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





       NARCOTERRORISM AND THE LONG REACH OF U.S. LAW ENFORCEMENT

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

                                HEARING

                               BEFORE THE

         SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 12, 2011

                               __________

                           Serial No. 112-67

                               __________

        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
ROBERT TURNER, New York
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                                 ------                                

         Subcommittee on Terrorism, Nonproliferation, and Trade

                 EDWARD R. ROYCE, California, Chairman
TED POE, Texas                       BRAD SHERMAN, California
JEFF DUNCAN, South Carolina          DAVID CICILLINE, Rhode Island
BILL JOHNSON, Ohio                   GERALD E. CONNOLLY, Virginia
TIM GRIFFIN, Arkansas                BRIAN HIGGINS, New York
ANN MARIE BUERKLE, New York          ALLYSON SCHWARTZ, Pennsylvania
RENEE ELLMERS, North Carolina













                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Douglas Farah, Senior Fellow, International Assessment and 
  Strategy Center................................................     5
Mr. Michael A. Braun, Managing Partner, Spectre Group 
  International, LLC.............................................    21
Vanda Felbab-Brown, Ph.D., Fellow, Foreign Policy, The Brookings 
  Institution....................................................    34

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Douglas Farah: Prepared statement............................     8
Mr. Michael A. Braun: Prepared statement.........................    22
Vanda Felbab-Brown, Ph.D.: Prepared statement....................    36

                                APPENDIX

Hearing notice...................................................    66
Hearing minutes..................................................    67

 
       NARCOTERRORISM AND THE LONG REACH OF U.S. LAW ENFORCEMENT

                              ----------                              


                      WEDNESDAY, OCTOBER 12, 2011

              House of Representatives,    
                     Subcommittee on Terrorism,    
                           Nonproliferation, and Trade,    
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 12:30 p.m., in 
room 2172 Rayburn House Office Building, Hon. Edward R. Royce 
(chairman of the subcommittee) presiding.
    Mr. Royce. This hearing will come to order. Today we're 
looking at the topic of narcoterrorism. Our hearing comes as a 
narcoterrorism-related case exploded into the public eye 
yesterday afternoon.
    The Justice Department detailed an Iranian directed plot to 
assassinate a foreign Ambassador on U.S. soil. From what we 
know, a key conspirator in the plot approached a Drug 
Enforcement Administration informant seeking to hire a drug 
cartel hit squad to carry out the attack here in Washington, 
DC.
    A plot was planned over multiple meetings in Mexico between 
the man now in U.S. custody and people that he at the time 
believed were cartel members.
    Iran's Quds Force conceived of a plot to recruit Mexican 
narcotraffickers in this assassination effort on U.S. soil. The 
fact that they would do that I don't think should be a great 
surprise. Clearly, this deadly force felt comfortable 
navigating the expansive criminal networks south of our border.
    For years, border security advocates saying that just 
because we had one or two Hezbollah operatives come across the 
border, that it was alarmism to say that this could ever 
escalate into the type of situation that we face today. But 
this plot proves just how important a secured border is to our 
national security.
    The Kourani case predates this. In that particular 
instance, it was the brother of the head of Hezbollah's 
security operation, the very individual, the very general who 
was shelling Haifa. It was his brother who came across the 
border in the trunk of a car and made his way up to Michigan to 
be reunited there with a cadre of confederates that had 
embedded itself there. And that, fortunately, was discovered at 
that time.
    I saw a little bit of his brother's handiwork because we 
were in Israel, in Haifa during the Hezbollah War, and his 
brother was in charge of the missile attacks which were coming 
in to downtown Haifa, where they had even launched an attack on 
the trauma hospital. Well, this was the individual's brother 
who was apprehended here on U.S. soil.
    Yesterday, incidentally, the trial of international arms 
dealer, Viktor Bout, began in New York City. And Bout was 
brought down by DEA agents in May of '08 for conspiracy to 
supply weapons to the FARC, a designated terrorist group. 
Another example of this type of nexus that occurs. And this 
``shadow facilitator'' was notorious for supplying arms to 
dictators and terrorists. After I and others pushed hard for 
Bout's extradition from Thailand, the ``Merchant of Death'' is 
finally getting his day in court. Michael Braun, who quarter-
backed this operation for the DEA, will testify a little bit 
about this operation.
    These cases illustrate two things. The first is the nexus 
between drugs and terrorism, and the second is the long arm of 
U.S. law enforcement.
    Unquestionably, the links between drugs and terrorism are 
growing at an alarming pace. Last year, the DEA tallied 18 of 
44 State Department-designated Foreign Terrorist Organizations 
as having links to the drug trade. And this includes the FARC, 
Hezbollah, Hamas, and al-Qaeda.
    Earlier this year, the Treasury Department designated 
Lebanese Canadian Bank as a ``primary money laundering 
concern,'' finding that as much as $200 million per month in 
drug money was laundered through that bank into the coffers of 
Hezbollah to fund their operations. Meanwhile, ties between 
Hezbollah and Mexican drug cartels have obviously strengthened. 
And this makes sense, drug cartels get Hezbollah's smuggling 
and explosive expertise, and Hezbollah gets a presence on the 
lawless Mexican border.
    As Doug Farah will testify, the ties between transnational 
criminal networks and terrorist organizations are ``morphing 
into something new.'' Looking forward, attacking those links 
will be critical to countering terrorist plots. As the U.S. 
Attorney for the Southern District of New York recently said, 
``The long arm of the law has to get even longer.''
    With a unique set of authorities, human sources, and 
expertise, the DEA has been bringing a cutting edge approach to 
attack this nexus abroad. But as we will hear today, despite 
its robust international posture in some continents like 
Africa, the DEA's presence is spread very, very thin. And 
that's just one of the many challenges it faces.
    The subcommittee looks forward to hearing from the DEA in 
the near future. And I'll now turn to Mr. Connolly for his 
opening statement.
    Mr. Connolly. Thank you, Mr. Chairman. And thank you for 
holding this hearing.
    And, obviously, the announcement yesterday of the 
unbelievably bold plot to assassinate the Saudi Ambassador here 
in Washington at a crowded restaurant that could involve 
hundreds of people, innocent people, is really extraordinary to 
contemplate. And it's very chastening, and yet maybe not 
surprising that the plotters turned to drug traffickers skilled 
in the arts, unfortunately, of murder and assassination, and 
terror to carry out their plot. Where else would you go in 
terms of the requisite skill set to pull off such an arrogant 
and breathtakingly bold crime here in Washington, DC?
    So, in some ways it really is a sobering reality that I 
hope, as you suggest, Mr. Chairman, has the policy community 
refocusing on this issue. It has been a while now since a 
number of terror groups from the Beqaa Valley in Lebanon with 
Hezbollah to the sort of unpoliced areas in the borders of 
Laos, Cambodia, and Thailand, to large swaths of the Upper 
Huallaga Valley in Peru and other parts of Bolivia and South 
America, while we're seeing the nexus between terrorists and 
drugs. Drugs are an easy source of financing.
    Now, one of the things that has to concern us as Americans 
is what is happening south of our border in the northern part 
of Mexico, large swaths of which look more and more, frankly, 
like a failed state that ought to be equally sobering for all 
Americans. That's our border, that's our neighbor.
    If we're looking for a model that mostly succeeded in 
turning this threat around when it all looked lost it's 
Colombia. And I will say that, having an honest discussion 
about this here in this Congress is not always easy, because 
there are some subjects some folks don't want to talk about.
    Resources to deter the threat is one of them. Guns are 
another.
    When I went to Mexico in a codel last year to talk to the 
Attorney General of Mexico about the pending threat the single 
most efficacious thing he could cite that would make a 
difference would be the reimposition of the assault weapon ban 
here in U.S. law, because of the unfettered trafficking of 
U.S.-made or U.S.-provided weapons going into Mexico.
    We could sharp the ATF on a different committee I'm a 
member of. We had hearings on the ATF, and much has been made 
of Fast and Furious, but what isn't talked about, or isn't 
always welcome is it's Congress that has prevented the ATF from 
having a permanent directive for 6 long years. It's Congress 
that has actually cut back on the resources ATF has requested.
    We had one ATF agent who's a former cop from New York City 
who testified that on one block in Manhattan there are more 
police officers than there are the entire ATF force policing 
the southwest border of the United States. So, we have to get 
serious, too, about this threat. We can't just pontificate 
about it, and rhetorically decry the nature of the threat, 
which is very real. We also have to be willing to make some 
tough decisions in terms of the allocation of resources to make 
sure we're meeting that threat, and policy decisions that may 
not always be welcome, but that also are a necessary part of 
the dialogue.
    I thank you, Mr. Chairman.
    Mr. Royce. Mr. Poe from Texas.
    Mr. Poe. Thank you, Mr. Chairman. Mr. Farah, good to see 
you again today.
    Several observations about this whole situation. I think 
it's important that we be realists as Americans to know exactly 
what's taking place. International terrorism we talk about, we 
realize is a bad thing, and people in the name of certain 
political beliefs want to cause harm to Americans. But we must 
also understand that terrorists want to get into the United 
States some way to do their mischief.
    The easiest way to get in the United States, of course, is 
to go through Mexico. If you get to Mexico, you can get to the 
U.S., no matter--I mean, Mexico has a problem of two sea 
borders, two land borders, and it's difficult to patrol. And I 
think that's the reason the Iranian operative from the 
government, in my opinion, sought help from the Zetas.
    The Zetas, a notorious outfit. They remind me of the old TV 
series ``Paladin.'' Probably none of you all remember that, the 
chairman probably does. Paladin had a card that said, ``Have 
gun will travel,'' and that was his business card. And that's 
like the Zetas, they have guns and they will travel. And they 
come to the United States, they'll go anywhere for money, and 
any criminal enterprise that can facilitate them bringing in 
money they'll be involved in.
    We have to understand, in my opinion, that this is a 
growing problem of international terrorist groups in the name 
of some political philosophy working with the people who will 
do anything for filthy lucre, money, and what we can do with 
that.
    It's still the same problem. We've got people and drugs 
coming north, and we've got guns and money going south of our 
international border with Mexico. We've done a lot, but the 
drug trade still occurs down there in south Texas, so it's 
important that we recognize the problem, and we actually have a 
strategy to deal with this on an international terrorist basis, 
as opposed to a kind of a hit and miss tactical strategy.
    Don't get me wrong. I think our border patrol agents, the 
DEA, they do a great job. They do a lot of good things the 
American public never knows about for security reasons, but I 
think maybe more boots on the ground, on the border to keep 
those cartels from passing into the U.S. is something we need 
to look harder at. Sure, it's the job of the Border Patrol to 
be the first line of defense, but they need some help.
    The Texas border is the same distance from New Orleans as 
it is to New York City. That's a long border with just a 
handful of folks trying to keep out the bad guys. So, I look 
forward to hearing from you and have several questions for all 
three of you.
    Thank you, Mr. Chairman.
    Mr. Royce. Thank you, Judge Poe.
    We're now joined by our distinguished panel.
    Mr. Doug Farah is a senior fellow with the International 
Assessment and Strategy Center. For two decades, Doug served as 
a foreign correspondent and investigative reporter for the 
Washington Post covering Latin America, as well as West Africa.
    In November 2001, Farah broke the story about al-Qaeda's 
links to the West African diamond trade. In November 2007, Doug 
co-authored ``Merchant of Death,'' detailing Viktor Bout's 
deadly trade. He has been a valuable resource to this 
subcommittee and its staff for many years, and we appreciate 
him appearing here today.
    We also have Mr. Michael Braun, managing partner at Spectre 
Group International. Before entering the private sector, Braun 
served for 34 years in law enforcement including nearly 4 years 
as the Assistant Administrator and Chief of Operations for the 
U.S. Drug Enforcement Administration. He was responsible for 
DEA's 227 domestic and 87 foreign officers and several 
divisions, so we thank him for his service and welcome him here 
today.
    Dr. Vanda Felbab-Brown is a fellow at the Brookings 
Institution. She is an expert on illicit economies and national 
and international conflicts, and she has done extensive 
research on South Asia, on Burma, on the Andean region, and on 
Mexico. She is the author of ``Shooting Up, Counterinsurgency 
and the War on Drugs.''
    All of the witnesses have their testimony in the record at 
this time, so I'd ask them all to encapsulate this into 5 
minutes, if they would, and we'll begin with Mr. Farah. Thank 
you.

