[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
        PRIORITIES FOR U.S. ASSISTANCE IN THE WESTERN HEMISPHERE

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         THE WESTERN HEMISPHERE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 13, 2011

                               __________

                           Serial No. 112-30

                               __________

        Printed for the use of the Committee on Foreign Affairs


 Available via the World Wide Web: http://www.foreignaffairs.house.gov/

                                 ______


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                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                                 ------                                

                 Subcommittee on the Western Hemisphere

                     CONNIE MACK, Florida, Chairman
MICHAEL T. McCAUL, Texas             ELIOT L. ENGEL, New York
JEAN SCHMIDT, Ohio                   ALBIO SIRES, New Jersey
DAVID RIVERA, Florida                ENI F.H. FALEOMAVAEGA, American 
CHRISTOPHER H. SMITH, New Jersey         Samoa
ELTON GALLEGLY, California           DONALD M. PAYNE, New Jersey


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Arturo Valenzuela, Assistant Secretary of State, 
  Bureau of Western Hemisphere Affairs, U.S. Department of State.     7
The Honorable Mark Feierstein, Assistant Administrator, Bureau 
  for Latin America and the Caribbean, U.S. Agency for 
  International Development......................................    17
The Honorable Adolfo A. Franco, vice president for global 
  regulatory affairs, Direct Selling Association (former 
  Assistant Administrator for Latin America and the Caribbean for 
  the U.S. Agency for International Development).................    43
The Honorable Mark L. Schneider, senior vice president, 
  International Crisis Group (former Assistant Administrator for 
  Latin America and the Caribbean for the U.S. Agency for 
  International Development).....................................    50

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Arturo Valenzuela: Prepared statement..............    10
The Honorable Mark Feierstein: Prepared statement................    20
The Honorable Adolfo A. Franco: Prepared statement...............    47
The Honorable Mark L. Schneider: Prepared statement..............    54

                                APPENDIX

Hearing notice...................................................    72
Hearing minutes..................................................    73
The Honorable Connie Mack, a Representative in Congress from the 
  State of Florida, and chairman, Subcommittee on the Western 
  Hemisphere: Prepared statement.................................    75
The Honorable Dana Rohrabacher, a Representative in Congress from 
  the State of California:
  Letter from the Honorable James M. Inhofe, United States 
    Senator, to His Excellency Porfirio Lobo Sosa, President of 
    the Republic of Honduras, dated February 17, 2011............    78
  Letter from Members of Congress to His Excellency Porfirio Lobo 
    Sosa dated September 17, 2010................................    79


        PRIORITIES FOR U.S. ASSISTANCE IN THE WESTERN HEMISPHERE

                              ----------                              


                       WEDNESDAY, APRIL 13, 2011

                  House of Representatives,
            Subcommittee on the Western Hemisphere,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:30 a.m., in 
room 2212 Rayburn House Office Building, Hon. Connie Mack 
(chairman of the subcommittee) presiding.
    Mr. Mack. Good morning, everyone. This subcommittee will 
come to order. I first want to thank everyone, especially our 
witnesses for joining us for the hearing today. And I want to 
thank all the members who showed up today. Try to make it light 
and lively.
    After recognizing myself and Mr. Sires for 5 minutes each 
for opening statements, I'll recognize the members of the 
subcommittee for 2 minutes each for their statements. We will 
then proceed directly to hearing testimony from our 
distinguished witnesses.
    The full test of the written testimony will be inserted in 
the record. Without objection, members may have 5 days to 
submit statements and questions for the record.
    After we hear from our witnesses, individual members will 
be recognized for 5 minutes each for questions to our 
witnesses. The chair now recognizes himself for 5 minutes.
    Again, thank you all for being here, and look forward to 
this hearing.
    As chair of the Western Hemisphere Subcommittee, I am 
focused on three key priorities that I believe are imperative 
to U.S. interests in the Hemisphere; these are freedom, 
security, and prosperity.
    On February 15th, we held the first hearing of this 
subcommittee. During that hearing, I promised to continue to 
engage the administration to develop a strategic relationship 
with Latin America, the Caribbean, and Canada that promotes the 
security, goals, and ideals of the U.S. and our allies. In that 
hearing, we addressed four or five main areas where the State 
Department's focus was not in line with U.S. interests.
    The include the Colombia and Panama Free Trade Agreements. 
I am encouraged to see that we are a step closer on Colombia. 
Venezuela: Where I highlighted the need for the Keystone XL 
pipeline in order to counter Chavez's influence; however, we 
still see delays in the approval process.
    Cuba: Where a USAID contractor was recently sentenced to 20 
years in prison while this administration sat back and watched; 
and Mexico: Where Americans are being murdered and the drug 
cartels are targeting border patrol agents.
    In light of these policy concerns, the purpose of today's 
hearing is to review the budget request for next year, 
acknowledge support for the necessary assistance that advances 
U.S. interests, and identify misdirected funds.
    First, I would like to address security. Security ranks as 
the number one concern for citizens throughout this hemisphere. 
And these security concerns post a significant threat to U.S. 
citizens. However, President Obama appears more worried about 
increasing funding for agenda-driven programs, like the Global 
Climate Change Initiative, which will cost taxpayers $109 
million.
    State Department-led programs in Mexico, Central America, 
and the Caribbean acknowledge the expansive security concerns 
that we face in our hemisphere. Yet, the apparent haphazard 
approach to security-related assistance, and lack of leadership 
in implementing these programs demonstrate that security is not 
a priority for this administration.
    While the threat of a failed state looms across our 
southern border with Mexico, the Merida Initiative has suffered 
extensive delays throughout the entire first phase of the 
program. With roughly $1.1 billion appropriated under Merida 
for security equipment since 2008, latest estimates show that 
only around $300 million has been delivered.
    Regarding Central American, President Obama recently 
announced a new Central American Citizens Security partnership, 
including $200 million in funding to Central America. This 
announcement came as news to Congress, especially since the 
ranking member and I personally met with the new State 
Department Drug Policy Coordinator, and there was no mention of 
this new partnership.
    To date, no one from this administration has made an effort 
to work with Congress in establishing this new approach. 
Further, El Salvador and others in the region are unclear of 
what the partnership stands for, and how it will be funded.
    If the United States isn't going to be a leader in the 
region, there are many nations who are vying for such a 
leadership role: Which leads me to the ALBA Nations, led by 
Venezuela, and the need to establish that their actions have 
consequences: Governments that stake their success on building 
hatred toward the United States should in no way, shape, or 
form receive assistance from the United States Government and 
the taxpayers.
    It is counterproductive for the U.S. to provide continued 
assistance to nations where we are unable to access vetted 
units, and the host government continuously works to thwart 
U.S. efforts.
    There must be clear consequences for the actions of the 
ALBA nations, and the U.S. should start by eliminating 
assistance to Venezuela, Ecuador, Bolivia, and Nicaragua in the 
2012 budget.
    It is time we regain our leadership role and demonstrate 
through our Foreign Assistance Budget the benefits of being an 
ally of the United States.
    Thugocrats who spew anti-U.S. sentiment, and seek to 
destroy the freedoms of their people, should do so with the 
understanding that they will receive zero assistance from U.S. 
taxpayers.
    Third, environmental assistance. Finally, where President 
Obama has shown a true commitment in the budget is through 
environmental assistance. We see Global Climate Change funding 
infused throughout the entire budget request totalling in $109 
million just in the Western Hemisphere. From $10 million for 
Brazil, a nation that leads in clean energy, to $8 million for 
Ecuador, who last week kicked out our Ambassador.
    This administration must recognize that budget cuts are 
necessary. All of us would like to support our special 
interests around the globe; however, we are broke. Now is not 
the time for U.S. taxpayers to support Ecuador's clean energy 
initiatives.
    While Americans are being murdered at the southern border, 
and nations in our hemisphere continue to strengthen ties with 
Iran and illegal sources of income, the United States needs to 
show leadership in its funding priorities.
    I look forward to hearing from how State and USAID plans to 
work closely with Congress to achieve our jointly held goal of 
a safer, more prosperous region.
    Thank you very much.
    And now I'd like to recognize Mr. Sires for 5 minutes for 
opening statement.
    Mr. Sires. Thank you, Mr. Chairman, for holding this 
hearing, and thank you to the witnesses for being here today. I 
know you've been here before, so I thank you for coming.
    I want to begin by emphasizing to all those attending this 
hearing that the prosperity and the security of the United 
States is intrinsically linked with the political and economic 
successes and failures of the countries of the Western 
Hemisphere.
    I emphasize this because at times it seems that we forget 
the importance of the relationships we have with our neighbors. 
And as members of this subcommittee, I believe that these 
relationships are some of the most important for our national 
security, and future economic prosperity.
    I was happy to see that the President visited the region 
where he emphasized the importance of our current and future 
economic ties for the hemisphere, as well as our shared 
security concerns.
    It is no doubt that many countries in the region are taking 
the steps toward political stability, and economic growth. Yet, 
the region has also experienced an increase in violence that 
has reduced the quality of living across much of the Americas.
    The lack of inclusive participation by all members of 
society in the growing economic prosperity of the region has 
made the Americas susceptible to populous appeal, and 
jeopardizes the political and economic improvement made in the 
region over the last two decades.
    Additionally, the declining support for democracy as a 
result of corrupt governance, drug traffickers acting with 
impunity as the result of weak State presence, or increased 
immigration as a result of economic and fiscal insecurity have 
stretched the chances of any sustainable progress.
    Our assistance programs, such as Merida Carsi should 
continue to counteract these forces, not only to insure a 
promising future for our neighbors, but also for ourselves. Of 
course, the assistance to the Cuban people remains a priority 
of mine.
    In 2010, State Department Human Rights reports on Cuba 
reads like a handbook of oppression, and tyranny. The 
violations include, but are not limited to, denial of medical 
care, arbitrary imprisonment, denial of fair trial, limited 
freedom of speech, press, and right to peaceful assembly, and 
association.
    In light of this report, it seems preposterous that there 
is a delay in the 2010 funding for the USAID democracy 
promotion program in Cuba. While this delay has been touted as 
necessary to review the program, I see it as turning our backs 
on the Cuban people, and as a blatant disregard of the will of 
this Congress.
    And might I add also that Senator Kerry's comments don't 
help, where he blames the programs for Alan Gross' 
imprisonment. I mean, he should wake up and smell the coffee, 
to see what's going on in Cuba.
    These funds provide the necessary assistance to combat the 
Castro regime through the promotion of democratic principles, 
and by supporting civil societies' initiatives in Cuba.
    The death of Orlando Zapata Tamayo and the unlawful 
imprisonment of Alan Gross again show the necessity of such 
programs in the first place. We must hold the Cuban regime 
responsible for all these human rights violations, and not 
punish the Cuban people by withholding these critical funds.
    I would like to, again, thank the chairman for holding this 
hearing. I look forward to the testimonies of our witnesses. 
Thank you.
    Mr. Mack. Thank you, Mr. Sires.
    And Ms. Schmidt is recognized for 2 minutes for opening 
statement.
    Ms. Schmidt. Thank you, Mr. Chairman, and thank you for 
holding this hearing. I also want to thank Assistant Secretary 
Valenzuela, as well as Messrs. Feierstein, Franco, and 
Schneider for being here today to address the subcommittee, and 
for answering any questions we may have on this subject.
    Mr. Chairman, assisting foreign governments financially can 
have great benefits for the United States; namely, increased 
national security, and an expansion of markets for U.S. 
products and goods.
    Foreign aid promotes democracy, encourages free markets, 
and enhances security, but I also believe, in a time when 
Americans are having difficulty putting food on their tables, 
keeping gas in their cars, and paying their utility bills, we 
need to be prepared to justify to them the benefits to be 
derived from spending their hard-earned tax dollars on foreign 
assistance.
    With fewer dollars available to devote to foreign aid 
initiatives, it is of the utmost importance that we spend those 
dollars wisely, and prudently.
    Mr. Chairman, recently I reviewed President Obama's 
proposed FY `12 budget for the Department of State, and 
specifically, its outlays for International Affairs, 
particularly with regard to the Western Hemisphere.
    At this point, I'm not convinced that the President's 
proposed FY '12 budget for foreign operations and U.S. economic 
assistance in the Western Hemisphere properly reflects a true 
understanding of U.S. interests in the region.
    Mr. Chairman, I look forward to the hearing, the collective 
testimony of today's witnesses, and do hope to learn more with 
regard to foreign aid initiatives in the Western Hemisphere. 
Thank you for having this important hearing. I yield back.
    Mr. Mack. Thank you, Ms. Schmidt.
    And now Mr. Payne is recognized for 2 minutes for an 
opening statement.
    Mr. Payne. Thank you very much. And thank you, Mr. 
Chairman, for calling this very important hearing. I'll be 
brief.
    Number one, I think that Colombia is still regarded as one 
of the most dangerous countries in the world, has the world's 
largest internally displaced communities in front, actually, of 
Sudan.
    I would like to know why we are not demanding that Colombia 
meet certain human rights benchmarks before rewarding them with 
an agreement that has a high probability of creating further 
displacement, murders, and poor conditions in the country.
    Number two, I would like to hear how the administration 
feels about the very flawed Haitian election process, and our 
concerns that we may have with President-Elect Michel Martelly, 
formerly allegedly associated with Tonton Macoutes back that 
had a reign of terror on Haiti back 20, 30 years ago.
    Finally, I'm concerned about the Western Hemisphere Bureau 
on Race, Ethnicity, and Social Inclusion Unit, which is set to 
expire despite its effectiveness in strengthening democracies 
by including minorities, and various aspects of the government 
in social planning.
    I think that we have been on the right trajectory in Latin 
America and the Caribbean. We have been moving forward in the 
right direction. I think it's important that our neighbors to 
the south continue to have assistance. I think it's in our best 
national interest.
    I yield back. Thank you, Mr. Chairman.
    Mr. Mack. Thank you, Mr. Payne.
    And I notice people are fanning themselves. We know it's 
hot. We've turned the air conditioning on, or up, or down, or 
whatever to make it cooler, so just bear with us.
    I now would like to recognize Mr. Rivera for 2 minutes for 
opening statement.
    Mr. Rivera. Thank you, Mr. Chairman. Thank you Mr. 
Secretary Valenzuela for being here, and Administrator 
Feierstein, as well. Thank you so much for being here.
    I'll be brief. We've had previous meetings, and other 
hearings where we've had several discussions, so I'll just 
recap two of them that I think are important to touch on as we 
proceed in this hearing.
    First of all, the Free Trade Agreements that the United 
States is pursuing with South Korea, Panama, and Colombia. I 
think it's important to reiterate that all three trade 
agreements are important, and all three trade agreements should 
move forward.
    I think the recent announcement with respect to Colombia 
was a positive step forward, but it is in no way an assurance 
that that Free Trade Agreement is going forward. And as I've 
said on many occasions, and as several Members of the Congress 
have said, I will vote against the South Korea Free Trade 
Agreement unless I see concrete, tangible progress on the 
Colombia Free Trade Agreement. And on Panama, as well. We know 
how important that is. But Colombia, in particular, is one of 
our best allies in a region that is fighting narco terrorism, 
that is fighting for commerce and trade throughout the region 
to be free, and is wanting to expand with the United States of 
America. I think it's important to pursue that.
    And then secondly is the democracy promotion issue. We've 
spoken previously about the Helms-Burton legislation, and the 
requirements on Title III, and making sure that there is 
justification for the promotion and advancement of democracy 
and suspending that.
    I'd like to hear some more about that, as well as the USAID 
funding that Congressman Sires mentioned earlier. We know 
what's happened recently with Alan Gross, and I think that only 
speaks to the fact that we need to continue to move forward 
with this democracy funding to promote freedom and human 
rights, and civil liberties inside Cuba.
    And I know, Administrator Feierstein, we've spoken earlier 
about the issue of liability waivers. I know we've spoken 
privately about that, but I'd like to hear from you on the 
record regarding that issue, as well.
    Thank you, Mr. Chairman.
    Mr. Mack. Thank you, Mr. Rivera.
    And Mr. Rohrabacher is recognized for 2 minutes for opening 
statement.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    First and foremost, I would like to associate myself with 
the opening remarks of Chairman Mack, who expressed some things 
that are really dear to my heart, but also of concern to all 
responsible Members of Congress at this point.
    I'd also like to suggest that we, when we're looking at 
Colombia, realize they have been going through this turmoil, 
and there has been great improvement in Colombia over the last 
few years in terms of human rights, and violations that happen 
during times of conflict.
    It always surprises me that people will expect Colombia to 
have such a high level of human rights protections, which I 
support, even though they've been in the middle of a conflict, 
but they don't have those same expectations for Cuba, and 
Venezuela, who are not going through this conflict situation, 
and have even worse standards of human rights.
    Finally, Mr. Chairman, your commitment to actually calling 
people to task for bad judgments and bad policies in their 
country, I would hope that any country in the Western 
Hemisphere, or anywhere else that expropriates the property of 
American citizens, they have to deal with that, and they have 
to make it right by those people, or we should not be giving 
them foreign aid.
    I will personally join with you and others who are 
interested in joining me in this. I will suggest as the aid 
package moves forward, that Honduras not be given further 
foreign aid until it deals with the expropriation of American 
properties in the country.
    We have expressed over, and over, and over again, 
petitions, letters, et cetera to the Government of Honduras 
that they need to deal with these expropriations, and deal with 
those people who have had their property taken in a fair way. 
They have not--they have stonewalled this issue, and I'm going 
to work with any other member of this committee who will work 
with me to see that Honduras does not get one cent of American 
money until it deals fairly with those Americans whose property 
has been expropriated.
    So, thank you very much, Mr. Chairman. There's lots to talk 
about today.
    Mr. Mack. Thank you, Mr. Rohrabacher.
    I'd like now to introduce our witnesses. First, the 
Honorable Dr. Arturo Valenzuela. It's good to see you again. 
Dr. Valenzuela is the Assistant Secretary of State for Western 
Hemisphere Affairs.
    Prior to his appointment to State, Dr. Valenzuela was a 
professor of government and director of the Center for Latin 
America Studies in the Edmund A. Walsh School of Foreign 
Service at Georgetown University.
    During the Clinton administration, Dr. Valenzuela served as 
Special Assistant to the President and Senior Director of 
Inter-American Affairs at the National Security Council. Again, 
thank you, and welcome.
    Second, the Honorable Mark Feierstein. Mr. Feierstein is 
the USAID Assistant Administrator for Latin America and the 
Caribbean.
    Before joining USAID, served as principal and vice 
president at an international polling firm. Additionally, he 
serves as Special Assistant to State for the U.S. Ambassador to 
the Organization of America States.
    Welcome both of you. Mr. Valenzuela, is recognized for 5 
minutes for an opening statement.

