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





   NARCOTERRORISM AND THE LONG REACH OF U.S. LAW ENFORCEMENT, PART II

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

                                HEARING

                               BEFORE THE

         SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 17, 2011

                               __________

                           Serial No. 112-81

                               __________

        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

                                WITNESS

Mr. Derek S. Maltz, Special Agent in Charge, Special Operations 
  Division, Drug Enforcement Administration, U.S. Department of 
  Justice........................................................     8

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Edward R. Royce, a Representative in Congress from 
  the State of California, and chairman, Subcommittee on 
  Terrorism, Nonproliferation, and Trade: Prepared statement.....     3
Mr. Derek S. Maltz: Prepared statement...........................    11

                                APPENDIX

Hearing notice...................................................    26
Hearing minutes..................................................    27

 
   NARCOTERRORISM AND THE LONG REACH OF U.S. LAW ENFORCEMENT, PART II

                              ----------                              


                      THURSDAY, NOVEMBER 17, 2011

              House of Representatives,    
                     Subcommittee on Terrorism,    
                           Nonproliferation, and Trade,    
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:12 p.m., in 
room 2200, Rayburn House Office Building, Hon. Edward R. Royce 
(chairman of the subcommittee) presiding.
    Mr. Royce. This hearing will come to order. The title of 
this hearing is ``Narcoterrorism and the Long Reach of U.S. Law 
Enforcement,'' and today we continue our look at that subject.
    A few weeks ago the subcommittee heard testimony from 
private witnesses on the growing nexus between drugs and 
terrorism. This afternoon we are joined by the head of the Drug 
Enforcement Administration's Special Operations Division.
    Nothing better illustrates this threat than the Iranian-
directed plot to assassinate a foreign ambassador on U.S. soil, 
detailed by the Justice Department last month. A key 
conspirator in this plot approached a DEA informant seeking to 
hire a Mexican drug cartel and their hit squad to carry out 
this attack. The plot was planned over multiple meetings in 
Mexico between the man now in U.S. custody and people he 
believed to be cartel members. This foiled plot is the latest 
example of how the DEA has reached beyond U.S. borders to 
investigate, arrest, and bring to justice those involved in 
terrorist conspiracies.
    This plot wasn't a surprise to the subcommittee. In 2006 we 
held hearings on the border where we heard testimony from local 
law enforcement that the drug cartels would move, in their 
words, anyone or anything, ``so as long as the price was 
right.'' Iran apparently believed $1.5 million was the right 
price for this brazen attack.
    As we will hear today, an increasing number of U.S.-
designated foreign terrorist organizations are involved in drug 
trafficking. As investigator Doug Farah testified last month, 
in his words, ``growing ties between transnational organized 
crime from multiple regions, and terrorist organizations, are 
morphing into something new, which represents unprecedented 
dangers'' for our country. Whether it is the Russian Mafia, or 
the FARC, or the Chinese Triads, or Zetas, Hezbollah, the Qods 
Force, al-Shabaab, many of these different groups may be 
connected through ``super-fixers,'' as they are called, 
``super-fixers,'' or ``shadow facilitators'' is a word used 
sometimes here. These are individuals or groups that provide 
the weapons, provide the sophisticated document forgeries, 
provide the money-laundering capabilities, and they work for 
both the terrorists, and they work for the drug cartels.
    One premier ``super-fixer'' was Viktor Bout, who supplied 
weapons to insurgents and militias and terrorists. Bout was 
brought down by DEA agents in 2008 for conspiring to supply 
weapons to the FARC, a designated terrorist organization. After 
a long saga, Bout was extradited from Thailand to the United 
States and this month was found guilty of all charges against 
him.
    The team that nabbed Bout is part of DEA's Special 
Operations Division. They have had other high-profile 
successes. As Mr. Maltz will testify, these operations 
exemplify ``what DEA does best: Maximizing limited resources 
while working closely with foreign counterparts and leveraging 
[DEA's] vast array of confidential sources to infiltrate the 
highest levels of the world's most significant and notorious 
criminal organizations.''
    But there are always ways to get better. A former top DEA 
official told us last month that these shadow facilitators 
haven't been ``attacked to the extent necessary.'' Even with 
the will, the Special Operations Division has only two of these 
field enforcement teams dedicated to narcoterrorism cases.
    With a unique set of authorities, and human sources, and 
experience in running complex organizations, the DEA has been 
bringing a cutting-edge approach to attacking narcoterrorism. 
But the DEA's presence in Africa is spread very, very thin. 
Despite the dramatic increase in drug trafficking across West 
and North Africa many of these countries are covered by DEA 
offices in Europe. With a mix of al-Qaeda presence, ungoverned 
spaces and weak institutions, the threat of narcoterrorism in 
this part of the world is a real concern.
    [The prepared statement of Mr. Royce follows:]
    