 STATEMENT OF MR. DOUGLAS FARAH, SENIOR FELLOW, INTERNATIONAL 
                 ASSESSMENT AND STRATEGY CENTER

    Mr. Farah. Thank you, Chairman Royce. It's always a 
pleasure to be here and work with your committee.
    As you described earlier, yesterday the Justice Department 
announced the stopping of a plot by the Iranian Government 
using special Quds Force operatives to assassinate the U.S. 
Ambassador in the United States.
    This is significant, I think, for multiple reasons. In my 
written testimony, I describe there are multiple alliances 
forming across Latin America among transnational criminal 
organizations, drug trafficking structures, terrorist groups in 
criminalized states that present a significant and perhaps 
unprecedented challenge to U.S. national security interests 
from that region.
    The allegation that Iran, a criminalized state which 
sponsors Hezbollah, one of the world's premier terrorist 
organizations in dealing with the Zetas, a non-state drug 
trafficking organization that controls key access points to 
cross the U.S. border truly is a perfect storm.
    This possibility, a hostile state using special forces and 
proxy agents to engage in criminal organizations for operations 
inside the United States has long been downplayed and sometimes 
ridiculed in policy making circles. Yet, the signs of this type 
of gathering storm have been evident for some time, including 
possible collaboration on the transportation of WMD components.
    As the recent White House strategy put forward by the NSC 
to combat transnational organized crime noted, ``While many 
terrorist links to transnational organized crime are 
opportunistic, this nexus is dangerous, especially if it leads 
to a transnational organized crime network to facilitate the 
transfer of weapons of mass destruction and materials to 
terrorists.''
    This is not a remote possibility. As the Iran assassination 
plot demonstrates, many things that were once unthinkable are 
now possible. The ideological boundaries and operational 
constraints that kept many groups from working together during 
the Cold War have largely been eclipsed, and there is a 
constant blurring of the lines that once separated organized 
crime from terrorist groups.
    The reasons are multiple and are driven, in part, by what 
the Drug Enforcement Administration has accurately identified 
as the crucial element in the logistical structure for both 
groups. The emergence of a small group of super fixers or 
shadow fixers, those who are able to provide specific, unique 
services to multiple groups regardless of ideology, motivation 
or location. And Viktor Bout, I think, is one of the premier 
examples of that type of person.
    These new realities render obsolete the usual definitions 
and assumptions about non-state actors, nation states and how 
they relate to each other. Hezbollah engages in criminal 
activities in West Africa and Latin America, yet also acts as a 
proxy for Iran's foreign policy and military intelligence 
activities. The FARC in Colombia produces most of the world's 
cocaine and is used as an instrument of power by the Bolivarian 
Alliance led by Venezuela's Hugo Chavez.
    It is the hybrid nature of these organizations and the 
increasing support they receive from criminalized states that 
makes the role of the shadow facilitators so vital. They 
understand how to exploit the scenes in the international, 
legal, and economic structures and work with both terrorist and 
criminal organizations. They specialize in placing people and 
products in the same pipelines, in the same illicit structures 
and exploiting the same weaknesses.
    Criminalized states frequently use transnational organized 
criminal organizations as a form of state craft bringing new 
elements that fundamentally alter the structure of global 
power. The spread of criminalized states and the benefits they 
offer are often overlooked in our policy making and in our 
thinking about the changing world order; yet, its implications 
are enormous.
    Rather than operating on the margins of the state or 
seeking to co-op small pieces of state machinery, the 
transnational organized crime groups in this construct operate 
in concert with the state on multiple levels. Within that 
stable environment, a host of new operations open from the sale 
of weapons to the use of national aircraft and shipping 
registries, as Viktor Bout showed, to easy use of banking 
structures, the acquisition of diplomatic passports, and other 
identification forms.
    Hugo Chavez and his allies in Ecuador, Bolivia and 
Nicaragua have allowed Iran, a state sponsor of terror, to open 
financial facilities, fund companies and dedicated shipping 
lines to evade sanctions on his nuclear program. At the same 
time, Iran is carrying out multiple mining activities in Latin 
America that directly benefit his missile and nuclear programs 
without transparency or public scrutiny.
    As has historically been the case, nation states have been 
slow in recognizing and adapting to the new series of threats 
and dramatic shifts in transnational organized crime in 
general, and particularly its relationship to terrorist 
organizations.
    This administration's transnational organized crime 
strategy released earlier this year was the first strategy 
released since 1995. In those 16 years, the world's illicit 
economy globally grew to represent up to 9-10 percent of the 
world GDP, or $6.2 trillion, a figure that ranks just behind 
the US, and EU, and ahead of Japan and China as global economic 
forces.
    The United States, despite its sluggish response, is among 
the most forward-looking nations in terms of policy relating to 
the criminal terrorist nexus. There have been some remarkable 
achievements by a small group within the government that have 
understood the challenges in the move to face them in new and 
innovative ways.
    As the chairman mentioned, the DEA has been particularly 
adept at identifying and capturing through complex operations 
several of the world's most prominent super fixers, including 
Monzer Al Kassar and Viktor Bout.
    With a unique set of authorities and support from other 
agencies, the DEA has broken new ground in tracking the network 
of relationships among drug trafficking organizations and 
terrorist groups around the world, but this is not enough. It 
is, indeed, a brave new world we are facing. The challenges of 
the transnational organized criminal state and terrorist nexus 
are underestimated at our own peril.
    Congress and the administration must insure that steps are 
taken commensurate with the scope and scale of the emerging 
global actor threat. Rather than tackling the enormous scope of 
the problem, the transnational organized crime terrorist nexus 
is generally treated as a slightly more serious version of what 
we have seen in the past. Instead, the enormous complexity, 
adaptive capacity and economic resources of the state and non-
state actors must be viewed as something far larger and more 
dangerous than a simple iteration of past structures. It must 
viewed as the dynamic, flexible, global phenomenon that can 
react more quickly than government, has more resources than any 
individual state, and has no underlying loyalty to the current 
world order.
    Thank you.
    [The prepared statement of Mr. Farah follows:]
    
