
account is opening in a cell that is an Al-Qaeda cell in Riyadh
or in Islamabad or in New York City, and the extent that we can
follow the dollar, if we can. That is the part we don't know.
The Chairman is back and I will come with a second round.
Well, I guess I won't come back. I will just state that I
really think we are misallocating our resources here. I do not
think that we have sufficient information, and it is
understandable, about the direct link between the actual
production and the actual processing of, in this case heroin,
but it could be other drugs as well, and the bank account of
Al-Qaeda.
Ms. McCarthy. Senator, I know you are focused on the money
lead and that is an excellent question. I just wanted to add a
piece of information. I think you were referring to what are
called the provisional regional teams.
Senator Biden. Thank you. Provisional regional teams. I
love that.
Ms. McCarthy. Well, we have some monies. INL has a small
effort in Afghanistan that is $60 million for 2003 basically to
boost capacity of the police and law enforcement. But, in
general, all those operating over there--there is the
acceptance that security in the countryside and, as I said, as
a corollary stopping the flow of drug money to the warlords, is
the top priority.
Senator Biden. Yes, and unfortunately you don't have any
ability to do it yet. Maybe we are going to have a little
epiphany here--not you all--and we are going to see the light
and figure out that there is no way. It is a little bit like
saying that we are going to stop--well, anyway, I am taking too
long, but it is something we want to work with you on. But we
really have to get to the directors of each of your departments
to be able to--yes, Mr. McCraw.
Mr. McCraw. Senator, if you don't mind, just quickly to
underscore, I think, the importance of what you said in terms
of prioritization, as I testified earlier, there is no question
that Al-Qaeda is the greatest threat; there is no question, and
Islamic extremists which have really morphed into that Al-Qaeda
threat. We talked a little bit about Hizballah, Hamas, and we
can work our way down the chain. All of them have the potential
to raise to a threat, but right now, without question, the
Director has named the priorities. The priority is
international terrorism, and in that Al-Qaeda is number one.
With your permission, with Congress' support, we have
diverted substantial criminal resources to divert because there
is one guiding principle here. No lead, no matter how
obnoxious--not obnoxious, excuse me; we are getting close
here--seemingly absurd, will go uncovered. We have to address
everyone.
And the way we address it is rather than following the seed
and the poppy back, we look at the enterprise itself. So when
we find trafficking in it, we exploit that like we did in San
Diego or with DEA in New York. If we find that it is
immigration violations, we work with our colleagues in BICE. It
doesn't matter what the violation is. We know what their
ultimate goal is and we will use any violation and any tool
that we can take out of the toolbox that the Congress and the
Constitution have provided us to disrupt that activity, because
the name of the game is prevention and that is clearly the
priority of the FBI, and I would submit the intelligence
community as well.
I would like to say something publicly. DEA has been a
tremendous support to the FBI not just in joint investigations,
but actually Steve himself called me on 9/11 and gave us
analysts and agents to help out in this particular fight.
Senator Biden. I am absolutely confident of that. That is
why I am so happy we didn't let you merge, which you all wanted
to do and I was able to help stop.
[Laughter.]
Senator Biden. Let me ask one last question, Mr. Chairman,
and I won't ask any more.
Steve, eradication. Doesn't the circumstance in Afghanistan
lend itself geographically, the topography, to the ability to
eradicate more easily than it did even in Mexico in the 1970's,
and clearly in Colombia?
As an adjunct to that, the Taliban did a pretty good job.
They shut the sucker down, they shut it down. So it is kind of
interesting that they could shut it down. We are not looking
for a pure democracy in Afghanistan. We are not following
Karzai with the American Civil Liberties Union behind him.
It seems to me we should be able to be mildly more
effective in Afghanistan than we have been, or am I missing
something here?
Mr. Casteel. Well, obviously, the Taliban had a little more
freedom, as did the Communist Party in China when they took
over. If you remember, they had a tremendous opium problem and
in 3 years it was gone. When you execute people and chop
people's arms off and things like that, they play a little
different game that we have.
Senator Biden. By the way, this is still an Islamic state.
Karzai still has the ability under the law to do similar
things. He just doesn't have any means of enforcing it.
Mr. Casteel. The issue of eradication has been discussed
often, especially with our British colleagues. I think you
spoke earlier about the importance to Europe of this, 90
percent of their heroin coming from that point. I think it is
just one tool in your tool belt that you use.
You and I have been around long enough that everybody walks
in with that one McDonald's answer for everything. I just think
as long as you consider eradication as one of your tools--and
by the way, it works in places. Peru and Bolivia are perfect
examples of how eradication can work when it is tooled together
with several other issues at the same time.
Senator Biden. Thank you, Mr. Chairman. I appreciate your
indulgence.
Senator Kyl. Thank you, Senator Biden.
Mr. McCraw, I wanted time and I will make this the last
question, but I would like to take a little time to the extent
that you might be able to expand on your testimony,
notwithstanding the fact that both of these matters are, I
believe, are still understand investigation, to tell us all
that you can about the arrest of the 16 Afghan and Pakistani
subjects possibly linked to the Al-Qaeda and the Taliban that
you referred to in your testimony, and also the arrest and
prosecution in San Diego of the individuals who were, as I
referred to in my opening statement, caught trading heroin and
hashish for cash and Stinger anti-aircraft missiles.
Mr. McCraw. Yes, sir, and thank you for phrasing it that
way so I can still within the four corners of the indictment.
The major case 190, the Crown Prince investigation, actually
started as a result of criminal violations being worked, and
then it branched out to where we were able to see a number of
different FBI cases converging in New York, and then soon later
DEA cases converging in New York.
They indicted the 16 Afghan and Pakistani subjects in this
particular case. We can make that clear distinction. We know
that the money and the crimes they had been involved had been
funneled back and they were funneling money back through
Pakistan into Afghanistan.
The degree in terms of the links--clearly, there were some
associations, and I am reluctant to go into detail. There were
associations there. Sometimes, when you take investigations
down at certain points, you aren't able to establish, without
question, certain links over the course of the forthcoming
trials we may bring to bear. But clearly there was a concern.
I guess it can be used certainly as a model to illustrate
your concern, Senator, Senator Biden's and the Chairman's
concerns about the problems with drugs and the funding that
they can provide to support and also facilitate drug
trafficking or terrorist activities.
The San Diego case was purely a drug case when it started.
An undercover agent in San Diego working on the drug squad
developed a source who developed a subject and was negotiating
in terms of the purchase of heroin and later hashish.