    
    
                              ----------                              

    Mr. Royce.I will now turn to Ranking Member Sherman for his 
opening statement.
    Mr. Sherman. I wonder how long we have until----
    Mr. Royce. You have got 5 minutes, and you are faster than 
me, so I think we are well suited here.
    Mr. Sherman. I am more long-winded than you are.
    I want to thank the chairman for holding these important 
hearings. This hearing follows the subcommittee's hearing on 
October 12th on the same topic, and that hearing had private 
witnesses.
    Narcoterrorism, where drug profits fuel terrorism, where 
drug dealers adopt terrorist tactics in order to further their 
own ends, has destabilized several countries of vital interest 
to the United States. As one of the witnesses at the last 
hearing mentioned, whether you want to smuggle foreign 
nationals to enter the U.S. illegally, move AK-47s to a 
terrorist group, or move cocaine, a trafficker often passes 
through the same shadowy routes. The lines between terrorism 
and narcotrafficking have faded in many parts of the world.
    In our last hearing our witnesses had a number of 
recommendations for dealing with this growing threat, including 
expanding the DEA's confidential informant program in light of 
the failed Iranian plot.
    Frankly, I think we ought to go vote.
    Mr. Royce. Let me suggest that we recess and come back 
after the vote, and at that time we will reconvene. There are 
actually a total of three votes, so it will be a few minutes.
    [Recess.]
    Mr. Royce. Judge Poe, would you like to make an opening 
statement?
    Mr. Poe. Thank you, Mr. Chairman.
    I appreciate you holding this hearing. If you can get to 
Mexico, you can get to the United States, so it makes sense 
that world terrorists want to use the drug cartels, who are the 
absolute best smugglers into the United States, to get into our 
country.
    Drug cartels like the Zetas remind me of the old TV series 
Paladin with Richard Boone, and their motto is ``have gun, will 
travel,'' and that, to me, is the Zetas. They will go anywhere, 
do anything for money, and they will use their weapons if they 
need to. If it means helping terrorists, I believe they are 
fine with that as long as they get paid.
    Terrorists meanwhile are realizing just how profitable the 
drug trade is. Branches of al-Qaeda and the Taliban are thought 
to rely on the drug trade as a source of income, especially 
when other ways of raising money is dried up because of the 
heat the DEA and other organizations in the United States and 
other countries have put on them.
    The point of all this is that the nexus between terrorists 
and drug cartels matters. We need to have a strategy, we need 
to know exactly what they are doing together, because they are 
outlaws in cahoots with each other.
    I believe strategy should include using the tools we have 
to fight terrorists to also bring down the drug cartels. To me, 
I think we should strongly consider, and I would like the 
witness to weigh in on this, on his opinion, whether or not we 
should put the Zetas and other specific drug cartels on the 
foreign terrorist organization list.
    I also believe we need to use more equipment. And we now 
have ready, available equipment coming from Iraq. Over 2 
million pieces of equipment are coming back to the United 
States. If some of that can be used on the southern border of 
the United States either with Federal officials or State and 
local officials, such as Humvees, night surveillance equipment, 
UAVs, then we have, I think, an opportunity to send that 
equipment to the border to help fight the drug cartels and the 
terrorists. I have introduced legislation to do just that, and 
I would like the witness' opinion on that as well.
    I thank you, Mr. Chairman. I will yield back the remainder 
of my time.
    Mr. Royce. Thank you.
    Mr. Sherman.
    Mr. Sherman. Thank you.
    As I said earlier in our last hearing, our witnesses had a 
number of recommendations for dealing with this threat, 
including the DEA's confidential informant program in light of 
the foiled Iranian plot, breaking down the barriers separating 
counternarcotics and counterterrorism in our Government, and 
responding to the new reality that the lines that once 
separated organized crime from political terrorism, those lines 
seem to be fading.
    As we learned the day before, part I of these hearings, 
U.S. law enforcement officials uncovered the ``guns for hire'' 
plot of the Iranian Government to kill the Saudi Ambassador on 
American soil. The suspect is now facing trial in Manhattan.
    Our witnesses from the first hearing believe that this bold 
new plot by Iran to commit terrorism on American soil with the 
help of a Mexican drug cartel signals a new tactic for state 
sponsors of terrorism. But more importantly, we need to press 
again and again, as I have said for 15 years, to take the 
