[Senate Hearing 112-370]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-370
 
   THE U.S.-CARIBBEAN SHARED SECURITY PARTNERSHIP: RESPONDING TO THE 

          GROWTH OF TRAFFICKING AND NARCOTICS IN THE CARIBBEAN

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


                                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

                             FIRST SESSION

                               __________

                           DECEMBER 15, 2011

                               __________

       Printed for the use of the Committee on Foreign Relations


      Available via the World Wide Web: http://www.gpo.gov/fdsys/




                  U.S. GOVERNMENT PRINTING OFFICE
73-934                    WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001



                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

Ayalde, Hon. Liliana, Senior Deputy Assistant Administrator for 
  Latin America and the Caribbean, U.S. Agency for International 
  Development, Washington, DC....................................    15
    Prepared statement...........................................    17
Benson, Rodney G., Chief of Intelligence, Drug Enforcement 
  Administration, Washington, DC.................................     9
    Prepared statement...........................................    11
Brownfield, Hon. William R., Assistant Secretary of State for 
  International Narcotics and Law Enforcement Affairs, U.S. 
  Department of State, Washington, DC............................     5
    Prepared statement...........................................     7
Farah, Douglas, scholar, International Assessment and Strategy 
  Center, Alexandria, VA.........................................    35
    Prepared statement...........................................    37
Gamarra, Dr. Eduardo A., professor, Florida International 
  University, Department of Politics and International Relations, 
  Miami, FL......................................................    29
    Prepared statement...........................................    32
Menendez, Hon. Robert, U.S. Senator from New Jersey, opening 
  statement......................................................     1
Rubio, Hon. Marco, U.S. Senator from Florida, opening statement..     4

                                 (iii)




   THE U.S.-CARIBBEAN SHARED SECURITY PARTNERSHIP: RESPONDING TO THE 
          GROWTH OF TRAFFICKING AND NARCOTICS IN THE CARIBBEAN

                              ----------                              


                      THURSDAY, DECEMBER 15, 2011

                           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 10:03 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 
Subcommittee will come to order.
    Welcome to our hearing on the U.S.-Caribbean Shared 
Security Partnership: Responding to the Growth of Trafficking 
in Narcotics in the Caribbean. I want to thank our panelists 
for coming today. I look forward to hearing what they have to 
say.
    Let me begin by providing some historical context for 
today's hearing.
    In May 2010, after a number of regional meetings and a 
substantial dialogue process, the United States and Caribbean 
representatives held the inaugural Caribbean-U.S. Security 
Cooperation Dialogue in Washington and approved a declaration 
of principles based on three strategic priorities: one, to 
substantially reduce illicit trafficking in the Caribbean; two, 
to advance public safety and security; and three, to further 
promote social justice.
    On November 10 of this year, the second annual Caribbean-
U.S. Security Cooperation Dialogue was held in the Bahamas. The 
keynote speech by Secretary of Homeland Secretary Janet 
Napolitano and the joint declaration afterward both highlighted 
a number of new initiatives designed to reinforce the original 
strategic priorities: the creation of a fingerprint collection 
system by the United States and Caribbean partners that will 
help to combat terrorism and transnational criminals; better 
sharing of information between the Caribbean and the United 
States; implementation of a regional maritime and air control 
strategy; and finally, developing a regional juvenile justice 
policy.
    While I applaud these initiatives and I know that 2 years 
is not a very long time to stand up such ambitious initiative 
like CBSI, I have to say, frankly, that I am neither satisfied 
with the progress being made on the ground, nor the news and 
information that I am receiving from the region.
    For example, in the Bahamas, 104 people have been killed 
this year, topping the record of 94 killings from last year. 
But that pales in comparison to Jamaica, which has become the 
murder capital of the Caribbean, with more than 1,400 people 
killed this year. In fact, a 2011 U.N. report on homicides 
worldwide reported that Caribbean homicide rates have been 
increasing every year since 2006 and concludes that the region 
exhibits some of the highest levels of lethal violence in the 
world.
    In September, President Obama certified four Caribbean 
nations as major drug transit countries: the Bahamas, the 
Dominican Republic, Haiti, and Jamaica. There is unquestionably 
a direct correlation between the growth in narcotrafficking and 
the total loss of security that we are seeing in the Caribbean.
    In the Dominican Republic, one of the candidates for 
President declared that the country is close to becoming ``a 
narcostate'' and said the government is incapable of stopping 
the drug traffickers.
    The situation has gotten so bad in Trinidad and Tobago, the 
government there has declared a state of emergency and imposed 
a nightly curfew so the police can combat Venezuelan drug 
smugglers.
    And the drug violence does not stop at the U.S. border. 
Puerto Rico has already seen 1,000 homicides this year, which 
is a new record. It is estimated that at least half of these 
murders involve drug trafficking organizations.
    This situation is deplorable and unsustainable. Violence is 
up throughout the region. Crime is increasing to the point that 
some countries are almost under siege, and drug trafficking is 
growing exponentially and drug use has hit alarming levels.
    Meanwhile the drug cartels are using money and violence to 
undermine the governments in the region by paying off corrupt 
officials and killing the honest ones. Corruption has returned 
to the region with a vengeance, making it almost impossible to 
reform the security and justice sectors in many countries. CBSI 
has little chance of working if the governments that we are 
partnering with are themselves involved in illicit activities.
    I am very troubled and concerned that when I talk to 
Government officials here in Washington, there does not seem to 
be a sense of urgency about the situation in the Caribbean. We 
have sent National Guard troops to the Mexican border. We are 
starting to see the Central America Regional Security 
Initiative get more funding. Colombia continues to get a lot of 
assistance.
    But what about CBSI? What about the Caribbean? Why have we 
not learned about the inherent ability of the traffickers to be 
one step ahead of our counternarcotics initiatives? Total CBSI 
funding is expected to drop next year, in fiscal year 2012, to 
$73 million from this year's $77 million allotment. The 
officials I talk with just do not seem to get that our 
counternarcotics efforts in other parts of Latin American are 
the reason that the cartels are moving into the Caribbean. And 
if we do not pay attention to the Caribbean, we are going to 
repeat history with our exclusive focus, for example, on 
Colombia drove traffickers into Mexico and Central America.
    And it is not just the scourge of drugs that is spiraling 
out of control. Gun smuggling is a growing menace, with 
firearms the most likely weapon used in a homicide in the 
region. Money laundering operations are illegally moving large 
quantities of cash throughout the region. Human trafficking has 
reached appalling levels. So what will it take for Washington 
officials to realize how bad the security situation is in the 
Caribbean?
    My other concern is that there does not seem to be a 
comprehensive approach to tackling these problems in the 
Caribbean. We have to make a thorough assessment of all the law 
enforcement and development agencies in the initiative, both 
domestic and foreign, to determine where there are redundancies 
and also where we are not applying enough resources. We have 
State, USAID, DEA, FBI, the Coast Guard and myriad other 
agencies all working in the region, and we hope that that can 
be in an even more coordinated fashion. Our commitment to share 
responsibility with our Caribbean partners must also be shared 
by our own Government, the bureaucracies that need to work 
together to coordinate efforts to bring a whole-of-government 
approach to the task.
    In order to work, CBSI must take a holistic approach to 
link the chains of land-based law enforcement from local to 
national to international, while integrating the maritime 
components, at the same time tying in the civil sector actors. 
And if funding for CBSI is cut, then we will really have to 
figure out how to make our efforts more effective, more 
efficient, and more coordinated.
    So I look forward to listening to where the leadership to 
drive this coordination is going to come from. Can anyone tell 
me what the administration's counternarcotics priorities in the 
Caribbean are? Is it interdiction of supply? Is it targeted 
eradication of production, because while cocaine originates in 
South America, the Caribbean is a big producer of marijuana? Do 
we just focus on coast guards and other maritime forces in the 
region? Yes, better intelligence is a priority, but does that 
entail more training of local police and vetting of those 
police and military forces or placing more U.S. assets in the 
region? Don't we need to enhance border control as well in 
order to stop the gunrunning, money laundering, and human 
trafficking? CBSI should be, could be, and I believe must be 
the vehicle to coordinate our engagement and create the 
synergies needed with our Caribbean partners to combat the twin 
scourge of drugs and violence that is rocking the region.
    To that end, in the last Congress, I worked with Senators 
Kerry and Lugar on legislative vehicles that would rechannel 
our efforts to address this issue, to create a comprehensive, 
multiyear strategy for combating narcotics, taking into account 
the demand and supply issues, the role of U.S. weapons flowing 
south, and the balloon effect that has moved the problem from 
one part of the hemisphere to another.
    I plan to reintroduce legislation in this Congress that I 
hope will refocus the administration's efforts on developing a 
comprehensive strategy for the hemisphere that will bring 
together all the pieces of the puzzle and truly commit us to 
the promises of assistance and cooperation in the Caribbean, as 
articulated by President Obama in April 2009 at the fifth 
summit of the Americas.
    So let me conclude my remarks by saying stopping the flow 
of drugs through the Caribbean is one of America's top national 
security interests, and CBSI deserves to have the resources 
that our country can muster.
    I often think about this in a very significant way in my 
own home State because we know that some of those container 
ships ladened with cocaine--when they leave the Dominican 
Republic, where do they sail to? Well, they very often end up 
in the Port of Newark and Elizabeth, which is the mega-port of 
the east coast in my home State of New Jersey. From the port, 
the drugs go to the street corners and the schools of New 
Jersey and New York. All of us here today, whether sitting on 
the dais or sitting in the witness chair, owe it to our 
children and those who protect them to do everything in our 
power to stop the flow of drugs in our country.
    And so we look forward to hearing from our panelists.
    And with that, let me turn to the distinguished ranking 
member of the committee, Senator Rubio.

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

    Senator Rubio. Thank you, Mr. Chairman, for holding this 
important hearing.
    I want to thank our witnesses for their continued service 
to our country, and I am pleased to see that Ambassador 
Brownfield has returned, yet again, to the Hill for one of his 
frequent visits. I want to welcome Professor Gamarra for being 
here from FIU, and Mr. Farah who I understand recently returned 
from Panama.
    You know, as the gateway to the Americas, a prosperous and 
secure Caribbean region is of utmost importance to my home 
State of Florida and to my fellow Floridians. At the same time, 
building a long-lasting partnership with our Caribbean partners 
and getting them to buy into a sustainable commitment to combat 
transnational criminal organizations is essential to our 
Nation's security and to our prosperity.
    The evolution of our counternarcotics strategies from 
country-specific into a subregional approach has significantly 
improved our chances of success in tackling the ever-changing 
threats from transnational criminal organizations. According to 
the March 2011 State Department International Narcotics Control 
Strategy Report, cocaine flows through the Caribbean into the 
United States have dramatically dropped in the last decade from 
about 40 percent in 1999 of our total flows to about 5 percent 
today. Yet, the Caribbean countries are suffering under 
dramatically high rates of violent crime, while increasingly 
becoming a transit zone for cocaine flows into Europe.
    So we must ensure that the administration builds enough 
resiliency into its Caribbean initiatives to withstand the 
pressure that will come from our enhanced efforts with Mexico 
and Central America. And in fact, very recently there is, I 
think, increasing concern that as the pressure increases in the 
Central American corridor, the balloon will expand back into 
the Caribbean zone. And of course, we always are looking to 
build on our successes in Colombia as well, but that also 
potentially increases potential traffic in the future through 
the Caribbean zone.
    So I am looking forward to your testimonies today. Thank 
you for being a part of this.
    And again, thank you, Mr. Chairman, for holding this 
hearing.
    Senator Menendez. Thank you, Senator.
    Let me introduce our first panel. Ambassador William 
Brownfield served as Ambassador to Venezuela and Chile before 
becoming our Ambassador to Colombia where he was instrumental 
in implementing Plan Colombia. He is currently charged with 
coordinating the Department's worldwide efforts as Assistant 
Secretary for International Narcotics and Law Enforcement, and 
we certainly look forward to hearing from Ambassador Brownfield 
on our efforts to coordinate our Nation's drug policy in the 
Caribbean and in the hemisphere.
    Mr. Rodney Benson is the Chief of Intelligence for the Drug 
Enforcement Administration. He is the DEA's representative to 
the U.S. intelligence community, oversees a global intelligence 
gathering organization. He has worked in the DEA's 
international operations, Mexico, Central America section where 
he coordinated enforcement activities conducted by DEA officers 
in Mexico and Central America, and at the DEA-led Special 
Operations Division, he coordinated law enforcement strategies 
and operations to dismantle major drug trafficking 
organizations operating on a regional, national, and 
international level. We appreciate very much your appearance 
here today, your experience, and certainly we salute all the 
members of your agency that engage in a singular, focused 
mission every day.
    Ambassador Liliana Ayalde is currently the senior Deputy 
Assistant Administrator for Latin America and the Caribbean. 
She recently served as Ambassador to Paraguay and before that 
had been posted in numerous countries in Latin America with 
USAID, including Guatemala, Nicaragua, Bolivia, Colombia. We 
look forward to your testimony on the Caribbean Basin Security 
Initiative, particularly how USAID plans to continue its CBSI 
and other development programs in the region during the 
difficult budget environment that we find ourselves in.
    With that, let me ask Ambassador Brownfield to begin the 
testimony, and then Mr. Benson and Ambassador Ayalde. We would 
ask you to summarize your testimony in about 5 minutes. Your 
full statements will be included in the record, without 
objection. Ambassador Brownfield, welcome again to the 
committee.

STATEMENT OF HON. WILLIAM R. BROWNFIELD, ASSISTANT SECRETARY OF 
STATE FOR INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS, 
            U.S. DEPARTMENT OF STATE, WASHINGTON, DC

    Ambassador Brownfield. I thank you very much, Mr. Chairman, 
Senator Rubio. I thank you both for the opportunity to appear 
before you today to discuss the U.S.-Caribbean Shared Security 
Partnership. And I do, indeed, thank you for the opportunity to 
enter my written statement into the record.
    Mr. Chairman, I want to start by telling a story, and it is 
the story of a crisis foretold. It begins in the year 2000 when 
the international community began to apply pressure on the drug 
cartels in Colombia and the drug nexus relocated to Mexico. In 
2007, we began to apply pressure in Mexico, and they are even 
today relocating to Central America. This year, we begin to 
apply pressure in Central America that they will feel in 2012 
and 2013.
    Mr. Chairman, Senator Rubio, I predict that the criminal 
organizations will not retire to run surfing cabanas on the 
beach when they are driven out of Central America. They will 
look to relocate again, and when they do, their old Caribbean 
routes and networks from the 1980s will look very attractive.
    Senators, I agree with both of your analyses. We see this 
crisis coming. We even have some sense as to when it will 
arrive. We have the opportunity and the obligation to prepare 
and position ourselves for it.
    I realize this is not the best time in our Nation's history 
to come before Congress with a huge budget request for a crisis 
that has not yet fully materialized, but through the 
President's Caribbean Basin Security Initiative, we have 
dramatically increased funding for the region, built a regional 
coordination mechanism, and identified trafficking, public 
security, and social justice as priorities in the region. And 
while resources are limited, we know what we need to do.
    First, we concentrate on building institutions and 
capabilities. Equipment and operations give quick results, but 
institutions are the logical targets of drug trafficking 
organizations, and we strengthen them with regional 
coordination, training, equipment, intelligence exchange, and 
access to databases. We must fortify both law enforcement and 
rule of law institutions.
    Second, we integrate our Caribbean programs into a 
comprehensive regional approach. We estimate our fiscal year 
2011 funding for CBSI at $77 million, and we get to that number 
by combining law enforcement, developmental, security, and 
antiterrorism accounts. They are separate appropriations, and 
some programs are inherently development or police or security, 
but they are all mutually supportive.
    Third, we work with and through partners. This is not a 
time of surging foreign assistance budgets which makes it all 
the more important that we work with other governments and 
organizations. Canada and the United Kingdom have serious 
programs in the Caribbean, and we coordinate well with them. 
The EU, other European governments, the OAS, and the United 
Nations are active. We need to leverage our impact by 
coordinating with them. Caribbean governments must put their 
own resources into these programs. We cannot do it for them. 
And we must work as well through existing regional mechanisms. 
The Caribbean states have longstanding coordination mechanisms 
in CARICOM and the regional security system, and we get better 
value for our investment if we work through them.
    Mr. Chairman, this is not the first time we have addressed 
security challenges in the Caribbean. We have learned some 
lessons since the 1980s. We cannot rely on a single tool like 
interdiction to address the threat. Coordination is essential. 
Regional governments must participate in designing the programs 
and invest their own resources in them. Our efforts must be 
comprehensive and whole of government. We must be flexible 
enough to adapt to the changing tactics of the drug trafficking 
organizations themselves.
    There are some who are already throwing their hands up in 
despair. We heard the same thing in the 1980s. They were wrong 
then, and I predict they will be wrong this time as well.
    I thank you, Mr. Chairman, and I look forward to your 
comments and your questions.
    [The prepared statement of Ambassador Brownfield follows:]

         Prepared Statement of Ambassador William R. Brownfield

    Chairman Menendez, Senator Rubio, and members of the Subcommittee, 
I am pleased to appear before you today to discuss the U.S.-Caribbean 
Shared Security Partnership and the work the Department of State has 
undertaken to address security issues in the region.
    I would like to begin my remarks by highlighting the word 
``partnership'' in your hearing title, which defines most succinctly 
the fundamental underpinning of our hemispheric approach on security. 
When President Obama announced the Caribbean Basin Security Initiative 
(CBSI) in 2009, he pledged to create a relationship of ``equal 
partners'' based on mutual interests and shared values. In the Western 
Hemisphere, our major initiatives--Merida, the Central American 
Regional Security Initiative (CARSI), the Colombian Strategic 
Development Initiative (CSDI), and CBSI--are partnerships that provide 
us with the framework to collaborate with other governments and jointly 
pursue our overall strategic goal to improve citizen safety and 
security. This focus on citizen safety and security partnerships draws 
on important lessons learned from our experience with Plan Colombia 
where, over time, it became clear that dismantling the drug cartels was 
one, but not the only step necessary to reduce crime and strengthen 
security. We recognize that only by extending the rule of law, 
increasing the reach of the state, and reforming criminal justice 
institutions could effective security take root in Colombia. We also 
learned that U.S. resources alone would not get the job done, that 
strong partners capable of providing the political will and leadership 
to undertake the combined security, counternarcotics, rule of law, and 
economic development programs are required.
                              introduction
    CBSI is a critical component of our hemispheric approach to counter 
a clear trend-line in the pattern of drug trafficking over the past 
three decades. Our experience in the region has taught us that we must 
apply constant pressure throughout the entire hemisphere in order to 
effectively combat trafficking organizations. In the 1980s, traffickers 
used the Caribbean as a launch pad to send drugs into Florida and the 
gulf coast--until we forced them to retreat back to South America. In 
the 1990s, Colombia became the epicenter of trafficking until Plan 
Colombia forced a shift to Mexico. In the 2000s, the Merida Initiative 
has, in turn, pushed the cartels increasingly into Central America. 
Although 90-95 percent of the cocaine from South America now transits 
the Central America/Mexico corridor, it is likely that the combined 
efforts of Merida and CARSI will force the traffickers to once again 
use the Caribbean as a conduit to the U.S. market.
    The Caribbean is already suffering from deteriorations in public 
safety that cannot be ignored. Rising homicide and crime rates are the 
subject of almost daily press reports and have become hot political 
issues. According to the UNODC's 2011 Global Study on Homicide, murder 
rates in the Caribbean and Central America have increased since 1995, 
and are among the highest in the world. Data from 2011 indicates that 
Jamaica's murder rate of 50/100,000 is the highest in the Caribbean 
followed by St. Kitts and Nevis at 40/100,000 and Trinidad and Tobago 
at 35/100,000. The same data indicate that Honduras leads Central 
America with an 80/100,000 homicide rate followed by El Salvador at 65/
100,000. By contrast, the U.S. homicide rate for the same year is 5/
100,000. Just as the Caribbean cannot ignore rising crime and violence, 
the United States cannot afford to ignore what is happening very close 
to our borders. Drug-related crime and violence in the hemisphere 
inevitably impacts U.S. security--whether it is youth gangs from 
Central America or traffickers from the Dominican Republic--and we have 
learned from experience that we need to address the problem at its 
source.
                          the cbsi partnership
    CBSI is a partnership that takes a comprehensive approach to 
improving citizen security. However, its emphasis on strengthening the 
capacity of the Caribbean to respond as a region to the transnational 
crime threat makes it unique. Unlike Central America, the Caribbean has 
a tradition of pooling limited resources through institutions such as 
the Caribbean Community (CARICOM) and the Regional Security System in 
the Eastern Caribbean. CBSI is also exceptional in that it is the 
product of a cooperative dialogue process between CARICOM, the United 
States and the Dominican Republic that began with year-long discussions 
that led to an agreement on a framework for cooperation linked to three 
CBSI objectives or pillars:

   Substantially Reduce Illicit Trafficking;
   Increase Public Safety and Security; and
   Promote Social Justice.