    STATEMENT OF THE HONORABLE ARTURO VALENZUELA, ASSISTANT 
SECRETARY OF STATE, BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S. 
                      DEPARTMENT OF STATE

    Mr. Valenzuela. Thank you very much, Mr. Chairman. I'm 
delighted to have this opportunity to testify before you today 
on the Department of State's budget priorities in the Western 
Hemisphere. I look forwarding to working with you, and with 
this committee to advance U.S. interest in the hemisphere. I am 
also honored to be here with my colleague, Mark Feierstein, in 
appearing before you.
    President Obama's recent visit to Brazil, Chile, and El 
Salvador highlighted the importance this administration places 
on its relations with Latin America. The President's message of 
partnership, and the dozens of agreements completed during the 
trip underscored how tremendously significant the region is for 
the United States on issues including our economic 
competitiveness, our global strategic interests, and our core 
values of democracy and human rights.
    And last week, President Obama announced that we are moving 
with the U.S.-Colombia and U.S.-Panama trade promotion 
agreements, which we expect will create thousands of American 
jobs, and increase U.S. exports by more than $1 billion.
    As Secretary Clinton recently stated:

        ``Enhancing our competitiveness, accelerating 
        innovation, achieving energy security, expanding our 
        exports, all of these require robust engagement with 
        Latin America. Even in this inter-connected world, 
        geography still matters. This administration believes 
        that our opportunity with Latin America derives from 
        the power of proximity; proximity that is geographic, 
        economic, and reflects the common history of the 
        Americas. Our hemisphere stands to gain from greater 
        cooperation, which can lead to the rise of even more 
        capable partners, who can help us accomplish our 
        strategic objectives from promoting clean energy to 
        improving security in the region, to strengthening 
        human rights and democracy.''

    The Obama administration's strategy of engagement has 
contributed to a shift in Latin American public opinion. 
According to the 2010 poll by Latinobarometro, two-thirds of 
the population in most countries had favorable attitudes toward 
the United States, an increase of 10 to 20 points from 2008 
levels. The role of the United States in Latin America is also 
overwhelmingly viewed as positive. This suggests the Obama 
administration's strategy has reversed the dangerous depletion 
of good will toward the United States that had occurred in the 
prior decade.
    U.S. foreign assistance in Latin America and the Caribbean 
supports our overall policy goals of advancing U.S. interests 
through promoting effective democratic governance, citizen 
safety for all, expanded economic and social opportunity, and a 
clean energy future.
    The U.S. foreign assistance request for FY 2012 for the 
Western Hemisphere totals $1.98 billion. We believe this 
request will help us meet the challenges and opportunities we 
face. At the same time, it is lean and responds to the fiscal 
constraints that we all recognize.
    In order to sustain the hemisphere's progress, we must 
prioritize citizen security. Our FY 2012 funding request 
targets the issue of citizen safety, accounting for just less 
than half of the total request for the Western Hemisphere. Our 
efforts will be particularly focused on improving citizen 
security in Mexico, Central America, the Caribbean, and 
Colombia.
    In order to oversee effectively the citizen security 
programs in Latin America and the Caribbean, I've asked 
Principal Deputy Assistant Secretary Roberta Jacobson to assume 
responsibility for ensuring program coordination.
    Our assistance request also reflects the priority we've 
placed on supporting democratic processes that meet 
international standards of transparency and accountability. We 
also seek to strengthen the foundation of civil society, 
thereby giving voice to the voices in countries like Venezuela 
and Cuba.
    We continue to help the Haitian people rebuild after the 
terrible earthquake that struck the country, fulfilling 
President Obama's vision that our commitment to Haiti is 
sustained.
    Additionally, we have made sure that critical issues like 
preventing youth violence, and combating violence against 
women, and other marginalized groups, including indigenous, 
African descendants, have become increasingly incorporated into 
our assistance programs.
    In conclusion, Mr. Chairman, we believe our budget 
priorities for the Western Hemisphere focus on achieving high 
impact in areas vital to U.S. interests and laying the 
groundwork for deeper and more productive partnerships with the 
region, as a whole.
    And I thank you for your attention, and I look forward to 
your questions.
    [The prepared statement of Mr. Valenzuela follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    Mr. Mack. Thank you very much.
    And now I'd like to recognize Mr. Feierstein for 5 minutes 
for an opening statement.

     STATEMENT OF THE HONORABLE MARK FEIERSTEIN, ASSISTANT 
ADMINISTRATOR, BUREAU FOR LATIN AMERICA AND THE CARIBBEAN, U.S. 
              AGENCY FOR INTERNATIONAL DEVELOPMENT