maximum possible actions to sanction Tehran for its sponsorship 
of terrorism and, of course, its efforts to develop a nuclear 
weapon. We need both stronger enforcement of existing laws and 
a new, tougher law designed to not only cripple the Iran 
Revolutionary Guard Corps, but to threaten regime survival. The 
committee took an important step in that direction when it 
marked up the Iran Threat Reduction Act on November 2nd and 
voted in favor of it overwhelmingly, I believe, without 
objection.
    We know that drug production and drug trafficking is a 
source of income for terrorist groups from Colombia to Lebanon 
to Afghanistan. The FARC taxes local cocaine production to 
finance its guerrilla war against the Colombian Government. The 
Taliban taxes local opium farmers to finance its war against 
our troops in Afghanistan. While Hezbollah was long dependent 
on Iran for financing in recent years, it has developed other 
sources of income, including drug trafficking.
    In February of this year, the Treasury Department 
designated the Lebanese Canadian Bank, Lebanon's eighth largest 
bank, as a primary money-laundering concern under the PATRIOT 
Act. Our Government found that Hezbollah operatives were 
laundering $200 million per month in drug money. Bank managers 
were found to be complicit in the activities and immediately 
were linked to Hezbollah officials inside and outside Lebanon, 
including Hezbollah officials in Iran.
    Iran and Hezbollah have steadily increased their influence 
in Latin America since the brutal bombings at the Israeli 
Embassy in Buenos Aires in 1992 and the Argentine-Israeli 
Mutual Association in 1994. All across Latin America, from 
Argentina to Mexico, Iranian and Iranian-backed Hezbollah 
activities are reportedly forming a nexus with--or their 
activists are forming a nexus with drug-traffic organizations.
    Finally as to Afghanistan, Afghanistan continues to be the 
source of the vast majority of the world's opium. The DEA has 
significantly boosted its enforcement activities in 
Afghanistan. The agency is increasingly involved in not only 
drug interdiction operations, but also financial investigations 
to track how drug proceeds are used to finance the Taliban. 
Several DEA officers who have been embedded in military units 
have lost their lives in the service of our country.
    One witness that I will preview--one question I will 
preview for the witness is should we spray the poppy fields in 
Afghanistan? This question needs to be looked at from three 
areas, and I realize our witness is more inclined to and more 
qualified to deal with only one. The first of these 
perspectives is what effect would that have on the streets of 
America, where another form of terrorism affects us every day, 
and that is the tremendous harm to our cities done by the 
selling of heroin? The second issue is what are the pluses and 
minuses that that would have for our activities in Afghanistan? 
We would be closing down a source of income for our enemies; at 
the same time we would be making America considerably less 
popular among many Afghans. And then finally, and I believe 
more important than its effect in Afghanistan, what effect 
would this have on Pakistan?
    I have said in this committee--before this committee more 
than once. Many think Pakistan is important because it is next 
to Afghanistan. I think Afghanistan is important because it is 
next to Pakistan. So our witness will address how our 
Government is responding to the fading lines between terrorism, 
narcotic traffickers and other criminal organizations, and what 
role we in Congress should play, and I look forward to the 
witness' testimony.
    Mr. Royce. Thank you, Mr. Sherman.
    Mr. Duncan of South Carolina, do you have an opening 
statement?
    Mr. Duncan. No.
    Mr. Royce. Okay. Very good sir.
    We will go now to Mr. Maltz, our witness. He is Special 
Agent in Charge of Drug Enforcement Administration's Special 
Operations Division. What do you call that, SOD?
    Mr. Maltz. Yes, sir.
    Mr. Royce. Mr. Maltz began his career with the DEA in 1986. 
He has had a variety of positions in the agency, winning 
numerous awards for his accomplishments. And in 2005, he was 
Special Agent in Charge, where he manages a staff of 300 
personnel, and they have 20 different government agencies there 
basically interlocking through your leadership. And this 
multiagency center uses sophisticated technology and 
intelligence resources to target narcoterrorism organizations. 
He serves as the DEA's lead spokesperson on merging technology 
and is the central link between the DEA and the Intelligence 
Community.
    Without objection, we are going to put your entire 
statement in the record, Mr. Maltz, but I would ask you if you 
could summarize your testimony and just give us 5 minutes here, 
and then we will get into our questions. Thank you very much, 
sir.

