[Senate Hearing 112-369]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 112-369
 
                     IRAN'S INFLUENCE AND ACTIVITY 
                            IN LATIN AMERICA 

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

                                HEARING

                               BEFORE THE

               SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE
                  CORPS, AND GLOBAL NARCOTICS AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 16, 2012

                               __________

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                       COMMITTEE ON FOREIGN RELATIONS          

             JOHN F. KERRY, Massachusetts, Chairman        
BARBARA BOXER, California            RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   MARCO RUBIO, Florida
JIM WEBB, Virginia                   JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire        JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware       JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois          JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico                MIKE LEE, Utah
               William C. Danvers, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

                         ------------          

          SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE          
             CORPS, AND GLOBAL NARCOTICS AFFAIRS          

             ROBERT MENENDEZ, New Jersey, Chairman        
BARBARA BOXER, California            MARCO RUBIO, Florida
JIM WEBB, Virginia                   MIKE LEE, Utah
JEANNE SHAHEEN, New Hampshire        JIM DeMINT, South Carolina
TOM UDALL, New Mexico                JOHNNY ISAKSON, Georgia
                                     JOHN BARRASSO, Wyoming

                             (ii)          

  



























                            C O N T E N T S

                              ----------                              
                                                                   Page

Arnson, Cynthia J., Ph.D., director, Latin American Program, 
  Woodrow Wilson Center, Washington, DC..........................     6
    Prepared statement...........................................     8
Berman, Ilan, vice president, American Foreign Policy Council, 
  Washington, DC.................................................    36
    Prepared statement...........................................    38
Farah, Douglas, senior fellow, International Assessment and 
  Strategy Center, Washington, DC................................    12
    Prepared statement...........................................    14
Menendez, Hon. Robert, U.S. Senator from New Jersey, opening 
  statement......................................................     1
Noriega, Hon. Robert F., former Assistant Secretary of State for 
  Western Hemisphere Affairs, former Ambassador to the 
  Organization of American States, Washington, DC................    30
    Prepared statement...........................................    32
Rubio, Hon. Marco, U.S. Senator from Florida, opening statement..     3

              Additional Material Submitted for the Record

Op-ed by Senator Richard G. Lugar ``Growing Risk Posed by Iran-
  Venezuela Axis,'' Miami Herald, February 15, 2012..............    55

                                 (iii)

  


                     IRAN'S INFLUENCE AND ACTIVITY
                            IN LATIN AMERICA

                              ----------                              


                      THURSDAY, FEBRUARY 16, 2012

                           U.S. Senate,    
        Subcommittee on Western Hemisphere,
         Peace Corps, and Global Narcotics Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:02 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Robert 
Menendez (chairman of the subcommittee) presiding.
    Present: Senators Menendez and Rubio.

           OPENING STATEMENT OF HON. ROBERT MENENDEZ,
                  U.S. SENATOR FROM NEW JERSEY

    Senator Menendez. Good morning. This hearing of the Western 
Hemisphere, Peace Corps, and Global Narcotics Affairs Committee 
will come to order. Let me welcome all of you to our hearing on 
Iran's influence and activity in Latin America. I want to thank 
all of our panelists for coming today and I look forward to 
hearing your assessment of the growing and multilayered 
relationship between Iran and countries in Latin America.
    Iran is seizing headlines around the world as its 
leadership pursues a singular agenda, to achieve nuclear 
weapons capacity. Fortunately, the world is largely united in 
its view that such a development would be devastating to our 
national security, to that of our allies, and to the stability 
of the region. Most of our allies agree that Iran cannot be 
permitted to succeed in this endeavor and, thanks to the 
leadership of this Congress and the Obama administration, more 
pressure has been placed on the Iranian regime than ever 
before.
    In December, the Senate voted unanimously to impose biting 
sanctions on the Central Bank of Iran that have led to a 25-
percent drop in the Iranian currency, the reconsideration of 
millions of dollars in purchases of petroleum from Iran, and 
the passage of similar sanctions and an oil embargo by the EU 
nations. Earlier this month, the Senate Banking Committee 
further tightened the noose by approving the Iran Sanctions 
Accountability and Human Rights Act, which imposes sanctions on 
joint energy ventures and uranium mining ventures, including 
some Iran has concluded with countries in this hemisphere, and 
support sanctions on the National Iranian Oil Company, which 
has also extended its reach into this hemisphere.
    As we tighten the noose around the Iranian regime, we must 
pay close attention to where President Ahmedinejad's increasing 
isolated government looks for friends and resources. 
Unfortunately, there are some countries in this hemisphere 
that, for political or financial gain, have courted Iranian 
overtures. They proceed at their own risk--the risk of 
sanctions from the United States and the risks of abetting a 
terrorist state.
    Within 4 years of President Ahmedinejad's election in 2005, 
Iran opened six new embassies in Latin America, including 
Bolivia, Chile, Colombia, Ecuador, Nicaragua, and Uruguay, in 
addition to the five embassies Iran already had. Iran has 
announced its intention to form a joint oil company with 
Venezuela, signed a memorandum of understanding to cooperate in 
oil activities and personnel training with Ecuador, and been 
awarded the right to explore 12 oil and gas blocks in Bolivia.
    In October we learned of Iran directing a plot to 
assassinate the Saudi Ambassador on United States soil using 
individuals it believed to be members of the Zetas drug cartel, 
and 2 months later the Spanish language network Univision aired 
a documentary that depicted a 2007 cyber attack plot by the 
Iranian Ambassador in Mexico, in conjunction with diplomatic 
officials from the Embassies of Venezuela and Cuba, to 
infiltrate U.S. Government computer systems in the White House, 
FBI, CIA, and two nuclear facilities. The Venezuelan official 
profiled in that documentary was later reposted to the 
Venezuelan consulate in Miami, until the State Department 
compelled that she be dismissed for her actions while serving 
in Mexico.
    Furthermore, an investigation into the Lebanese Canadian 
Bank profiled by the New York Times discovered a complicated 
web of high-ranking Hezbollah officials involved in South 
American cocaine trafficking trade, as well as an extensive 
network of money laundering for Colombian and Mexican drug 
cartels.
    When you view this in conjunction with the fact that travel 
between Iran and both Venezuela and Bolivia does not require 
visas despite weak commercial and tourist ties between the 
countries, and the fact that partnering with Venezuelan banks 
allows Teheran to seek to circumvent financial sanctions, it is 
impossible to say this issue does not merit more United States 
attention.
    Ahmedinejad has said, ``When the Western countries were 
trying to isolate Iran, we went to the U.S. back yard.'' We 
cannot ignore the geostrategic significance of Iran forming 
alliances with countries in the Western Hemisphere, 
particularly with anti-American leaders like Hugo Chavez and 
Daniel Ortega. This is especially threatening in light of the 
recent plot to assassinate an ambassador on United States soil, 
which our intelligence community believes is evidence that the 
leadership in Teheran feels increasingly emboldened in its plan 
to undermine American interests and those of our allies.
    As expressed by our own Director of National Intelligence, 
James Clapper, in testimony before the Senate Intelligence 
Committee this month, the Iranian leadership is now, ``more 
willing to conduct an attack on the United States in response 
to real or perceived U.S. actions that threaten the regime.''
    Iran is a terrorist state whose behavior poses a 
significant global threat. In the last week, we suspect that 
Iran has instigated attacks in India, Georgia, and Thailand. 
Iran has a terrorist history even in Latin America, directing 
the bombing of the Israeli Embassy and the Jewish Community 
Center in Buenos Aires in the 1990s.
    So what do countries in the hemisphere hope to gain from a 
relationship with a country as isolated, repressive, and 
dangerous as Iran? Some may argue that Iranian influence in 
this hemisphere has yet to materialize, that what Iran actually 
brings to the table is unfulfilled promises, factories unbuilt, 
ports undredged, humanitarian aid undelivered; that Venezuela, 
Nicaragua, Ecuador, and Bolivia allow themselves to be courted 
by Ahmedinejad to stick a proverbial finger in America's eye, 
and that may be true. But at the same time, we cannot ignore 
the possibility, given Iran's worldwide terror escapades, that 
there is more to the story or that, at a minimum, there will 
be.
    So I called this hearing to sift through the facts, discuss 
with the experts before us what about Iran's relationship with 
the nations of our hemisphere should be of serious concern, and 
discern the appropriate United States response.
    With that, I am looking forward to hearing from our 
witnesses, and will turn to the distinguished ranking member 
and my colleague, Senator Rubio.

             OPENING STATEMENT OF HON. MARCO RUBIO,
                   U.S. SENATOR FROM FLORIDA

    Senator Rubio. Thank you, Mr. Chairman, for holding this 
hearing. I echo everything you've just said and I just wanted 
to add a few things.
    First let me thank the witnesses. We have a great panel. 
Thank you all for being a part of this. I've already read all 
of your statements, so I look forward to hearing them and 
answering your questions.
    As you've described, Mr. Chairman, the regime in Iran does 
pose an international threat, not just to the United States, 
but to the world, and the purpose of this hearing is to examine 
the increasing role they're playing in the Western Hemisphere 
and what's behind it.
    I think we need to begin by making sure we don't exaggerate 
things. Iran really is not capable of doing much on its own in 
the region. All these promises they make about things they're 
going to build, they very rarely keep any of them. In fact, 
they haven't kept almost any of them. So a reminder to the 
people of these countries that the cost-benefit analysis of 
being associated with Iran isn't necessarily on the benefit 
side.
    I would go on to say, however, that, while it's important 
to not exaggerate the role they're playing, we need to 
understand why it is that they're doing what they're doing, and 
we clearly need to identify that Iran is working in the 
hemisphere with nations like Venezuela and Cuba and with other 
governments like the ones in Nicaragua, Bolivia, and Ecuador. 
These leaders of these countries are basically putting their 
nations at the service of Iran for the detriment of their 
people and to their future.
    So I think one of the things I hope to hear today is why 
they're doing it, and I think what I hope you'll explore 
further in your testimony is a few of the reasons. The first is 
they're obviously looking--Iran is looking to avoid isolation. 
They want to be able to point to the world and say, look, we're 
not alone, these are these other countries that are aligned 
with us, this is really a Western nation versus a rest of the 
world type argument, and they want to point to these nations as 
being part of some sort of new axis that they're helping or 
they're trying to create.
    The second is they're looking for allies to help them 
circumvent sanctions, allies and other countries that have 
access to the international banking system that will allow them 
to circumvent some of the international sanctions that are 
increasingly growing on Iran.
    But the third is the one that I think is most dangerous of 
all, and that is ultimately they seem to be establishing a 
platform to potentially carry out asymmetrical attacks against 
the United States in the region, and it's something that we 
need to be cognizant of. Now, that may sound farfetched, except 
that the evidence is increasingly clear that Iran is much 
bolder in their willingness to attack the United States through 
terrorism than anyone had ever imagined.
    In an open hearing on January 31, the Director of the 
National Intelligence, James Clapper, acknowledged when he 
said: ``Iranian officials, probably including Supreme Leader 
Ali Khamenei, have changed their calculus and are now willing 
to conduct an attack in the United States.'' That's his 
assessment of Iran, a nation who is now beginning to see its 
footprint even more clear in the capitals and in these 
countries that we've outlined just a moment ago.
    The history and the lessons of history are even more 
startling. Let's remember that it was senior Iranian officials 
that were linked to the 1992 bombing of the Israeli Embassy in 
Buenos Aires that killed 30 people, a 1994 bombing at the 
Argentine-Israeli Mutual Association that killed 85 people.
    In October of this year we uncovered a plot by the Quds 
Force to assassinate the Saudi Arabian Ambassador in the United 
States in this very city. And earlier this year, the Univision 
television network had a documentary that showed an Iranian 
diplomat colluding with what they believed to be Mexican 
students that were interested in carrying out terrorist attacks 
against national security targets inside of the United States. 
It showed the Venezuelan consul in Miami, Livia Acosta Noguera, 
asking for information and advising the students. Obviously, 
she was expelled, but it just shows the lengths of which this 
continues to develop. So you look at all these things and we 
have cause for concern.
    So let me close by saying that I hope the message of 
today's hearing and the actions moving forward, which I believe 
are shared by both parties--and I, by the way, would encourage 
everyone to read an op-ed piece today that ran in the Miami 
Herald by our esteemed colleague, Senator Lugar, which I really 
think outlines the challenge before us. I think it's important 
to send a message to the leaders of both Venezuela and Cuba and 
to their puppets, the leaders of Nicaragua, Bolivia, and 
Ecuador, that, No. 1, your people and your nations don't agree 
with you. They certainly do not want to be associated with a 
pariah regime like Iran and they recognize that their benefits 
they get for being associated with a pariah are far outweighed 
by the cost of being associated with these individuals.
    The second message I hope they'll take from today and 
moving forward is that the leaders of these countries are 
playing with fire. They're playing with fire because they're 
associated with an unpredictable group. One thing is to say 
these ridiculous statements about how great Moamar Qadafi was 
and what a good hero Assad is. Another thing is to actually 
give these people operating space in your own country from 
which they can do things that you can never imagine, and the 
consequences will be extraordinary. They are playing with fire. 
It's a very dangerous game they're playing. Their people 
deserve better and I hope they'll reconsider.
    So thank you for holding this hearing on this important 
topic, Mr. Chairman.
    Senator Menendez. Thank you, Senator Rubio.
    Let me introduce our panelists. First we'll hear from Dr. 
Cynthia Arnson, the director of the Latin American Program of 
the Woodrow Wilson International Center for Scholars. Dr. 
Arnson recently edited a publication titled ``Iran and Latin 
America, Threat or Axis of Annoyance,'' and since joining the 
center's Latin American program in 1994 she has focused on 
questions of democratic governance, conflict resolution, human 
rights, the international relations of Latin America, and U.S. 
policy in the Western Hemisphere.
    Next we welcome Mr. Douglas Farah, an adjunct fellow at the 
Americas Program at CSIS and a senior fellow at the 
International Assessment and Strategy Center. He is an expert 
on transnational criminal organizations, insurgencies, 
ungoverned spaces, illicit money flows, and resource 
exploitation in Latin America. In recent years he has written 
extensively about Iran's growing influence in Latin America, 
the Bolivarian revolution, and transnational criminal and 
terrorist networks in the region.
    We'd also like to welcome Ambassador Roger Noriega back to 
the committee. He coordinates the American Enterprise 
Institute's program in Latin America and has served as our 
Assistant Secretary of State for the Western Hemisphere 
Affairs, as well as U.S. Ambassador to the Organization of 
American States, and is a former staff member of this 
committee.
    Finally, we welcome Ilan Berman, vice president of the 
American Foreign Policy Council. An expert on regional security 
in the Middle East, Central Asia, and the Russian Federation, 
he has consulted for both the U.S. Central Intelligence Agency 
and the U.S. Department of Defense, and recently returned from 
an extended fact-finding trip to examine Iran's growing 
influence in Latin America.
    So thank you all for your willingness to share your 
expertise with the committee. We welcome you and ask you that 
you limit your testimony to approximately 5 minutes.
    Your full testimony will be included in the record.
    With that, we'll begin with Dr. Arnson.

STATEMENT OF CYNTHIA J. ARNSON, PH.D., DIRECTOR, LATIN AMERICAN 
         PROGRAM, WOODROW WILSON CENTER, WASHINGTON, DC

    Dr. Arnson. Thank you very much, Senator Menendez, and 
thank you, Senator Rubio, for the invitation to testify on this 
difficult subject. This is obviously a highly charged topic. 
International tensions over the purpose and the lack of 
transparency of Iran's nuclear program have escalated 
dramatically in recent weeks. The subject of Iran's involvement 
in Latin America is additionally difficult precisely because 
there's so little transparency in Iran's economic, security, or 
intelligence dealings with the region. This is compounded by a 
parallel or similar lack of transparency among its principal 
allies in the region, the countries of the so-called ALBA bloc.
    The allegations about Iran's activities in Latin America, 
which both you and Senator Rubio have just outlined, especially 
those related to its nuclear ambitions and support for 
terrorism, deserve to be treated with the utmost seriousness. 
As you mentioned, there is a track record. Five Iranian 
officials, including the current Defense Minister, along with 
an operative of Hezbollah, have been accused by the Government 
of Argentina, and those arrest warrants have been validated by 
Interpol, for masterminding the two most devastating terrorist 
attacks in recent Latin American history, the 1992 bombing in 
Buenos Aires of the Israeli Embassy, and the 1994 bombing of 
the Jewish Community Center, the AMIA.
    This is a political year in the United States, however, and 
it's easy to see how hot-button issues of Iran and its 
intentions in the Middle East or in Latin America can become 
the subject of heated debate and partisan contention. When one 
adds to this mix the polarizing and stridently anti-United 
States figure of President Hugo Chavez in Venezuela, the whole 
mix becomes especially volatile.
    I would argue, however, that the politicization of this 
issue will not and rarely leads to good policy. The assessments 
of intentions as well as capabilities are by definition hard to 
make, all the more so when they involve both state and nonstate 
actors who endeavor to keep their activities secret. Vigilance 
is essential at this time, as is evidence-based consideration 
of these difficult issues.
    President Ahmedinejad recently concluded a trip to the 
region, prompted by an invitation to visit Nicaragua to attend 
the inauguration of President Daniel Ortega. As much as the 
Iranian President might have derived some satisfaction from 
this trip, showing up again, as Senator Rubio has indicated, on 
the United States doorstep, showing that he could poke the 
United States in the eye, I think that in a broader sense the 
trip was a major failure, demonstrating mostly that Iran has 
lost political ground in the hemisphere.
    Ahmedinejad was rebuffed by Brazil, which is Iran's largest 
trading partner in Latin America, in sharp contrast to 
reciprocal visits by the Iranian and Brazilian Presidents in 
2009 and 2010. The new government of President Dilma Rousseff 
has voted against Iran in the United Nations, for the first 
time supporting the sending of a special rapporteur. She has 
called Iranian human rights violations, including the proposed 
stoning of a woman convicted of adultery, a ``barbarity'' and 
``a medieval practice.''
    Argentina, which is Iran's second-largest trading partner, 
was also not on the itinerary. And despite previous trips to 
Bolivia, Ahmedinejad did not stop in La Paz, most likely 
because in May 2011 the Iranian Defense Minister, Vahidi, who 
was in fact one of those accused of involvement in the 
terrorist bombings in Argentina, visited Bolivia at the 
invitation of the defense ministry. Following an outcry, 
Bolivian President Evo Morales publicly apologized, calling the 
invitation to Vahidi a ``grave error'' and apologizing to the 
Jewish community in Argentina, saying that the visit was a 
mistake.
    There were rumors that Ahmedinejad would attend the 
inauguration of Guatemalan President Otto Perez Molina, which 
took place at the same time that he was in the region, and I 
believe that his failure to show up indicates that Guatemalan 
authorities backpedaled very substantially to prevent that 
visit from taking place.
    Finally, I think it's important to note that Ahmedinejad 
remains very unpopular in Latin America as a whole. According 
to the polling firm Latinobarometro, the citizens of the region 
rank Iran last out of nine countries about which they were 
asked if they had a favorable opinion. It is interesting and 
important to note that the United States ranked first.
    I'm almost out of time, but I'll say that the economic 
relationship between Iran and Latin America has grown in recent 
years, but its significance is easy to exaggerate. The media 
use words like ``surge'' or ``increasing sevenfold'' to 
characterize Iran's trade relationship with Brazil, but 
Iranian-Brazilian trade is a mere 0.6 percent of Brazil's total 
foreign trade. Iran-Venezuela trade is less than 0.02 percent 
of Venezuela's total trade. My testimony includes some charts 
that indicate this.
    I share the concern about the efforts of Iran to establish 
perhaps a military, intelligence, and security presence. The 
Manhattan district attorney's office has launched an ongoing 
investigation of Venezuelan collaboration in procuring 
financing and materials for alleged weapons production in Iran, 
in violation of United States sanctions. As Doug Farah has 
written and I'm sure will tell us more, the Iranian financial 
presence in Caracas potentially serves as a way to bust 
sanctions.
    Both of you have indicated the number of actions that the 
U.S. Government has taken to sanction Venezuelan diplomats who 
have served allegedly as facilitators and fundraisers for 
Hezbollah. The U.S. Government has also sanctioned the 
Venezuelan oil company, PDVSA, for deliveries of gasoline 
components in defiance of sanctions against Iran. As you have 
noted, the U.S. Government implicated an Iranian citizen in an 
alleged plot to assassinate the Saudi Ambassador in Washington. 
We can go on and on.
    At the same time, I think it's important, as much as we 
attempt to investigate with the greatest seriousness the 
various bits and pieces of information that have come out, most 
of which are quite alarming, I think it's important to keep 
this issue in perspective. There are other pressing human 
security concerns in the hemisphere, including the tens of 
thousands of people killed in the past several years, primarily 
in Mexico, but also in Central America, in violence related to 
narcotrafficking, and the threat to democratic institutions 
posed by transnational crime.
    We should also be careful--this is now the second or third 
hearing----
    Senator Menendez. If I could ask you to summarize.
    Dr. Arnson. Final point--that we not allow this issue to 
overshadow attention to the broader dynamics in the hemisphere, 
which are marked by economic growth, the fight against poverty 
and inequality, the emergence of Brazil as a global power, the 
region's expanding relations with China and Asia, all of which 
are issues central on the Latin American agenda. Our failure to 
pay attention to the issues that are important in the region 
will serve to isolate the United States from our allies in the 
hemisphere, as much as the issue of Iran's activities in Latin 
America deserves the utmost serious consideration.
    Thank you.
    [The prepared statement of Dr. Arnson follows:]