    Mr. Feierstein. Mr. Chairman and members of the committee, 
thank you the invitation to testify today.
    I am grateful for the committee's interest in the U.S. 
Agency for International Development's priorities in Latin 
America and the Caribbean, and pleased to have this opportunity 
to discuss the Obama administration's development policy in the 
Americas.
    The President's FY12 budget request for USAID in the 
Western Hemisphere reflects the administration's intent to 
focus our investments in priority countries and sectors, and 
achieve lasting development gains overseas, while contributing 
to the security and prosperity of the American people.
    USAID's work is not charity. When we help economies closely 
tied to our own, we develop markets for our products. When we 
help farmers in coca producing areas harvest legal crops, we 
stem the flow of drugs to our communities. When we reduce the 
prevalence of disease in the Americas, we help keep our 
communities healthy.
    But USAID's programs also reflect core American values. The 
American people's outpouring of support following Haiti's 
earthquake is a prime example of these values at work. We at 
USAID are doing our part in Haiti, too, and we're seeing 
progress despite the daunting challenges.
    The number of Haitians living in tent camps has fallen by 
more than 800,000; 20 percent of the 10 million cubic meters of 
rubble produced by the quake has been removed. More Haitians 
have access to clean water and health services today than 
before the earthquake.
    We look forward to working with the new Haitian Government 
to accelerate the reconstruction process, and implement our 
long-term development plans.
    In the context of a challenging fiscal environment, 
President Obama's FY12 budget request projects key priorities 
including combating drug trafficking and organized crime in the 
Americas. Mexico, Central America, and parts of the Caribbean 
are suffering from the highest rates of non-political violence 
in the world, and it is in our interest to support their 
efforts to combat crime.
    While we continue our longstanding programs to strengthen 
judicial systems, the heart of USAID's security work involves 
preventive measures that deal with the social roots of 
violence; namely, providing productive alternatives to youth 
vulnerable to the lure of crime.
    We also continue to help drug-producing countries to cut 
off the source. In Colombia and Peru, USAID is providing 
farmers with legal alternatives to growing coca and helping to 
re-establish government presence in areas where guerilla groups 
and drug trafficking organizations recently operated with 
impunity.
    Defeating the drug cartels and gangs will require strong 
democratic institutions. Our FY12 budget request maintains our 
support for programs that strengthen the capacity of national 
and local institutions to provide services.
    But our democracy work also extends to the support of civil 
society, and political parties in countries where political 
space is narrowing or, in the hemisphere's remaining 
dictatorship, non-existent. Our engagement with countries will 
be shaped by their commitment to democratic practices and 
respect for human rights.
    Democracy is advanced and bolstered by broad-based economic 
growth. USAID, therefore, continues to prioritize programs that 
allow the private sector to flourish, and create jobs that lift 
people out of poverty.
    Ensuring we have adequate resources for our highest 
priorities requires making tough choices; choices we are 
already making. We have committed to closing two USAID overseas 
offices in this hemisphere in recognition of the gains that 
Panama has made since we re-established a presence there in 
1990, and will close our office and wind down our programming. 
And in a cost-saving measure, we plan to manage our Guyana 
projects from one of our regional offices.
    Of all the metrics we use to gauge our success, none is 
more important than reaching the point at which we can close up 
shop in a country. As President Obama has said: ``The purpose 
of development is creating the conditions where our assistance 
is no longer needed.''
    In order to maximize the impact of our budget, we are 
leveraging other sources of funding. We are already working 
with countries like Brazil and Chile, which are valuable 
lessons to share from their recent successes in achieving 
broad-based economic growth, and developing effective 
democratic institutions.
    Recognizing that long-term development and job creation 
depend upon an active and vibrant private sector, we are also 
increasingly collaborating with businesses. And we are 
increasing the return on our investments by encouraging the 
development of innovative solutions.
    For example, spurred on by an incentive fund created by 
USAID and the Gates Foundation, the telecommunications company, 
Digicel, introduced a mobile money system that is enabling 
Haitians to access financial services on their cell phones.
    Such novel approaches, combined with selectivity in our 
investments, and a commitment to create greater capacity 
abroad, will accelerate the pace of development in the 
Americas. And as Latin America and the Caribbean become more 
prosperous and secure, the United States will also reap the 
benefits.
    Thank you, Mr. Chairman. I look forward to your questions.
    [The prepared statement of Mr. Feierstein follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Mack. Thank you. And now we'll move on to questions.
    Mr. Valenzuela, can you talk a little bit about how you--
how the State Department views the priorities of Latin America? 
What are our priorities in Latin America?
    Mr. Valenzuela. Yes. Well, thank you very much, Mr. 
Chairman.
    I think that you summarized well in your opening remarks 
what our priorities would also be; would be freedom, security, 
and prosperity. And when we look at the countries of the 
Western Hemisphere, we're mindful of two things. One, that 
there has been extraordinary progress in the region as a whole. 
We're no longer in the situation we were 25 years ago with 
authoritarian regimes and civil conflicts in Central America, 
and failed economic policies.
    We're in a situation that's really far more promising in 
that respect, where you have elected governments in most parts, 
where you have, at the same time, countries that are able--have 
been able to take on economic policies that not only have led 
to significant prosperity and growth in many places, but also 
have addressed issues of social exclusion.
    So, we see the glass half full in this sense, because we're 
also mindful, and I'll finish my comment with this reflection. 
We're also mindful of the challenges that still remain, that 
there are weak democratic institutions in some countries, that 
there are really significant levels of exclusion of certain 
sectors of societies, that there's a lot more to be done. And 
we want to stand to be an effective partner to be able to 
address all three of these things; how we can better help 
protect security, how we can better advance freedom, and how we 
can, at the same time, better advance economic opportunity and 
prosperity.
    Mr. Mack. Thank you. Can you tell me then why looking at 
the budget, it appears that--so you would agree that security 
is either the, or one of the top issues and concerns facing all 
of us in the Western Hemisphere.
    Mr. Valenzuela. That's correct.
    Mr. Mack. Can you tell me then why in the budget that was 
submitted to the Congress, that it appears less of an emphasis 
on security, and more emphasis on other programs, including 
$109 million for Global Climate Change?
    Mr. Valenzuela. If I might summarize very briefly our 
priorities. The largest commitment that we have in our budget 
is, in fact, to citizen safety initiatives. It's 48 percent of 
the entire budget. And that includes Merida, it includes CARSI 
in Central America, it includes the CBSI initiatives in the 
Caribbean, it includes Colombia. This is a substantial 
commitment and the lion's share of our budget commitments.
    We also have other priorities that are indicated by the 
three objectives that you, yourself underlined. And we want to 
be responsive to some of the other priorities, as well.
    And alternative energies and climate change is an issue 
that is a priority in the Western Hemisphere in all the 
countries. When I travel, as I did recently with the President, 
one of the conversations it was clear both in Brazil and in 
Chile, was the importance of addressing issues of alternative 
energy and climate change.
    Mr. Mack. Again, let me get back to the priorities, though. 
So, you can't help but to see things in the news that's talking 
about Mexico, and the problems that's happening in Mexico with 
the drug cartels, and security concerns there.
    Guatemala, there's concerns in Guatemala, and the security 
threats and challenges in Guatemala. The drug trade that 
continues to flow through Venezuela, but also is impacting most 
of the nations in Latin America.
    And when we look at the budget, and we see a diminishing 
priority in budgetary items for security issues, it puts up red 
flag. And then you superimpose that on $109 million for global 
climate change, which I understand is a priority of the 
President, but I don't know that it's a priority of the people 
who are seeking security in Latin America.
    How do you justify those? And you've got about--if you 
could, really quickly, on that. And then I've got a follow-up 
question.
    Mr. Valenzuela. Yes. Well, again, I would reiterate that 
our commitment to programs like Merida, and CARSI, and CBSI is 
fulsome.
    One of the reasons why there's some decline----
    Mr. Mack. Okay. Let me, real quick, because you keep 
talking about----
    Mr. Valenzuela. Sure.
    Mr. Mack. Only $300 million of the $1.1 billion has been 
delivered in Merida, so there's an issue there.
    Let me ask this one last question. And I mentioned this in 
my opening statement about ALBA countries.
    We continue to support with U.S. tax dollars countries like 
Venezuela, Bolivia, Ecuador, and Nicaragua, who are building--
trying to build up their nations by spewing anti-U.S. rhetoric. 
Why would we spend almost $95 million in assistance to 
countries like Venezuela, Bolivia, Ecuador, and Nicaragua, who 
have made it clear that their priorities, their goals, their 
visions in life are not the same as the United States, or the 
people of the United States? Why would we continue to support 
those countries?
    Mr. Valenzuela. Mr. Chairman, if I might simply respond to 
your earlier remark, as well.
    With the $408 million has been already delivered in the 
case of Merida, and we expect that $500 million more will be 
delivered by the end of this year. So, it may have been slow at 
the beginning, but we're really meeting our commitments with 
the case of Merida.
    And, also, the final traunche of Merida is focusing on 
some--we moved beyond equipment and things like that to, in 
fact, some of the really critical issues, such as institution 
building, and judicial reform, and police training.
    I don't want to----
    Mr. Mack. The issue, though, there is that we are lagging 
behind the drug cartels. And this is since 2008. It's extremely 
disappointing that a commitment that we made to work with the 
Mexicans in this, the fact that $300-, $400 million of $1.1 
billion has only been delivered since 2008 is cause for 
concern; I think you recognize that.
    My time is up, so let me move on. We'll have a chance to--
--
    Mr. Valenzuela. All right, thanks.
    Mr. Mack [continuing]. If you need it, to discuss this.
    Mr. Sires is recognized for 5 minutes for questions.
    Mr. Sires. Thank you, Mr. Chairman.
    First, let me associate my remarks--associate myself to the 
remarks of Dana regarding Honduras. I'd be happy to work with 
you, Congressman, on this issue.
    You know, we talk a lot about the Merida initiative. And 
one of the things that I had a concern with when this whole 
thing was first conceived was the fact that we seem to not take 
a regional approach to the problems in the Western Hemisphere, 
but we seem to be focusing--we focus on Mexico, so the drug 
gangs move to another country. It's like a balloon, you push it 
here, and it pops out someplace else.
    We were very successful in Colombia. I think until we do a 
regional approach in all these countries in Central America, 
we're not going to be as successful as we want to be. Let me 
put it that way.
    The fact that the President is putting $200 million, I 
would like to see more details about it. I don't know enough 
about it. Is it going to be more of a regional-basis, or is it 
not?
    So, I was just wondering how you feel about the comment 
that I just made, that I think we should take more of a 
regional approach, instead of taking--it seems that we're 
taking country by country, and where the problem pops up, we 
try to throw some money in there.
    Can you just comment, both of you?
    Mr. Valenzuela. Congressman, I couldn't agree with you more 
that, in fact, this cannot be approached simply by doing 
bilateral relationships with particular countries and 
assistance with particular countries. It has to be a broad 
regional focus.
    And, indeed, one of the first steps that the administration 
did with Merida when this administration came in was, in fact, 
to broaden Merida to include a strong component with regard to 
Central America, which led to the development CARSI initiative, 
the Central American Regional Security Initiative, as well as 
the CBSI initiative with regard to the Caribbean; mindful of 
the fact that we still needed to continue to cooperate with 
Colombia on this.
    So, at this particular point, our entire focus is really 
very significantly regional. It extends from Mexico, through 
Central America, through the Caribbean, and into Colombia. And 
we're working together with all of the countries there.
    And if I might say something about the Partnership for 
Central America that the President referred to. This is a broad 
partnership that not only includes the United States, but it 
also includes key actors, such as Colombia, and, in fact, 
Mexico, working in Central America, but other donor 
organizations. And by that I mean the Inter-American 
Development Bank, and the World Bank, and other countries, such 
as the European Union, and others.
    We're trying to do a much more strategic planning effort 
with other countries, with donors, so that we can, in fact, 
address what is, indeed, a regional problem, as you suggest.
    Mr. Sires. Would you like to comment on that, sir?
    Mr. Feierstein. Yes, thank you. I very much appreciate the 
opportunity to address that.
    I think if you look at the FY12 budget request, and, in 
fact, look at our budget today, and our programs, you'll see it 
reflects the approach that you're encouraging.
    The largest budget for us in the Western Hemisphere after 
Haiti, of course, is in Colombia. And that is largely a 
security program, where we do a lot of alternative development 
work in helping the government establish a presence in areas 
that were in conflict recently.
    Peru, which is our second-largest budget in the hemisphere, 
half of our budget there is devoted to alternative development, 
which, of course, is security-related work.
    And at the same time, for FY 12 we've been able to, in a 
very challenging fiscal environment, in our austere budget, 
been able to protect and even increase funding for Mexico, El 
Salvador, Guatemala, and Honduras. And, again, those are 
security-related programs.
    In the case of USAID, which has a relatively smaller piece 
of the overall U.S. Government security package, we're focusing 
our work, and Rule of Law with extensive programs in Mexico and 
elsewhere. And, also, working with at-risk----
    Mr. Sires. I'm running out of time, and I just want to ask 
this other question.
    One of the problems that I talked to the Ambassador from 
Guatemala was that when we find people that are illegally in 
this country, and there are gang members, we send them back to 
the country. We don't let them know that these people were gang 
members. Has that changed? We don't let these countries know 
that I am sending you 20 gang members from whatever gang. Do we 
let them know now?
    Mr. Valenzuela. Congressman, my understanding is that the 
law enforcement agencies are making much more of an effort now 
to, in fact, inform their counterparts in countries of the 
background of some of the people that are being sent back.
    Mr. Sires. Okay.
    Mr. Valenzuela. But you would have to--I would refer you to 
them, however, for a fuller explanation.
    Mr. Sires. Chairman, thank you very much.
    And my last question has to do with the budget for 
democracy promotion. I understand that there were cuts there in 
this budget for foreign programs, and so forth. How are you 
going to prioritize that, if we're going to have these cuts?
    Mr. Feierstein. Congressman, I think if you look at the 
budget you'll see that, in fact, the largest sector of the FY12 
budget request is for democracy. We have a whole host of 
democracy programs, which range from strengthening institutions 
like parliaments in local government, but also working in 
countries where there's been a backsliding, or repression. We 
have important programs in Cuba, Venezuela, and elsewhere. So, 
it is a high priority for us, and those programs will continue.
    Mr. Sires. If we ever get the programs going in Cuba.
    Mr. Feierstein. Well, our programs are ongoing in Cuba. 
There's been no interruption there. We have just submitted a CN 
for an additional $20 million, and we look forward to 
continuing those programs.
    Mr. Sires. Okay. Thank you very much, Chairman.
    Mr. Mack. Thank you, Mr. Sires. Mr. McCaul is recognized 
for 5 minutes for questions.
    Mr. McCaul. Thank you, Mr. Chairman. And I want to thank 
the witnesses for being here today.
    Mr. Secretary, I--when Secretary Clinton testified before 