   STATEMENT OF MR. DEREK S. MALTZ, SPECIAL AGENT IN CHARGE, 
 SPECIAL OPERATIONS DIVISION, DRUG ENFORCEMENT ADMINISTRATION, 
                   U.S. DEPARTMENT OF JUSTICE

    Mr. Maltz. Distinguished members of the subcommittee, on 
behalf of the Drug Enforcement Administration, I would like to 
thank you for this opportunity today to talk to you about the 
ties between drug trafficking and terrorism. I would also like 
to thank Chairman Royce and this committee for your tremendous 
support to DEA to address this threat, specifically your 
leadership in fully engaging in the issues that we faced during 
a very difficult extradition process of Viktor Bout. I am proud 
to say that this notorious arms trafficker that was causing 
havoc around the world, after a successful trial in the 
Southern District of New York, is no longer going to be a 
threat to the public. It took less than 6 hours for the jury to 
deliberate and find Mr. Bout guilty on all charges. The U.S. 
justice system prevailed.
    As the agent in charge of the Special Operations Division 
since 2005, I have had the privilege of working with numerous 
law enforcement agencies around the world, the Intelligence 
Community and the Department of Defense. I have witnessed the 
amazing results that we can accomplish when we share our 
intelligence and we coordinate our efforts against the common 
enemies.
    SOD is a multiagency center that coordinates and 
deconflicts investigations around the world. SOD personnel, 
regardless of the agency, focus on connecting the dots of these 
criminal networks, pooling the resources of all the 
participating agencies to maximize the U.S. Government's 
efforts to disrupt the criminal networks.
    In response to the September 11th attacks on America, the 
Department of Justice, the DEA and the FBI established a 
Counter-Narcoterrorism Operations Center at SOD. That center is 
responsible for coordinating all the narcoterrorism 
investigations of the DEA and works closely with the FBI and 
the National Joint Terrorism Task Force to pass any DEA 
information around the world on terrorist activity timely.
    Over the years clearly the nexus between drug trafficking 
and terrorism has grown. The recent example of the plotted 
assassination attempt on the Saudi Arabian Ambassador in the 
U.S. illustrates the extent to which terrorists will align 
themselves with drug traffickers to achieve their goals. In 
this case the Iranian Qods Force operative approached an 
individual to carry out the assassination. He thought the 
person was a member of the Mexican drug cartels. Fortunately 
for all of us, the individual he approached was a DEA 
informant, and the plot was thwarted.
    The American people expect the government to cooperate on 
these types of investigations, and that is exactly what the DEA 
and the FBI did. In addition to the coordination with our 
fellow domestic enforcement agencies, our global partnerships 
are critical as we battle these threats around the world.
    DEA has one of the largest law enforcement presence 
overseas, 83 offices in 62 countries, and works closely with 
our host counterparts daily. Because of these relationships DEA 
is extremely well positioned to go after the global threats. 
DEA also has a vast worldwide confidential source network; a 
robust judicial telephone intercept program; and talented and 
dedicated personnel that have the passion, the heart, the 
desire to pursue this critically important and often dangerous 
mission.
    Due to the immediate and dire consequences of international 
narcoterrorism, DEA cannot take a reactive approach to this 
threat. Only proactive investigative action can protect the 
lives and property of the innocent victims. To accomplish this 
the walls between counterterrorism and counternarcotics or 
criminal investigations must come down. This is critical for 
our safety and the security.
    Drug proceeds in the billions are funding terrorist 
activity around the world. By combining the expertise of 
multiple U.S. Government agencies, we are able to utilize all 
tools in the toolbox. For example, earlier this year we joined 
with the Treasury Department and DEA and announced the 
identification of the Lebanese Canadian Bank and all its 
subsidies as a financial institution of primary concern on 
section 311 of the U.S. PATRIOT Act. The organization was 
moving multiton quantities of cocaine into West Africa and 
North Africa up into Europe, into the Middle East, laundering 
hundreds of millions of dollars monthly through the Lebanese 
Canadian Bank. This action also exposed Hezbollah's links to 
Lebanese Canadian Bank and the international narcotics-
trafficking and money-laundering network. This was the first 
time a 311 action in this manner was done in conjunction with 
law enforcement on a drug case, and I thank the Treasury 
Department for their work in this case.
    DEA has been extremely successful in attacking numerous 
criminal organizations here in the United States, seized assets 
of approximately $3 billion in cash over the last 5 years and 
over $5 billion in assets domestically here in the United 
States.
    As state-sponsored terrorism is declining, terrorism fueled 
by drug trafficking is on the rise. Criminals are operating at 
full speed in their efforts to do us harm, and we must act with 
greater speed to stop them. Though law enforcement and the 
Intelligence Community has come a long way in sharing 
information and working jointly, there is still more work to be 
done to accomplish our shared goal, which is to protect this 
country and go against all those who want to do us harm.
    In the words of President Obama, ``Terrorists increasingly 
are turning to crime and criminal networks for funding.'' For 
example, this week a Malian citizen pled guilty in the Southern 
District of New York on one of DEA's cases for his role as a 
conspirator to provide material support to terrorists. He 
agreed to transfer cocaine throughout Africa into northern 
Africa, into Europe, with the intention to support al-Qaeda, 
AQIM and the FARC. Al-Qaeda is clearly looking for additional 
funding streams.
    The Special Operations Division has established itself as a 
multiagency law enforcement center that can immediately 
deconflict investigative information, coordinate operations and 
mitigate threats through its multiagency resources and global 
capabilities. We have numerous successes behind us and will 
remain focused on the emerging threats that we face in this 
country.
    Thank you for your opportunity to appear today to discuss 
this important topic. I am happy to answer any questions that 
you may have.
    [The prepared statement of Mr. Maltz follows:]
    