During the course of this, some links were established that
looked like there was some association. Again, many of these
groups use different criminal organizations. Terrorist groups
share those, so there were some links and it morphed into a
counter-terrorism investigation before it was all over with,
using drug, criminal and counter-terrorism resources.
The most disturbing part of that is when the undercover
agent was overseas in Hong Kong negotiating for these 5 metric
tons of hashish and 600 kilograms of heroin--during the course
of it, unsolicited, they said, hey, you know, we would like to
have--paraphrasing here, we would like to have four Stinger
missiles that we intend to provide to others that we suspect
will be used for shooting down U.S. airplanes. That was in the
indictment.
I really can't go further in terms of discussions, but
certainly if that doesn't send a chill down everybody's back in
this room, I don't know what will. Obviously, we took the case
down. I mean, you could argue that we should have kept it
going, but the fact that they were going to get the four
Stingers from us doesn't mean they weren't looking for four
Stinger missiles. And we couldn't risk that opportunity or that
threat and we did take it down. As you know, it is pending
trial at this point in time and we have been able to work with
the People's Republic of China or Hong Kong to have them
extradited to the U.S.
Senator Kyl. Where will that trial be held?
Mr. McCraw. San Diego, sir.
Senator Kyl. Okay, and the timing on that is?
Mr. McCraw. I couldn't give you an exact time. I can get
back to you, Senator.
Senator Kyl. Okay. Well, this is the kind of thing
obviously we will want to follow, and it causes me to make a
final point. If any of you would like to comment on this, fine.
Otherwise, we can move on to the next panel.
One of the things that we have had a little trouble
grappling with here in the Congress in trying to write laws or
amend laws is an understanding that the kind of people that we
are dealing with now are unlike past organizations or state
sponsors of terror. And the point you just made, Mr. McCraw, I
think, ties into this very well.
You don't have necessarily representatives of other nations
engaged in this activity, though that does happen. You don't
necessarily have members of an explicit terrorist organization,
like a Hizballah, for example, which is relatively close-knit,
although that happens.
Frequently, you have people who are Islamic jihadists,
simply people associated with a cause that don't necessarily
belong to any organization, as we in the West tend to think of
belonging to an organization. They simply belong to a movement
and they may be associated with or have dealings with people
that we call Al-Qaeda. They may themselves be Al-Qaeda at one
time or another, but they may simply be acting out this hatred
toward the United States and not really affiliate with any
particular organization, per se.
They may also be dealing with criminal enterprises, as you
note, to accomplish their goals, trafficking in drugs, money
laundering and the sort, or they may be doing this again as
individuals. So when we write laws that tend to try to
categorize things, we get into trouble, and we need to always
be cognizant in writing these laws to understand the new nature
of the threat which is amorphous, undefinable frequently,
people moving in and out of organizations, in and out of
criminal enterprises, lots of different cut-outs, and therefore
needing a different kind of description frequently in order for
us to be able to satisfy the requirements of the law in many
cases.
That is something we have become aware of and we haven't
really mastered the notion in all of what we are doing. We
recently passed out of the Senate an amendment to the FISA law
that recognizes that fact and attempts to deal with the lone
wolf terrorist or the terrorist that may or may not be
associated with an organization, but at least at the time we
are trying to get the warrant we don't know for sure. So that
was at least one recognition of that problem, but there are
clearly others, too.
Any comments on that particular point before we move on?
Any disagreement with it?
Mr. McCraw. Absolutely not. I fully agree with you,
Senator.
Senator Kyl. Okay, great. Well, we appreciate your comments
here. We are going to leave the record open one week for
members to submit questions to you or for you to provide any
other information to us. But don't stand on that formality. If
there are other things that you think would be beneficial to
the Committee, I would like to ask you to get them to us.
The Subcommittee on Technology and Terrorism, which I
Chair, will be having a couple of hearings soon, one of which
will be on money laundering, and we will try to get your ideas
on those subjects as well.
We thank you very much for being with us this morning. With
that, I will excuse this panel and we will move to the next
panel.
The next panel will consist of Mr. Raphael Perl, specialist
in international affairs at the Congressional Research Service
here at the Library of Congress; Mr. Rensselaer W. Lee,
President of Global Advisory Services, in McLean, Virginia; and
Mr. Larry Johnson, Managing Director of Berg Associates, in
Washington, D.C. We welcome all of you to this hearing, as
well.
I think the order we will do it in is Mr. Perl, then Mr.
Lee, and then Mr. Johnson, if that is all right with the three
of you. So as soon as we get settled down here, I will call
upon you.
We were anticipating the possibility of a vote, but now it
appears that we won't be interrupted. We may need to conclude
by noon, but I think we should be able to do that, especially
if I am not joined by others here at the dais.
Mr. Perl, why don't you begin? Thank you.
STATEMENT OF RAPHAEL PERL, SPECIALIST IN INTERNATIONAL AFFAIRS,
CONGRESSIONAL RESEARCH SERVICE, LIBRARY OF CONGRESS,
WASHINGTON, D.C.
Mr. Perl. Thank you, Mr. Chairman. I would like to ask that
my written remarks be submitted for the record.
Although their objectives differ with drug traffickers
seeking profits and terrorists seeking political aims, both
thrive on instability. Instability provides fertile ground for
their ongoing operations and expansion. The combined threat and
activities of drug-trafficking and terrorist organizations pose
an escalating danger to societies worldwide.
Even in instances where groups do not actively cooperate
together, the synergy of their separate operations and shared
efforts at destabilization pose an increasing threat. Whether
by design or happenstance, each group serves as a force
multiplier for the other, and many experts view as imperative
that these threats be addressed together, not separately.
There are many similarities between drug-trafficking and
terrorist groups. As we have heard today, both operate
transnationally, benefitting from trends associated with
globalization and an open, deregulated environment. Both thrive
in regions and areas without effective government control,
where the line between the criminal world, the drug-trafficking
world and the terrorist world is becoming increasingly
difficult to draw.
Both exploit porous U.S. borders and seek loopholes in
immigration controls. Both rely on the services of the criminal
underworld. Both target civilian populations, one with
indiscriminate killings, the other with drugs. And both target
youth, either for recruitment into drug use or into terrorist
cells. Approximately one-third of the groups on the State
Department's Foreign Terrorist Organization list have reported
drug-trafficking links.
It is also worthy to note that at least four of the seven
nations on the State Department's Sponsors of Terrorism list
have some history of condoning or supporting drug trafficking--
Syria, Iran, Cuba and North Korea. However, as overt State
support of terrorism has decreased, it seems that,
increasingly, terrorist organizations must fend for themselves.