the full committee, I brought up Merida. And as with the 
chairman of this subcommittee, expressed my disappointment in 
the flow of--in the implementation of that, particularly at a 
time when Mexico is in a real crisis. And I know the Ambassador 
has expressed his concerns from Mexico to us about that.
    I asked her to respond in specific numbers what is the 
latest with that program, and I look forward to getting that 
response.
    I've spent a lot of time talking about Mexico lately, and 
the drug cartels. I wanted to focus on another issue of 
importance today; and that is Venezuela.
    And I'm concerned, as I believe the chairman is, as well, 
of the influence of Venezuela in Western Hemisphere. Under this 
budget, $5 million will be given to Venezuela in economic 
assistance, so I think it's appropriate to talk about the role 
of Venezuela.
    Clearly, they're not our friend. Their allegiance to Iran 
concerns me greatly. I recently had Bolivian law makers who 
came to me in my office, and told me about these large aircraft 
that were leaving Bolivia, flying to Venezuela, and then on to 
Iran. They mentioned these uranium mine fields, or mining 
facilities in Bolivia. That's a real concern.
    Maybe you can tell me whether that's fact or fiction, or 
perhaps another setting, but that is very concerning to me. And 
then we had the Commander of SOUTHCOM, General Fraser, testify 
before the Senate last week, and talked about his concerns 
about the flights between Caracas and Tehran.
    And just recently, I was told that the administration is 
considering issuing special licenses to allow Iranian aircraft 
and engines of U.S. origin to be serviced and repaired.
    To me, that's pretty stunning. I mean, if we have a role in 
servicing Iranian aircraft that could be complicit with 
exporting uranium from Bolivia and Venezuela.
    Mr. Secretary, let me just throw that out. This is what's 
being reported to me. If it is, in fact, true, it's very 
disturbing news, and I hope you can perhaps shed some light on 
this information.
    Mr. Valenzuela. Thank you, Mr. Congressman. I want to thank 
you for your concerns, and your focus on Mexico, and the things 
that you've done, and brought to our attention. And want to be 
as responsive as we can to you on your concerns about that.
    With regard to Venezuela, I couldn't agree with you more, 
that we're concerned about Venezuela's position. We have been 
for some time, not only internally, the way Venezuela has been 
going after press freedoms, and after opposition sectors, 
undermining democratic institutions, issuing things like, or 
doing things such as having the National Assembly delegate 
authority to the Executive that goes beyond the term of that 
National Assembly, and so on. So, the pattern is a long one.
    And we're also concerned about the relationships that 
Venezuela has with Iran. And we've been tracking those very 
carefully, and very closely. And we've been following up. In 
fact, we're in continuous communication with our intelligence 
community, we're in continuous communication with other 
partners.
    I just had a bilateral set of meetings, day-long meetings 
with the Israelis recently where we went through a whole host 
of issues, including this particular concern that we share with 
regard to Iran.
    And let me just simply say that Iran does clearly want to 
increase its profile in the Western Hemisphere. The base point 
from which they start, however, is extremely low. And, in that 
sense, you know, we haven't seen some of the things that have 
been alleged out there. But I can assure you, Mr. Congressman, 
that we really are looking very closely at these sorts of----
    Mr. McCaul. And my time is running out, but, again, we had 
the Commander of SOUTHCOM. It's not me, or some anonymous--this 
is the General as Commander of SOUTHCOM, expressing concerns 
about these flights between Caracas and Tehran. That gets my 
attention. And I think it gets most people's attention.
    Do you have any information about these flights, not only 
from Venezuela, but also originating out of Bolivia, and the 
potential that these aircraft may be carrying the very 
materials that Tehran may be using to produce a nuclear bomb?
    Mr. Valenzuela. Yes. We are concerned about these 
allegations. We've looked at them extremely carefully. We 
continue to monitor them very carefully.
    And, Mr. Congressman, I want to be responsive to your 
question regarding the alleged licensing of--I don't know about 
that. This is the first I've heard about that, and I would be 
glad to look into that, and get back to you on it.
    Mr. McCaul. And just in closing, and thank you for your 
cooperation on that. I just find it absolutely absurd that we 
would be providing assistance to Iranian aircraft by way of--
basically, providing material support to a terrorist nation. 
And if these licenses are granted, to fix these airplanes.
    So, with that, and thank you for your time, and I yield 
back.
    Mr. Mack. Thank you, Mr. McCaul. And now I'd like to 
recognize Mr. Payne for 5 minutes for questions.
    Mr. Payne. Thank you very much.
    Although you touched on a question of Haiti, could you 
update us on the development; are many people still in tents, 
and there's been a tremendous amount of pledges made. I wonder 
do you know how many of the pledges from countries around the 
world actually have been lived up to. And is there a program 
going on to relocate the people that are in tent cities?
    Mr. Feierstein. Well, thank you, Congressman. I appreciate 
the question. Of course, you are very much aware of the 
enormous challenges we're facing in Haiti. This was a country 
that was before the earthquake the poorest in the hemisphere, 
one of the poorest in the world. And the devastation was 
tremendous from the earthquake, with 20 or 30,000 people being 
killed, and government ministries being damaged.
    In terms of the people living in tent camps, at one point 
it had reached 1.5 million people. We are encouraged that that 
number is now down to under 700,000. Now, to be sure, that's 
too much, but we're working very hard to continue that 
transition. We have a number of programs in place to do so.
    We're repairing what's referred to as yellow homes. These 
are homes that were damaged in the earthquake, but they could 
be repaired. We're helping transition people into what are 
called green homes. These are homes that are ready to be moved 
into. We've also provided two shelters, transitional shelters. 
And we have a long-term program in place to build more 
permanent homes.
    At the same time, we're trying to insure that the people 
who are living in these tent camps are being taken care of, and 
we've been providing free food, free water, health care. In 
fact, as I noted earlier, today in Haiti more people have 
access, more Haitians have access to clean water and health 
care than before the earthquake. And, in large part, that's 
because of the services that exist in the tent camps.
    And what's remarkable with regard to the cholera crisis, 
which we're hoping to--we think is under control now, has 
barely touched the tent camps. If you look at the conditions in 
which people are living in there, there was great fear when the 
cholera crisis broke that it would have a terrible impact on 
the camps. In fact, there has been very little impact on the 
camps because of the clean water people have there, and their 
access to health care.
    But the reconstruction of Haiti is going to take many 
years, and we are very much committed to the reconstruction of 
Haiti, and looking forward to working with the new government.
    Mr. Payne. Is there any assessment yet of the new 
government? I know with President Aristide there, back--has 
that had any impact on what's going on in Haiti?
    Mr. Feierstein. To the best of my knowledge, there hasn't 
been any impact yet. We've had some discussions with the 
candidate string, the campaign, and there have been discussions 
between the Embassy and USAID Mission in Haiti with the 
incoming government. And we believe that there is--there will 
be an alignment in terms of the priorities with regard to 
development and reconstruction there.
    Mr. Payne. There is, as I mentioned earlier, the Western 
Hemisphere Bureau has a Race, Ethnicity, and Social Inclusion 
Committee, and it seems that the committee is about to expire. 
And I just wondered are you aware of it, and has there been any 
allocations in the current budget for the unit, or is there 
enough interest in keeping this going, especially in Brazil and 
Colombia?
    Mr. Valenzuela. Congressman, I participated personally in 
these events with that unit. I think that it's extraordinary 
work that the unit has done. Our dialogue with Brazil on race 
and discrimination issues has been extremely important, and 
we've been very interested in the level at which Brazil has 
responded with regard to that.
    Also, our interest in continuing to work the Colombians, 
particularly on the issues with Afro Colombians is very 
important. So, it's our commitment to look for ways to maintain 
that unit, and to keep it vibrant. It will certainly be 
continued to be part of our diplomacy.
    We're encouraging embassies throughout the hemisphere to 
adopt programs like this. They're very valuable. They allow us 
to share best practices with regard to measures that can be 
taken to address issues of social exclusion, racial 
discrimination, and things like that. So, we're very committed 
to this kind of a program.
    Mr. Payne. My time has expired. Thank you very much.
    Mr. Mack. Thank you, Mr. Payne. Now I'd like to recognize 
Mr. Rivera for 5 minutes for questions.
    Mr. Rivera. Thank you, Secretary Valenzuela. I'm still a 
little murky as the real impact of the recent announcement on 
the Colombia Free Trade Agreement. When President Santos left 
the White House, and our Trade Ambassador, Mr. Kirk, came 
outside and gave a statement, I saw a video of the statement, 
and what he said, in essence, was that: ``The agreement allows 
us to be put on a path to begin a discussion on how we can come 
to an agreement on steps that can be taken to move forward with 
the Colombian Free Trade Agreement.'' What in the world does 
that mean?
    Mr. Valenzuela. Congressman, it means that we want to move 
forward, and this is the administration's policy to conclude 
the Free Trade Agreement with Colombia and Panama. We hope to 
move as expeditiously as possible on that. We've had an 
excellent, excellent dialogue with the Colombians on this.
    There is an action program that we've worked together with 
them on it, and I think--I'm very optimistic. This is 
something, also, that the Colombians are doing not because the 
United States has asked them to do it. It's something that they 
are committed to. And I'm referring very specifically to such 
things as labor rights, and the treatment of labor official----
    Mr. Rivera. Where are we today that's different from the 
day before this agreement, or this quasi agreement was 
announced? What's the difference?
    Mr. Valenzuela. I think that we're close to being able to 
move this forward. And I'm confident that this is something the 
administration wants to get done this year.
    Mr. Rivera. We're close to moving it forward, because we 
had heard that previous to this agreement they signed, also. 
This agreement does not mean this Congress is going to get the 
Colombia Free Trade Agreement any time soon.
    Mr. Valenzuela. I would defer to USTR, on issues like 
timing. But we're optimistic that this is moving forward.
    Mr. Rivera. Well, I hope you'll take back the message to 
USTR that in no way will this agreement mollify the commitment 
of many Members of Congress to move forward on the Colombia 
Free Trade Agreement. And I'm speaking in terms of a bipartisan 
commitment that I've heard from colleagues, such as Congressman 
Farr, who although I may disagree on a variety of issues vis a 
vis U.S. policy toward Latin America, when he says that he's 
going to vote against the South Korea Free Trade Agreement, and 
work to kill the South Korea Free Trade Agreement, if the 
Colombia Free Trade Agreement does not come forward, as well, 
you can put a lot of members on the list that will do that, 
including myself. I will work day and night, whatever I can do 
to kill the South Korea Free Trade Agreement unless there is 
concrete movement on the Colombia Free Trade Agreement, as 
well.
    A second issue----
    Mr. Valenzuela. We're committed to Colombia Free Trade.
    Mr. Rivera. I hope as committed as you are to South Korea.
    Going to the issue of Cuba and democracy promotion, is 
there any conversation or consideration to taking Cuba off the 
list of state sponsors of terrorism?
    Mr. Valenzuela. No, there's not.
    Mr. Rivera. So, this administration is fully committed, and 
believes that Cuba merits being on the list of state sponsors 
of terrorism.
    Mr. Valenzuela. That's correct.
    Mr. Rivera. Why does this administration believe Cuba 
merits being on that list?
    Mr. Valenzuela. Because the finding has been that this is a 
country that has in the past supported terrorism, is involved 
in terrorist actions. And we're not intending to change that.
    Mr. Rivera. Well, I hope the administration will also 
remember there is currently activities, as well, in terms of 
activities with terrorist organizations, whether it be the ETA, 
Basque terrorists, or FARC terrorists, and so forth. And we 
also have to remember that one of the main tactics that 
terrorists will often use is hostage taking.
    And in that sense, I want to come to the issue of Alan 
Gross, and ask you where are we in terms of making sure that 
this particular American hostage is released by the Cuban 
Dictatorship immediately?
    Mr. Valenzuela. Congressman, thank you for asking. We've 
made it very, very clear that we think it's an outrage that not 
only was he detained for as long as he was, but that, in fact, 
that he was convicted inappropriately. This is a dedicated 
international aid worker, who was working--and Mark can speak 
more specifically to the kinds of programs he was working with. 
And we think that, and we've made it very clear to the Cuban 
authorities that we would want him to be released immediately.
    Mr. Rivera. So, there is no consideration----
    Mr. Valenzuela. And we're working very assiduously in that 
direction.
    Mr. Rivera. So, there is no consideration, whatsoever, to 
the possibility of making an agreement whereby Mr. Gross is 
released, and Cuba is taken off the list of state sponsors of 
terrorism.
    Mr. Valenzuela. No.
    Mr. Rivera. Thank you, Mr. Chairman.
    Mr. Mack. Thank you, Mr. Rivera. Mr. Rohrabacher is 
recognized for 5 minutes for questions.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman. Mr. 
Chairman, at this point I'd like to submit for the record a 
letter from Senator Inhofe to President Lobo of Honduras, as 
well as a copy of the letters that were sent to the President 
of Honduras by other members of the House.
    Mr. Mack. Without objection.
    Mr. Rohrabacher. Thank you very much. And the letters are 
self-explanatory, and let me just ask, what is the policy of 
American properties expropriated in a country in this 
hemisphere? Do we just shrug our shoulders and say we're going 
to give them aid, anyway?
    Mr. Valenzuela. Thank you for the question, Congressman. 
I'd be happy to look at the letters and the information you're 
going to send me.
    This issue has been raised before in previous testimony. We 
don't comment on investment disputes. This is something that is 
between private parties, but we'll be very happy to look at the 
letters that you are referring----
    Mr. Rohrabacher. It has been adjudicated, and there are a 
number of cases that have been adjudicated. We're not just 
talking about one, although there's one that we all know about. 
That adjudication then at some point put has some sort of 
moral, if not legal, onus on us to follow-up, and have a 
different kind of policy based on the fact that there's been a 
legal finding of wrong-doing. And I would hope that we do not 
provide foreign aid of American taxpayers dollars to 
governments that have taken property from Americans. And after 
having it legally decided that it was unlawful expropriation, 
that we would then just continue sending money, our aid dollars 
to them.
    On a totally different issue, what role does the Export 
Import Bank play in your development goals in Latin America?
    Mr. Valenzuela. It actually plays a very important role. 
You would have to--I would have to refer you to them for the 
specifics on their programs, but I might point out that during 
President's trip, the chairman of the Export Import Bank was 
one of the members of the cabinet, and sub-cabinet that 
attended some of the meetings, and participated in the CEO 
forum. And, in fact, the Export Import Bank has made available, 
I believe, $1 billion line of credit for U.S. companies to be 
able to participate in some of the infrastructure projects 
that----
    Mr. Rohrabacher. The Export Import Bank, if I'm correct, 
we, the taxpayers, although there's no appropriation for the 
Export Import Bank, we are, basically, guaranteeing the loans 
of the Export Import Bank.
    Mr. Valenzuela. Exactly.
    Mr. Rohrabacher. And, again, the Export Import Bank then 
guarantees other loans to do business where it targets. What do 
you make of this report that the Export Import Bank has 
promised Brazil's state-owned oil company a $2 billion loan 
guarantee to help them with their offshore oil drilling, at a 
time when, of course, our Government is opposing, and has 
actually stopped the offshore oil drilling in the Gulf of 
Mexico?
    Mr. Valenzuela. I would have to refer you to the Export 
Import Bank for comment on that.
    Mr. Rohrabacher. You don't know anything about this.
    Mr. Valenzuela. I don't know much about that, yes.
    Mr. Rohrabacher. Let me just note for the record, Mr. 
Chairman, that there are reports that the Export Import Bank 
has offered this $2 billion loan guarantee to the Brazilian 