    
    
                              ----------                              

    Mr. Royce. I appreciate very much you coming down and 
testifying today, Mr. Maltz. First let me congratulate the DEA 
on its operation against the ``Merchant of Death,'' as he was 
known in Africa, Viktor Bout, the international arms 
trafficker. That was superlative work.
    The operative in charge of that operation made an 
observation, a former colleague of yours. He said, what in 
God's name do we do when a terrorist organization has the 
ability to collaborate with a Mexican drug cartel? Now we are 
getting to that point where we are beginning to see exactly 
that happen.
    We had Jameel Nasr arrested in Tijuana, a Mexican national 
with family ties to Lebanon attempting to set up a Hezbollah 
network in Mexico. You referenced another case. The 
sophistication of the explosives used by Mexican cartels that 
have been picked up, some of that has been learned from sources 
from the Middle East. I have been in some of those tunnels. You 
saw in the paper, I think yesterday, another massive tunnel 
operation linking Tijuana to San Diego, and as you go down 
there, these are the types of state-of-the-art tunneling 
operations that you also see on the Lebanon border, and 
Hezbollah has an influence with because of their tunneling 
capabilities.
    The ability to exchange expertise between drug traffickers 
and those who are involved in that kind of opportunity, it 
really sets up an interesting dynamic. And I wanted to ask you, 
how concerned are you about the possibility of this terrorist-
cartel nexus?
    Mr. Maltz. Well, sir, I am very concerned. I have three 
children, and, like all of us, we are looking out for the best 
interests of the United States. Mexican drug cartels are 
extremely violent. There has been over 40,000 folks killed in 
Mexico since 2006. I remain very concerned.
    We have seen the growing nexus between these Middle Eastern 
terrorist organizations and different criminal organizations 
around the world. As you know, we have linked 19 out of 49--we 
have linked 19 out of 49 designated foreign terrorist 
organizations to be connected with drug trafficking. So we 
remain--we share your concern. We remain vigilant, working 
jointly with the Mexicans. We have not seen any connection to 
tunnels in Mexico coming into the United States, but obviously 
we remain focused on that, and we share your concern.
    Mr. Royce. I appreciate that.
    Another case I was going to ask you about is this North 
Korean case with the drug trafficking--150 kilos of pure 
heroin--not too long ago produced in North Korea. This is one 
of their exports. They do pretty well with counterfeit $100 
bills, with missile exports, and with heroin and with meth. 
This is one of their sources of hard currency. So we did break 
up the operation there, I guess, on the way to Australia's 
shores for distribution by organized triads that operate in 
that part of the world.
    But are you targeting North Korean drug activity now? Has 
the State Department been asking you to make this a priority or 
not?
    Mr. Maltz. Sir, I have not had any conversation with the 
State Department on the North Korea drug situation. We have 
agents around the world. We have had information in the past 
about drug trafficking in North Korea, but we would have to get 
back to you on more details.
    Mr. Royce. Here is what I am interested in. When the 
Illicit Activities Initiative was at its height, we were really 
trying to move on the counterfeiting over there and the other 
sources of hard currency that assist the regime because they 
are able to continue their weapons program because of the hard 
currency they get overseas, they don't really have any domestic 
capability of paying for the gyroscopes that they buy on the 
black market and so forth, they need hard currency to do this. 
So a special coordinator was tasking agencies like the DEA, 
ATF, FBI, Secret Service, who tackle the counterfeiting part of 
this. All of those were supposed to work in tandem to squeeze 
North Korea on this illicit activity front. I wonder if that 
has sort of fallen off the radar a little bit.
    I bring it up because there are very real benefits to 
getting a handle on their ability to use this kind of criminal 
enterprise for the hard currency. You got to shut off the 
spigot, and this is one way to do it. So I will bring that up 
to you.
    Let me ask you about North and West Africa as well. You are 
spread pretty thin in Africa. And one of the questions I have 
is West Africa in particular is a center of operations for an 
awful lot of drug smuggling. It is expanding very, very 
rapidly; Guinea-Bissau, Senegal, these areas are now covered by 