The drug trade provides an attractive source of income.
The involvement of terrorist groups in the drug trade, and
vice versa, presents both challenges and opportunities for
policymakers. One challenge is the tradeoff where counter-
terrorism priorities overshadow counter-drug agendas. Could
situations arise where giving priority to anti-terrorism goals
detracts from the effectiveness of anti-drug efforts deemed
important to the national interest?
A second challenge relates to the fact that not all drugs
produced or trafficked by terrorist groups are destined for the
United States. If our drug enforcement community increasingly
focuses on interdicting drugs not designed for the United
States, does this reduce the resources available to keep
foreign drugs off the streets of our cities?
A third challenge is how the priorities of counter-drugs
and counter-terrorism can be reconciled, as is the case in
Afghanistan today. And many observers also cite a fourth
challenge, a need to reverse a longstanding erosion of
America's ability to conduct diplomacy abroad largely as a
result of budgetary limitations. Arguably, investing in
diplomacy may help to deal with these problems and may prove
far less expensive in the long run.
The challenges posed to the United States and the world by
the combined threat of drug traffickers and terrorist groups
are formidable. But with challenges come opportunities. When
terrorists engage in the drug trade, they become increasingly
vulnerable to law enforcement activity. Drug-trafficking
organizations and terrorist organizations share many
characteristics and many of the same criminal structures for
support. If we effectively combat one, it helps battle the
other.
To conclude, Mr. Chairman, an effective campaign against
these combined threats may indeed make the world safer and more
secure. By according recognition and policy focus to the
combined threat of drug trafficking and terrorist, we may be
better able to devise cohesive strategies to deal with these
threats in an effective and holistic manner.
Mr. Chairman, this concludes my formal remarks. I welcome
your questions and comments, and there are also a number of
concerns that I would be happy to share with you during the
question and answer period.
[The prepared statement of Mr. Perl appears as a submission
for the record.]
Senator Kyl. Thank you very much. I just mentioned to
Senator Biden that you raise a very interesting perspective on
this. The more we are able to separate the terrorists from
states, from nations, the more difficult it is for them to
finance their operations. They then have to turn to things like
drug trafficking, at which point we now have two different ways
of going after them from a law enforcement perspective. They
become more vulnerable to our enforcement, which I think is an
excellent point. I hadn't quite thought about it that way in
the past.
Dr. Lee.
STATEMENT OF RENSSELAER W. LEE, PRESIDENT, GLOBAL ADVISORY
SERVICES, MCLEAN, VIRGINIA
Mr. Lee. Thank you, Senator Kyl, Senator Biden.
In recent years, we have seen a recognizable convergence
between the lawless swamps of drug trafficking and
international terrorism. These areas of overlap or intersection
between these worlds are summed up in the concept of narco-
terrorism.
This concept has the positive policy connotation that
fighting drugs will significantly cut into the revenues of
terrorist groups, cripple their operations, and help stabilize
conflict-torn states and regions. Yet, we must also recognize
the limitations of counter-narcotics as a tool for combatting
terrorism.
Experience and logic suggests that drug-dealing and
terrorism are really different phenomena requiring different
solutions. I have made a number of points to this effect in my
prepared testimony which I would like to have submitted for the
record and I will try to summarize these points here.
Motives, for example, are a distinguishing characteristic.
Professional drug criminals are typically concerned with
amassing vast wealth, concealing the fruits of their crimes,
and avoiding prosecution. Terrorists' aims are preeminently
non-financial, gaining political influence or legitimacy,
overthrowing a government, or fulfilling a radical religious
vision.
Sometimes, the interests of terrorists and criminals
coincide, but sometimes they are very much at odds. On
occasion, governments have sought, wisely or unwisely, to
leverage these points of conflict to advance the fight against
domestic or international terrorist threats. We have seen some
overtones of this, unfortunately, in Colombia and Afghanistan.
Drugs figure more prominently--this is the second point--
drugs figure more prominently in the fundraising strategies of
some terrorist groups than others. I think if we could
construct a typology of such groups, we might see that certain
actors, like the Revolutionary Armed Forces of Colombia, the
FARC, and Peru's resurgent Shining Path guerrillas, earn fairly
significant revenues from taxing or selling illicit drugs.
But the dangerous Middle Eastern terrorists like Al-Qaeda,
Hizballah and Hamas traditionally have relied largely on
donations from wealthy Arab contributors, sometimes funneled
through Islamic charities, and in the case of Hamas and
Hizballah on infusions of money and weapons from sympathetic
states. And this means that whatever we can accomplish on the
international drug front, however valuable, may not do much to
constrain the activities of certain lethal terrorist entities.
Even if we could cut substantially the narcotics revenues
of a group such as the FARC, its response might be simply to
expand into new criminal lines or to extract more revenues from
tried-and-true ones such as extortion, kidnapping and
hijacking, inflicting even more terrorism and misery on the
Colombian population.
A broader lesson here, I think, is that efforts to disrupt
terror financing, while useful, are not an adequate substitute
for targeting the terrorist organizations, per se, their core
leadership, their ideology, their recruitment stratagems.
The imperatives of fighting drugs are not the same as the
imperatives of fighting terror--and this is my last major
point--and might even conflict with them at some points. For
example, in Afghanistan, the world's largest opium-producing
nation, drug control has tended to take a back seat to the
counter-agenda, which has included overthrowing the Taliban,
rooting out pockets of Al-Qaeda and Taliban resistance, and
creating, or you might say cobbling together some kind of a
viable anti-Taliban governing coalition.
Emphasis has been on consensus-building, and alliances have
been struck and compromises formed with some possibly unsavory
political forces that have a reputed history of involvement
with the drug trade. And certainly the U.S. military--at least
this is my impression--has not seen as its principal mission
destroying drug crops, opium storehouses, or heroin labs, or
going after heroin kingpins and their political sponsors.
In Colombia, where counter-narcotics ranks as a higher
priority, some of the drug control measures that we are funding
such as the aerial spraying of illicit crops are controversial.
Some people believe that they are intrinsically anti-popular
and that these measures complicate, in fact, the task of
winning rural adherence in the struggle against insurgency.
Possibly, our drug control strategies could be fine-tuned to be
a little bit more people-friendly, to focus more on hearts and
minds approaches toward inhabitants of contested rural areas in
Colombia.
A final point. It is frequently argued, and I think I heard
it argued today, that narcotics trafficking itself is a form of
terrorism directly against the United States of America.
Indeed, drugs impose a huge cost upon our society. I think the
figure used by the drug czar is something upwards of $160
billion a year.
