[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
TRANSNATIONAL DRUG ENTERPRISES (PART II): U.S. PERSPECTIVES ON THE
THREATS TO GLOBAL STABILITY AND U.S. NATIONAL SECURITY
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY
AND FOREIGN AFFAIRS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
MARCH 3, 2010
__________
Serial No. 111-117
__________
Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
EDOLPHUS TOWNS, New York, Chairman
PAUL E. KANJORSKI, Pennsylvania DARRELL E. ISSA, California
CAROLYN B. MALONEY, New York DAN BURTON, Indiana
ELIJAH E. CUMMINGS, Maryland JOHN L. MICA, Florida
DENNIS J. KUCINICH, Ohio MARK E. SOUDER, Indiana
JOHN F. TIERNEY, Massachusetts JOHN J. DUNCAN, Jr., Tennessee
WM. LACY CLAY, Missouri MICHAEL R. TURNER, Ohio
DIANE E. WATSON, California LYNN A. WESTMORELAND, Georgia
STEPHEN F. LYNCH, Massachusetts PATRICK T. McHENRY, North Carolina
JIM COOPER, Tennessee BRIAN P. BILBRAY, California
GERALD E. CONNOLLY, Virginia JIM JORDAN, Ohio
MIKE QUIGLEY, Illinois JEFF FLAKE, Arizona
MARCY KAPTUR, Ohio JEFF FORTENBERRY, Nebraska
ELEANOR HOLMES NORTON, District of JASON CHAFFETZ, Utah
Columbia AARON SCHOCK, Illinois
PATRICK J. KENNEDY, Rhode Island BLAINE LUETKEMEYER, Missouri
DANNY K. DAVIS, Illinois ANH ``JOSEPH'' CAO, Louisiana
CHRIS VAN HOLLEN, Maryland
HENRY CUELLAR, Texas
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
PETER WELCH, Vermont
BILL FOSTER, Illinois
JACKIE SPEIER, California
STEVE DRIEHAUS, Ohio
JUDY CHU, California
Ron Stroman, Staff Director
Michael McCarthy, Deputy Staff Director
Carla Hultberg, Chief Clerk
Larry Brady, Minority Staff Director
Subcommittee on National Security and Foreign Affairs
JOHN F. TIERNEY, Massachusetts, Chairman
CAROLYN B. MALONEY, New York JEFF FLAKE, Arizona
PATRICK J. KENNEDY, Rhode Island DAN BURTON, Indiana
CHRIS VAN HOLLEN, Maryland JOHN L. MICA, Florida
PAUL W. HODES, New Hampshire JOHN J. DUNCAN, Jr., Tennessee
CHRISTOPHER S. MURPHY, Connecticut MICHAEL R. TURNER, Ohio
PETER WELCH, Vermont LYNN A. WESTMORELAND, Georgia
BILL FOSTER, Illinois PATRICK T. McHENRY, North Carolina
STEVE DRIEHAUS, Ohio JIM JORDAN, Ohio
STEPHEN F. LYNCH, Massachusetts JEFF FORTENBERRY, Nebraska
HENRY CUELLAR, Texas BLAINE LUETKEMEYER, Missouri
MIKE QUIGLEY, Illinois
Andrew Wright, Staff Director
C O N T E N T S
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Page
Hearing held on March 3, 2010.................................... 1
Statement of:
Kerlikowske, R. Gil, director, White House Office of National
Drug Control Policy; David T. Johnson, Assistant Secretary
of State, Bureau of International Narcotics and Law
Enforcement, U.S. State Department; Anthony P. Placido,
Assistant Administrator and Chief of Intelligence, Drug
Enforcement Administration, U.S. Department of Justice;
Adam J. Szubin, Director, Office of Foreign Assets Control,
U.S. Treasury; and William F. Wechsler, Deputy Assistant
Secretary of Defense for Counternarcotics and Global
Threats, U.S. Department of Defense........................ 11
Johnson, David T......................................... 26
Kerlikowske, R. Gil...................................... 11
Placido, Anthony P....................................... 40
Szubin, Adam J........................................... 57
Wechsler, William F...................................... 73
Letters, statements, etc., submitted for the record by:
Johnson, David T., Assistant Secretary of State, Bureau of
International Narcotics and Law Enforcement, U.S. State
Department, prepared statement of.......................... 28
Kerlikowske, R. Gil, director, White House Office of National
Drug Control Policy, prepared statement of................. 14
Placido, Anthony P., Assistant Administrator and Chief of
Intelligence, Drug Enforcement Administration, U.S.
Department of Justice, prepared statement of............... 42
Szubin, Adam J., Director, Office of Foreign Assets Control,
U.S. Treasury, prepared statement of....................... 59
Tierney, Hon. John F., a Representative in Congress from the
State of Massachusetts, prepared statement of Mr. Bever.... 3
Wechsler, William F., Deputy Assistant Secretary of Defense
for Counternarcotics and Global Threats, U.S. Department of
Defense, prepared statement of............................. 75
TRANSNATIONAL DRUG ENTERPRISES (PART II): U.S. PERSPECTIVES ON THE
THREATS TO GLOBAL STABILITY AND U.S. NATIONAL SECURITY
----------
WEDNESDAY, MARCH 3, 2010
House of Representatives,
Subcommittee on National Security and Foreign
Affairs,
Committee on Oversight and Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:06 a.m., in
room 2154, Rayburn House Office Building, Hon. John F. Tierney
(chairman of the subcommittee) presiding.
Present: Representatives Tierney, Flake, Quigley, Foster,
Mica, Leutkemeyer, Jordan, Welch, and Duncan.
Also present: Representative Chu.
Staff present: Orly Isaacson, LA; Catherine Ribeiro, CD;
Robyn Russell, LA; Andy Wright, staff director; Elliot
Gillerman, clerk; Talia Dubovi and Scott Lindsay, counsels;
Steven Gale and LaToya King, fellows; Aaron Blackberg and
Bronwen De Sena, interns; Adam Fromm, minority chief clerk and
Member liaison; Tom Alexander, minority senior counsel; and
Christopher Bright, minority senior professional staff member.
Mr. Tierney. Good morning, everybody. A quorum being
present of the Subcommittee on National Security and Foreign
Affairs, the hearing entitled, ``Transnational Drug Enterprises
(Part II): U.S. Government Perspectives on the Threats to
Global Stability and U.S. National Security,'' will come to
order.
I ask unanimous consent that only the chairman and ranking
member of the subcommittee be allowed to make opening
statements. Without objection, so ordered.
And I understand that Representative Judy Chu is joining us
today on the subcommittee and would like to welcome her
participation. As such I ask unanimous consent that Ms. Chu be
allowed to participate in the hearing in accordance with
committee rules. She will be allowed to question the witnesses
after all official members of the subcommittee have had their
turn. Without objection, so ordered.
I ask unanimous consent that the hearing record be kept
open for 5 business days so that all members of the
subcommittee be allowed to submit a written statement for the
record. Without objection, so ordered.
And I ask unanimous consent the written testimony from Mr.
James Bever from the U.S. Agency for International Development
be submitted for the record. And without objection, that as
well is so ordered.
[The prepared statement of Mr. Bever follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Tierney. With that all aside, again good morning and
thank all the witnesses for joining us here today. We are
continuing our oversight on national security and the threats
from illicit global drug enterprises. In October we held our
first hearing with a panel of nongovernment experts who focused
on disrupting and dismantling drug operations in Southwest
Asia, Latin America, and West Africa. We heard then about the
mounting evidence that the drug trade is closely tied to
international criminal and terrorist organizations and poses a
national security threat to the United States.
Today we welcome witnesses from the Drug Enforcement
Administration, the Department of Defense, the State
Department, and the Treasury Department to respond to the
recommendations that emerged from our October hearing. We are
pleased to have with us today the White House Director of
National Drug Control Policy.
The U.N. Office on Drugs and Crimes estimates that the
global proceeds from illicit drugs range from $100 billion to
more than $1 trillion per year. That is quite a range. The
amount of money garnered by the drug trade puts enormous power
in the hands of criminal actors who have every incentive to
disrupt law enforcement, displace legitimate enterprise, and
destabilize governments.
The President's drug control budget request for fiscal year
2011 is now before Congress. It asks for $15.5 billion, of
which $6 billion is slated for international support in
interdiction. This includes funding for efforts to halt drug
flows from abroad into the United States.
One question we should address today is whether this
overall amount is adequate. The second question is whether the
amount targeted to international drug cartels in interdiction
is sufficient to mitigate the national security threats
emanating from the expanding global drug trade and associated
criminal syndicates.
Our last hearing highlighted a number of policy and
strategy issues. In Afghanistan the ever-changing and
increasingly complex relations between the drug trade, the
insurgency, and terrorism continue to challenge us. Our main
counternarcotics initiatives over the past 9 years,
eradication, interdiction, justice reform, and the promotion of
alternative livelihoods, continue to evolve. These programs are
supposed to be interwoven with our counterinsurgency efforts,
but a recent Inspector General report questions whether those
efforts are actually integrated.
The witnesses at our October hearing cautioned that no
single counternarcotics approach will work successfully since
traffickers are quick to adapt. They also emphasized that
regional, cultural, and economic differences across the country
must be taken into account for any effort to succeed.
The extreme violence we have seen in recent years along the
Mexican border has exposed the tragic consequence of the drug
trade as well as the acute threat these enterprises pose to our
own Nation and to our neighbors. The United States has
longstanding counternarcotics efforts in Latin America,
including the multi-year, multi-billion dollar Plan Colombia
and the ongoing Merida Initiative in Mexico and Central
America. While eradication has been an entrenched aspect of
U.S. drug control policy in Latin America for many years, in
part because it has been seen as cutting a lot of drugs at
their source, some witnesses told us that the forced crop
eradication in the absence of real alternative livelihood
programs was a doomed drug control policy.
West Africa is fast becoming a preeminent international
drug hub, and the threats of the region are still not fully
understood. New transit routes where drugs travel from Latin
America to West Africa and then to Europe represent lucrative
opportunities for criminal enterprises. These organizations
threaten stability in an area of the world that is already
prone to violence and corruption and where we are seeing the
rise of terrorist organizations such as al Qaeda in the Islamic
Maghreb.