                Prepared Statement of Cynthia J. Arnson

    Mr. Chairman and members of the subcommittee, thank you for this 
opportunity to testify on Iran's relationship with Latin America.\1\
    This is a highly charged as well as difficult subject.
    It is highly charged in that international tensions over the 
purpose and lack of transparency of Iran's nuclear program have 
escalated dramatically. Indeed, just as Iranian President Mahmoud 
Ahmadinejad made yet another trip to the region last month, Iranian 
authorities threatened to close down the Strait of Hormuz if sanctions 
were adopted against its sale of oil; Iranian judicial authorities 
sentenced to death a dual Iranian-American citizen and former U.S. 
Marine accused of espionage; and speculation about possible military 
strikes by Israel or the United States against Iran's nuclear 
installations has increased exponentially. The recent assassination in 
Tehran of yet another Iranian scientist working on the country's 
nuclear program--for which Iran blames the Israeli Government--and 
assassination attempts against Israeli diplomats in India and Georgia--
for which Israeli officials blame Iran--have contributed to the 
thickening of tensions.
    The subject of Iran's involvement in Latin America is difficult 
precisely because there is so little transparency in Iran's economic, 
security, or intelligence dealings with the region; this problem is 
compounded by a similar lack of transparency among its principal allies 
in the region, the countries of the so-called ALBA bloc.\2\ What is 
assumption, speculation, or suspicion and what is hard evidence based 
on reliable sources? The allegations are many and serious but the 
ability to verify definitively is often lacking. There are 
disagreements within and outside the U.S. Government about the precise 
contours of the relationship. For example, in April 2010, a Department 
of Defense report to Congress indicated that the elite unit of Iran's 
Islamic Revolutionary Guard Corps, the Quds Force, had increased its 
presence in Latin America, particularly in Venezuela. Yet shortly 
thereafter, General Douglas Fraser, head of the U.S. Southern Command, 
stated that Iran's growing interest in, and engagement with, Venezuela 
was diplomatic and commercial, not military. Secretary of State Hillary 
Clinton stated in 2009 that Iran was building a large embassy in 
Nicaragua; the report turned out to be false.
    The allegations about Iran's activities in Latin America, 
especially those related to its nuclear program and support for 
terrorism, deserve to be treated with the utmost seriousness. There is 
a track record: five Iranian officials, including the current Defense 
Minister, along with an operative of Hezbollah have been accused by the 
Government of Argentina--and arrest warrants have been issued by 
INTERPOL--for masterminding and staging two of the most devastating 
terrorist attacks in recent Latin American history: the 1992 bombing in 
Buenos Aires of the Israeli Embassy, and the 1994 bombing of the Jewish 
community center known as the AMIA. One hundred fourteen people died in 
those attacks and hundreds more were wounded.
    In this political year in the United States, however, it is easy to 
see how the hot-button issues of Iran and its intentions--in the Middle 
East or Latin America--can become the subject of heated debate and 
partisan contention. When one adds the polarizing and stridently anti-
U.S figure of President Hugo Chavez of Venezuela, the mix becomes 
especially volatile. Politicization of issues, however, rarely leads to 
good policy. Assessments of intentions as well as capabilities are by 
definition hard to make, all the more so when they involve activities 
that state and nonstate actors endeavor to keep secret. Vigilance is 
essential, as is evidence-based consideration of difficult issues.
    Iran's relationship with the Western Hemisphere goes back half a 
century or longer. Venezuela and Iran were founding members of OPEC in 
the 1960s, and for decades pursued a common agenda around keeping oil 
prices high. Iran also sought to expand commercial relations with 
Mexico and Brazil, and through the Non-Aligned Movement established 
friendly relations with a number of Latin American countries. The 
overtly political aspects of the current relationship deepened after 
the 1979 Iranian revolution, the same year in which the Sandinistas 
took power in Nicaragua. The election of Iranian President Mahmoud 
Ahmadinejad in 2005 and his promotion of an ``aggressive foreign 
policy'' to counter Iran's international isolation marked a new phase 
in Iran's relationship with Latin America, and it is this current phase 
that has been of greatest concern to the Washington policy 
community.\3\
    The relationship between Iran and several Latin American countries 
since in 2005 is driven by multiple factors. These include, for both 
sides, economic self-interest--the search for new trade partners and 
markets--the desire to assert foreign policy independence and 
sovereignty and diversify international partners beyond the United 
States, and for some, a shared anti-U.S., ``anti-imperialist'' agenda. 
Negotiations over Iran's nuclear program served as an opportunity for 
Brazil during the Lula administration to project its own global 
ambitions, even if such efforts were highly controversial within Brazil 
and in the United States at the time. (As described below, the 
government of current President, Dilma Rousseff, has adopted a 
significantly different posture.) Venezuelan President Hugo Chavez has 
most actively courted Ahmadinejad, using the relationship to express 
antipathy to, and score propaganda points against, the United States. 
He has facilitated Iran's relationships with ALBA allies such as 
Nicaragua, Ecuador, and Bolivia, whose governments similarly exploit 
antagonism with the United States for internal political purposes, 
albeit to a degree far less than Venezuela.
    President Ahmadinejad's most recent trip to the region in January 
2012 was organized around an invitation to attend the Presidential 
inauguration of Daniel Ortega in Nicaragua; the agenda also included 
Venezuela, Ecuador, and Cuba. Ahmadinejad may have derived some 
political satisfaction from the trip; he showed up once again on the 
U.S. doorstep, attempted to demonstrate that Iran was not entirely 
isolated internationally; and was joined by leaders in Caracas and 
Quito in rejecting claims that Iran's nuclear program was for anything 
but peaceful purposes. In a broader sense, however, the trip was a 
major failure, demonstrating that Iran has lost political ground in the 
region:

   Ahmadinejad was rebuffed by Brazil, Iran's largest trading 
        partner in Latin America, in stark contrast to the visits by 
        Ahmadinejad and Lula to each other's capitals in 2009 and 2010, 
        respectively. In March 2011, the government of President Dilma 
        Rousseff voted against Iran in the United Nations for the first 
        time in a decade, supporting a resolution in the Human Rights 
        Council to send a special rapporteur to Iran to investigate 
        human rights violations. As President-elect, Rousseff condemned 
        the sentence--death by stoning--of an Iranian woman convicted 
        of adultery, calling the proposed punishment a ``barbarity'' 
        and a ``medieval practice.'' Brasilia ultimately abstained when 
        the rapporteur's final report on human rights in Iran was 
        brought to a vote. But a spokesman for Ahmadinejad in Tehran 
        publicly criticized Rousseff for ``destroying years of good 
        relations'' built up under President Lula.
   Argentina, Iran's second-largest trading partner, was also 
        off the itinerary.
         Despite a growth in bilateral trade, the issue of Iran's role 
        in the two terrorist bombings in the 1990s precludes a deeper 
        relationship.\4\
   Despite previous visits to Bolivia, Ahmadinejad did not stop 
        in La Paz. In May 2011, Iranian Defense Minister Ahmad Vahidi--
        accused by the Argentine Government of involvement in the AMIA 
        case--visited Bolivia at the invitation of the Defense 
        Ministry. Following an outcry in Argentina, Bolivian President 
        Evo Morales publicly apologized, calling the invitation to 
        Vahidi a ``grave error.'' Morales also apologized to 
        representatives of Argentina's Jewish community, saying that 
        the visit was a ``mistake.''
   Ahmadinejad did not attend the inauguration of Guatemalan 
        President Otto Perez Molina, even though its timing coincided 
        with the trip to the other four countries, and even though 
        reports in the Guatemalan press indicate that Ahmadinejad had 
        been invited, along with the Presidents of all countries with 
        which Guatemala has diplomatic relations.
   The relationship with Cuba also manifests some important 
        areas of divergence. Fidel Castro has openly condemned the 
        IranianGgovernment's anti-Semitism and denial of the Holocaust.
   Finally, Ahmadinejad remains extremely unpopular in Latin 
        America as a whole. According to the polling firm 
        Latinobarometro in 2011, citizens of the region ranked Iran 
        last out of nine countries about which they were asked if they 
        had a favorable opinion. (The United States ranked first.)\5\

    The economic relationship between Iran and Latin America has grown 
in recent years, but its significance is also easy to exaggerate (see 
Table 1). The media use words like ``surge'' and ``sevenfold'' increase 
to characterize Iran's trade relationship with Brazil. Yet the $2.1 
billion in bilateral trade in 2010 constituted less than 0.6 percent of 
Brazil's total foreign trade (see Table 2). Similarly, Iran-Venezuela 
trade is less than 0.02 percent of Venezuela's total trade. According 
to IMF statistics reported by the European Commission, Iran ranks 27th 
among Brazil's trading partners, and ranks only 48th for Venezuela. Of 
Iran's major trade partners, Brazil appears in 18th place, and 
Argentina is in 34th place (both are dwarfed by Iran's trade with the 
United Arab Emirates, China, India, Japan, Turkey, and South Korea). 
Notably, none of the countries of the ALBA bloc figures among Iran's 
top 50 trading partners.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Similar exaggeration characterizes Iran's aid and investment to its 
closest allies in Latin America. Scores, if not hundreds, of 
cooperation agreements have been signed and billions upon billions have 
been pledged, in areas as diverse as energy, infrastructure and port 
development, agriculture, cement, textiles, and mining. Most of the 
projects have not and will never come to fruition, in no small measure 
because they are unpopular in Iran. The Iranian Parliament must approve 
funding for such projects and opposition is stiff in light of the 
economic pain inflicted by international sanctions.
    Iran's behavior in the international system, from the support of 
terrorist movements to the defiance of the international community with 
respect to inspections of its nuclear program, raises the most concern 
and alarm about its increased activities in Latin America. Several 
years ago the Manhattan District Attorney's office launched an ongoing 
investigation of Venezuelan collaboration with Iran to procure 
financing and materials (including uranium) for weapons production in 
violation of U.S. and international sanctions. The Iranian financial 
presence in Caracas, through the Banco Internacional de Desarrollo 
(BID) and the Banco Binacional Irani-Venezolano, raise concerns about 
Iran's use of the Venezuelan banking system to avoid sanctions. Indeed, 
the Toseyeh Saderat Iran Bank, the primary shareholder in the BID, was 
designated by the U.S. Treasury Department in 2007 as a vehicle for the 
funding of Hezbollah.\6\
    There is every reason to be watchful and vigilant, and treat 
allegations about Iran's military and intelligence activities in the 
region with the utmost seriousness. As mentioned earlier, the secrecy 
and lack of transparency that characterize the behavior of the Iranian 
regime, including its dealings with allies in Latin American on 
economic as well as military matters, heighten the level of concern. 
The U.S. Department of Treasury in 2008 accused a Venezuelan diplomat 
who had served in Lebanon and Syria of acting as a facilitator and 
fundraiser for Hezbollah.\7\ In May 2011, the U.S. Government 
sanctioned the state-owned Venezuelan oil company PdVSA for deliveries 
of gasoline components to Iran in defiance of sanctions. In October 
2011, the U.S. Government implicated an Iranian citizen in an alleged 
plot to arrange the assassination of the Saudi Ambassador in 
Washington. In January 2012, the Obama administration expelled 
Venezuela's consul in Miami, Livia Acosta, following the airing of a 
television documentary linking her to the planning of cyber attacks on 
the United States.
    Allegations about Iranian efforts to obtain uranium in Venezuela 
and Bolivia are more difficult to substantiate, but these, along with 
questions raised about an increased presence of the Quds Force in 
Iranian diplomatic missions, should be further investigated. At the 
same time, counterevidence should also be weighed seriously. For 
example, in 2011 a reporter writing for the Wilson Quarterly attempted 
to learn more about the direct flights between Caracas and Tehran 
inaugurated in 2007. But when he visited the office of the Venezuelan 
airline, Conviasa, to inquire about purchasing a ticket, he was told 
that the service had been canceled ``about a year ago.'' Similarly, the 
same reporter who visited a car dealer to inquire about purchasing a 
vehicle made by the joint Venezuelan-Iranian car and tractor 
manufacturer Veniran was told there weren't any and that there was a 
waiting list from 2010 of more than 4,000 customers.\8\ Is this the 
definitive word? Probably not. Sifting through what is real and what is 
not is an important and indeed urgent task.
    At the same time, other pressing human security concerns in the 
hemisphere, including the tens of thousands of people killed in the 
past several years in violence related to narcotrafficking or the 
threat to democratic institutions posed by transnational crime also 
deserve serious attention. Attention to this issue should not 
overshadow the broader dynamics in the hemisphere, marked by economic 
growth, the fight against poverty and inequality, the emergence of 
Brazil as a global actor, expanded relations with China and other Asian 
countries, democratic deepening, and a growing clamor for the United 
States to reform its immigration and counterdrug policies. Losing sight 
of the concerns and priorities of Latin American countries themselves 
risks isolating the United States from important allies in the 
hemisphere; these countries will look elsewhere for global partners who 
share their priorities and are willing to act on a common agenda.
    Thank you for your consideration.

------------------
End Notes

    \1\ I am grateful to Adam Stubits, Program Associate at the Woodrow 
Wilson Center, and interns Julie Anderson, Melissa Nolan, and Hanif 
Zarrabi-Kashani for research assistance.
    \2\ The Bolivarian Alliance of the Peoples of our America (ALBA) 
was founded in 2004 and includes Antigua and Barbuda, Bolivia, Cuba, 
Dominica, Ecuador, Nicaragua, St. Vincent and the Grenadines, and 
Venezuela.
    \3\ For additional background on Iran's foreign policy toward the 
region, see Farideh Fahri, ``Tehran's Perspective on Iran-Latin 
American Relations,'' in Cynthia Arnson, Haleh Esfandiari, and Adam 
Stubits, eds., ``Iran in Latin America: Threat or `Axis of 
Annoyance'?'' Woodrow Wilson International Center for Scholars, Latin 
American Program and Middle East Program, 2009, http://
www.wilsoncenter.org/sites/default/files/Iran_in_LA.pdf
    \4\ Press reports that the Argentine Foreign Ministry was 
contemplating a warming of relations with Iran and a softening of the 
position vis-a-vis the 1990s bombings caused a firestorm. Whatever the 
validity of the reports, the Argentine Government's position remains 
unchanged.
    \5\ The United States had a 72-percent favorable rating, followed 
by Spain (71 percent). Ranked more favorably than Iran were the 
European Union, China, Canada, Venezuela, Cuba, Israel.
    \6\ See Douglas Farah, ``Iran in Latin America: An Overview,'' in 
Cynthia Arnson, Haleh Esfandiari, and Adam Stubits, eds., op.cit.
    \7\ In January 2011, a Congressional Research Service report on 
Hezbollah noted that ``there is little credible evidence of the present 
activity of operational Hezbollah cells in Latin America,'' but 
indicated that Hezbollah and its supporters and sympathizers were 
involved in illegal activities such as drugs and arms trafficking, 
money laundering, and other forms transnational crime.
    \8\ Joshua Kucera, ``What is Hugo Chavez Up To?'' Wilson Quarterly, 
Vol. 35, No. 2, Spring 2011.

    Senator Menendez. Thank you.
    Mr. Farah.

   STATEMENT OF DOUGLAS FARAH, SENIOR FELLOW, INTERNATIONAL 
         ASSESSMENT AND STRATEGY CENTER, WASHINGTON, DC

    Mr. Farah. Thank you, Chairman Menendez and Ranking Member 
Rubio and members of the subcommittee, for the opportunity to 
testify today on an issue I feel is of profound importance.
    Latin America is undergoing significant changes as numerous 
extra-regional state actors with little history in the region 
engage there in trade, military sales, resource extraction, and 
intelligence collection on an unprecedented scale. These 
include China, Russia, and Iran. While the interests of Russia 
and China will often diverge from those of the United States, 
the interests of Iran, a state sponsor of terrorism and sponsor 
of a terrorist group operating in the region, are directly and 
openly antagonistic.
    Iran's interests lie in strengthening ties to the highly 
criminalized states in the Bolivarian axis. Iran and the 
Bolivarian states, led by Hugo Chavez, including Rafael Correa 
of Ecuador, Evo Morales of Bolivia, and Ortega in Nicaragua, 
bring a significant and dangerous new set of threats to the 
region as they work together with transnational organized 
criminal groups and terrorist groups. This threat includes not 
only drug trafficking, but also the potential for WMD-related 
trafficking.
    These activities are carried out with the participation of 
regional and extra-regional state actors who have a publicly 
articulated doctrine of asymmetrical warfare against the United 
States and its allies that explicitly endorses as legitimate 
the use of WMD in that struggle. This is still a statement of 
intentions, not of capacity, but, given Iran's past terrorist 
activities, this intent must be taken seriously.
    The goal of Iran's presence in the region is twofold in my 
opinion: to develop the capacity and capability to wreak havoc 
in Latin America and possibly the United States homeland if the 
Iranian leadership views this as necessary to the survival of 
its nuclear program; and to develop and expand the ability to 
blunt international sanctions that are crippling the regime's 
economic life. These corrosive activities are accelerating the 
weakening of states and hollowing out of many of the first 
generation democracies in Latin America and setting a predicate 
for the reassertion of authoritarian rule in these states and 
their neighbors.
    The relationship between Iran and the Bolivarian states is 
built on a shared perception of history and grievances against 
the United States that leads directly to the doctrine of 
asymmetrical warfare and the embrace of the concept of 
justified use of WMD against their enemies. While Iran's rulers 
view the 1979 Iranian revolution in theological terms as a 
miracle of divine intervention against the United States, the 
``Great Satan,'' in which they defeated the Great Satan, the 
Bolivarians' view this as a roadmap of how to defeat the United 
States through asymmetrical means.
    Among the first to articulate the merging of radical Shiite 
Islamic thought with Marxist aspirations of destroying 
capitalism and U.S. hegemony was Ilich Sanchez Ramirez, better 
known as ``Carlos the Jackal,'' a Venezuelan citizen who until 
his arrest in 1994 was one of the world's most wanted 
terrorists. Sanchez Ramirez writes that Islamism and Marxism 
combined could form a global anti-imperialist front that would 
definitively destroy the United States, globalization, and 
imperialism. In his seminal 2003 book ``Revolutionary Islam,'' 
written from prison where he is serving a life sentence, 
Sanchez Ramirez praises Osama bin Laden and the 9-11 attacks 
and warns that, ``from now on terrorism is going to be more or 
less a daily part of the landscape of your rotting 
democracies.''
    The public praise of Chavez for Sanchez Ramirez is a 
crucial element in Bolivarian ideology. In a 1999 letter to 
Sanchez Ramirez, Chavez greeted the terrorist as a 
distinguished compatriot and wrote that, ``Swimming in the 
depths of your letter of solidarity, I could hear the pulse of 
our shared insight that everything has its due time, a time 
when you can fight outright for principles and a time when you 
must choose the proper fight.'' He signs off: ``with profound 
faith in our cause and our mission, now and forever, Hugo 
Chavez.''
    Chavez has adopted as his military doctrine the concepts 
and strategies articulated in ``Peripheral Warfare and 
Revolutionary Islam: Origins, Rules, and Ethics of Asymmetrical 
Warfare,'' by Spanish politician and ideologue, Jorge 
Verstrynge. I have a copy of the book here if you'd like to 
look at it later.
    The tract is a continuation of Sanchez Ramirez's thought, 
incorporating the endorsement of the use of WMD to destroy the 
United States. Chavez liked Verstrynge's book so well that he 
had a special pocket-sized edition--I also have a copy of that 
here--printed and distributed to his officer corps, with the 
Venezuelan flag imprinted on the cover, and making it the 
official military doctrine of the Venezuelan military.
    To further ingrain this teaching and eradicate any vestiges 
of U.S. military doctrine in the region, Chavez and other 
Bolivarian leaders, in conjunction with Iran, have recently 
opened a new military academy to teach Bolivarian military 
doctrine, operating in Santa Cruz, Bolivia. Iran's interest in 
the project was made clear when Iranian Defense Minister Ahmad 
Vahidi arrived in Bolivia for the school's inauguration. He had 
to leave, of course, before it was actually inaugurated when 
his presence caused an international outrage.
    Iran and its Bolivarian allies systematically engage in a 
pattern of financial behavior, recruitment exercises, and 
business activities that are not economically rational and 
could be used for the movement and/or production of WMD and the 
furthering of Iran's stated aim of avoiding international 
sanctions.
    These include significant investments in financial 
institutions in the region that can easily be used to move 
money from Iran to banks around the world through third 
parties. Among the most important are the Banco Internacionale 
de Desarrollo, the Export Development Bank of Iran, the Fondo 
Binacional Venezuela-Iran, established in 2008 with a capital 
of $1.2 billion, and FONDEN, the Fondo de Desarrollo Nacionale, 
which is most interesting because it receives direct injects 
from the PRVSA, and in 2010 official government figures showed 
that FONDEN had received $15 billion in money that was not 
officially part of the state coffers. From 2005 to 2010, an 
estimated $63 billion had been put into that fund and 
disappeared from public accounting.
    Finally, Iran's Sadra Marine Industry Company, which 
operates illicit shipping or sanctioned shipping companies 
around the world, is also owned by the Revolutionary Guard and 
operates out of Venezuela.
    Finally, I would like to say that one of the most 
significant new developments I've found is Panama's role in 
helping Iran avoid sanctions, often through Venezuelan front 
companies operating in the Colon Free Trade Zone. Iranians 
traveling in the region often use identity cards issued by 
Bolivarian states, particularly Ecuador and Venezuela, to move 
freely across the region.
    I'd welcome your questions afterward. Thank you.
    [The prepared statement of Mr. Farah follows:]