    The framework for cooperation called for the establishment of an 
annual high-level Dialogue, a Commission to oversee the implementation 
of CBSI and Technical Working Groups to develop projects designed to 
meet its objectives. The Technical Working Groups met during the first 
6 months of 2011 and brought together our Caribbean partners as well as 
the broader international community to collectively reach agreement on 
specific projects and to identify priorities going forward. The 
dialogue process has proven to be an effective mechanism in creating 
and reinforcing the sense of partnership that is critical to the 
success of CBSI. At the Second Annual CBSI Dialogue held in Nassau on 
November 10, Caribbean nations, in a joint declaration with the United 
States, publicly affirmed their commitment to strengthening their 
regional institutions and developing and sustaining a coordinated 
approach to citizen security. They also expressed appreciation for the 
$139 million Congress appropriated in FY10 and FY11 to support 
activities in the following areas:
    Maritime and Aerial Security Cooperation: Maritime interdiction 
operational capacity is a necessary tool for Caribbean nations to 
counter narcotics trafficking. As a result of a capacity deficiency, 
the United States provided specific interceptor boats and training to 
support interdiction operations. Absent the ability to detect 
traffickers, interdiction operations are for naught. CBSI is also 
supporting the development of the Caribbean Sensor and Information 
Integration (CSII) initiative to improve domain awareness and 
coordination in the Caribbean by integrating partner nations and U.S. 
data into a regional, Web-based network for sharing a common operating 
picture on air, maritime, and land activity. As part of this effort, 
coastal radars will be installed at strategic locations to provide 
greater visibility into illicit trafficking patterns to our partners 
through the Joint Task Force-South. The U.S. Coast Guard's Technical 
Assist Field team (TAFT), which is based in Puerto Rico and includes 
engineers and logistical experts, will also expand to bolster the 
maintenance and logistics capabilities of Caribbean maritime forces 
under the initiative. What's more, maritime surveillance aircraft from 
the RSS in the Eastern Caribbean will be overhauled and upgraded with 
new sensors.
    Law Enforcement Capacity Building: Many Caribbean nations have 
demonstrated the will to expand their capacity to administer justice 
under the rule of law, but most do not have the resources or expertise 
to train their police and security services. Under CBSI, we plan to 
provide training in community-based policing, investigation of money 
laundering and financial crimes, and the interdiction of trafficking of 
drugs, arms, and bulk cash to Caribbean police managers. To counter 
drug trafficking organizations, CBSI provides DEA-led vetted police 
units in The Bahamas, the Dominican Republic, and Jamaica with training 
equipment and operational support. In addition to specialized training, 
our assistance in the region provides specific anticrime technologies 
to investigate and apprehend illicit actors. For example, assistance 
already provided includes forensics equipment for the collection and 
sharing of digital fingerprints and ballistics information. And 
building on past efforts by the Royal Canadian Mounted police to train 
polygraph examiners, we will partner with Canada to establish a 
regional center capable of certifying examiners to international 
standards. Anticorruption efforts include the development of policies 
and standard operation procedures for internal affairs investigations. 
For example, the success of the anticorruption efforts of the Jamaican 
Constabulary Force (JCF) will serve as a model for dealing with police 
corruption. The JCF has conducted investigations that resulted in the 
dismissal of more than 300 police officers on charges of corruption 
since the initiative was launched in 2008.
    Border/Port Security and Firearms Interdiction: Technology for 
inspection and interdiction operations is important, but not effective 
without the appropriate training. CBSI provides specific advanced 
training on techniques for intercepting smuggled narcotics, weapons, 
and other contraband at ports of entry to the very law enforcement and 
customs officers who will be responsible for this task. What's more, in 
the area of passenger screening we are working to enhance the capacity 
of Caribbean nations to identify high-risk travelers and execute 
coordinated interdiction operations utilizing the CARICOM Advance 
Passenger Information System that was developed in partnership with 
DHS. Training and assistance also supports the policing efforts to 
seize firearms and secure weapons and ammunition stockpiles for 
judicial handling and court procedures.
    Justice Sector Reform: At their request, we are helping to reform 
and further develop Caribbean criminal justice institutions through our 
deployment of regional legal advisors with the Department of Justice. 
We are jointly funding a prosecutor from the United Kingdom based in 
the Eastern Caribbean who provides technical assistance and training to 
judges and prosecutors. And we plan to facilitate the deployment of a 
U.S. Department of Justice lawyer to advise selected jurisdictions on 
establishing a task force to coordinate efforts on reducing homicides 
and violent crime. Separately, through prison assessments and training, 
the State Department is helping Caribbean governments reduce 
overcrowding and improve prison management strategies.
    Crime Prevention and At-risk Youth: Programming in this area 
focuses on developing a sustainable approach to juvenile crime by 
targeting first-time offenders. We are helping the Caribbean design 
education and workforce development services for at-risk youth to 
provide an alternative to crime and other harmful behavior. Separate 
programming supports drug demand reduction through the training of 
treatment and rehabilitation professionals.
                          cbsi implementation
    To assist in the implementation of CBSI, the Department of State 
has drawn upon the expertise of our colleagues at U.S. Customs and 
Border Protection (Department of Homeland Security), the Office of 
Technical Assistance (Department of the Treasury), and the Office of 
Overseas Prosecutorial Development, Assistance and Training (Department 
of Justice) to contribute technical assistance focusing on border 
control, antimoney laundering, and criminal justice reform. We have 
also secured cooperation with international donors to an unprecedented 
level. Through cooperative arrangements with the United Kingdom and 
Canada to jointly fund CBSI projects, we are leveraging available tools 
to enhance priority capability needs in the Caribbean together. This 
coordinated approach ensures that our governments and other 
international donors avoid duplication and reduce redtape to deliver 
professional skills more quickly. Our arrangement with Canada, which 
currently supports the creation of a regional ballistics information 
sharing network, will also serve as the vehicle to jointly impart law 
enforcement professionalization projects in Jamaica and the Regional 
Security System described earlier. We will use our current arrangement 
with the United Kingdom to expand our cooperation into additional 
criminal justice reform activities.
                               conclusion
    Citizen safety and security in the hemisphere continues to be 
threatened by a wide range of criminal organizations; drug related 
crime, violence and corruption; and youth gangs. Nevertheless, I am 
confident that our focus on strengthening law enforcement and judicial 
institutions in the region has put us on the right track toward a 
sustainable response. The concept of ``partnership'' is critical to the 
success of our efforts to improve citizen security in the hemisphere, 
and while CBSI is in the early stages of its implementation, I am 
confident that we have created a framework for cooperation that will 
serve to strengthen the working relationships we have with the 
Caribbean nations to counter the violence that threatens their 
communities.

    Senator Menendez. Thank you.
    Mr. Benson.

  STATEMENT OF RODNEY G. BENSON, CHIEF OF INTELLIGENCE, DRUG 
           ENFORCEMENT ADMINISTRATION, WASHINGTON, DC

    Mr. Benson. Good morning, Chairman, Ranking Member Rubio. 
Thank you for the opportunity to speak with you today on DEA's 
assessment of illicit drug trends in the Caribbean region. On 
behalf of Administrator Leonhart and the men and women of the 
Drug Enforcement Administration, thank you for your support.
    The Caribbean region continues to be a focus of U.S. 
counterdrug efforts. The principal drug threat in the region is 
cocaine trafficking. The smuggling and abuse of heroin, 
marijuana, and MDMA are also of concern, as is the diversion of 
prescription drugs in Puerto Rico and the U.S. Virgin Islands. 
As the lead U.S. counternarcotics agency, DEA is actively 
engaged in addressing all these drug threats.
    I understand that the committee is particularly concerned 
about the role of the Dominican Republic in the drug trade and 
rightly so as the Dominican Republic is the primary Caribbean 
transit point for South American cocaine. Through Operation 
Broken Bridge initiated in August 2007, DEA successfully 
assisted the Dominican Government in its interdiction efforts 
against drug-ladened aircraft arriving in Hispaniola from 
Venezuela. As a result, traffickers increasingly shifted toward 
maritime operations, transporting cocaine loads of 500 to 2,000 
kilograms in go-fast boats.
    Today, DEA is working closely with our Dominican 
counterparts under Operation Seawall to target and disrupt go-
fast activity in the Dominican Republic and the secondary flow 
of cocaine from the Dominican Republic to Puerto Rico.
    The Dominican Republic is certainly not the only Caribbean 
transit point that traffickers use. They also send cocaine 
loads through Trinidad and Tobago, the Bahamas, Puerto Rico, 
and other Caribbean islands.
    As for the other drugs of concern in the region, Jamaica is 
the primary marijuana producer for the Caribbean, and heroin is 
transported from Colombia and Venezuela through the eastern 
Caribbean to Puerto Rico and onward to the United States. 
Finally, MDMA is transported from Europe through the Caribbean 
for either local consumption or for the export to the United 
States.
    Drug trafficking organizations from Mexico and South 
America are attracted to the Caribbean due to its proximity to 
both South America and the southern coast of the United States 
to include the U.S. territories of Puerto Rico and the U.S. 
Virgin Islands. A joint DEA and Dominican operation this past 
July led to the arrest of a Mexican national and member of the 
Sinaloa Cartel in the Dominican Republic. This trafficker 
coordinated cocaine shipped by air from Venezuela to the 
Dominican Republic. After the arrest of this individual and his 
Dominican associates, several execution style murders took 
place in the Dominican Republic, further highlighting concern 
over rising rates of violence. Certainly over the past decade, 
violence has increased in the region. There have also been very 
notable recent spikes of violence. For example, there have been 
over 1,050 reported homicides this year alone in Puerto Rico, 
many of which are believed to be related to the illicit drug 
trade on the island.
    Despite the importance of the Caribbean, it is critical to 
remember that the vast majority of drugs destined for the 
United States still transit Mexico and Central America. DEA 
does not see current indications of a large-scale trafficking 
shipped back to the Caribbean, but we remain alert and engaged 
for such a possibility, particularly as enforcement operations 
in Mexico and Central America become increasingly effective.
    Our engagement in the Caribbean is a regional one that 
takes into account drug flow through the entire hemisphere. The 
U.S. Government's counternarcotics strategy is the Drug Flow 
Attack Strategy, an innovative multiagency strategy designed to 
disrupt the flow of drugs, money, and chemicals between source 
zones in the United States. This strategy calls for aggressive 
and coordinated enforcement operations in cooperation with host 
nation counterparts. DEA is committed to working with our U.S. 
agency partners, host nation counterparts, and others in order 
to reduce this drug trafficking threat.
    I thank you very much for the opportunity to be here today 
and I welcome your questions.
    [The prepared statement of Mr. Benson follows:]

                 Prepared Statement of Rodney G. Benson

                              introduction
    Chairman Menendez, Ranking Member Rubio, and distinguished members 
of the subcommittee, on behalf of Drug Enforcement Administration (DEA) 
Administrator Michele M. Leonhart, I want to thank you for your 
continued support of the men and women of DEA and the opportunity to 
testify about what our Administration is seeing with regard to the 
current drug trafficking situation in the Caribbean, counterdrug 
operations, and DEA's regional engagement moving forward.
                          dea in the caribbean
    The Drug Enforcement Administration has a unique and challenging 
problem set in the Caribbean with both foreign and domestic offices 
covering thousands of square miles with hundreds of islands that speak 
multiple languages. DEA's Caribbean Field Division, headquartered in 
San Juan, has oversight of the island of Puerto Rico, the United States 
Virgin Islands (USVI), 27 island nations throughout the Caribbean, and 
the countries of Guyana and Suriname in South America. Seven DEA 
Caribbean Island Country Offices are located in Barbados, Curacao, 
Dominican Republic, Haiti, Jamaica, Suriname, and Trinidad and Tobago. 
DEA's Miami Field Division has oversight of The Bahamas, with the 
country office located in Nassau, and a resident office located in 
Freeport, Bahamas.
       background: the scope of drug trafficking in the caribbean
    Given their geographic locations, the Caribbean Islands are 
extremely vulnerable to drug trafficking. Historically, significant 
quantities of cocaine destined for the United States transited the 
Caribbean. Counterdrug successes in the region, coupled with a changing 
dynamic between Colombian and Mexican Drug Trafficking Organizations 
(DTOs), led traffickers to shift transit routes increasingly toward 
Mexico and Central America. While the vast majority of drugs destined 
for the United States still transit Mexico/Central America, enforcement 
action and rising violence in Mexico have begun to lure some 
traffickers back to the Caribbean. The illegal drug trade remains a 
menace to the public welfare and represents a serious threat to the 
rule of law in many Caribbean island nations.
    The principal drug threat in the Caribbean region today continues 
to be cocaine; however, the smuggling and abuse of heroin, marijuana, 
and methylenedioxymethamphetamine (MDMA, otherwise known as Ecstasy) 
are also of concern. In addition, the diversion, unlawful sale, and 
abuse of prescription drugs are a growing threat in Puerto Rico and the 
USVI. The increasing levels of drug-related violence in Puerto Rico, 
the USVI, and many Caribbean nations is one of the most pressing issues 
currently facing regional law enforcement and public officials.
    DTOs from Mexico (particularly the Sinaloa Cartel) and South 
America are attracted to the Caribbean region due to its proximity to 
South America, the southern coast of the United States, and the U.S. 
Territories of Puerto Rico and the USVI. Additionally, traffickers take 
advantage of the vast Atlantic Ocean for unfettered movement to West 
Africa and Europe. Established ties with Caribbean DTOs provide South 
American and Mexican traffickers with transportation, security, stash 
sites, and other logistical support necessary to manage drug 
trafficking operations in the Caribbean.
Cocaine
    Cocaine is the primary drug threat in the Caribbean region. The 
Caribbean serves as a major transshipment and storage location for 
cocaine originating primarily in Colombia (frequently traversing 
Venezuela) and destined for the United States, Canada, and Europe. 
Cocaine departing South America through the Caribbean follows three 
distinct trafficking corridors: (1) the Central Caribbean Corridor, 
which includes the islands of Jamaica, The Bahamas, Haiti, the 
Dominican Republic, and Cuban territorial waters; (2) the Eastern 
Caribbean Corridor which starts in Trinidad and Tobago and moves north 
through the Leeward Islands; and (3) the ABC Corridor which includes 
the islands of Aruba, Bonaire, and Curacao.
    The Dominican Republic remains the main Caribbean transit point of 
South American cocaine, although at much lower levels than those 
witnessed in 2009 due to a significant disruption of air transportation 
activity into Hispaniola. Nonetheless, over half of the cocaine that 
currently transits the Caribbean is estimated to flow through the 
Dominican Republic.
    While drug traffickers use every means at their disposal to move 
drugs through these corridors, maritime transportation is the most 
commonly used conveyance in the Caribbean Basin. The use of go-fast 
boats, capable of carrying 500-2,000 kilograms per trip, is the primary 
method used to move loads quickly from South America through the 
Central Corridor and between the Caribbean islands. Containerized 
cargo--with loads ranging from 50 kilograms up to multitons--is another 
maritime trafficking conveyance, as DTOs are able to hide large 
quantities of drugs amid legitimate container traffic, making 
interdiction extremely difficult without specific intelligence. In 
addition, traffickers have recently begun to affix torpedo-shaped tubes 
or metal boxes carrying cocaine, heroin, marijuana, MDMA, and bulk cash 
to the underside of maritime cargo vessels. Once the vessels arrive at 
their destination, divers retrieve the parasitic devices and their 
contraband contents. Additional maritime conveyances include local and 
commercial fishing vessels, luxury vessels, ferries, and cruise ships. 
Finally, due to recent self-propelled 3 semisubmersible (SPSS) seizures 
that occurred in 2011 off the coast of Honduras, it is expected that 
traffickers will begin exploring this option to carry multiton loads of 
cocaine through the Eastern Caribbean.
    Traffickers also use commercial and noncommercial aircraft to 
smuggle cocaine through the Caribbean. Most notably, departures via 
noncommercial aircraft--in both twin and single engine planes--from 
Apure, Venezuela, have increased in recent years. Loads are either 
airdropped, or traffickers land the planes on clandestine airstrips. 
This trend has led to a rise in subsequent cocaine transshipment 
through the neighboring Caribbean islands of Aruba and Curacao, the 
northern Leeward Islands, and Trinidad and Tobago. Couriers on 
commercial aircraft, air cargo, and parcel services are also used to 
smuggle cocaine.
    Once in the Caribbean, cocaine is repackaged and sent to the United 
States or Europe by both air and maritime conveyances. In the Central 
Corridor, traffickers send loads through Dominican Republic, Haiti, 
Jamaica, and The Bahamas for entry into Puerto Rico and the USVI and 
the southeastern portion of the United States. In the Eastern Corridor, 
traffickers move loads into Puerto Rico via the USVI, British Virgin 
Islands (BVI) and St. Maarten, or directly to Europe. There is also a 
threat through the western coastal area of Puerto Rico where drug 
shipments are smuggled via maritime conveyances from the Dominican 
Republic. Puerto Rico's western and eastern coastal areas continue to 
be dominant sites for drug operations. Antigua, in the Leeward Island 
chain, has also emerged as a major command and control center for drug 
movement.
Marijuana
    A secondary threat in the Caribbean is the cultivation and 
smuggling of marijuana. Jamaica is the primary marijuana producer for 
the Caribbean, and large amounts of marijuana are smuggled out of 
Jamaica via go-fast vessels, cargo containers, couriers, and parasitic 
devices attached to the hulls of vessels. Marijuana is also smuggled 
through overnight and express mail delivery services, such as Federal 
Express, DHL, United Parcel Service, and the U.S. Postal Service. While 
it may seem counterintuitive, most of the marijuana consumed in Puerto 
Rico originates in Mexico. The Mexican marijuana is smuggled into the 
United States via the Southwest border and then transported to Puerto 
Rico by couriers on commercial airline flights or through commercial 
parcel services.
Heroin
    Traffickers primarily transport Colombian heroin (often transiting 
Venezuela) to Puerto Rico for onward shipment to U.S. cities such as 
Miami, New York, and Houston. There are two distinct heroin 
transportation routes through the Caribbean: (1) Colombia through the 
eastern Caribbean nations of St. Maarten and the Dutch Antilles to 
Puerto Rico where loads are broken down prior to being shipped to the 
United States; and (2) Venezuela to Aruba and Curacao, a route which 
has seen a marked increase in recent usage. Aruba has become an 
important transit point for heroin destined to the United States. Like 
cocaine, heroin is transported via both air-drop operations and 
maritime vessels, including go-fast boats and cruise ships. In some 
instances, heroin is comingled with cocaine shipments.
MDMA
    Most MDMA transported through the Caribbean is imported from Europe 
(particularly the Netherlands and France), Canada, and the Caribbean 
island of Guadeloupe via airports, seaports, and mail parcels. Aruba 
and Curacao are particularly significant MDMA and precursor chemical 
transshipment points in the Caribbean. In addition, MDMA trafficking 
through the Dominican Republic has increased during the past 2 years. 
MDMA is used for local consumption among tourists and wealthy Dominican 
families as well as for export to the United States.
                  current highlights in the caribbean
    In addition to the general drug trafficking trends through the 
Caribbean, there are a few specific related factors that merit 
particular consideration:

   Violence in the Caribbean. While there are many factors 
        contributing to the rate of violence in the Caribbean, drug 
        trafficking is one factor of particular concern to DEA.
      Puerto Rico. There have been over 1,050 homicides in Puerto Rico 
        between January and early December 2011. Homicide rates in 
        Puerto Rico, on average, rank among the highest in the nation. 
        DTOs, money laundering organizations, and street gangs 
        habitually use intimidation, violence, and murder to gain or 
        retain control of the drug markets within the region. 
        Furthermore, firearms transported into Puerto Rico and the USVI 
        from the United States, particularly from Florida, are a 
        significant threat to stability in the region.
      Dominican Republic. The Dominican Republic is a popular 
        transshipment location in the Caribbean for South American and 
        Mexican cartels. After the arrest of a Sinaloa Cartel member 
        and his Dominican associates in August 2011, several execution-
        style murders took place, intensifying local concern over 
        rising rates of drug-related violence. The overall homicide 
        rate in the Dominican Republic has steadily increased, reaching 
        25 homicides per 100,000 people.
      U.S. Virgin Islands. The USVI has also experienced an increase in 
        violence. The USVI has a higher per capita homicide rate than 
        most U.S. states, reaching more than 10 times the national 
        average. The increasing importance of the USVI to drug 
        traffickers as entry points to the United States, and as 
        transshipment points to Europe, may facilitate this trend of 
        drug-related violence.
      Trinidad and Tobago. In August 2011, the Prime Minister of 
        Trinidad and Tobago declared a limited state of emergency 
        following the murder of 11 people in 4 days. The Prime Minister 
        attributed these murders to recent drug seizures. Trinidad and 
        Tobago is a major transshipment point for South American 
        cocaine destined for Europe and the United States and is also a 
        significant hub for arms smuggling and money laundering. 
        Trinidad and Tobago's close proximity to Venezuela and its 
        well-developed banking and transportation infrastructure make 
        it a convenient destination for all manner of illegal activity. 
        The small Caribbean nation has experienced a dramatic rise in 
        crime over the last few years--although violence this year has 
        decreased from last year--and is struggling to combat drug-
        related violence. A lack of resources and effective laws 
        continues to hamper counterdrug efforts. The rising crime rate 
        has become a political issue, as the country's two major 
        political parties focus on the government's commitment to crime 
        reduction.
   Presence of Mexican Cartels in the Dominican Republic. 
        Mexican drug trafficking organizations, particularly members of 
        the Sinaloa Cartel, have established a limited presence in the 
        Dominican Republic. A recent operation in the Dominican 
        Republic led to the arrests of Dominican Republic and Mexican 
        nationals responsible for facilitating drug movement from 
        Colombia through the Caribbean to Mexico on behalf of the 
        Sinaloa Cartel. DEA believes the Mexican cartel's presence 
        within the Caribbean indicates a desire to expand the Mexican 
        DTOs' market, gain greater control over drug movements, and 
        avoid the turf wars currently plaguing Mexico and Central 
        America.
   Bulk Currency Smuggling. Bulk currency smuggling through the 
        Caribbean is the primary method for returning illicit proceeds 
        to the source zones. Traffickers conceal bulk cash in parcels, 
        luggage, and via courier, using the same smuggling routes that 
        are used to move drug loads; i.e., containers, maritime and 
        noncommercial air shipments. Traffickers also launder illicit 
        proceeds in order to avoid the risk of moving large amounts of 
        bulk currency. Preferred money laundering methods in the 
        Caribbean include purchasing real estate and other tangible 
        goods like high-end vehicles and jewelry, money remitters, 
        structured bank deposits, and the black market peso exchange.
                     dea programs in the caribbean
    As in other regions, the U.S. Government's strategy in the 
Caribbean is the Drug Flow Attack Strategy, an innovative strategy 
leveraging DEA, Department of Defense, other U.S. law enforcement, and 
host-nation resources, to combat the illicit trafficking of drugs, 
money, and chemicals in the region. This strategy supports the 
Caribbean Basin Security Initiative's aims of strengthening maritime/
aerial security, building law enforcement capacity, and strengthening 
border/port security. Under the umbrella of this overall strategy, DEA 
maintains many effective enforcement programs in the Caribbean, several 
of which are highlighted below:

   Operation All-Inclusive is a combination of sequential and 
        simultaneous land, air, maritime, and financial attacks 
        targeted by DEA intelligence. It involves synchronized 
        interagency counterdrug operations designed to influence 
        illicit trafficking patterns and increase disruptions of DTOs.
   The Sensitive Investigative Unit (SIU) Program is the 
        foundation for building effective and trustworthy partner-
        nation units capable of conducting complex drug investigations. 
        There is a DEA-sponsored SIU in the Dominican Republic, as well 
        as five additional DEA-supported vetted units in the Dominican 
        Republic dedicated to various facets of investigative and 
        interdiction activities. In addition, there are also DEA 
        supported vetted units in several other Caribbean nations. In 
        lieu of an SIU, DEA is working with the U.S. State Department 
        to reconfigure the Haitian National Police's antinarcotics unit 
        as a vetted narcotics task force trained and equipped to 
        function as a capable counterdrug partner.
   Operation Bahamas, Turks and Caicos (OPBAT) is a DEA-led, 
        multiagency, multilateral operation for disrupting the flow of 
        illegal drugs through The Bahamas and Turks and Caicos to the 
        United States. OPBAT operates under the Three Part (TRIPART) 
        Agreement among the United States, The Bahamas, and the United 
        Kingdom; this agreement authorizes OPBAT helicopters and 
        personnel to conduct counterdrug operations in The Bahamas and 
        the Turks and Caicos Islands.
   Operations Broken Bridge and Seawall. Operation Broken 
        Bridge, initiated in August 2007, successfully assisted the 
        Dominican Republic Government in its interdiction efforts 
        against drug-laden aircraft. This operation served as a 
        response to the increased number of drug air shipments 
        transported from Venezuela into Hispaniola. Although this 
        operation curtailed the aviation threat in the Dominican 
        Republic, maritime smuggling remains a threat. As a result, 
        Operation Seawall was initiated in October 2011 as a Dominican 
        Republic-led operation to target go-fast activity in the 
        Dominican Republic and the secondary flow of cocaine smuggling 
        from the Dominican Republic to Puerto Rico.
   Judicial Intercept Programs. Communication interception and 
        exploitation abilities are another great asset that DEA employs 
        in coordination with several host-nation countries in the 
        Caribbean.
   The Caribbean Corridor OCDETF Strike Force (CCSF) is a 
        federal multiagency strike force focused on the disruption of 
        maritime drug trafficking in the Caribbean. The CCSF targets 
        South American-based DTOs and is located in DEA's San Juan 
        office.
          conclusion: dea's regional engagement moving forward
    DEA recognizes that interagency and international collaboration and 
coordination are fundamental to our success. We remain committed to 
working with our U.S. law enforcement and intelligence partners as well 
as with our host-nation counterparts in order to disrupt drug 
transportation routes through the Caribbean. Bringing to the criminal 
and civil justice systems of the United States, or any other competent 
jurisdiction, those organizations and principal members of 
organizations involved in the cultivation, manufacture, and 
distribution of controlled substances appearing in or destined for 
illicit trafficking in the United States remains the core of our focus.
    Thank you for the opportunity to appear before you today to discuss 
this important issue. I am happy to answer any questions you may have.

    Senator Menendez. Thank you.
    Ambassador Ayalde.

        STATEMENT OF HON. LILIANA AYALDE, SENIOR DEPUTY 
 ASSISTANT ADMINISTRATOR FOR LATIN AMERICA AND THE CARIBBEAN, 
   U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, DC

    Ambassador Ayalde. Mr. Chairman, Senator Rubio, thank you 
for the opportunity to testify today. I appreciate and welcome 
this opportunity to share what the U.S. Agency for 
International Development is doing to advance citizen security 
in the Caribbean. It is an honor to complement the testimony of 
my colleagues.
    Mr. Chairman, during my tenure working for USAID in the 
hemisphere and most recently as U.S. Ambassador to Paraguay, I 
have observed with great concern the security situation in this 
region. The problem is exacerbated in the Caribbean where very 
small economies are confronting frightening levels of drug-
fueled crime and the associated violence.
    Over the last 10 years, there has been an alarming 
escalation of the homicides in the region. In some countries, 
the murder rates doubled or tripled, and Jamaica has one of the 
highest murder rates in the hemisphere.
    We are especially concerned about the situation of 
Caribbean youth who, like their peers in Latin America, 
struggle with the high levels of unemployment and are 
disproportionate victims and perpetrators of crime. In Jamaica, 
for example, 70 percent of homicides are committed by youth 
under the age of 30, and in the Dominican Republic, 70 percent 
of drug-related arrests, or 17,000 people, are young offenders.
    Our mission in the Caribbean and Latin America is to 
strengthen the capacity of the region's governments, civil 
society, and private sector to improve citizen security, 
governance, and economic growth. We recognize that we will not 
be successful in advancing these development goals if we do not 
help our neighbors get a handle on the security problem.
    So through the President's Caribbean Basin Security 
Initiative, USAID is working with our Caribbean partners and 
other donors on youth-focused crime prevention programs. These 
are designed to get at the root causes of crime and to generate 
long-term solutions to juvenile crime in the Caribbean.
    We are doing so alongside our colleagues from INL, DEA, and 
other U.S. Government agencies. Evidence from successful 
anticrime strategies implemented in cities like L.A., New York, 
and Rio and the improvements I have personally witnessed in 
cities Medellin during my tenure in Colombia tells us that 
effective crime reduction happens when law enforcement actions 
are paired with community-based crime prevention, workforce 
development, and violence reduction programs.
    Our investments build stronger and safer communities where 
youth and their families can live in peace and have access to 
greater educational and job opportunities. With our support, 
youth in Antigua and Barbuda receive relevant job training and 
internships with local businesses. The poor inner-city 
communities in Jamaica are working closely with the police to 
improve security, and at-risk youth in Santiago and Santo 
Domingo are tapping into informal education and job training 
opportunities.
    We are already having success with these interventions. For 
instance, USAID's A Ganar project, a sports-based, workforce 
development program cofunded by Nike and Microsoft, has 
successfully placed eastern Caribbean youth in internships and 
jobs. In 2011, 85 percent of the students who completed the 
program obtained a job, went to school, or started a business. 
We embrace this model for youth development because it creates 
employment for youth and leverages the private sector resources 
to supplement our investments.
    We also collaborate with local governments and civil 
society to reform juvenile justice systems in the Caribbean and 
craft policies to address youth crime in the long term. For 
example, we are helping Caribbean legal authorities to 
introduce early intervention for at-risk youth, alternative 
sentencing for young offenders, and the separation of juveniles 
from adults in correctional facilities.
    CBSI not only enables USAID to ramp up our crime prevention 
investment, it also helps target all our programs in a country 
toward preventing crime. In fact, I witnessed this firsthand 
during my recent visit to the Dominican Republic. Our bilateral 
programs to train teachers and link small producers to 
lucrative markets contribute to building stronger communities 
that offer youth viable alternatives to crime.
    In addition, CBSI has helped the members of the Caribbean 
Community, CARICOM, and the Dominican Republic work together 
with support from USAID and other donors to draft and implement 
a regional security strategy, share best practices, coordinate 
implementation, and refine priorities. This regional 
cooperation is crucial because no one island can take on this 
region's well-armed and well-organized criminal outfits on 
their own.
    Nor can a single subregion make headway in the absence of 
complementary efforts underway in other parts of our 
hemisphere. That is why our investments in the Caribbean are 
matched by the work being done in CARSI in Central America and 
Mexico's Merida Initiative.
    Just as no one country or region can solve the citizen 
security challenge on their own, neither can a single donor. 
The United States Government can help, but the primary 
responsibility lies with the national governments.
    CBSI's success is in the interest of the United States.
    The Caribbean Basin, with its open seas and porous island 
borders, is a major transit route for illegal trafficking of 
all sorts. And given our geographical and cultural ties, the 
crime that afflicts those countries eventually flows to us.
    Finally, CBSI helps deter the illegal activity and violence 
that saps the resources, creativity, and dynamism of youth and 
the communities on both sides of the Caribbean Sea, whether 
they be in Jamaica, the country, or Jamaica, Queens in New 
York.
    Thank you, Mr. Chairman. I look forward to the committee's 
questions.
    [The prepared statement of Ambassador Ayalde follows:]

              Prepared Statement Ambassador Liliana Ayalde

    Mr. Chairman and members of the subcommittee, thank you for the 
invitation to testify today. I appreciate and welcome this opportunity 
to share what the U.S. Agency for International Development (USAID) is 
doing to advance security and citizen safety in the Caribbean. It is an 
honor to testify with my colleagues, Ambassador William Brownfield of 
the State Department's Bureau of International Narcotics and Law 
Enforcement Affairs and Rodney Benson of the Drug Enforcement 
Administration.
    Mr. Chairman, during my experience working for USAID in the 
hemisphere for the last 30 years, and most recently serving as the U.S. 
Ambassador to Paraguay, I have observed with great concern the security 
situation in this region. The problem is exacerbated in the Caribbean, 
where very small economies are confronting frightening levels of drug-
fueled crime and the associated violence.
    Over the last 10 years, there has been an alarming escalation of 
homicides in the region: in St. Kitts and Nevis, increasing from 5 to 
40 per 100,000 inhabitants in the period 2001-2011, in Trinidad and 
Tobago, increasing from 9 to 35 per 100,000 in the same period; and 
Jamaica has the highest rate in the region with 50 murders per 100,000 
inhabitants. The United Nations Office on Drugs and Crime (UNODC) 
calculates that the high homicide rate in Jamaica has decreased GDP per 
capita by 5.4 percent.
    To complicate the picture, in Jamaica, 70 percent of homicides are 
committed by youth under the age of 30. And in the Dominican Republic, 
70 percent of drug-related arrests (or 17,000 people) are young 
offenders.
    We at USAID are especially concerned about the situation of 
Caribbean youth, who like their peers in Latin America, are struggling 
with high levels of unemployment, are disproportionate victims and 
perpetrators of crime, and are increasingly anxious about their future. 
These statistics highlight the need to target youth and young adults 
with programs that can prepare them for life.
    Our mission in the Caribbean and Latin America is to strengthen the 
capacity of the region's governments, civil society, and private sector 
to improve citizen security, governance, and economic growth. We 
recognize that we will not be successful in advancing this development 
goal if we do not help our neighbors get a handle on the security 
problem.
    Our agency's citizen security programs in the Caribbean focus, 
therefore, on addressing the development challenges posed by the 
escalating crime and violence. We know that crime erodes citizens' 
confidence in government and weakens public institutions; violence 
deters investment and economic opportunity; and citizens are left with 
few licit alternatives.
    So through the Obama administration's Caribbean Basin Security 
Initiative (CBSI), USAID is working with our Caribbean partners and 
other donors on youth-focused crime prevention programs, designed to 
get at the root causes of crime and lead to long-term solutions to 
juvenile crime in the Caribbean.
    And we are doing so alongside our colleagues from INL, DEA, and 
other U.S. Government agencies. Because the evidence from the 
successful anticrime strategies implemented in cities like Los Angeles, 
Chicago, New York, and Rio de Janeiro--and the improvements I witnessed 
personally in cities like Medellin during my time as Mission Director 
in Colombia (2005-2008)--tells us that effective crime reduction 
happens when law enforcement actions are paired with community-based 
crime prevention, workforce development, and violence reduction 
programs.
    Our investments through CBSI are helping build stronger and safer 
communities where youth can live in peace and have access to greater 
educational and job opportunities. With our support, the youth at the 
Gilbert Agricultural Rural Development Centre (GARDC) in Antigua and 
Barbuda receive relevant job training and internships with local 
businesses; the Grants Pen community in Kingston, Jamaica, is working 
closely with the police to identify and address safety and security 
problems; and out-of-school children and at-risk youth in Santiago, the 
Dominican Republic, are being provided with informal education 
opportunities and job skills training.
    These kinds of interventions have been previously tested and proven 
to address the vulnerabilities of youth in the Caribbean. USAID's ``A 
Ganar,'' a public-private alliance which is a sports-based workforce 
development program, has been successful in placing vulnerable youth in 
jobs and other productive activities. In 2011, 85 percent of students 
who completed the ``A Ganar'' program obtained a job, went back to 
school, or started a business. The best aspect of this initiative is 
that by working in collaboration with the private sector, we can 
leverage resources and develop sustainable models for youth 
development.
    In the area of juvenile justice, USAID is working closely with 
national and municipal governments and civil society to promote 
juvenile justice reform and craft policies that can address youth crime 
in the long term. Examples include working with the relevant legal 
authorities to introduce early interventions with at-risk youth and 
alternative sentencing for young offenders, as well as separating 
juveniles from adults within a country's correctional system.
    Our Caribbean programs have always sought to create more 
opportunities for the poor and the vulnerable, and CBSI has allowed 
USAID to replicate and expand successful activities that prevent crime 
by building stronger communities and supporting at-risk youth.
    CBSI has helped target our programs, not just those that fall under 
the rubric of ``citizen security,'' toward strengthening communities 
and improving alternatives for youth. In fact, during my recent visit 
to the Dominican Republic I witnessed first-hand how USAID's entire 
portfolio supports local efforts to prevent crime. Our bilateral 
programs to train teachers provide out-of-school youth with conflict 
resolution techniques, link small producers to lucrative markets and 
support the development of a fully operational and politically 
independent national Office of the Public Defender with representation 
in 22 out of 31 provinces; all contribute to building more resilient 
communities. All of our missions have been instructed to make sure that 
they are orienting large portions of their portfolios to addressing 
this pressing challenge.
    In addition, CBSI has helped the islands of the Caribbean Community 
(CARICOM) and the Dominican Republic work together to draft and 
implement a regional security strategy.
    Regional coordination under CBSI includes a USAID-led technical 
working group focused on crime prevention efforts, which has provided a 
forum for our Caribbean partners to share best practices, coordinate 
implementation, and refine priorities. This coming year, we hope to use 
the CBSI working groups to further engage civil society and strengthen 
public-private partnerships targeting these issues. This kind of 
regional cooperation is a crucial component of CBSI because no one 
island can take on the region's well-armed and well-organized criminal 
outfits on their own.
    Nor can a single subregion make headway in the absence of 
complementary efforts underway in other parts of our hemisphere. That 
is why the Obama administration's investments in the Caribbean are 
being matched by the work being done in Central America through the 
Central American Regional Security Initiative (known as CARSI) and 
Mexico's Merida Initiative.
    Moreover, other donors are currently complementing USAID's citizen 
security investments in the Caribbean. For instance, UNICEF is funding 
juvenile justice programming in the Eastern Caribbean; and the European 
Union is supporting poverty reduction in Jamaica.
    Just as no one country or region can solve the citizen security 
challenge on their own, neither can a single donor. The U.S. Government 
can help, but the primary responsibility lies with national 
governments.
    The CBSI is not charity. The Caribbean and the United States 
security challenges are intertwined. The Caribbean Basin with its open 
seas and porous island borders is a major transit route for illegal 
trafficking of all sorts. The crime and violence that afflict those 
islands eventually flows northward to the United States. And the drug 
trade and associated violence drain the resources and dynamism out of 
communities on both sides of the Caribbean--whether they be Jamaica the 
country, or Jamaica, Queens, in New York.
    Thank you, Mr. Chairman. I look forward to the committee's 
questions.