The United Nations Office of Drug Control estimated that
close to $2 billion worth of cocaine passed through West Africa
in 2007, which would make cocaine one of the largest exports of
that region.
Transnational drug enterprises did not evolve overnight and
have shown remarkable flexibility, alliance building capacity,
operational fluidity, and top to bottom organizational
sophistication that many licit businesses would envy. The
United States, working closely with our partners, must break
the back of transnational drug enterprises and sever the drug
terror nexus where the monetary proceeds from drug trafficking
help fund terrorist organizations such as the FARC in Colombia,
the Taliban in Afghanistan, and al Qaeda in the Islamic
Maghreb.
While it is not the focus of our hearing today, I want to
note the importance of addressing the demand for drugs that
comes from within our own borders. Until we are more successful
at reducing demand and taking the profits out of drug
trafficking, we will continue to face significant challenges in
our international counternarcotics efforts.
With these sobering thoughts in mind, I look forward to
hearing from today's witnesses, who have been charged by the
American people with the challenging task of dismantling
international drug enterprises, stopping the flow of money to
terrorists and criminal organizations, and protecting our
national security.
Mr. Flake, I welcome you to give your opening remarks.
Mr. Flake. Thank you, Mr. Chairman. Thank you for calling
this hearing. I appreciate the witnesses coming forward. We
have heard from the private sector nonprofit witnesses before,
as mentioned, and it is good to hear now from every level of
government, both those who are targeting the financial networks
like we do at Treasury and those who are looking at other
efforts.
I will be interested to see how targeting the heroin trade
now will impact what we are doing with the surge in Afghanistan
and then how those two items intersect, but also to see how
your assessment of what our international partners are doing,
if this has been a good year and a good trend or if we need
some more help there.
But anyway, thank you all for coming. I look forward to the
hearing.
Mr. Tierney. Thank you. The subcommittee will now receive
testimony from the panel that is before us today. I will give a
brief introduction of each of you, and then we will start going
from left to right on the testimony.
Mr. Gil Kerlikowske is the White House Director of National
Drug Control Policy, a position he has held since May 2009. In
that capacity he coordinates Federal drug control programs and
oversees implementation of the President's National Drug
Control Strategy. Prior to this position he served for 9 years
as chief of police in Seattle. Mr. Kerlikowske holds a BA and
an MA from the University of South Florida.
Ambassador David Johnson is the Assistant Secretary of
State for International Narcotics and Law Enforcement Affairs.
In that role he coordinates with the President and the
Secretary of State to develop policies to combat crime and
international narcotics. A career Foreign Service Officer,
Ambassador Johnson has also previously served as a Deputy Chief
of Mission for the U.S. Embassy in London and as the Afghan
Coordinator for the United States. He holds a BA from Emory
University.
Mr. Anthony Placido is an Assistant Administrator and Chief
of Intelligence for the Drug Enforcement Administration. In
that capacity he serves as DEA's senior officer for the U.S.
intelligence community and manages the agency's Intelligence
Division in the Organized Crime Drug Enforcement Fusion Center.
Mr. Placido has served with the DEA since 1982 in a number of
foreign and domestic posts. He holds a BS from Northeastern
University and an MPA from Golden Gate University.
Mr. Adam Szubin serves as the Director of the Treasury
Department's Office of Foreign Assets Control. In that capacity
he is responsible for overseeing the U.S. Government's economic
sanctions programs which target international narcotics
traffickers. He has held this position since 2006 and has also
previously served as a senior adviser to the Under Secretary of
the Treasury for Terrorism and Financial Intelligence. A former
Fulbright scholar, Mr. Szubin holds a BA from Harvard College
and a JD from Harvard Law School.
Good to see so many Massachusetts educated people.
Mr. William Wechsler is the Deputy Assistant Secretary of
Defense for Counternarcotics and Global Threats. In that
capacity he oversees the Department of Defense's
Counternarcotics and Threat Finance Policies and Operations. He
has previously served on the staff of the National Security
Council as Director for Transnational Threats and is Director
for Global Issues in Multilateral Affairs. Mr. Wechsler holds a
BA from Cornell University and an MPA from Columbia University.
I want to thank all of you for making time on your
schedules to join us here today and share your substantial
expertise. It is the policy of this subcommittee to swear you
in before you testify today or have you affirm your obligation
to tell the truth. So I ask you to please raise your right
hands and stand.
[Witnesses sworn.]
Mr. Tierney. The record will please reflect that all the
witnesses answered in the affirmative. I think you all know
that your complete written remarks by agreement are already
going to be put in the hearing record, and I know that they
were substantial. We appreciate them and they will be read. But
I ask that you try to summarize those remarks in about 5
minutes if you would.
The lights reflect green while you are on the go time, with
a minute to go it will turn to amber, and when your 5 minutes
is up it will turn to red, the floor opens up, you drop down
and that is it. The Ambassador says, fine with me, I get to get
out of here. Not so lucky. We will try to be as flexible as we
can, but we do have five witnesses. We appreciate you trying to
adhere as best you can to those time guidelines.
Mr. Kerlikowske, we are pleased to hear from you.
STATEMENTS OF R. GIL KERLIKOWSKE, DIRECTOR, WHITE HOUSE OFFICE
OF NATIONAL DRUG CONTROL POLICY; DAVID T. JOHNSON, ASSISTANT
SECRETARY OF STATE, BUREAU OF INTERNATIONAL NARCOTICS AND LAW
ENFORCEMENT, U.S. STATE DEPARTMENT; ANTHONY P. PLACIDO,
ASSISTANT ADMINISTRATOR AND CHIEF OF INTELLIGENCE, DRUG
ENFORCEMENT ADMINISTRATION, U.S. DEPARTMENT OF JUSTICE; ADAM J.
SZUBIN, DIRECTOR, OFFICE OF FOREIGN ASSETS CONTROL, U.S.
TREASURY; AND WILLIAM F. WECHSLER, DEPUTY ASSISTANT SECRETARY
OF DEFENSE FOR COUNTERNARCOTICS AND GLOBAL THREATS, U.S.
DEPARTMENT OF DEFENSE
STATEMENT OF R. GIL KERLIKOWSKE
Mr. Kerlikowske. Thank you for the opportunity to testify
on this important subject of transnational drug enterprises.
The Obama administration believes that a balanced drug control
strategy includes comprehensive efforts to reduce our
consumption of illicit drugs as well as drug production,
trafficking and related violence at home and abroad. Consistent
with this view, the President's fiscal year 2011 national drug
control budget proposal seeks over $2.3 billion to provide
support to our international partners and counternarcotics
programs, and that is an increase of $20 million over the
levels of the last fiscal year.
Now, although today's hearing focuses on transnational
threats, it is important to note the administration's strong
commitment to reducing drug consumption at home. As a long time
police chief I have seen up close the terrible impact that
drugs have had on individuals, families and communities. The
earlier we can intervene to get people help, the better, and
that is why community-based prevention will be a focus of our
efforts.
Drug use and its consequences affect different places in
very different ways, and in fact there is no single drug
problem in this country, but a wide variety of drug problems.
The drug issues in each community are closely tied to the
makeup, the economy, the geography, and the culture of
particular communities.
We will be expanding and enhancing existing prevention
efforts and working to ensure drug abuse treatment services are
made more widely available. These efforts will include expanded
work to address the abuse of pharmaceutical drugs. That is a
problem of increasing concern within the United States.
Let me turn to the serious transnational threat posed by
drugs. In order to put the thrust of our efforts to combat
transnational drug enterprises in context, it is essential to
examine the manner in which these organizations function. They
thrive in an environment of weak governmental institutions,
insecurity, corruption, and limited legitimate economic
opportunity, and their purposes are served by a culture of
violence, intimidation, and impunity to create the perception
that they are the governing body in the areas that they operate
freely.
A clear nexus has been established linking the revenue
produced by illicit trafficking and their violent destabilizing
activities. In light of this, government efforts against the
international drug production and trafficking organizations
typically include interdiction, direct organizational attack,
and disruption of inputs to the trafficker's chain of
production and distribution.
In Colombia we have witnessed an evolution from what many
describe as a nearly failed state during the nineties to
today's situation in which the drug funded terrorist
organizations have been reduced in size and power.
Additionally, security has returned to many parts of the Nation
and the government is taking an increasing responsibility for
implementation of programs formerly dependent on U.S.
assistance.
I visited Colombia last September and I observed that it is
a safer place than at any time in the last 20 years. They have
also significantly improved their human rights record over the
past 10 years. There are still certainly problems, but this
remains a priority for the U.S. Government in working with
Colombia. And the government is stepping up to take on more
ownership of the counterdrug programs, I met with the national
police chief there, from eradication to alternative development
to demand reduction.
And in Mexico President Calderon's government is engaged
in, as we well know, a violent struggle to dismantle major
criminal organizations, and at the same time they are working
to permanently reform and strengthen the democratic
institutions of government.
The U.S. intelligence sharing, training and the provision
of equipment through the Merida Initiative and other regional
programs have been invaluable to our strategic partnership with
Mexico, the Caribbean, and the Central American nations.
Additionally, U.S. cooperation with Mexico also includes
expanding collaboration and exchanges on prevention, treatment,
and innovative criminal justice practices.
The most recent example is the U.S.-Mexico Demand Reduction
Bi-National Policy Conference which ONDCP hosted last week here
in Washington, DC, with many Federal partners, including the
State Department. The conference brought together public policy
leaders, researchers, program providers and local coalition
organizers from both nations to address the science of
addiction, and the effective prevention, treatment and recovery
programs that we have here in the United States that can be
outsourced. The conference concluded with a joint declaration
of drug demand reduction cooperation, to include among other
things the further implementation of best practices in the
fields of prevention and treatment. Similarly, there is much
that we can do to address the drug threats attacking both the
United States and Mexico.
In June 2009, Secretary Napolitano, Attorney General
Holder, and I released the National Southwest Border
Counternarcotics Strategy in New Mexico. That strategy is a key
component of our comprehensive national response to the threat
along the border. The response includes cooperation with Mexico
through the Merida Initiative. The Southwest Border Strategy
also seeks to leverage information sharing with State and local
partners.
And given the stop sign, I think I will stop here so the
floor doesn't open up.
[The prepared statement of Mr. Kerlikowske follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Tierney. Thank you very much. We will try to give you
an opportunity to get where else you want to go in terms of
questioning on that.