                  Prepared Statement of Douglas Farah

    Thank you Chairman Menedez, Ranking Member Rubio, and members of 
the subcommittee for the opportunity to testify today on an issue that 
I feel is of profound importance to the security of the Homeland as 
well as the survival of democracy in Latin America.
                          the regional context
    In order to understand Iran's role in the region it is important to 
understand the overall context in which its diplomatic, military, 
intelligence and economic expansion is taking place. Latin America is 
undergoing significant changes as numerous extra-regional state actors 
with little history in the region engage there in trade, military 
sales, resource extraction, and intelligence collection on an 
unprecedented scale.
    These include China, Russia, and Iran. While the interest of Russia 
and China will often diverge from those of the United States in the 
region, the interests of Iran--a state sponsor of terrorism and sponsor 
of a terrorist group operating in the region--are directly and openly 
antagonistic. Iran's interests lie in strengthening ties to highly 
criminalized states in the ``Bolivarian'' axis\1\, whose leaders, while 
espousing 21st century socialism, are deeply involved in transnational 
organized crime (TOC) enterprises, particularly the cocaine trade.
    The Bolivarian bloc of nations--led by Hugo Chavez of Venezuela, 
includes Rafael Correa of Ecuador, Evo Morales of Bolivia, and Daniel 
Ortega of Nicaragua--seeks to break the traditional ties of the region 
to the United States.
    To this end, the Bolivarian alliance has formed numerous 
organizations and military alliances--including a military academy in 
Bolivia to erase the vestiges of U.S. military training from the 
militaries--which explicitly exclude the United States.\2\ What the 
academy, partly financed by Iran, is teaching in its place, as I will 
discuss later, is a military doctrine explicitly based on a concept of 
asymmetrical warfare modeled on Hezbollah, the terrorist group in 
Lebanon that receives extensive financing and support from Iran.
    Iran and the Bolivarian states bring a significant and dangerous 
new set of threats to the region as they work together with TOCs and 
terrorist groups. This threat includes not only traditional TOC 
activities such as drug trafficking and human trafficking, but also the 
potential for WMD-related trafficking. These activities are carried out 
with the participation of regional and extra regional state actors 
whose leaders are deeply enmeshed in criminal activities. These same 
leaders have a publicly articulated doctrine of asymmetrical warfare 
against the United States and its allies that explicitly endorses as 
legitimate the use of weapons of mass destruction in that struggle.
    This is, at this point a statement of intentions and not one of 
capacity. But, given Iran's past terrorist activities, including the 
1994 AMIA bombing in Argentina, the intent of the statement should be 
taken seriously. Given the publicly stated intent of the Bolivarian 
nations to not comply with the United Nations trade sanctions on Iran, 
expressed at a joint meeting of Foreign Ministers in Tehran on July 14, 
2010, it is safe to assume, I believe, that the economic ties with Iran 
will deepen.
    In a joint statement, the Foreign Ministers of Venezuela, Bolivia, 
Ecuador, Nicaragua, and other members of the Chavez-led ALBA alliance 
vowed to ``continue and expand their economic ties with Iran.'' ``We 
are confident that Iran can give a crushing response to the threats and 
sanctions imposed by the West and imperialism,'' Venezuelan Foreign 
Minister David Velasquez said at a joint press conference in Tehran.\3\
    Each of the Bolivarian states has lifted visa requirements for 
Iranian citizens, thereby erasing any public record of the Iranian 
citizens that transit these countries. Given the extremely small number 
of tourists that ply the routes from Iran to Latin America, and the 
relatively small number of businessmen who are not tied to the Iranian 
state, one can assume most of the travel is related to Iranian 
officials.
    According to data I have collected, many hundreds of Iranian 
citizens, if not thousands, travel to Latin America on undisclosed 
business. More than 400 Iranians traveled just to Panama in 2011, and 
an even higher number travel regularly to Ecuador, Bolivia, and 
Venezuela.
    Panama is a significant new player in helping Iran avoid sanctions, 
often through Venezuelan front companies operating in the Colon Free 
Trade Zone. Iranians traveling in the region often use identity cards 
issued by Boliviarian states, including Ecuador and Venezuela, to move 
freely across the region.
    The intentions of Iran in the region have long been a subject of 
debate; but today there is a much clearer indication available, to both 
the intelligence community and investigators on the ground, that the 
goal of Iran's presence in the region is twofold: to develop the 
capacity and capability to wreak havoc in Latin America--and possibly 
the U.S. homeland--if the Iranian leadership views this as necessary to 
the survival of its nuclear program; and, to develop and expand the 
ability to avoid international sanctions that are increasingly 
crippling the regime's economic life.
    As James Clapper, the Director of National Intelligence recently 
stated, ``some Iranian officials--probably including Supreme Leader Ali 
Khamenei--have changed their calculus and are now more willing to 
conduct an attack in the United States in response to real or perceived 
U.S. actions that threaten the regime. We are also concerned about 
Iranian plotting against U.S. or allied interests overseas.'' \4\
    A recent Univision documentary ``La Amenaza Irani'' (The Iranian 
Threat) showed Iranian diplomats in Mexico, working with their 
Venezuelan and Cuban counterparts, to try to develop the capacity to 
carry out a sophisticated cyber attack against U.S. military, nuclear, 
and economic targets. The documentary shows military training provided 
by Hezbollah to Venezuelan militias directly under the control of 
Chavez, with weapons and ammunition provided by the Venezuelan 
military. It also identifies by name the leaders of Hezbollah in 
Venezuela.\5\
    Some of what is happening in Latin America in terms of TOC is 
deeply rooted and goes back several decades. Significant TOC 
organizations, principally drug trafficking groups, have posed serious 
challenges for U.S. security since the rise of the Medellin cartel in 
the early 1980s, the growth of the Mexican drug trafficking 
organizations in the 1990s, and continuing to the situation we see in 
Mexico and Central America today.
    This emerging combination of threats comprises a hybrid of 
criminal-terrorist, and state- and non-state franchises, combining 
multiple nations acting in concert, and traditional TOCs and terrorist 
groups acting as proxies for the nation-states that sponsor them. These 
hybrid franchises should now be viewed as a tier-one security threat 
for the United States.
    These franchises operate in, and control, specific geographic 
territories which enable them to function in a relatively safe 
environment. The franchises comprise pipelines, or recombinant chains 
of networks, which are highly adaptive and able to move a multiplicity 
of illicit products (cocaine, weapons, humans, bulk cash) which 
ultimately cross U.S. borders undetected thousands of times each day. 
The actors along the pipeline form and dissolve alliances quickly, 
occupy both physical and cyber space, and use both highly developed and 
modern institutions, including the global financial system, as well as 
ancient smuggling routes and methods.
    The threat increases dramatically with the nesting of criminal/
terrorist groups within governments that are closely aligned 
ideologically, such as Iran and the Bolivarian states in Latin America; 
and, when TOC becomes an instrument of state power. The primary 
nonstate actors in this case are the Fuerzas Armadas Revolucionarias de 
Colombia (Revolutionary Armed Forces of Colombia-FARC) and Hezbollah; 
both are U.S.-designated terrorist organizations with significant 
involvement in TOC activities.
    These corrosive activities, taken together, are accelerating the 
weakening of states, hollowing-out of many of the first-generation 
democracies and their constitutional and civil society processes, and 
setting a predicate for a reassertion of authoritarian rule and ruin in 
these states and their neighbors. These states' survival and growth are 
critical to long-term regional and U.S. security.
    Concurrently, we see the further empowerment, training, and 
technological support of the oppressive internal security apparatuses 
in the increasingly undemocratic Bolivarian states provided by the 
Iran-Hezbollah-ICRG/Quds forces combine. Other outside powers, notably 
China and Russia further compound these efforts. However Iran, 
Hezbollah, and the ICRG/Quds forces are the sharpest edge of this sword 
at present, and the one most openly aimed at the U.S., and least 
tractable to diplomacy.
    All of this comes at the expense of U.S. influence, security and 
trade--including energy security, and hence economic and infrastructure 
security (Venezuela is the fourth-largest supplier of U.S. petroleum 
imports, just behind Mexico; indeed Latin America is our second-largest 
source of petroleum imports overall, only slightly behind the Middle 
East). While this hearing focuses on Hezbollah, the nonstate, armed 
branch of radical Shiite Islamists, one cannot ignore the direct 
relationship of this organization to state sponsors. As the DIA noted 
in 2010:

          The Qods Force stations operatives in foreign embassies, 
        charities, and religious/cultural institutions to foster 
        relationships with people, often building on existing socio-
        economic ties with the well-established Shia diaspora. At the 
        same time, it engages in paramilitary operations to support 
        extremists and destabilize unfriendly regimes. The IRGC and 
        Quds Force are behind some of the deadliest terrorist attacks 
        of the past three decades, including the 1983 and 1984 bombings 
        of the U.S. Embassy and annex in Beirut, the 1983 bombing of 
        the Marine barracks in Beirut, the 1994 attack on the AMIA 
        Jewish Community Center in Buenos Aires, the 1996 Khobar Towers 
        bombing in Saudi Arabia, and many of the insurgent attacks on 
        coalition and Iraqi security forces in Iraq since 2003. 
        Generally, it directs and supports groups actually executing 
        the attacks, thereby maintaining plausible deniability within 
        the international community.
          Support for these extremists takes the form of providing 
        arms, funding, and paramilitary training. In this, Quds Force 
        is not constrained by ideology; many of the groups it supports 
        do not share, and sometimes openly oppose, Iranian 
        revolutionary principles, but Iran supports them because of 
        common interests or enemies.
          The Quds Force maintains operational capabilities around the 
        world. It is well established in the Middle East and North 
        Africa, and recent years have witnessed an increased presence 
        in Latin America, particularly in Venezuela [author emphasis]. 
        As U.S. involvement in global conflicts deepens, contact with 
        the Quds Force, directly or through extremist groups it 
        supports, will be more frequent and consequential.\6\

    As the DIA notes, many groups, including the Quds Force, are no 
longer constrained by ideology or theology, but work with whomever they 
have a common, though perhaps temporary, common interest. This growing 
TOC threat in multiple theaters was recognized in President Obama's 
recent ``Strategy to Combat Transnational Organized Crime,'' released 
in July 2011. It was the first such strategy released since the end of 
the Clinton administration, an indication of how other priorities have 
eclipsed TOC in recent times.\7\ The strategy states that TOC networks 
``are proliferating, striking new and powerful alliances, and engaging 
in a range of illicit activities as never before. The result is a 
convergence of threats that have evolved to become more complex, 
volatile and destabilizing.'' \8\
    The Strategy also noted that

          Terrorists and insurgents increasingly are turning to crime 
        and criminal networks for funding and logistics. In FY 2010, 29 
        of the 63 top drug trafficking organizations identified by the 
        Department of Justice had links to terrorist organizations. 
        While many terrorist links to TOC are opportunistic, this nexus 
        is dangerous, especially if it leads a TOC network to 
        facilitate the transfer of weapons of mass destruction material 
        to terrorists.\9\

    The profits of global TOC activities, even before factoring in the 
growing efficiencies derived from state sponsorship and protection, are 
enormous. The sheer scale of the enterprise, and the impact it has on 
legal economies, argues for sustained national and international 
attention and resources as a tier-one security threat. These new 
factors further increase the threat.
    The most recent comprehensive studies of global criminal proceeds 
demonstrate the magnitude of the challenge. The White House estimates 
in its 2011 ``Transnational Organized Crime Strategy'' that money 
laundering accounts for $1.3 trillion to $3.3 trillion--or between 2 
percent and 5 percent of the world GDP. Bribery from TOCs adds close to 
$1 trillion to that amount, while drug trafficking generates an 
estimated $750 billion to $1 trillion, counterfeited and pirated goods 
add another $500 billion, and illicit firearms sales generate from $170 
billion to $320 billion. This totals to potentially $6.2 trillion--
fully 10 percent of world GDP--placing it behind only the U.S. and 
E.U., but well ahead of China, in terms of global GDP ranking.\10\ 
Other estimates of global criminal proceeds range from a low of about 4 
percent to a high of 15 percent of global GDP.\11\
    Understanding and mitigating the threat requires a whole-of-
government approach, including collection, analysis, law enforcement, 
policy and programming. No longer is the state/nonstate dichotomy 
viable in tackling these problems, just as the TOC/terrorism divide is 
increasingly disappearing.
         the bolivarian and iranian revolutions: ties that bind
    Iran, identified by successive U.S. administrations as a state 
sponsor of terrorism, has expanded its political alliances, diplomatic 
presence, trade initiatives, and military and intelligence programs in 
the Bolivarian axis.
    This press for expanded ties comes despite the almost complete lack 
of cultural or religious ties to the region, linguistic affinity, or 
traditional economic logic and rationale in the relationships. The 
relationship, in fact, is built on a common perception of history and 
grievances against the United States that lead directly to the doctrine 
of asymmetrical warfare and the embrace of the concept of justified use 
of WMD against its enemies.
    The most common assumption among those who view the Iran-Bolivarian 
alliance as troublesome (and many do not view it as a significant 
threat at all), is that sole points of convergence of the radical and 
reactionary theocratic Iranian Government and the self-proclaimed 
socialist and progressive Bolivarian revolution are: (1) an overt and 
often stated hatred for the United States and a shared belief in how to 
destroy a common enemy; and (2) a shared acceptance of authoritarian 
state structures that tolerate little dissent and encroach on all 
aspects of a citizen's life.\12\
    These assumptions are true but do not recognize the broader 
underpinnings of the relationship. While Iran's revolutionary rulers 
view the 1979 revolution in theological terms as a miracle of divine 
intervention in which the United States, the Great Satan, was defeated, 
the Bolivarians view it from a secular point of view as a roadmap to 
defeat the United State as the Evil Empire. To both it has strong 
political connotations and serves a model for how asymmetrical 
leverage, when applied by Allah or humans, can bring the equivalent of 
David defeating Goliath on the world stage.
    Ortega has declared the Iranian and Nicaraguan revolutions ``twin 
revolutions, with the same objectives of justice, liberty, sovereignty, 
and peace . . . despite the aggressions of the imperialist policies.'' 
Ahmadinejad couched the alliances as part of ``a large anti-imperialist 
movement that has emerged in the region.''
    Among the first to articulate the possible merging of radical Shite 
Islamic thought with Marxist aspirations of destroying capitalism and 
U.S. hegemony was Illich Sanchez Ramirez, better known as the terrorist 
leader ``Carlos the Jackal,'' a Venezuelan citizen who was, until his 
arrest in 1994, one of the world's most wanted terrorists.
    In his writings Sanchez Ramirez espouses Marxism tied to 
revolutionary, violent Palestinian uprisings, and, in the early 2000s 
after becoming a Muslim, militant Islamism. Yet he did not abandon his 
Marxist roots, believing that Islamism and Marxism combined would form 
a global ``anti-imperialist'' front that would definitively destroy the 
United States, globalization, and imperialism.
    In his seminal 2003 book ``Revolutionary Islam,'' written from 
prison where he is serving a life sentence for killing two French 
policemen, Sanchez Ramirez praises Osama bin Laden and the 9/11 attacks 
on the United States as a ``lofty feat of arms'' and part of a 
justified ``armed struggle'' of Islam against the West. ``From now on 
terrorism is going to be more or less a daily part of the landscape of 
your rotting democracies,'' he writes.\13\
    In this context, the repeated, public praise of Chavez for Sanchez 
Ramirez can be seen as a crucial element of the Bolivarian ideology and 
an acceptance of his underlying premise as important to Chavez's 
ideological framework. Chavez ordered his ambassador to France to seek 
the release of Sanchez Ramirez and on multiple occasions referred to 
the convicted terrorist as a ``friend'' and ``true revolutionary.'' 
\14\ In a 1999 letter to Sanchez Ramirez, Chavez greeted the terrorist 
as a ``Distinguished Compatriot'' and wrote that

          Swimming in the depths of your letter of solidarity I could 
        hear the pulse of our shared insight that everything has its 
        due time: time to pile up stones or hurl them, to ignite 
        revolution or to ignore it; to pursue dialectically a unity 
        between our warring classes or to stir the conflict between 
        them--a time when you can fight outright for principles and a 
        time when you must choose the proper fight, lying in wait with 
        a keen sense for the moment of truth, in the same way that 
        Ariadne, invested with these same principles, lays the thread 
        that leads her out of the labyrinth. . . .
          I feel that my spirit's own strength will always rise to the 
        magnitude of the dangers that threaten it. My doctor has told 
        me that my spirit must nourish itself on danger to preserve my 
        sanity, in the manner that God intended, with this stormy 
        revolution to guide me in my great destiny.
          With profound faith in our cause and our mission, now and 
        forever! \15\

    In fact, the Bolivarian fascination with militant Islamist thought 
and Marxism did not end with the friendship between Chavez and the 
jailed terrorist. Acolytes of Sanchez Ramirez continued to develop his 
ideology of Marxism and radical Islamism rooted in the Iranian 
revolution.
    The emerging military doctrine of the ``Bolivarian Revolution,'' 
officially adopted in Venezuela and rapidly spreading to Bolivia, 
Nicaragua, and Ecuador, explicitly embraces the radical Islamist model 
of asymmetrical or ``fourth generation warfare,'' and its heavy 
reliance on suicide bombings and different types of terrorism, 
including the use of nuclear weapons and other WMD. This is occurring 
at a time when Hezballah's presence in Latin America is growing and 
becoming more identifiable.\16\
    Chavez has adopted as his military doctrine the concepts and 
strategies articulated in ``Peripheral Warfare and Revolutionary Islam: 
Origins, Rules and Ethics of Asymmetrical Warfare'' (Guerra Periferica 
y el Islam Revolucionario: Origenes, Reglas y Etica de la Guerra 
Asimetrica), by the Spanish politician and ideologue Jorge 
Verstrynge.\17\ The tract is a continuation of and exploration of 
Sanchez Ramirez's thoughts, incorporating an explicit endorsement of 
the use of weapons of mass destruction to destroy the United States. 
Verstrynge argues for the destruction of United States through series 
of asymmetrical attacks like those of 9/11, in the belief that the 
United States will simply crumble when its vast military strength 
cannot be used to combat its enemies.
    Although he is not a Muslim, and the book was not written directly 
in relation to the Venezuelan experience, Verstrynge moves beyond 
Sanchez Ramirez to embrace all strands of radical Islam for helping to 
expand the parameters of what irregular warfare should encompass, 
including the use of biological and nuclear weapons, along with the 
correlated civilian casualties among the enemy.
    Central to Verstrynge's idealized view of terrorists is the belief 
in the sacredness of the willingness of the fighters to sacrifice their 
lives in pursuit of their goals. Before writing extensively on how to 
make chemical weapons and listing helpful places to find information on 
the manufacture of rudimentary nuclear bombs that ``someone with a high 
school education could make,'' Verstrynge writes:

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          We already know it is incorrect to limit asymmetrical warfare 
        to guerrilla warfare, although it is important. However, it is 
        not a mistake to also use things that are classified as 
        terrorism and use them in asymmetrical warfare. And we have 
        super terrorism, divided into chemical terrorism, bioterrorism 
        (which uses biological and bacteriological methods), and 
        nuclear terrorism, which means ``the type of terrorism uses the 
        threat of nuclear attack to achieve its goals.'' \18\

    In a December 12, 2008, interview with Venezuelan state television, 
Verstrynge lauded Osama bin Laden and al-Qaeda for creating a new type 
of warfare that is ``de-territorialized, de-stateized and de-
nationalized,'' a war where suicide bombers act as ``atomic bombs for 
the poor.'' \19\ In his interview with Univision, Verstrynge said his 
model was specifically modeled on Hezbollah.
    Chavez liked the Verstrynge book so well that he had a special 
pocket-sized edition printed and distributed to the officer corps with 
express orders that it be read cover to cover. It has since been 
adopted as official Venezuelan military doctrine. Even more worrisome, 
copies of the book have been found over the past year, for the first 
time, in FARC camps in Colombia, indicating the doctrine is being 
passed on to Venezuela's nonstate proxy.
    According to Colombian military sources the new FARC leadership is 
more open to a tactical alliance with radical Islamist groups.\20\ 
Given the FARC's longstanding desire and capacity to build alliances, 
and exchange technologies and lessons learned with other terrorist and 
criminal groups (ETA of Spain, Irish Republican Army, the Sinaloa 
cartel of Mexico),\21\ one can assume the group is open to an alliance 
with Hezbollah and other radical Islamist organizations.
    To further ingrain this teaching, and explicitly to eradicate any 
vestiges of U.S. military doctrine in the region, Chavez and other 
Bolivarian leaders, in conjunction with Iran, have recently opened a 
new military academy to teach Bolivarian military doctrine, operating 
in Santa Cruz, Bolivia. The ALBA Defense School is going to teach the 
``beautiful projects and experiences that unite our military,'' said 
Nicolas Maduro, Venezuela's Foreign Minister. This includes, he said, 
the doctrines of Jose Marti, the hero of Cuban independence; Simon 
Bolivar, the hero of South American independence; Eloy Alfaro, an 
Ecuadoran revolutionary; Augusto Cesar Sandino, a Nicaraguan 
revolutionary.\22\
    Bolivian President Morales at the inauguration of the facility said 
the School would prepare the peoples of the region to defend against 
``imperialist threats, which seek to divide us.'' He said that the 
``Peoples of the ALBA are being besieged, sanctioned, and punished by 
the imperial arrogance just because we are exerting the right of being 
decent and sovereign.'' He added that, ``We must not allow that the 
history of colonization repeats and that our resources are the loot of 
the empire.'' An official Bolivarian Web site report on the 
inauguration stated that

          Facing this aggressive power (the United States) the 
        countries and peoples of the region have no choice but to seek 
        ways to defend themselves. The just struggles of the Latin 
        American peoples for independence, freedom, and social progress 
        deserve the support of everyone.\23\

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    Iran's interest in the project was made clear when Iranian Defense 
Minister, Ahmad Vahidi, arrived in Bolivia for the school's 
inauguration, despite having an Interpol Red Notice issued for his 
arrest for his alleged participation in the 1994 AMIA bombing in Buenos 
Aires. His public appearance at a military ceremony the day before the 
school's inauguration set off an international scandal and sharp 
protests from Argentina, which had asked Interpol to emit the Red 
Notice. Vahidi quietly slipped out of the Bolivia.\24\

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    This ideological framework of Marxism and radical Islamic 
methodology for successfully attacking the United States is an 
important, though little examined, underpinning for the greatly 
enhanced relationships among the Bolivarian states and Iran. These 
relationships are being expanded and absorb significant resources 
despite the fact that there is little economic rationale to the ties 
and little in terms of legitimate commerce.
    For Iran, however, the benefits are numerous, particularly in 
building alliances with nations to break its international isolation. 
It also affords Iran the opportunity to mine strategic minerals for its 
missile and nuclear programs, position Quds Force and Revolutionary 
Guard operatives under diplomatic cover, greatly expand and enhance its 
intelligence gathering, and operate state-to-state enterprises that 
allow for the movement of just about any type of goods and material.
    One glimpse at the type of shipments such a relationship can be 
used for came to light in 2009, when Turkish authorities randomly 
inspected some crates being shipped from Iran to Venezuela at the port 
of Mersin. The 22 crates were labeled ``tractor parts'' but in fact 
carried equipment for manufacturing explosives.\25\
    One need only look at how rapidly Iran has greatly increased its 
diplomatic, economic, and intelligence presence in Latin America to see 
the priority it places on this emerging axis--given that it is an area 
where it has virtually no trade, no historic or cultural ties and no 
obvious strategic interests. The gains, in financial institutions, 
bilateral trade agreements and state visits (nine state visits between 
Chavez and Ahmadinejad alone since 2006), are almost entirely within 
the Bolivarian orbit and, as noted, the Bolivarian states have jointly 
declared their intention to help Iran break international sanctions.
    Iran is also spending scarce resources on expanding its cultural 
influence. Part of the effort through a strong Spanish language, Latin 
American-based Internet presence, with Web sites in most countries. The 
sites generally laud Hezbollah, offer the teachings of Iran's 
revolutionary leaders, extol the peaceful nature of its nuclear 
program, as well as offer Spanish language literature on Shia 
Islam.\26\ What is of particular concern is that many of the bilateral 
and multilateral agreements signed between Iran and Bolivarian nations, 
such as the creation of a dedicated shipping line between Iran and 
Ecuador, or the deposit of $120 million by an internationally 
sanctioned Iranian bank into the Central Bank of Ecuador, obey no 
economic rationale.\27\
    The most recent salvo by Iran is the launching of a Spanish 
language satellite TV station, Hispan TV, aimed at Latin America. 
Bolivia and Venezuela are collaborating in producing documentaries for 
the station. Mohammed Sarafraz, deputy director of international 
affairs, said Iran was ``launching a channel to act as a bridge between 
Iran and the countries of Latin America was a need to help familiarize 
Spanish-speaking citizens with the Iranian nation.''
    He said that Hispan TV was launched with the aim of reinforcing 
cultural ties with the Spanish-speaking nations and helping to 
introduce the traditions, customs, and beliefs of the Iranian people. 
Attempting to show the similarities between Islam and Christianity the 
first program broadcast was ``Saint Mary,'' depicting ``the life of 
Saint Mary and the birth of Jesus Christ from an Islamic point of 
view.'' \28\
    There is growing evidence of the merging of the Bolivarian 
Revolution's criminal-terrorist pipeline activities and those of the 
criminal-terrorist pipeline of radical Islamist groups (Hezbollah in 
particular) supported by the Iranian regime. The possibility opens a 
series of new security challenges for the United States and its allies 
in Latin America. The 1994 Hezbollah and Iranian bombing of the AMIA 
building in Buenos Aires, Argentina, is a useful reminder that these 
groups can and do operate in Latin America.
    As noted above, Operation Titan provides clear evidence of the 
merging relationship among drug trafficking organizations with strong 
ties to the FARC and purchasers and money launderers with close ties to 
Hezbollah.
    A clear example of the breadth of the emerging alliances among 
criminal and terrorist groups was Operation Titan, begun by Colombian 
and U.S. officials in 2006 and still ongoing. Colombian and U.S. 
officials, after a 2-year investigation, dismantled a drug trafficking 
organization that stretched from Colombia to Panama, Mexico, West 
Africa, the United States, Europe and the Middle East.
    Colombian and U.S. officials say that one of the key money 
launderers in the structure, Chekry Harb, AKA ``Taliban'' acted as the 
central go-between among Latin American DTOs and Middle Eastern radical 
groups, primarily Hezbollah. Among the groups participating together in 
Harb's operation in Colombia were members of the Northern Valley 
Cartel, right-wing paramilitary groups and the FARC.
    This mixture of enemies and competitors working through a shared 
facilitator, or in loose alliance for mutual benefit, is a pattern that 
is becoming more common, and one that significantly complicates the 
ability of law enforcement and intelligence operatives to combat these 
groups.\29\
    A more recent example was the alleged October 2011 plot by elements 
of the Quds Force, the elite arm of the Iranian Revolutionary Guard 
Corps, to hire a hit man from a Mexican cartel to assassinate the Saudi 
Ambassador in the United States. The plot could be the first time 
members of an official Iranian institution, albeit a secretive one long 
known to support terrorist activities, dealt directly with a Mexican 
cartel to carry out an attack in the United States.\30\
    While there has been little public acknowledgement of the Hezbollah 
ties to Latin American TOC groups, recent indictments based on DEA 
cases point to the growing overlap of the groups. In December 2011, 
U.S. officials charged Ayman Joumaa, an accused Lebanese drug kingpin 
and Hezbollah financier, of smuggling tons of U.S.-bound cocaine and 
laundering hundreds of millions of dollars with the Zetas cartel of 
Mexico, while operating in Panama, Colombia, the DRC and elsewhere.
    ``Ayman Joumaa is one of top guys in the world at what he does: 
international drug trafficking and money laundering,'' a U.S. antidrug 
official said. ``He has interaction with Hezbollah. There's no 
indication that it's ideological. It's business.'' \31\
    Other cases include:

   In 2008, OFAC designated senior Venezuelan diplomats for 
        facilitating the funding of Hezbollah.
      One of those designated, Ghazi Nasr al Din, served as the charge 
        d'affaires of the Venezuelan Embassy in Damascus, and then 
        served in the Venezuelan Embassy in London. According to the 
        OFAC statement in late January 2008, al Din facilitated the 
        travel of two Hezbollah representatives of the Lebanese 
        Parliament to solicit donations and announce the opening of a 
        Hezbollah-sponsored community center and office in Venezuela. 
        The second individual, Fawzi Kan'an, is described as a 
        Venezuela-based Hezbollah supporter and a ``significant 
        provider of financial support to Hezbollah.'' He met with 
        senior Hezbollah officials in Lebanon to discuss operational 
        issues, including possible kidnappings and terrorist 
        attacks.\32\
   In April 2009, police in the island country of Curacao 
        arrested 17 people for alleged involvement in cocaine 
        trafficking with some of the proceeds being funneled through 
        Middle Eastern banks to Hezbollah.\33\
   A July 6, 2009, indictment of Jamal Yousef in the U.S. 
        Southern District of New York alleges that the defendant, a 
        former Syrian military officer arrested in Honduras, sought to 
        sell weapons to the FARC--weapons he claimed came from 
        Hezbollah and were to be provided by a relative in Mexico.\34\

    Such a relationship between nonstate and state actors provides 
numerous benefits to both. In Latin America, for example, the FARC 
gains access to Venezuelan territory without fear of reprisals; it 
gains access to Venezuelan identification documents; and, perhaps most 
importantly, access to routes for exporting cocaine to Europe and the 
United States--while using the same routes to import quantities of 
sophisticated weapons and communications equipment. In return, the 
Chavez government offers state protection, and reaps rewards in the 
form of financial benefits for individuals as well as institutions, 
derived from the cocaine trade.
    Iran, whose banks, including its central bank, are largely barred 
from the Western financial systems, benefits from access to the 
international financial market through Venezuelan, Ecuadoran, and 
Bolivian financial institutions, which act as proxies by moving Iranian 
money as if it originated in their own, unsanctioned financial 
systems.\35\ Venezuela also agreed to provide Iran with 20,000 barrels 
of gasoline per day, leading to U.S. sanctions against the state 
petroleum company.\36\
    In addition, Chavez maintains his revolutionary credentials in the 
radical axis comprised of leftist populists and Islamic 
fundamentalists, primarily Iran. As a head of state, he is able to 
introduce external (nonregional) actors into the region for a variety 
of purposes, some of which directly benefit nonstate actors.
    Iran is not the only extra-territorial actor that Chavez has 
courted and whose interests diverge notably from U.S. interests. Of 
primary concern are Russia and China, with Russia acting in a dual 
capacity as weapons facilitator and the provider of choice for nuclear 
development in conjunction with Iran. China has served as both a market 
for goods from all of Latin America, as well as provider of billions of 
dollars in investments, loans, military sales, and advanced satellite 
services.
    In late September 2008, Prime Minister Vladimir Putin of Russia and 
Chavez announced joint plans to build nuclear plants in Venezuela. 
Atomstroyexport--the same company building the Bushehr nuclear power 
plant in Iran--will be the project operator.\37\ In September 2009, 
Chavez announced that Venezuela and Iran would jointly build a 
``nuclear village'' in Venezuela and pursue nuclear technology 
together.\38\ Ecuador and Russia also inked an agreement on civilian 
nuclear power cooperation and uranium exploration,\39\ and Russia has 
offered similar assistance to Bolivia. In 2009, Ecuador and Iran signed 
a Memorandum of Understanding to carry out joint mining activities and 
geological mapping.\40\
    None of these agreements violate international sanctions, but the 
constellation of actors and the fervor with which the agreements have 
been embraced raise many questions. Given the opaque nature of the 
agreements, and the history of some of the principals involved in 
supporting the use of WMD to annihilate states viewed as the enemy 
(Israel and the United States), and flaunting international regulatory 
regimes, it is both reasonable and prudent to approach these 
developments warily.
                             major findings
    The assumptions and framework presented above were arrived at 
through IASC research in the region. The following summary was first 
prepared for the Department of Defense's Defense Threat Reduction 
Agency `s (DTRA) Advanced Concepts office, which released this 
UNCLASSIFIED summary.\41\
    The level of concern for WMD proliferation issues in this context 
has risen over time, in part because it has become increasingly clear 
that many of the Iranian instruments used in the region are closely 
linked to its ongoing and systematic efforts to acquire banned nuclear 
material and have already been identified and sanctioned as part of 
Iran's proliferation efforts.

    (1) Iran and its Bolivarian allies (Venezuela, Bolivia, Nicaragua, 
and Ecuador) in Latin America are systematically engaged in a pattern 
of financial behavior, recruitment exercises and business activities 
that are not economically rational and could be used for the movement 
and/or production of WMD and the furthering of Iran's stated aim of 
avoiding international sanctions on its nuclear program. As shown 
below, those Iranian financial institutions engaged in the region have 
been designated by the United States and/or the United Nations for 
their participation in Iran's proliferation efforts or to support 
Hezbollah and other designated terrorist entities. These actions 
include:

          i. Significant investments in financial institutions in the 
        region that can easily be used to move money from Iran into the 
        world financial sector through the use of banks and joint 
        investment corporations. The financial institutions being used 
        enjoy special protection from the states in which they operate 
        and have no oversight from banking commissions, the 
        congressional branch, or the public.
          ii. Among the most important are: the Banco Internacional de 
        Desarrollo (BID) in Venezuela, a wholly owned Iranian bank 
        operating in Venezuela which, after several years of operation, 
        was formally sanctioned by the U.S. Treasury Department but 
        continues to operate; The Economic Development Bank of Iran 
        (EDBI), under U.S. sanction for working its role in helping 
        Iran evade nuclear sanctions and one of the main Iranian owners 
        of BID. EDBI signed agreements with the Central Bank of Ecuador 
        (2008) and the Central Bank of Bolivia (2009) to finance the 
        purchase of Iranian goods (including helicopters and military 
        materiel in the case of Bolivia).
          iii. According to internal documents obtained in Venezuela, 
        the BID's profits have plummeted 96 percent in early 2010, 
        perhaps an indication that U.S. sanctions are having an impact. 
        It maintains only one office in Venezuela (8th Floor, Edificio 
        Dozsa, Avenida Francisco de Miranda, El Rosal, Caracas, 
        telephone +58 212 952 65 62). It still offers a wide variety of 
        banking services, including international transfers, investment 
        advising, automobile loans and others. The board of directors 
        is composed of seven Iranian nationals, while the legal 
        representative is a Venezuelan (identities available from 
        author). It remains exempt from taxes and is, at least on 
        paper, one of the smallest banks in the country, with one 
        office, 14 employees, and 313 depositors. Most of its loans are 
        given to Iranian citizens living in Venezuela. However, it does 
        not appear that BID has been completely shut out of the 
        international banking system.

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    According to local banking industry sources, BID operates 
correspondent accounts through another government bank, BANDES, which 
is unsanctioned. This allows BID to move money as if it were of 
Venezuelan rather than Iranian in origin or from BID.

          iv. Perhaps replacing BID as a major financial vehicle for 
        Iran is the Fondo Binacional Venezuela-Iran (FBVI), established 
        in May 2008 with an initial capital of $1.2 billion. Each 
        country provided half of the initial capital. This institution 
        is directly managed by Ricardo Menendez, the Minister of 
        Science, Technology and Industry, which is responsible for 
        Venezuela's nascent nuclear program. It is an especially opaque 
        institution, and none of its expenditures pass through the 
        National Assembly or any other outside body for approval or 
        auditing.
          v. The FBVI is only one of a host of para-state institutions 
        the Chavez government has set up that are accountable only to 
        the executive. Others include FONDEN, FONDESPA, El Fondo Chino 
        (Chinese Fund), the Belarus Fund and others. Among these, 
        FONDEN (Fondo de Desarrollo Nacional or National Development 
        Fund) is by far the most important because it receives direct 
        funding injects from the state petroleum company. So far in 
        2010 government figures show FONDEN received $15 billion in 
        money that does not officially form part of the state coffers. 
        Since 2005 an estimated $63 billion has been put into the fund, 
        and then virtually disappeared from all public accounting.
          vi. Playing a crucial role in Iran's economic activity in the 
        region is the Economic Development Bank of Iran (EDBI), an 
        Iranian financial institution designated by the U.S. Treasury 
        Department's Office of Foreign Assets Control as part of Iran's 
        illegal nuclear proliferation network. The designation states 
        that: ``EDBI provides financial services to multiple MODAFL-
        subordinate entities that permit these entities to advance 
        Iran's WMD programs. Furthermore, the EDBI has facilitated the 
        ongoing procurement activities of various front companies 
        associated with MODAFL-subordinate entities. Since the United 
        States and United Nations designated Bank Sepah in early 2007, 
        the EDBI has served as one of the leading intermediaries 
        handling Bank Sepah's financing, including WMD-related 
        payments. In addition to handling business for Bank Sepah, the 
        EDBI has facilitated financing for other proliferation-related 
        entities sanctioned under U.S. and U.N. authorities.'' \42\
          The BID is reportedly a Venezuelan bank, which the EDBI would 
        have no influence over. In fact, BID, sanctioned by OFAC at the 
        same time as the EDBI, and is wholly owned by Bank Saderat, an 
        Iranian bank under U.S. and U.N. sanction. The BID was 
        sanctioned because it was deemed by the Treasury Department to 
        be acting on behalf of EDBI. According to an OFAC statement: 
        ``Bank Saderat has been a significant facilitator of 
        Hizballah's financial activities and has served as a conduit 
        between the Government of Iran and Hizballah, Hamas, the 
        Popular Front for the Liberation of Palestine General Command, 
        and the Palestinian Islamic Jihad.
          ``Another primary banking relationship is between the Export 
        Development Bank of Iran (EDBI) and the Central Bank of 
        Ecuador, according to an agreement signed in November 2008 but 
        not made public until almost a year later.'' \43\
          The heart of the deal is for EDBI to deposit some $120 
        million in Ecuador's state bank, to be used to foment export 
        and import activity between the two countries.\44\ This sum 
        seems unusually high for legitimate commercial activity since 
        total trade between the two nations has never exceeded $2.3 
        million, a sum reached in 2003. In 2006 and 2007 Ecuador 
        registered zero exports to Iran and imports of $27,000 and 
        $16,000 in those years.\45\

    There is a significant part of the agreement that demonstrates how 
interlinked these banking institutions (EDBI and BID) are, despite 
Venezuela's public denial of any linkages. Point 6 of the ``Protocol of 
Cooperation'' between the Central Bank of Ecuador and EDBI,``EDBI 
manifests its readiness to establish a branch of Banco Internacional de 
Desarrollo (BID) in the Republic of Ecuador.'' \46\
    The BID is reportedly a Venezuelan bank, which the EDBI would have 
no influence over, including where it opened branches. In fact, EDBI 
can open branches of BID as part of EDBI.
    Despite later assurances by the Ecuadoran Government to the U.S. 
Embassy in Quito that the deal was not consummated, and that a branch 
of BID was not opened, at least not publicly, Ecuadoran banking sources 
say that Iran is, in fact, using the Ecuadoran Central Bank to hold 
Iranian Government funds.

    (2) Iran has sought to establish independent binational agreements 
in Ecuador and Venezuela to establish joint shipping lines to these 
countries. The primary company that is used is Sadra Iran Marine 
Industrial Company, which is majority owned by the Iranian 
Revolutionary Guard Corps' Khatam al-Anbia force.\47\ It is part of the 
IRGC's shipping conglomerate, the Islamic Republic of Iran Shipping 
Lines (IRISL), a entity, along with all its constantly shifting 
components, that have been designated by OFAC for aiding Iran's missile 
and nuclear programs.
    As Stuart Levey, the Treasury Department's Undersecretary for 
Terrorism and Financial Intelligence said: ``Iran has consistently used 
its national maritime carrier, the Islamic Republic of Iran Shipping 
Lines (IRISL), to advance its missile programs and to carry other 
military cargoes. Some shipments have been stopped, and were clear 
violations of Security Council resolutions--including arms shipments 
believed to have been destined for Syria, for transfer to Hezbollah.'' 
Levey stated that the sanctioning of IRISL was to ``sharpen the focus 
on another sector that is a critical lifeline for Iran's proliferation 
and evasion: shipping. Some of Iran's most dangerous cargo continues to 
come and go from Iran's ports, so we must redouble our vigilance over 
both their domestic shipping lines, and attempts to use third-country 
shippers and freight forwarders for illicit cargo.''\48\

    The importance of the shipping lines may have grown since the 
weekly flights between Caracas and Tehran appear to have been 
cancelled. The reasons for the cancellation were not clear, but it 
removes another state-protected method for moving significant amounts 
of resources between the two countries.
    Despite this work by Treasury there is very little reporting on 
Iran's shipping activities in Latin America, despite the fact that Iran 
makes little effort to hide its actions (see picture below, taken at a 
public Iran-Venezuela trade exposition in Caracas). This area is of 
particular concern because of the increased reports of Iran's increased 
interest in mining strategic minerals in the Boliviarian states, 
particularly minerals that can be used in missile programs and nuclear 
fusion facilities.
    Given the state-to-state nature of the shipping lanes, the cargo on 
the ships moving to and from Iran can be used to move virtually 
anything either state wants to move, as there will be no Customs checks 
and no need to declare the contents of the shipping containers. Unlike 
illicit or contraband activity outside of state control, where the 
state may actually be interested in hindering the process, movements 
under state control can easily be used to further the movement of 
sensitive, undeclared goods.
    Iran's efforts to establish dedicated shipping lines with 
individual countries, such as Ecuador,\49\ where there is virtually no 
commerce and certainly not enough to sustain a shipping line, raises 
serious questions in light of Levey's statements. Given Iran's already 
demonstrated capacity and capability to move materiel banned by 
international sanctions, this LOE by Iran should be of significant 
concern.

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    (3) Iran appears to be engaged extensively in increasing mining 
activities in Latin America of minerals that have WMD and/or weapons 
uses. These include tantalum (Bolivia) and thorianite (Guyana-Brazil-
Suriname). Thorianite, a radioactive rare earth mineral with nuclear 
applications as part of the thorium group, is being mined in an area 
where gold is traditionally mined, but the increasing number of 
Iranians in the region and a sharp increase in requests for gold mining 
permits has brought some notice to the new mining. Tantalum is used in 
highly heat resistant alloys and high-powered electronic resistors. 
These are minerals that are found elsewhere, but seem to be being 
acquired in Latin America, perhaps in order to avoid scrutiny

    (4) The Bolivarian states appear to be laying the groundwork for 
public (internal and international) acceptance of the acquisition of 
nuclear power, always carefully couched as for peaceful uses. This 
seems to be aimed at developing a political acceptance for the unusual 
activities, if they become too big to remain clandestine, as part of a 
normal development of bilateral and multilateral relations.
    Bolivian President Evo Morales visited Tehran shortly after 
Venezuelan President Chavez visited Iran and several other staunchly 
anti-U.S. countries, including Syria. Both publicly declared their 
intentions to acquire, in the shortest time possible, nuclear 
capabilities. This bodes ill for the region, particularly given Iran's 
ability to keep international inspectors at bay for many years. While 
much of the current talk may be bluster, it also signals the clear 
intention of these groups to work with rogue nations to acquire nuclear 
capacity.
                               conclusion
    Iran and its proxy force Hezbollah are engaging in a widespread and 
multifaceted effort to expand their influence along with their 
intelligence capabilities, military capacities, and sanction-evasion 
methods. In this effort they are allied with the Boliviarian states of 
Latin America led by Hugo Chavez of Venezuela, and his proxy force, the 
FARC. Both Hezbollah and the FARC, as designated terrorist entities 
that engage in extensive TOC activities, are instruments of statecraft.
    This alliance of state and nonstate actors, engaged in terrorism 
and TOC, has an expressed doctrine of asymmetric warfare that endorses 
the use of WMD against the United States, viewed by both blocs as the 
primary enemy. Iran has taken concrete steps to enhance its ability 
evade international financial sanctions through numerous financial 
institutions acting on its behalf in the Bolivarian states. It also 
engages in extensive purchases of dual use equipment and other 
purchases through the Bolivarian states and Panama. All of Iran's 
activities in the region, and the activities of the Bolivarian nations 
to help, are designed to be as opaque as possible and all oversight and 
accountability. Such basic data as the number of accredited diplomats 
Iran has in the Bolivarian countries are not obtainable by the 
Congresses of those nations.
    Given the nature of the actors, the deliberate opaqueness of the 
activities and public articulation of a military doctrine to strike the 
United States, one can only conclude that Iran's aims and intentions 
are hostile and that the Bolivarian states are aiding and abetting Iran 
in these efforts despite clear violations of international sanctions 
regimes and clear ties to TOC activities.