But let's not forget that the intent of the perpetrators is
usually to make a profit and not to inflict necessarily harm on
U.S. nationals or institutions. Also, unlike the victims of the
9/11 attacks and other terror atrocities around the world, the
victimized drug consumers have a choice, which is not to buy
and use illicit substances.
Thank you very much.
[The prepared statement of Mr. Lee appears as a submission
for the record.]
Senator Kyl. Thank you, Dr. Lee.
Now, Larry C. Johnson.
STATEMENT OF LARRY C. JOHNSON, MANAGING DIRECTOR, BERG
ASSOCIATES, WASHINGTON, D.C.
Mr. Johnson. I appreciate the chance to appear before this
Committee, and ask that my written statement be included in the
record.
By way of background, I come at this really from three
different angles. I started off in the Central Intelligence
Agency. In part, I guess you can blame Senator Hatch for that;
he wrote one of the letters of recommendation. I then moved to
the State Department and worked in the Office of Counter-
Terrorism, and then since leaving that office I have been
involved with scripting exercises for the special operations
community in the field of counter-terrorism. At my current
company, though, we are involved with money laundering
investigations and do work for several Department of Justice
entities. We handle a lot of the financial analysis.
The bottom line with the link between terrorism and
narcotics is it is all about the money and there is no other
aspect to it. It is about the money. And as in terrorism, I
believe if you follow the money you can break its back. I want
to show you a couple of charts and graphs to illustrate this.
Prior to 1991, we did not see significant amounts of
terrorist funding coming from narcotics activity. It was the
conventional State sponsorship. But if you look at 1991, and
particularly the red, that shows Marxist-Leninist groups.
When the Soviet Union collapsed--and I am not one that
subscribes to the fact that the Soviets funded all terrorism,
but the Soviets were a significant source of funding for other
regimes that were sponsors, particularly Libya, Iraq and Cuba,
in particular.
When the Soviet Union collapsed, look at what happens to
the Marxist-Leninist groups; within 3 to 4 years, it is in
half. That speaks to the point that, without money, these
terrorist groups cannot operate and they are confronted with a
choice of either coming up with an alternative source or going
out of business.
What happened in the case of particularly the FARC and the
ELN and the Kurdish Workers Party in Turkey--the PKK in the
early 1990's was the most active terrorist group in the world,
more active actually than the FARC and the ELN. What happened
is those three groups then moved into narcotics trafficking.
Now, one of the points that Senator Biden made earlier--and
I have a personal anecdote to illustrate it. I sat in on a
meeting out at the counter-narcotics center after Ambassador
Busby had left Colombia. I had worked for him when he was the
coordinator for counter-terrorism. We met with one of the
senior analysts who had actually been a former branch-mate of
mine when I was at the CIA, and there was a heated debate over
were the FARC and the ELN involved with narcotics trafficking.
The intelligence community's position was it was not
occurring, it was nonsense. Ambassador Busby was about ready to
pull out his hair, saying what are you talking about; of
course, it is true. At that time, I didn't understand the
disconnect. It was only when my two partners--one was the
former chief of the International Office for DEA, Bobby Nievas,
and John Moynihan--that we joined up that I came to understand
what had happened.
The DEA-6s, those law enforcement intelligence reports that
are used internally for DEA and are never generated as
intelligence reports, detailed names, events, dates, places,
and it was clear the connection. The problem was the
intelligence community wasn't seeing it then and still isn't
seeing it today, so they live in the dark. Unfortunately, the
rule in the intelligence community is if it is not in black and
white and on paper, it doesn't exist.
Let me take you, then, to--
Senator Biden. Mr. Johnson, let me ask a question.
Mr. Johnson. Yes, sir.
Senator Biden. You are saying today, if, in fact, the DEA
in Afghanistan had clear, direct evidence of a connection
between the poppy being grown in the Pashtun area, the profits
going directly to Al-Qaeda, that would not be on the CIA's
radar screen, other than if they got it themselves?
Mr. Johnson. Yes, sir, that is correct. That is my
understanding. I have learned this: DEA is our best
intelligence organization in the U.S. Government because they
have better human sources. The problem is they are their own
worst enemy; they don't realize what they have. I think the
Committee may be aware of some other technical things that were
developed at DEA--it took the FBI 4 years to come around to use
them--that have been integral in the battle against terrorism.
The next chart illustrates the activities of international
terrorism, and I think it is important that we put the facts on
the table of what is going on. Last year, in 2002, India and
Colombia accounted for over 60 percent of the international
terrorist attacks. In fact, India alone accounted for one out
of every three international terrorist attacks. Yet, when we
talk about terrorism, India doesn't even appear; we ignore it.
Senator Biden. When you say attacks, you mean they were
attacked?
Mr. Johnson. Yes, they were attacked.
Senator Biden. In their country?
Mr. Johnson. Yes, attacks that took place in their country,
in the Kashmir region, and the groups carrying out these
attacks were training in Afghanistan in the Al-Qaeda camps.
These groups have received direct funding and support from
renegade elements of the Pakistani ISI, the intelligence
service. And at least some elements in Pakistan have allowed
those groups to continue, pass through Pakistan and operate in
the Kashmir region.
And not only the attacks, but if you look at the deaths
last year and if you ask the average American where did most of
the casualties occur in terrorism, they would say, well, it was
Israel. Wrong. More people died from terrorist attacks in India
than in Israel, and almost as many were wounded in India and in
Israel.
Now, you say, well, what is the relevance of this? The
relevance of this is highlighted and you see the two reds,
India and Pakistan. Now, let's look at the INCSR. Where are the
areas of greatest either heroin production or opium production
or cocaine production?
India doesn't appear, but bordering it on either side we
see Burma and Afghanistan, and then Colombia shows up as the
primary producer of cocaine. This is not coincidence. The fact
that you have the drug trafficking activities both from
production and distribution in the same areas of the world
where these groups that either Marxist-Leninist or Islamic is
no coincidence. And that goes to the heart of your point that
we need to get after this.
Let me wrap up with just one thing on the money laundering
front and bring it down in terms of a case that we are working
on in support of the Department of Justice. There is a movement
of money, checks written on U.S. banks that are coming out of
the United States, and this goes directly to a group that has
links to Al-Qaeda and it is an active case right now.
Those checks come out of the United States, they go into a
country over in the Middle East area, to leave it vague enough
for now. Those checks are then deposited in a foreign bank.
Those checks then--
Senator Biden. Start again, please.