Ambassador Johnson.
STATEMENT OF DAVID T. JOHNSON
Mr. Johnson. Thank you, Mr. Chairman, Ranking Member Flake,
members of the subcommittee, thank you for the opportunity
today to discuss an issue of great concern to me and to my
colleagues at the Department of State: transnational drug
enterprises and their associated illicit networks.
Mr. Chairman, I am grateful for your leadership and the
awareness that today's hearing brings to this important
national security issue. We believe that transnational drug
enterprises directly threaten the security interest of the
United States as well as the health and safety of our fellow
citizens. These criminal enterprises actively work to subvert
the rule of law wherever they operate. They undercut democratic
institution building and economic growth in developing
countries.
As you noted at the first part of this hearing, the large
profits generated by the drug trade and the efforts to hide and
launder them can distort economies and governing institutions
even in developed states. Drug trafficking organizations are at
their core business enterprises often closely linked to other
transnational crime groups and regularly engaged in a broad
range of illegal activities that affect American values,
business, and our security and health.
The Department shares this subcommittee's deep concerns
over links between international drug trafficking and
terrorism. As the international community has clamped down on
terrorism and pressured governments from financially supporting
terrorist organizations, some groups have resorted to drug
trafficking as a source of revenue. Much of the work my
colleagues and I do at the State Department involves foreign
assistance and cooperation programs to isolate, minimize, and
neutralize transnational drug enterprises. Using bilateral,
regional and global initiatives and assistance programs, we
seek to build the law enforcement capacity of foreign
governments so they can confront these threats before they
reach or impact on U.S. soil.
We help them strike directly at these organizations by
disrupting their operations, arresting and imprisoning their
leaders, and seizing their assets. This can include destroying
drug crops on the ground before they can enter the processing
chain, particularly in areas where farmers have viable
alternatives, as Mr. Mansfield pointed out in Part I of this
hearing. And in other cases with our partners at the U.S.
Agency for International Development we provide substantial
programs to help wean growers away from drug farming through
alternative livelihood and economic development.
Mr. Chairman, countering the power of transnational drug
and crime enterprises requires a global effort. It requires
enormous strategic political, operational and financial
coordination and commitment and, most importantly, it requires
building and further developing good and capable governance
capacity in the regions where transnational drug enterprises
operate.
Thank you for your invitation this morning. I look forward
to addressing any questions you have, in particular any
questions you might have about the programs and initiatives
that my Bureau operates around the world. Thank you, Mr.
Chairman.
[The prepared statement of Mr. Johnson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Tierney. Thank you, Ambassador.
Mr. Placido.
STATEMENT OF ANTHONY P. PLACIDO
Mr. Placido. Thank you, Mr. Chairman, Ranking Member Flake,
distinguished members of the subcommittee. On behalf of the men
and women of the Drug Enforcement Administration, I would like
to thank you for your continued support, and I will cut
directly to the chase.
Drug trafficking and abuse exacts a significant toll on the
American public. More than 31,000 Americans or approximately 10
times the number of people killed on 9/11 die each year as a
direct result of drug abuse. Approximately 7 million people who
are addicted to controlled substances squander their productive
potential. Many of these addicts neglect or abuse their
children and commit a variety of crimes under the influence of
or in an attempt to obtain illicit drugs. Tens of millions more
suffer from this erstwhile ``victimless'' crime as law abiding
citizens are forced to share the roads with drugged drivers, to
clean up toxic waste in clandestine laboratories, rehabilitate
addicts, incarcerate criminals, and put together the pieces of
shattered lives.
However, if we want to assess the true cost of this threat
we have to go further and we have to look at the impact that
transnational drug trafficking has on corrupting government
institutions, undermining confidence in the rule of law,
fueling violence, undermining regional stability and funding
terrorism.
Those who organize, finance, and direct this criminal
enterprise thrive in areas where government control is week. It
is no coincidence that the so-called kingpins who run this
global trade do not reside in the United States where they
would be most exposed to our criminal justice system. They
operate from locations which they perceive to be safe havens
and they direct the activity of subordinates and surrogates who
supply drugs to the United States.
Drug trafficking is a global enterprise that generates a
staggering $394 billion a year. This figure dwarfs the proceeds
from all other forms of organized crime. Let me put this number
in context. In aggregate, that $394 billion exceeds the gross
domestic product of many national governments around the globe.
Some would argue that legalization and regulation even at the
cost of untold human suffering and misery would at least strip
the proceeds of this economic fund from the market. But both
common sense and history have taught us that those who are
displaced from the drug trade don't move into corporate life,
they morph into other areas of criminality. And what we are
really faced with is fighting people who put personal greed
above all else.
Parts of Central America, West Africa and Asia have become
havens for criminals who pursue illicit activities largely
undeterred by law enforcement or local government. Drug
traffickers use these regions for the production,
transshipment, and storage of illicit drugs. Violent
traffickers are relocating to take advantage of these
permissive environments and importing their own brand of
justice, contributing to further instability.
Unfortunately, areas with limited or poor governance are
also the breeding grounds for other types of criminal activity,
to include terrorism. Eighteen of 44 international terrorist
groups have been linked to some aspect of the international
drug trade.
Today the FARC is primarily funded through the drug trade.
It sells multi-ton quantities of cocaine and uses the proceeds
to purchase weapons for use in the FARC's decades long fight to
topple the legitimate government of Colombia.
Similarly, insurgents in Afghanistan and terrorists in the
Middle East, Europe and Africa fund their activities through
the drug trade. The DEA has documented hundreds of millions of
dollars in proceeds from drug trafficking flowing to the
Taliban.
In Africa international terrorist organizations such as al
Qaeda and the Islamic Maghreb rely on criminal specialists
closely linked to the drug trade for money laundering, document
forgery, transportation, security, weapons, corruption, and
other criminal activities.
In Europe the Madrid train bombing was funded through the
sale of hashish and Ecstasy. And DEA investigations have
disclosed significant linkages between Hezbollah and the drug
trade in Africa, the Middle East, and Latin America.
However, these transnational threats do not have to involve
insurgency or terrorism to warrant our concern. In spite of
President Calderon's extraordinary steps to deploy more than
45,000 military troops to assist the police in combating cartel
influence, there have still been more than 18,000 murders,
drug-related murders, in the last 3 years. More troubling is
the fact that many of these murders were intentionally
committed to try and intimidate the public and influence the
government to stop its activities.
From the war on terrorism to our southwest border
transnational drug trafficking threatens the security of
Americans at home and abroad. In Afghanistan, U.S. soldiers are
fighting an insurgency that is substantially funded by the drug
trade. In our own hemisphere ever increasing rates of violence
threaten the security of our borders and those of our
neighbors.
Let me conclude by saying that the consequences of drug
trafficking have never been higher. We must continue our
efforts to mitigate this damage or we will certainly pay a
higher price later on. Thank you.
[The prepared statement of Mr. Placido follows:]
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Mr. Tierney. Thank you, Mr. Placido.
Mr. Szubin.
STATEMENT OF ADAM J. SZUBIN
Mr. Szubin. Thank you, Chairman Tierney, Ranking Member
Flake, members of the committee. Thank you for the opportunity
to appear before you today to discuss the role played by the
Treasury Department in combating the threat posed by
transnational drug enterprises. We work alongside the agencies
represented here and many others in our government to add
financial expertise and our unique authorities to our
collective counternarcotics efforts, and financial sanctions
can be a powerful tool.
Top level Colombian traffickers have told us that they fear
three things above all else: The first, arrest and extradition
to the United States; second, seizure of their assets; and
three, being placed on the OFAC sanctions list.
There is a heightened awareness of sanctions among the drug
trafficking community and a fear of their consequences.
Individuals and entities designated by OFAC lost access to the
U.S. financial system. And U.S. persons, whether they be here
or abroad, are forbidden from doing business with them. Any of
their assets are immediately frozen if they are or come within
possession of a U.S. person or financial institution.
And while these direct legal consequences can be highly
disruptive, the informal ripple effects of our designations go
much farther. In practicing their own due diligence and risk
avoidance, many foreign, non-U.S. banks will immediately close
the accounts and deny service to anyone who is placed on the
OFAC list. Foreign companies that have no legal obligation to
comply with U.S. sanctions will likewise often refuse to do
business with designated parties, thereby further isolating
them from legitimate commercial markets.
This type of reaction is now common in Colombia, and we are
beginning to see the same type of isolating impact played out
in Mexico.
Treasury has been targeting international drug enterprises
for 15 years. In 1995, President Clinton signed Executive Order
12978 which targets Colombian drug traffickers and
organizations. In 1999, Congress globalized the concept
enacting the Foreign Narcotics Kingpin Designation Nation Act,
or the Kingpin Act, which has allowed us to act against the
network of cartels worldwide. Since 1999, the President has
identified 82 Tier I kingpins and OFAC has identified over 500
individuals and companies that make up their support and
financial networks.
Just yesterday we designated two of Colombia's most wanted
drug lords; Daniel Barrera Barrera, known as ``El Loco''
Barrera, and Pedro Oliviero Guerrero Castillo, a/k/a
``Cuchillo.'' These druglords operate primarily in eastern
Colombia and are closely aligned with the FARC, whose criminal
and destabilizing activities were highlighted by Mr. Placido.
In a good example of OFAC's network approach, at the same
time yesterday we also named and targeted the assets of 29
individuals and 47 companies in these druglords' distribution,
money laundering, and money concealment networks.
Cooperation with host governments is vital to our work.
These are transnational threats, and they warrant a
transnational approach. A good example are our collective
actions against the Amezcua Contreras organization. In October
2008 we designated a company named Collins Pharmaceuticals and
its associated officials. The company had manufactured
pseudoephedrine and diverted it to drug trafficking
organizations for the production of methamphetamine. As a
result of this action nearly $3 million was immediately blocked
in U.S. bank accounts.
But following our action, Mexico's Attorney General's
office blocked bank accounts in Mexico belonging to the same
individuals and entities that we had listed.
In September 2009, we followed up again on the action and
designated additional individuals and front companies who had
been working to circumvent the earlier sanctions. Of course we
have also intensified our efforts greatly against narcotics
traffickers in Afghanistan and Pakistan to support the efforts
alluded to earlier by others on this panel. Treasury is
actively supporting those efforts to disrupt and dismantle the
narcotics networks in those countries using the same approaches
that have yielded results elsewhere.