state-owned company here, an oil company. And the oil company 
is actually, also, being involved in this happens to have an 
investor. And there are millions of shares of Petrobras, this 
Brazilian oil company, the state-owned oil company, I guess. 
But they actually are--it's on the market, as well. And 
billions of shares of this have been bought and sold by various 
interests. The largest firms holding this prior to the 
disclosure of the Export Import Bank's offer for this credit 
line, the firm that had the most shares in this company prior 
to this announcement, in some way the biggest owner of those 
shares of that company was Mr. George Soros, who happens to be 
one of the President's biggest campaign contributors. This 
deserves to be looked into, don't you think?
    Mr. Valenzuela. Again, I would refer you to the Export 
Import Bank for the details on that. I have no comment.
    Mr. Rohrabacher. Well, I can tell you, if it was a 
Republican administration, that people would be up in arms. 
There'd be-every news show would have something about this. 
Something stinks down there about this. Two billion dollars 
going to help offshore oil drilling off Brazil with no 
guarantee that we're going to get any of that oil, at a time 
when the administration is clamping down on our own people who 
are trying to do offshore drilling, that, itself, is 
questionable.
    Then when you tie this into the fact that George Soros 
probably made hundreds of millions of dollars off the stock 
that he owned in the company that we were providing these loan 
guarantees for, which he's probably already liquidated and 
made--and pulled in his cash, this is outrageous, and deserves 
a very close look from this committee, Mr. Chairman. Thank you 
very much.
    Mr. Mack. Thank you, Mr. Rohrabacher. And if the witnesses 
don't mind, we will, I think, go another round of questions, 
because I think there's a little more to chew on here. So, I'll 
recognize myself for 5 minutes.
    I want to get back to this question about the ALBA 
countries, and why would we continue to fund them. The 
President of Ecuador is quoted as saying to the U.S.: ``That we 
can keep our dirty money, and that Ecuador doesn't need it.'' 
So, the question is, is why do we continue to send U.S. 
taxpayer dollars to countries like Ecuador, who (a) think that 
the taxpayers in the United States are dirty, and they don't 
want their dirty money, and they don't need it.
    Mr. Valenzuela. Right. It's a very fair question, 
Congressman. Let me answer it this way. We have fundamental 
strategic interests in the Western Hemisphere that we need to 
advance. Among those strategic interests are, indeed, 
strengthening democracy freedoms, as you pointed out earlier, 
addressing security issues, and looking for greater 
opportunities.
    The ALBA countries are, by choice in this one group, but 
they're very different societies. And their histories are 
really quite different. So, the phenomena in Bolivia is a very 
different phenomena from the Venezuelan, and from the 
Ecuadorian phenomena, or the Nicaraguan phenomena. And we need 
to be mindful of those differences.
    And our response needs to be one that is a strategic 
response. We shouldn't just have a blanket answer that says oh, 
we won't fund, or we will fund. What we need to do is to see 
how we can, in fact, advance our interests.
    Mr. Mack. But what interests----
    Mr. Valenzuela. And in some----
    Mr. Mack. Okay.
    Mr. Valenzuela. Well, in some cases----
    Mr. Mack. Wait. Hold on.
    Mr. Valenzuela. Yes.
    Mr. Mack. I get your--so, what you're saying is we have 
strategic interests, and that helping some of these countries 
with U.S. taxpayer dollars to help fight drug trafficking is a 
good thing. So, I hear what you're saying, but why would we 
send $8 million to Ecuador for Global Climate Change 
Initiatives?
    Mr. Valenzuela. Because we're interested in advancing 
Global Climate negotiations, and things like that.
    Mr. Mack. I mean, I'm sorry, but there is no--other than if 
there's--this is my opinion, that there's a political 
motivation by the President and the administration to promote 
Global Climate Change Initiatives, but when a country like 
Ecuador, the President says keep their dirty money, and that 
the Ecuadorians don't need it, I say we take him at his word. 
And that if he doesn't need the money, and if he's going to 
join with Venezuela and other ALBA countries in trying to build 
his own country on spewing against the United States, then we 
should--the taxpayers of America don't want their money being 
spent on programs like this.
    Mr. Valenzuela. I understand your position on this. 
Congressman, let me say a word about Ecuador, if I might, 
because, as you know, the Ambassador was PNG'd from Ecuador. We 
think that this was an outrageous determination on the part of 
the Ecuadorian Government. We immediately took reciprocal act 
by PNG'ing their Ambassador here in Washington, and we've cut 
off, in fact, the high-level bilateral dialogue that we had on 
a series of issues.
    And at this particular point, we are reviewing all of our 
cooperation with Ecuador to see where we, in fact, move ahead. 
And there may be some areas where it--in fact, maybe it is in 
our interest, for example, to deal with support for certain 
sectors of Ecuadorian society, where we may have some benefit 
to having some contacts with them.
    Mr. Mack. Well, let me----
    Mr. Valenzuela. But those are things that we're still 
considering.
    Mr. Mack. Okay. Let me just say this for the record, and I 
hope they hear me loud and clear.
    I understand that what you're referring to is the 
President's budget and request. In this Congress, with the 
majority being now in the Republican's hands, I'm going to work 
hard to defund any assistance to the ALBA countries, because I 
don't--first of all, we've got our own financial problems here 
in the United States. We certainly don't need to be funding 
programs like Global Climate Change, or any other initiatives 
in countries where the leaders of those countries don't want 
the support of the United States.
    And I think we can save the American taxpayers' money, and 
at the same time send a strong message to these ALBA countries, 
if you continue down this path, you can expect zero assistance 
from the United States. Nine seconds. You agree?
    Mr. Valenzuela. It's your prerogative.
    Mr. Mack. Thank you. My time is expired. Congressman Sires 
is recognized for 5 minutes for additional questions.
    Mr. Sires. Thank you, Mr. Chairman.
    You know, Senator Kerry made a big issue out of the $20 
million that were used to promote democracy in Cuba, where he 
claims that what this does is antagonize the country, and so 
forth. You know, my comment to that is, I don't think Cuba 
needs any antagonizing to put people in jail. They've been 
doing that for the last 50 years.
    And I would just wonder how the administration feels about 
the comments made by Senator Kerry? Is it going to change your 
mind? Are the programs going to be stopped? Because I know 
Senator Menendo is pretty harsh on the comments that the 
Senator made.
    Mr. Feierstein. Thank you, Congressman. We are fully 
supportive of our programs, our democracy programs in Cuba. 
These are programs that began in 1996 under the Clinton 
administration. They've continued throughout through three 
administrations now. They have strong bipartisan support. We 
think those programs are essential. We intend to fully fund it 
at levels consistent with previous years. We've just submitted 
a CN. I believe there will be a briefing later this week by the 
State Department and USAID to go into greater detail with those 
programs. And we look forward to full funding from Congress for 
them. Thank you.
    Mr. Sires. I was just wondering, when you sit next to these 
people across from you in Cuba, and you have their interest 
groups, do you bring up the criminals that are in Cuba, like 
Chesimard, who killed a state trooper in New Jersey, and fled 
to Cuba? She shot him point blank. She's there now. Her new 
name is Assata Shakur, we know her as Chesimard. Do you raise 
those issues with the Cuban Government? I mean, these are 
people that are wanted here for killing a state trooper in New 
Jersey. Sir? Don't run away from me. Please let me know, yes or 
no.
    Mr. Feierstein. I'll have to defer to my State Department 
colleague on that. They handle the relations with Cuba.
    Mr. Sires. Okay. Thank you.
    Mr. Valenzuela. I'm not familiar with this particular case 
that you're referring to, Congressman. I'd be happy to look 
into it. But let me say that when we do have our discussion, 
and I haven't conducted them myself, but when we have 
discussions from my Bureau with the Cubans on things like the 
post office, and the migration talks, we always raise issues 
like these. And we also insist on meeting with people from 
civil society in these countries.
    Mr. Sires. Well, New Jersey has put a bounty on her head of 
$1 million. And I know that the State Troopers in New Jersey 
are constantly coming to see me to make sure that the woman 
that shot this state trooper is not forgotten. So, I would just 
put it on the list to do, when you meet with some of these 
people.
    There are over 100 criminals in Cuba, or more that have 
fled from this country. And they have sanctuary there, so I was 
just wondering, with all this talk about Alan Gross, what a 
terrible person he is, we have people that committed murder 
here in this country, and are living in Cuba, and it's like a 
sanctuary. So, I just don't know--I think the administration 
could be a little firmer, and more aggressive in trying to 
pursue some of these criminals, and bring them back for justice 
here in the United States. I mean, these are people that are 
convicted here by our courts. These are people that escape from 
jail, and went to Cuba as a sanctuary.
    All right. Thank you very much.
    Mr. Valenzuela. Sure. Thank you.
    Mr. Mack. Thank you, Mr. Sires. Mr. McCaul is recognized 
for 5 minutes for questions.
    Mr. McCaul. Thank you, Mr. Chairman.
    I, actually, do want to go back to, now that we have a 
second round, go back to Mexico. And Congressman Cuellar and I 
were involved with Merida, and I think we're almost in a post-
Merida phase, and that we need to start thinking about what is 
the next--what is the strategy?
    And I chaired a hearing on Homeland Security where the 
focus was, what is the plan, and what is the strategy to help 
the Mexican Government win this war against the drug cartels, 
which President Calder"n clearly says, ``It's a war.'' I think 
when 35,000 people died at the hands of the drug cartels, he's 
correct in saying that.
    But we've had contracts and problems with Merida. Mr. 
Feierstein, I know you're aware of some of these, 90 percent to 
one company for training, that people don't even show up. But 
I'm interested in what is the--you know, I had the Department 
of Defense, DHS, State Department all at this hearing. What is 
the plan? It seems to me that these different agencies ought to 
be working together on what is the overall strategy that we 
should be implementing to help Mexico. After all, it is in our 
backyard. It's not Libya, halfway around the world. It's right 
next door.
    And one issue that came up, and the two of you are very 
familiar with what we did in Colombia, not that you want to use 
a cookie cutter approach, but it seems to me that we should be 
looking at maybe the best practices, and lessons learned from 
the Colombia experience. And I know that sometimes this gets 
people nervous, but I think we ought to look at what worked 
down there in Colombia, and apply that to Mexico.
    Can you tell me if either one of you agree with that 
assessment? And, if so, what can we do working together? And 
Congressman Mack and I will be traveling down to Colombia and 
Panama and meeting with President Calder"n in Mexico City. What 
can we do working together, not only this administration, the 
majority and the minority in Congress, but also with the 
Mexican Government? What can we do working together to help 
them win this war, which I believe Merida is not being 
implemented as it should, and it's not working, and we're 
losing. They're losing, and we're losing, also.
    So, with that, do you agree that we ought to be looking at 
what happened, our experience in Colombia, and are there things 
we can be doing in Mexico, applying those principles, and how 
can we work together on this?
    Mr. Valenzuela. Congressman, I couldn't agree with you more 
that this is of the highest priority for the United States in 
terms of our fundamental interests to be able to work 
effectively with Mexico, to be able to overcome this challenge.
    And I also would agree with you that to draw on lessons 
that have been learned elsewhere is a very valuable way to go. 
And, in fact, there is much more conversation. One of the 
aspects of this regional strategy with regard not only to 
Mexico, but also to Central America, and the Caribbean is to 
get other partners involved. And the Colombians have really 
stepped up to the plate in this regard.
    They're training policemen, as you know, in Mexico. They're 
also helping training policemen in Central America right now. 
But taking this a step further, some of the strategies that 
were used, in fact, to go push back on the criminal 
organizations that the Colombians used is something that the 
Mexicans might look into.
    We're fairly confident that the essential pillars that 
we've been following are the correct ones, that we need to 
bring down the drug trafficking organizations, and criminal 
cartels, and that sort of thing. That you also cannot do this 
without paying attention to building stronger institutions, 
including judicial institutions, and----
    Mr. McCaul. And I agree. We have a President in Mexico who 
wants to work with us, and I don't know what the next election 
will bring, whether we'll have that same window of opportunity. 
And time is kind of running out. I think President Calder"n has 
been a great ally, and we've been a good ally to him, but time 
is running out, and the window is shutting. And it seems to me 
we need to maybe start thinking, maybe not outside the box, but 
think about an overall new strategy that we can bring to bear 
down in an area that's right next door, where there's a crisis 
on our doorstep.
    So, I would hope you would take a look at that. I, 
personally, think it's getting to the point where the idea of a 
joint intelligence/joint military type operation is going to be 
necessary. Now, I know the sovereignty issues are great. And I 
understand the obstacles that you have in the State Department 
to convince them that that's the best thing, but if you're 
sending our guys down there, we ought to do it without one hand 
tied behind our backs.
    So, if I could indulge the chair, and ask one more 
question. And this has to do with--it was called to my 
attention that the Palestinian authority, President Abbas, was 
traveling. He's traveled around the world, but particularly in 
Latin America, trying to get support for the recognition of a 
Palestinian State outside of the Negotiation Peace Process.
    I think that's troubling, obviously, to the Israelis, 
because I think their view is look, let's come to the table, 
but let's come without any conditions, without any 
preconditions. And I think that has some merit to it. Why bring 
conditions before you even sit down at the table?
    So, I, personally, I think I find this activity a little 
bit--it's counterproductive, in my judgment, to what Secretary 
Clinton and the State Department is trying to do with respect 
to the Peace Process in the Middle East. And this may even come 
down to a U.N. resolution.
    What is your position on this strategy that President Abbas 
has been taking? And what would be the position of this 
administration, if a U.N. resolution was to come down 
recognizing a Palestinian State outside of the negotiation 
process?
    Mr. Valenzuela. Congressman, our position has been very 
clear on this, that this is not a helpful step for countries to 
recognize the Palestinian State at this particular point. This 
is something that is being negotiated by the two parties. In 
fact, it's far better for them to address these issues, and 
that this, in fact, could be counterproductive to have 
countries do this kind of recognition. And we've made that very 
clear to our counterparts throughout Latin America.
    As you well pointed out, there are some countries that have 
recognized the Palestinian State, some of them have actually 
indicated that they recognize it with the 67 borders. We've 
made it very clear to all of our counterparts that we don't 
think this is a good idea.
    Mr. McCaul. Well, I think that's the right course of 
action. And thank you for your answer.
    Mr. Mack. Thank you very much. And I'd like to thank the 
witnesses for being here today, and bearing with us as we move 
through this. And always appreciate your input, and trying to 
work on making America stronger around the world, and at the 
same time protecting the taxpayer dollars. So, thank you very 
much.
    Mr. Valenzuela. Thank you, Mr. Chairman. Thank you, 
Congressmen.
    Mr. Mack. And I think now we will have a second panel. 
We'll give a moment for this panel to gather their things.
    I'd now like to introduce the second panel. First, the 
Honorable Adolfo Franco. Mr. Franco is the vice president for 
global regulatory affairs for Direct Selling Association. 
Previously, Mr. Franco served at USAID as the Assistant 
Administrator for Latin America and the Caribbean. Welcome.
    And, second, the Honorable Mark Schneider. Mr. Schneider is 
the senior vice president for International Crisis Group. Mr. 
Schneider has previously served as the Director of the Peace 
Corps, and as the Assistant Administrator for Latin America and 
the Caribbean at USAID. And welcome to you, too, sir.
    I would now like to recognize Mr. Franco for 5 minutes for 
an opening statement.