    Senator Menendez. Thank you very much, Ambassador. Thank 
you all.
    There are a lot of questions here, so let me start off with 
Ambassador Brownfield.
    Do you believe that we have a comprehensive, multiagency, 
hemispheric-wide counternarcotics policy to address the 
challenges and threats from the different regions within the 
hemisphere? And if your answer to that is yes, then I would 
like to know who is formulating this policy and who is in 
charge of carrying it out.
    Ambassador Brownfield. That is an absolute----
    Senator Menendez. If you put the microphone on, I would 
appreciate it.
    Ambassador Brownfield. My loud and annoying voice often 
carries, Mr. Chairman, even without the assistance of a 
microphone. I hear that from my spouse with considerable 
regularity.
    Mr. Chairman, my answer to your question, as usual, will be 
two-part. I will say, first, I believe we have a 
comprehensive--comprehensible, multiagency approach and process 
for addressing this issue. That, of course, was not your 
question.
    Your question was, do we have a policy, and I would say on 
that, this is a work in progress. We have a structure that we 
have put together. It is a structure whereby at least once a 
year we meet at ministerial level with each of the governments 
in the region, us and the other international players in this. 
More than once a year, we meet at the next level down, the 
commission, which is what they would call the permanent 
secretary level, to set the agenda, if you will, for the 
ministerial meeting. And below that, we meet as often as 
necessary, and frequently three or four times a year, in 
technical working groups to address these issues among 
ourselves.
    Within the U.S. Government itself, we have an interagency 
process whereby we prepare for each level of those 
international meetings. We operate on the basis of the three 
core principles that you described in your own opening 
statement that drive our participation in CBSI, addressing 
illicit trafficking, addressing citizen security, and 
addressing social justice.
    So we have an umbrella policy, and we have, I think, an 
unusually successful process to try to put meat on the bones of 
that policy. But I do assert, claim, and accept in response to 
your probable followup question that we still owe you greater 
detail and greater specificity in terms of what this policy is.
    Senator Menendez. Well, Ambassador, I appreciate your 
answer, but I take it to say we do not quite have a hemispheric 
policy because it is a work in progress, which means we do not 
have any policy that is final. Is that a fair statement?
    Ambassador Brownfield. That would be a fair summary.
    Senator Menendez. And therefore, if we do not have a policy 
that is final, we do not have a policy yet. The question is, 
who is working to develop that policy? When will we expect a 
policy to exist? And who is the individual who is going to be 
in charge of carrying out that policy?
    Ambassador Brownfield. Fair enough.
    First, within the executive branch, as you know, we have an 
interagency process that is managed or at least coordinated out 
of the White House and the National Security staff. Their 
principal players in terms of working toward a single, 
coherent, comprehensive Caribbean policy would be your beloved 
Assistant Secretary of State for INL attempting to manage the 
foreign assistance side of drugs and law enforcement, the 
Western Hemisphere Bureau of the Department of State managing 
the overall policy side of the approach. The distinguished lady 
seated two seats to my right obviously handles the 
developmental side: social, economic, and other elements that 
we traditionally associate with developmental. Not present with 
us today are the representatives of the armed forces and 
specifically the U.S. Southern Command who has a piece of this. 
Our counterterrorism colleagues have a piece of this in terms 
of the NADR funding which goes into certain areas such as 
firearms which are important in the region. That is the process 
by which we are getting there. It is coordinated at the top by 
the National Security staff.
    Senator Menendez. Well, that sounds to me like a recipe 
where we are not going to get to where we need to be anytime 
soon.
    Let me ask you this. You know, we talk about the Caribbean 
as a transit flow, maybe not as great as it once was, but I am 
fearful of what is and what could be again. A lot of this 
transit is from Venezuela. Do you think the Venezuelan 
Government is doing anything to prevent drug trafficking? They 
seem to be using Trinidad and Tobago with impunity, also using 
the Dominican Republic for overflights. And we have seen recent 
reports of Hezbollah working with drug cartels in the region. 
So as the starting point, of which a lot of this comes through, 
what can you tell me about that?
    Ambassador Brownfield. Mr. Chairman, you are going to tease 
a headline out of me, but I will try to use my words and select 
my words judiciously.
    When I look at the air tracks that are provided to us by 
that part of the U.S. Government, the Joint Interagency Task 
Force South, headquartered in Key West, FL, that attempts to 
track the movement both maritime and air of illicit product 
coming up from South America, the overwhelming majority of the 
air tracks do come out of Venezuela. It would not, I think, be 
a surprise to you to learn that we have at this stage very 
minimal cooperation between the United States Government and 
its constituent parts and the Government of the Bolivarian 
Republic of Venezuela. There are a few case-specific areas 
where we have cooperated, but that relationship has in 
practical terms not worked probably for about 4 or 5 years. It 
is a challenge. It is a problem.
    The approach we have attempted to take in a strategic sense 
is to build work-arounds to strengthen the periphery around 
Venezuela in an effort to control, monitor, and if possible 
reduce the flow of product that----
    Senator Menendez. So if I asked the Venezuelan Government 
if it was doing anything to prevent drug trafficking, your 
answer would be yes, no, not very much, somewhat. What would be 
the answer?
    Ambassador Brownfield. My answer would be they are doing 
very little in terms of cooperating with us to reduce flow. 
They assert they are doing great things. I am not in a position 
to express a view on that. I have an inherent bit of skepticism 
on the point.
    Senator Menendez. Well, if you had worldwide for the State 
Department and our Government this issue, surely you would have 
a view as to their cooperation. Your cooperation is nonexistent 
with us. The question is, are they doing anything on their own 
to actually impede this. And I would like to turn to Mr. Benson 
for an answer before I turn to Senator Rubio. If all of or a 
very large number of these flights laden with drugs are coming 
out of Venezuela, I've got to believe the Venezuelans are not 
doing very much in this regard.
    Ambassador Brownfield. I would agree with you 100 percent.
    Senator Menendez. Mr. Benson, could you give us some 
insights from DEA's perspective?
    Mr. Benson. Senator, clearly Venezuela is evolving into a 
major transshipment point for cocaine moving into Central 
America and also moving into the Caribbean. As the Ambassador 
noted, the cooperation that we have with the Venezuelan 
Government is limited. And our strategy is to look at those 
criminal organizations that are operating in Venezuela and 
Central America, as well as Colombia and the region, and target 
them and dismantle them. But clearly, the role of Venezuela as 
a transshipment point is growing in significance by the week.
    Senator Menendez. I have several other questions, but I 
will turn to Senator Rubio.
    Senator Rubio. Thank you, Mr. Chairman.
    I think the first question maybe is of Ambassador 
Brownfield, but it could be of all three of you really. You 
note in your testimony that the violence is among the highest 
in the world. The murder rates are high in Jamaica, St. Kitt's, 
Nevis, Trinidad and Tobago, even Puerto Rico. We will talk 
about that in a moment. But drug trafficking in the United 
States or the Caribbean has decreased over the last 10 years. 
And I think you touched upon it a little bit in all of your 
testimonies. But how do we coincide the rise in violence but 
lower in the amount of drugs being shipped through the region? 
What is it that is driving the increase in the murder rate and 
then the violent crime in conjunction with this decline in the 
flow that is coming through the area? How do you coincide the 
two things?
    Ambassador Ayalde. There has been the recession in the 
region, and the economy has certainly had an impact in the 
unemployment. That is precisely why we are focusing on the 
youth because those are the ones that have been impacted by 
this economic situation. Obviously, the tourism has been 
affected, and all of that has a way of decreasing job 
opportunities.
    Ambassador Brownfield. I will add to that, Senator, at 
least a little bit. My testimony, which in fact I completely 
and utterly believe, is one, that we are correct. Over the last 
20 years and certainly over the last 10 years the amount of 
illicit drugs that are transiting through the Caribbean have 
gone down. They have gone down dramatically, and I would add 
they have gone down dramatically because of our efforts, those 
of the U.S. Government, to control this flow.
    Second, I also genuinely believe that the handwriting is on 
the wall. We can see the train. It is coming down the tracks. 
They will return. And they have left some structure and some 
infrastructure behind. Some of that is what is driving things 
such as homicide rates today. In other words, the same people, 
the same organizations, the same businesses, and to a certain 
extent, the same officials who were corrupted in the 1980s and 
the 1990s are still there. They are still capable of doing the 
same sort of things they were doing back then. Among those 
would be homicide and general violent crimes. And that is why 
my own conclusion is we know we are going to have to deal with 
this crisis again. It is in our interest. In fact, it would be 
the height of folly and stupidity for us not to prepare for it 
now and in advance.
    Senator Rubio. I want to turn my attention to Puerto Rico 
because that is a domestic security obligation that we have. I 
was there earlier in the year and I heard about this, and 
obviously the situation has continued. I think it is over 1,000 
homicides this year.
    What is our strategic partnership? What are our efforts? 
Describe to me that situation and what we are doing in 
conjunction with the government there and the governor and his 
office to tackle this. First of all, is the increase in the 
homicide rate there and the violence directly linked to drug-
related violence?
    And second, what is our comprehensive approach to that? Are 
we reexamining that situation? You know, this is a domestic 
obligation of ours. This is not another country. This is under 
our jurisdiction, and these are American citizens. And so what 
is our plan there? How are we working that? How is that 
developing? Are we looking at some new things that we can do?
    Mr. Benson. Senator, we see a lot of that violence 
occurring in San Juan and a lot of the murders that I mentioned 
occurring in those housing projects, and it is drug-related, 
street-level distribution. Our best way to tackle that, working 
with our partners in Puerto Rico, is to attack the organization 
responsible for distributing drugs, bringing in those loads 
into Puerto Rico, and then looking at that distribution chain 
and building cases against them and then attacking the 
organization.
    Senator Rubio. I am sorry to interrupt you. What I wanted 
to find out, because you touched on it and I will forget to ask 
you, is Puerto Rico both a domestic consumption issue and a 
distribution point? Does it have both of these elements? 
Because at the street level, they are probably distributing to 
domestic consumption. Right?
    Mr. Benson. We see organizations bringing in larger loads 
of cocaine and heroin into Puerto Rico. Some of that is for 
domestic consumption there, and then----
    Senator Rubio. How serious of a domestic problem do they 
have consumption-wise?
    Mr. Benson [continuing]. Consumption is----
    Senator Rubio. Similar to the rest of the country?
    Mr. Benson [continuing]. Is significant. That as a U.S. 
territory, I would say it needs to address. But then also we 
see a lot of that cocaine and heroin then moving into the 
United States up the eastern seaboard.
    Senator Rubio. Their consumption problem is comparable to 
other--like San Juan's to other major U.S. cities, comparable 
to what I would see in Miami or----
    Mr. Benson. I do not have the consumption statistics, but 
consumption is occurring and there is street-level distribution 
in the projects there and there is a lot of violence.
    Senator Rubio. I guess my point is cocaine comes into Miami 
where I live. Right? And then it is distributed to street-level 
organizations that sell it to people there. It is kind of the 
same process that we are seeing in San Juan, for example. And 
then in addition to that, it is also a transit point. Correct?
    Mr. Benson. Yes, Senator. We see then cocaine and heroin 
leaving Puerto Rico and then getting moved into the United 
States into south Florida all the way up the eastern seaboard 
into New York and other cities.
    Senator Rubio. So what they face in Puerto Rico today is 
similar to what we saw in south Florida in the 1980s in terms 
of a transit point, an entry point from the Caribbean on. What 
is the route that that usually services? From Puerto Rico, the 
route is toward the eastern seaboard?
    Mr. Benson. Primarily. Primarily we see those loads of 
cocaine and heroin then moving up into south Florida. So it 
does serve as a transit area, a transshipment point, but then 
also there is that local distribution as well.
    Senator Rubio. Is there a resource problem in Puerto Rico? 
Do their law enforcement agencies have a resource problem in 
terms of dealing with the complexity of this? I thought I read 
somewhere there was even submarine activity. Is that correct? 
Submersible vehicles?
    Mr. Benson. We have seen the trafficking organizations 
shift. We have seen them use air. We have addressed that 
threat. Then we see go-fast boat activity. We have seen as well 
innovative approaches such as semisubmersible submarines.
    Senator Rubio. I guess my point is they are not using 
Jacksonville, FL, or other places, nor do I want them to, by 
the way. But my point is that they are not using these places 
for a reason. Is there some specific vulnerability in Puerto 
Rico's capabilities that they are exploiting? And at the end of 
the day, is that a resource problem that needs to be addressed? 
Do they just not have good resources on the island to deal with 
some of these law enforcement----
    Mr. Benson. I mean, I could get back to you with a number 
on the staffing level of the Puerto Rican state police.
    Senator Rubio. Yes, please.
    Mr. Benson. Our staffing has been constant over the last 
several years. So that really has not--we have kept our full 
complement of resources throughout the Caribbean.
    Senator Rubio. I guess the last point I would make is if 
this criminal activity were happening in Jacksonville people 
would be screaming about it right now. I just want to make sure 
from not just the administration but from the congressional 
perspective that we are paying just as much attention to it 
because Puerto Rico is a domestic responsibility of ours. It is 
not another country. And so I want to make sure that we are 
giving it the attention it deserves both resourcewise and 
publicly. So I look forward to exploring with your office what 
we can do on our end on the congressional level to ensure that 
we are providing them the resources they need to address this 
problem.
    Thank you.
    Senator Menendez. Thank you, Senator Rubio.
    I have another round of questions here.
    I am particularly concerned within the context of the 
Caribbean about the Dominican Republic, and I would like to ask 
Mr. Benson to help us understand what is happening. I am 
particularly concerned about the substantial increase in 
narcotics consumption and trafficking in the DR, as well as the 
presence of international crime syndicates reportedly, 
including Mexican and Colombian cartels, as well as mafia-
affiliated entities from Venezuela, Russia, and even Albania. 
In just the last few weeks, there have been reports from France 
and Puerto Rico documenting significant finds of narcotics 
coming from the DR.
    Can you comment for the committee on the growth in the 
narcotics trade in the DR, how it is entering and leaving the 
country, what effect corruption has on our ability to address 
this growing problem and reform the police? So let us start 
with an oversight on the Dominican Republic.
    Mr. Benson. Senator, the Dominican Republic, as we look at 
it from a targeting point of view, plays a major role as a 
transshipment point for those drug trafficking organizations. 
We see loads of cocaine and heroin moving up into the Dominican 
Republic. We saw utilization of aircraft. We see go-fast boat 
activity bringing loads of cocaine. We see containerized cargo 
moving up into the DR. It is still probably the most 
significant transit point for criminal organizations to take 
those loads of cocaine and then we see it move from that point 
to the United States. We see also significant loads of cocaine 
leave the Dominican Republic and also then move to Europe as 
well. So it is a critical spot for us to work with our 
counterparts in the Dominican Republic from a targeting 
strategy point of view, and we do that every day.
    There are issues of corruption in the Dominican Republic, 
and then there is also great partnerships and counterparts that 
we work with every day to get the job done.
    Our targeting strategy there is effective. One thing we are 
trying to do is build throughout the Caribbean additional 
information and intelligence exchange with all of the nations 
there in Caribbean to build that more robust targeting 
approach, and that is how we see us going forward in the future 
from DEA looking at the Dominican Republic, Haiti as well, with 
the overall goal of dismantling those criminal organizations.
    Senator Menendez. When you and I spoke--and you mentioned 
this in your response to Senator Rubio's previous question--you 
talked about submersibles. Could you expound upon that? It 
seems to be a relatively new but growing mechanism that they 
are using to try to ship drugs to the United States.
    Mr. Benson. We clearly see drug trafficking organizations 
changing their tactics in response to the successful operations 
that we have. So they have, over the period of the last few 
years, begun to utilize semisubmersible submarines, fully 
submersible submarines as well, to transport larger quantities 
of cocaine being constructed in South America and then being 
utilized to move narcotics up into Central America and Mexico.
    Senator Menendez. Now, I read just a few days ago the 
statements of one of the Presidential candidates in the 
Dominican Republic who stated, ``We are at the risk of 
converting ourselves into a narcostate,'' and then went on to 
cite a series of cases which are pretty alarming if they, in 
fact, are true, and maybe, Ambassador Brownfield, you can help 
us with this as well as Mr. Benson. He cites the cases of 
former army captain, Quirino Ernesto Paulino Castillo, who 
operated within the military structure, recalling that the navy 
had guided and transported drug shipments instead of protecting 
the marine frontier.
    He also spoke about someone--and maybe, Mr. Benson, you 
could help us with this, as well as Ambassador Brownfield--Jose 
David Figueroa Agosto having an ID card from DNA, which is 
Dominican National Intelligence, and was supposedly guarded by 
police colonels, as well as having official license plates. 
Those are just some of a series of examples that have existed.
    Could you talk about those individuals and/or challenges?
    Mr. Benson. There is clearly, as you noted, Senator, 
corruption, but our approach is to work with those members of 
the Dominican police forces that we have a history of working 
with. As you know, we do have a very robust, sensitive 
investigation unit that has achieved many operational 
successes. So as we look from a targeting and intelligence-
sharing point of view, we are always cognizant that corruption 
does exist there, as well as other places, but we approach it 
in a way where we still are able to put very significant 
operations and cases together to achieve those results that we 
need to achieve.
    Senator Menendez. Well, I appreciate that the DEA is 
working as best it can in this environment with vetted entities 
and units or individuals. My question, however, is to try to 
get to a broader understanding. Maybe, Ambassador Brownfield, 
you can help us with this because at the end of the day, do you 
know who Jose Figueroa Agosto is?
    Ambassador Brownfield. Mr. Chairman, I am not going to 
offer a specific view on a specific case. I have heard the 
name, but in my case I have heard it mostly through media 
reporting. But I do not question in any way what you have just 
read.
    You asked earlier about a policy, and let me give you a 
sense of the four core elements of INL's counternarcotics 
approach and policy.
    Senator Menendez. With all due respect, we covered that 
ground before. I want to discuss specifics about what is 
happening in the Dominican Republic.
    Do you know Jose Figueroa Agosto?
    Ambassador Brownfield. I do not, no.
    Senator Menendez. I mean, do you know----
    Ambassador Brownfield. I mean, I do not know him.
    Senator Menendez [continuing]. Not personally know him, but 
do you know of his case?
    Ambassador Brownfield. No.
    Senator Menendez. Is it fair to say, Mr. Benson, that he 
has ties? Clearly is he not under our arrest and in the midst 
of prosecution?
    Mr. Benson. What I know about Mr. Figueroa, Senator, was he 
was a drug trafficker. He was ultimately arrested back in July 
of 2010 in Puerto Rico and is awaiting trial.
    Senator Menendez. Did he not act within the Dominican 
Republic before he was caught in Puerto Rico?
    Mr. Benson. He was in the Dominican Republic as a 
trafficker, and there were attempts to apprehend him, and then 
ultimately he was arrested in Puerto Rico.
    Senator Menendez. And let me ask you, Ambassador 
Brownfield. Are you familiar with the fact that we have 
canceled a series of visas of persons from the Dominican 
Republic, as well as officials from the Dominican Republic, 
because of issues of corruption and narcotrafficking?
    Ambassador Brownfield. Yes. I mean, most of them would have 
been canceled as a result of decisions made within the INL's 
crime office in terms of the corruption provision in the 
statute.
    Senator Menendez. And do you know that specifically in the 
context of the Dominican Republic that we have, in fact, 
canceled a series of visas because of those concerns?
    Ambassador Brownfield. Yes.
    Senator Menendez. Because I note that there is an article 
where the United States Ambassador in the Dominican Republic, 
while not referring to a specific case, talks about a series of 
visas that have been canceled.
    So my concern is that we can make all the efforts we want. 
I am using the Dominican Republic by way of example. But it 
sounds like in the case of DEA's challenge, enormous as it is, 
in some cases you have to work around these governmental 
entities where some of the highest levels of the government 
seem to be corrupted by the drug traffickers, and that is a 
huge challenge. Is that fair to say?
    Ambassador Brownfield. It is very fair to say and it is a 
core element. The corruption element is a core part of what we 
are trying to do in the DR.
    Senator Menendez. Mr. Benson, let me ask you, using again 
the Dominican Republic by way of example. It is a major 
shipping, normal shipping, port. It has two major, significant 
ports. A lot of shipping goes to Europe. A lot of shipping 
comes to the United States to my home port in New Jersey.
    I have read a series of articles and concerns in which the 
basis of the cargo inspection, the basis of some of those ports 
being used where there is no inspection, or after an inspection 
takes place, the door is changed where the seal has been 
issued, which is sort of like our guarantee that in fact what 
has been inspected there is legitimate and able to come to the 
United States. And then the door is changed and moved to 
another container where ultimately what is in there is illicit 
drugs. There may be other items as well.
    Can you talk to the committee a little bit about that?
    Mr. Benson. Well, clearly the drug trafficking 
organizations have recognized that the ports are a place where 
they can move shipments of drugs to the United States and 
Europe.
    The major port there, the Dominican port, Casedo--and then 
there are 15 or so other smaller ports. We clearly have 
investigations tied to activity there. We work with our 
sensitive investigative units at targeting what is moving 
through those ports. There are issues, Senator, as you 
mentioned, with port security that needs to be looked at. But 
we continue to work with those trusted partners at targeting 
those organizations responsible for movement of drugs through 
the ports there.
    Senator Menendez. And finally, yesterday a Dominican paper 
reported on the visit to the United States of the Dominican 
drug czar, Rolando Rosado, to discuss the creation of what he 
described as a maritime wall. Can you comment on that?
    Mr. Benson. We have an operation called Operation Seawall 
that is looking at maritime activity both from the interdiction 
focus, but in every piece of this, as the Ambassador mentioned, 
it is not just interdiction. We are looking at the entire 
organization, those responsible for movement, those 
transportation specialists, but then also targeting the 
leadership responsible in tracing those loads of cocaine all 
the way back down to Colombia because that is what we have to 
do, Senator. We have to look at the source zone, the transit 
zone, and the arrival zone in places like New Jersey and many, 
many other places that are negatively being impacted by these 
shipments of cocaine and heroin. So it is a broad-ranging 
approach, but it is looking at the source, transit, and 
arrival.
    Senator Menendez. And finally, Ambassador Brownfield, I 
want to talk about funding. I see the administration asking for 
less funding for CBSI in fiscal year 2012. The question is why. 
And then I see overall INL funding significantly lower, from 
$565 million versus $701 million. I recognize Merida may be 
part of that decrease attributed to the decrease in Merida 
funding for large equipment purposes, but I see our challenge 
growing beyond the Caribbean. Can you give the committee a 
sense as to why we are headed in the opposite direction when 
our challenge is growing?
    Ambassador Brownfield. Yes, Mr. Chairman. That said, I am a 
team player and I accept that I am part of a larger team and I 
am not the quarterback of that team and I do not call the 
plays.
    What we have asked for is what has finally been approved in 
a complicated budgetary process, managed first within the 
Department of State and then in a larger sense from the White 
House in terms of the administration's and the President's 
budget request to you.
    I have been led to believe that we are operating in an 
environment where the expectation is we will take an absolute 
cut in our core budgets and we must get to that cut. I am 
operating in an environment where each of the regions where I 
am called upon to support programs take a percentage cut. So my 
global budget number is driven down, and then I have to get 
within a region-by-region or geographic region-by-region number 
as well. This is driving the number that has been brought 
before you.
    You have not asked, but if you were to ask would I in a 
more perfect world like and be able to make excellent use of a 
larger budget, of course I would. That said, I go back to my 
starting point. I am a team player. I will accept the number 
that the quarterback finally tells me or the coach calls in in 
terms of the play. And that is the best answer I can give you 
right now.
    Senator Menendez. Well, I appreciate being a team player. I 
appreciate, more importantly, however, the role in informing 
Congress of the underlying decisions for public policy. Is it 
fair to say that the reductions that we are seeing here are 
going to have consequences in terms of the fight that we need 
to continue?
    It seems to me we are spending an enormous amount of money 
along the border between the United States and Mexico just to 
intercede people who would come over, but yet the underlying 
challenge is there in Central America, in the Caribbean which, 
while reduced in terms of transiting, can easily be the place 
that it goes back to when we squeeze. At the end of the day, it 
is along Central America. We squeeze there and now we see the 
Caribbean which is very porous, has water frontiers versus land 
frontiers. That challenge is, at the end of the day, going to 
be one that is not fully met. Is that fair to say?
    I am not asking you whether you are a team player or not. I 
appreciate that you are. But I want to know as the chair of 
this subcommittee that, in fact, is it not going to be more 
difficult for us to meet our challenges with the reductions 
that we are seeing taking place.
    Ambassador Brownfield. Mr. Chairman, as I said in my 
statement, I see a crisis coming and I believe our challenge is 
going to get greater in the coming years. It is my view right 
now that Congress has been generous over the last 2 years. We 
actually do have a substantial amount of funding in the 
pipeline. You have a reasonable expectation that I should be 
able to deliver concrete, measurable results in the course of 
this coming year in that regard. You have an equal right to 
expect from me an explanation as to how much more I truly and 
genuinely need for the post-2012 timeframe. I am trying to work 
four initiatives at the same time: Plan Colombia, Merida in 
Mexico, CARSI in Central America, and CBSI. You have a right to 
expect me to offer you my best possible judgment in terms of 
how we can work those four initiatives simultaneously and 
within realistic expectations of what the U.S. Senate and 
Congress can offer us by way of resources.
    Senator Menendez. Mr. Benson, if we had greater resources, 
could you not deploy them effectively in your singular mission?
    Mr. Benson. Senator, we have a strong footprint in the 
Caribbean, but if we had additional resources, we could always 
deploy those resources to target that threat.
    Senator Menendez. And here is my point. There is no 
question that we have to cut our national debt. There is no 
question that we have to meet our challenges. We have to do 
that intelligently while still meeting what I perceive as 
national security challenges. I unfortunately have seen too 
many families in which a child becomes addicted to a drug, and 
that is devastating for not only that child but that family. I 
see too many murders take place on the streets of the cities 
that I have the privilege of representing, and a fair number of 
that is related to drug trafficking.
    So I do not want to be obfuscated by the fog of ``let us 
cut at any cost'' when in fact there are some things for which 
the national interest and security of the United States still 
calls for. And I believe this is a field. It is a field that I 
intend to work very vigorously on in our jurisdiction of global 
narcotics and to try to help build so that we can meet that 
challenge. And I will appreciate honest answers to what it is 
that we need in order to get there.
    So with that, I understand Senator Rubio does not have any 
other questions.
    Senator Rubio. I do not. I want to just take off on what 
you are saying. I too take the national debt very seriously. It 
was a cornerstone of the reason why I ran.
    On the other hand, I would love to see an analysis of how 
much money we would spend domestically if we do not address 
these issues. It sounds like we are going to spend the money 
either way. The question is whether we are going to spend it on 
the front end or we are going to spend it on the back end and 
at a higher human cost. So that would probably be something 
interesting to look at. There may be studies out there already. 
But the money is going to be spent because if people are 
addicted, if you have got crime here domestically, if in fact 
this emerging crisis that Mr. Brownfield has outlined hits us, 
the costs of that are going to be pretty high as well, and we 
are going to have to deal with those. So we will work on that. 
That is interesting.
    Senator Menendez. Well, with my thanks to this panel for 
all of your insights and for all of your missions and 
particularly, Mr. Benson, to you and the men and women of the 
DEA, thank you very much. We look forward to working with you 
to build our capacity and our ability to meet the challenge. 
With that, this panel is dismissed. Thank you very much for 
your testimony.
    Let me, as we bring up the second panel, introduce them. 
Dr. Eduardo Gamarra is a professor of politics and 
international relations at Florida International University 
where he has also served as the director of the Latin American 
and Caribbean Center. I will yield to Senator Rubio since----
    Senator Rubio. Just he is a member of the political science 
faculty there as well, which is, I believe, the finest 
political science faculty in the southeastern United States, 
not just because I coteach there. [Laughter.]
    Senator Menendez. And you are so diplomatic. You limited it 
to the southeast so you would not have a problem with the 
chair. I appreciate that.
    Senator Rubio. A big State.
    Senator Menendez. Yes.
    Dr. Gamarra has written and edited a number of books on the 
Caribbean and Central America. He has worked in a consulting 
capacity on counternarcotics with police organizations and 
Federal agencies throughout Latin America with a particular 
emphasis on counternarcotics efforts in the Dominican Republic. 
So we appreciate his presence here.
    Douglas Farah is a senior fellow at the International 
Assessment and Strategy Center where he is a renowned national 
security consultant and analyst. For close to two decades, he 
was a foreign correspondent, investigative reporter for the 
Washington Post, and freelanced for other publications such as 
the Boston Globe, the Financial Times, and Mother Jones 
covering Latin America and West Africa. He has worked in 
Colombia and Venezuela, Ecuador, and Bolivia. He chronicled the 
rise and fall of the Medellin Cartel and its leader, Pablo 
Escobar, and we appreciate his insights here today.
    So with that, Dr. Gamarra, we will start with you. If you 
each would summarize your testimony for about 5 minutes and 
then we will have your full testimony entered into the record 
and we will have a discussion after that.