In sum, economic sanctions can be a highly effective tool
which when used in concert with United States and foreign law
enforcement authorities can advance U.S. efforts to combat
these dangerous transnational drug efforts.
Thank you for your invitation and for your interest in this
important matter.
[The prepared statement of Mr. Szubin follows:]
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Mr. Tierney. Thank you Mr. Szubin.
Mr. Wechsler.
STATEMENT OF WILLIAM F. WECHSLER
Mr. Wechsler. Thank you very much. Mr. Chairman, Ranking
Member Flake, distinguished members of the committee, thank you
for the opportunity to testify here. And it is particularly
appropriate that you invite me to testify with all my
interagency colleagues because this panel represents the whole
of government approach to this issue that we find vitally
important.
We have all seen the disruptive effect of illegal
trafficking. Unfortunately, looking back over time, most
governments around the world, including ours, have historically
compartmentalized these threats into categories that fit our
bureaucratic organizations. There are national security
threats, there are intelligence threats, there are law
enforcement threats, there are health concerns, there are
commerce concerns, there are education concerns. As a result,
again, historically, each bureaucratic arm addressed the threat
according to its respective organization's perspective without
as much crosscutting organization and integration as to
maximize our effectiveness. The predictable result in those
instances has been lack of uniformity and marginal results.
Where we have had on interagency, coordinated approach we have
had quite powerful results.
Under the Obama administration the United States is
attempting to address these shortcomings by providing a whole
of government approach designed to dismantle bureaucratic
barriers that have long prevented a centralized method of
attacking these threats to global stability and U.S. national
security.
As my colleagues have described, in some parts of the world
broken communities become breeding grounds for criminal
activities of all kind, including all types of illicit
trafficking: drugs, weapons, people, cash. Lawless environments
make inviting sanctuaries for religious zealots, political
ideologues, insurgents, and terrorists, all sharing a common
proclivity for violence and destruction. Such groups seek to
evade or neutralize the forces of order. Their common needs
allow them to cohabit in an environment where the government is
weak and the populace can be controlled by bribes,
intimidation, violence, and corruption. All types of
organizations expand power bases and corrupt and control more
communities. They become more formidable. Eventually criminal
and extremist organizations may be able to carve out safe
havens in parts of the world and at times they become direct
threats to U.S. national security in which the Department of
Defense has to become involved directly. A coordinated
interagency response is critical to defeating the threats posed
by these transnational drug enterprises.
My office's principal role is to provide counternarcotics
support to domestic law enforcement agencies and foreign
security forces conducting counternarcotics missions. The
Department has also concluded from experience, quite often
painful experience, that the kinds of enemies that we are
fighting on the battlefield today and the kinds of enemies that
we expect to fight on the battlefield in the years to come are
going to be financed, supported, and organized in part by
transnational illicit networks and especially drug networks.
Therefore, we in the Department of Defense have to reach
out to our interagency colleagues who have much more
experience, expertise and particular authorities in dealing
with these threats in order to integrate them into our military
efforts to make our efforts as successful as possible.
In addition to these kinds of support that we provided in
the past, the Department of Defense is trying to increase its
supporting role in addressing threat finance more generally.
Terrorists and insurgents typically rely on irregular ways to
fund their activities, including crime, donation from
nongovernmental organizations, using front companies, and
various black market activities that Adam talked about. Only
recently we have developed all the weaponry that we need to
really attack these financial networks, and we cannot
overemphasize enough that a successful effort in this nature
will be accomplished only with an interagency whole of
government approach. It is critical for us, for our way of
thinking, of addressing the asymmetric warfare that we are
confronting today and we expect to confront in the future.
Chairman, ranking member, thank you again for the
opportunity to discuss this issue. I look forward to answering
all the committee's questions.
[The prepared statement of Mr. Wechsler follows:]
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Mr. Tierney. Thank you, Mr. Wechsler. Thank all of you for
your testimony.
This is a perplexing area, to say the least. I know your
jobs are challenging. We appreciate what you do.
Mr. Kerlikowske, let me start with sort of a procedural
question here. I understand you don't yet have in place all the
key staff you need. What expectations do you have on staffing
up and where is the status of that?
Mr. Kerlikowske. We are working very hard at getting the
people on board. One of the concerns has been the Deputy
Director. One of the Deputy Directors was voted out in November
and is still awaiting confirmation.
Mr. Tierney. He is out of committee and waiting full Senate
confirmation?
Mr. Kerlikowske. That is exactly right, Mr. Chairman. So I
think it is difficult sometimes to get the job done if you
don't have all the folks in place.
Mr. Tierney. Perhaps we can engage our colleagues here and
maybe we will be able to communicate with the Senate our desire
at least that this office get staffed up and that you have the
tools that you need to move forward on that. I am sort of
always struck by this idea that this all is driven by money, at
least it seems to all have been driven by money and therefore
the power and everything else on that basis, and I wonder of
all the different methods that we have to address that, which
ones are really, really effective or are we just chasing our
tails on some of this stuff. I can imagine the frustration of
the DEA fighting the same fight over and over again every day
and it seems to pop up somewhere else.
So I want to ask each of you a question and answer it if
you can. We have the drugs obviously, so you can go after the
drugs, interdiction on that, you can go after the money on
that, you can go after the precursors if you can so that they
can't make the drugs in the end, or you can sort of attack the
one thing that we have some control over, I guess, in this
country, which is the end user, and try to diminish that. Of
those, if I have missed something please tell me that, but of
all those ideas which do you think is the more effective, just
so I can get something from each of you.
Mr. Kerlikowske. The money. I think choking off the money
has not been as much of a whole of government approach as you
are seeing here today. I also don't think that when it comes to
seizing those assets that State and local law enforcement, and
I spent the vast majority of my career at the local level, I
don't think that they have been as engaged in working with
Federal partners on choking off money.
We have all seen the press conferences with the arrests and
the people in handcuffs, we have seen the seizures of guns and
drugs laid out on the table. It is not that exciting to seize a
bank account. And I think that if we really concentrate the way
it has been expressed here I think that we will have a better
opportunity to choke off money and in turn that is the life
blood of these cartels.
Mr. Tierney. Ambassador Johnson.
Mr. Johnson. I think that the monetary driver of this is
something you always have to keep your eye on. It is the reason
these people get up in the morning. They are not interested in
trading cocaine for its own sake. But I think it is important
to peel back a little bit and figure out how you go about that.
And from my point of view, and this is, I guess this is because
of what I do for a living, but helping foreign governments
build the institutions of governance is the long run, durable
answer to this problem, and that gets at the money as part of
that. Getting at the money is a first level, is a rifle shot
and it has to be followed up and followed up and followed up.
But helping build those institutions with our foreign partners
gives people in the DEA and the Treasury and other places in
our government partners to work with.
And it goes back to the main problem here, and that is that
ungoverned space will bite you. And whether it is ungoverned
space in a remote part of the world or it is ungoverned space
in a neighborhood, in a close-by country, that is I think where
the key is to dealing with this problem, and it goes directly
to that question of how do you make money on the street.
Mr. Tierney. Mr. Placido.
Mr. Placido. Thank you, Mr. Chairman, for the question. I
would just say that I have spent the better part of my 31 years
in this profession wrestling with the question that you have
asked and I have come to the conclusion that there is no silver
bullet, there is no one tool that will eliminate this problem,
but rather many. What I will say is a matter of personal
preference, and my organization of the Drug Enforcement
Administration has come to the conclusion that the notion that
we have a war on drugs suggests that we are fighting against
the contraband itself and we don't believe that is true. We are
really fighting against organizations and it is an
organizational attack strategy designed to go after the people
and the greed of those who put personal profit above all else.
And I believe you heard Mr. Szubin and others talk about the
things that these traffickers fear most is really their own
well-being. Certainly they are concerned about their money, and
the profit is the reason that they get involved in the
business. But it is actually taking these people out of
circulation where their money can't buy corruption, can't help
them where they can't benefit from that and actually
incarcerating these people for long periods of time, I think
that is the reason why the so-called kingpins, or as we now
call them, the consolidated priority organization parties,
don't reside here within the confines of the United States. We
do a pretty fine job of motivating people to stay out of our
jurisdiction.
That is not true around the world, and that is why we have
to build these partnerships around the globe as they are
looking for safe havens and refuge.
Mr. Tierney. Mr. Szubin, if you can quickly.
Mr. Szubin. It won't come as a surprise for us that the
focus is money.
Mr. Tierney. I knew what everybody's focus was. I think
people have been pretty good about stepping outside of that to
find something else that was effective.
Mr. Szubin. I think the effectiveness can be really
significant for all the reasons mentioned. And when we are
talking about the money of these traffickers it is not just the
bulk cash smuggling that people often picture that is secreted
in a compartment in a truck heading down to Mexico. It is what
are these narcotics organizations doing with the money, doing
with their profits. They are not putting it under their
mattresses. They are investing it in often appearing seemingly
legitimate businesses. And they will develop networks of
companies, whether or not they are companies that they use
directly in their trafficking enterprises. We have just this
week designated a trucking company that was affiliated with a
narcotics organization. Well, a trucking company is very
useful; small aircraft companies are very useful. But more
broadly, retail operations are very useful. If you have a
pharmaceutical company you have an excuse for coming into banks
with large sacks of cash because you have customers coming in
and you have receipts. So we see them putting the money in
these accounts in these companies to launder it, to conceal it.
And when we talk about going after the money we are talking
about going after their treasure houses, going after their bank
accounts, their financial holdings abroad. And I think the
impact there can be palpable. And not just the impact on the
worst of the traffickers but the deterrent impact on those who
otherwise might have said, I will go into business with you, I
will agree to serve as a corporate officer. We try to name all
of those people who are found on the Dun & Bradstreet sheets
for these companies, and we see them then coming to us and
saying, I want off the list, I won't have anything to do with,
you fill in the blank, drug organization, just take me off your
list. And so it is a behavior changing tool as well.
Mr. Tierney. Thank you.
Mr. Wechsler.
Mr. Wechsler. I would echo in many ways what Tony has said,
that rather than looking for one the critical element that is
too often missing is the integration of all of these efforts.