----------------
End Notes

    \1\ The self-proclaimed ``Bolivarian'' states (Venezuela, Ecuador, 
Bolivia, and Nicaragua) take their name for Simon Bolivar, the revered 
19th century leader of South American independence from Spain. They 
espouse 21st century socialism, a vague notion that is deeply hostile 
to free market reforms, to the United States as an ``imperial power,'' 
and toward traditional liberal democratic concepts, as will be 
described in detail.
    \2\ These include recently founded Community of Latin American and 
Caribbean States (Comunidad de Estados Latinoamericanos y Caribenos-
CELAC), and the Bolivarian Alliance for the Peoples of Our America 
(Alianza Bolivariana para los Pueblos de Nuestra America-ALBA). The 
military school in Warnes, in the department of Santa Cruz, is called 
the Escuela de Defensa de la Alianza Bolivariana para los Pueblos de 
Nuestra America (Defense School for the Bolivarian Alliance for the 
Peoples of Our America.
    \3\ ``Venezuela/Iran ALBA Resolved to Continue Economic Ties With 
Iran,'' Financial Times Information Service, July 15, 2010.
    \4\ James R. Clapper, Director of National Intelligence, 
``Unclassified Statement for the Record: Worldwide Threat Assessment of 
the U.S. Intelligence Community for the Senate Select Committee on 
Intelligence, January 31, 2012, p. 6.
    \5\ Univision, ``La Amenaza Irani,'' aired December 8, 2011.
    \6\ Lt. Gen. Ronald L. Burgess, Jr., Director, Defense Intelligence 
Agency, ``Iran's Military Power,'' Statement before the United States 
Senate Committee on Armed Services, April 14, 2010.
    \7\ National Security Council, ``Strategy to Combat Transnational 
Organized Crime: Addressing Converging Threats to National Security,'' 
Office of the President, July 2011. The Strategy grew out of a National 
Intelligence Estimate initiated by the Bush administration and 
completed in December 2008, and is a comprehensive government review of 
transnational organized crime, the first since 1995.
    \8\ ``Fact Sheet: Strategy to Combat Transnational Organized 
Crime,'' Office of the Press Secretary, the White House, July 25, 2011.
    \9\ ``Fact Sheet: Strategy to Combat Transnational Organized 
Crime,'' Office of the Press Secretary, the White House, July 25, 2011.
    \10\ ``Fact Sheet: Strategy to Combat Transnational Organized 
Crime,'' op. cit.
    \11\ On the lower end, the United Nations Office of Drugs and Crime 
estimate TOC earnings for 2009 at $2.1 trillion, or 3.6 percent of 
global GDP. Of that, typical TOC activities such as drug trafficking, 
counterfeiting, human trafficking, weapons trafficking and oil 
smuggling, account for about $1 trillion or 1.5 percent of global GDP. 
For details see: ``Estimating Illicit Financial Flows Resulting from 
Drug Trafficking and other Transnational Organized Crimes,'' United 
Nations Office of Drugs and Crime, September 2011. On the higher end, 
in a speech to Interpol in Singapore 2009, U.S. Deputy Attorney General 
Ogden cited 15 percent of world GDP as total annual turnover of 
transnational organized crime. See: Josh Meyer, ``U.S. attorney general 
calls for global effort to fight organized crime,'' Los Angeles Times, 
October 13, 2009, accessed at: http://articles.latimes.com/print/2009/
oct/13/nation/na-crime13.
    \12\ For a more detailed look at this debate see: ``Iran in Latin 
America: Threat or Axis of Annoyance?,'' op cit., in which the author 
has a chapter arguing for the view that Iran is a significant threat.
    \13\ `` `Jackal' book praises bin Laden,'' BBC News, June 26, 2003.
    \14\ See, for example: Associated Press, ``Chavez: `Carlos the 
Jackal' a `Good Friend' '' June 3, 2006.
    \15\ Paul Reyes (translator) and Hugo Chavez, ``My Struggle,'' from 
a March 23, 1999, letter to Illich Ramirez Sanchez, the Venezuelan 
terrorist known as `Carlos the Jackal,' from Venezuelan President Hugo 
Chavez, in response to a previous letter from Ramirez, who is serving a 
life sentence in France for murder. Harper's, October 1999, http://
harpers.org/archive/1999/10/0060674.
    \16\ In addition to Operation Titan there have been numerous 
incidents in the past 18 months of operatives being directly linked to 
Hezbollah have been identified or arrested in Venezuela, Colombia, 
Guatemala, Aruba, and elsewhere in Latin America.
    \17\ Verstrynge, born in Morocco to Belgian and Spanish parents, 
began his political career on the far right of the Spanish political 
spectrum as a disciple of Manuel Fraga, and served as a national and 
several senior party posts with the Alianza Popular. By his own 
admission he then migrated to the Socialist Party, but never rose 
through the ranks. He is widely associated with radical 
antiglobalization views and anti-U.S. rhetoric, repeatedly stating that 
the United States is creating a new global empire and must be defeated. 
Although he has no military training or experience, he has written 
extensively on asymmetrical warfare.
    \18\ Verstrynge, op cit., pp. 56-57.
    \19\ Bartolome, op cit. See also: John Sweeny, ``Jorge Verstrynge: 
The Guru of Bolivarian Asymmetric Warfare,'' www.vcrisis.com, Sept. 9, 
2005; and ``Troops Get Provocative Book,'' Miami Herald, November. 11, 
2005.
    \20\ Farah interviews with senior Colombian officials and recent 
FARC deserters.
    \21\ Douglas Farah, ``The FARC's International Relations: A Network 
of Deception,'' NEFA Foundation, September. 22, 2008.
    \22\ Juan Pauliler, ``Que busca la academia military del ALBA?'' 
BBC Spanish Service, June 15, 2011.
    \23\ ``ALBA School of Defense and Sovereignty Opens,'' Anti-
Imperialist News Service, June 14, 2011. Accessed at: http://www.anti-
imperialist.org/alba-school-of-defense-opens_6.
    \24\ Robin Yapp, ``Iran Defense Minister Forced To Leave Bolivia 
Over 1994 Argentina Bombing,'' The Telegraph (London), June 1, 2011.
    \25\ ``Turkey holds suspicious Iran-Venezuela shipment,'' 
Associated Press, June 1, 2009. http://www.ynetnews.com/articles/
0,7340,L-3651706,00.html.
    \26\ For a fuller examination of the use of Web sites, see: Douglas 
Farah, ``Islamist Cyber Networks in Spanish-Speaking Latin America,'' 
Western Hemisphere Security Analysis Center, Florida International 
University, September 2011.
    \27\ For a more complete look at Iran's presence in Latin America, 
see: Douglas Farah, ``Iran in Latin America: An Overview,'' Woodrow 
Wilson International Center for Scholars, Summer 2009 (to be published 
as a chapter in: ``Iran in Latin America: Threat or Axis of 
Annoyance?'', edited by Cynthia J. Arnson, et al. 2010. For a look at 
the anomalies in the economic relations, see also Farah and Simpson, 
op. cit.
    \28\ Tehran Times, ``Hispan TV begins with `Saint Mary,' '' 
December 23, 2011, accessed at: http://www.tehrantimes.com/arts-and-
culture/93793-hispan-tv-begins-with-saint-mary.
    \29\ While much of Operation remains classified, there has been 
significant open source reporting, in part because the Colombian 
Government announced the most important arrests. For the most complete 
look at the case see: Jo Becker, ``Investigation Into Bank Reveals 
Links to Major South American Cartels,'' International Herald Tribune, 
December 15, 2011. See also: Chris Kraul and Sebastian Rotella, 
``Colombian Cocaine Ring Linked to Hezbollah,'' Los Angeles Times, 
October 22, 2008; and ``Por Lavar Activos de Narcos y Paramilitares, 
Capturados Integrantes de Organizacion Internatcional,'' Fiscalia 
General de la Republica (Colombia), October 21, 2008.
    \30\ Evan Perez, ``U.S. Accuses Iran in Plot: Two Charged in 
Alleged Conspiracy to Enlist Drug Cartel to Kill Saudi Ambassador,'' 
Wall Street Journal, October 12, 2011.
    \31\ Sebastian Rotella, ``Government Says Hezbollah Profits From 
U.S. Cocaine Market Via Link to Mexican Cartel,'' ProPublica, December 
11, 2011.
    \32\ ``Treasury Targets Hizbullah in Venezuela,'' United States 
Department of Treasury Press Center, June 18, 2008, http://
www.treasury.gov/press-center/press-releases/Pages/hp1036.aspx.
    \33\ Orlando Cuales, ``17 Arrested in Curacao on Suspicion of Drug 
Trafficking Links With Hezbollah,'' Associated Press, April 29, 2009
    \34\ United States District Court, Southern District of New York, 
The United States of America v Jamal Yousef, Indictment, July 6, 2009.
    \35\ For a look at how the Ecuadoran and Venezuelan banks function 
as proxies for Iran, particularly the Economic Development Bank of 
Iran, sanctioned for its illegal support of Iran's nuclear program, and 
the Banco Internacional de Desarrollo, see: Farah and Simpson, op cit.
    \36\ Office of the Spokesman, ``Seven Companies Sanctioned Under 
Amended Iran Sanctions Act,'' U.S. Department of State, May 24, 2011, 
http://www.state.gov/r/pa/prs/ps/2011/05/164132.htm.
    \37\ Russia Izvestia Information, September 30, 2008, and Agence 
France Presse, ``Venezuela Wants to Work With Russia on Nuclear Energy: 
Chavez,'' Sept. 29, 2008.
    \38\ Simon Romero, ``Venezuela Says Iran is Helping it Look for 
Uranium,'' New York Times, September 25, 2009.
    \39\ Nikolai Spassky, ``Russia, Ecuador strike deal on nuclear 
power cooperation,'' RIA Novosti, August 21, 2009.
    \40\ Jose R. Cardenas, ``Iran's Man in Ecuador,'' Foreign Policy, 
February 15, 2011, http://shadow.foreignpolicy.com/posts/2011/02/15/
irans_man_in_ecuador.
    \41\ Douglas Farah, ``Iran and Latin America: Strategic Security 
Issues,'' Defense Threat Reduction Agency Advanced Concepts Office, May 
2011.
    \42\ United States Department of Treasury, ``Export Development 
Bank of Iran Designated as a Proliferator,'' Press office of the Office 
of Foreign Assets Control, October 22, 2008.
    \43\ Copies of the agreement described here were presented to ASCO 
in the October update briefing.
    \44\ ``Banco Irani Que Despierta Dudas se Asocia con el Central,'' 
Hoy (Ecuador), September 7, 2009.
    \45\ Montufar, op cit.
    \46\ Document in possession of the author.
    \47\ Ardalan Sayami, ``1388: Year of Militarization of Iran's 
Economy,'' Rooz Online, March 23, 2010, accessed at: http://
www.payvand.com/news/10/mar/1213.html.
    \48\ Stuart Levey, ``Iran's New Deceptions at Sea Must be 
Punished,'' Financial Times, August 16, 2010.
    \49\ On December 7, 2008, Ecuador's Minister of Foreign Affairs and 
Commerce, Maria Isabel Salvador, and her Iranian counterpart, Masoud 
Mir Kazem, signed a ``Memorandum of Understanding For the Study of a 
Maritime Shipping Line'' between the two countries. A copy of the MOU 
is attached.

    Senator Menendez. Thank you very much.
    Ambassador Noriega.

STATEMENT OF HON. ROBERT F. NORIEGA, FORMER ASSISTANT SECRETARY 
 OF STATE FOR WESTERN HEMISPHERE AFFAIRS, FORMER AMBASSADOR TO 
      THE ORGANIZATION OF AMERICAN STATES, WASHINGTON, DC

    Ambassador Noriega. Thank you very much, Mr. Chairman.
    Good morning. I applaud you and Senator Rubio for 
initiating this review of Iran's growing shadow in Latin 
America.
    You made reference to General Clapper's very startling 
statement that Iranian officials at the highest levels are now 
more willing to conduct an attack in the United States. General 
Clapper's statement represents a significant break with the 
skeptics in the foreign policy establishment, including too 
many U.S. diplomats, who have failed to appreciate the dire 
implications of Iran's activities in the Western Hemisphere.
    I coordinate a project at the American Enterprise Institute 
to monitor and expose Iran's activities in Latin America, in 
order to inform the public as well as policymakers who are 
responsible for protecting our national security. Our team has 
conducted dozens of interviews with experts from throughout the 
world and with eyewitnesses on the ground in the region. We 
also have obtained reams of official Venezuelan and Iranian 
documents, some of which we have published to support our 
conclusions. I want to share with the committee some of the 
essential conclusions that we have made to date.
    Venezuelan strongman Hugo Chavez and Iranian leader Mahmoud 
Ahmadinejad are conspiring to wage an asymmetrical struggle 
against United States security and to abet Iran's illicit 
nuclear program. Iran has provided Venezuela conventional 
weapons capable of attacking the United States and our allies 
in the region. On this subject, I would suggest that United 
States officials focus on the military-to-military cooperation 
and, in particular, the Iranian companies that are involved, 
that are associated with the Quds Force. Iran has used $30 
billion in economic ventures in Venezuela to launder money and 
to evade international financial restrictions.
    I also refer the committee and U.S. officials to the work 
of the district attorney of New York, Cyrus Vance, Jr., whose 
office has continued to look into this important issue and the 
implications for our security.
    Iran discovered vast uranium deposits in Venezuela in 2005 
and it is conducting suspicious mining operations in uranium-
rich areas in Venezuela, Ecuador, and other countries. Two 
terrorist networks, one home-grown Venezuelan clan and another 
cultivated by radical Iranian cleric, Mohsen Rabbani, 
proselytize, fundraise, recruit, and train operatives on behalf 
of Iran and Hezbollah in numerous countries in the Americas.
    The Venezuelan state-owned airline, Conviasa, operates 
regular service from Caracas to Damascus and Teheran, providing 
Iran, Hezbollah, and associated narcotraffickers a 
surreptitious means to move personnel, weapons, contraband, and 
other material in and out of our hemisphere.
    Mr. Chairman, our project has shared substantial 
information about these aforementioned threats with U.S. 
Government officials. Quite frankly, too often the attitude we 
have encountered among these career officers has been one of 
skepticism or indifference. To offer just a couple of brief 
examples.
    About 6 months ago we provided U.S. officials the name and 
contact information of a reliable Venezuelan source with 
privileged information about the Conviasa flights between 
Caracas and the terrorist states of Syria and Iran. To this 
day, that source has never been contacted. That's fine. I'm 
sure that the U.S. Government has many, many sources. However, 
congressional staff members tell us that executive branch 
officials are unable to answer the simple question of whether 
those Conviasa flights are continuing. Our source reassures us 
that that critical logistical link is still in service, and as 
a matter of fact there are reports that it may extend its 
service to Ecuador.
    Another brief example: Almost 7 years after the first 
reports that Iran discovered or was seeking uranium in 
Venezuela, United States officials are still unable or 
unwilling to say clearly whether Iran is mining uranium in 
Venezuela, notwithstanding documentation revealed by our 
project over a year ago regarding Iranian mining in the 
uranium-rich Roraima Basin in eastern Venezuela.
    Mr. Chairman, quite frankly, the risk we are running today 
is not that we exaggerate the threat, but that we're ignoring 
it. I believe--and I'm sure you will agree because of the work 
that you've done in this area--that the executive branch, 
beginning in the waning days of the last administration and 
continuing today, has been slow to recognize and respond to 
this multidimensional threat.
    We believe that congressional scrutiny is essential to 
encourage executive branch agencies to act. The dangerous 
activities of Iran and Hezbollah so near our borders demand a 
whole of government strategy, beginning with an interagency 
review to understand and assess the transnational, multifaceted 
nature of the problem, to mobilize friendly governments to 
respond, and to insist on inspection of suspicious operations 
and military inventories.
    This is all being carried out against the backdrop of Hugo 
Chavez dying of cancer. We have reports from our sources that 
on February 12 after a military parade he collapsed, was 
unconscious, and it took an hour and a half for his medical 
staff to stabilize his condition. So the transition that will 
be under way will be very dangerous. It may include chaos and 
create a very troubling environment where our enemies are at 
work. Our government must be prepared to implement effective 
measures unilaterally and with willing partners to disrupt and 
dismantle illicit operations and to neutralize unacceptable 
threats.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Ambassador Noriega follows:]

           Prepared Statement of Ambassador Roger F. Noriega

    Mr. Chairman, I applaud you and other members of the subcommittee 
for initiating a review of Iran's activities in Latin America.
    Since you announced your inquiry, the Director of National 
Intelligence, James R. Clapper, testified earlier this month that 
``Iranian officials'' at the highest levels ``are now more willing to 
conduct an attack in the United States. . . .'' General Clapper also 
reported that Iran's so-called ``Supreme Leader'' Ali Khamenei was 
probably aware of the bizarre plot discovered last October to conspire 
with supposed Mexican drug cartel leaders to commit a terrorist bombing 
in the heart of our Nation's capital.\1\ Only because American law 
enforcement officials were willing to set aside conventional wisdom 
about how and where Iran would wage war against us were they able to 
thwart that attack.
    Iranian officials have made no secret of the regime's intention to 
carry its asymmetrical struggle to the streets of the United States and 
Europe. For example, in a May 2011 speech in Bolivia, Iran's Defense 
Minister, Ahmad Vahidi, promised a ``tough and crushing response'' to 
any U.S. offensive against Iran.\2\ In the same week in early January 
that Iran caught the world's attention by threatening to close the 
Strait of Hormuz and brandishing shore-to-sea cruise missiles in a 10-
day naval exercise, Mahmoud Ahmadinejad announced a five-nation swing 
through Latin America aimed at advancing its influence and operational 
capabilities on the U.S. doorstep.\3\
    To comprehend what Iran is up to, we must set aside conventional 
wisdom about its ambitions, strategies, and tactics and follow the 
evidence where it leads. General Clapper's public statement represents 
a dramatic break with the skeptics in the foreign policy 
establishment--including too many U.S. diplomats--who have failed to 
appreciate the breadth and depth of Iran's activities in the Western 
Hemisphere. The Intelligence Community's fresh assessment of Iran's 
willingness to wage an attack on our soil leads to the inescapable 
conclusion that Teheran's activities near our homeland constitute a 
very real threat that can no longer be ignored.
    The next logical question is, ``What is that hostile regime doing 
with the support of its trusted allies very close to our borders?'' In 
my capacity as a Visiting Fellow at the American Enterprise Institute 
for Public Policy Research (AEI), I am coordinating an ongoing effort 
to answer that very question. I cooperate with a team of experienced 
experts who are committed to monitoring and exposing Iran's activities 
in Latin America in order to inform the public as well as policymakers 
who are responsible for protecting our national security.
    To date, we have conducted dozens of interviews with experts from 
throughout the world and with eyewitnesses on the ground in the region. 
We also have obtained reams of official Venezuelan and Iranian 
documents, only a few of which we have published to support our 
conclusions.
    Our exhaustive work leads us to the following conclusions:

   Venezuelan strongman Hugo Chavez and Iranian leader Mahmoud 
        Ahmadinejad are conspiring to wage an asymmetrical struggle 
        against U.S. security and to abet Iran's illicit nuclear 
        program. Their clandestine activities pose a clear and present 
        danger to regional peace and security.
   Iran has provided Venezuela conventional weapon systems 
        capable of attacking the United States and our allies in the 
        region.
   Iran has used $30 billion in economic ventures in Venezuela 
        as means to launder money and evade international financial 
        sanctions.
   Since 2005, Iran has found uranium in Venezuela, Ecuador, 
        and other countries in the region and is conducting suspicious 
        mining operations in some uranium-rich areas.
   Two terrorist networks--one home-grown Venezuelan clan and 
        another cultivated by Mohsen Rabbani, a notorious agent of the 
        Quds Force of the Iranian Revolutionary Guard Corps--
        proselytize, fund-raise, recruit, and train operatives on 
        behalf of Iran and Hezbollah in many countries in the Americas.
   Hezbollah conspires with drug-trafficking networks in South 
        America as a means of raising resources and sharing tactics.
   The Venezuelan state-owned airline, Conviasa, operates 
        regular service from Caracas to Damascus and Teheran--providing 
        Iran, Hezbollah, and associated narcotraffickers a 
        surreptitious means to move personnel, weapons, contraband, and 
        other materiel.

    Mr. Chairman, our project has shared substantial information about 
these aforementioned threats with U.S. Government officials--either 
directly or through Members of Congress. Quite frankly, too often the 
attitude we have encountered has been one of skepticism or 
indifference.
    To offer just two examples, we understand that U.S. executive 
branch officials have continued to misinform Members of Congress about 
the existence of Conviasa flights between Venezuela and the terror 
states of Syria and Iran. Many months ago, we provided U.S. officials 
the name and contact information of a reliable Venezuelan source with 
privileged information about those ongoing flights. Unfortunately, that 
source was never contacted. And congressional staff members tells us 
that executive branch officials continue to provide vague or misleading 
answers to direct questions on this relatively simple subject of 
whether those Conviasa flights continue.
    Another example of this official indifference: Almost 7 years after 
the first reports that Iran was seeking uranium in Venezuela, U.S. 
officials are still unable or unwilling to state clearly whether Iran 
is mining uranium in Venezuela--notwithstanding documentation revealed 
by our project over a year ago regarding Iranian mining in the uranium-
rich Roraima Basin in eastern Venezuela. That U.S. officials do not 
know whether Iran is supporting its illicit nuclear program with 
uranium from Venezuela is incomprehensible. That they do not care 
enough to find out is unacceptable.
    I believe that the executive branch--beginning in the waning days 
of the last administration and continuing today--has been slow to 
recognize or respond to this multidimensional threat. At long last, it 
is time for our national security agencies to get smart and get busy.
    Mr. Chairman, I am convinced that congressional attention, such as 
this hearing, is essential to encourage executive branch agencies to 
act. For example, sanctions last year against Venezuela's state-owned 
petroleum company for transactions with Iran were the direct result of 
pressure by the House Committee on Foreign Affairs, acting in part on 
information provided by my project. Representative Jeff Duncan (R-SC) 
has introduced H.R. 3783, the ``Countering Iran in the Western 
Hemisphere Act of 2012,'' which will require the executive branch to 
report to Congress on Iran's activities in a host of areas and to 
provide a strategy for countering this threat.
    I believe that such a thorough, congressionally mandated review 
will require the executive branch to apply additional needed 
intelligence resources to collect on subject matters in Venezuela, 
Bolivia, Ecuador, and beyond. Once they understand the scope and depth 
of the problem, I hope for a whole-of-government response to protect 
our security, our interests, and our allies against the threat posed by 
Iran, Hezbollah, and their support network in the Americas.
    Of course, my project at AEI is prepared to cooperate with this 
policy review by providing the subcommittee documents and analysis 
regarding suspicious transactions and installations operated by Iran in 
Venezuela, Ecuador, Bolivia, and elsewhere in the region.
                       background and discussion
    Iran's push into the Western Hemisphere is part of a global 
strategy to break its diplomatic isolation, develop new sources of 
strategic materials, evade international sanctions and undermine U.S. 
influence. To these ends, Iran expanded the number of its embassies in 
the region from 6 in 2005 to 10 in 2010.\4\ The real game-changer, 
however, has been the alliance developed between Iran's Mahmoud 
Ahmadinejad and Venezuela's Hugo Chavez.
    In the last 7 years, Iran has begun to take full advantage of its 
Venezuelan partner. Chavez's petro-diplomacy has paved the way for 
Ahmadinejad to cultivate partnerships with anti-U.S. regimes in Cuba, 
Ecuador, Bolivia, Nicaragua, et al. Today, a shadowy network of 
commercial and industrial enterprises in several countries affords Iran 
a physical presence in relatively close proximity to the United States. 
Iran is well-positioned to use its relationships with these countries 
to pose a direct threat to U.S. territory, strategic waterways and 
American allies. Iran also has provided the Venezuelan military with 
weapon systems that give Chavez unprecedented capabilities to threaten 
its neighbors and the United States.
    Chavez's support for terrorist groups such as the Revolutionary 
Armed Forces of Colombia is notorious. In recent years, Chavez's most 
trusted security officials--from senior to operational levels--have 
provided material support to Hezbollah. Today, Venezuela's Margarita 
Island has eclipsed the infamous ``Tri-Border Area'' (TBA) in South 
America as the principal safe haven and center of Hezbollah operations 
in the Americas.
    Indeed, wherever Iran goes, Hezbollah is not far behind; Latin 
America has been no exception. Research from open sources, subject-
matter experts and sensitive sources within various governments has 
identified at least two parallel, collaborative terrorist networks 
growing at an alarming rate in Latin America. One of these networks is 
operated by Venezuelan collaborators, and the other is managed by the 
Quds Force of the Iranian Revolutionary Guard Corps. These networks 
encompass more than 80 operatives in at least 12 countries throughout 
the region (with their greatest areas of focus being Brazil, Venezuela, 
Argentina, and Chile).
The Nassereddine Network
    Ghazi Atef Nassereddine Abu Ali, a native of Lebanon who became a 
Venezuelan citizen about 12 years ago, is Venezuela's second-ranking 
diplomat in Syria. Nassereddine is a key Hezbollah asset because of his 
close personal relationship to Chavez's Justice and Interior Minister, 
Tarik El Aissami, and because of his diplomatic assignment in Damascus. 
Along with at least two of his brothers, Nassereddine manages a network 
to expand Hezbollah's influence in Venezuela and throughout Latin 
America.
    Nassereddine's brother, Abdallah, a former member of the Venezuelan 
Congress, uses his position as the former vice president of the 
Federation of Arab and American Entities in Latin America and the 
president of its local chapter in Venezuela to maintain ties with 
Islamic communities throughout the region.\5\ He currently resides on 
Margarita Island, where he runs various money-laundering operations and 
manages commercial enterprises associated with Hezbollah in Latin 
America. Younger brother Oday is responsible for establishing 
paramilitary training centers on Margarita Island. He is actively 
recruiting Venezuelans through local circulos bolivarianos 
(neighborhood watch committees made up of the most radical Chavez 
followers) and sending them to Iran for follow-on training.
The Rabbani Network
    Hojjat al-Eslam Mohsen Rabbani, who was the cultural attache at the 
Embassy of the Islamic Republic of Iran in Buenos Aires, Argentina, 
oversees a parallel Hezbollah recruitment network.\6\ Rabbani is 
currently the international affairs advisor to the Al-Mostafa Al-Alam 
Cultural Institute in Qom, which is tasked with propagation of Shia 
Islam outside Iran.\7\ Rabbani, referred to by the important Brazilian 
magazine Veja as ``the Terrorist Professor,'' \8\ is a die-hard 
defender of the Iranian revolution and the mastermind behind the two 
notorious terrorist attacks against Jewish targets in Buenos Aires in 
1992 and 1994 that killed 144 people.\9\
    At the time, Rabbani was credentialed as Iran's cultural attache in 
the Argentine capital, which he used as a platform for extremist 
propaganda, recruitment and training that culminated in the attacks in 
the 1990s. In fact, he continues to exploit that network of Argentine 
converts today to expand Iran's and Hezbollah's reach--identifying and 
recruiting operatives throughout the region for radicalization and 
terrorist training in Venezuela and Iran (specifically, the city of 
Qom).
    At least two mosques in Buenos Aires--Al Imam and At-Tauhid--are 
operated by Rabbani disciples. Sheik Abdallah Madani leads the Al Imam 
mosque, which also serves as the headquarters for the Islamic-Argentine 
Association, one of the most prominent Islamic cultural centers in 
Latin America.
    Some of Rabbani's disciples have taken what they have learned from 
their mentor in Argentina and replicated it elsewhere in the region. 
Sheik Karim Abdul Paz, an Argentine convert to Shiite Islam, studied 
under Rabbani in Qom for 5 years and succeeded him at the At-Tauhid 
mosque in Buenos Aires in 1993.\10\ Abdul Paz is now the imam of a 
cultural center in Santiago, Chile, the Centro Chileno Islamico de 
Cultura de Puerto Montt. Another Argentine convert to radical Islam and 
Rabbani disciple is Sheik Suhail Assad, who lectures at universities 
throughout the region and recruits young followers to the cause.\11\
    A key target of the Rabbani network--and Hezbollah in general--is 
Brazil, home to some 1 million Muslims. Rabbani travels to Brazil 
regularly to visit his brother, Mohammad Baquer Rabbani Razavi, founder 
of the Iranian Association in Brazil.\12\ Another of his principal 
collaborators is Sheik Khaled Taki Eldyn, a Sunni radical from the Sao 
Paulo Guarulhos mosque. Taki Eldyn, who is active in ecumenical 
activities with the Shia mosques, also serves as the secretary general 
of the Council of the Leaders of the Societies and Islamic Affairs of 
Brazil.\13\ A sensitive source linked that mosque to a TBA network 
cited by the U.S. Treasury Department as providing major financial and 
logistical support to Hezbollah.\14\ As far back as 1995, Taki Eldyn 
hosted al-Qaeda leader, Osama bin Laden, and 9/11 mastermind, Khalid 
Sheik Mohammed, in the TBA region. According to Brazilian intelligence 
sources cited by the magazine Veja, at least 20 operatives from 
Hezbollah, al-Qaeda and the Islamic jihad are using Brazil as a hub for 
terrorist activity.\15\ The fact that Brazil is set to host the FIFA 
World Cup tournament in 2014 and the Summer Olympics in 2016 makes it 
an inviting target for international terrorism.
                         waking up to a threat
    Bracing for a potential showdown over its illicit nuclear program 
and emboldened by inattention from Washington in Latin America, Iran 
has sought strategic advantage in our neighborhood. It also is 
preparing to play the terrorism card--exploiting its new ties with 
Venezuelan operatives, reaching into Mexico, and activating a decades-
old network in Argentina, Brazil, and Chile.
    Even as the International Atomic Energy Agency (IAEA) affirmed in a 
recent report that foreign support is crucial to Iran's capability of 
developing a nuclear weapon,\16\ U.S. diplomatic, intelligence, and 
security agencies apparently are in the dark on whether Iran is 
extracting ore from vast uranium basins in Venezuela, Ecuador, or 
Bolivia or whether Argentina has resumed nuclear technology-sharing 
with Teheran.
    An important exception to executive branch neglect of this 
troubling phenomenon is the work of the Drug Enforcement Administration 
(DEA) and the Office of Foreign Assets Control (OFAC) of the Department 
of the Treasury to sanction numerous Venezuelan officials and entities 
for their complicity with and support for Iran and international 
terrorism. Again, according to sources in these agencies, State 
Department officers systematically resist the application of sanctions 
against Venezuelan officials and entities, despite the fact that these 
suspects are playing an increasingly important role in Iran's 
operational capabilities near U.S. territory.
                               conclusion
    President Obama declared in December 2011, ``We take Iranian 
activities, including in Venezuela, very seriously, and we will 
continue to monitor them closely.'' \17\ Merely monitoring Iran's foray 
into Latin America is the very least the United States must now do to 
frustrate Teheran's plans to threaten U.S. security and interests close 
to home.
    The dangerous activities of Iran and Hezbollah so near our borders 
demand a whole-of-government strategy, beginning with an interagency 
review to understand and assess the transnational, multifaceted nature 
of the problem; educate friendly governments; and insist on inspection 
of suspicious operations and military compounds. Our government must be 
prepared to implement effective measures--unilaterally and with willing 
partners--to disrupt and dismantle illicit operations and neutralize 
unacceptable threats.
    Ahmadinejad's January visit to Venezuela and elsewhere in the 
region was clearly intended to shore up Iran's interests in Latin 
America as Chavez loses ground in his fight with cancer. Iran can be 
expected to make common cause with Cuba, Russia, and China to protect 
their Venezuelan haven--if necessary, by encouraging Chavez's leftist 
movement to scuttle the October 2012 elections. If the United States 
were to be more vigilant at this critical post-Chavez transition phase, 
it might be possible to spoil Iran's plans by supporting a peaceful, 
democratic solution. If not, Washington may find itself confronting a 
grave and growing Iranian threat that it can neither diminish nor 
evade.