Mr. Johnson. Okay. Checks in the United States written on a
U.S. bank, individual checks, and the way we came across this
is we found a bulk transaction of $18,000, roughly, and when we
broke it out, the average check amount was something like $21.
And you are thinking who is writing a $21 check and sending it
over to the Middle East and Europe?
What was happening was they write the checks here. Those
checks would be taken overseas and they would be deposited in a
foreign bank. The foreign bank then would credit an account,
but would literally bundle the checks together and send them
back, what is called a cash letter agreement.
When those checks arrive in the United States at the
correspondent bank, the bank takes them, stamps them, gets them
deposited, and it is back in the system. They avoid the
reporting requirements that you would normally see with wire
transfers.
Senator Biden. Because they are coming back?
Mr. Johnson. Yes, yes. You know, these folks are very
creative and entrepreneurial. I will just close with that and
then we will entertain any questions.
[The prepared statement of Mr. Johnson appears as a
submission for the record.]
Senator Kyl. Thank you very much.
We have been joined by Senator Feinstein. Senator Biden,
would it be all right if I turned to Senator Feinstein first?
Senator Biden. Yes.
Senator Kyl. Let me just say that in about two minutes I am
going to have to leave, but I am happy to turn the gavel over
to Senator Biden and for he and Senator Feinstein to close the
hearing. I am sorry that I will have to leave at that time.
Senator Feinstein.
Senator Feinstein. Thanks very much, Senator Kyl.
If I understand this correctly--and I am sorry I missed the
first panel--59 percent of the world's heroin is produced in
Afghanistan. None up to this point has been eradicated, and I
guess what I want my colleagues to know is, in briefings, we
have been shown actual places where this poppy has been
stockpiled. And I have asked questions and I have been assured
that the military was going to destroy those stockpiles.
Now, if what has been heard today is correct, it indicates
that I wasn't told the truth and I am very concerned about
that. It seems to me if we can't destroy stockpiles and fields
in countries we occupy, how is there ever a chance to approach
this problem on the supply side at all?
I would be curious if any of the panelists have any
comments on this because I find it beyond surprising, really
shocking. So much has been made by Government spots on how
narcotics is connected to terrorism. We are in a global war on
terror. We occupy a country which is a principal producer of
hard narcotics and yet we have done nothing to stop that
production.
Mr. Perl. Senator, I would defer to Dr. Lee on that. He has
written what I would consider to be the authoritative study on
the drug trade in Afghanistan.
Mr. Lee. Thank you very much. That is very kind of you,
Raphael.
I think that there has been a tendency on the part of our
Government and the administration to try to distinguish short-
term and long-term objectives. Today, Afghanistan is
demonstrably the world's largest opium producer, producing last
year--about 75 percent of the world supply of opium comes from
Afghanistan. I think there is going to be another record
harvest this year.
The problem is that we are still fighting a war against
terrorism in Afghanistan, and in order to fight this war
against terrorism--and I think the thinking goes both to some
extent in Washington and in Kabul--we have to build alliances.
To build these alliances, unfortunately we have had to make
some arrangements and compromises with people that frankly may
have some history of involvement with the drug trade and may be
even possibly currently protecting the drug trade.
This is a tragic situation, and it is a tragic situation
because even given these consensus-building imperatives in the
fight against terrorism, it is inconceivable that Afghanistan
can ever develop as a nation state without getting a handle on
this opium problem.
On the other hand, you can see that you are talking about
75 percent of the world's opium, you know, and much of the
rural population and much of the Afghan economy tied up in this
business. This has to be done in a very careful manner.
Senator Feinstein. Well, if I might just have a little bit
of a discourse with you on this, if we don't do it now, it is
never going to be done. We know the Taliban are going to try to
come back. We know that this is a prime source of funding for
them. If we don't make some other arrangements with these
warlords, even if it is to pay them a stipend not to produce
while you cement a more permanent form of government and
security system, I think it is all lost.
You know, I think it is real hypocrisy. I don't know how we
can go in there and talk about quelling the supply and be in
control and do nothing to deter what you said this year will be
a bumper crop. I think it is shameful.
Mr. Lee. Well, I think it is shameful, but I think that it
is an extremely difficult situation. We need, for example, to
find ways of supporting these farmers whose opium we must
necessarily eradicate. We don't have really much of any kind of
a program in Afghanistan; small programs, yes, but it is going
to have to be a very large-scale, very expensive effort. And
above all, we have to make a commitment to that country; we
have to make a commitment to the political and economic
reconstruction. Our attention has been diverted elsewhere, in
Iraq and other places.
Senator Feinstein. There are tens of millions of dollars
being spent in Afghanistan in all kinds of different ways. It
seems to me that if you have to give somebody, if you will
pardon the expression, a stipend not to produce to be able to
support their families for a given period of time and have that
arrangement, that is money well spent, as opposed to allowing
them to produce it so that you have a kilo, which is $300,
which becomes $100,000 by the time it comes on the market. This
money goes back to fund others in the community that would do
us harm.
So I am happy to have heard this because I am going to do
something about it in the Intelligence Committee, because we
have been given, I think, information that is contrary to what
I have heard here this morning.
Thanks, Senator Biden.
Mr. Perl. Senator, you raise a very interesting point and
it relates to the whole issue of when you have a merger between
drug-trafficking groups and terrorist groups where one has
political ideology and one has financial profit as the
motivation--when you have the overlap, it becomes increasingly
difficult to find political solutions as the two groups merge
because the drug trade becomes more and more entrenched.
So with many groups, even if we could come to a political
solution with many groups that are today terrorist groups,
because of their involvement in the drug trade and because
there is very little incentive for them to end their terrorist
activities because it facilitates the drug trade to which they
become addicted to, it no longer becomes a political issue.
Mr. Lee. Senator, just one more point. We have to remember
also that the Taliban in its last years eradicated opium, and
in so doing it created many enemies within Afghanistan among
people who were very much involved in opium and heroin
trafficking.
So we had to make an initial choice. Getting rid of the
Taliban was the major objective and to the extent that that in
a way is still going on, we find ourselves saddled,
unfortunately, with--
Senator Feinstein. You are saying we chose drugs.
Mr. Lee. Well, I didn't choose drugs.
Senator Feinstein. No, you didn't say that, but that is
clearly the implication.
Mr. Lee. Yes. Well, I think that not enough has been done
on the drug front and I think not enough attention has been
devoted to the entire Afghanistan political and economic
reconstruction issue.
Senator Feinstein. Thank you.
Senator Biden [presiding]. Thank you, Senator. I share your
frustration. You fortunately didn't have to hear what I had to
say about this earlier. I want to reiterate two points.