And I would suggest as one place to look for a successful
effort to date, although not final, is in Colombia. There in
the late 1990's the Colombian people when polled, two-thirds of
them believed that it was very likely that the FARC was going
to take Bogota and take over the whole country. Now the FARC
controls only a sliver of territory and is a shadow of what it
was. There are so many problems there, we don't want to
discount them. But taking a long range multi-year approach,
bringing in all the lines of operation, the financial
operation, the law enforcement operation, the capacity building
operation to foreign countries, the military and Special Forces
operation, the intelligence operations and integrating it as a
whole under the leadership of strong local leadership as we had
in Colombia is what can succeed and can really change the game.
Mr. Tierney. Thank you.
Mr. Flake, take 8.
Mr. Flake. Thank you. I have enjoyed this testimony. It is
been very enlightening. Mr. Szubin, you have mentioned the
importance of having agreement with host countries while we are
trying to target some of this illicit action.
Can you talk a little about third countries, particularly
in Europe, with the banking system? A lot of this money as you
said isn't put under mattresses, it moves throughout the
system. How has the cooperation been with our European allies,
for example, with regard to movement of money to South America
or Middle East or elsewhere through Europe?
Mr. Szubin. I would say it has been very good in our area,
and I would certainly leave it to Ambassador Johnson and others
to talk more broadly. But when it comes to isolating named
kingpins and their networks, the Europeans are extremely
supportive of our efforts. And the European banks are, even
without the cooperation of their governments, large reputable
banks in Europe do not want to be doing any business with
somebody who ends up on the wrong side of a kingpin listing.
And it is a very powerful, reinforcing impact because it means
what is technically, perhaps legally a unilateral sanction
under the congressionally enacted Kingpin Act ends up spilling
out in terms of its effect across the globe.
Mr. Flake. Thank you.
Now, Mr. Szubin is too much of a diplomat to say this but I
will. I think part of the issue, you mentioned that, Mr.
Kerlikowske mentioned that in the past maybe a weaker link has
been the money side, and part of the issue we have had is the
wide portfolio that OFAC, the Office of Foreign Assets Control,
has had. Few people outside of government realize that OFAC
administers the travel ban we have on Cuba. And in the past I
think far too much time and resources has had to be devoted,
not their choice, it is Congress's edict, to issuing travel
licenses for individuals to travel to Cuba and looking at that
angle. And I think that has the effect of diverting too much
attention from the real matters that matter right now, and that
is to intercept these money transfers.
I have worked with Mr. Szubin before and I know that they
have the right priorities and they are doing well and focusing
more partly because some of those restrictions on travel have
been lifted and it perhaps has made it easier and less of a
drain on that office. But I want to commend you for how you are
handling that. And also I want to appeal to my colleagues to
change it and free up OFAC to do what it needs to do with more
of their time and resources.
Did you have a comment on that?
Mr. Johnson. I just wanted to say that European governments
have been very careful in trying to work with us on this issue.
They probably exercise more care than sometimes we would like
to make sure that they don't get a bad precedent set which
would tie their hands. But the issue that Adam raised about the
banking institutions themselves I think has been probably the
most important and the most effective, and that is the banking
institutions, particularly those that hang up signs that you
see, are extremely concerned about their own reputational risk.
And bringing things to their attention about what those risks
are and helping them with their compliance programs has been an
extraordinarily effective tool that Treasury has worked very
hard with the Europeans.
Mr. Flake. It sounds as if the contacts are made with the
banks themselves as opposed to the governments in which these
banks are located.
Mr. Johnson. It is both. But I think that it has been more
creative, if you will, on the reputational side, and this is a
new tool. And I compliment Treasury because they have really
worked this issue hard.
Mr. Flake. That is good to hear, that is good to hear. Mr.
Kerlikowske, the Southwest Border Initiative you mentioned
earlier, the announcement, how is that going to change what is
going on from the Southwest border. Those of us from Arizona
are particularly interested in this.
Mr. Kerlikowske. I have been to the Southwest border now
three times. Over my career my colleagues in the major cities
all along those States have oftentimes in our meetings
reflected upon the real problems that they have been facing. I
think there are a couple of important changes with the
Southwest Border Initiative. One is that there has been a very
active involvement of State and locals that I don't think had
been brought into the fold as much before. There was concern in
the past that, look, we are already pretty busy in these
sheriff's departments with literally thousands of square miles,
as you know, and not an awful lot of deputies. But they have
really stepped up to the plate. They really understand that
partnering with the Federal Government is important.
The second thing that I think is important is this new
initiative and focus on guns going south and cash or the assets
or proceeds going south. And so the government of Mexico making
those choices to inspect cars coming into the country, which
had really not been done in the past, those things are
important. So I see the continuing cooperation and work of
everybody coming together having perhaps some significant
effects in the course of this year.
Mr. Flake. Thank you.
Mr. Foster [presiding]. Thank you. And now I will recognize
myself for 5 minutes.
Director Szubin first. Which countries currently provide
safe haven for the drug traffickers' finances? Is there a short
list of countries that are most prominent?
Mr. Szubin. No, I don't think we find that there are
countries that are affirmatively stepping up to operate as safe
havens. Certainly there are areas that are less well regulated.
And where the banking sector, the financial industry writ
large, is less aware of the types of risk factors that I was
talking about earlier that have become so central to banks in
Latin America. And our efforts alongside State, alongside all
of our colleagues, are of course to raise the tide for all
boats and to try to see the kind of careful compliance efforts
by banks around the world and to see governments also doing
more across the board.
When they improve their anti-money laundering practices,
that helps in terms of the narcotics effort. When they improve
sanctions implementation efforts, that helps. You know,
narcotics is touching on so many different areas that our
technical assistance activities, our capacity building
activities that have been flagged so well by Director
Kerlikowske and Ambassador Johnson are helping us throughout
the world.
Mr. Foster. And how connected is this to the efforts to get
at bank secrecy laws used for tax evasion? Are these very
similar efforts or are these really disjoined?
Mr. Szubin. I would say they are separate, and people tend
to make a distinction in foreign discussions between tax issues
and counternarcotics or other sort of mainstream criminal
organization issues, and so I see them as separate. But I would
certainly defer to my colleagues to comment.
Mr. Johnson. I think they are separate. Obviously some of
the capacity building about bank regulation can have an impact
on both issues. But on tax regulation we are looking more at
what our own citizens are doing. And in the money laundering we
are tending to focus on what others are doing. And those tend
to involve as much domestic transactions as they do
international transactions.
Mr. Foster. And are there additional legislative tools or
international agreements that you really need to make these
financial pressures on the drug cartels more effective?
Mr. Szubin. The main tool we use, as I noted, is the
Kingpin Act, and it is a very powerful authority that Congress
gave the administration back in 1999. It allows the President
to name what we refer to as Tier I kingpins, whether an
organization or a major trafficker. And then it falls on us in
the Treasury to followup. And when I say us in the Treasury, I
am not really speaking about a single agency effort by any
means, because it is the intelligence, the law enforcement
information from our colleagues at this table that are the fuel
for these actions.
But what we ideally do is go after the companies, the front
companies, shell companies, money laundering vehicles, the
accountants, the lawyers that are propping up these networks
and that are allowing them to launder and to conceal their
funds and ideally put them out of commission.
Now, I don't want to give you the mistaken impression that
every time we take a sanction action it means the company
closes down. There are times when we have to keep at it for
years and employ diplomatic efforts and persuasion to try to
bring foreign law enforcement to bear, whether that is in a
seizure, a forfeiture, or pulling the company's registration
altogether. But sometimes the coordination works so well that
the effects really are immediate.
Mr. Foster. So you think it is a fair statement that you
are limited by your manpower and foreign cooperation at this
point rather than your legislative authority.
Mr. Szubin. I don't view the legislative authority as
holding us back in any way.
Mr. Foster. I guess a question just for anyone who wants to
field it. Has there ever been any attempt at a sort of unified
economic analysis to see where we should put our money to get
the most bang for the buck, you know, just to try to figure out
some sort of metrics for how to minimize the economic damage
caused by drugs in the United States and the indirect cost to
our military and just some sort of bottom line and say, OK,
given that where do we put our resources? You know, you could
put them anywhere from bribing Afghan farmers to grow something
else to try to, you know, better enforcement on the streets and
cities in the United States and anywhere in between.
Has there ever been any group that just tried to look at
the whole, the economics of the whole thing and identify the
best return on investment?
Mr. Kerlikowske. It depends on which group I am talking to.
It is been interesting, but an area that actually you left out,
the prevention programs, are critically important. If we reduce
our demand here in the United States, if these other countries,
and I just came back from Russia, I have heard from every
country now that I have visited of their growing addict
populations, it is a significant drain on dollars. A small
amount of investment and prevention, we know that treatment is
about half the cost of incarceration and that treatment can in
fact be effective. None of this means that we are reducing the
power of law enforcement or the importance of law enforcement.
And in fact oftentimes people go into treatment with handcuffs
on. So I think that might be important.
When it comes to the other areas that you have talked
about, it has often been said that if our goal in eradication
is to reduce the amount of drugs coming into the United States,
it would be analogous to reducing the number of diamonds by
removing the lumps of coal. There are a lot of good reasons for
various eradication programs, a number of good reasons for it.
But if you really look at how it is going to reduce the amount
of drugs that are in the United States, that is probably at the
lowest end of that tier.
Mr. Foster. Thank you. I guess my time has expired, and so
now I will recognize Representative Mica.
Mr. Mica. Thank you. And I am glad that we are conducting
this hearing. I had the privilege of chairing this subcommittee
or its predecessor back in 1998 to 2000, and I think
responsibility for oversight is extremely important. I am
dismayed, however, at the systematic dismantling, and we heard
we are not even supposed to talk about a war on drugs. When
this administration comes in and takes your position, Mr.
Kerlikowske, takes it out of the Cabinet to me lessens its
importance, of, visibility. Some of the efforts to promote
legalization may be well intended, but they do have
consequences. And some of the reduced enforcement, all of this
will end up with more young people, in particular, who look to
role models and also look to leadership, believe it or not, and
the direction from the highest office of the United States
toward their attitudes of drug use and drug abuse. So I think
we are headed downhill.