----------------
End Notes

    \1\ ``Notorious Iranian Militant Has a Connection to Alleged 
Assassination Plot Against Saudi Envoy,'' by Peter Finn, The Washington 
Post, October 14, 2011.
    \2\ ``Sanction Shows U.S. Weakness, Says Iran Minister,'' Iranian 
Students' News Agency, June 1, 2011; ``Iran Warns of Street War in Tel 
Aviv If Attacked,'' Fars News Agency, November 8, 2011.
    \3\ ``Iran Seeking To Expand Influence in Latin America,'' by Joby 
Warrick, The Washington Post, January 1, 2012.
    \4\ General Douglas M. Fraser, USAF, ``Posture Statement,'' 
Testimony before the 112th Congress, House Armed Services Committee, 
March 30, 2011.
    \5\ This organization was founded in Argentina in 1972 to unite 
Muslims, namely the Syrian and Lebanese communities, in Latin America 
and has spread rapidly throughout Latin America, with offices in 
Argentina, Chile, Brazil, Cuba, Venezuela, Guadalupe Island, Antigua, 
and Uruguay. It is overtly anti-Israel; supportive of anti-American 
regimes in the Middle East and Latin America; and used as a platform 
for Hezbollah to raise money, recruit supporters, and solicit illegal 
visas.
    \6\ ``Reis-Jomhour-e Arzhantin Dar Sazeman-e Melal: Tehran Ba 
Mohakemeh-ye Maqamatash Dar Keshvar-e Sales Movafeqat Konad'' [The 
President of Argentina: Tehran Should Accept Trial of Its Authorities 
in a Third Country], Asr-e Iran (Tehran), September 25, 2010, 
www.asriran.com (available in Persian, accessed September 29, 2011).
    \7\ ``Din va Siasat Dar Amrika-ye Latin Dar Goftegou Ba Ostad 
Mohsen Rabbani'' [Religion and Politics in Latin America in 
Conversation with Professor Mohsen Rabbani], Book Room (Tehran), May 3, 
2010.
    \8\ ``The Terrorist `Professor,' '' Veja (Brazil), April 20, 2011.
    \9\ Marcelo Martinez Burgos and Alberto Nissman, Office of Criminal 
Investigations: AMIA Case (Buenos Aires, Argentina: Investigations Unit 
of the Office of the Attorney General, 2006), 
www.peaceandtolerance.org/docs/nismanindict.pdf (accessed September 27, 
2011).
    \10\ ``Goftegou Ba Sarkar-e Khanom-e Ma'soumeh As'ad Paz Az 
Keshvar-e Arzhantin'' [Conversation with Lade Ma'soumeh As'ad Paz From 
Argentina], Ahlulbayt (Tehran), June 13, 2011.
    \11\ Marielos Marquez, `` `El Islam es una forma de vida': Sheij 
Suhail Assad,'' DiarioCoLatino, August 27, 2007.
    \12\ ``Sourat-e Jalaseh'' [Agenda], Iranianbrazil (Brazil), March 
17, 2010.
    \13\ ``Aein-ha-ye Ramezani Dar Berezil'' [Ramadan Traditions in 
Brazil], Taghrib News (Qom), September 5, 2010.
    \14\ U.S. Department of the Treasury, ``Treasury Designates Islamic 
Extremist, Two Companies Supporting Hizballah in Tri-Border Area,'' 
news release, June 10, 2004.
    \15\ ``The Terrorist `Professor,' '' Veja (Brazil), April 20, 2011.
    \16\ ``IAEA Says Foreign Expertise has Brought Iran to the 
Threshold of Nuclear Capability,'' by Joby Warrick, The Washington 
Post, November 6, 2011.
    \17\ ``El Universal Interviews President Obama on U.S.-Venezuela 
Relations,'' by Reyes Theis, El Universal (Caracas, Venezuela), 
December 20, 2011.

    Senator Menendez. Thank you, Ambassador.
    Mr. Berman.

  STATEMENT OF ILAN BERMAN, VICE PRESIDENT, AMERICAN FOREIGN 
                 POLICY COUNCIL, WASHINGTON, DC

    Mr. Berman. Thank you, Mr. Chairman. Mr. Chairman, Senator 
Rubio, thank you for the opportunity to appear before you today 
to discuss this very important topic.
    I'd like to take a somewhat different tack than my 
colleagues before me and discuss, rather than Iran's activities 
themselves, the motivations that underlie them. In the 
discussions in Washington that have predominated about Iran's 
presence and activities in the Western Hemisphere, many times 
the missing part of the puzzle is identifying and soberly 
assessing what Iran wants in the hemisphere--and whether or not 
it's succeeding in getting it.
    I think when you look at the level of activity that Iran is 
carrying out in the region, it's possible to discern four 
distinct strategic motivations that the Iranians have with 
regard to their presence and their activities in our 
hemisphere. The first, of course, is diplomacy and coalition-
building. Outreach to Latin America is seen by Iran first and 
foremost as a means to lessen its deepening international 
isolation, an isolation that's gotten deeper as a result of 
recent sanctions passed by the United States and by the 
European Union. The Iranian response--and we have seen this 
from the start of international efforts to pressure Iran's 
nuclear program in 2003, but certainly these efforts have 
escalated in recent times--has been to observe and interact 
with sympathetic regimes beyond their immediate periphery as a 
way of skirting and diluting sanctions and attempting to 
preserve the continuity of their nuclear program.
    Due to its favorable geopolitical climate, which is 
typified by vast ungoverned areas and widespread anti-
Americanism, Latin America has emerged as an important focal 
point of that effort. Most prominent, obviously, with regard to 
Iran's regional contacts is the relationship that Iran has 
built with Venezuela since Mahmoud Ahmedinejad's inauguration 
in 2005. That's a relationship that has gone from, if I may 
say, zero to 60 practically overnight in foreign policy terms, 
and now boasts billions of dollars of concrete investment, as 
well as activities that both support Iran's efforts to skirt 
sanctions that have been imposed upon its dealings with the 
international financial system, as well as the activities of 
Iranian proxies such as Hezbollah.
    But Iran's activities are not simply centered on Venezuela. 
They extend beyond it to a burgeoning relationship with Evo 
Morales in Bolivia, to a growing relationship with Rafael 
Correa and Ecuador, and beyond that to a softening of the anti-
Iranian position that one is witnessing in places such as 
Buenos Aires.
    I think it would be premature to suggest that the Iranian 
presence in the region is diminishing, or in decline. I think 
it is very much a work in progress. But it's important to point 
out that this presence is not simply pragmatic, and it's not 
simply defensive. In fact, Iran has engaged in a systematic 
outreach to regional states in a way that suggests that it sees 
the Western Hemisphere as a strategic theater where it can 
expand its own influence and dilute that of the United States. 
This can be called an antiaccess strategy on the part of the 
Iranians, wherein they sew up and engage regional regimes so it 
is more difficult for the United States to do so.
    Beyond diplomacy, Iran is engaged in a quest for strategic 
resources. Conventional wisdom has it as Iran's nuclear program 
has progressed and matured to the point that it has become well 
nigh self-sufficient, but this, in fact, is not the case. The 
opposite is actually true. As Iran's stockpile of uranium 
centrifuges has expanded, so has its need for the critical raw 
material that will be placed in those centrifuges: uranium ore.
    Iran itself runs a deficit of naturally occurring uranium, 
and when the Shah launched a national nuclear endeavor in the 
1970s he was forced to procure a large-scale supply from South 
Africa. Four decades on, that supply is mostly depleted and of 
poor quality, and as a result recent years have seen a widening 
Iranian quest to procure uranium from abroad.
    Iran can now be said to be looking extensively for uranium 
in two places: in sub-Saharan Africa, where it's engaging with 
regimes such as Zimbabwe and the Democratic Republic of Congo; 
and in Latin America. We heard from Ambassador Noriega about 
the expanding evidence that Iran is mining extensively in the 
Roraima Basin adjacent to Venezuela's border with Guyana. But 
also you have a burgeoning relationship on the strategic 
resources front with the government of Evo Morales in Bolivia. 
Regional officials that I talked to when I was in the region 
last month suggested that there are no fewer than 11 sites in 
eastern Bolivia, adjacent to the industrial capital of Santa 
Cruz, in which Iran is suspected to be mining. Not 
coincidentally, it is rumored that the Conviasa flight that 
Ambassador Noriega talked about could soon have an additional 
leg that will go from Caracas down to Santa Cruz, suggesting 
that there is certainly at least something of interest in Santa 
Cruz that the Iranians desire.
    Beyond that, Iran has been involved in building a 
surprisingly robust asymmetric presence in the region. This 
involves not only Iran's exploitation of grey and black markets 
and free trade zones, such as the ``Triple Frontier'' and 
Venezuela's Margarita Island, but increasingly a paramilitary 
presence as well. Regional officials that I spoke with 
suggested that there were between 50 and 300 Iranian trainers 
linked to the Iranian Revolutionary Guard present in Bolivia at 
this particular time.
    There is not a great deal of clarity as to what they're 
doing, or their level of activity. I would point out, however, 
that Iran has provided at least some of the seed money for the 
regional defense school recently set up by the ALBA bloc, which 
was inaugurated by Iranian Defense Minister Ahmad Vahidi when 
he was in Bolivia in the late spring/early summer last year.
    This asymmetric capability has created a latent operational 
capability. The conventional wisdom in this town has long been 
that Iran uses the region opportunistically rather than 
operationally. In fact, as you pointed out, the failed plot to 
assassinate Saudi Ambassador Adel al-Jubeir in Washington in 
October suggests that there has been a significant strategic 
shift in Iranian thinking and that Iran now begins to look at 
the region operationally.
    General Clapper concluded his recent testimony to the 
Senate Select Committee on Intelligence by saying that: ``The 
Iranian regime has formed alliances with Chavez, Ortega, 
Castro, and Correa that many believe can destabilize the 
hemisphere. These alliances can pose an immediate threat by 
giving Iran directly through the IRGC, the Quds Force, or its 
proxies like Hezbollah a platform in the region to carry out 
attacks against the United States, our interests, and our 
allies.''
    In conclusion, I think it's important to reiterate that 
Iran's presence in the region is very much a work in progress. 
Iran has not managed to firmly entrench itself, or to 
operationalize the relationships that it's seeking to build. 
But the interests and the strategic imperatives that drive them 
are clear, and they're worth our attention.
    Thank you.
    [The prepared statement of Mr. Berman follows:]

                   Prepared Statement of Ilan Berman

    Chairman Menendez, Senator Rubio, distinguished members of the 
subcommittee, it is a privilege to appear before you today to discuss 
an issue of growing importance to the national security of the United 
States: that of Iran's activities and influence in the Americas.
    Although Iran's inroads into the Western Hemisphere have recently 
garnered considerable attention among experts and the press, the 
motivations behind them remain poorly understood. Yet in tracing Iran's 
pattern of behavior in the region over the past several years, it is 
possible to discern four distinct strategic objectives.
                  i. diplomacy and coalition-building
    Outreach to Latin America is seen by Iran first and foremost as a 
means to lessen its deepening international isolation. Since 2003, when 
its previously clandestine nuclear program became public knowledge, the 
Islamic Republic has faced mounting global pressure over its nuclear 
ambitions. The Iranian regime has sought to mitigate the resulting 
political and economic restrictions levied against it by the United 
States and its allies through intensified diplomatic outreach abroad.
    Due to its favorable geopolitical climate--typified by vast 
ungoverned areas and widespread anti-Americanism--Latin America has 
become an important focal point of this effort. Over the past decade, 
Iran has nearly doubled the number of its embassies in Latin America 
(from 6 in 2005 to 10 in 2010).\1\ It also has devoted considerable 
energy to forging economic bonds with sympathetic regional governments.
    Far and away the most prominent in this regard has been Venezuela. 
Since Hugo Chavez became its President in 1999, alignment with Iran has 
emerged as a cardinal tenet of Venezuela's foreign policy. The 
subsequent election of Mahmoud Ahmadinejad to the Iranian Presidency in 
2005 kicked cooperation into high gear, with dramatic results. Today, 
Venezuela and Iran enjoy an extensive and vibrant strategic 
partnership. Venezuela has emerged as an important source of material 
assistance for Iran's sprawling nuclear program, as well as a vocal 
diplomatic backer of Iran's will to atomic power. The Chavez regime 
also has become a safe haven and source of financial support for 
Hezbollah, Iran's most powerful terrorist proxy.\2\ In turn, Iran's 
feared Revolutionary Guards have become involved in training 
Venezuela's secret services and police.\3\ Economic ties between 
Caracas and Tehran likewise have exploded--expanding from virtually nil 
in 2007 to an estimated $40 billion today.\4\
    Just as significantly, Venezuela has served as Iran's ``gateway'' 
for further economic and diplomatic expansion into the region. Aided by 
its partnership with Caracas and bolstered by a shared anti-American 
outlook, Iran has succeeded in forging significant strategic, economic, 
and political links with the regime of Evo Morales in Bolivia and 
Rafael Correa in Ecuador. Even Iran's relations with Argentina, where 
Iranian-supported terrorists carried out major bombings in 1992 and 
1994, have improved in recent times, as the government of President 
Cristina Fernandez de Kirchner has hewed a more conciliatory line 
toward Tehran.\5\
    It would be a mistake, however, to view these contacts as simply 
pragmatic--or strictly defensive. Iran's sustained systematic outreach 
to regional states suggests that it sees the Western Hemisphere as a 
crucial strategic theater wherein to expand its own strategic influence 
and dilute that of the United States. Indeed, a 2009 dossier prepared 
by Israel's Ministry of Foreign Affairs noted that ``since 
Ahmadinejad's rise to power, Tehran has been promoting an aggressive 
policy aimed at bolstering its ties with Latin American countries with 
the declared goal of `bringing America to its knees.' '' \6\ This view 
is increasingly shared by the U.S. military. In its 2010 report on 
Iranian military power, the Office of the Secretary of Defense noted 
that ``Iran seeks to increase its stature by countering U.S. influence 
and expanding ties with regional actors'' in Latin America.\7\
    To this end, Iran is ramping up its strategic messaging to the 
region. Late last month, on the heels of Iranian President Mahmoud 
Ahmadinejad's very public four-country tour of South America, the 
Iranian regime formally launched HispanTV, a Spanish-language analogue 
to its English-language PressTV channel. The Bolivian-headquartered 
television outlet has been depicted by Ahmadinejad as part of his 
government's efforts to ``limit the ground for supremacy of dominance 
seekers''--
a thinly veiled reference to U.S. influence in the Western 
Hemisphere.\8\
    As Ahmadinejad's statement indicates, Iran is pursuing an ``anti-
access'' strategy in Latin America--one that promotes its own ideology 
and influence at the expense of the United States. In this endeavor, 
Iran has been greatly aided by Venezuelan strongman, Hugo Chavez, who 
himself has worked diligently to diminish America's political and 
economic presence in the region under the banner of a new 
``Bolivarian'' revolution.
                  ii. a quest for strategic resources
    Since the start of the international crisis over Iran's nuclear 
ambitions nearly 9 years ago, the popular perception has emerged that 
Iran's atomic program are now largely self-sufficient--and that its 
progress is therefore largely inexorable. This, however, is far from 
the case; in fact, the Iranian regime currently runs a considerable, 
and growing, deficit of uranium ore, the critical raw material needed 
to fuel its atomic effort.
    According to nonproliferation experts, Iran's indigenous uranium 
ore reserves are known to be both ``limited and mostly of poor quality 
. . .'' \9\ Thus, when Iran's Shah mapped out an ambitious national 
plan for nuclear power in the 1970s, his government was forced to 
procure significant quantities of the mineral from South Africa. Nearly 
four decades later, however, this aging stockpile reportedly has been 
mostly depleted.\10\ As a result, Iran in recent years has embarked on 
a widening quest to acquire supplies of uranium ore from abroad. In 
2009, for example, it is known to have attempted to purchase more than 
1,000 tons of uranium ore from the Central Asian republic of Kazakhstan 
at a cost of nearly half-a-billion dollars.\11\ In that particular 
case, deft diplomacy on the part of the United States and its European 
allies helped stymie Iranian efforts--at least for the time being.
    However, Iran's search has not abated. In February of 2011, a new 
intelligence summary from a member state of the International Atomic 
Energy Agency reaffirmed to the international community that the 
Islamic Republic continues to search extensively for new and stable 
sources of uranium to fuel its nuclear program.\12\ Today, this effort 
is focused in two principal geographic areas. The first is Africa, 
where in recent years Iran has made concerted efforts to engage a 
number of uranium producers (such as Zimbabwe, Senegal, Nigeria, and 
the Democratic People's Republic of Congo).\13\ The second is Latin 
America, where Tehran now is exploring and developing a series of 
significant resource partnerships.
    The most well-known of these is with Venezuela. Cooperation on 
strategic resources has emerged as a defining feature of the alliance 
between the Islamic Republic and the Chavez regime. Iran is currently 
known to be mining in the Roraima Basin, adjacent to Venezuela's border 
with Guyana. Significantly, that geological area is believed to be 
analogous to Canada's Athabasca Basin, the world's largest deposit of 
uranium.\14\
    Bolivia, too, is fast becoming a key source of strategic resources 
for the Iranian regime. With the sanction of the Morales government, 
Iran is now believed to be extracting uranium from as many as 11 
different sites in Bolivia's east, proximate to the country's 
industrial capital of Santa Cruz.\15\ (Not coincidentally, it is 
rumored that the now-infamous Tehran-Caracas air route operated jointly 
by Conviasa, Venezuela's national airline, and Iran Air will be 
extended in the near future to Santa Cruz.\16\) Additionally, a series 
of cooperation agreements concluded in 2010 between La Paz and Tehran 
have made Iran a ``partner'' in the mining and exploitation of 
Bolivia's lithium, a key strategic mineral with applications for 
nuclear weapons development.\17\
    Iran even appears to be eyeing Ecuador's uranium deposits. A $30 
million joint mining deal concluded between Tehran and Quito back in 
2009\18\ has positioned the Correa regime to eventually become a 
supplier for the Islamic Republic.
    Regional experts note that Iran's mining and extraction efforts in 
Latin America are still comparatively modest in nature, constrained by 
competition from larger countries such as Canada and China and by 
Iran's own available resources and know-how.\19\ However, the region is 
unquestionably viewed as a target of opportunity in Iran's widening 
quest for strategic resources--both because of its favorable political 
operating environment and because states there (especially Bolivia) 
represent unknown quantities in terms of resource wealth. This raises 
the possibility that Latin America could emerge in the near future as a 
significant provider of strategic resources for the Iranian regime, and 
a key source of sustenance for Iran's expanding nuclear program.
                      iii. an asymmetric presence
    Iran's formal political and economic contacts with regional states 
are reinforced by a broad web of asymmetric activities throughout the 
Americas.
    Illicit financial transactions figure prominently in this regard. 
Over the past several years, Iran's economic ties to Venezuela have 
helped it skirt the sanctions being levied by the international 
community, as well as to continue to operate in an increasingly 
inhospitable global financial system. It has done so through the 
establishment of joint companies and financial entities, as well as the 
formation of wholly Iranian-owned financial entities in Venezuela and 
the entrenchment of Iranian commercial banks there.\20\ Experts note 
that this financial activity exploits an ``existing loophole'' in the 
current sanctions regime against Iran--one that leverages the freedom 
of action of Venezuelan banks to provide the Islamic Republic with ``an 
ancillary avenue through which it can access the international 
financial system despite Western pressure.'' \21\
    Iran is also known to be active in the region's ubiquitous gray and 
black markets, as well as its free trade areas--operating both directly 
and via terrorist proxy Hezbollah.\22\ Most notoriously, these include 
the so-called ``Triple Frontier'' at the crossroads of Argentina, 
Paraguay, and Brazil, as well as Venezuela's Margarita Island.
    Iran also boasts an increasingly robust paramilitary presence in 
the region. The Pentagon, in its 2010 report to Congress on Iran's 
military power, noted that the Quds Force, the elite paramilitary unit 
of Iran's Revolutionary Guards, is now deeply involved in the Americas, 
stationing ``operatives in foreign embassies, charities, and religious/
cultural institutions to foster relationships with people, often 
building on existing socio-economic ties with the well-established Shia 
diaspora,'' and even carrying out ``paramilitary operations to support 
extremists and destabilize unfriendly regimes.'' \23\
    This presence is most pronounced in Bolivia. Iran has been 
intimately involved in the activities of the Bolivarian Alliance for 
the Americas (ALBA) since the formation of that Cuban- and Venezuelan-
led geopolitical bloc--which also encompasses Ecuador, Bolivia, 
Nicaragua, and a number of other nations--in the early 2000s. As part 
of that relationship, Iran reportedly provided at least some of the 
seed money for the establishment of the bloc's ``regional defense 
school'' outside Santa Cruz, Bolivia. Iranian Defense Minister Ahmad 
Vahidi reportedly presided over the school's inauguration in May 2011, 
and Iran--itself an ALBA observer nation--is now said to be playing a 
role in training and indoctrination at the facility.\24\ Regional 
officials currently estimate between 50 and 300 Iranian ``trainers'' to 
be present in Bolivia.\25\ Notably, however, a personal visit to the 
facility found it to be largely unattended, at least at the present 
time.
                  iv. a latent operational capability
    Conventional wisdom in Washington has long held that Iran's 
activism in the Americas is opportunistic--rather than operational. Yet 
the growing asymmetric capabilities being erected by Iran throughout 
the region have the potential to be directed against the U.S. homeland.
    This was hammered home in October 2011, when U.S. law enforcement 
agencies succeeded in foiling a plot by Iran's Revolutionary Guards to 
assassinate Adel al-Jubeir, Saudi Arabia's envoy to the United States, 
on American soil. That attack, if it had been successful, would 
potentially have killed scores of U.S. citizens in the Nation's 
capital. The incident marks a significant development; as Director of 
National Intelligence James Clapper observed in his recent testimony 
before the Senate, in response to mounting international pressure and 
asymmetric activity against their nuclear program, it appears that 
``Iranian officials--probably including Supreme Leader Ali Khamenei--
have changed their calculus and are now willing to conduct an attack in 
the United States.'' \26\
    Latin America figures prominently in this calculus. The foiled 
October 2011 plot is known to have been both orchestrated and 
facilitated via South America, suggesting that Iran increasingly finds 
the region to be an advantageous operational theater. Moreover, as 
Iran's influence and activities there intensify, the Islamic Republic 
will be able to field a progressively more robust operational presence 
in the Americas. Clapper concluded his Senate testimony with an ominous 
warning. ``The Iranian regime has formed alliances with Chavez, Ortega, 
Castro, and Correa that many believe can destabilize the Hemisphere,'' 
he noted. ``These alliances can pose an immediate threat by giving 
Iran--directly through the IRGC, the Quds Force, or its proxies like 
Hezbollah--a platform in the region to carry out attacks against the 
United States, our interests, and allies.'' \27\
                      opportunity within adversity
    Understanding these motivations is essential to assessing the 
significance of Latin America in Iran's strategic calculus, and to 
determining whether or not its efforts there are in fact succeeding.
    For the moment, Iran's regional inroads still represent a work in 
progress. The Iranian regime has demonstrated a clear interest in Latin 
America over the past decade, and is now striving to expand its 
influence there. As of yet, however, it has not succeeded in 
solidifying this presence--or in fully operationalizing its regional 
relationships and institutionalizing its influence. As experts have 
noted, although Iran's promises of economic engagement with regional 
states have been abundant, precious little of this aid has actually 
materialized, save for in the case of Venezuela.\28\ Moreover, despite 
increasingly robust cooperation with regional states on mining and 
extraction, there is as yet no indication that Latin America in and of 
itself can serve as the answer for Iran's strategic resource needs.
    Furthermore, an expansion of Iran's footprint in the region is not 
necessarily inevitable. Over the past year, the health of Iran's most 
stalwart ally in the region, Hugo Chavez, has become increasingly 
critical, and the Venezuelan strongman is now believed to be in the 
terminal stages of cancer. Significant ambiguity abounds over 
Venezuela's future direction--and, as a result, about the durability of 
the partnership forged between Caracas and Tehran under Chavez.
    Iran's expanding regional activism therefore can be understood at 
least in part to be contingency planning of sorts; an effort to broaden 
contacts and ensure the survivability of its influence in the Americas 
in a post-Chavez environment. In this context, the regimes of Evo 
Morales in Bolivia and Rafael Correa in Ecuador figure prominently, 
with Correa in particular increasingly looked at as a potential 
successor to Chavez as a standard bearer of the new ``Bolivarianism''--
and as an inheritor of cooperation with Iran.\29\ Iran's future 
progress in solidifying and expanding those partnerships will serve as 
an important barometer of the long-term survivability of its bonds to 
the region as a whole.
    Since October 2011, policymakers in Washington have begun to pay 
serious attention to Iran's activities in the Western Hemisphere. But 
they have done little concrete to respond to it, at least so far. 
Despite heartening early steps (such as the ``Countering Iran in the 
Western Hemisphere Act of 2012'' recently introduced in the House by 
Representative Jeff Duncan), a comprehensive strategy to contest and 
dilute Iranian influence in the Americas remains absent. Unless and 
until such a strategy does emerge, Iran's efforts--and the threats 
posed by them to American interests and the U.S. homeland--will only 
continue to expand.