the DEA from your Paris office rather than on the ground. I was 
going to ask if that hampers your operations out there at all 
and your opinion on that.
    Mr. Maltz. Well, clearly we have seen increases of cocaine 
flowing out of South America into West Africa for distribution 
in Europe and the Middle East, so we are very concerned about 
that drug flow. Of course, we are working closely with 
counterparts throughout West Africa. We have had some 
significant success. As you may know, in Liberia and Ghana on 
some joint cases, we actually had the President of Liberia's 
son doing undercover work for the DEA in a joint operation when 
the Colombian traffickers were trying to corrupt officials in 
Liberia to stash cocaine in the multi ton quantities.
    So we have had success. We are going to continue to do the 
best that we can with the personnel that we have on the ground 
in Africa and in Europe, but like anything else, you know you 
can always do better if you have more resources.
    Mr. Royce. I appreciate that. And I do understand you are 
going to open up potentially an office in Kenya.
    Mr. Maltz. Yes.
    Mr. Royce. I really hope we can get a focus, going back to 
my point on North Korea. And maybe you and I can circle around 
afterwards, but it has become a national security issue. This 
regime has nukes. It is trying to get the money to pay to 
miniaturize those nukes to put it on an ICBM. And while they 
are running their gulags over there and involved in their 
illicit activity, at times it is escaping the world's attention 
because of all the other problems out there. And you have got 
two teams to handle all of this. I hope we can beef up your 
resources at some point, but I also hope we can keep this on 
the radar. And we will talk later, Mr. Maltz.
    We will go to Mr. Sherman.
    Thanks for your good service to this country.
    Mr. Maltz. Thank you, sir.
    Mr. Sherman. I second that comment. And, Mr. Maltz, I kind 
of previewed my questions.
    Let us talk about the possibility of spraying the poppy 
fields in Afghanistan. Let us put aside the policy aspect, 
including the policy aspect of how that would affect public 
opinion in Afghanistan toward the United States, and let us 
just look at the technical biology here. If we really made an 
effort, could we significantly reduce the amount of opium 
produced in Afghanistan by spraying the crops?
    Mr. Maltz. Sir, I run an operational center for the DEA, 
and unfortunately I don't have the background to answer that 
question appropriately. Spraying, of course, is run by the 
State Department, and you know my concern is to go after the 
threats to the best of our ability as an investigating agency, 
and I really do not have the details to answer that question. I 
apologize for that.
    Mr. Sherman. So you are not involved in trying to stamp out 
the production so much as to deal with the drug trafficking 
after the poppies have been produced?
    Mr. Maltz. Well, DEA, in working jointly with the 
Department of Defense, State Department and the Afghan National 
Police, are involved with going after the production of heroin 
in Afghanistan. We have had very significant successes just 
last month, in September, some of the largest seizures ever in 
production of heroin.
    Mr. Sherman. If I can, I am focusing now on the poppy. The 
next phase, and more, perhaps, akin to what you do, is after it 
has been refined into heroin, or at least partially refined 
toward becoming heroin, then it becomes less of a ``stamp out 
the crop'' process and much more of a deal with the drug 
traffickers process. I gather from your answer that your focus 
tends to be on the heroin and the money rather than the poppy 
cultivation?
    Mr. Maltz. No. We are concerned about the poppy 
cultivation, but the State Department would have the oversight 
and the lead on spraying, whether that is advantageous. And we 
are going to continue to work with our partners in Afghanistan 
on the ground to go after the lab operators and the kingpin 
organizations to try to make a difference in that way.
    Mr. Sherman. Focusing on the testimony we had from Michael 
Braun, he said at our first hearing on this subject that our 
missions are stifled by the distinct operational authorities 
and sources of funding, between those focused on 
counternarcotics and those focused on counterterrorism. Do you 
see advantages of combining our counterterrorism and 
counternarcotics capacities and operations?
    Mr. Maltz. Yeah. I mean, at SOD, like I said, we have the 
counterterrorism operation, counter-narcoterrorism operations 
center. And we work with the FBI's counterterrorism, we work 
with the CIA and all the other agencies involved with 
counterterrorism, and we are working jointly on these 