    
    
    
                              ----------                              

    Mr. Royce. Mr. Braun.

 STATEMENT OF MR. MICHAEL A. BRAUN, MANAGING PARTNER, SPECTRE 
                    GROUP INTERNATIONAL, LLC

    Mr. Braun. Mr. Chairman, other members of this very 
distinguished and critically important subcommittee, I 
appreciate the invitation to speak before you today.
    Doug Farah and I have long been on the same set of tracks 
headed in the same direction, so he's basically covered most of 
what I was going to say, but I want to highlight a few things. 
And I know you're itching to ask us lots of questions, and I'll 
just move on from there.
    Mr. Chairman, you said early on in your statement that 
basically half of the designated foreign terrorist 
organizations are now involved in one or more aspects of the 
global drug trade. I think it's far worse than that. That's a 
very conservative estimate, as well it should be, but suffice 
it to say that it is a growing phenomenon. And, quite frankly, 
it's happened because of our successful prosecution of the 
global war on terror.
    Two things that have happened specifically is state 
sponsorship declined significantly for terrorist groups after 
9/11, which caused more of these groups to move to drug 
trafficking and to a lesser degree some other transnational 
organized criminal activity to fund their operations, to keep 
the movements alive.
    The second thing that we've done is our nation has done 
yeoman's work working with coalition partners around the globe 
to identify and significantly disrupt the funding streams from 
very powerful private donors. Again, a second reason why more 
and more of these groups are having to turn to the drug trade, 
other organized criminal activity to keep their movements 
alive.
    I would also like to say that Doug is exactly right, Mr. 
Chairman, Mr. Connolly, Mr. Poe, all of your comments with 
respect to this event that took place yesterday is the perfect 
example of what Doug and I have been preaching in this town for 
8 or 10 years. And you talked about the very dangerous threat 
posed by this growing phenomenon, this growing confluence of 
drugs and terror. That is a very dangerous threat.
    But what is just as threatening, and we need to understand 
this, is this committee gets it. You understand it, but far too 
many other folks in this town don't understand it, and they're 
not embracing the idea that these very powerful threats are 
coming together, and the consequences for allowing that to 
happen. So, there's a lot of education that needs to take 
place, as far as I'm concerned.
    And then lastly, Mr. Chairman, I would like to thank you 
personally. I was over at DEA back in 2008 when the Bout case 
was playing out in those very critical days for several months 
there, and I can say this; that had it not been for you and the 
other members of this very important subcommittee, and some 
others in Congress, had it not been for your leadership and 
your push to get the Thais to extradite him, to do the right 
thing, to stand by the rule of law, there is no doubt in my 
mind that Viktor Bout would not be standing trial this week in 
New York. And as I have said many times in the past, he is, as 
far as I'm concerned, or was one of the most dangerous men on 
the face of the earth.
    So, I am looking forward to answering your questions, and 
helping you and your staff members in any way that I can. Thank 
you.
    [The prepared statement of Mr. Braun follows:]
    
    
                              ----------                              

    Mr. Royce. Well, thank you, Mr. Braun. Thank you for a very 
risky operation on your part in terms of bringing him to 
justice.
    Let's go to Dr. Felbab-Brown for her remarks. Thank you.

STATEMENT OF VANDA FELBAB-BROWN, PH.D., FELLOW, FOREIGN POLICY, 
                   THE BROOKINGS INSTITUTION

    Ms. Felbab-Brown. Mr. Chairman, Mr. Connolly, I thank you 
for giving me this opportunity to address the committee.
    Organized crime, illicit economies, especially when they 
coincide with military conflict generate multiple threats to 
states and to society.
    Yet, although the negative aspects, the threats are clear, 
the relationship between human security, crime, illicit 
economies, and law enforcement is, in fact, highly complex. Not 
understanding the complexity and nuances has the great 
potential of undermining the effectiveness of policies, as well 
as depriving law enforcement of a panoply of strategies for 
dealing with this issue.
    For many people around the world, participation in formal 
or outright illegal economies like the drug trade is the only 
means to satisfy their basic livelihoods. Any chance of social 
advancement, even as they continue to exist in the type of 
criminality, and security, and marginalizations. The more the 
state is absent or deficient in providing the necessary public 
goods, the more communities become susceptible to and sometimes 
outright dependent on those state entities, be they criminal 
groups or insurgents.
    For this very reason, those belligerent groups, as well as 
criminal groups can obtain not only large financial benefits 
from sponsoring illicit economies, but also significant 
political capital, significant political support.
    But although criminal groups and belligerent groups often 
interact in the domain of illicit economies, sometimes shear 
tactics, sometimes coordinate their action, they have not 
morphed into one homogeneous, monolithic entity. Rather, the 
crime nexus is far from stable and not necessarily inevitable.
    Frequently, relations between criminal groups and 
belligerents are characterized by as much violence, as much 
competition and resentment as by cooperation, and often even 
tactical alliances collapse quickly. That is because criminal 
groups are not only profit maximizers, but more often than not 
they are risk minimizers.
    Losing this nuance, losing this understanding of the 
different motivations and incentive structures of belligerent 
groups and terrorist groups would deprive law enforcement of 
critical mechanisms to break up the nexus and minimize threats 
to the United States and the international community.
    Because of the complexities of illicit economies and the 
fact they generate political capital for those who sponsor them 
with respect to marginalized populations, effective state 
response is rarely one solely of law enforcement. Rather, an 
effective response will address all the complex reasons, why 
populations turn to illegality, one of which is law 
enforcement, but not a sole one.
    Other aspects of an effective response would include a 
multi-faceted state building effort to deprive the belligerents 
or criminal groups of the potential to develop bonds with the 
marginalized community. Some of these mechanisms might include 
extending Rule of Law, access to dispute resolution mechanisms, 
or systematic development with urban or rural.
    In the case of the cultivation of illicit crop, eradication 
has dubious effects on the financial profits of belligerents. 
Only under the most auspicious circumstances can they use the 
financial profits of belligerents. But the definite aspect of 
eradication is that it antagonizes rural populations from the 
government, from the counterinsurgent forces and denies--
deprives both of intelligence flows on the belligerent.
    Regarding third crime terror nexus the priority for the 
United States and the international community needs to be to 
combat the most disruptive and dangerous networks of organized 
crime and belligerents, those with the greatest links or 
potential links to international terrorist groups with global 
reach, and those that are most rapacious and predatory to the 
society and equitable state, and those that most concentrate 
rents from illicit economies to a narrow clique of people.
    It is important to realize that indiscriminate and uniform 
application of law enforcement, whether external or internal, 
can generate several undesirable outcomes. One of these 
outcomes is that the weakest criminal groups will be 
eliminated. That, in fact, applying law enforcement or 
interdiction might inadvertently increase the efficiency, 
lethality, corruptive and coercive power of the remaining 
criminal groups, might very well give rise to vertical 
integration of the criminal industry.
    The second need to prioritize is that uniform--not 
prioritized application of law enforcement does not, in fact, 
push criminal groups together into alliance with terrorist 
groups. The opposite should be the goal of law enforcement to 
generate incentives for the groups to be as much in conflict as 
possible.
    I think our law enforcement needs to be very much commended 
for uncovering the plot that was announced yesterday. And I 
think it's significant that there was a differential incentive 
structure on the part of these members of the criminal 
community that allowed this access to take place. And we need 
to enhance such mechanisms for law enforcement. Thank you.
    [The prepared statement of Dr. Felbab-Brown follows:]
    