I saw some statistics the other day I thought were
disturbing. With crime down generally across the country, we
still have young people addicted. And was it Mr. Placido, who
gave the statistic, 31,000 deaths? It is by far the worst
social and criminal problem that we have in the United States.
The other thing, too, is you are talking about putting
resources and what is most effective on the international
scene, and that is important. I want to talk about that. But
aren't most of the drugs still coming into the United States
from the Caribbean and South America through the Southwest
border and Florida? Is that right, Mr. Kerlikowske, Mr.
Placido? Is that right, Mr. Placido?
Mr. Placido. Particularly with cocaine we estimate now, the
interagency estimates about 91 percent of the cocaine crosses
the Southwest border, significant amounts of meth and
marijuana.
Mr. Mica. I was down in San Juan and got a briefing by the
Coast Guard and they showed me the charts of the drugs coming
out of South America. They traced the planes coming out. There
were solid red lines coming still out of there. So it is coming
into Florida, some of it was going up to Mexico and then
transiting in.
Were you consulted, Mr. Kerlikowske, or anyone else here
when the administration proposed to cut the Coast Guard
positions by 1,100, to mothball five recently upgraded
helicopters, reducing the Coast Guard's antidrug operations in
Florida, where I just happen to live? And the Caribbean, which
we just cited, was the main source of these people bringing
this crap in. That would dramatically reduce our Nation's
capability. Were you consulted on these cuts?
Mr. Kerlikowske. No.
Mr. Mica. Were you consulted, anyone on the panel?
OK. I was appalled. I am going to the budget hearing in a
few hearings and speak about that. I have gone to the Coast
Guard hearing. And actually both sides of the aisle were just
stunned at the administration's proposal.
Furthermore, in the same budget to cut border protection
fencing technology and infrastructure by more than--well, it is
almost a quarter of a billion dollars, $225 million. Were you
consulted Mr. Kerlikowske, the Drug Czar, on this?
Mr. Kerlikowske. I wasn't consulted on the fencing, but I
do know there are significant concerns about how effective that
program has been.
Mr. Mica. Well, again, our job is to take the resources and
make them effective, and I am looking for that. I am not here
just to criticize you. We want this to be successful. Those
kids are dying in our streets. I can tell you the names of
parents I have talked to in the last year that have lost their
kid with drug overdoses and drug abuse.
Ambassador Johnson, most of the heroin that is produced in
Afghanistan, I haven't been up to the border in a long time,
but it used to go to Europe. Is still about 90 some percent
going to Europe of that heroin?
Mr. Johnson. I don't think 90 percent goes.
Mr. Mica. OK. How much?
Mr. Johnson. Almost none of it comes to the United States.
Mr. Mica. All right. That was my point. You said in your
statement, I took it down, requires a global effort. Now, I
don't think the United States, and I used to be involved in
these panels, in legislative panels, and you guys listen here,
the new Members here who haven't been around. We need to get
some of our folks into these discussions again, legislative
people who set the policy, and get with the commissioners, get
with the European Union and others because they do have clout.
And if we talk to them Member to Member, interparliamentary
discussions to get the EU to do more, that crap is coming into
Europe and they are suffering. How much are they doing as far
as programs in Afghanistan, what share are they doing now?
Mr. Johnson. The Europeans are contributing significantly
to the ISAF forces, notwithstanding the----
Mr. Mica. For the drugs, crop substitutions, others.
Mr. Johnson. Yes, particularly the European Union
Commission and the British Government.
Mr. Mica. I can tell you whatever they are doing is peanuts
compared to what the United States is doing. They have lost
personnel, too, and we have lost personnel. But they have a
distinct interest in stopping this heroin. And I used to go to
those meetings, and we would sit there and the Europeans would
pooh-pooh us about cocaine. We did such a good job, up until
most recently, of stopping that cocaine from getting into the
United States and the price down here that it is being diverted
to Europe because it gets more dollars, right, and now they are
transiting they have a cocaine problem from South America in
Europe.
But we need to get more engaged as a subcommittee and
committee, and you guys need to get over there. And I know this
is an election year. Talk to these parliamentarians who make
that policy and get them engaged, not only for their benefit
and stop this stuff, but also for our benefit.
I thank you for letting me go over my time. I have
additional questions to submit to the record.
Mr. Foster. Representative Quigley is the next in
subcommittee seniority.
Mr. Quigley. Thank you, Mr. Chairman.
Mr. Kerlikowske, just taking this a slightly different way,
we have been told by many, including the Secretary of State,
that 90 percent of the weapons, including assault weapons that
are used in these drug wars that take place, are coming from
the United States.
Your thoughts on reextending the assault weapon ban as it
relates to these weapons?
Mr. Kerlikowske. No. I have been on the record as a police
chief for a number of years along with many, many, many of my
colleagues on the assault weapons ban. There were a number of
issues surrounding that, how effective it was. I would tell you
that right now that the assault weapons ban issue has not even
been something that I have considered only because of the
amount of time that I have been devoting on the drug issue.
But I will tell you this: that I think with the ATF's
implementation of electronic tracing data that has now been put
into Mexico in a Spanish version, we will know with much more
certainty the number of guns being seized in Mexico and where
they actually came from, whether it was Guatemala, Honduras, or
whether it was the United States. And I think that information
will in fact then impact future discussion.
Mr. Quigley. It will do that?
Mr.Kerlikowske. I think that information about where the
guns are coming from that are being seized in Mexico and are
being used to kill prosecutors, judges, and others, I think the
information about where those guns come from will be helpful to
any administration.
Mr. Quigley. Let's just say that it allows us to determine
that 70 or 80 or 90 percent of the assault weapons are coming
from the United States, that they are purchased through straw
purchasers or whatever. I know that is valuable information,
but I have a pretty good hunch that is the ballpark number now,
and doesn't it make sense to go forward more strongly and
reinstate the assault weapon ban?
I don't know that it gives anybody comfort whose lost
family members through assault weapons that we know where they
came from.
Mr. Kerlikowske. I think it makes sense to take that
information as an administration and to very carefully review
it and consider also the problems that have existed in the past
around the assault weapons ban. Other than that, there are a
number of other agencies and Secretaries that have a vested
interest in this issue, also, and I would probably defer some
of those comments to them.
Mr. Quigley. I have asked just about everybody who has come
before this committee the same question. But for the time
allowed, if anyone else on the panel would like to provide
their insight on that thought.
Mr. Placido. Thank you, Mr. Quigley. I just have one
comment. That is that this committee may be pleased to hear
that through the use of the asset forfeiture fund; that is,
moneys that have been seized from the drug traffickers
themselves, we have rolled out a picket line of license plate
readers in general proximity to the Southwest border to inspect
vehicles southbound into Mexico looking for bulk cash and
firearms, and I believe that we are having some success, at the
early stages now, but in actually stopping those firearms from
reaching Mexico in the first place.
Mr. Quigley. I appreciate that but you realize you are not
going to catch them all, right?
Mr. Placido. That is right.
Mr. Quigley. And having a greater source or greater volume
of weapons purchased initially legally makes it tougher to stop
all of them. There is a bigger pool coming into the country of
Mexico, therefore putting more innocent people, including
Americans involved in this war, at risk?
Mr. Placido. Yes, sir.
Mr. Quigley. Thank you.
Mr. Foster. And we will now recognize Representative
Luetkemeyer for 5 minutes.
Mr. Luetkemeyer. Mr. Wechsler, I am very familiar with the
program that we have, the National Guard troops over in
Afghanistan trying to teach the Afghan farmers how to produce
other crops so that they will no longer produce poppies, which
we get heroin from. How successful do you believe that program
to be?
Mr. Wechsler. That program, which is quite important, is
integrated into a number of other programs for alternative crop
development. The Secretary of Agriculture has personally gone
out there to give his advice and guidance.
It is, from the Department of Defense's recent experience
at least, the first time that we are integrating the Department
of Agriculture into our war efforts. It is critical that we do
so.
One that I would call your attention to is that not too
long ago, in the 1970's, the area of Afghanistan that we are
talking about was not a massive source of drugs. It was a
massive source of regular agricultural produce that was part of
the global market and made its way to market, and people had
healthy, vibrant communities based on that.
The efforts that we are doing there are to do crop
substitution and alternative development. Efforts are not going
to succeed overnight. In fact, they are going to take quite a
long time, given how much damage has been done, and they are
integrated into our wider COIN efforts to do so.
But it at least gives some degree of comfort to note that
there was a time not in the too distant past where that
provides a vision of where we might be going again.
Mr. Luetkemeyer. I come from Missouri. Our National Guard
group was the first one to go over there, and we have our group
over there for the third tour. And meeting with Colonel Lepper
last week with regards to his oversight with regards to the
program, it has been, in my view, pretty successful. And I
think it is probably, as you indicated, it is probably an
integral part of any sort of ability of us to transform that
country and cutoff the flow of drug money. If they don't
produce the agricultural crop from which they derive the drug,
it is going to be more difficult for the Taliban to fund
themselves.
So as a result of the success of the program, are you
thinking about promoting it somewhere else in the world, or is
this the pilot project and the verdict still yet to be
determined?
Mr. Wechsler. We still have a lot of work to do in
Afghanistan, and again, this work is going to take place over a
number of years. And it is not, of course, going to be just a
military activity but a wider whole-of-government activity to
do so because once we take the territory we have to hold the
territory and build the territory. And building the territory
means a lot of things, and one of the things it means is
bringing this territory back into an economic zone where they
can feed themselves and meet their own needs without having to
rely on the drug trade.
And it is also important to note for the individual farmer,
there are a number of crops that provide a lot more in the way
of money and value to that farmer that are completely legal
than opium. We just need to build the infrastructure around and
build the security structure around that so they can make the
logical financial decision to move in that direction. Right now
they are not in that position, too many of them.
Mr. Luetkemeyer. I realize it is a long-term process, but
it is a huge step in the right direction. If you transform the
economy, you can earn the trust of the people. If you can earn
the trust of the people, you can root out the Taliban, and I
think that is where we are headed. And I think from my
discussions and my knowledge of the programs, it seems to be
working very, very well.
Mr. Placido, with regards to threats around the world, what
do you feel right now is the most significant threat or what
you feel is the rising threat from whatever area, whatever
country that is sort of top of mind, ones we really need to
focus in on?