operations. The case with the assassination attempt, clearly 
that was a seamless operation between DEA and FBI, exactly what 
the public would expect.
    So there is a big advantage because criminals turn--I mean, 
terrorists are turning to criminal networks for funding, so you 
have to look at it as one network of bad guys around the world 
that are looking to do this country harm. You cannot separate 
out----
    Mr. Sherman. So you don't think that there are 
bureaucratic, stovepiping or barriers that prevent good 
coordination and communication between those who, like 
yourself, are involved in counternarcotics and those who are 
focused on counterterrorism?
    Mr. Maltz. Sir, I worked in the Special Operations Division 
prior to 9/11, and I have been at the SOD operation now for 
over 6 years, and I can say that the cooperation is continually 
getting better. There is always going to be stovepiping because 
it is a personality situation depending on where you are 
working in the world.
    Mr. Sherman. If I can interrupt to try to squeeze in one 
more question. Those engaged in counterterrorism have to focus 
not only on how to hit the terrorists, but also on winning over 
the hearts and minds of those who might be terrorists or might 
be thinking of becoming terrorists. Those who are engaged in 
counternarcotics usually don't focus so much on the hearts and 
minds of the criminals involved. Is there a clash of approach 
between a law enforcement and anti--counternarcotics approach 
that focuses on nailing the bad guys and a counterterrorism 
approach that talks an awful lot about winning over the bad 
guys?
    Mr. Maltz. Well, all I can say is in our efforts, we are 
looking to prosecute the bad guys. We have approaches where we 
are looking to develop evidence, we are looking to work with 
whoever we can work with around the world, combine the 
resources to maximize your efforts. In counterterrorism 
operations a lot of times they may be looking to disrupt 
something that is going to happen, and they have to take action 
immediately, and, you know, collecting evidence may not be as 
important.
    But to go back to your question, I think that there are 
some walls that need to come down, there are some stovepipes 
that need to come down, but the good news is we are making a 
lot of progress, and we hope to make more progress.
    Mr. Sherman. Thank you.
    Mr. Royce. Mr. Duncan.
    Mr. Duncan. Thank you, Mr. Chairman.
    And, Agent Maltz, thanks for being here. I just came back 
from Afghanistan and Iraq, and we met with some DEA agents over 
there. I understand the good work that is going on to eradicate 
some of the opium poppy fields and other things and turn those 
areas into food production and the work that DEA is doing 
there.
    I want to focus on Iran and the threat in the Western 
Hemisphere. I notice in your testimony you say this: Luckily 
the individual who was allegedly approached was a DEA agent and 
informant, or a DEA informant, and the plot was thwarted. Many 
of us that have been following this issue for a long time--I 
have been in Congress since January--this issue of Iran and 
Qods Force; Hezbollah being involved with the Mexican drug 
cartel; and drug trafficking utilization of tunneling, a lot of 
the sophisticated tunnels we see are very similar to what you 
see in maybe Lebanon. The issue with Qurani and ties to 
Hezbollah are very, very clear. I think you guys got that. I 
don't think you are completely lucky. I think you had the right 
resources in place to be lucky. I would rather be lucky than 
good any day, and that is an old saying, but I am glad you had 
those guys in place.
    A lot of folks question me why Iran, why Hezbollah would be 
involved with the drug cartels. And I go back to the 1980 fatwa 
by Hezbollah that gives rationale to that, why they should 
engage in drug production and trafficking, and I am sure you 
are familiar with that.
    But I want to bring your attention to H.R. 429. It is a 
resolution I have put forth that got bipartisan support, and 
hopefully we are going to get some movement on it. But it 
basically says that under the next counterterrorism strategy, 
that will include North America--excuse me, the Western 
Hemisphere in the area of focus, which I think was left out in 
the 2011 area of focus. I think it should be part of the next 
one.
    And we need to constantly be aware of the fact that Iran 
opened six Embassies in the Western Hemisphere in the last 5 
years that many folks have testified in front of our committees 
that see that possible lily pad effect of Hezbollah and the 
Qods Force using those Embassies and those relationships to 
leapfrog into threatening this country.
    And so one thing that you said concerns me, and I want to 