    
    
                              ----------                              

    Mr. Royce. Thank you, I appreciate your testimony, as well.
    Let me go to Mr. Braun with the first question, which would 
be on the DEA confidential informant who was at the heart of 
this Iranian assassination plot. According to the Justice 
Department, what we know is, presumably, Iran's Quds Force 
approached the Iranian-American. It was last spring, and they 
approach him with the idea of recruiting narcotraffickers into 
the plot.
    What I was going to ask you is, if this is the case, what 
it would tell us is that Iranians were comfortable swimming in 
those waters in terms of the cartels in Mexico. I'd like you to 
discuss the relationship between the Quds Force and Hezbollah, 
and the Mexican cartels to the extent you can. And how are 
these confidential informants worked in a situation like this?
    Mr. Braun. Mr. Chairman, some important points. The DEA on 
any given day of the week has got several thousand confidential 
informants that are working for the Agency domestically and 
around the globe.
    An important point to make about law enforcement 
confidential sources, and I don't mean to in any way diminish 
the importance of human intelligence sources within the Intel 
community, but in law enforcement those sources have to pass 
what I call the judicial test. And by that I mean at some point 
in time when their case handlers are interviewing them for the 
first time or the 100th time working with them what's in the 
back of their mind is at some point in the future he, meaning 
the informant, and/or me, meaning the agent, is going to end up 
in a Federal courthouse testifying under oath about what's 
happening, is going to be raked across the coals by a defense 
attorney being paid way too much money, and it's not a pleasant 
experience. So, the Agency goes to great lengths to corroborate 
every piece of information that those sources reveal. Again, 
one important point.
    Another important point here is that it is not unusual for 
the DEA, which is a single mission agency, but obviously multi-
faceted, as they're working the most complex investigations in 
Federal law enforcement, targeting the most ruthless drug 
trafficking cartels in the world for them to come against 
terrorist organizations, against money launderers, hit men, 
arms traffickers, what I refer to as the potpourri of global 
scum, it happens routinely. Another important point.
    But with that said, the DEA relies heavily on those 
informants. They have over the last several decades relied 
heavily--more heavily on judicially approved telecommunications 
intercept operations that we use very effectively against guys 
like Bout and others.
    I don't want to--Mr. Chairman, I don't want to get into the 
details of this particular case.
    Mr. Royce. Just give me a little bit about the connection, 
if you have any specifics on Mexican drug cartels and 
Hezbollah.
    Mr. Braun. Well, here's what I can tell you.
    Mr. Royce. I know one specific instance.
    Mr. Braun. Okay.
    Mr. Royce. The Kourani case that I referred to earlier.
    Mr. Braun. Here's what I can tell you. In places like the 
Tri-Border area of Latin America, in places like West Africa, 
and I particularly believe in some permissive environments 
within Mexico, groups like very powerful drug trafficking 
groups and terrorist organizations are coming together.
    As Doug has said in the past, and I have said in the past, 
they hang out in the same sweaty brothels, they rub shoulders 
in the same city bars, and they stay at the same hotels. And 
what are they doing? They're sharing lessons learned, they're 
talking business.
    I believe that those things are playing out, and have been 
playing out for a long time. And I believe that it was that 
kind of a scenario that enabled the informant to be at just the 
right place at just the right time to be approached by an 
Iranian-American, allegedly a member of the Quds Force as a 
brother, and that's how that informant--that investigation 
hinged on that informant and the important role that he played.
    Mr. Royce. Thank you. Let me ask Dr. Brown a question.
    Hernando de Soto's work in Peru on the Third Path in terms 
of trying to install the rule of law by giving private property 
rights to people that normally would be involved in the drug 
trade. Is that the type of example that you were thinking of? 
I'd just like to get your response to some of the concepts that 
he has utilized in order to try to engage people who normally 
would not have an interest in moving away from the narcotics 
trade and, instead, giving them an alternative path. Let me ask 
you about that.
    Ms. Felbab-Brown. It needs to be a multi-faceted extension 
of the state presence, one of which is bringing effective and 
accountable law enforcement, one that is not abusive toward the 
population, one that has the capacity to develop good relations 
with the communities, so that the community is willing to 
provide intelligence, and one that is effective at protecting 
the community against non-state actors. Often, those state 
actors themselves are providers of security.
    Another aspect in extending Rule of Law in the form of 
justice, a resolution mechanism, or access to justice so that 
the population does not have to turn toward non-state actors 
for the dispensation of rules and order.
    And yet another aspect is providing the necessary socio 
economic benefits, access to legal jobs, and access to 
infrastructure, schools, clinics.
    How one actually goes about it in the particular 
circumstances will depend on the local circumstances. In 
Mexico, Todos Somos Juarez is an example of such a program. The 
U.S. component under Beyond Medidas called the Fourth Pillar. 
But the goal is to satisfy the ability of the population to 
have legal livelihoods, and access to Rule of Law through 
official state mechanisms.
    Mr. Royce. Thank you, Dr. Brown. I'll return in the second 
round for a question for Mr. Farah. Let me now go to the 
ranking member, Mr. Connolly.
    Mr. Connolly. Mr. Chairman, I'm happy if you wish to pursue 
that, and I'll go----
    Mr. Royce. Very good. I'll go with one question, then Mr. 
Connolly, and then over to Dana Rohrabacher.
    I wanted to ask you, Doug Farah, about the learning curve 
that seems to be pretty rapid in these parts of the world as we 
see the explosives used by the drug cartels, for example. They 
started a few years ago with pipe bombs, and then all of a 
sudden you've got these radio triggered plastic explosive car 
bombs. And it does look as though there's an expertise that's 
being shared. I was wondering if you had any information on the 
types of expertise that gets transferred, and what kind of 
support, outside support the cartels might be seeking?
    Mr. Farah. Thank you. I think that it's one of the great 
benefits of inhabiting permissive environments is exactly that, 
the chance to sit down and do lessons learned. If you look 
specifically at groups like the FARC, which are both a 
terrorist organization and a drug trafficking organization, 
they've gone out of their way to acquire lessons from ETA 
Basque terrorists, from the remnants of the Irish Republican 
Army, from numerous other terrorists groups which greatly 
enhance their explosive capacity, and their ability to do 
intelligence, counterintelligence.
    And I think that if you look at Mexico, you see the 
possible transfer, at least a great improvement in the types of 
tunnels they're making. There's a lot of concern that that 
might be coming directly from Hezbollah or other people who 
have really perfected the art of tunnel building. And what they 
really--they want a couple of things, and that is technical 
expertise on intelligence gathering. Counterintelligence is one 
of the things they value incredibly highly, and any sort of 
games and toys they can get their hands on that will make the 
lives of the cops more difficult.
    In Colombia and Mexico you see the high premium placed on 
encryption, different types of encryption that they can use 
because, as Mike knows well, when the DEA used to buy something 
it has to go through a process of acquiring it, and bidding, 
and all that stuff. These guys go buy the best off the shelf 
stuff and they're generations ahead sort of almost by default.
    So, I think that those are the specific ways. But I think 
one of the things you're finding is, I think it's both old and 
new. I think you find this whole new range of technologies 
being used. But more and more I'm seeing, particularly in 
Central America and through Mexico the traditional routes that 
have always been used for smuggling, the routes that the FMLN 
used, the routes that the Contras used, the routes everybody 
used for different things in those wars are still in use in 
part because I think the way Vanda accurately describes it, the 