Mr. Placido. I think it is very difficult to put them in a
rank order because we are not comparing apples to apples. My
personal opinion--and I think where this administration has
been--is to really focus on Mexico, which is the arrival zone
for three of the major four drugs that are abused in the United
States and because of its geographic proximity to the United
States. While we are concerned about lawlessness across the
globe, be it West Africa or Afghanistan, there is a certain
urgency that is felt when there is instability to our immediate
south. And so I think that this administration and my agency
have spent a lot of time focusing on Mexico, and I think that
is appropriate.
Mr. Luetkemeyer. Mr. Kerlikowske, what do you think about
that?
Mr. Kerlikowske. When I look at the 2,000-mile border and
the level of violence, I would say that Mexico is very clearly
one where we should concentrate time, effort and resources.
General McCaffrey was just recently down there along with a
number of other people. I don't think it quite gets the
attention right now that other places in the world do get. But
after that, I think working on the global cartel issues--
because we not only see the flow coming through Mexico at times
and into the United States, we see a flow coming out of South
America into West Africa, Europe, the UK, etc.
And somebody had mentioned we are all in this lifeboat
together, with increasing addict populations and increasing
drug problems. So when Tony talks about this shared
cooperation, particularly among law enforcement agencies
regardless of nation, I think that has the most potential. But
Mexico would be at the top of my list.
Mr. Foster. Mr. Duncan, you are recognized for 5 minutes.
Mr. Duncan. Thank you, Mr. Chairman.
It was mentioned a while ago that 90 percent of the heroin
comes up from South America, but Mr. Placido just said three of
the four major drugs are primarily coming through Mexico. Do we
know what percentage of the drug activity overall is coming
from Mexico?
Mr. Placido. Sir, if I misspoke let me correct myself. The
interagency assesses that 91 percent of the cocaine which
enters the United States actually, whether it comes through the
Caribbean or up the isthmus of Central America, finds its way
into Mexico to cross the border in the Southwest. So that is
cocaine.
The four principal illicit drugs of abuse would be
marijuana, methamphetamine, heroin, and cocaine, and what we
know is that in addition to 91 percent of the cocaine
transiting Mexico before it arrives, a very large percentage of
the methamphetamine abused in the United States is either
manufactured in or comes from Mexico. I don't know that we can
put a number on it with precision. I have heard numbers that
range from the 70 to 80 percent range. Whether those are
accurate or not, it is a significant amount.
And we also get a very large percentage of the heroin,
which is either manufactured in Mexico or South American
heroin, principally from Colombia, that transits Mexico on it
is way to the United States.
So Mexico has become a very critical transshipment point
for many of the drugs that arrive in the United States.
Mr. Duncan. How are those drugs coming in? I know there are
thousands of trucks that come from Mexico every day. Is most of
it coming in on these trucks, or how is it coming in?
Mr. Placido. Well, I suspect that if we knew with precision
the answer we could really do something about it. What we know
is the seizures that we do effect reflect ingenuity by the
traffickers. Million-dollar-a-copy, self-propelled, semi-
submersible vessels, essentially a poor man's submarine, that
are used on a one-way trip where the drugs are ballast, bring
it up into the isthmus of Central America and into Mexico where
it is staged and moves across the border. We see backpacking of
marijuana and other drugs across the border between ports of
entry, ingenious concealments in vehicles and on railcars going
across the border.
Given the enormous profits that are at stake, the
traffickers have used planes, trains, and automobiles, and I am
sure some modes of conveyance that we have not even learned of
yet. But what we do know is that based on the seizures that we
make, the arrests, and the information that we develop, that
despite our best efforts they are successful in smuggling large
quantities of drugs into this country.
Mr. Duncan. What percentage of the vehicles coming from
Mexico are inspected for drugs each day?
Mr. Placido. I am afraid I am not the best person to
address that question. That would probably be best addressed by
somebody in the Bureau of Customs and Border Protection.
What I can say for the record is that it is a relatively
small number, and there is a constant tension between
facilitating lawful commerce across the border and inspecting
for contraband.
Mr. Duncan. Yes, sir.
Mr. Johnson. In some manner of speaking, there is 100
percent inspection, but the CBP, Customs and Border Protection,
has to make a decision as to whether a vehicle or a trailer
deserves further. They have a range of equipment to do so. But
as Tony was mentioning, the ability and ingenuity of these
individuals to secret their product in places, in cavities in
cars that people don't really know exist really requires kind
of a special touch by the customs people to discern who might
be a little dodgy and go after them in a very concentrated way.
Mr. Duncan. Well, it seems to me a few minutes ago it was
said that almost none of these drugs in Afghanistan are coming
to the United States, they are going to Europe. Seems to me
that we should direct almost all of this effort in Mexico,
where the problem really exists, instead of to places where the
problem doesn't exist.
Thank you very much, Mr. Chairman.
Mr. Tierney [presiding]. Thank you very much, Mr. Duncan.
Ms. Chu, you are recognized for 5 minutes.
Ms. Chu. Thank you. Unfortunately, I know all too well how
the violence of the Mexican drug cartels can affect us here in
the United States. Last December, one of my constituents was
the innocent victim of the drug cartels in Mexico. His name was
Bobby Salcedo, and he was abducted and murdered along with five
other men while visiting family members in Durango, Mexico. He
was an elected official and a rising star in our community.
Neither he nor the other five men had any connection to the
cartels or the drug trade. They were just in the wrong place at
the wrong time.
Since Mr. Salcedo was murdered, I have been in touch with
the Secretary of State, representatives for the FBI and
representatives from the Mexican Government to try to
understand how we can bring the killers to justice and also how
we can curb the violence of the drug cartels.
So I have questions on the Merida Initiative and money
laundering, specifically with regard to Mexico.
First on the Merida Initiative, we know that this was
started in 2007 but that out of the $830 million that has been
appropriated for Merida, only $26 million has been spent as of
September 2009.
What I would like to ask is the Merida Initiative, I
believe, was a very important first step toward a strong
cooperative relationship between the United States and Mexico,
but the official agreement ended last year and the
administration has not yet come up with a comprehensive plan to
succeed this initiative.
What are the plans for the future and what would be your
recommendations?
Mr. Johnson. Thank you, Madam Congresswoman. A couple of
preliminary comments.
I think that the Merida Initiative represents a new and
comprehensive method of cooperation between us and the Mexican
authorities and the type of engagement we have had with them
during the course of this is in a different plane than it has
been before. This is an ongoing program. What we are trying to
do, working with the Mexicans, is trying to figure out what the
next steps are beyond what we are already committed to do
together, what sort of Merida II, if you will, will be. But our
work with them under the current program continues unabated and
is very, very aggressive.
The second point I would like to make is while that $26
million number that you cited from the GAO report is correct in
terms of ``expended,'' it doesn't really reflect what has been
done. For example, the appropriation for the Blackhawk
helicopters that have been purchased, that will not appear as
an expended fund for some time because we don't actually pay
the bills until the product is delivered, accepted, and
everything is done in order to protect the taxpayer. Those
aircraft have already been manufactured, they have been
delivered by Sikorski, they are in Huntsville, AL, being
modified for the Mexicans' needs and they will be delivered to
them we believe sometime in the early to mid-summer.
So many of these programs continue even though they are not
reflected in that number. That doesn't mean that we don't want
to accelerate that just as rapidly as we possibly can. We are
very grateful to Sikorski and the Army for having found a place
in the queue, if you will, to accelerate this delivery in a way
that didn't affect our own Army's delivery of these
helicopters, for example. We are taking as many steps like that
as we can. We have delivered about 50 of these nonintrusive
inspection vehicles that they require for their police and
their border officials, a like number of armored vehicles.
Programs we have developed to train investigators that bring in
our own law enforcement authorities from DEA, from FBI, from
State and local government in Houston and Chicago and Los
Angeles.
So there are a number of aggressive programs going on that
I think reflect more clearly the effort that we have underway
with Mexico.
Ms. Chu. Can you tell me what Merida II might look like?
Mr. Placido. I think that what the distinction will be that
much of the, if you will, big ticket items have been covered
under the current appropriation: aircraft, nonintrusive
inspection equipment, things of that nature that are truly
quite expensive. As we look forward, we are going to want to
concentrate much more on training and institution building and
helping the Mexicans transform their police service and their
courts and their prosecution so that they are much more
effective.
Ms. Chu. In fact, I am glad you talked about the equipment
because when I talked to Ambassador Sarukhan he did express
concern that the Mexican Government has not yet received some
of the equipment that was promised under the Merida Initiative.
Are the items that you talked about the main items that are
really on the books but have not yet been delivered?
Mr. Placido. The items that I mentioned to you have in fact
transited to the border and are in the hands of the Mexican
authorities. I appreciate that the Mexicans want to push this
as hard as they can go and get materials as quickly as they
can. There has been a number of deliveries already. The Bell
helicopters are there as of last fall. These things are
ongoing, but we are working with the Mexican authorities to
move them just as quickly as we can.
Ms. Chu. My next questions have to do with the money
laundering aspect.
I understand that they have made progress on electronic
transfers that have to do with money laundering but that there
is a big problem with the bulk cash smuggling and that there
need to be more remedies along those lines.
Could you talk about that?
Mr. Placido. The effort that we have underway with the bulk
cash smuggling issue that I am primarily responsible for has to
do with giving the Mexicans greater capacity to detect cash
that is being smuggled into Mexico. As Director Kerlikowske was
mentioning a few minutes ago, the Mexicans are now inspecting
southbound cargo in a way that they have never done before, and
they are utilizing some of this equipment that we have provided
both at the land border and at air transit points and at marine
points as well. These are the points of capabilities that will
allow them to see into things as odd as tractor axles where
moneys are secreted.
I think that will get to part of the problem, but I have to
say that is an integral part of the larger effort to stop money
laundering through financial institutions, and that continues
to be a work in progress. We have made some progress on that,
but there is much more work to be done because we know there
are billions flowing in through the accounting systems that we
have in our banking system and theirs, and we are only catching
a sliver of that.
Ms. Chu. Thank you.
Mr. Tierney. Mr. Flake.
Mr. Flake. I just have one more question.
It has been said in your testimony and also we have heard
from others that West Africa is becoming a transit point,
Guinea Bissau in particular, some of the other countries.