STATEMENT OF THE HONORABLE ADOLFO A. FRANCO, VICE PRESIDENT FOR 
 GLOBAL REGULATORY AFFAIRS, DIRECT SELLING ASSOCIATION (FORMER 
ASSISTANT ADMINISTRATOR FOR LATIN AMERICA AND THE CARIBBEAN FOR 
         THE U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT)

    Mr. Franco. Thank you so much, Mr. Chairman. And thank you 
for the invitation to testify today. It's really great to come 
home to the House Foreign Affairs Committee. And I appreciate 
the opportunity to share with you my perspectives on how the 
United States should advance our interests in Latin America and 
the Caribbean.
    Let me begin by saying that although I may disagree with 
some of my colleagues, including my good friend, Mark 
Schneider, testifying here today, I have great respect for 
them, and for the commitment they bring they bring to their 
work.
    Arturo Valenzuela and I had many vigorous debates during 
the 2008 Presidential election when he worked for the Obama 
campaign, and I worked for the McCain campaign. And I look 
forward to continuing these exchanges with him, and others in 
the future.
    However, we do have significant, even profound differences 
in our views regarding U.S. interests, and how best to secure 
them. These are clearly seen in our positions regarding the 
President's proposed budget for Fiscal Year 2012, and his 
conduct of foreign affairs in the region, as a whole.
    I have trouble, Mr. Chairman, understanding a foreign 
policy that espouses a hard line with respect to democratic 
Honduras, and yet extends a welcoming hand to the brutal 
regimes in Venezuela and Cuba. I believe our current policy is 
driven by an effort to appease and reach accommodation with 
those adversaries at the expense of diminishing support for our 
allies, most notably Mexico and Colombia.
    A subject that is particularly close to my heart is the 
Cuba democracy program that Congress authorized 15 years ago. 
This program is designed to bring about genuine change in Cuba 
by providing the growing dissident movement with the tools 
needed to overcome Castro's information blockade. As we 
witnessed in Eastern Europe a generation ago, true change is 
only possible when it is broadly supported at the grassroots 
level, and information about the outside world is widely 
disseminated, and Cuba is no different.
    When I assumed my position as Assistant Administrator for 
USAID's Latin America Bureau, the Cuba program budget was a 
paltry $5 million, and most of that was unspent. By the end of 
the Bush administration, the Cuba program had increased 
dramatically, reaching $40 million at USAID alone. Other 
government agencies who were also actively engaged and provided 
financial resources to support those pressing the Castro regime 
for change.
    Moreover, our efforts in Cuba were bolstered by a 
multinational component that included a range of prominent 
individuals in Europe who identified with the struggle for 
freedom, such as Lech Walesa and Vaclav Havel, as well as 
statesmen such as former Spanish Prime Minister Joe Maria 
Aznar. These inspiring leaders and the organizations they 
represent were active participants in our programs, USAID's 
programs, to bring about light and hope to the Cuban people.
    Unfortunately, the U.S. Government's interest in this 
multinational effort has dwindled to nothing. This is no 
accident, Mr. Chairman. Instead of assisting growing democracy 
movement on the island, U.S. foreign policy now focuses on 
expanding contacts with the Castro regime, and relaxing 
regulations, including travel, to Cuba.
    Instead of ratcheting up pressure on Castro, the Obama 
administration has relaxed travel restrictions, and provided 
the regime with the additional resources that will allow it to 
perpetuate its tyranny. Since I left USAID, the Cuba program I 
ran has had its budget cut in half. Support for Radio Martii, 
another vitally important tool in our arsenal to provide a 
democratic transition to Cuba, is also waning. The simple fact 
is, Mr. Chairman, that in spite of the continued repression in 
Cuba, the President's goal is to reach an accommodation on the 
Cuban regime's terms rather than those of the Cuban people.
    The Obama administration not demonstrated an ability to 
learn from its mistakes in Cuba or elsewhere in Latin America, 
and so it falls on Congress, and you, Mr. Chairman, as well as 
this committee, to insure that basic American interests are not 
undermined.
    This starts with a careful review of the President's 
request of over $2 billion for Latin America and the Caribbean 
in Fiscal Year 2012. While I applaud the President for his 
restraint regarding the overall request this year, I take issue 
with the proposed allocation of the funds requested.
    In a time of increasing violence and insecurity in the 
region, nearly all of the 2012 reductions come from military 
and police assistance programs. For example, under the 
President's budget only 23 percent of the 2012 request is 
allocated for police and military aid. In the last budget 
President Bush sent to this Congress, nearly 40 percent of our 
assistance was allocated to police and military-related 
activities, including community policing, which I strongly 
advocated to reduce gang violence, which poses a clear threat 
to democracy in the region, and to our own internal security.
    Sadly, most of President Obama's proposed reductions would 
be borne by our key allies, Colombia and Mexico. Let me be 
clear: Despite the extraordinarily successful presidency of 
Alvaro Uribe, Colombia's struggle with narco traffickers and 
its internal insurgency is far from over. Colombia is 
increasingly threatened by hostile Venezuela that has openly 
and repeatedly threatened to attack it, and though close to 
bankruptcy, itself, Venezuela continues to lavish enormous 
resources on a massive military buildup with Russian and 
Iranian assistance.
    Equally important, President Bush's Merida Initiative for 
Mexico should be built upon, not reduced. Some will argue that 
the necessary military and police equipment has already been 
provided, and a reduction in outlays is now warranted. I 
strongly disagree. Long-term and sustained institutional 
training of the Mexican police and military, as well as 
assistance to its justice system, will remain a basic 
necessity. I fact, Secretary of State Hillary Clinton 
recognized this need when she promised a $500 million aid 
package to Mexico during her recent visit. But, apparently, the 
administration has decided to ignore her pledge, as the 
President's request falls short of the promise made to Mexico, 
allocating only $112 million in Fiscal Year 2011, and $102 
million in Fiscal Year 2012.
    But even as the President's request, if enacted, will 
undermine our allies' security, it spares most of the social 
development assistance. Social development programs, such as 
Climate Change, will do little to counter the growing threats 
from Ecuador's authoritarian Rafael Correa, or the likes of Evo 
Morales in Bolivia, and Daniel Ortega in Nicaragua. It simply 
ignores what even the magazine The Economist says of Hugo 
Chavez' drive to turn Caracas into a ``Caribbean Tripoli'' with 
``people's communities and communes' and militias.
    Simply stated, Mr. Chairman, this committee should review 
each and every expenditures proposed by USAID and the Inter-
American Foundation, an independent agency of the United States 
Government, to insure that organizations and programs supported 
by these organizations support the interests of the United 
States, its allies, and those who share our values and ideals.
    I can tell you in closing from my own experience, that 
providing such assistance, especially hard assistance in the 
form of military and police equipment sends a very clear 
statement to both our friends and adversaries. Suspending 
assistance to countries that are clearly not committed to 
democracy, such as Ecuador, Bolivia, Nicaragua, would send an 
equally strong message. Make no mistake about it, assistance 
provided through ``non-governmental organizations'' is often 
assistance to the various regimes and often heads directly into 
the hands of tyrants.
    The simple fact is that we are now competing with Iran, 
China, and other non-hemispheric global players for influence 
in the region. We need to stand with our friends and allies, 
and provide them with the tools they need to provide internal 
security and prosperity.
    Mr. Chairman, I am convinced that with your continued 
leadership, we can, as Speak Boehner has said, persuade this 
President to change course.
    I would be pleased to answer any questions that you and 
other members of the committee may have for me. Thank you very 
much, sir.
    [The prepared statement of Mr. Franco follows:]