One is all that is happening in Afghanistan is operating
under the umbrella of an absolute failed policy politically,
economically, strategically, in every way. We are about to
fundamentally lose Afghanistan in a way that will not be able
to be retrieved because as my visits there have indicated, next
time when the swamp fills up in 2, 3, 4, 5 years, we will not
have the Northern Alliance to march with us next time. We will
not have the Alliance that did most of the fighting next time.
Let's get something straight here, because I agree with Mr.
Perl's comments. Dr. Lee, you have done the definitive work
here. We made a judgment. The President announced in a detail a
policy toward Afghanistan within 3 months after, quote, ``our
victory.'' He called for a Marshall Plan. We had a group of
donor nations. No Senator or Congressman used that term. The
President of the United States of America said he was
initiating a Marshall Plan.
He sent his Secretary of State to Tokyo to meet with the
donor nations. There were pledges made far less than we
anticipated, but the cost in a report that I wrote then was a
minimum of $19 billion was going to be the cost, a minimum
number. Everybody signed on to that number as a minimum cost
for political, economic and other reconstruction to take place
in that country.
There was a great debate that took place between Cheney and
Rumsfeld on one side and the Secretary of State on the other,
and the issue was again a report we wrote in the Foreign
Relations Committee calling for the expansion of ISAF. Messrs.
Rumsfeld and Cheney won that fight. The State Department
vehemently opposed the position taken by the Defense Department
that we should not expand ISAF. I personally met with the
British one-star running the operation for ISAF. In fact,
everyone told us that if we did not expand, Europe was not
going to do that; it would not be involved, they could not.
There was a fundamental shift in policy that took place
about 2 months later, when it was clear that we decided that
stability would be gained through the warlords. That is how it
would occur. There would no expansion of ISAF. And guess what?
With that, you had the donor nations drop off, including us, in
terms of the funding. There is no Marshall Plan. There is not
even a mini-plan going on in Afghanistan right now.
And now we are given this bizarre reasoning coming from the
President that the reason why we can't spend money more rapidly
is we can't get out in the field because there is no security.
That is the rationale now; there is no security. so we come up
with this stupid acronym, whatever the heck it is called, these
forces that are going to go out, provincial reconstruction
terms. Mr. Karzai was chastened before our Committee by the
administration to say that is all he needed, when he know he
needed a lot more.
So the bottom line is why is anybody surprised? There is no
significant money internationally for reconstruction. There is
no security beyond Kabul. We now have American forces guarding
Mr. Karzai. We are his bodyguards now. We can't even put
together and train for them, which was the plan of this Afghan
army of 70,000, his own bodyguards. This is a disaster.
Anyone who thinks that one of the logical outcomes of this
is not going to be a significant increase in drug production,
why wouldn't there be? Why would there not be? In fairness, I
think, Dr. Lee, you are correct. Once you decide you are not
going to expand through NATO and the United States another
100,000 forces or 50,000 forces, taking care to secure the rest
of the country, then you have to make a judgment.
You make a trade, and the trade is trade in drugs. We want
to focus on Al-Qaeda and it may not be as bad a deal as it
appears if one question were able to be answered, and this is
my question, and that is if there is no real nexus between the
profits from the drug trade and the financing of Al-Qaeda and
their operations worldwide, then, okay, not as big a downside
as it could be.
But if there is that nexus that it is an alternative
funding source of consequence for Al-Qaeda, then the Faustian
bargain we made with the warlords has produced the exact
opposite of what we intended. What was the deal? What did the
administration say? Why did they make the bargain with the
warlords? To secure the region, because guess what? I keep
picking Ismael Kahn, but he is one of the most powerful.
Ismael Kahn doesn't like Al-Qaeda. Therefore, that is okay.
If he doesn't like Al-Qaeda, we don't care about western
Afghanistan. That is the truth; the administration doesn't give
a damn about it. We don't care about it. So as long as Al-Qaeda
is not able to play in that part of Afghanistan, what
difference does it make?
But the irony will be if the drug flows which come out of
western Afghanistan and southern Afghanistan with the Pashtun
are ending up in the pockets of Al-Qaeda, funding their ability
to purchase a little ball of enriched plutonium from Korea as
they begin their plutonium factory, then that Faustian bargain
is going to take us all to hell.
I think it is a travesty, an absolute travesty, and to fly-
speck it as to whether or not we can now provide incentives or
not provide incentives and, with all due respect, even take out
the warehouses--I sat there in Afghanistan and there was talk
about the plan that we were going to provide alternatives for
these farmers and there was an urgency. Everybody knew if we
did not get them money right away so they could eat and live,
they would be growing that pretty little poppy. There is no
other choice; there is nothing else.
So I apologize for my frustration, but, Doctor, your
reports are important. The one thing I have got to know for me
personally, and you may be able to answer it, is how direct is
the nexus. Where is the poppy being grown, the bulk of it? My
understanding is it is nationwide, but the bulk of it is in the
control of the Pashtun. I may be wrong. I don't know.
Who controls most of it--that is my first question--the
actual growing of the poppy, what parts of the country, and on
whose watch is it happening?
Mr. Lee. Well, let me try to answer that question and it is
very difficult because I never got a sense of who actually was
in control in what areas. But my sense is that most of the
poppy production in Afghanistan is grown in areas under the
control of political groups and forces, warlords who are more
or less affiliated with what passes for a central government in
Kabul.
There is not a situation that I could see that you describe
in which the remnants of Al-Qaeda are systematically extracting
revenues from parts of the opium trade somewhere in the
country. In fact, my impression has always been that even under
the Taliban, the Taliban was successful in taxing the opium
crop, but they were far less successful in actually being able
to extract money from these clannish tribal trafficking groups
that have quite a lot of power and weapons to back up this
power.
Senator Biden. I agree that is factually correct. The
question is has that changed now, because that was not narco-
terror trafficking then. Because it was not the case, you had a
lot of money coming out of Saudi Arabia and other places
funding the camps, funding the rest of it, and there was a
counterintuitive instinct.
Mr. Lee. That is absolutely correct that traditionally Al-
Qaeda has gotten its money from donations, primarily. Has it
changed? Maybe, because some of our efforts to cut the flow of
terrorist financing, centralized financing arrangements of Al-
Qaeda, might have pushed the organization more into a state of
dependence on the drug trade. But I can't tell you for sure
whether that is true or not.
Senator Biden. Neither can I.
I will yield to you, Mr. Johnson, in just a second.