culture of their legality. It's very difficult to establish 
state presence in areas that have always used illegal methods, 
or what they don't consider to be illegal methods for their 
livelihoods, but the explosion of drug money into those 
networks is what really changes the game.
    Mr. Royce. Thank you, Mr. Farah. Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    Mr. Farah, and I may be pushing you beyond your area of 
expertise, but based on what we know from announcements 
yesterday, what is your understanding of the relationship of 
the Quds to the government, the formal Government of Iran?
    Mr. Farah. Well, I think that there has been a lot of 
concern for a long time. The Quds Force is not directly 
responsible to the formal government. Ahmadinejad does not 
necessarily control the Quds Force, or the Iranian 
Revolutionary Guard.
    I think there's a lot of concern that the Quds Force does a 
lot of things that are outside what would be the normal chain 
of command that goes very high up into the clerical structure. 
So, I would say that--I'm not an expert on Iran, but I--my 
understanding is that there's significant possibility that 
those who hold formal power in Iran do not actually have the 
power to control the Quds Force. And the Quds Force is clearly 
one of the tips of the spear and oversees acquisitions of 
companies, front companies, money laundering, intelligence 
gathering. They're the ones who are sent out, and if you look 
at the Iranian Embassies growing particularly across Latin 
America, they're enormous in comparison to what their listed 
activity would normally require. Most of those people, a good 
chunk of those people I think we can say now with a fair degree 
of certainty from my research and a lot of other work that's 
been done in the U.S. Government, a Quds Force inhabiting those 
Embassies for specific intelligence purposes. Not responsive--
often they are carved out.
    If you look at the Buenos Aires case in 1994, the AMIA 
bombing, Quds Force had an entirely separate section of the 
Embassy that the Ambassador did not have access to. So, I think 
that that explains their ability to do things without 
necessarily being formally tasked by the President to do it.
    Mr. Connolly. Of course, one could also interpret that as a 
convenient compartmentalization.
    Mr. Farah. Oh, absolutely. I don't mean it's not officially 
sanctioned. I just mean people in the formal structure who 
think they control things, maybe not when the people above them 
do. It doesn't detract from the fact they're state sponsors, 
not at all.
    Mr. Connolly. What I find so interesting and appalling in 
the details that we know of that have been made public 
yesterday, rarely has a sovereign state sunk this low in 
attempting--I mean, I think of a handful of examples; the 
Pinochet regime and the Letelier bombing here in Washington, 
the Libyan regime under Gaddafi, both Pan Am at Lockerbie, and 
also the bombing of a bar in Germany with U.S. service members. 
These were state sponsored terrorist acts by fringy if not 
outlaw states. And here's Iran, which has been doing--taking 
great efforts to try to restore some of its respectability in 
the international community, Ahmadinejad speaking at the U.N., 
albeit failing, perhaps, in that effort but, nonetheless, 
making that effort.
    This is astounding that a representative even though not 
officially sanctioned of the Iranian Government would go and 
seek out narcoterrorists to do his dirty work, and be quoted as 
saying well, it's sort of the nature of the game that there'd 
be a lot of civilian casualties, and maybe some political 
casualty, as well. We've got to kill the sovereign Ambassador 
of a sovereign state in the Middle East.
    Mr. Farah. I would just say, sir, that if you look at 
Iran's behavior, particularly in Buenos Aires in 1993 and 1994, 
the bombing of the Israeli Embassy, and then the AMIA bombing. 
That was--they didn't go to drug traffickers to carry it out, 
but that was Quds Force, Hezbollah, and the Lebanese diaspora 
community working in conjunction to carry out an attack--a 
sovereign attack on a sovereign nation against a sovereign 
nation. So, I don't think it's unprecedented for Iran.
    I think that the fact that they're looking outside their 
normal channels and into drug trafficking is a new element, and 
one that we need to understand better. But I think that Iran's 
main thrust into state sponsored terrorism is not new. And I 
think if you--as we've talked about in this subcommittee and 
elsewhere, the ability to deny that that relationship between 
Iran and Venezuela is dangerous because of Iran's sponsorship 
of terrorist organizations, and Venezuela's sponsorship of 
terrorist organizations is just living in a world that doesn't 
exist.
    States are now willing to take on certain risks if it's in 
their best interest, and if they think they can get away with 
it. And I think Iran, particularly, is losing its fear of the 
ability of people to retaliate, or the willingness of people to 
retaliate against it because they have a much broader coalition 
behind them, the Bolivarian states are arming Syria, et cetera. 
So, I think it's very disturbing, but I think it's not 
unprecedented, and it wasn't unthinkable that that would 
happen, something general like that would happen.
    Mr. Connolly. No, but (a) trying to do it here is for Iran, 
I think, unprecedented. The link with the narcoterrorists to do 
the actual dirty work I think is sort of a new low even for 
Iran. And to me, I think the downside of this is--I'm sorry, 
Mr. Chairman, I'm just taking a little bit more time, but you 
talked about well, they're going to do it if they see it as in 
their self interest.
    It's hard to believe how even Tehran thinks that the public 
release and disclosure of this act, this proposed act is going 
to add any kind of respectability or soften sanctions, or win 
Brownie points in the international community for it and its 
various arms.
    Mr. Farah. Well, I don't think they were counting on being 
caught. I think that was--I don't think they were planning on 
that being made public. But I think you're absolutely right. I 
think the relationship with a narco organization is new and 
extremely dangerous, and their willingness to do it in the 
United States I think is also either desperation or incredibly 
bold step of confidence, one of the two as to how they feel 
they can operate. But I do think it sets an entirely new 
precedent for how we have to view Iran's willingness to act in 
this hemisphere. Thank you.
    Mr. Connolly. Thank you.
    Mr. Royce. Congressman Rohrabacher from California.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    I'd like to follow-up on the line of questioning that we 
just had. And I think the categorization of this as perhaps 
convenient compartmentalization is probably on target, so let's 
take a look at what convenient compartmentalization means in 
terms of where we are with this regime that has been implicated 
in a very serious crime.
    First of all let me just ask yes or no to the panel, do you 
believe the leadership--the mullah leadership of Iran knew 
about this scheme, just yes or no?
    Mr. Farah. I think, certainly, elements of them had to have 
known.
    Mr. Rohrabacher. Okay.
    Mr. Braun. I believe they would have had to have known.
    Mr. Rohrabacher. Okay.
    Ms. Felbab-Brown. I don't think we have the information to 
be able to answer that.
    Mr. Rohrabacher. Okay. So, you don't assume that when 
someone is a vicious gangster and something happens that's bad, 
that we could assume that the gangster knew about it even 
though it was his henchman who did it. Is that what Brookings 
teaches us?
    Ms. Felbab-Brown. I think it would be inappropriate to jump 
to conclusions about what elements of the Iranian Government, 
in fact, knew about the operation at this point.
    Mr. Rohrabacher. Okay. All right. I would--so, two out of 
three of you think that the mullah regime--now, let me ask you 
this. If in this type of government, meaning the mullah-
controlled dictatorship in Iran, someone would launch a scheme 
like this not approved by the mullahs, and the mullahs found 
out about it and disapproved, that person would then be--what 
do you think the punishment would be of that individual?
    I guess the witnesses don't have to really guess on that, 
but I would suggest, Mr. Chairman, that if the mullahs found 
out that someone in their government was involved with 
something like this without their knowledge there would be 
severe punishment, if not death for that individual in their 
government who is being out on his own so much. So, I would 
hope that our--we are a little more realistic when we're 
assessing the activity of people who murder their own people.
    The mullah regime--could this mullah regime, again a 
question, this mullah regime--we hesitated to speak loudly 