    
    
    
    
    
    
    
    

    Mr. Mack. Thank you very much.
    And, Mr. Schneider, you're now recognized for 5 minutes. 
And if you go a little longer, I'm not sure we're going to get 
much complaint up here. Is your microphone on?

   STATEMENT OF THE HONORABLE MARK L. SCHNEIDER, SENIOR VICE 
    PRESIDENT, INTERNATIONAL CRISIS GROUP (FORMER ASSISTANT 
ADMINISTRATOR FOR LATIN AMERICA AND THE CARIBBEAN FOR THE U.S. 
             AGENCY FOR INTERNATIONAL DEVELOPMENT)

    Mr. Schneider. Now it's on.
    I want to commend the committee for addressing Priorities 
in U.S. Foreign Assistance at this time, while the Executive 
and Legislative Branches are really grappling with the question 
of a budget crisis.
    This hearing offers an opportunity to identify those 
assistance programs for Latin America and the Caribbean which 
should be protected from budget cuts. And I think it's 
important to understand that the reason that they should be 
protected is because they're vital to U.S. foreign policy 
goals, those that prevent conflict, strengthen democratic 
institutions, especially those related to the Rule of Law, and 
directly encourage economic growth that reduces poverty and 
inequality.
    The International Crisis Group is a leading non-partisan, 
non-governmental organization that focuses on analyzing from 
the field what drives conflict, coming up with policy 
recommendations to you, and others, as to how to prevent 
conflict, or to resolve it.
    In Latin America, our headquarters is in Bogota, and we 
focus in the Andes, significantly on the Colombian civil 
conflict. We also have an office in Haiti, where we've been 
since 2004, and we've just opened a project in Guatemala, given 
the rising threat to the State from organized crime and drug 
trafficking in that country.
    It's useful to step back a moment and recognize that in 
this hemisphere over the past three decades, most of the 
countries have made the difficult transition from military rule 
to democratic government.
    On the economic front, most of the countries have adopted 
reforms that enable the region to bounce back faster than any 
other region, including the United States, from the recent 
financial crisis.
    Unfortunately, in 2011, and this is something to take into 
account, the estimates are that GDP growth in the hemisphere is 
likely to drop to about 4 percent, again demonstrating the drag 
of continued inequality and poverty on the region's prospects.
    And when you talk about innovative social policies, many of 
those have been initiated in the region, and are being used 
elsewhere; the conditional cash transfer policies, 
particularly. They need to be supported.
    The challenges that continue to face the hemisphere, 
though, are first, confronting inequality and exclusion; 
second, combating drugs and crime; and, third, strengthening 
democracy and combating corruption. And I would argue, Mr. 
Chairman, that in the discussion earlier this morning, those 
three elements are fundamental to security, security of the 
countries of Latin America, and, actually, security of the 
United States, as well.
    First with respect to inequality and exclusion. Despite 
economic growth last year, in 2010, more than 180 million 
people lived on less than $2 per day, more than 72 million 
lived on less than $1 dollar per day in this hemisphere. I 
believe that there are three ways that the United States 
through its assistance programs can help the countries of the 
region deal with that. First is to expand help for rural 
development and small farmers. Second, to help the region 
expand quality education; and, third, to encourage tax reform.
    I'm going to focus a little bit in detail, in my testimony, 
you'll see the actions that I suggest, but let me explain the 
reasons why it's important to help the countries deal with that 
from the standpoint of U.S. national interest.
    First, much of the flow of the illegal migration from 
Mexico and Central America actually originates in the rural 
areas of those countries, not just the overcrowded urban areas. 
Economic growth south of the border, in fact, is the only long-
term way to decrease illegal migration north of the border.
    Second, coca cultivation takes place in the poorest rural 
regions of the Andean ridge countries, yet campesinos there 
have no desire to work with or for the illegal drug cartels. 
They need the same help to grow legal crops, as they get to 
grow illicit crops. Those are the same regions where the FARC 
in Colombia and illegal armed groups now in Peru, have found a 
home in the past, and today. And those are the same rural areas 
where the Afro Colombians and the Indigenous live who have been 
excluded for so long.
    I won't go into the issue of quality education, but it's 
crucial. And the fact is that the budget of USAID, essentially, 
ignores that. Only in Latin America, it's about $50 million, 
$50-60 million out of a $2 billion budget. I think we can do 
better. Not all by ourselves, but linking and partnering with 
the IDB, the World Bank, and others to focus on this issue.
    Today in Latin America, just to give you some sense of the 
problem, the richest fifth of the population receives as much 
from every dollar publicly spent on elementary education as the 
poorest fifth. And when it comes to higher education, the 
richest fifth receive many times as much as the poorest fifth 
in terms of benefitting. Something needs to change.
    Tax reform is fundamental to allow those governments to 
function.
    The second challenge is drugs and organized crime. A lot of 
the discussion today is focused on this issue. The response of 
the Mexican State with U.S. support under Plan Merida has 
blocked the cartels from acquiring full control over border 
states. It's also pushed more of the drug flow into Central 
America. And those governments are far less equipped to defend 
themselves.
    And I just note that between Guatemala and Mexico, there 
are 58 border crossings, only four are permanently covered by 
police control. So, when you wonder about how it gets through, 
it's pretty easy.
    I just want you to just also note that in Guatemala in 
2009, the death toll is equal to that of Mexico, a country 
about 10 times larger. And last year, the death toll again in 
Guatemala is among the highest in the world.
    And something that I didn't hear much mention of earlier is 
impunity. The ability of those criminals to believe, and to be 
successful in not being held to account for their actions. Last 
year, the International Commission Against Impunity in 
Guatemala found that less than 1 percent of those who were 
arrested for violent crimes were convicted.
    In Colombia, Plan Colombia has strengthened the capacity of 
the Colombian State to defend itself against the FARC and the 
ELN, and encouraged paramilitary demobilization. However, the 
rise of what they call the BACRIM, Bandas Criminales, made up 
in large part by undemobilized paramilitary continue to pose 
threats to citizens' security throughout the country. They now 
number between 6,000-10,000. There's a need for much more 
coordinated effort by the Colombian Government with others 
help, including our's, to deal with that.
    At the same time, in Colombia, while there's been a 
reduction in overall cultivation of coca in terms of number of 
vectors, the fact is that there is a wider area that's affected 
than there was 10 years ago. And, in addition, now the movement 
has gone back to Peru and Bolivia, and the same amount, 
virtually the same amount of cocaine is flowing north. The 
Inter-Agency Assessment of Cocaine Movement that DIA runs 
continues to estimate about 1,000 metric tons coming out of the 
Andean ridge countries coming north, and to Europe.
    And I should note, as you already have, that while 90 
percent of the cocaine coming to the United States comes 
through Central America and Mexico, the vast bulk of the 
cocaine going out to Europe goes through Venezuela, and then 
out to the Caribbean, or through the Atlantic to West Africa.
    The response, it seems to us, the Latin American Commission 
on Drugs and Democracy led by Former Presidents Fernando 
Henrique Cardoso, Cesar Gaviria, and Zedillo, came up with a 
serious proposal. Last year, Members of Congress offered a 
similar proposal for a bipartisan commission to fundamentally 
look at our counter drug policies, and come up with some better 
answers. And I would urge this Congress to move forward with 
that.
    In Colombia, President Santos has launched a welcome set of 
new reform initiatives. That needs to be supported. And I would 
just add here that I traveled to La Macarena consolidation zone 
in December, and there needs to be a greater buy-in by civilian 
government, and civilian administration in making that work. 
And, also, in insuring that human rights protections are a 
major focus of attention.
    Mr. Mack. Mr. Schneider, I'd ask you to----
    Mr. Schneider. The final comment is this. The third 
challenge is strengthening democracy and confronting 
corruption. And I think there are ways that we can do more.
    And, finally, on Haiti, don't forget Haiti. If we move away 
from this effort to help Haiti recover from the earthquake, the 
future, unfortunately, is going to be one which we're going to 
have do more in terms of preventing refugees from Haiti coming 
to the United States. And it will be a failed state forever. 
And we really can't afford that.
    [The prepared statement of Mr. Schneider follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Mack. Thank you, Mr. Schneider.
    Mr. Franco, I want to continue on part of your opening 
statement. And you talked about how to make a statement in 
Latin America. And when we talk about Bolivia, and Ecuador, and 
Nicaragua, Venezuela, how do you see this budget that has been 
put forward, does it support, you think, the ideals of America, 
or does it support some other agenda?
    Mr. Franco. Mr. Chairman, I'm not going to question the 
President's motivations, and patriotism, or anybody at the 
administration. They're not my priorities, or the way I would 
allocate it. I don't think they further our interests for the 
following reasons, and I think you've articulated them very 
well.
    The first has to do with what you described in your opening 
statement about freedom, prosperity, and security. And I think 
it falls very short on the security front. And you can't have 
freedom and prosperity without security, and promoting our 
interests in that regard.
    Don't take my word for it. Your able staff here, Kristen, 
Nathan, and the rest of them, they can look it up on something 
called Just the Facts, which is analysis, a non-partisan 
analysis of the President's budget, and it is reduced by 43 
percent, despite what the witnesses said earlier on military 
and security, and police matters. And I don't think that's in 
our interest, first and foremost, to do that. And it's really 
balanced on the backs of Mexico and Colombia. They fall far 
short. The Merida Initiative falls short, and Colombia's 
military spending is slashed significantly.
    Secondly, I don't believe, and I share your view, in 
rewarding enemies and adversaries of the United States. I think 
it sends the wrong signal. I think it is fine to talk about 
Global Climate Change, and I have a lot of respect for Mark. 
And he always gives a very good academic presentation, and he's 
a very smart guy. But with respect to our narrow foreign policy 
specific interest in the region, I think we need to send a very 
strong message to those countries that have taken positions 
that not only are contrary to our own, but they threaten our 
own security, and the continued spread of populism a la Hugo 
Chavez being the ringleader in the region.
    I think it's making a mockery of the United States that we 
continue to engage in these programs in countries that have 
kicked out an ambassador, for example, of the United States. Of 
course, she's not the only one. We have that track record in 
Venezuela, and Bolivia, as well.
    So, the short answer is, I think the $2 billion should be 
reallocated. I commend the President for coming in with a $2 
billion budget, but I think it should be--and I went at length 
about the Cuba program.
    I would ask, though, last thing on Cuba, is that you take a 
very close look at the Congressional Notification Document. I 
question the allocation of the funds to Cuba, how they're being 
used. I don't believe talking to lawyers in Cuba on human 
rights, and gay and lesbian rights in Cuba, these are fine 
things in a free society, but Cuba is not a free society. There 
are no lawyers in Cuba per se, or anything of that kind.
    What's been suspended is the multinational efforts that we 
were--the information, to get information into Cuba. Frankly, 
what Mr. Gross was doing, and those are the things that have 
now been changed. So, I would take exception with even the 
money allocated to Cuba.
    Mr. Mack. Thank you. So, I put up on the monitor there a 
chart that shows the security funding in relation to all the 
other funding. And I just don't know, with all that's happening 
in Latin America, and security being such an important issue, 
because, frankly, without, as you said, without security, 
freedom and prosperity will not exist. And I just--I'm very 
disappointed, and you can't say this, or chose not to, but I 
can. I'm very disappointed that the President's budget request 
appears to be more interested in things like Global Climate 
Change, which I'm not sure that there's agreement here in this 
country on a way to go forward on Climate Change.
    But, certainly, I share your thoughts when it comes to our 
adversaries in Latin America. And whether it's $95 million that 
we're giving to countries that said that our money is dirty, 
and they don't want it. So, Mr. Schneider, can you--would you 
like to respond to that? I mean, I know that you have a 
slightly different opinion in what kind of goes into security, 
and what doesn't go into security. And I respect your opinion 
very much. I may disagree, and look at how we place our 
priorities differently, but I understand.
    But how, on this question of our adversaries, those that 
have--they've chosen to be adversaries of the United States. We 
didn't choose to push them out. How do we continue to fund 
programs in those countries?
    Mr. Schneider. Two things. You're right, I'm desperate to 
answer the question.
    I think, first, that the issue of security, particularly 
when you look at this hemisphere, needs to be viewed as what 
our threat is. And the threat is really from organized crime 
and violence. And, therefore, the question is, how do you 
strengthen the capacity of the law enforcement institutions 
from the police, to prosecutors, to judges, to prisons to 
operate effectively, and insure that somebody who engages in 
murder, or drug trafficking is brought to justice, and put 
away? And that seems, to me, to be fundamental.