------------------
End Notes

    \1\ General Douglas M. Fraser, Posture statement before the House 
of Representatives Committee on Armed Services, March 30, 2011, http://
armedservices.house.gov/index.cfm/files/serve?
File_id=fcc6b631-6b51-4bdb-b0a0-6b97ea36cb58.
    \2\ Martin Arostengui, ``U.S. Ties Caracas to Hezbollah Aid,'' 
Washington Times, July 7, 2008, http://www.washingtontimes.com/news/
2008/jul/07/us-ties-caracas-to-hezbollah-aid.
    \3\ ``Iran Using Venezuela To Duck U.N. Sanctions: Report,'' Agence 
France Presse, December 21, 2008, http://www.google.com/hostednews/afp/
article/ALeqM5h1fferlbgjsi06XFgTklru3hbatA.
    \4\ Erick Stakelbeck, ``Iran, Hezbollah Tentacles Reaching Latin 
America,'' CBN, December
12, 2011, http://www.cbn.com/cbnnews/world/2011/December/Iran-
Hezbollah-Spread-Tentacles-to-Latin-America/.
    \5\ Louis Charbonneau, ``Exclusive: Argentina Flirts With Iran As 
West Watches Nervously,'' Reuters, December 5, 2011, http://
www.reuters.com/article/2011/12/05/us-iran-argentina-idUSTR
E7B408T20111205.
    \6\ ``Israel: Ties to South America Aiding Iran's Nuclear 
Program,'' Yediot Ahronot (Tel Aviv), May 25, 2009, http://
www.ynetnews.com/articles/0,7340,L-3721335,00.html.
    \7\ U.S. Department of Defense, Office of the Secretary of Defense, 
``Unclassified Report on Military Power of Iran,'' April 2010, http://
www.iranwatch.org/government/us-dod-reportmiliary
poweriran-0410.pdf.
    \8\ ``Ahmadinejad Lauds Launch Of Iran's Spanish-Language Satellite 
TV As Blow To U.S. `Dominance,' '' Associated Press, January 31, 2012, 
http://www.washingtonpost.com/business/iran-launches-spanish-language-
satellite-tv-channel-in-outreach-to-latin-america/2012/01/31/
gIQAITlIeQ_story.html.
    \9\ George Jahn, ``Iran Hunts for Uranium Supplies, Finds 
Scrutiny,'' Associated Press, February 24, 2011, http://www.salon.com/
news/feature/2011/02/24/iran_nuclear_capacity_ 
zimbabwe.
    \10\ Vivienne Walt, ``Is Iran Running Out of Uranium?'' TIME, April 
27, 2010, http://www.time.
com/time/world/article/0,8599,1984657,00.html.
    \11\ ``Report: Iran Seeking to Smuggle Raw Uranium,'' Associated 
Press, December 29, 2009, http://www.msnbc.msn.com/id/34622227/ns/
world_news-mideast/n_africa/.
    \12\ Jahn, ``Iran Hunts for Uranium Supplies, Finds Scrutiny.''
    \13\ Ibid.
    \14\ Bret Stephens, ``The Tehran-Caracas Nuclear Axis,'' Wall 
Street Journal, December 15, 2009, http://online.wsj.com/article/
SB10001424052748704869304574595652815802722.html.
    \15\ Author's interviews, La Paz, Bolivia, January 23-25, 2012.
    \16\ Author's interviews, Santiago, Chile, January 20-21, 2012.
    \17\ ``Iran `Partner' In The Industrialization Of Bolivia's Lithium 
Reserves,'' MercoPress, October 30, 2010, http://en.mercopress.com/
2010/10/30/iran-partner-in-the-industrialization-of-bolivia-s-lithium-
reserves.
    \18\ ``Memorando De Entiendimento Entre El Ministerio De Minas Y 
Petroleos De La Republica Del Ecuador Y El Ministerio De Industrias Y 
Mineria De La Republica Islamica De Iran En El Sector Geologico 
Minero,'' December 3, 2009, http://www.foreignpolicy.com/files/fp_
uploaded_documents/3_AC%20IRAN%20MINERIA%20Y%20NAVEGACION.PDF.
    \19\ Author's interviews, Santiago, Chile, January 20, 2012.
    \20\ See, for example, Norman A. Bailey, ``Iran's Venezuelan 
Gateway,'' American Foreign Policy Council Iran Strategy Brief No. 5, 
http://www.afpc.org/files/getContentPostAttachment/213.
    \21\ Ibid.
    \22\ Rex Hudson, ``Terror and Organized Crime Groups in the Tri-
Border Area (TBA) of South America,'' Library of Congress, Federal 
Research Division, December 2010, http://www.loc.gov/rr/frd/pdf-files/
TerrOrgCrime_TBA.pdf; U.S. Department of Defense, Office of the 
Secretary of Defense, ``Unclassified Report on Military Power of 
Iran,'' April 2010, http://www.iranwatch.org/government/us-dod-
reportmiliarypoweriran-0410.pdf.
    \23\ Office of the Secretary of Defense, ``Unclassified Report on 
Military Power of Iran.''
    \24\ Author's interviews, Santiago, Chile and La Paz, Bolivia, 
January 20-24, 2012.
    \25\ Author's interviews, Santiago, Chile, January 20, 2012.
    \26\ James Clapper, testimony before the Senate Select Committee on 
Intelligence, January 31, 2012.
    \27\ Ibid.
    \28\ Bailey, ``Iran's Venezuelan Gateway.''
    \29\ Jose R. Cardenas, ``Iran's Man In Ecuador,'' Foreign Policy, 
February 15, 2011, http://
shadow.foreignpolicy.com/posts/2011/02/15/irans_man_in_ecuador.