ask you about the wall, the wall between the counterterrorism 
and counternarcotics that you mention, and the fact that it 
needs to come down, because that struck a cord with me, because 
the 9/11 Commission identified the wall that existed between 
government agencies that kept information from flowing that 
could have thwarted that attack. So if you could delve into 
that, the wall aspect that you mentioned, and what we can do as 
Congress to help eradicate that wall and have more information 
sharing.
    Mr. Maltz. Thank you.
    Well, the good news is, as an example, the United States 
attorney in the Southern District of New York took 
unprecedented action, and he broke down those walls. In his 
prosecution--with his prosecution units in New York, there is 
no longer a drugs and a terrorism unit, it is one unit of very 
aggressive, very competent prosecutors that are going to work 
together to go after the threats. The U.S. attorney for the 
Eastern District of Virginia has done the same. He has 
restructured his units so he has the best prosecutors available 
to go after the biggest threats to the country.
    So we are working on taking down these type of walls, and 
we have made a lot of progress, but I am concerned because 
there are different philosophies, different ways of looking at 
going after a terrorist organization, a drug organization--I 
don't know what happened to the sound.
    Mr. Duncan. We can hear you.
    Mr. Maltz. So I am still concerned about the walls.
    And I worked very hard on trying to convince others out 
there on the reasons we have to work very closely together. 
Bottom line is it is about the money. If a terrorist 
organization wants to carry out a terrorist act against this 
country, they need money, and drugs are generating billions of 
dollars around the world. So whether it is drug smuggling, 
alien smuggling, arms trafficking, the bad guys are going to 
generate money from criminal activity, and they are going to 
provide that money to terrorists.
    So we have to continue to look at this issue as a problem 
of a criminal organization that wants to do harm to this 
country and just do the best we can to share information with 
everybody that has a role, all the law enforcement agencies and 
the Intelligence Community.
    Mr. Duncan. Mr. Chairman, I yield back.
    Mr. Royce. Let me thank Mr. Duncan, too. He has legislation 
that he has been working on in terms of Hezbollah's operations 
in our hemisphere, and his staff has been working with the 
committee staff on this legislation. We hope to move it, and we 
wanted to acknowledge that.
    Mr. Maltz, in your circumstances is there anything else 
that you would like to share with us, you would like us to be 
pondering, you think we should be thinking about?
    Mr. Maltz. I am just very thankful of what this committee 
has done already, the fact that you engaged very heavily. And I 
read the letter that you wrote regarding the Bout extradition, 
and I just appreciate that, personally appreciate that, because 
we have done a lot of work in that investigation, and we were 
very happy at the results. But just the fact that we are having 
this hearing is appreciated by me.
    Mr. Royce. I made several phone calls to people in more 
than one government.
    Mr. Maltz. I recognize that, sir.
    Mr. Royce. But I know what you did as well. And I think it 
is a great message to the next arms trafficker, the fact that 
your team could go out there, reach out there, catch this 
individual who was about to escape justice, make sure he faced 
justice, bring him back to the Southern District of New York, 
charge him, convict him. It is impressive. It is very, very 
impressive, and I would say it has not gone unnoticed by others 
that are involved in this type of work out there. So if you can 
keep up that pace and remove somebody who has done as much 
damage and brought as much destruction and death as Viktor 
Bout, you have done something for world peace.
    Mr. Maltz. Thank you, Chairman. I mean, after we arrested 
Monzer Kassar, Mr. Untouchable, in Spain, and brought him to 
justice in the Southern District of New York, and were able to 
be recognized by the Klinghoffer daughters at a ceremony in New 
York that we never forgot the killer of their father, we 
appreciate your comments, and we are going to continue to 
conduct business just like we have been doing.
    Mr. Royce. Thank you, sir. Thanks for your testimony today. 
And I thank the members of the subcommittee.
    Mr. Maltz. Thank you very much.
    Mr. Royce. We stand adjourned.
    [Whereupon, at 3:25 p.m., the subcommittee was adjourned.]
                                     

                                     

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