about the election fraud that happened in the last Iranian 
election, even though the streets were filled with anti-mullah 
protestors who were protesting the mullah dictatorship.
    Do you think our lack of energy in condemning that type of 
fraud leads to the mullah leadership going along with such 
schemes as has been exposed in the last couple of days? Whoever 
in the witness stand would like to answer that.
    Okay, let me put it a different way. If we were tougher 
with the mullah regime and they knew that we were a leading 
force supporting the democratic elements in their country 
rather than hesitant supporters of them, do you think that 
might deter them from becoming involved with assassination 
schemes that would take place in our own country?
    Ms. Felbab-Brown. Possibly. We don't know the answer, but 
possibly it might also encourage them to engage in other 
provocative action in retaliation. I think it's an open 
question.
    Mr. Rohrabacher. We could certainly go out of our way to 
encourage all kinds of bad guys to do things, couldn't we? Yes, 
go right ahead.
    Mr. Farah. I think one of the things that's empowering Iran 
is the feeling that they're no longer internationally isolated. 
It doesn't go directly to our policy, but I think our policy of 
not dealing directly with the Bolivarian threat as it exists 
through Venezuela, Ecuador, Bolivia, Nicaragua particularly, is 
one of the things that gives them this feeling that they can--
that the sanctions aren't going to bite. If you look at the 
amount of money they've invested through Venezuela into Panama 
and elsewhere to meet their basic needs, I think they're 
feeling like sanctions were going to be a significant terrible 
problem for them. And on their key issues, they're not as 
significant and terrible a problem as they had thought they 
would be. And I think they feel they have a little more margin 
to move internationally.
    The fact that Argentina this year didn't walk out when 
Ahmadinejad stood up and did his usual talk at the United 
Nations, all of this leads them to understand that they have a 
lot more people willing to work with them. They're not the 
pariah state that we had tried to make----
    Mr. Rohrabacher. I would suggest, Mr. Chairman, that the 
conciliatory tone of this administration has encouraged if not 
the mullahs themselves, but at least people who work for the 
mullahs to involve themselves in the type of conspiracy that we 
saw exposed just yesterday that would lead to the death of 
American citizens, a bomb going off here, an act of such 
terrorism.
    Let's remember that during the Cold War, Romania was--we 
sort of had a hands-off policy toward Romania. Well, where did 
the man who shot the Pope, where was he held--where did he hole 
up? He holed up in Romania. He was there in Romania. And I 
think it's--the Romanian Government probably knew. And he was a 
Turk, by the way, a Turk in Romania involved in an 
assassination plot against the Pope.
    Well, we had let Romania off the hook, and the Romanian 
Government obviously knew about this man, but let him stay and 
operate out of their country.
    If we permit a reconciliatory approach to the mullah regime 
and treat them as if they were a democratic regime, I think we 
can expect more of the type of terrorist assassination plots 
that were uncovered, luckily uncovered and foiled by our 
agents. Thank you very much, Mr. Chairman.
    Mr. Royce. Thank you, Mr. Rohrabacher. We go now to Jeff 
Duncan from South Carolina. Mr. Duncan.
    Mr. Duncan. Thank you, Mr. Chairman.
    I don't think anyone that's followed the issue of the 
Iranian and Hezbollah influence in the Western Hemisphere was 
really surprised by the Quds Force working with the Mexican 
drug cartel, albeit an undercover agent of the United States, 
but under their understanding he was a member of the drug 
cartel to plan and possibly carry out a very heinous act that 
was thwarted by the FBI. And I want to congratulate them. But I 
don't think anyone was surprised really that the Quds Force, 
and Hezbollah, and a Mexican drug cartel were working together, 
because if you followed this issue you've seen evidence of 
that.
    I'm very, very concerned about Iran's influence in the 
Western Hemisphere, the fact that they've opened six Embassies 
in South America over the last 5 years. We continue to see very 
sophisticated tunneling by the drug cartels under the Mexican 
border that resembles the tunnels Hezbollah digs in Lebanon. 
So, that expertise I believe is being brought.
    If you look at the number of folks tied to Hezbollah that 
have been arrested in this country, the Mexican drug cartel 
guys that are arrested in this country with Farsi tattoos, and 
there are just a lot of things that show that we shouldn't have 
been surprised.
    I'm very surprised, though, that Quds Force, an Iranian-
sponsored group, would decide to carry out an attack on another 
nation, to assassinate an Ambassador in the United States of 
America. So, yesterday I drafted a resolution, and I've sent it 
to your colleague, and I ask Mr. Connolly because of his 
comments a little while ago to take a look at this, is House 
Resolution 429.
    Mr. Duncan. It's a Resolution on Iran and the Western 
Hemisphere.
    Mr. Royce. And it's a very timely resolution that documents 
Iran's activity in this hemisphere. So, we look forward to 
reviewing it.
    Mr. Duncan. Yes, sir. Thank you, Mr. Chairman.
    Mr. Connolly. Will my colleague yield?
    Mr. Duncan. Yes, sir.
    Mr. Connolly. I thank my colleague, and I'd be glad to look 
at it. And if--are you finished?
    Mr. Duncan. I'm going to ask him a question.
    Mr. Connolly. Oh, I'm sorry. I'd be glad to look at it.
    Mr. Duncan. In my remaining 2 minutes, I've established 
that I'm very concerned about Iran's presence in this 
hemisphere. I'm concerned about Hezbollah's influence with the 
Mexican drug cartel. I think it's very clear. And we've got to 
really put some effort on that, so I'm going to ask Mr. Farah, 
to your knowledge, is there any counter terrorism task force 
that utilizes the efforts of Homeland Security, State, DEA, 
CIA, FBI, any other intelligence agencies to focus on Iran's 
presence, their influence, their activity in the Western 
Hemisphere?
    Mr. Farah. Thank you, Congressman. I had the opportunity to 
work with your staff a little bit on that resolution.
    Mr. Duncan. Thank you for that, too, by the way.
    Mr. Farah. A pleasure. As far as I know, there's no task 
force. I think individual components of the intelligence and 
law enforcement community do look at that. So far, I think 
yesterday's events will change that considerably. There's not 
been traditionally a lot of effort put into that because of 
resources allocated elsewhere in different--and I think a lack 
of sense of that was a policy imperative that we needed to 
understand that. I think that's wrong, but I think that that 
was sort of the mind set there, that it was--nothing could 
really come of that relationship.
    I think it's also very important to reiterate something 
Vanda said earlier, and that is that you have these multiple 
crossings of these multiple terrorist and organized groups, but 
it doesn't mean that that's one giant conglomerate out there 
operating in unison or as a single force. Everyone has their 
own interest. It's more like a series of one night stands than 
trying to get married to someone. They cycle through 
relationships fairly quickly.
    What I think Iran and the Bolivarian groups bring to this 
in the Western Hemisphere is more stability, more of a grounded 
relationship that has the capacity to last much longer. And I 
think that that--when you look at the criminalization of the 
Bolivarian states where you have senior members of the Bolivian 
Government deeply involved in drug trafficking, Nicaragua, 
Ecuador, the President of Ecuador receiving money from the 
FARC, as well as ongoing narcotics activities. I think there's 
a more permanent criminalization that allows Iran to root 
itself much more deeply than it had in the past when we did see 
mostly the series of one night stands.
    But I think it's dangerous, also, to conflate everybody as 
acting in unison, in concert together in one giant conspiracy 
when, in fact, it's multiple networks running multiple plans 
that overlap at different places.
    Mr. Duncan. Well, I think it would be helpful. And I think 
we've had so much focus on al-Qaeda, there's a Kronos article 
I'll be glad to share that shows a connection--the nexus 
connection between al-Qaeda and Quds Force. But we need to wake 
up, America, that Iran and Hezbollah are very active in our own 
hemisphere, very evident yesterday. And I hope that it won't be 
evident in the future, but we do need a task force, I think, 
dedicated to this. And I'll yield back.
    Mr. Royce. I think Mr. Braun had a response to you.
