[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                  THREAT TO THE HOMELAND: IRAN'S EXTENDING 
                   INFLUENCE IN THE WESTERN HEMISPHERE
=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT
                       AND MANAGEMENT EFFICIENCY

                                 OF THE

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              JULY 9, 2013

                               __________

                           Serial No. 113-24

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

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                     COMMITTEE ON HOMELAND SECURITY

                   Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Peter T. King, New York              Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Paul C. Broun, Georgia               Yvette D. Clarke, New York
Candice S. Miller, Michigan, Vice    Brian Higgins, New York
    Chair                            Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania         William R. Keating, Massachusetts
Jeff Duncan, South Carolina          Ron Barber, Arizona
Tom Marino, Pennsylvania             Dondald M. Payne, Jr., New Jersey
Jason Chaffetz, Utah                 Beto O'Rourke, Texas
Steven M. Palazzo, Mississippi       Tulsi Gabbard, Hawaii
Lou Barletta, Pennsylvania           Filemon Vela, Texas
Chris Stewart, Utah                  Steven A. Horsford, Nevada
Richard Hudson, North Carolina       Eric Swalwell, California
Steve Daines, Montana
Susan W. Brooks, Indiana
Scott Perry, Pennsylvania
Mark Sanford, South Carolina
                       Greg Hill, Chief of Staff
          Michael Geffroy, Deputy Chief of Staff/Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

          SUBCOMMITTEE ON OVERSIGHT AND MANAGEMENT EFFICIENCY

                 Jeff Duncan, South Carolina, Chairman
Paul C. Broun, Georgia               Ron Barber, Arizona
Lou Barletta, Pennsylvania           Donald M. Payne, Jr., New Jersey
Richard Hudson, North Carolina       Beto O'Rourke, Texas
Steve Daines, Montana                Bennie G. Thompson, Mississippi 
Michael T. McCaul, Texas (Ex             (Ex Officio)
    Officio)
               Ryan Consaul, Subcommittee Staff Director
                   Deborah Jordan, Subcommittee Clerk
           Tamla Scott, Minority Subcommittee Staff Director
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Jeff Duncan, a Representative in Congress From the 
  State of South Carolina, and Chairman, Subcommittee on 
  Oversight and Management Efficiency:
  Oral Statement.................................................     1
  Prepared Statement.............................................    13
The Honorable Beto O'Rourke, a Representative in Congress From 
  the State of Texas:
  Oral Statement.................................................    14
  Prepared Statement.............................................    15
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Prepared Statement.............................................    16

                               Witnesses

Mr. Ilan Berman, Vice President, American Foreign Policy Council:
  Oral Statement.................................................    17
  Prepared Statement.............................................    19
Mr. Joseph M. Humire, Executive Director, Center for a Secure 
  Free Society:
  Oral Statement.................................................    26
  Prepared Statement.............................................    28
Mr. Blaise Misztal, Acting Director of Foreign Policy, Bipartisan 
  Policy Center:
  Oral Statement.................................................    39
  Prepared Statement.............................................    41
Mr. Douglas Farah, President, IBI Consultants:
  Oral Statement.................................................    50
  Prepared Statement.............................................    53

                             For the Record

The Honorable Jeff Duncan, a Representative in Congress From the 
  State of South Carolina, and Chairman, Subcommittee on 
  Oversight and Management Efficiency:
  Statement of Dr. Matthew Levitt, Director, Stein Program on 
    Counterterrorism and Intelligence, The Washington Institute 
    for Near East Policy.........................................     1
  Statement of Robert Raben, Executive Director, American Task 
    Force Argentina..............................................     9

                                Appendix

Questions From Chairman Jeff Duncan for Ilan Berman..............    79
Questions From Chairman Jeff Duncan for Joseph M. Humire.........    80
Questions From Chairman Jeff Duncan for Douglas Farah............    81