    STATEMENT OF DR. EDUARDO A. GAMARRA, PROFESSOR, FLORIDA 
     INTERNATIONAL UNIVERSITY, DEPARTMENT OF POLITICS AND 
               INTERNATIONAL RELATIONS, MIAMI, FL

    Dr. Gamarra. Thank you very much, Senator Menendez and 
Senator Rubio, for the opportunity to provide this testimony 
about the overall situation of violence primarily in the 
Dominican Republic and the Caribbean more broadly.
    As you noted, over the past decade, I have been working 
with the Government of the Dominican Republic in addressing 
some of these problems and the impact particularly on democracy 
there. I have worked primarily as a consultant for a firm based 
in Miami called Newlink Research which in 2004 was asked by 
President Fernandez to design a comprehensive plan aimed at 
trying to address the trends that we were seeing at the moment 
of increased drug trafficking organization presence, drug 
consumption and, of course, violence.
    The Plan de Seguridad Democratica, or Democratic Security 
Plan, was a comprehensive plan that included the development of 
a subprogram called Safe Neighborhood which targeted the most 
violence-prone neighborhoods particularly in Santiago and in 
Santo Domingo. In addition to a police component, the plan 
included a battery of social programs that, for the most part, 
were applied in up to 110 neighborhoods throughout the country.
    Initially the PSD had some very promising results. Violent 
death rates in the most violent neighborhoods of the country 
declined and the national death rate, which had almost reached 
30 per 100,000, reached 17 per 100,000 in the year 2006. Our 
conclusion at the time was that the combined presence of the 
police and the implementation of this battery of social 
programs was responsible for restoring the rights of citizens 
to organize and participate actively in communal activities 
without fear of crime. In my view, it was a good faith effort 
to address a problem that was, unfortunately, larger than the 
Dominican Republic and, in essence, the changing security 
situation throughout the Caribbean.
    Following its initial success, unfortunately, violent death 
rates began to climb again and other forms of crime, especially 
muggings, robberies, and the like, exploded, in particular 
outside of the Barrio Seguro neighborhoods. Our own evaluations 
concluded that the problems were both domestic on the one hand, 
and domestic in particular, Senator Menendez, had to do with 
the resistance of the national police which resisted some of 
the programs that we attempted to introduce to change the 
structure of that institution, and that involves corruption to 
a series of problems related to lack of training and lack of 
resources. Another issue was lack of coordination between what 
certain outfits were doing in government and the national 
police and the judicial system.
    But in my view, the major problem was the lack of 
international support for the PSD. The U.S. Embassy, for 
example, provided very small and largely, in my view, 
insignificant efforts to promote community policing and to 
strengthen the prosecutor's office. I am not talking about DOD 
or DEA support.
    Over the course of the past 8 years, I believe that U.S. 
support for President Fernandez's initiatives has been 
extraordinarily limited, and I would argue that even some of 
the State Department reports about what the United States is 
doing in community policing and in strengthening the 
prosecutors' offices are highly exaggerated. The U.S. impact, 
in fact, is quite small. At times I would say that Embassy 
officials in Santo Domingo saw the PSD with great skepticism 
and even suspicion, and in my view, the narrow focus of the 
very limited assistance projects that conspired against the 
more comprehensive approach that the PSD tried to initiate.
    The same can be said for other international funding, the 
Inter American Development Bank and the World Bank and others.
    Now, by 2007, our research confirmed what has been said 
here already, the enormous presence of transnational criminal 
organizations that were using the island, not just the 
Dominican Republic but certainly Haiti, to traffic drugs to 
both the United States and to Europe. I conducted focus groups 
throughout the Dominican Republic basically in very small 
communities, which basically talked about bombardments in very 
small communities. These drugs that fell from the sky had a 
very significant multiplier impact.
    First, drug use became a problem not just in Santo Domingo 
but around the country.
    Second, as we have said, drug busts in the Dominican 
Republic today are transnational as well. It is not Dominicans 
alone that are being arrested, but you have multiple 
nationalities that are involved.
    And third, most importantly, the Dominican Republic in 
large measure is becoming the place where numerous drug 
trafficking transnational organizations are settling their 
scores.
    In the 1990s some analysts, including myself, predicted 
that the Dominican Republic would become the command and 
control center for drug trafficking in the Caribbean. My sense 
is that today perhaps the Dominican Republic is close to that.
    In 2011, the situation is much more serious than in 2004. 
Today the State Department report and the U.N. World Drug 
Report coincide that about 7 percent of all cocaine that enters 
the United States passes through Hispaniola and about 11 
percent of all cocaine that goes to Europe passes through the 
Dominican Republic. And they are coming through diverse areas: 
air, land, and sea.
    Now, in my view, the Dominican Republic with these very 
scarce resources has been trying to do certain things that are 
quite important. For example, something that was not mentioned 
in the first panel, President Fernandez purchased eight Super 
Tucano airplanes from Brazil, in fact, trying to shut down the 
air drops, and the results, at least in this first year, have 
been quite positive. The United States looked somewhat askance 
at that initiative; in my view, the Dominican Republic has had 
to do that because the bombardment had reached epidemic 
proportions and foreign support to help end this trend was 
conspicuously absent.
    The purchase of those planes demonstrates the resolve of 
governments in the region to spend and even indebt themselves 
to counter a problem that is undermining their democracies.
    Passing very quickly here to the American efforts and 
particularly to CBSI, my view is that this is an enormously 
important program because it is targeting the grave situation 
facing the region. This situation in the Dominican Republic is 
affecting in particular young Dominicans, the most vulnerable 
sector. This has been amply documented through the studies 
conducted by Newlink Research. They are the main victims of 
violence. They lack educational and job opportunities and they 
face extraordinary discrimination. Few who live in these 
neighborhoods are able to obtain employment outside of the most 
affected neighborhoods. And they, of course, are not only 
victims but they are also victimizers; in that sense, young 
Dominicans are essentially being condemned to lives of 
violence, poor education, unemployment, and exclusion.
    The CBSI initiatives are a worthwhile effort but in my view 
are insufficient. The three dimensions, which include 
regionwide assessments, complementary education alternatives, 
and training and basic employment and vocational skills, are 
very important, but $5 million does not go very far.
    In conclusion, I would say, based on my experience in the 
Dominican Republic, that these underfunded programs have no 
real impact and contribute instead to deepening the gap between 
the promise and performance that plagues all democracies in the 
Caribbean and in the hemisphere.
    Thank you very much.
    [The prepared statement of Dr. Gamarra follows:]