What are we doing proactively? What structures can we put
in place now, both financially and otherwise, with DOD to try
to head this off before it becomes more of a problem? Is there
something that, looking back now at Latin America and South
America and everything else, that we could have done more
easily before it became such a big problem that we can do in
West Africa?
And I will go with Mr. Szubin first on that.
Mr. Szubin. It is a real challenge that you are raising,
and I think that the financial system there, the capacity of
the regulatory system, the government, is really not where it
needs to be in order to replicate what we have been able to do
in some other places, and it is not a quick fix.
I get a lot of e-mails from Nigerians every day. I would
encourage you not to send money.
Mr. Flake. Good advice. Thanks.
On DOD's side, anybody want to add anything, or anybody
else, on proactively what can we do to make it easier before it
becomes more of a problem than it is?
Mr. Johnson. As Adam mentioned, this is going to be
probably harder than Latin American rather than easier, and
that is because of the weak nature of these governments and the
institutions that they have. We have jointly done some
assessments of their capabilities. We have worked with DEA to
help build their partners, and this is a nascent effort.
But we believe that the most effective way is going to be
investing in building institutional capacity in those
governments so that they can detect, prosecute, incarcerate
people as well as build the type of linkages that we need so
that they can extradite people to the United States, if indeed
their activities implicate activities that are prosecutable
under our laws.
Mr. Placido. The only thing I would add, Mr. Flake, is that
through the generosity of Congress, the Drug Enforcement
Administration has been able to open a second office in West
Africa in 2009 in Accra, Ghana, and it was through the opening
of that office and the creation of vetted teams that we are
working with that we are able to, for example, this latest
investigation linking AQIM, al-Qaida in the Islamic Maghreb,
with drug trafficking. And our colleagues in Ghana expelled
these folks and they are sitting in a prison in New York
awaiting trial.
So there are things that can be done. I believe this is an
order of magnitude problem. We are not resourced at a level
that is commensurate with the problem that we face over there,
and there is engagement with organizations like ECOWAS, the
Economic Council of Western African States, and perhaps ILEA
training for some of our counterparts over there. There is much
in the works but a long, long way to go.
Mr. Flake. Thank you, Mr. Chairman. I believe you are going
to take care of this, but several Members on this side want to
submit questions. So if we can unanimous consent to allow them
to submit them for 5 days.
Mr. Tierney. There is unanimous consent to allow all
Members to submit remarks and questions to the witnesses within
the next 5 days.
Do any of the witnesses have any objection to that? The
record will reflect that they are all willing to do that, and
by unanimous consent that will be the case.
Just one last set of brief questions.
Mr. Szubin, you properly staff the Treasury. Does it have
enough personnel in collaboration with your colleagues here and
your own staff to address this at the level that you want to
address it?
Mr. Szubin. We are a much smaller outfit obviously than
some of my colleagues located here, and that is as it should
be. We don't need to do the very difficult work of drug
eradication.
Mr. Tierney. I am assuming that you leverage them for some
of the things that you need. Would that be a correct statement?
Mr. Szubin. That is very accurate. And it is DEA's field
investigators, the information they are obtaining, the
information that our intelligence colleagues are obtaining that
then feeds and fuels our targeting efforts to apply sanctions.
Mr. Tierney. Do you find like other aspects of this drug
situation that when you shut off one avenue there are still too
many avenues that are left available, and those would be
countries that don't cooperate with the United States, and what
other impediments do we have?
Mr. Szubin. I didn't hear the last few words.
Mr. Tierney. The impediments that we have for getting this
right? Some countries still just don't cooperate and are there
other impediments as well?
Mr. Szubin. I heartily agree that wherever you hit them,
they then move to another area. Whether that is another means
of transmitting money, whether we are talking about moving from
financial system to the gray market, casa de cambios, and bulk
cash. There is also, as soon as we designate a company, we know
that there is going to be efforts to circumvent sanctions, to
create a new company, a new shell, a new front, and disguise
the assets. This is our bread and butter, is not just
designating a network and walking away from it but then
monitoring very closely to see what are springing up as the
attempts at evasion and hammering them again. There is a cat-
and-mouse aspect to it which I think is common to all law
enforcement efforts, and we have to keep at it.
Mr. Tierney. I want to give each of you an opportunity. If
anybody feels they want to contribute something but feels they
weren't given that chance, just give me some acknowledgement
here, and I will be happy to give you an opportunity to make a
closing statement on that.
Mr. Kerlikowske.
Mr. Kerlikowske. Mr. Chairman, there was some discussion
about efforts to promote legalization. The administration is on
the record 100 times over that legalization of drugs is not in
the President's vocabulary, it is not in mine, and it is not
anything being discussed.
Role models. There is only one anti-drug messaging system
out there. The President requested $70 million for that, and I
think that is important.
And then Mr. Placido brought up the number of deaths in
this country, the tragic number of deaths in this country that
exceed gunshot wounds that are due to drugs. That has been
spiked by prescription drugs, drugs coming right out of
medicine cabinets and pharmaceutical places, not necessarily
drugs flowing into the country from other countries.
Mr. Tierney. Anybody else? Ambassador.
Mr. Johnson. Just to followup on a couple of points, on the
issue that Mr. Flake raised with respect to West Africa, we are
doing our best to get ahead of this problem. The Presidential
request for assistance to West Africa for institution building
goes up sharply in this budget from a relatively small base but
to $13\1/2\ million, and while it is dwarfed, if you will, by
some of our other programs there is a capacity takedown from
the governments involved that we have to pay attention to.
Showering them with more and more resources may be not be the
best way. We are going to have to build and work with our
partners, as Tony was mentioning, both within our government
and without.
The second point I would make is, as Will was mentioning
earlier, this is very much an every agency at the table
operation. There is a role for Africa on here, there is a very
big role for DEA, there is a role for institution building as
well, and a role for institution finance.
The second point to followup I would make, there was a
question raised earlier about whether we should drop everything
else we are doing and work just on Mexico. That is a very
important challenge that we have, and the law of concentric
circles certainly works. But we have an incredible national
interest in addressing the problems of Afghanistan in order for
our colleagues in the military to succeed.
So while the heroin problem from Afghanistan affects
largely its immediate neighbors, particularly Iran and the
Central Asian countries, as well as Europe and the Russian
Federation, we have an enormous interest in helping deal with
that problem because if we don't we are not going to succeed
there in any other way at all.
Thank you.
Mr. Placido. Mr. Chairman, if I could just add to briefly
clarify the record. It has been mentioned several times that
hardly any of the heroin from Afghanistan comes to the United
States. In point of fact, we run a forensic chemistry program
that identifies the source geographically of the heroin that is
seized in the United States, and there is a small percentage,
about 4 percent, of the heroin seized and analyzed by our DEA
laboratories has its origins in Southwest Asia, Afghanistan.
But more importantly is that a large percentage of the heroin
abused in Canada today comes from Southwest Asia and
Afghanistan, and so it would be a mistake to simply say that
this is a European problem or a problem in Iran or Russia or
other places which feel the bite of Afghan heroin more strongly
today because these networks that are smuggling into Canada
could very easily move that heroin into the United States and
undercut the market quickly. So it is not something that we can
take our eye off the ball on.
Mr. Tierney. Let me leave this closing question with you.
When we look at a range of drugs that cause problems for
people, either result in deaths or addiction or health
problems, alcohol is way up there. In fact, it is way over some
of these drugs that we are talking about here today.
So how do we reconcile that, that alcohol is way up there,
we spend very little attention on that. Marijuana, for
instance, is way down there, and we spend an incredible amount
of attention on that. Are we prioritizing any of our efforts on
that, or are we taking that into account at all?
Mr. Kerlikowske, I am going to let you do that one.
Mr. Kerlikowske. Mr. Chairman, the issue of underage
drinking has been in all of the past National Drug Control
Strategies, a discussion about it. I think it is well
recognized. It isn't exactly in my portfolio, but we are
certainly able to address it and talk about it because we also
see that combination of alcohol and other types of drugs. And
your points, sir, are well taken.
Mr. Placido. Sir, I would just add that our guidance from
the Department of Justice and from ONDCP, for that matter, on
the prioritization from these drug threats is crystal clear,
and while there has been much news about law enforcement
operations targeting medical marijuana, pain clinics and the
like, I can tell you it is a miniscule part of DEA's overall
effort that is spent on those kinds of operations and that when
we do get engaged in those it is because the people engaged in
that activity are violating both State and Federal law and we
are doing it with the help and at the request of State
governments.
Mr. Tierney. So you are going to tell me, Mr. Placido, that
every time the Federal DEA goes into a State that has legalized
medical marijuana and makes a bust or an arrest in there or
gets involved in that, you have been requested to go in by the
State?
Mr. Placido. We are working in conjunction with the States.
That is right, sir.
Mr. Tierney. You are working in conjunction with them, but
have you been requested to go in by them or is it an initiative
of the Federal Government?
Mr. Placido. It depends on at what level you are talking
about, the request. There is not a formal request coming from
the Governor's office but oftentimes working with local,
municipal, and community authorities who have requested
assistance.
Mr. Tierney. I have read quite a bit lately that there
seems to be some discontent with the fact that the policy was
that people were legalized for medical use in different States
and the Federal Government would basically allow that policy to
be implemented, but the DEA seems to be, according to these
accounts, a bit of a rogue agency and just going off and doing
it anyway.
Mr. Placido. I would assert that is not the case, sir, and
I would be glad to provide you with a briefing on that.
Mr. Tierney. Mr. Kerlikowske.
Mr. Kerlikowske. Mr. Chairman, also the guidelines from the
Attorney General's Office to the U.S. Attorneys in those States
with medical marijuana, there is a sentence that says that they
should listen to the concerns voiced by local law enforcement
and prosecutors to be receptive to that issue.
Mr. Tierney. I understand that to be the case, but what we
are reading about is that there aren't any complaints and they
decide that they are going in anyway despite local
considerations otherwise. So I do want to clarify that and I
would like at least a staff briefing on that so we can clarify
that issue.
I want to thank all of the witnesses for being here today
for your testimony and expertise. We will do the followup
questions. And I know that Members were not leaving because of
disinterest, but there is a ceremony for Mr. Murtha, who passed
away, right now that has drawn a lot of Members away.
This hearing is adjourned.
[Whereupon, at 11:50 a.m., the subcommittee was adjourned.]
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