    Senator Menendez. Thank you. Thank you all very much. A 
lot's been said here that's valuable and I'd like to explore it 
with you. So let me start off.
    Let me just make sure I understand. Dr. Arnson, you're not 
suggesting that a hearing of this sort is a politicalization of 
the topic? I assume if that's the case you wouldn't have 
accepted our invitation; is that correct?
    Dr. Arnson. That is absolutely correct. But I do think that 
it's no secret we're in a political year, and this is a kind of 
issue--some of the other witnesses have indicated that they do 
not consider the Obama administration to have taken 
sufficiently seriously the allegations that have been made.
    I know that you'll be meeting with people from the 
administration later this afternoon, and I suggest that those 
are questions better put to them. I'm not in a position to 
independently verify whether or not the administration is 
paying attention to it. It says that it is.
    Senator Menendez. Our concern here is obviously substantive 
and we think that it is important to review all of the views 
that exist, to understand the depth of Iran's intentions and 
clarify their participation. So when you reference 
politicalization I wanted to make sure you weren't referring to 
this hearing.
    From my perspective, I do believe the Obama administration 
has actually engaged in more sanctioning activities and 
enforcement of sanctions activity than ever before, and I think 
they are fully engaged and understand the nature of the threat. 
Our goal here is to determine another dimension of that 
potential threat here in the hemisphere.
    Could we have even envisioned, in the last decade, that 
Ahmedinejad would have been able to visit anywhere in Latin 
America? I mean, a decade ago would you have thought that 
Ahmedinejad would have had an open door, maybe other than 
inside of Cuba?
    Ambassador Noriega. Well, Mr. Chairman, if I can jump in, I 
think the extraordinarily important point of inflection here 
has been the hospitality offered by Chavez. They have absolute 
impunity to operate in Venezuelan territory. They have a 
partner, they have an ally in terms of evading sanctions, 
obtaining uranium, and carrying out activities to support 
Hezbollah.
    They have a willing partner that seeks to acquire military 
capabilities and deploy those military capabilities on 
Venezuelan soil. They have a petro-rich economy that carries 
out a very vigorous diplomacy, that has opened doors for 
Teheran in other countries in Latin America.
    So I think the critical ingredient here has been Chavez. 
The only thing he has in common with that Islamic Republic is 
unrelenting hostility to the United States.
    Senator Menendez. Mr. Berman, let me ask you. You ended on 
a note that I'm interested in. The question is Iran's 
motivation in the hemisphere, its interests and its abilities. 
Iran may not have it now, but is it seeking operational 
capacity in the Western Hemisphere? Does it have the potential 
resources, if it has the right set of allies in the hemisphere, 
to seek to effectuate operational capacity?
    When you see Univision's ``airing'' of that which they 
received about cyber attacks against the United States, when 
you know about the facts that are pursued by our own Justice 
Department on the attempted assassination of the Saudi 
Ambassador, when you hear General Clapper's statements--this is 
not someone who would cavalierly suggest that it is something 
to be concerned. I'd like to hear your opinion, Is the search 
for operational capacity something that we should be concerned 
about?
    Mr. Berman. I think so, sir. Here, I think it's useful to 
point out two things. First of all, Iran's presence in Latin 
America long predates the current debate over Iran's nuclear 
program. Iran was instrumental in helping Hezbollah put down 
roots initially in the Tri-Border region and beyond beginning 
in the early 1980s. So Iran's presence in the region is far 
more historic than we give it credit for.
    Second, that presence has become an important part of 
Iran's strategic mix as the crisis over Iran's nuclear program 
has deepened. We here in town are still debating what the next 
steps will be with regard to Iran's nuclear program if 
diplomacy, if economic sanctions, are insufficient.
    From the Iranian perspective, however, warfare, at least of 
an asymmetric variety, has already been joined, as manifested 
through Stuxnet, the malicious cyber worm, and other variants 
that have attacked their nuclear program. In this context, a 
peripheral strategy, in which Iran has the ability both to 
build and then to leverage asymmetric capabilities in various 
regions, is certainly smart strategic planning. While, as you 
pointed out, they might not have that capability yet, it is 
certainly one that they've paid increasing attention to as the 
international crisis over their nuclear program has deepened.
    Senator Menendez. Several of you mentioned uranium 
exploration. This is something that we have sought to address 
in the Iran sanctions bill that passed out of the Banking 
Committee, that was inspired by my legislation earlier this 
month, requiring the imposition of sanctions on persons who 
knowingly participate in joint ventures with Iran's Government, 
firms or persons acting on behalf of the Government of Iran in 
the mining, production, or transportation of uranium anywhere 
in the world.
    Obviously, there are responsible state actors who will look 
at not just the United States, but the world community, the EU 
and others, and say, we want to live within an international 
order that says that Iran's march to nuclear weaponry is a 
concern and that uranium production for them is incredibly 
important toward that goal, and therefore we're going to follow 
the international effort to eliminate or dramatically reduce 
their ability to obtain uranium.
    But some countries may very well not care. You both 
mentioned the possibilities of uranium mining in our 
hemisphere. Isn't this a potential opportunity for Iran to work 
with countries who may not necessarily be concerned by the 
sanctions consequence?
    Ambassador Noriega. Well, apparently Bolivia and Venezuela 
are engaged with Iran companies and allowing mining activities 
to go on in their countries. Edhasse Sanat is an Iranian 
company that has industrial installations in both countries and 
operates mines in both countries. We can provide details about 
that. These countries may not care about the U.S. law, but 
they're obligated under U.N. sanctions to deny Iran access to 
material that could encourage its rogue nuclear program.
    So I think there needs to be a considerable amount of 
attention paid to these activities that are going on and to 
hold these governments accountable, and I applaud you for the 
legislation that you have pushed in the Senate on this subject. 
But we can investigate, even though this is sort of denied 
territory--Venezuela and Bolivia being relatively unfriendly 
governments--we can nevertheless investigate the international 
financial transactions, dollar-denominated transactions, that 
are going on to this very day supporting Iran's activities in 
both of these countries.
    Mr. Berman. Sir, if I may, a quick point. I think this is 
also in many ways an answer about the credibility of our 
sanctions threat. I commend you for passing legislation that 
begins to look at Iran's uranium activities and begins to 
counter them. But historically I think it's fair to say that 
our application of biting sanctions against Iran has lagged 
behind the Iranian threat, and as a result over time more than 
a few countries have come to view business with Iran as a 
calculated risk; they believe they can essentially get away 
with business as usual without facing serious censure from the 
United States.
    I fear that with that as historical precedent, these 
uranium sanctions will face the same high hurdle in terms of 
credibility. If Bolivia or Venezuela, which are not predisposed 
to cooperate with the United States and help isolate Iran, 
sense that, while Congress is seized of the need to sanction 
them because of this uranium activity, there is no concrete 
followthrough, they're likely to continue business as usual.
    Senator Menendez. I'm going to turn to Senator Rubio, but I 
think that the amendment that I authored and was passed 100 to 
nothing on sanctioning the Central Bank of Iran and sanctioning 
entities that deal with the Central Bank of Iran should send a 
pretty clear message to those who think they're making a 
calculated risk and business decision, that it's far more than 
a risk. So far, the administration's enforcement of that has 
been one that I applaud. I look forward to its vigorous 
fulfillment as the different elements of the law come to pass. 
I think that is our last best chance at the end of the day to 
deter Iran's behavior.
    Senator Rubio.
    Senator Rubio. Thank you.
    First of all, the entire panel kind of continues to bring 
more clarity to this issue. I think we understand the Iranian 
side of this equation pretty clearly, based on your testimony, 
that what they get out of this is, No. 1, the ability to avoid 
sanctions or trying to avoid sanctions, particularly economic 
sanctions; No. 2 is access to uranium and other raw materials 
that they need for their ambitions; and the third is an 
operational platform, to have--this is a country that clearly 
uses terrorism as part of its foreign policy mechanisms, and 
they are, according to your testimony, increasingly trying to 
develop an operational platform in the region. We don't know 
what stage that's in, but any stage is not a good one.
    I want to focus for a moment on what these countries get 
out of it, and in particular what these governments in these 
countries. There's clearly not a religious affinity here. I 
mean, they don't share that. So what are--and my sense is, both 
from talking to expatriates from these countries and even 
people living there now, that it's not like Iran is a beloved 
country by the Nicaraguan people, the people of Bolivia, the 
people of Ecuador, the people of Venezuela.
    In fact, in Venezuela there is a lot of resistance to the 
Cuban presence. You can only imagine the resistance there would 
be to the Iranian presence there.
    What does Hugo Chavez get out of this and what do the other 
leaders of these countries get out of this arrangement? Because 
they're not getting the kind of economic support that Iran is 
promising. I don't know who wants to go first, but I think 
that's to the whole panel.
    Mr. Farah. I would just say that what Venezuela is looking 
for and the Bolivarian states, I think as time has gone on 
they've become clearly increasingly criminalized as 
governments, particularly in the cocaine trade. I think the 
driving impetus has been for Chavez, from the letters I've read 
and stuff, his fascination with this ability to destroy the 
United States. If you read his letters to Carlos the Jackal, 
they're really magnificently megalomaniacal: I am here, 
destined to do great things, and I hold your hand as we go 
forward into history together, et cetera, et cetera.
    So I think his personal view is of himself as this 
transcendent revolutionary figure, and I think that--but as 
time has gone on, I think they've become increasingly obsessed 
with the need to hang onto power at any cost. I think one of 
the fascinating things if you look at the Bolivarian trajectory 
is that they start out as elected and then over time they take 
over the judiciary, all the levers of government, destroy civil 
society, free press, et cetera.
    But it's driven by the impetus that they know they can no 
longer leave power without facing consequences.
    I think that one of the things that Chavez finds, besides 
his deep attachment to this revolutionary, romantic idea that 
radical Islam and Marxism can coexist in the South-North 
conflict and defeat the United States, is the tremendous drive 
to hang onto power.
    I think that you mentioned terrorism as a foreign policy, a 
part of Iran's foreign policy. The FARC is a part of Chavez's 
foreign policy, and I think one of the great dangers you see in 
the region is the coalescing not only just of the state-to-
state relationship, but the coalescing of the nonstate proxy 
relationship which you're already seeing.
    This book, which was written, designed on Hezbollah's 
strategy, has recently been found in FARC camps for the first 
time, which shows the transmission of one type of military 
doctrine into another state proxy.
    So I think long term they want to defeat the United States. 
I think that's very real in their minds, whether it's rational 
or not. And they really want to hang on to power more than 
anything else. I would say those are the two of the driving 
forces.
    Dr. Arnson. If I could address this for a moment, there's 
obviously a huge political benefit that Chavez and other 
countries in the region get from publicly appearing with 
Ahmedinejad. It's an opportunity not only to assert 
independence from the United States, but actually to show their 
opposition to U.S. policy. I think that the mutual interests of 
the Iranians in showing up in the so-called United States 
backyard has a flip side, which is the interest of these 
governments in showing that they will oppose the United States 
and act to undermine its interests. I think that's----
    Senator Rubio. Do you think there's a domestic political 
benefit to appearing with Ahmedinejad, for example, for Chavez, 
or an international? In essence, do you think he looks like a 
bigger leader to his own people when he does this or do you 
think that's more from an international perspective?
    Dr. Arnson. I think it's more from an international 
perspective. I mentioned the poll that was taken by 
Latinobarometro. It's very clear that Iran is not popular in 
the region. Venezuela is partly a Caribbean country. The idea 
that women walk around in head scarves and covered, I mean, 
it's just a foreign culture. So I don't think that there's any 
political benefit to the countries in Latin America for this 
kind of relationship, other than a kind of an assertion of 
nationalism and sovereignty in showing that they're standing up 
to the ``Yankee empire.''
    Senator Rubio. I think, unless someone disagrees with what 
Mr. Farah said, we can add to that, but what about these other 
countries? Are they doing it because of Chavez, or what does 
Nicaragua get out of this? What does Bolivia get out of this?
    Ambassador Noriega. I think there are some material 
benefits that they're getting from the associations, no doubt. 
I think a lot of it is political. They're united, motivated by 
hostility to the United States and defiance of the United 
States.
    When we look at these regimes, and particularly Chavez, we 
have to sort of think in his mindset and what we might regard 
as irrational, provocative, or irresponsible he sees as just 
one more act of defiance and, more importantly, creating the 
means to threaten the United States in an asymmetrical 
struggle.
    So that's what makes the fact that he's dying so 
extraordinarily important right now, because there's a real 
struggle that will go on in the next 12 months about whether 
the hard-liners will hold on to power in Venezuela and might 
continue to be hospitable to Iran or whether a democratic 
transition has some sort of a chance. That's why we definitely 
need to be engaged.
    I would say that the U.S. Government really needs to pay 
attention to the military-to-military cooperation and what 
quite literally Venezuela is getting out of the Iranian 
relationship. I think we will be startled by what you find.
    Mr. Berman. As an Iran expert rather than a Latin American 
subject matter expert, I can only add a brief nuance. 
Ambassador Noriega talked in his testimony, at least in 
passing, about the transition that's taking place in Venezuela. 
From the Iranian perspective, we have a situation that 
represents both crisis and opportunity. Iran, in seeking to 
entrench itself in the region, is very concerned about 
succession in Venezuela. It's very concerned about its post-
Chavez operating environment in the region. And, as a result, 
over the last 12 months it has stepped up its diplomatic and 
political contacts with the regime of Evo Morales in Bolivia, 
as well as with that of Rafael Correa in Ecuador.
    The health of those relationships, as Chavez continues to 
become more ill and the political transition takes hold in 
Venezuela, will be a very good barometer of how entrenched and 
how much freedom of operation Iran has after Chavez leaves the 
scene.
    Senator Menendez. I just have one or two other questions. 
When we talk about the ability for operational capacity--Mr. 
Farah, maybe you, with your expertise on organized crime and 
drug cartels in the Western Hemisphere--but I welcome anybody's 
assessment. Looking at Iran's diplomatic outreach and 
commercial ventures, we know the IRGC and Quds ultimately in an 
Iranian context have a big part of their commercial enterprise 
behind them, which is why I targeted the IRGC in our sanctions 
legislation.
    Do you think that this is an opportunity for them to 
establish a force presence in the region? Is that something 
that is possible, and what would it take to be able to 
operationalize that?
    Mr. Farah. Well, I think that targeting the IRGC is exactly 
right. I think that they are the driving economic force and in 
the military-to-military relationships. I think if you look at 
the merging of state and nonstate actors, which I think you've 
seen these hybrid transnational organized criminal 
organizations now appended to states, and you see particularly 
the government of Hugo Chavez, but also Evo Morales, using now 
transnational organized criminal groups as instruments of state 
policy, particularly the FARC.
    I think if you look at how they need specific control of 
geographic territory, I think that that is what primarily their 
alliance with these transnational organized criminal 
organizations can do. If you look at how products--illicit 
products--move across the region, if you're moving 30 kilos of 
cocaine or 300 AK-47s or 30 Chinese illegal immigrants, they're 
going to pass through the same basic pipelines and the same 
basic choke points, and 95 percent of the time they will cross 
our borders undetected and unimpeded.
    So I think access into that network, that pipeline that's 
able to move any product basically across the northern tier of 
South America, through Central America, across our borders, 
undetected is tremendously beneficial to them if they choose to 
use that as a way to move either people or elements that could 
be either WMD or whatever.
    In the report I did for DOD, that was what we were looking 
at: What is the potential for WMD movement? That was our 
conclusion, that even a tiny country like El Salvador, the size 
of Massachusetts, has 460 puntos ciegos, blind crossing border 
points that are uncontrolled completely. They have no control 
over their air space. People routinely file a flight plan to 
land in Comalapa, the main airport, and then say, as they're 
flying into Salvadoran air space: We'd like to land in San 
Miguel instead. And they say, OK, and there's no customs, 
nothing.
    So there's a whole pipeline available to them as they plug 
in, and I think that, particularly on the sanctions-busting, if 
you look at Panama again, as one of their crucial elements now 
in how both, Chavez, but particularly Iran, is using to launder 
their money or access money and access dual-use things.
    I'll just end saying I had a fascinating talk with someone 
who had just left the International Atomic Energy Agency, who 
knew nothing about Latin America, but had been focusing on Iran 
for many years. I was asking them, what is their basic MO? When 
they're doing dual-use things and things, what do they look at? 
He said: Well, they almost always do two things: tractor 
factories and car factories.
    I was like: No kidding? We have tractor factories and car 
factories both in Bolivia and Venezuela. And I asked him what 
the purpose of that was, and he said because they can get so 
many things that they need in the manifests, that are tucked 
away, that are impossible to detect unless you want to spend 6 
months reviewing their manifest, that they can move virtually 
anything with those two things. He said that's what they 
traditionally use, and if you look at what's happening in Latin 
America, they're building tractors that no one buys, cars that 
no one buys, and very few of them, but they have the factories 
and the shipping component mechanisms in place.
    Senator Menendez. It's interesting.
    One of my concerns I mentioned in the opening statement is 
that places like Venezuela and Bolivia require no visa from 
Iran, despite relatively weak certainly touristic ties. And 
even in Ecuador, we have seen movement of Somalis coming from 
Ecuador up, attempting to come into the United States. So the 
pipeline that you talked about for moving anything can start 
with an entry point at which there is no visa required. Is that 
a legitimate concern?
    Mr. Farah. Absolutely. I think if you look at it--I'm doing 
a study for Homeland Security right now on human smuggling and 
one of the fascinating things is that almost every non-Central 
American large contingent of migrants goes through Ecuador. 
Why? Because Ecuador listed visa requirements on everyone 
except for two or three countries in the world. So they're 
suddenly inundated with Chinese organized crime, Russian 
organized crime. It's like water running downhill. As you well 
know, they'll go where it's easiest to operate, and suddenly 
Ecuador has become overwhelmed with massive criminal elements 
because it's so easy to get there. Every group of Chinese, 
major group of Chinese, Indians, Sri Lankans, Somalis, pass 
through Ecuador for that precise reason.
    Having the opportunity to review some internal Ecuadoran 
documents on immigration, they had more than 480 Iranians 
coming and going out of there unregistered, not registered in 
the normal way, out of Ecuador, which isn't a huge number, but 
given the fact that none of them are tourists, one should 
wonder what the purpose is, given that their embassy supposedly 
has a very limited number of people, about 6, when they 
probably have much closer to 50.
    But anyway, there's numerous--there's many interesting 
elements to what the lack of immigration control and the lack 
of visas offer countries like Iran, as well as transnational 
criminal organizations.
    Senator Menendez. Two final sets of questions.
    Ambassador Noriega. Mr. Chairman, something to recognize as 
a tactical opportunity that the Iranians and terrorist 
organizations have acquired from the association with the 
Venezuelan authorities: the estimates are there have been 
hundreds of thousands of official Venezuelan documents issued 
to people who have no real association with Venezuela, who 
can't even speak Spanish.
    We've spoken with security officials throughout the 
hemisphere who refer to persons that they arrest or detain with 
Venezuelan passports who don't even speak Spanish.
    The other question you asked about the operational capacity 
to detect what's going on. The DEA was able to discover this 
October 2011 plot to commit a bombing here in the United 
States, because they set aside conventional wisdom about what 
Iran would be capable of doing. And now we know from General 
Clapper that this bomb plot was a probably decision made at the 
very highest levels of the Iranian regime.
    The IRGC was involved in that activity. They are also 
mysteriously involved in industrial activities in Venezuela in 
the petrochemical industry, for example. You have to ask, What 
are they up to there?
    Also associated with the IRGC and the Quds Force, Mohsen 
Rabbani, who I referred to, who was the cultural attache of 
Iran in Argentina and who was implicated in the 1992 and 1994 
bombings in Buenos Aires. He maintains a network on behalf of 
Hezbollah in the Western Hemisphere. People that he recruited 
when he was assigned in Argentina are still operating up and 
down the South American Continent, recruiting, proselytizing, 
and radicalizing.
    His brother lives in Brazil. Rabbani has a red notice from 
Interpol. He's not supposed to be able to travel. He has 
traveled to Brazil at least a couple of times in the last 12 
months. His brother runs a mosque in Brazil, where they 
recruited dozens of people to his cause.
    So the IRGC footprint is there and the common denominator 
is the audacity. We really need to pay attention to this and 
set aside conventional wisdom to understand what they're 
capable of.
    Senator Menendez. Dr. Arnson, I see you want to comment on 
this, and then I have a question for you.
    Dr. Arnson. Just an additional comment. Assistant 
Secretary--former Assistant Secretary of State for Latin 
America, Tom Shannon, replied or commented during an earlier 
Ahmedinejad trip to Latin America that ``Past is prologue,'' 
and he was specifically referring to the Iranian involvement in 
the bombings that took place in Argentina in the early 1990s. 
One can only surmise that in the 20 or so years that have 
passed since those took place that that capacity has been 
expanded and has developed.
    Whether it's an offensive capacity or a defense capacity is 
something that I certainly am not prepared to comment on. But 
one could imagine that Iran, as it feels encircled in the world 
and threatened by military attack, would actively seek to be 
able to strike back. Many of the panelists have referred to 
asymmetrical warfare and I find that extremely plausible as 
something that Iran would try to do. Whether I have evidence 
that that is actually taking place or whether it's on the verge 
of becoming operational is not something that I can comment on.
    Senator Menendez. I appreciate that.
    Let me ask you--in a 2010 report on Iranian military power, 
the Office of the Secretary of Defense noted that, ``Iran seeks 
to increase its stature by countering U.S. influence and 
expanding ties with regional actors in Latin America.'' Last 
month the Iranian regime formally launched HispanTV, a Spanish 
language analog to its English language press. What do you view 
that effort to be?
    Dr. Arnson. Well, obviously, having a Spanish language news 
outlet is an effort to spread propaganda, win hearts and minds 
in the region. Iran faces a sharp uphill battle in that effort. 
There's not a great deal of sympathy among populations, but 
it's an obvious propaganda tool.
    I think it's notable that it was several weeks after the 
Iranian President traveled to the region most recently in 2012 
that that was announced. It's an obvious attempt to spread the 
Iranian point of view among what it considers to be a 
potentially receptive audience. How effective that will be, I 
think, is anybody's guess. My guess is that it will not be that 
well received.
    Senator Menendez. My final question. There have been 
independent sources that have stated that Hezbollah has 
training camps in the jungles of Venezuela. I'm wondering if 
any of you have any information on that? Also, are any of you 
aware of newspaper reports of a jointly constructed missile 
base planned for Venezuela's Paraguana Peninsula? Any of you 
have any knowledge of that?
    Mr. Farah. On the training, sir, I would say that I think 
that the Univision documentary, and if you read the book by 
Antonio Salas, ``El Palestino,'' it goes into great detail, by 
a journalist who specializes in going undercover for many 
years. He spent time in the Hezbollah camps in Venezuela, and I 
think if you look at his track record, I don't know him 
personally, but if you look at his track record of 
investigations, they've been really, really outstanding. Many 
people in his other investigations have been convicted and gone 
to jail based on evidence he's provided. So I would take that 
seriously.
    I think that what the Univision folks were able to show was 
that you have a Venezuela colonel providing weapons and 
ammunition to militias being trained by folks who were formerly 
of Hezbollah in the field in Venezuela. It's not as direct a 
tie as Mr. Salas makes in his book, but he gives names, dates, 
exact locations, et cetera. So I would say that that to me 
would be a very credible threat.
    On the missiles, my people tell me they don't have any 
evidence to support that, but others may have.
    Ambassador Noriega. Regarding the published reports on the 
missiles, of course, we've seen those very specific reports for 
close to 2 years. We've received specific information that's 
very disturbing, that tends to corroborate the possibility.
    This would be a real escalation, because the published 
reports that we've read refer to ballistic missiles, which 
would be a real escalation in the region, and it would require 
a U.S. response. No country in the region really would be 
capable of responding to that sort of escalation if Venezuela 
has acquired that capability. The good news is it would also 
unite other countries in the region with us in wanting to deal 
with that escalation.
    We have some information. We'd be glad to share it with the 
committee privately on that subject.
    Senator Menendez. Thank you.
    Just for the record, it is the reports of a missile base, 
not necessarily missiles. But we look forward to seeing some 
information.
    Senator Rubio.
    Senator Rubio. Thank you.
    I want to close my part of this by focusing on the capacity 
part, because one of the challenges I have found here is--and 
it's hard to get people to believe this. When people think 
about terrorism and terrorism threats to the United States or 
any threats to the United States, Latin America, the Western 
Hemisphere, is just not what comes to mind. It's just not been 
the case. It's just hard to get people to take it seriously.
    So we don't know where they are capacity-wise. I think 
that's still a matter of debate, although we clearly know what 
direction they'd like to go. That's what I want to focus on 
before we close today, is intent; where their mindset is.
    Before that, if I can, I want to rely on an article from 
the Miami Herald that cites extensively from the Univision 
network's documentary. It says--it talks about this former 
consul to Miami, Liva Acosta Noguera, and it says that ``one 
month''--``The decision to expel her came one month after 
Spanish-language Univision network broadcast a documentary 
about Iran's alleged terrorist activities in Latin America, 
including a taped segment in which she asks an alleged Mexican 
hacker to give her the access code to nuclear facilities in the 
United States. In the tape, the alleged hacker''--who is 
playing a part--``says that he provided the secret codes and 
the location of each of the U.S. nuclear plants to Iran, and a 
voice attributed to her is heard to say `You should give me 
that,' she says, `so that I can send it to the president,' ''--
meaning Chavez--`` `or rather, the chief of defense. The chief 
of presidential security is my friend,' she says.''
    This tape was made while she was the cultural attache at 
the Venezuelan Embassy in Mexico. Then it goes on to say: 
``Documents obtained by the Herald indicate that she actually 
performed other functions there as well. According to these 
documents, Acosto and Vice Consul Edgar Gonzalez Belandria, who 
was in charge of issuing passports at the Miami consulate, were 
registered in the Savings Bank of the Bolivarian Intelligence 
Service, all indications that they are in the intelligence 
service's payroll.'' ``Sources close to Venezuelan security 
organizations reached Belandria, said that they had knowledge 
that Acosto was a member of the Bolivarian intelligence network 
and that she did intelligence work while working in Mexico.''
    Now, obviously this wasn't a real hacker and this wasn't a 
real offer. But what I think the Univision documentary shows is 
intent.
    I guess my question is, in your opinions, based on what 
you've seen, know, and heard about Iran, is this an isolated 
incident of someone trying to show off and be a big shot, or is 
this the kind of miscalculation, is this kind of stuff that we 
can see from Venezuelan officials in the future, because at the 
very top of that organization we have someone that, as you've 
described him, is not in touch with reality, has these 
illusions about being some sort of transformational historical 
figure, and who as a result could lead to someone making a very 
serious miscalculation that could quickly escalate into a very 
big problem.
    So my question is, Is this an isolated thing about someone 
trying to show off? Was she just trying to be a big shot, or is 
this the kind of behavior that's going on on a repetitive basis 
because people are taking direction from the attitude coming 
from the top? Because if it is, this is a recipe for a 
miscalculation and a regional disaster.
    Mr. Farah. I would say it's, unfortunately, far from an 
isolated incident. I think we've had numerous. In my work with 
the U.S. Government and elsewhere, it's clear there is a 
network. I think this is one of the primary misunderstandings 
we have about the Bolivarian Project, is we view Venezuela, we 
view Bolivia, we view Ecuador, we view Nicaragua, when in fact 
they're states operating with a common goal, sharing resources, 
and with a common criminalized element to them, which is deeply 
disturbing.
    But it also implies a very concrete common intelligence 
apparatus. If you look at the role that Cuba plays in this 
alliance, what they bring to the table is a very structured 
internal military intelligence apparatus that these countries 
have never had. Bolivia never had it. They tried. They never 
got--even through all the military--they never got anywhere 
near having a competent internal security service.
    Ecuador is the same thing. Iran has now provided President 
Correa with specific listening technology, intercept 
technology, that runs out of his palace and is directed by him 
directly.
    So I think that it is far from an isolated incident. I 
think exactly what you said is--I don't know if--I think Hugo 
Chavez has a greatly exalted view of himself, obviously. I'm 
not sure that--he's out of touch with reality, certainly as he 
views it. But I think that that's exactly the type of--I think 
that is exactly the recipe for the miscalculation that worries 
me most, is that because they're wrapped up in their own world 
and believe certain things are possible--if you read 
Vertrynge's book, it's really rather preposterous. It's not a 
smart manual on asymmetrical warfare. It's a diatribe against 
the United States and where to go to find out on line how to 
make weapons of mass destruction and why we should be able to 
do this to defeat the empire.
    It's not a rational, coherent, military doctrine as you 
would lay out in a U.S. military academy or European or even 
Latin American military academy. But it shows this grandiosity 
of intent, and I think that that is a profoundly dangerous 
element to the Bolivarian revolution, and when you add in the 
Iranian mix. We have multiple other cases of Venezuelan 
diplomats operating as intelligence agents. We have multiple 
cases of Iranian diplomats operating as intelligence services, 
and multiple cases of the Cubans serving as facilitators among 
the different Bolivarian intelligence structures, which are now 
more united than they were.
    So I think it's far from an isolated case, and I think that 
it is profoundly dangerous to live in a world where you think 
you can launch a nuclear attack as a way of destroying the 
United States and that there would be no rational consequences 
to it.
    Ambassador Noriega. Senator, I would like to add to that. I 
agree entirely with what Doug said, of course. That Univision 
report also included a tape of a Mexican youth who found 
himself in Qom at a training center. We've talked about this 
recruitment and training of youth, and here's a guy literally 
on television explaining his experience. He recognized that 
this was not for him and he essentially fled the country. He 
saw people around him from other countries in Latin America who 
were being trained in this radical Islam and in terror methods 
and all of that. It was an insight into the sort of thing that 
we're talking about, that's happening behind the headlines.
    There is an interesting aspect of the Acosta Noguera 
situation. U.S. officials supposedly had access to this tape 
before she was even accredited as consul general in Miami. Why 
was she even allowed into the United States? More to the point, 
her former boss in Venezuela's Bolivarian intelligence system, 
who's now retired, was just given a visa to enter the United 
States. I guess he's going to Disneyland or something. But it's 
just like we do not learn----
    Senator Rubio. Who is her former boss?
    Ambassador Noriega. I can get you the name.
    Senator Rubio. OK.
    Ambassador Noriega. I was told by a U.S. law enforcement 
official, who was very frustrated that this person was given 
the visa to enter the United States.
    Senator Rubio. Is the Disney World thing just--is that 
really what's happening?
    Ambassador Noriega. I don't know.
    Senator Rubio. Oh, OK.
    Senator Menendez. Senator Rubio has a very serious concern 
about Disney World. [Laughter.]
    Senator Rubio. That's right. I care who we let in there.
    Senator Menendez. Let me close, thank the panelists and 
make an observation. After September 11, when as a Member of 
the House of Representatives I sought to invoke into law all of 
the recommendations of the September 11 Commission, I said: 
``We live in a new world. It is a world in which an airplane 
used for commercial and business travel has become a weapon of 
mass destruction. It is a world in which a letter can be used 
as a deadly weapon when it is laced with anthrax. It is a world 
in which we must think differently than we thought before 
September 11.''
    It is in that spirit that I view what this hearing is 
about; that we must look at the potential, the possible, think 
outside of the box, understanding that if I wanted to do harm 
to the United States, and could operationalize the ability to 
do that in America's front yard, then I certainly would want 
to.
    That doesn't mean that it will effectuate itself, but I 
would think that the desire to do so would be real, and 
therefore I take General Clapper's comment seriously. I take 
the Department of Defense's view of the efforts of influence 
here seriously. And it is in that spirit that we have held this 
hearing and will continue to pursue information as it relates.
    Since I assumed the chairmanship of the subcommittee, I've 
had it as my focus to pay attention to this part of the world, 
which has often not had the full attention of the broad scope 
of U.S. policy in a way that is in our national interest and 
our national security.
    So I appreciate all of the witnesses' attention, and we 
thank you for your insights. I thank my colleague for his full 
engagement. And with that, this hearing is adjourned.
    [Whereupon, at 11:24 a.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


   Op-ed by Senator Richard G. Lugar, U.S. Senator From Indiana and 
        Ranking Member of the Senate Foreign Relations Committee

                 [From the Miami Herald, Feb. 15, 2012]

               Growing Risk Posed by Iran-Venezuela Axis

                     (By Senator Richard G. Lugar)
    The growing and deepening alliance between the mullahs of Iran and 
the America-bashing leader of Venezuela, Hugo Chavez, poses a serious 
threat to U.S. national interests, but the Obama administration has 
been behind the curve in appraising these risks and forging effective 
policies to counter them.
    The administration's neglect of the dangers in the Iran-Venezuela 
bonds assumes greater importance against the backdrop of the rising 
tensions in the Middle East. Iran continues to be a direct threat to 
U.S. national security, the security of our close ally, Israel, and 
other U.S. interests. As Iran accelerates its drive toward building a 
nuclear weapon in the face of growing U.S.-led sanctions, the 
probabilities grow of a major conflict in the region.
    Countries that support Teheran, such as Venezuela, could be tempted 
to serve as proxies for Iran around the world and in coordination with 
Iran openly challenge the United States. Iranian government officials 
have already made statements to the effect that any response to 
aggression would include the closing of the Strait of Hormuz, the choke 
point through which a fourth of the world's oil moves. Venezuela, in 
sympathy with its friend Iran, could at the same time cut off its oil 
exports to the United States or take other steps to disrupt oil 
supplies.
    Yet the administration has paid little attention to Venezuela's 
tightening links with Iran and the consequences for U.S. security. The 
most glaring recent example is President Obama's cavalier decision last 
year to delay construction of the Keystone XL pipeline, which would 
bring Canadian oil down to Gulf Coast refineries that now rely heavily 
on Venezuelan crude. Ending our energy dependence on Venezuela would 
take the oil weapon out of Chavez's hands, in effect disarming him 
without firing a shot.
    Hostile Iranian actions in the Western Hemisphere are not far-
fetched, they are a reality. Iran is seeking to establish terrorist 
networks around the world, and it sponsored a terrorist attack in 
Buenos Aires in 1992. The bizarre plot by Iran against Saudi Arabia's 
ambassador to Washington, disrupted last year, further illustrates the 
mullahs' brazen intentions.
    The chances of Venezuela serving as Iran's surrogate in the 
hemisphere through terrorism or other coordinated action are increased 
by its chaotic state of affairs. Venezuela is in the midst of a make-
or-break election that will determine the survival of its democracy 
amid continuing doubts about President Chavez's health and a welcomed 
show of will by its diverse opposition groups. Divisions in Venezuela's 
Russian-armed military, an inflation rate over 30 percent, a 
dilapidated oil infrastructure, widespread food and energy shortages, 
and soaring crime rates are all putting heavy pressure on President 
Chavez.
    President Chavez may think he would benefit from redirecting 
attention away from his domestic troubles by uniting his followers and 
feeding his paranoid ``anti-imperialist dreams'' in a battle against 
the United States.
    At the same time, Iranian-Venezuelan ties are steadily growing. 
Iranian President Mahmoud Ahmadinejad made a five-day visit last month 
to Venezuela and three other Latin American countries, his fifth trip 
to the region since 2005.
    If Iran were to close the Strait of Hormuz in a conflict, global 
oil prices would skyrocket. Venezuela supplies about 10 percent of 
current U.S. imports of crude oil and petroleum products. In a scenario 
where the Strait is closed, a coordinated shutdown of Venezuela's oil 
to the United States would be a double blow to the United States.
    I call on the Obama administration to address promptly the threats 
to the United States should Venezuela use energy as a weapon. The 
president should:

   Issue an explicit warning to Venezuela that the United 
        States would regard a cut off of oil exports in coordination 
        with a belligerent Iran as a threat to U.S. national interests.
   Expand strategic energy agreements with Brazil and other 
        countries in the hemisphere to help assure access to supplies 
        of petroleum, refined products and ethanol in the event of a 
        crisis.
   Immediately approve construction of the Keystone XL 
        pipeline, as he is authorized to do under a recent law I 
        sponsored, to supply Canadian crude to the Gulf Coast 
        refineries that now depend on supplies from Venezuela.

                                  
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