The whole purpose of this hearing, as I understood it, is
not merely to delineate what we know in the International Drug
Caucus and in the Crime Subcommittee of the Judiciary
Committee, where we spend all our time talking about the drug
problem.
This was about drug-trafficking organizations which, as one
of you said, are all about finances, money, big houses, fast
boats, and lifestyles, merging with ideological organizations
that use terror as the method to impose their ideology. That is
the $64 question here. Ironically, we haven't gotten anything
that has spoken to that specifically yet.
We know it is occurring with the FARC, we know it is
occurring with the AUC, the paramilitaries. We know it is
occurring with the ELN. They have become self-financing
mechanisms. None of those three organizations have chosen
Americans, other than through kidnapping, as targets. Their
ideology does not call for the destruction of the Western
Culture and/or the United States of America.
So our focus is supposed to be, I hope, on that one
organization and its ancillary organizations that have as their
objective killing Americans wherever they find them, with as
big a payoff as they can get. And the question is are those
organizations now finding their revenue stream in having
partnered with, or to use the phrase you used, Mr. Perl, merged
with traditional drug-trafficking organizations, whether they
be tribal in nature or ideological in nature.
I have not seen a shred of evidence yet, although I don't
doubt it--I mean, intuitively it would seem that it is
happening--whether or not the funding, these billions of
dollars that are made, or the hundreds of millions that are
made, is going into the pockets of terrorist organizations now
who have as their number one enemy the United States of
America. That is the question I am looking for an answer to.
That is the question I think has to be answered because it
radically changes the degree to which I focus my attention on
the issue.
Does anybody want to comment on that?
Mr. Johnson. Well, I would encourage you not to divert your
attention because I think we were sitting in the second row as
sort of the ``amen'' corner when you were speaking earlier.
There are elements in which money that will originate out
of drug trafficking, not necessarily drug production but drug
sales, is working its way back through the system. In terms of
Al-Qaeda's overall reliance on the financing, I think you make
the correct distinction that unlike the Marxist groups in
Colombia where they don't have an institutional sakat, an
institutional charitable giving system that backs them up, they
also have not gotten into the same kinds of front businesses.
We have seen with Al-Qaeda that they will send operatives
into areas and actually set them up in furniture manufacturing
and fishing. We have also seen the Al-Qaeda organization move
into areas such as commodities. They deal with contraband and
counterfeit merchandise that passes through Dubai and then on
up into areas of Iraq and Iran and Afghanistan.
So they are not relying on one source, but I think you put
your finger on it that by recreating the infrastructure in
Afghanistan where opium production can proceed almost
unchecked, where the links still exist between those opium-
producing organizations and Russian organized crime, which is
another vehicle for moving it, it creates the potential that if
we have continued success in shutting down these other avenues,
then they have something to turn to that can create significant
problems.
That is why the one message I have that I heard last week
in Kansas City--I was an organized crime drug enforcement task
force and an FBI guy came up to me and he said this insane
focus on terrorism is ridiculous, he said, because we are
getting people telling us that, oh, you know, drugs is old news
and terrorism is the hot item.
But when you sit down and look at the actual loss of life
in the United States, we lose far more people to drug use than
we do to terrorism. So we shouldn't make it an either/or
because the tools to combat one are as effective in combatting
the other and it is not that you have to do necessarily
anything different.
Senator Biden. Yes, Mr. Perl.
Mr. Perl. My analysis reveals that I do not see a trend of
the organizations merging. I see a trend of the activities
merging and this concerns me because I know of terrorist
organizations--
Senator Biden. Tell us what you mean by the activities
merging.
Mr. Perl. Terrorist groups engage in drug-trafficking
activity, and the concern here is that I do know of terrorist
groups that have negotiated and decided that they will cease to
commit terrorist acts and be involved in terrorism. But I know
of no narcotics organization that has agreed to stop
trafficking in drugs voluntarily.
This raises the possibility that we see a phenomenon here
where terrorism will continue to perpetuate itself at a greater
rate in the future than in the past because of the involvement
of terrorist organizations in drug-trafficking activity.
Senator Biden. I couldn't agree with you more, and I hope
several of you know me well enough or at least know my
predisposition about this drug issue that I don't have to spend
a lot of time prefacing my remarks here and explaining the
context.
There is no doubt in my mind--and I will not keep you
beyond this--that you are, as a matter of principle, correct
that there are some terrorist organizations or ideologically
constructed organizations who have used terror as an instrument
for their political ends that have, in fact, gone out of
business. They have been politically negotiated out of
business. I know of no drug organization that has gone out of
business other than being crushed.
Your generic point that the merger of the two--even once
they abandon their ideological objective, they are still in the
business of liking the fast boats and the big cars. They are
not going to go out business. I understand that.
I have a myopic focus at the moment on Al-Qaeda, not at the
expense, Larry, of focusing on domestic--I am the guy calling
for significantly more domestic investment on traditional law
enforcement efforts relating to drugs, organized crime and the
like.
By the way, the guy who is going to run up against the
terrorist on the streets of Washington, D.C., is going to be a
D.C. cop. It is not going to be a special forces guy with night
vision goggles on.
Mr. Johnson. Right.
Senator Biden. And so I have no illusions about it and so I
want to make it clear that I think we have misallocated the
money we are spending, but I also think we have failed to
prioritize.
You said something, Dr. Lee, and you have been fastidious,
and I respect it, in not getting into the politics of any of
this. But you said something, and I don't know whether it
slipped or it was intended, that our attention has been
diverted to Iraq. Our attention has also been diverted, in
part, away from Al-Qaeda. No one has forgotten it; it has not
exclusively moved.
But the point is the idea of the terrorist groups that are
likely to cause the most economic as well as physical damage to
the United States of America and its citizens do not have any
possibility, in my view, any more than a drug-trafficking
organization, to negotiate themselves out of existence. The
political end of Al-Qaeda is totally incompatible with our
ability to continue as the nation state we are with our Western
democracy. So my concern here is if that marriage took place,
that merger were to take place--and I don't know that it has--
then it seems to me that our focus on the drug effort should
prioritize that aspect of the drug trade.
When I wrote the drug czar law, the purpose was do we focus
on methamphetamine this year more than we focus on cocaine, do
we focus more on cocaine than we do on heroin. We can't do it
all at once. We can't spend equal amounts of resources on it
all, and it varies. These are entrepreneurial folks; they
decide.
When I wrote a report 5 years ago saying the biggest
producer of heroin was soon going to be Colombia, everybody
said what are you talking about? All you have got to do is
think. They are looking for product, product. It is no
different than selling soap. They are looking for product. And
what is the product they diversified to? Heroin. There was no
heroin, Larry, coming out of the Andean region.