              Prepared Statement of Dr. Eduardo A. Gamarra

    Thank you very much for the opportunity to provide testimony today 
about the overall situation with crime and violence in the Dominican 
Republic specifically and the Caribbean more broadly. Over the course 
of the past decade I have been working directly with the Government of 
the Dominican Republic in addressing these problems and their impact on 
development and democracy. As a consultant for Newlink Research, a 
Miami based firm, I was asked in the fall of 2004 by President Leonel 
Fernandez to develop a comprehensive plan that would address what was 
already a visible trend: the increased presence of drug trafficking 
organizations, an increase in drug consumption, and a rise in violent 
crime.
    President Fernandez made fighting crime one of the most important 
components of his new government. Thus, rather than waiting for the 
international community to help him address the problem, he devoted 
Dominican resources from the outset. This showed both the will and the 
resolve to address a problem that was achieving significant 
proportions. As President Fernandez told me at the time of the 
launching of his anticrime plan, his objective was to prevent the 
Dominican Republic from following the pattern of the DR-CAFTA 
countries.
    The Plan de Seguridad Democratica (Democratic Security Plan-PSD) 
was a comprehensive plan aimed specifically to bring down the violent 
death and crime rates that had been steadily rising since the year 
2002, in part, as a result of an unprecedented economic crisis. More 
broadly, the PSD included the development of a program dubbed Barrio 
Seguro (Safe Neighborhood) through which the most violence prone 
neighborhoods were targeted not only for increased police presence but 
also for the development of a battery of social programs aimed 
primarily at youth at risk.
     Based on the results of intensive qualitative and quantitative 
data gathered by Newlink Research in dozens of neighborhoods throughout 
the larger cities of the Dominican Republic, the PSD initially had some 
very promising results. Violent death rates in some of the worst 
neighborhoods dropped dramatically and evaluations showed that in a few 
of these neighborhoods the Barrio Seguro program helped jump-start 
citizen participation.\1\ Our conclusion was that the combined presence 
of the police and the implementation of a variety of social programs 
were responsible for restoring the rights of citizens to organize and 
participate actively in communal activities without fear of crime
---------------------------------------------------------------------------
    \1\ The violent death rate in 2004 was 30 per 100,000 inhabitants. 
In 2006 the violent death rate dropped to 17 per 100,000. In 2010 the 
violent death rate had climbed to 24 per 100,000.
---------------------------------------------------------------------------
    It is fair to say that the PSD and Barrio Seguro were a good faith 
effort to address a problem that unfortunately was larger than the 
Dominican Republic and the changing security situation throughout the 
Caribbean. Following its initial success, violent death rates began to 
climb again and other forms of crime, especially muggings, robbery, and 
the like exploded especially outside of the Barrio Seguro 
neighborhoods. Our own evaluations identified the factors that 
transformed the security situation in the Dominican Republic. These are 
factors common to other countries facing the same issue.
    On the domestic front, the most serious problem facing the PSD was 
its failure to overhaul the National Police, which continues to be an 
institution that resists change for reasons that range from corruption 
to a severe lack of training and resources. A second major issue was 
the politicization of the PSD as those who were charged with carrying 
out the plan saw it is as an important tool to seek higher political 
office. Another issue involved the lack of coordination between those 
institutions charged with implementing the PSD; in particular, the Plan 
suffered from a very serious lack of coordinated efforts between the 
National Police and the Ministry of Interior.
     A final major problem was the lack of international support for 
the PSD. The U.S. Embassy provided funding for very small and largely 
insignificant efforts to promote community policing and to strengthen 
the prosecutor's office. In my view, over the course of past 8 years 
U.S. support for President Fernandez's initiatives has been limited. 
Moreover, I would argue that in its yearly INCSR reports, the impact of 
U.S. assistance programs is highly exaggerated. U.S. assistance has 
been limited in size and scope and often it duplicates or contradicts 
ongoing local efforts. At times, Embassy officials saw the Dominican 
President's anticrime initiatives with great skepticism and suspicion. 
The narrow focus of the very limited assistance programs--aimed mainly 
at the police and the prosecutor's office--conspired against the more 
comprehensive security plan that President Fernandez pursued.
    Funding from the Inter American Development Bank (IADB) and World 
Bank was also very limited and did not directly fund the PSD. In 2008, 
however, the IADB sent a team headed by Rafael Pardo, Colombia's former 
Minister of Defense to evaluate the PSD; its final report lavished 
extensive praise and urged the Bank to fund some of its components, 
especially in the prosecutor's office.
    While the PSD's success was affected by these domestic and funding 
constraints, the reality is that the situation in the Caribbean 
(including Venezuela, Colombia, and Mexico) had also changed 
dramatically during this period and was having an enormous impact on 
the Dominican Republic. By 2007, our research confirmed the presence of 
transnational criminal organizations that were increasingly using the 
entire island of Hispaniola to traffic drugs to both the United States 
and Europe. We conducted focus groups in remote areas of the country 
where villagers reported continuous ``bombardments'' of drugs from the 
sky.
    The drugs that fell from the sky had a multiplier impact on the 
country. First, drug use became an issue even in small towns where 
traffickers were paying villagers in kind for turning over the drugs 
they collected. This produced not only violence but also contributed to 
drug consumption problems among young Dominicans. Second, increasingly 
drug busts were netting individuals from a variety of countries 
including Colombians, Venezuelans, Central Americans, Mexicans, and 
Haitians. Third, this trend suggested that the Dominican Republic was 
fast becoming not only an important transshipment point but also a 
place where traffickers of all nationalities were violently settling 
scores. In 2011, the Dominican Republic appeared to have fulfilled the 
prediction by some analysts in the 1990s that it was becoming the 
command and control center of the Caribbean drug trafficking industry.
    According to Dominican sociologist Lilian Bobea,

          In recent years the surge of drug trafficking toward and from 
        the Dominican Republic and the emergence of internal 
        microtrafficking have become a complex, expansive, and harmful 
        phenomena for Dominican society. Given their importance, both 
        constitute a development engine for many sectors of the urban 
        and rural economy of the country. Progressively and owing to 
        its resilience, the ties of this industry strengthen an 
        integrated vertical and horizontal transnational criminal 
        structure that involves a network of social and political 
        organizations. These dynamics affect the quality of life in the 
        Dominican Republic and they undermine trust in institutions and 
        democratic governance . . .\2\
---------------------------------------------------------------------------
    \2\ Lilian Bobea, ``Vinculos y Estructuras del Narcotrafico en 
Republica Dominicana,'' in Eduardo A. Gamarra and Diana Pardo, 
``Aciertos y Errores de la lucha contra el trafico de drogas ilicitas: 
Lecciones de las experiencias nacionales de America Latina y el 
Caribe,'' (Santo Domingo, FUNGLODE, forthcoming 2011).

    In 2011, more drugs are entering and exiting the Dominican Republic 
than ever. The Dominican National Directorate for Drug Control (DNCD) 
routinely confiscates cocaine, heroin, marihuana, and synthetic drugs. 
And these drugs are coming into the country through diverse air, land, 
and sea routes. Within the country the distribution and 
commercialization routes have also become more complex and diverse and 
they increasingly involve a larger number of Dominicans and foreigners 
at every level. Not surprisingly this evolving and increasingly complex 
structure has contributed to a significant expansion of violent crime, 
especially in the largest urban centers of the country. At the same 
time drugs are passing through the Dominican Republic at a faster rate 
than ever before. According to the 2011 INCSR and the U.N.'s World Drug 
Report, 7 percent of all cocaine that enters the United States passes 
through the island of Hispaniola and 11 percent of all the cocaine that 
reaches Europe is transshipped from the Dominican Republic.
    As the UNODC 2011 Global Study on Homicide shows, homicide rates 
experienced a sharp increase in Central America and the Caribbean. This 
trend is the result of multiple factors, such as a rapid urbanization, 
the easy availability of guns, high-income inequality, a high 
proportion of youth, local gang structures, and organized crime and 
drug trafficking. A decade ago homicide rates in the Caribbean were 
significantly lower than in Central America. But they have recently 
increased, most notably in Jamaica (52.1 deaths per 100,000 
inhabitants), Trinidad and Tobago (35.2), Puerto Rico (26.2), St. Kitts 
and Nevis (38.2), and the Dominican Republic (24.9).\3\
---------------------------------------------------------------------------
    \3\ United Nations Office on Drugs and Crime, ``Global Study on 
Homicide 2011,'' (Vienna, UNODC, 2011).
---------------------------------------------------------------------------
     Unfortunately, most of the Caribbean countries faced this dramatic 
transformation with their own meager resources. Despite the launching 
of Plan Merida in the latter days of the Bush administration, very few 
U.S. resources were available. The diagnoses of the problem were amply 
documented by the research commissioned by the Dominican Government. 
While the PSD was aimed at controlling the situation in the 
neighborhoods, the government opted to purchase eight A-29 Tucano 
planes from Brazil to shut down the drug bombardments. At this date, 
the presence of these aircraft has had a significant impact, yet it is 
still insufficient to prevent the flow of drugs from South America 
through air, land, and sea. The purchase of these planes reveals, 
however, the resolve of some governments in the region to spend--and 
even indebt themselves--to address a problem that is undermining their 
countries.
    Despite the best efforts under the PSD, the reality is that today 
the Dominican Republic is facing a more serious challenge than in 2004. 
And, public perception of the lack of safety has skyrocketed leading 
the average Dominican not only to complain about the ineffectiveness of 
the PSD but to also demand a much stronger and violent response by the 
government. My research has found that Dominicans are not as concerned 
about police human rights violations as are organizations such as 
Amnesty International.
    This sentiment, which found echo among some of the most 
conservative politicians contributed to the whittling down of basic 
habeas corpus guarantees found in the Code of Criminal Procedure. USAID 
funding in the 1990s led to the passage of this important Code and some 
funding is still available to help in its implementation. The Dominican 
Congress recently adopted modifications that are likely to send younger 
kids to adult prisons and will provide police with the right to hold 
suspects indefinitely.
    The reality of this situation is being felt daily by young 
Dominicans, the most vulnerable sector to the growing threat posed by 
transnational trafficking and the deterioration of citizen security. 
Since 2004, Newlink Research has amply documented the plight of at-risk 
youth especially in the aforementioned Barrio Seguro neighborhoods. 
They are not only the main victims of violence, they also lack 
educational and job opportunities and face extreme discrimination 
outside of their neighborhoods. Few are able to obtain formal 
employment if they list one of these neighborhoods as their home 
address. While young men are the main victims and also victimizers, 
young women are the main victims of intrafamily violence and early 
pregnancy further limits already scarce opportunities to success. As a 
result, most young Dominicans are condemned to a life in the vast 
informal sector of the Dominican economy. Similar results have been 
obtained by evaluations of USAID programs aimed at young Dominicans.
    For this reason, I believe that the CBSI initiatives are a 
worthwhile--albeit insufficient--effort to address the problems of 
young Dominicans. According to USAID, the $5 million for programs in 
the Dominican Republic over promise to provide:

   Regionwide assessments aimed at improving ongoing programs 
        focused on first offenders and other at-risk youth, good 
        governance, anticorruption, community policing, and youth 
        education;
   Complementary education alternatives for Dominican youth, 
        including flexible learning models and literacy campaigns;
   Training in basic employment and vocational skills in the 
        areas of tourism, agriculture, and the computer sciences for 
        at-risk youth.

     While some of these programs were already underway mainly as a 
result of World Bank, Inter-American Development Bank, and Dominican 
funding, the sad reality is that these are perhaps too little and too 
late to be effective. Moreover, these programs provide a long-term 
solution to a very limited number of young people. In the meantime the 
majority will continue to face the daily problems of violence, drug 
abuse, and lack of opportunity.
    Based on my long-term experience in the Dominican Republic, I am 
convinced that any future engagement should not suffer from the 
piecemeal approach of U.S. assistance. USAID programs should not 
duplicate and undermine local Caribbean efforts but seek serious 
partnerships instead so that it can more effectively shape their 
content and long-term course. Underfunded programs have no real impact 
and instead contribute to deepening the gap between promise and 
performance that plagues all democracies in the Caribbean and elsewhere 
in this hemisphere.

    Senator Menendez. Thank you very much.
    Mr. Farah.

 STATEMENT OF DOUGLAS FARAH, SCHOLAR, INTERNATIONAL ASSESSMENT 
              AND STRATEGY CENTER, ALEXANDRIA, VA

    Mr. Farah. Chairman Menendez and Ranking Member Rubio, 
thank you for the opportunity to testify today.
    As many others have said, drug trafficking routes and 
networks are like water running downhill: they will always seek 
the path of least resistance.
    The CBSI program, in anticipation of the pressure being 
applied in Mexico and Colombia, is aimed at making it 
simultaneously more difficult to traffic cocaine and other 
illicit drugs through the Caribbean. The goals are laudable and 
these areas of cooperation are necessary in the small and 
generally underresourced countries of the Caribbean, and the 
program correctly anticipates the region's growing importance 
as a transnational shipping route not only for drugs but for 
human smuggling and other transnational organized criminal 
activities. But there are several significant roadblocks for 
CBSI achieving these goals.
    The first is the growing political and economic influence 
of Venezuela in the region, a significant drawback given that 
Venezuela is the growing and primary gateway for the flow of 
illicit narcotics into the Caribbean and that senior members of 
its government have been sanctioned by the United States for 
their involvement in drug trafficking and working with 
designated terrorist entities.
    The second is the continuing existence of large offshore 
financial centers offering multiple services to a broad array 
of transnational criminal organizations, both regional and 
extra-regional, thereby allowing the profits of illicit 
activities to flow back to criminal organizations.
    In 2004, Presidents Hugo Chavez of Venezuela and Fidel 
Castro of Cuba announced the formation of the Bolivarian 
Alliance for the Peoples of Our America, ALBA; an alliance 
aimed at creating a political, economic, and military structure 
that explicitly excludes the United States but allies with Iran 
and other regimes hostile to the United States.
    The two authoritarian governments were soon joined by the 
leaders of Bolivia, Ecuador, Nicaragua, all espousing 21st 
century socialism. The leaders have one thing in common or many 
things in common, among them offering material support to the 
Revolutionary Armed Forces of Colombia, the FARC, a designated 
terrorist organization by both the United States and the 
European Union. And there are senior leaders in all of these 
countries who are deeply corrupted and involved in the drug 
trade. In 2008, the nation of Dominica joined ALBA, and in 
2009, St. Vincent and the Grenadines and Antigua and Barbuda 
also joined the alliance.
    This is worrisome on multiple fronts. If they were simply 
democracies seeking a different democratic path, it would not 
be so troublesome. But when the most authoritarian governments 
in the region form an alliance that consistently utilizes the 
drug trade as an instrument of statecraft, allies itself with 
and facilitates the expansion of the influence of nations 
hostile to both the United States and its democratic allies, 
and systematically reduces freedom of expression, political 
freedom, and the rule of law, this alliance cannot be viewed as 
benign.
    Most of the Caribbean nations that have joined ALBA, or are 
considering joining, because of the cheap oil subsidies 
provided by Venezuela, which is a real economic boon. But as 
the Congressional Research Service found, this has considerable 
risks. As they wrote in their recent report, ``As United States 
counternarcotics cooperation with Venezuela has diminished 
since 2005, Venezuela has become a major transit point for drug 
flights through the Caribbean, particularly Haiti and the 
Dominican Republic, into the United States.''
    In addition to the sea-lanes to the Caribbean islands and 
the westbound flights over the eastern Caribbean, significant 
drug traffic transits the Caribbean through the airspace 
between Venezuela and Colombia to the eastern Atlantic and 
Caribbean coast of Central America. Particularly hard hit are 
Honduras, Belize, and Nicaragua.
    The Chavez government aids and protects drug traffickers at 
the highest levels. Perhaps the strongest public evidence of 
the importance of Venezuela to the FARC, which produces 90 
percent of the cocaine consumed in the United States, is the 
public designation of three of Chavez's closest advisors and 
senior government officials by our U.S. Treasury's Office of 
Foreign Assets Control. As legendary District Attorney Robert 
Morgenthau warned as he left public service in Manhattan after 
40 years, ``Let there be no doubt that Hugo Chavez leads not 
only a corrupt government but one staffed by terrorist 
sympathizers. The government has strong ties to 
narcotrafficking and money laundering, and reportedly plays an 
active role in the transshipment of narcotics and the 
laundering of narcotics proceeds in exchange for payments to 
corrupt government officials.''
    One of the primary areas also not addressed by CBSI is the 
extensive use of offshore banking and corporate registries that 
are part of the lifeblood of drug cartels and the ability to 
move their money. Again, our own Government has documented the 
anomalies of these anonymous jurisdictions. For example, 
according to the State Department, in the British Virgin 
Islands with 22,000 people, as of September 2010, there were 
456,547 active companies, 237 licensed banks, and 2,951 mutual 
funds. BVI's unique share structure does not require a 
statement of authorized capital, as well as the lack of 
mandatory filing of ownership which poses a significant money 
laundering risk. That can be said for virtually any country in 
the Caribbean. Almost all of them have the same incredibly weak 
laws.
    And this again ties back to Venezuela which is now acting 
as a broker in the money laundering services for the cartels. 
As the State Department noted, ``Money laundering occurs 
through Venezuela's commercial banks, exchange houses, gambling 
sites, fraudulently invoiced foreign trade transactions, 
smuggling, real estate, agriculture and livestock businesses.'' 
Venezuela is not a regional financial center and does not have 
an offshore financial sector, but many of its local banks have 
offshore affiliates in the Caribbean and that is one of the key 
gateways into the money laundering world.
    I would say that the blind trusts are particularly 
unnoticed in the region, although my own research in recent 
years has documented that the Muslim Brotherhood, as well as 
the bin Laden family, maintained dozens of companies in Panama 
and elsewhere in the Caribbean where the true ownerships of the 
accounts were hidden and difficult to find.
    This summer, the International Investment Corporation of 
the Gulf-Bahamas, a wholly owned subsidiary of the Dar al Maal 
Al Islami Bank, an Islamist banking institution linked to the 
Muslim Brotherhood, reached a nonprosecution agreement with the 
U.S. Department of Justice where they agreed to pay more than 
$30 million in fines and penalties for significant tax 
violations in the United States.
    In conclusion, I would say CBSI could be a useful tool for 
helping Caribbean partners combat drug trafficking, endemic 
corruption, violence, and the erosion of the rule of law that 
transnational organized criminal groups bring. However, the 
initiative in my view will have little impact as long as 
Venezuela and ALBA nations in Latin America and the Caribbean 
continue to criminalize and use transnational organized crime 
as part of their statecraft, giving support and protection to 
drug trafficking and designated terrorist organizations such as 
the FARC. With Venezuela and its allies opening key corridors 
for drug trafficking to the United States, as well as providing 
sophisticated aid in laundering hundreds of millions of dollars 
in illicit programs, any program, especially one as 
comparatively small as this one, which does not deal with the 
source of the drugs flowing through them will do little to 
mitigate the problem.
    Thank you.
     [The prepared statement of Mr. Farah follows:]

                    Prepared Statement Douglas Farah

    Honorable Chairman Menendez and Ranking Member Rubio, thank you for 
the opportunity to testify today on the Caribbean Basin Security 
Initiative and the increasing flow of illicit drugs through the 
Caribbean region.
    As many others have said, drug trafficking routes and networks are 
like water running downhill, they will always seek the path of least 
resistance. And, like a balloon, when pressure is applied in one area 
the displaced operations pop up in another. The $139 million, 2-year 
CBSI program, in anticipation of the pressure being applied in Mexico 
and Colombia, is aimed at making it simultaneously more difficult to 
traffic cocaine and other illicit drugs through the Caribbean.
    According to the State Department the purpose of the CSBI money 
flowing into the Caribbean is to aid in:

   Maritime and Aerial Security Cooperation;
   Law enforcement capacity-building;
   Border/Port Security and Firearms Interdiction;
   Justice sector reform;
   Crime prevention and at-risk youth.