    Now, you don't get that with just security assistance out 
of FMF. You get that, in part, from ESF that goes to strengthen 
Rule of Law.
    The second part of that is, one of the real problems in 
Central America is you've got the large number of unemployed, 
and in a sense frustrated youth who become the foot soldiers, 
and they become most vulnerable. We need to do a better job of 
dealing with them. That's on the security side. At least, I 
would think that that needs to be--you need to look at both 
sides of security when you're making your assessment.
    The second is, on the question of the ALBA countries. There 
are two things, and let me start off where I'm most in 
disagreement with Adolfo, and that is about non-governmental 
organizations. And let me explain.
    Adolfo spoke very eloquently about trying to provide 
assistance to groups in Cuba. Why? Because he wants to focus on 
strengthening civil society in a country with a repressive, 
authoritarian regime.
    In Ecuador, in Bolivia, in Venezuela, I want to see what 
the mechanisms are to strengthen civil society in those 
countries to bring pressure toward democratic change, and 
strengthening democratic battles in those countries. And I 
would look to do it not just directly, but with other countries 
in the hemisphere.
    A long time ago, I started something in Chile to try and 
see whether Chile, and particularly the groups that had managed 
the transition from military rule to democratic rule could 
engage with countries who were still having the problems in 
this region. And now I think that this is something we might 
think about elsewhere. But it's basically to take the 
experience of democracy in this hemisphere, and to use it to 
strengthen civil society in countries in this hemisphere, and 
elsewhere that clearly are facing critical problems. So, I 
would say look for ways to strengthen civil society in those 
countries.
    The other thing that I would say is, that when you're doing 
humanitarian work to, let's say, reduce maternal mortality in 
Bolivia or in Ecuador, or immunize children, I don't think that 
benefits the government. That benefits the people, and that's 
one of the reasons why over the last 2 years, 3 years the 
Latino Barometro shows the U.S. approval in Latin America has 
jumped 20 points, because I think that we need to continue to 
focus on how we can be identified with the things that the 
people are concerned about. That includes reducing crime in 
their countries, and it also includes providing benefits, and 
reducing poverty.
    Mr. Mack. And look, I agree with that idea, that look, in a 
country where there's--on Madison Avenue in New York, 
advertising firms can convince people to buy a pet rock, we 
should be able to do a better job of communicating to Latin 
America all of the things that we do do for the people of Latin 
America. I agree with you.
    Did you want to----
    Mr. Franco. I just wanted to add a couple of things. I 
don't want to turn it into a debate here. But I just wanted to 
make a couple of comments regarding Mark's presentation.
    Mr. Mack. Let me pose--I'll let you do that, but let me, if 
you might, I just want to get this other question out there----
    Mr. Franco. Sure.
    Mr. Mack [continuing]. Before we end up with votes and 
stuff. So, and both of you can take a crack at this. So, if you 
only have X amount of dollars to spend.
    Mr. Franco. Right.
    Mr. Mack. And you look at the priorities of our security in 
Latin America. And when I--I keep going back to security. This 
isn't just my own--I think, generally, most people recognize 
that the issue of security is paramount in Latin America, and 
all of the Western Hemisphere. So, if you only have X amount of 
dollars, how can you justify spending a large portion of that 
money on other things, other than security? That's one.
    And, two, if you have only X amount of dollars, and you 
have to make priorities, how do you prioritize a country that 
is opposed to the United States, and in direct conflict with 
the United States? If you had more money, and you could do more 
things, then maybe you would look at ways to try to do some 
things in those countries, but in this time, how do we justify 
that? So, you can respond, and then answer questions.
    Mr. Franco. Well, Mr. Chairman, your question is excellent, 
because it answers what I was going to make some comments 
regarding Mr. Schneider's comments.
    The first is, there is just a pie. You've put it up there 
on the slide. And that is the budget. And, yes, it would be 
great to do everything we possibly could for all kinds of 
humanitarian purposes throughout the world, including needs in 
our country. We just don't have the resources to do that. So, 
the pie is the pie. It's $2 billion, unless someone is 
advocating to go beyond what the President has requested, which 
I have yet to hear.
    Therefore, that $2 billion, how best to allocate it? I'd 
love to hear what the Colombians think about the allocation of 
the resources, and the Mexicans, as well. I would venture to 
say from my experience at USAID, maybe things have changed, but 
in the last 6 years, I would think the security items you've 
just described is at the top of their list. I don't think it's 
going to be the NGO organizations that Mark made a reference 
to.
    So, since this is a government-to-government assistance 
program, USAID, this is our foreign policy. These are our 
partners, they are our allies. I'd like to hear what they have 
to say. And I can assure you from my experience, that it tends 
to be the security items, and it tends to be the specific tools 
that they need to combat internal insurgencies, and gang 
violence that they clamor for in the first instance. And I 
think we should be responsive to that.
    Secondly, I do take exception with my friend, Mark 
Schneider, on NGOs. First of all, when I was at AID, we did not 
support NGOs in Cuba. There's no such thing. Everything in Cuba 
is controlled by the Cuban Government. We supported the 
dissidents, as authorized by this Congress, but they're not 
NGOs.
    What I did support was organizations from outside the 
country, particularly in Europe, since there was such a clamor 
from the other side at the time of the Democratic Congress that 
we needed--we had to not make this a bilateral problem with 
Cuba, but a multilateral one. Well, when I engaged the 
Europeans, and others, and they were all--I met with Mr. 
Hovell, I met with Mr. Bolessa, they were all very eager to 
help us out. And these efforts haven't continued.
    So, to be clear, we don't support NGOs in Cuba. I don't 
know what they propose to do with these activities they're 
proposing in their CN. I don't understand how they could work 
with lawyers within Cuba that are not controlled or government 
agents.
    Secondly, with respect to global change, or humanitarian 
efforts, or the rest of it is, I think it's high time that 
Brazil, a country that has an assistance agency, Mr. Chairman, 
it's called ABC. It's a cooperation agency, that's their 
acronym for AID. They can step up to the plate. In Brazil, they 
can step up to the plate in the region. They're a regional 
player. Chile is a very prosperous country. I don't think this 
should be shouldered by the United States.
    The fact of the matter is, from my experience in 
development in 25 years, it's not $2 billion. You would be 
talking $2 trillion, and we still would not be resolving the 
problems. The problems are often internal. They need to be 
resolved by the people and the governments, themselves.
    I think what we can do is look at what our interests are 
first. And I can tell you, Mr. Chairman, gang violence is a 
problem in the United States. It is a problem now in about 46 
states, not just the border states, where Mexican gangs are 
operating here. Those are the things we need to combat first 
and foremost.
    The rest of the items that we've discussed here today, I 
think are the skewed and wrong priorities. They're skewed the 
wrong way by this President's budget.
    Mr. Mack. Thank you, Mr. Schneider. And, Mr. Schneider, 
before you go, by the way, there's $10 billion to Brazil for 
Global Climate Change. And Brazil is the world leader on clean 
energy, so it seems that--well, I'll keep my editorial to 
myself. Mr. Schneider.
    Mr. Schneider. Okay. Let me just go back to two things. One 
is on the question of--it seems to me there's a distinction 
between Colombia, Mexico on the one hand, and the countries of 
ALBA on the other. And it's in those countries that ALBA, where 
your aim is not to provide benefits to the government. 
Understood. But it seems to me there you have--there are 
avenues, and that's where I was talking about non-governmental 
organizations, and civil society, to try and support 
development, and helping the people in those countries. And 
down the road, resulting in, hopefully, changes that result in 
governments with whom we can cooperate.
    And I'll just give you one anecdote, personal anecdote. In 
1966, I was a Peace Corps volunteer in El Salvador. There was a 
military government there. The idea that because there was a 
military government we shouldn't do anything, including the 
Peace Corps, was wrong. We were in the Peace Corps, and the 
people that I worked with, those people became democratic 
government in El Salvador afterwards, and now.
    And it seems to me that that's the kind of grassroots 
contact that we can have with civil society in those countries, 
and try and look down the road at the same time we provide 
benefit to the people now.
    The second thing you mentioned in Colombia----
    Mr. Mack. Mr. Schneider, wouldn't you--real quick. Wouldn't 
you agree, though, if the pie is only so big, and we have such 
security concerns that----
    Mr. Schneider. I understand. I understand. I just do think 
that the pie is big enough to do that, because the benefit to 
the United States, it's going to be very small amounts of money 
relative to the $400 million that we're proposing for Colombia, 
or the $250 million for Mexico. I think it's actually $350 
million for Mexico. But it's going to--we're talking about very 
small amounts for civil society in those countries. But those 
small amounts can have a significant impact immediately and 
down the road.
    On the security side, again, please look at what--I went to 
Colombia. I met with the Minister of Defense, I met with the 
National Security Advisor in December, and talked to them about 
how the U.S. assistance could be most effective.
    The most effective way is strengthening their capacity to 
go after these organized crime gangs, and strengthening their--
the Fiscalia General is vastly underfunded. It needs 
substantial additional attorneys and investigators. The procura 
generale, the Defensor del Pueblo, they need to be out in those 
consolidation zones, where you want to have the civilian states 
say when you move the FARC out, what comes is the positive 
presence and activities of civilian government. That's why I've 
always said you need to task the ministries, agriculture, 
health, education to be out there along with the law 
enforcement.
    Mr. Mack. Thank you very much. Mr. Franco.
    Mr. Franco. I don't want to get the last word in here, Mr. 
Chairman, but----
    Mr. Mack. Sure you do.
    Mr. Franco. But the fact of the matter is, and I appreciate 
what Mark says, it is important to have security assistance. 
It's reduced by this budget. If it's so important, it's being 
reduced, and it's being reduced because--and you have to look 
at the graphs, and the figures. Social development programs are 
spared.
    I understand and appreciate, and understand what you're 
saying, Mark, about social development programs. We've done 
them historically in this country, it shows the good will of 
the American people. Those programs are spared, and military 
and security spending, which you acknowledge is important, is 
reduced by 43 percent.
    I think this hearing's purpose, which I applaud Mr. 
Chairman for holding it, was the foreign policy priorities, and 
the allocation of the resources. That's what this was about. 
This is not debating whether a vaccination program is a good 
thing, or a bad thing. I'm not here to do that. It is we have a 
pie, we have priorities, are they the right priorities? My 
simple answer to you and the committee is, they are not.
    Mr. Mack. Thank you very much. And I want to thank--hold 
on. Okay. All right.
    Mr. Schneider. Just one minor point. Secretary Gates, who, 
presumably, is concerned about security, has told us time and 
again that one of the key problems in Afghanistan is the 
failure to have parallel to our military capacity civilian 
capacity working to help build law enforcement at the local 
level, and development.
    And all I'm saying is that that same concept in terms of 
broadly, what produces security has to be in the way we think 
about the priorities. And in Latin America right now, dealing 
with the problems of organized crime, law enforcement means not 
just tanks. It means judges, and prosecutors who are clean. It 
means police who can function, work in community policing, 
absolutely. But also police who are capable of going after 
these organized crime.
    Mr. Mack. Well, thank you.
    Mr. Franco. Have we reduced our budget for Afghanistan in 
the military side by 43 percent?
    Mr. Mack. No. And here's what I would like to end with, is 
this; that all of this is great, but when we are broke, and we 
have to look at the priorities--I mean, every dollar we spend, 
we have to borrow at this point. So, to continue to fund things 
that aren't targeted to the goals of the United States, which 
should be security, my frustration is, is I look at the budget. 
There seems to be a lot of money in areas that do not further 
the security goals that we should have on one hand, and on the 
second hand, we continue to fund countries who are our 
adversaries. And I'm just going to leave it with that.
    I think this budget is wrong headed, that we need to have a 
course correction. We need to get back to funding the real 
priorities, which is in this case security.
    Thank you, gentlemen, very much for being here. And the 
meeting is adjourned.
    [Whereupon, at 12:43 p.m., the committee was adjourned.]
                                     

                                     

                            A P P E N D I X

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     Material Submitted for the Hearing RecordNotice deg.



                               Minutes deg.

                               
                               
                               
                               
                               Mack statement deg.
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Material Submitted for the Record by the Honorable Dana Rohrabacher, a 
        Representative in Congress from the State of California







                                 
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