    Mr. Braun. Yes. Congressman Duncan, if I could just build 
on what Doug said, and your concern that you voiced.
    You mentioned the six new Embassies, Iranian Embassies that 
have sprung up in Latin America, very fairly quickly, by the 
way.
    Understand that with those Embassies come the increased 
number of IRGC and Quds Force operatives that we know are 
flowing into the Western Hemisphere, not only through those 
Embassies under diplomatic cover, but also clandestinely thanks 
to Hugo Chavez, the undisputed gatekeeper for Middle Eastern 
terrorist organizations that have got strategic interest in our 
part of the world. Lebanese and Syrian individuals can enter 
Venezuela without a visa these days, and are welcome.
    Another point that I'd like to make with respect to 
Hezbollah, there's growing clear evidence of this very, very 
close relationship that we've known has existed, but there's 
growing evidence of a very close relationship between Hezbollah 
and the Quds Force when it comes to global organized criminal 
activity. It would not surprise me one bit if we realized at 
some point in the not too distant future that the Quds Force 
was actually in command and control, sell our directorate, if 
you would, for the Hezbollah's global involvement in the--the 
growing involvement in the global cocaine trade.
    The Hezbollah are absolute masters at identifying existing 
smuggling infrastructures around the world, and leveraging them 
for everything that they're worth. And if anyone for a moment 
believes in our Government that the Hezbollah, and Quds Force, 
and the IRGC do not realize that Mexican drug trafficking 
organizations dominate the drug trade in over 230 cities in our 
country and realize and recognize that for the strategic--for 
its strategic value, then those folks simply don't understand 
how the underworld works. We better wake up. Thank you.
    Mr. Royce. Well, let me just say this before we go to Mr. 
Connolly. I think you had a question. Then we'll go to Mr. 
Sherman. Let's do it this way. Mr. Connolly, ask your question 
first.
    Mr. Connolly. Thank you, Mr. Chairman. And I just wanted to 
follow-up with my friend from California. We play tag team 
often at hearings. But Dr. Felbab-Brown, I wanted to follow-up 
on a response I heard you give to Mr. Rohrabacher of 
California.
    You said that you thought it was inappropriate to assign 
blame or responsibility to any part of the Iranian Government 
and Tehran at this point.
    Ms. Felbab-Brown. No. What I responded was that it is 
premature, inappropriate to make judgments about what levels of 
the Iranian Government were involved with the plot.
    Mr. Connolly. Well, what judgment would you make?
    Ms. Felbab-Brown. We know that a member of the Quds Force 
was directing the operative. What we do not know is was the 
sanction by the highest levels--some of the highest mullahs, 
was it sanctioned by President Ahmadinejad? What role this Quds 
operative had within the Quds Forces, was he a prominent member 
of the Quds Forces? Was this directed? Was it a rogue 
operation, or was it an operation at the highest levels of the 
Iranian Government directed? I do not believe that we have this 
information at this point.
    Mr. Connolly. That may be technically true, but you heard 
Mr. Farah point out that this is not an isolated incident by 
elements of the Iranian Government, high and low, in actually 
perpetrating murder, and assassination, and terrorism. And, 
therefore, the preponderance of evidence would suggest whatever 
level you want to assign it, we as a sovereign state witnessing 
and uncovering a plot to assassinate the representative of 
another sovereign state in our Capital City have a right to 
hold the Iranian Government fully responsible irrespective of 
what element, or what level of any element in that government 
was, in fact, planning the plot. And that's why I'm very 
puzzled by your answer to Mr. Rohrabacher that it's 
inappropriate to exercise such a judgment.
    Pray tell, when does a sovereign state have the right to 
protect its own people and its own capital?
    Ms. Felbab-Brown. Well, I think it's totally appropriate 
that we condemn the act. I think it's appropriate and 
encouraging that our law enforcement was able to uncover the 
plot. And I think that shows the talent and intelligence 
capacity of our law enforcement.
    I also believe that it is appropriate, very much so, that 
we make clear that no nation, Iran included, no nation cannot 
conduct terrorist operations on our territory, and should not 
conduct terrorist operations anywhere in the world.
    Mr. Rohrabacher's question was was the regime fully aware, 
and I don't believe we have the evidence of that.
    Mr. Connolly. Well, I would just say to you, as I coined 
the phrase, convenient compartmentalization. I don't think we 
can afford the luxury of that kind of indulgence, with all due 
respect. I think the United States must hold the Iranian 
Government fully responsible until and unless they're able to 
isolate a rogue element and hold them accountable, and take 
appropriate measures.
    Until and unless that happens, it seems to me that this 
plot was planned for this capital, this city. It is 
unacceptable, and it seems to me we have to hold that foreign 
government fully responsible until and unless there's evidence 
to the contrary. Thank you.
    Mr. Royce. Let me go to one case where I know it's not 
theoretical, and bring this up again: The Mahmoud Kourani case. 
When we're talking about whether there's a nexus between 
Hezbollah and the cartels, which we know in that specific 
example there's no question. This was an individual who was 
trained by the Quds Force in Iran, in Lebanon. He offered a 
bribe to the Mexican consulate there, someone in the consulate, 
$5,000 I believe. He was able to come illegally into Mexico. 
His next step was, as a Hezbollah member, to team up with a 
cartel who provided him a special arrangement to hide in a 
compartment that was placed in a car. And they drove him over 
the border, over our southern border in California. So that 
would be one example.
    I just ask Mr. Braun, because I had someone bring me a few 
years ago a document from USCIS which showed terror connections 
over the border, and illegal crossings over the border. When we 
contacted the organization they basically said, well, you're 
not supposed to have that. You're not supposed to comment on 
that. But I was going to ask you, do you have information about 
crossings like Mr. Kourani's case, evidence that individuals 
who are involved in terror making an egress or an entry over 
the border?
    Mr. Braun. Mr. Chairman, I don't have any specific--any 
other specific examples. But with that said, if you'll remember 
probably I'm guessing maybe 8 months to a year ago there was a 
report that the Mexican Federal Police, the SSP has rounded up 
a Hezbollah recruiting cell just across the southwest border. 
And I can't remember which city it was in. I talked to some of 
my former colleagues while--some former high-level Mexican 
Federal police officials that I had worked with and they said 
that it did, in fact, happen, that the member was a--or that 
the suspect that was arrested was a member of Hezbollah, and 
that he had been sent into the country to recruit, basically. 
And I would--so, I don't have any other specific----
    Mr. Royce. We're finding them in the U.S. We don't know--in 
the Kourani case, I think there were 50 other members of the 
cell. We don't know how they all get here.
    Mr. Braun. Sure.
    Mr. Royce. But it's an interesting evolution as these cells 
are established. And from time to time, of course, we manage to 
break them up. Mr. Farah.
    Mr. Braun. Chairman, if I could just say one last thing.
    Mr. Royce. Yes.
    Mr. Braun. And I really don't want to sound too crude here, 
but I was in law enforcement for 34 years.
    Mr. Royce. Right.
    Mr. Braun. And my dad used to have a saying, ``Where you 
see one roach, there are thousands.'' Now, I'm not saying there 
are thousands of Hezbollah operatives, but where we see one or 
two, and this is based on my 34 years in law enforcement, you 
don't need an analyst, a very bright analyst sitting in a pod 
to tell you that that's not the case. I've seen it one too many 
times.
    Mr. Royce. Well, I know where there was one in this case 
there were 52 anyway for sure.
    Mr. Farah, you wanted to----
    Mr. Farah. I was just going to say, that was the case of 
Mr. Nasr, N-A-S-R, who was rolled up in there, and the Tucson, 
Arizona Police wrote a report about his involvement with--there 
are multiple cases that for different reasons have not been 
made public. But if you look in the--if you talk to the police 
forces on the border, particularly in Texas and Arizona, there 
are other cases that have--I don't they're officially 
classified but they haven't wanted to share very broadly. But 