    These are laudable and necessary areas of cooperation with the 
small and generally underresourced countries of the Caribbean, and the 
program correctly anticipates the region's growing importance as a 
transnational shipping route not only for drugs, but for human 
smuggling and other transnational organized criminal activities.
    Of the 16 nations in the Caribbean, the U.S. Government has 
identified four (the Dominican Republic, Haiti, Bahamas, and Jamaica) 
as major transit countries, while many others, particularly in the 
Eastern Caribbean, continue to serve as significant transit points.\1\
---------------------------------------------------------------------------
    \1\ Clare Ribando Seelke, Liana Sun Wyler, June S. Beittel, and 
Mark P. Sullivan, ``Latin America and the Caribbean: Illicit Drug 
Trafficking and U.S. Counterdrug Programs,'' Congressional Research 
Service, May 12, 2011, p. 1.
---------------------------------------------------------------------------
    But there are several significant roadblocks for the CBSI achieving 
its goals, in addition to the traditional issues of corruption, weak 
institutions, lack of rule of law, and lack of resources to fight 
traffickers who are well-resourced, and have multiple unguarded points 
of entry across the region. I would like to address these in particular 
today, and also to stress they cannot be addressed outside of the 
broader regional context of Latin America. The two most significant 
roadblocks, in my opinion are:
          1. The growing political and economic influence of Venezuela 
        in the region, a significant drawback given that Venezuela is a 
        growing and primary gateway for the flow of illicit narcotics 
        into the Caribbean, and that senior members of its government 
        have been sanctioned for their involvement with drug 
        trafficking and designated terrorist entities;
          2. The continuing existence of large offshore financial 
        centers offering multiple services to a broad array of 
        transnational criminal organizations, both regional and extra-
        regional, thereby allowing the profits of illicit activities to 
        flow back to criminal organizations. As you are well aware, 
        some of these TOC groups, particularly those operating out of 
        Mexico, pose a significant national security challenge to the 
        United States.
                 venezuela's growing role in the region
    In 2004, Presidents Hugo Chavez of Venezuela and Fidel Castro of 
Cuba announced the formation of the Bolivarian Alliance for the Peoples 
of Our America (Alianza Bolivariana para los Pueblos de Nuestra 
America-ALBA), an alliance aimed at creating a political, economic, and 
military structure that explicitly excludes the United States, but 
allies with Iran and other regimes hostile to the United States.
    The two authoritarian governments were soon joined by the leaders 
of Bolivia, Ecuador, and Nicaragua, all espousing 21st century 
socialism. The leaders have other commonalities: they all offering 
material support to the Revolutionary Armed Forces of Colombia (Fuerzas 
Armadas Revolucionarias de Colombia-FARC), a designated terrorist 
organization by both the United States and European Union; and, there 
are senior leaders in all the countries who are deeply corrupted and 
involved in the drug trade. In 2008, the nation of Dominica joined ALBA 
and, in 2009, St. Vincent and the Grenadines, and Antigua and Barbuda 
joined Alliance.
    The political intent of the union was made clear in a statement 
when the Caribbean nations joined, where the final declaration stated 
that, ``[We recognize] the strengthening of the ALBA and its 
consolidation as a political, economic, and social alliance in defense 
of the independence, sovereignty, self-determination, and identity of 
member countries and the interests and aspirations of the peoples of 
the South, in the face of attempts at political and economic 
domination.'' \2\
---------------------------------------------------------------------------
    \2\ James Suggett, ``ALBA Block Grows by Three New Member Countries 
At Summit,'' Venezuelanalysis, June 26, 2009, accessed at: http://
venezuelanalysis.com/news/4547.
---------------------------------------------------------------------------
    This is worrisome on multiple fronts. If these were simply 
democracies seeking a different democratic path, it would not be 
troublesome. But when the most authoritarian governments in the region 
form an alliance that consistently utilizes the drug trade as an 
instrument of statecraft; allies itself with and facilitates the 
expansion of the influence of nations hostile to both the United States 
and its democratic allies; and, systematically reduces freedom of 
expression, political freedom, and the rule of law, the alliance cannot 
by viewed as benign.
    Most of the Caribbean nations that have joined ALBA, or are 
considering joining, are in it for the cheap oil subsidies provided by 
Venezuela, a very real economic boon, particularly in a time when--
except for the small amount of money for each country in the CBSI, and 
the humanitarian aid to Haiti--U.S. aid in the region is shrinking, as 
is its regional diplomatic presence.
    The reality is that the relationships with Venezuela in the region 
are dangerous and facilitate drug trafficking. As the most recent State 
Department report on drug trafficking patterns noted ``Venezuela is a 
major drug-transit country. A porous western border with Colombia, a 
weak judicial system, inconsistent international counternarcotics 
cooperation, and a generally permissive and corrupt environment have 
made Venezuela one of the preferred trafficking routes out of South 
America to the Eastern Caribbean, Central America, the United States, 
Europe, and western Africa.'' \3\
---------------------------------------------------------------------------
    \3\ Bureau of International Narcotics and Law Enforcement Affairs, 
``International Narcotics Control Strategy Report, 2011,'' Department 
of State, March 2011, accessed at: http://www.state.gov/p/inl/rls/
nrcrpt/2011/vol1/156363.htm#venezuela.
---------------------------------------------------------------------------
    The Congressional Research Service also found that ``As U.S. 
counternarcotics cooperation with Venezuela has diminished since 2005, 
Venezuela has become a major transit point for drug flights through the 
Caribbean--particularly Haiti and the Dominican Republic--into the 
United States as well as to Europe. Elsewhere in the Caribbean, the 
Bahamas continues to serve as a major transit country for both Jamaican 
marijuana and South American cocaine.'' \4\
---------------------------------------------------------------------------
    \4\ Seelke, Wyler, et al, op cit p. 2.
---------------------------------------------------------------------------
    Declassified U.S. and Colombian reports on drug movements from the 
traditional drug producing countries such as Colombia, Peru, and 
Bolivia show that the Caribbean is becoming a more important transport 
route, especially for those drugs that pass through the region to West 
Africa and then northward to Europe. The transshipment of drugs through 
West Africa is now several years established, but as U.S., U.N., and 
West African drug experts can attest, the vast majority of the cocaine 
reaching those shores arrives on flights that originate in Venezuela.
    In addition to the sea-lanes to the Caribbean islands and the west 
bound flights over the Eastern Caribbean, significant drug traffic 
transits the Caribbean through the air space between the Venezuela-
Colombia corridor and the eastern Atlantic/Caribbean coast of Central 
America. Particularly hard hit are Honduras, Belize, and Nicaragua.




    0As demonstrated by the extensive connectivity among the producing 
and transit regions, the concept of initiating a productive Caribbean 
Basin security initiative without having some strategy for closing the 
main door through which the drugs enter the region (Venezuela), is 
likely to be untenable. While the Caribbean is also a transit zone for 
cocaine leaving Colombia, there is a fundamental difference. The 
Colombia Government, at great cost in life and national treasure, 
actively works to combat the trafficking and to drive it from its 
national territory.
    The Chavez government in Venezuela, in contrast, aids and protects 
drug traffickers at the highest level. Perhaps the strongest public 
evidence of the importance of Venezuela to the FARC, which produces 
some 90 percent of the cocaine consumed in the United States, is the 
public designations of three of Chavez's closest advisers and senior 
government officials by the U.S Treasury Department's Office of Foreign 
Assets Control (OFAC).
    OFAC said the three--Hugo Armando Carvajal, director of Venezuelan 
Military Intelligence; Henry de Jesus Rangel, director of the 
Venezuelan Directorate of Intelligence and Prevention Services; and, 
Ramon Emilio Rodriguez Chacin, former Minister of Justice and former 
Minister of Interior--were responsible for ``materially supporting the 
FARC, a narcoterrorist organization.''
    OFAC specifically accused Carvajal and Rangel of protecting FARC 
cocaine shipments moving through Venezuela, and said Rodriguez Chacin, 
who resigned his government position just a few days before the 
designations, was the ``Venezuelan Government's main weapons contact 
for the FARC.'' \5\ In November 2010, Rangel was promoted to the 
overall commander of the Venezuelan Armed Forces.\6\
---------------------------------------------------------------------------
    \5\ ``Treasury Targets Venezuelan Government Officials Support of 
the FARC,'' U.S. Treasury Department Office of Public Affairs, 
September 12, 2008. The designations came on the heels of the decision 
of the Bolivian Government of Evo Morales to expel the U.S. Ambassador, 
allegedly for supporting armed movements against the Morales 
government. In solidarity, Chavez then expelled the U.S. Ambassador to 
Venezuela. In addition to the designations of the Venezuelan officials, 
the United States also expelled the Venezuelan and Bolivian Ambassadors 
to Washington.
    \6\ ``Chavez Shores up Military Support,'' Stratfor, November 12, 
2010.
---------------------------------------------------------------------------
    As legendary Manhattan district attorney Robert M. Morgenthau 
warned, as he left public service in 2009 after decades of prosecuting 
financial fraud cases, ``And let there be no doubt that Hugo Chavez 
leads not only a corrupt government but one staffed by terrorist 
sympathizers. The government has strong ties to narcotrafficking and 
money laundering, and reportedly plays an active role in the 
transshipment of narcotics and the laundering of narcotics proceeds in 
exchange for payments to corrupt government officials.'' \7\
---------------------------------------------------------------------------
    \7\ Robert M. Morgenthau, ``The Link Between Iran and Venezuela: A 
Crisis in the Making,'' speech at the Brookings Institution, September 
8, 2009.
---------------------------------------------------------------------------
    One effect of this state tolerance for, if not sponsorship of, the 
FARC, is a broad network of FARC activities in the Caribbean, 
particularly in the Dominican Republic, in addition to Cuba and other 
ALBA nations. Among the most well-known of the FARC political faces in 
the region is Narciso Isa Conde, a Dominican national who publicly 
admits he has befriended the FARC for 40 years.\8\
---------------------------------------------------------------------------
    \8\ Narciso Isa Conde, ``Pronunciamiento del Dominicano Narciso Isa 
Conde, Citado por el Colombiano Hoyos en la OEA,'' published on the 
FARC-friendly Web site apporrea.org, July 22, 2010, accessed at: http:/
/www.aporrea.org/actualidad/n161889.html.




    The existence of this network, integrated into the Continental 
Bolivarian Movement (Movimiento Continental Bolivariano-MCB) directly 
ties into the drug trafficking flows through the Dominican Republic and 
elsewhere, routes the FARC is working actively to exploit and expand.
    While Cuba is not listed as a major drug transshipment center or 
money laundering haven, it also plays a crucial role with ALBA nations, 
providing growing support for intelligence and counterintelligence, 
primarily aimed at the internal opposition to the ALBA governments. 
Through its close ties to, and control of, parts of the Venezuelan 
intelligence apparatus, Cuban operatives enjoy greater access in the 
region than they have for at least two decades.
    One of the reasons this is significant, additional to creating an 
environment in the Caribbean that is increasingly favorable to U.S. 
enemies (Iran) or potential enemies (China and Russia) is the strategic 
importance of the region to the United States.
    Most of the crude oil the U.S. imports is transported by sea. About 
64 percent of U.S. energy imports are transported through the Caribbean 
before reaching the gulf coast. According to DOE data, ``Nine out of 
every fourteen barrels of U.S. imported oil--from suppliers including 
Angola, Nigeria, Saudi Arabia, Chad, Russia, Kuwait, and Ecuador--must 
pass through at least one of four principal sea passages in the 
Caribbean to reach U.S. refineries.'' \9\
---------------------------------------------------------------------------
    \9\ ``Venezuela Plays The Russia Card,'' Investor's Business Daily, 
September 11, 2008, accessed at: http://www.ibdeditorial.com/
IBDArticles.aspx?id=305766737761086.
---------------------------------------------------------------------------
    This open oil traffic pattern has several important vulnerabilities 
because there are only a few safe lanes for the ships to move their 
cargo. According to a recent report, about 14 million barrels of oil a 
week arrive at the U.S. gulf coast refineries through the Windward 
Passage between Cuba and Hispaniola; the Mona Passage between 
Hispaniola and Puerto Rico; the Florida straits north of Cuba; and, the 
Yucatan Channel between Cuba and Mexico, because those are the safest, 
calmest sea-lanes. ``Independent of the gulf destination, nearly 2,000 
tankers crossed the Panama Canal in 2007, or 16.9 percent of its 
traffic, Panama Canal Authority data show. Most went to U.S. ports. 
These tankers ship oil from places such as Saudi Arabia to refineries 
in places such as Long Beach, Calif., making the canal a critical--and 
vulnerable--choke point. Even some of Alaska's oil has been known to 
cross the Panama Canal through the Caribbean on its way to the East 
Coast. Going both ways, 31 million long tons of petroleum and products 
were transported to the U.S. in 2007. With the widening of the canal by 
2014, more traffic still is expected to pass.'' \10\
---------------------------------------------------------------------------
    \10\ IBD, op cit.

    
    

             the offshore financial havens of the caribbean
    One of the primary areas not addressed explicitly in the CBSI is 
the extensive use of offshore banking and corporate registries that are 
part of the lifeblood of drug trafficking organizations in particular, 
and of TOC groups in general. Terrorist groups also can and do use the 
anonymous accounts and registries to move money and avoid detection.
    One can correctly assume that the driving force of most, if not 
all, of the TOC activity one observes is the desire to make profits and 
securely accumulate wealth. As ``know your customer'' rules have grown 
more stringent in much of the world, many parts of the Caribbean 
continue to offer facilities that make hiding and moving ill-gotten 
gains relatively easy.
    As Morgenthau noted, ``For years I have stressed the importance of 
transparency in financial transactions. In the realm of preventing 
money laundering and terror financing, the concept of `know your 
customer' is the starting point in any scheme designed to detect 
suspicious transactions.'' \11\
---------------------------------------------------------------------------
    \11\ Robert M. Morgenthau, ``The Link Between Iran and Venezuela: A 
Crisis in the Making,'' speech at the Brookings Institution, September 
8, 2009.
---------------------------------------------------------------------------
    Again, our own government has documented the anomalies that these 
anonymous jurisdictions continue to present. For example, according to 
the State Department, in the British Virgin Islands (BVI), with 22,00 
people, as of September 2010, ``there were 456,547 active companies, 
237 licensed banks and 2,951 mutual funds registered with the BVI 
Financial Services Commission (FSC). BVI's unique share structure that 
does not require a statement of authorized capital as well as the lack 
of mandatory filing of ownership, pose significant money laundering 
risks.'' \12\
---------------------------------------------------------------------------
    \12\ Bureau of International Narcotics and Law Enforcement Affairs, 
``Money Laundering and Financial Crimes, 2011,'' Volume 2, Department 
of State, March 2011, accessed at: http://www.state.gov/p/inl/rls/
nrcrpt/2011/vol2/156374.htm#britishvirginislands.
---------------------------------------------------------------------------
    As stated initially, on both the transportation side and money 
laundering sides of the illicit drug world, water will follow the path 
of least resistance. The lack of such basic standards as mandatory 
filing of ownership, and overall bank secrecy, is an open invitation to 
abuse by those who use these services to advance TOC activity.
    The same basic scenario is played out across the Caribbean. Again 
the State Department notes that, ``Antigua and Barbuda is a significant 
offshore center that despite recent improvements remains susceptible to 
money laundering due to its offshore financial sector and Internet 
gaming industry. Illicit proceeds from the transshipment of narcotics 
and from financial crimes occurring in the U.S. also are laundered in 
Antigua and Barbuda.'' \13\
---------------------------------------------------------------------------
    \13\ Bureau of International Narcotics and Law Enforcement Affairs, 
``Money Laundering and Financial Crimes, 2011,'' Volume 2, Department 
of State, March 2011, accessed at: http://www.state.gov/p/inl/rls/
nrcrpt/2011/vol2/156374.htm#antiguaandbarbuda.
---------------------------------------------------------------------------
    While these havens have long existed, and efforts to curtail their 
most egregious activities have been underway for decades, there is now 
a new factor aggravating an already dangerous situation--the presence 
of the Chavez government in Venezuela and its negligible enforcement 
efforts, both on interdicting cocaine and in the flow of money.
    Venezuela continues to operate in the global financial market on 
behalf of Iran, Cuba and other nations that face U.S. and international 
sanctions. In addition, due to the endemic corruption in an economy 
that is orders of magnitude larger than its Caribbean neighbors, 
Venezuela offers multiple advantages to money launderers, some of which 
were enumerated in this year's State Department report on money 
laundering:

          Venezuela is one of the principal drug-transit countries in 
        the Western Hemisphere. Cocaine produced in Colombia is 
        trafficked through Venezuela to the Eastern Caribbean, Central 
        America, the United States, Europe, and western Africa. In 
        2010, Mexican drug trafficking organizations gained an 
        increased presence in Venezuela. Venezuela's proximity to drug 
        producing countries, weaknesses in its antimoney laundering 
        regime, limited bilateral cooperation, and alleged substantial 
        corruption in law enforcement and other relevant sectors 
        continue to make Venezuela vulnerable to money laundering. The 
        main sources of money laundering are proceeds generated by drug 
        trafficking organizations and illegal transactions that exploit 
        Venezuela's currency controls and its various exchange rates.
          Money laundering occurs through commercial banks, exchange 
        houses, gambling sites, fraudulently invoiced foreign trade 
        transactions, smuggling, real estate (in the tourist industry), 
        agriculture and livestock businesses, securities transactions, 
        and trade in precious metals. Venezuela is not a regional 
        financial center and does not have an offshore financial 
        sector, although many local banks have offshore affiliates in 
        the Caribbean.\14\
---------------------------------------------------------------------------
    \14\ Bureau of International Narcotics and Law Enforcement Affairs, 
``Money Laundering and Financial Crimes, 2011, Volume 2, Department of 
State, March 2011, accessed at: http://www.state.gov/p/inl/rls/nrcrpt/
2011/vol2/156376.htm#venezuela.
---------------------------------------------------------------------------
               radical islamist networks in the caribbean
    No successful terrorist attacks against the United States have 
originated in Caribbean. Yet there is a significant history of radical 
Islamist movements there, both organizationally and financially.
    Trinidad, one of the principal suppliers of liquefied natural gas 
for the U.S. market, has a small but vocal Islamist community. In 1990, 
the Islamist group Jama'at al Muslimeen under the control of Imam Yasin 
Abu Bakr, attempted to establish the first Islamic state in the Western 
hemisphere. The coup failed, but the group remains active. In 2002 
another Islamist group on the island, Waajihatul Islaamiyyah, openly 
supported Osama Bin Laden, al-Qaeda and Jemmah Islamiyyah, the 
organization behind the Bali beachfront bombing that killed close to 
200 people. A 2002 press release showed a keen awareness of the need to 
attack critical infrastructure, saying: ``With our weapons we are going 
to reach you. We will reach you where you sleep, we will reach you 
where you take your baths, we will reach you where you take your meals 
and have your drinks, and even a glass of water you hold in your hand 
to drink may not be safe.'' \15\
---------------------------------------------------------------------------
    \15\ For a more comprehensive look at this, as well as links to the 
communiques, see Candyce Kelshall, ``Radical Islam and LNG in Trinidad 
and Tobago,'' Institute for the Analysis of Global Security, Nov. 14, 
2005, viewable at: www.iags.org/n1115045.htm.
---------------------------------------------------------------------------
    While Jama'at al Muslimeen was largely viewed as a fringe group of 
little importance, its leader, Bakr has been implicated in advising 
those plotting the June 2007 failed attempt to blow up fuel tanks and 
buildings at JFK International Airport in New York. Two of those 
arrested in the plot were natives of Trinidad, and court documents said 
at least one of the men, Kareem Ibrhaim, was a member of Jama'at. He 
was arrested on an airplane bound from Trinidad to Venezuela, and said 
he was flying to Caracas to catch another flight to Tehran.\16\ His 
flight to Iran was apparently arranged by Abdul Kadir, also convicted 
and sentenced to life in prison in the plot.
---------------------------------------------------------------------------
    \16\ Francis Joseph, ``Trini Held in JFK Bomb Plot,'' Newsday, June 
3, 2007,accessed at: http://www.newsday.co.tt/news/0,58214.html.
---------------------------------------------------------------------------
    As the prosecution said after winning the case, ``The evidence at 
trial established that Russell Defreitas, a naturalized United States 
citizen from Guyana, originated the idea to attack JFK Airport and its 
fuel tanks and pipelines by drawing on his prior experience working at 
the airport as a cargo handler. In 2006 and 2007, Defreitas recruited 
Kadir and others to join the plot during multiple trips to Guyana and 
Trinidad. Between trips, Defreitas engaged in video surveillance of JFK 
Airport and transported the footage back to Guyana to show Kadir and 
their coconspirators. Kadir, a trained engineer with connections to 
militant groups in Iran and Venezuela, provided the conspirators with 
links to individuals with terrorist experience, advice on explosive 
materials, and a bank account through which to finance the terrorist 
attack.'' \17\
---------------------------------------------------------------------------
    \17\ ``Russell Defreitas Sentenced to Life in Prison for Conspiring 
to Commit Terrorist Acts at Airport,'' Eastern District of New York, 
Press Release, February 17, 2011, accessed at: http://www.justice.gov/
usao/nye/pr/2011/2011feb17.html.
---------------------------------------------------------------------------
    Such a series of connections would not necessarily have been cause 
for deep concern if Latin America and the Caribbean were flourishing 
economically and moving toward the rule of law in democratic societies. 
But in the past 5 years the regional posture toward the United States 
has shifted significantly, growing increasingly hostile.
    Registries (corporate, shipping, or company) are valuable sources 
of information, when they are available. The more transparent the 
registry procedure, the less likely it is that the networks will seek 
to use it. Because of this, the more obscure registries are often 
preferred.
    For example, many leaders of the Muslim Brotherhood (Al Ikwan al 
Musulman),\18\ as well as the Bin Laden family, have maintained dozens 
of companies in Panama, where true ownership of accounts and companies 
are easy to hide and secrecy strictly enforced.\19\ Many changed 
ownership, at least on paper, following the 9/11 attacks, making it 
impossible to know the true ownership structures at this point because 
Panama allows bearer shares, and lawyers can register the companies and 
serve on the boards without disclosing the true ownership structure. 
There are dozens of havens around the world that offer this service, 
including Liberia, where the bin Laden family also has maintained 
companies.\20\
---------------------------------------------------------------------------
    \18\ The Brotherhood, formed in 1928, espouses the creation of 
theocratic states ruled by Shari'a law and the reestablishment of the 
Muslim Caliphate, or empire. Many of the radical Sunni terrorists and 
theologians of today passed through Muslim Brotherhood structures in 
their radicalization process, including Osama bin Laden and Khalid 
Sheik Mohammed. Most Brotherhood statements today call for a political 
takeover of the West that is not explicitly violent. However, Hamas, a 
designated terrorist organization, identifies itself in its 
constitution, as an armed branch of the Muslim Brotherhood. The motto 
of the Brotherhood, in use today, is: ``Allah is our objective; the 
Koran is our constitution; the Prophet is our leader; jihad is our way; 
death for the sake of Allah is our highest aspiration.'' The 
Brotherhood is unique in that it is the only transnational Islamist 
organization that bridges the Sunni-Shi'ite divide. While primarily 
Sunni, its leaders have maintained close relations with Iran, 
particularly in the immediate aftermath of the 1979 Iranian revolution. 
For a more complete look at the Brotherhood see: Douglas Farah, ``The 
Challenge of Failed States, the Muslim Brotherhood and Radical Islam,'' 
International Assessment and Strategy Center, adaptation of 
presentation to the Defense Advanced Research Projects Agency (DARPA), 
July 11, 2007, accessed at http://www.strategycenter.net/research/
pubID.168/pub_detail.asp.
    \19\ The NEFA Foundation has obtained many of these corporate 
registry records, and has them on file.
    \20\ The NEFA Foundation has not been able to obtain these 
documents but knows of their existence from numerous reliable sources.
---------------------------------------------------------------------------
    It is worth noting that the Brotherhood, whose legacy groups inside 
the United States have been convicted of supporting Hamas, for more 
than three decades has controlled a large Islamist banking structure in 
the Bahamas, and an offshore business structure based in Panama, 
indicating that radical Islamist groups were more familiar with 
operating in Latin America than is often understood.
    Many of the banking structures were shut down in the immediate 
aftermath of the 9/11 attacks. The Treasury Department's designation of 
the banks stated that one of the Bahamas' institutions, Bank al Taqwa, 
was a shell bank, with no real physical installations. The Treasury 
Department stated that the bank was used to funnel money to al-Qaeda, 
even after the attacks on U.S. soil. The bank also allegedly 
facilitated secure communications among al-Qaeda cells, as well as the 
transportation of weapons. The key leaders of the bank, Yousef Nada, 
Ghalib Himmat, and Idriss Nasreddin, were designated as terrorist 
financiers by the U.S. Government and the United Nations.\21\
---------------------------------------------------------------------------
    \21\ U.S. Treasury Department Statement on Terrorist Designations, 
Aug. 12, 2002.
---------------------------------------------------------------------------
    In addition to working with al-Qaeda, the banks were also the 
primary financial institution for Hamas, even after the organization 
had been declared a terrorist group by the United States. At one point 
the bank reportedly held more than US$60 million in Hamas funds.\22\
---------------------------------------------------------------------------
    \22\ U.S. Treasury Department Statement on Terrorist Designations, 
Aug. 12, 2002.
---------------------------------------------------------------------------
    This summer, the International Investment Corporation of the Gulf-
Bahamas (IICG-B), a wholly owned subsidiary of Dar al Maal Al Islami 
(DMI), an Islamist banking structure heavily influenced by the 
Brotherhood, reached a nonprosecution agreement with the U.S. 
Department of Justice. In the agreement, IICG-B agreed to pay more than 
$30 million in fines and penalties for significant tax violations in 
the United States.\23\
---------------------------------------------------------------------------
    \23\ U.S. Department of Justice, Tax Division, Islamic Investment 
Company of the Gulf (Bahamas) Limited Non-Prosecution Agreement, August 
12, 2011. Accessed at: http://www.
investigativeproject.org/3200/doj-releases-islamic-bank-agreement.
---------------------------------------------------------------------------
                               conclusion
    The CBSI could be a useful tool in helping Caribbean partners 
combat drug trafficking and the endemic corruption, violence and 
erosion of the rule of law that inevitably accompanies the emergence of 
TOC groups.
    However, the Initiative, in my view, will have little impact as 
long as Venezuela and the ALBA nations in Latin America and the 
Caribbean continue to criminalize, and use TOC and drug trafficking as 
part of their statecraft, giving support and protection to drug 
trafficking, and designated terrorist organizations such as the FARC. 
With Venezuela and its allies opening key corridors for drug 
trafficking to the United States and Europe (via West Africa), as well 
providing sophisticated aid in laundering the hundreds of millions of 
dollars in illicit proceeds, any program--especially one this 
comparatively small--which does not deal with the source of the drug 
flow will likely do little to mitigate the problem.

    Senator Menendez. Well, thank you all for your testimony.
    Let me start, Mr. Farah, with you. We have seen clearly 
Iran seeking to use Venezuela as a foothold in Latin America. 
We also know that Iran has been the biggest supporter of 
Hezbollah, and we see that Hezbollah is active in the region. 
Do you have any sense from your history reporting in the 
region, whether Hezbollah is working with drug cartels in the 
region? We saw some reports very recently of a whole host of 
banking-related issues, all emanating out of this relationship 
in Venezuela. What can you tell us about that?
    Mr. Farah. Well, I think one of the key objectives of Iran 
in the region, not just the Caribbean but in Latin America, is 
to break out of its international isolation and move and break 
out of the banking sanctions particularly which I think makes 
the Caribbean particularly attractive to them.
    I think that there is little history of radical Islamist 
activities in the region that come to the open, but one of the 
really notable ones was the 2007 attempt to bomb JFK and the 
gas lines there where you had members of the Caribbean. And one 
of the persons, who was fleeing who has been arrested and is 
now sentenced to life in prison, was on his way out of--I think 
it was out of Guyana into Venezuela to catch a flight to Iran. 
And that was set up, as the United States court documents show, 
by a Guyanan who had been an Iranian agent for many years and 
was facilitating the flight after what was supposed to be a 
very significant terrorist attack. So I think you have a 
footprint there.
    I think that they have done a great deal to disguise it, 
and I think what is useful and what is to me most concerning 
about the ALBA relationships in the Caribbean is that Iran is 
using Venezuela to hide its financial transactions, and the 
more they can diffuse that into the other banking jurisdictions 
where it is very difficult to track money anyway, the better 
off Iran is.
    Senator Menendez. Dr. Gamarra, I appreciate your very 
balanced review particularly of the Dominican Republic and some 
of the initiatives there. In my personal view it was good that 
President Fernandez and the Dominican Government were seeking 
to try to control their airspace, so I looked at the purchase 
of that aircraft in a different way than maybe others within 
the government did.
    Having said that, on one dimension you see that and in 
another dimension you see all of the challenges within the 
Dominican Republic's defense forces, the Dominican Republic's 
security force, elements of the Dominican Government that have 
been denied despite the fact that we do not deny visas very 
easily, particularly to officials in other governments. Yet, 
there have been a slew of denials from our Government of visas 
to the United States by Dominican Government officials. That 
seems to undermine the fact that we are buying aircraft to 
control Dominican airspace and intercede the fight. At another 
level, we have all of these different governmental entities 
that undermine the very essence of the fight on the ground. So 
it is almost a contrast. We are trying to control airspace, but 
on the ground we are doing a whole host of different things or 
not vigorously pursuing the cleansing of those entities.
    And then maybe that gives rise to your observation, which I 
found very interesting and want to pursue, that there has 
actually been, in real terms, very little financial assistance 
by the United States toward the initiative in the Dominican 
Republic. So that is incredibly important as well. But maybe it 
gives rise to say, well, we cannot be spending money if we do 
not have a governmental structure that is responsive to these 
things.
    Help me through some of that.
    Dr. Gamarra. Right. First, Senator Menendez, I think your 
final observation is something that the United States has found 
historically everywhere throughout the region. This is not the 
first time that somebody has called a country a narcostate. I 
think we have to be cautious about that especially because this 
is done in the context of an electoral campaign and it is said 
by a candidate who probably has no chance of winning the 
Presidency. In my opinion the Dominican Republic is far from a 
narcostate. And the two cases mentioned are Quirino who is 
serving in prison in New York and Jose Figueroa Agosto who is 
under arrest in Puerto Rico, and that organization was largely 
dismantled. And just last week the successors were arrested in 
the Dominican Republic as well. In other words the Dominican 
Republic has arrested, convicted, and also deported major drug 
lords.
    But in the main, many, many things were tried with the 
police and they continue to be tried. Very good results have 
also been obtained. We argued very much for a purging of the 
institution. And there were occasional purges and significant 
purges, and yet the structures of organized crime seem to be 
able to reproduce themselves almost instantaneously within the 
organization. And so I think you have a very, very interesting 
contrast here between the will of the President and the 
institutional capacity to carry things forth.
    Senator Menendez. No. please go ahead. Finish your thought.
    Dr. Gamarra. And at the same time as there is an absence of 
funds to carry out a significant process of police reform 
international factors, such as the explosion of the situation 
in Mexico and what is happening, as described by Doug Farah, 
right now in Venezuela had an enormous impact on the well-
intentioned efforts of the Dominican Republic. Owing to the 
international situation, and despite the best efforts of the 
Dominican Government the situation which was already bad in 
2004 when this program was designed, is probably worse in 2011.
    Senator Menendez. Actually, is it not true that the 
Dominican country was not a consuming country? It has been a 
transshipment point.
    Dr. Gamarra. That is right.
    Senator Menendez. But it has become now more of a consuming 
country because the cartels and the traffickers are----
    Dr. Gamarra. Paying in kind, yes.
    Senator Menendez [continuing]. Paying in product.
    Dr. Gamarra. Right.
    Senator Menendez. And that has addicted people.
    And I appreciate your observation--certainly I was not 
suggesting the Dominican Republic is a narcostate. I was 
reading the comments of the candidate. And maybe he is not 
going to have any chance to win, but sometimes when you do not 
have a chance to win, you say things that either can be 
outrageous or can be very honest.
    Dr. Gamarra. Right.
    Senator Menendez. I looked at the link of all the people 
Jose Figueroa Agosto had access to, and for a long time he 
worked with impunity within the Dominican Republic. Would that 
not be fair to say?
    Dr. Gamarra. Yes, absolutely fair to say and, in fact, in 
three successive administrations because it started out in the 
early 2000s when he fled Puerto Rico, came into the Dominican 
Republic and used multiple personalities. You know, his front 
was as a business person and became really a very, very public 
and significant figure with great access to the police, to the 
DNI, and to even very prominent politicians. I think the 
fortunate thing was--and I think largely as a result of 
Dominican police cooperation with DEA--that organization was 
dismantled. But as we know from experience in Bolivia and Peru 
and Colombia and elsewhere, these organizations very, very 
rapidly reorganize or are replaced by others. And I think part 
of what is happening in the Dominican Republic, because of a 
magnitude of the threat, is that we already have replacements 
in place.
    Senator Menendez. Senator Rubio.
    Senator Rubio. Thank you.
    Just briefly for both of you, Mr. Farah, the gist of your 
testimony is all of this stuff is great, but as long as 
Venezuela is out there, true success is going to be very 
difficult to accomplish. In essence, all these other things 
that we are doing are important, but to ultimately see them 
come to fruition and really bring about the kind of level of 
stability out there, as long as Venezuela is using drug 
trafficking as a part of statecraft, it will be very difficult 
for us. That is the root of the problem and how serious the 
problem is. Is that an accurate summary of what you are here to 
tell us today?
    Mr. Farah. Absolutely.
    I would like to correct my previous answer just briefly 
before I answer that. The person leaving from Trinidad to 
Venezuela to get on the Iran flight as he left the JFK bombing 
incident.
    Yes, I think that is absolutely right. To me it is like 
leaving the front door open while you are trying to lock the 
back door. There is no point in trying to keep the stuff out. 
And I think one of the things that Eduardo was saying with how 
much worse the situation for the Dominican Republic is is 
because there is more stuff now being channeled directly to 
them. Before, there was a range of places. You go to Central 
America.
    But the difference between Colombia and Venezuela, if you 
look at the air corridors, is Colombia is actually trying to 
stop them whereas Venezuela is giving them active protection. 
And when you have a state protection of illicit activities, it 
becomes much more difficult to combat.
    So, yes, I think that is an exactly fair statement.
    Senator Rubio. And then related to that--and Dr. Gamarra is 
here. What is your view, as we head toward 2012 and the 
upcoming elections or lack thereof in Venezuela, whatever is 
going to happen there? Additionally, how what happened in 
Nicaragua a few weeks ago could ultimately impact the direction 
that leaders there may or may not take. I know it is kind of an 
open-ended question with only a few minutes left, but what is 
your view of the situation in Venezuela, the political 
situation as the opposition seems to hopefully be able to 
coalesce behind somebody, in my opinion anyway, and how does 
that play out?
    Dr. Gamarra. Yes. It is a very interesting process. The 
opposition will have its elections in early February and will 
elect a candidate. There are, at least in my opinion, two or 
three very good candidates on the opposition side.
    But it is kind of interesting what is happening on the side 
of the government. And this is probably one of the more 
difficult things I think the United States has been largely 
unable to explain: the continued popularity of President Chavez 
both abroad and domestically. And part of it is evident in 
public opinion polls. President Chavez's popularity has shot 
right back up in part because of his battle with cancer. And 
you know, just this month in December, he has actually given 
five salaries to public employees. So if you are a public 
employee and you are getting five salaries at the end of the 
year, I would vote for him too probably. So I think his 
popularity, if he survives, will guarantee him the Presidency 
next year. I do not see the opposition really putting forth the 
capacity to win an electoral battle.
    And I think what you were asking me is whether there will 
be fraud, given what happened in Nicaragua. Again, given 
President Chavez's popularity, he probably will not need fraud, 
but he has a record of not conducting the cleanest of elections 
either.
    Senator Rubio. Do you have any doubt there was fraud in 
Nicaragua?
    Dr. Gamarra. No, I do not. No, not at all.
    Senator Rubio. Thank you both.
    Senator Menendez. Thank you.
    Let me just follow up on Senator Rubio's question because 
you said something that I found very interesting. It has been 
my observation and I would love to hear your opinion, that Hugo 
Chavez is using the national patrimony of Venezuela to buy both 
influence in the hemisphere and, of course, in his own 
election. So if you spend enormously, as you suggested, I do 
not know if it is bonuses or salaries, whatever it is.
    Dr. Gamarra. The equivalent of five salaries.
    Senator Menendez. The equivalent of it. And you spend the 
national patrimony by giving out oil that is subsidized or free 
throughout the hemisphere, of course, that is all resources 
that could go to the Venezuelan people for education, for 
health care, for food, for a variety of purposes. Is that not 
fair to say, that to a large degree he is using the nation's 
resources for his own political aggrandizement?
    Dr. Gamarra. Yes, I think so, Senator. The reality is that 
given Venezuela's wealth, while poverty in Venezuela has 
decreased, it has not decreased to the extent that one would 
expect one of the wealthiest nations on earth to have a poverty 
rate of almost 30 percent, where you have poverty declines in 
the rest of the region using very different policy designs and 
without Venezuela's natural wealth.
    By the same token--and this was addressed a little earlier, 
the reality is that some countries that benefit from the oil 
largesse are countries that are largely dependent on the 
subsidies that they receive from Venezuela. And it is an 
expensive subsidy, because while they are getting short-term 
access to oil, this is a long-term investment that makes these 
countries financially dependent because they will inevitably 
have to repay these subsidies.
    Senator Menendez. Mr. Farah, last observation.
    Mr. Farah. Can I just briefly say one of the really 
interesting things with Venezuela is that essentially every 
time it goes broke, it manages to find a donor, particularly 
China? If you noticed last year when China came in with $20 
billion, it is being paid back in petroleum at a price of $18 a 
barrel. So that is a very good deal for China, but it is enough 
to keep the Chavez government alive.
    And I think one of the things you see in the 
criminalization or the state of the increased drug trafficking 
there is that they need other resources to maintain the loyalty 
of the military, civil servants, and others, and as other 
legitimate resources run out, then they turn increasingly to 
drug profits to fill that void. And I think that is one of the 
great benefits they receive from their relationship with FARC, 
is the ability to receive extra-budgetary infusions of cash 
that allow them to then dispense largesse.
    Senator Menendez. But taking your point, this is what I see 
on the horizon for the people of Venezuela. To sell to the 
Chinese at $18 a barrel when oil is hovering somewhere--I have 
not seen the latest price in the last couple days, but 
somewhere in the 90-some odd dollar range--is in essence giving 
it away to have a temporary flow of money. But in the process, 
you are taking the nation's--it is not Mr. Chavez's money. It 
is the nation's money. So if you think about it, both what he 
is doing throughout the hemisphere and what he is doing in this 
transaction, which is a very interesting one for you to note, 
is undermining the long-term national interest of the people of 
Venezuela. You can imagine if, instead of those subsidies, that 
money was being used to create greater upward mobility, that 
you would not have that 30 percent of poverty in a country that 
is so wealthy. So it is ironic that he is seen as the populist 
when at the same time, it is almost like a Roman circus. You 
keep people temporarily entertained, but at the end of the day, 
you are dramatically undermining their ability for social 
mobility within their own country.
    Well, thank you very much. I think you have added greatly 
to our conversation here. We appreciate your testimony.
    The record will remain open for 2 days for members who may 
have questions. If any questions are submitted to any of the 
witnesses, we urge them to answer them expeditiously.
    And with that, this hearing is adjourned.
    [Whereupon, at 12:45 p.m., the hearing was adjourned.]

                                  