I think we need some harder data in order to make priority
judgments about the extent to which there is a fundamentalist
Islamic/terrorist nexus with drug trafficking. That is the key
because if that is to be established and if we are unwilling in
this or future administrations to spend the resources necessary
to cover all the bases, then guys like me are left in a
position of deciding how to best spend the limited resources. I
know you understand it.
You know, I used to have a friend named Bob Gold. God love
him, he passed away. Bob was a street-smart guy. Sometimes,
though, because he didn't know a specific thing, I would say,
Bob, do you understand? And he would look at me and he would
say, Joe, I not only understand, I overstand. I am sure you
overstand the point I am making here. I hope you think, whether
I am right or wrong, it is a legitimate point that we able to
prioritize our funding.
I will conclude, and I will give each of you an opportunity
to make a closing statement, by saying this. I really think,
Larry, we are making a serious mistake to think that we can
take 567 FBI agents in violent crime task forces, FBI agents
who work coordinated with DEA, move them out of that business
as if it separable into counter-terrorism, not increase their
total numbers at the FBI, have a 1-percent increase in DEA's
budget, reduce local law enforcement total Federal funding by
over 40 percent, and say that because we are going to spend $43
billion on homeland defense we are actually increasing our
security. I don't get that, I do not get that.
Is that to say the $43 billion is not being wisely spent?
No. It is to say that spending that $43 billion, if we ever get
that far over this period of time, and eliminating or shifting
these other priorities is counterproductive.
I think there is much too narrow a definition of national
security being engaged in here, and I think we are leaving a
lot of our friends, the guys you have worked with before,
whether it is at the CIA, whether it is at the DEA, whether it
is at the FBI, in a very tenuous position.
And I want to tell you you are the only one who said it,
and you are a former CIA guy and you know my record with the
CIA.
Mr. Johnson. Sure.
Senator Biden. The DEA on this issue is by far and away the
best resource asset we have.
Mr. Johnson. Right.
Senator Biden. It is almost like we are compartmentalizing
this again.
Mr. Johnson. And we still don't use it.
Senator Biden. And we still don't use it.
I would invite each of you--you have been so kind to spend
this long--to make any comment you would make, if you have any,
on any aspect of what you have testified to or what I have said
or anyone else has said because your insights at this point are
needed.
Mr. Perl, do you have anything you would like to say?
Mr. Perl. I have two thoughts. One thought relates to the
issue of prioritization that you have talked about here in the
hearing today and emphasized. One thing that struck me sitting
in the audience when I looked at the first panel was that we
had four people from four different organizations talking about
the same issue, but they had different priorities.
That, in my mind, raises the issue that we do have a
national strategy for combatting terrorism that came out in
February of this year and we have a national drug control
strategy. But if indeed these two problems are becoming
increasingly intertwined, perhaps we need an integrated
strategy or sub-strategy as to how to approach them more
effectively, to get all these different organizations better
reading from the same sheet of music.
Very frequently when strategies are devised, they are
devised by people within the administration, but from different
agencies, with different interests and institutional goals to
pursue. So I would offer as a suggestion to consider the option
of having an independent organization, something like the
National Research Council, look at how to deal with this issue
in an effective manner, how to prioritize the resources, and
what a strategy might look at. That is one issue.
Senator Biden. Good suggestion. Thank you.
Dr. Lee.
Mr. Lee. Well, I certainly share your concern about the
lack of adequate information on the connections between Islamic
terrorism and drug-dealing. I think there should be an
intelligence priority. I think that we need to have more
intelligence operatives, DEA people out in the field collecting
this information. We need to have more information-sharing
between DEA and the CIA to build this picture and I hope that
this will be done.
Senator Biden. Thank you.
Mr. Johnson. I am in violent agreement with you and I will
just leave it at that.
Senator Biden. Well, one of the things that is coming out
of this for me--and because we didn't have the answer to the
question of the nexus, please do not think that I don't
understand the value of the testimony across the board we have
gotten today. It has been very valuable.
What it has focused for me, though, is, more than I had
focused on it before coming into this hearing is I am going to
ask my staff, and hopefully with the concurrence of the
Chairman--maybe he will join me or I will join him--for us to
be able to draft very concise, precise questions about the
status of the analysis within the administration, wherever it
may lay, as to this nexus between fundamental Islam and narco-
trafficking, because that is the question we have to get
answered first before we can make any judgments, at least in my
view, before we can adequately prioritize.
A woman who has been deeply involved in this has been
Senator Feinstein. She rightly points out that she is dismayed
by the failure of the military to destroy stockpiled opium
where they know it exists. That in and of itself is worthwhile
because that opium goes out to the world and pollutes the world
and kills, as you said, Larry, more people than an airplane
crashing into the Trade Towers, which was horrible. But that
does not answer the question. That all by itself is a
worthwhile thing to do.
My criticism of Afghanistan and our policy has been
consistent, and maybe I have been consistently wrong, but I
don't think so because I have been trying to work inside the
administration and do it quietly. Now, I am trying to scream
and make a mess of it so hopefully something happens.
But the truth of the matter is none of that will give me
the answer, were I making those decisions, on how to prioritize
my assets to deal with what is the number one, overriding,
overarching short-term concern for the American people, and
that is fundamental Islamic organizations who have us as a
target.
As bad as the FARC is, as bad as even Hamas is, by the way,
and Hizballah--they are the first team--so far they have not
been taking flight lessons to figure out how to get to the
Sears building. I have no illusions about how, quote, ``evil''
their intent is, but I want to concentrate on the guy coming at
me now. I want to concentrate on the guy that has me in his
cross-hairs now. We know of at least one outfit that has us in
its cross-hairs.
So I hope our staffs can work together. It is presumptuous
of me to do this. I am getting back into a bad habit of acting
like I am the Chairman or Ranking Member, but thank God I am
not. But maybe we can work together to come up with that.
I have a couple of questions--I will not trespass any more
on your time right now, but a couple of questions in writing,
and you can take your time. I mean, there is no urgency. In a
week or ten days, get it back to us, but I would like to have
it for the record on things we have not gone into.
I can't tell you how much I appreciate your work here and
your willingness to take the time, and as corny as it sounds,
your patriotism in feeling obliged as a responsibility to be
engaged in this effort. I thank you all. I look forward to
talking to you some more, Larry, about some of this domestic
allocation.
Thank you all very much. We are adjourned.
[Whereupon, at 12:35 p.m., the Committee was adjourned.]
[Question and answer and submissions for the record
follow.]
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