there are multiple cases not of big groups, but of individuals 
coming across. And Mr. Nasr was the most prominent, most public 
of those.
    Mr. Royce. Thank you, Mr. Farah. We'll go now to Mr. 
Sherman, and Mr. Duncan. Thank you.
    Mr. Sherman. We're going to get distracted here about 
whether this official or that official of the Iranian 
Government authorized this particular hit. And that can be our 
excuse to do nothing, or to do a little inconsequential thing, 
and then pretend that we've done enough, and then go on, 
because that's what the State Department and multinational 
corporations want us to do.
    The fact is, this was a Quds Force operation. It was not a 
rogue operation, but if no one in Iran is going to be held 
accountable for violating--they're not going to extradite 
anybody to the United States saying here's one of our citizens 
who plotted an event in your country. But what we know is 
authorized by the highest levels of the Iranian Government is 
their nuclear program, and we know that we're just getting a 
taste of what we're going to see with a nuclear Iran, that is 
to say terrorism with impunity.
    We've passed laws here. They have been deliberately 
violated by the last three administrations. I refer to the Iran 
Sanctions Act. Now, we're told that an attack was going to come 
on our own territory, and what is the response? Four or five 
Iranian individuals will be told that they cannot visit 
Disneyland. And if they happen to have an account at Bank of 
America, they will be subject to a $5.00 a month charge whether 
or not they use their ATM card. That's our response.
    Why such a timid response? Because that is what European--
multinational businesses and European diplomats expect of us. 
And it is a reflection on the fact that the views of the 
American people are not taken into a whole lot of account in 
our foreign policy.
    What we should do is require multinational businesses to 
decide are they going to do business in Iran, or are they going 
to do business in the United States? I don't know anybody--any 
major multinational that would choose Iran. But that would 
offend the multinational corporations. So, we have a problem. 
How can we preserve a government policy that meets the needs of 
multinational corporations, that is not displeasing to European 
diplomats, while at the same time pacifying the American 
people? And the answer is to wildly exaggerate the importance 
of telling four or five Iranians they cannot visit Disneyland, 
and to freeze the assets in the United States that those five 
individuals don't have.
    It is a pitiful response, but it will be one of many 
pitiful responses that we will make as the centrifuges turn, 
and as the terrorism plots continue. And soon we will be told 
oh, we can't respond to this or that act of Iranian terrorism 
because after all, they're a nuclear state.
    Now, a question or two for the witnesses. Does this new 
bold plot for Iran to commit terrorism on U.S. soil with the 
help of Mexican drug cartels signal a new trend, state sponsors 
of terrorism using criminal elements to carry out their 
attacks, Mr. Braun?
    Mr. Braun. Ranking Member Sherman, I don't know if it's 
going to result in a new trend or not, but here's what worries 
me about this, and to kind of build on that theme, if you will.
    In permissive environments that are existing around the 
globe where you have very powerful young sergeants and 
lieutenants from both foreign terrorist organizations as well 
as very powerful drug trafficking organizations that have been 
dispatched by their leadership to move their agendas forward in 
places like West Africa, as I said, the Tri-Border Area of 
Afghanistan, the AfPak Region, and some other locations.
    These tough young sergeants and lieutenants from both of 
these threats are coming together. They're building close 
interpersonal relationships today that in my mind, it's as 
clear as can be, will develop into strong inter-organization, 
or potentially could grow into strong inter-organizational 
relationships and alliances in the future. Why? Because these 
tough young sergeants and lieutenants are naturally going to 
claw their way to the--within their organizations to key 
leadership positions.
    And it's one thing to say that we know that the Quds Force 
has got the ability to pick up the phone and ask al-Qaeda for a 
favor or vice versa. We know that happens, and we know it's 
been happening for quite some time.
    It's an entirely different scenario, though, when you stop 
to think what are we going to do when a member--a key leader in 
AQIM, or al-Qaeda, or the Quds Force has got the ability to 
pick up the phone and call a ranking member within, or an 
executive member of the Sinaloa Cartel, or the FARC, or the 
Gulf Cartel and ask for a favor. I don't think that that's too 
far down the road, if it's not already happening now.
    Mr. Sherman. What we're going to do, of course, is make 
sure that that person does not visit Disneyland, and we're 
going to tell the American people that as a sufficient 
sanction.
    Mr. Farah, is there anything we can do to substantially 
disadvantage the Iranian regime that would not anger 
multinational businesses or European diplomats?
    Mr. Farah. I think that's a trick question, sir. No, I 
think, basically, I think the cost the Iranian regime is paying 
now is much less than it would be because we're not--we look at 
the Iranian Government in isolation instead of as part of a 
broad group of countries that are aimed at enabling them to 
break their sanctions. You have the entire Bolivarian--foreign 
ministers of every Bolivarian country go to Tehran last year 
and publicly say we're going to violate the sanctions, and we 
hope the United States keels over dead, the press conference, 
that's Venezuela, Bolivia, Iran, Ecuador, and other countries.
    The circumstances, assuming that what we do on sanctions 
matters is living on another planet. They now have access to 
Central Banks across Latin America. They're clearly willing to 
work with Syria. They were--so I think thinking about what we 
can do is important, but I think it's much broader than what we 
can do on Iran. And we have to recognize that there is a 
coalition of countries out there that wish to harm the United 
States, and share some basic underlying principles, and that is 
primarily the--so, I think if you want to get at that issue, 
you have to think of a much broader way of going about 
sanctions and dealing with the government than just looking at 
Iran. I think you have to go after the enablers, as well, and I 
don't think we're even at the point of considering that.
    Mr. Sherman. Or we're going to have to give up on non-
lethal action and focus on whether Israel or the United States 
takes lethal action. But I'm still looking for the non-lethal 
approach. I yield back. Thank you.
    Mr. Duncan. Doctor, do you want to answer that just real 
quickly, real briefly, please.
    Ms. Felbab-Brown. And even more important that whatever 
support or whatever relations Iran has in Latin America is, of 
course, the engagement that Iran has with Russia, China, and 
India. And the gas and oil interest that these countries have 
with Iran. As long as these relations are not changed, our 
sanctions will inevitably be limited. And I would assume that 
the plot that was uncovered would be a very important 
opportunity to hone to countries like China, Russia, and India 
that strong pressure needs to be applied on Iran not to engage 
in such terrorist actions.
    Mr. Duncan. Well, there's no other members of the committee 
here, so we'll just conclude with thanking the ranking member 
for participating today. I'd also like to thank our witnesses 
and our panelists for being here and their excellent testimony. 
And thank you for your time.
    Mr. Sherman. Mr. Chairman, if I could just note for the 
record, I would have been here the entire hearing. The hearing 
had to be scheduled at a different time because of very 
important work that the chairman has to do, and that I strongly 
support on the Financial Services Committee. So, I want the 
witnesses to know that had this hearing been held at its 
previously scheduled time, I would have had a chance to see 
them deliver their opening statements in person instead of 
reading them tonight. Thank you very much.
    Mr. Duncan. All of you bring a wealth of experience, and 
that was very evident today, and unique perspectives in the 
nexus between drugs and terrorism. As Mr. Royce mentioned in 
his opening statement, the subcommittee will be looking forward 
to follow-up with the DEA in the future on this issue. And with 
nothing further, we'll stand adjourned. Thank you.
    [Whereupon, at 1:55 p.m., the subcommittee was adjourned.]
                                     

                                     

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