   THREAT TO THE HOMELAND: IRAN'S EXTENDING INFLUENCE IN THE WESTERN 
                               HEMISPHERE

                              ----------                              


                         Tuesday, July 9, 2013

             U.S. House of Representatives,
          Subcommittee on Oversight and Management 
                                        Efficiency,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:00 p.m., in 
Room 311, Cannon House Office Building, Hon. Jeff Duncan 
[Chairman of the subcommittee] presiding.
    Present: Representatives Duncan, Barletta, Hudson, McCaul 
(ex officio), and O'Rourke.
    Also Present: Representatives Jackson Lee and Vela.
    Mr. Duncan. The Committee on Homeland Security Subcommittee 
on Oversight and Management Efficiency will come to order.
    The purpose of this hearing is to examine the threat that 
the Islamic Republic of Iran poses to the United States from 
its extending influence in the Western Hemisphere. Before I 
begin my opening statement, I would like to ask unanimous 
consent that a written statement by Dr. Matthew Levitt from the 
Washington Institute for Near East Policy and a letter from the 
American Task Force Argentina be entered into the record.
    Hearing no objection, so ordered.
    [The information follows:]
    Statement of Dr. Matthew Levitt\1\, Director, Stein Program on 
 Counterterrorism and Intelligence, The Washington Institute for Near 
                              East Policy
---------------------------------------------------------------------------
    \1\ Author, Hezbollah: the Global Footprint of Lebanon's Party of 
God (Georgetown University Press and Hurst Publishers, 2013).
---------------------------------------------------------------------------
                              July 9, 2013
    Chairman Duncan, Ranking Member Barber, distinguished Members of 
the Subcommittee on Homeland Security Subcommittee on Oversight and 
Management Efficiency, it is an honor to be able to submit to you 
written testimony for this timely hearing on Iran's extending influence 
in the Western Hemisphere. I apologize for not being able to appear 
before you in person to provide oral testimony as well, but I had 
already committed to testifying today in Brussels before the Committee 
on Foreign Affairs of the European Parliament on the importance of an 
E.U. designation of Hezbollah. This committee's hearing here in 
Washington is equally important, however, so I am very grateful to the 
committee for generously allowing me the opportunity to submit this 
written testimony.
    As Iran geared up for its June 14 presidential election, the 
activities of its powerful intelligence services were also kicking into 
high gear across the globe. The U.S. State Department's annual 
terrorism report, released May 30, headlined the ``marked resurgence'' 
of Iran's terrorist activities--and with good reason. ``Iran and 
Hizballah's terrorist activity has reached a tempo unseen since the 
1990s, with attacks plotted in Southeast Asia, Europe, and Africa,'' 
the report reads.\2\ Then there is Iran and Hezbollah's active support 
for Syrian president Bashar al-Assad's brutal crackdown against his own 
people.
---------------------------------------------------------------------------
    \2\ U.S. State Department, ``Country Reports on Terrorism,'' May 
30, 2013, http://www.state.gov/j/ct/rls/crt/2012/209978.htm.
---------------------------------------------------------------------------
    But closer to the United States, Iran not only continues to expand 
its presence in and bilateral relationships with countries like Cuba, 
Ecuador, Nicaragua, and Venezuela, but it also maintains a network of 
intelligence agents specifically tasked with sponsoring and executing 
terrorist attacks in the Western hemisphere. True, the unclassified 
annex to a recent State Department report on Iranian activity in the 
Western Hemisphere downplayed Iran's activities in the region; this 
material, however, appeared in an introductory section of the annex 
that listed the author's self-described ``assumptions.'' While one 
assumption noted that ``Iranian interest in Latin America is of 
concern,'' another stated that as a result of U.S. and allied efforts 
``Iranian influence in Latin America and the Caribbean is waning.''\3\ 
The reality is that Hezbollah and Iran have both worked long and hard 
over many years to build up their presence and influence in Latin 
America.
---------------------------------------------------------------------------
    \3\ ``Annex A, Unclassified Summary of Policy Recommendations,'' 
Appended to press release ``Duncan Releases Statement on the State 
Department's Report on Iranian Activity and Influence in the Western 
Hemisphere,'' June 26, 2013.
---------------------------------------------------------------------------
                       hezbollah in latin america
    Hezbollah's presence in Latin America is nothing new. Together with 
Iran, the group was responsible for the 1992 bombing of the Israeli 
embassy and, 2 years later, the bombing of the AMIA Jewish community 
center, both in Buenos Aires. Hezbollah traces its origins in Latin 
America back to the mid-1980s, long before the Buenos Aires bombings, 
when its operatives set up shop in the Tri-Border Area (TBA) of Brazil, 
Paraguay, and Argentina. At the height of the Lebanese civil war, 
Hezbollah clerics began ``planting agents and recruiting sympathizers 
among Arab and Muslim immigrants in the TBA,'' according to a study 
conducted for U.S. Special Operations Command. A region routinely 
called the ``United Nations of crime,'' a classic ``terrorist safe 
haven'' and a counterfeiting capital, the TBA made a natural home for 
operatives seeking to build financial and logistical Hezbollah support 
networks within existing Shia and Lebanese diaspora communities.\4\
---------------------------------------------------------------------------
    \4\ Sebastian Rotella, ``Jungle Hub for World's Outlaws,'' Los 
Angeles Times, August 24, 1998; U.S. State Department, Office of the 
Coordinator for Counterterrorism, Country Reports on Terrorism 2009, 
August 5, 2010.
---------------------------------------------------------------------------
    Hezbollah has long benefited from the loosely-regulated TBA, using 
the area to engage in illicit activity for profit and to solicit 
donations from the local Muslim communities. In its 2011 Country 
Reports on Terrorism, the State Department noted that ``ideological 
sympathizers in South America and the Caribbean continue to provide 
financial and moral support to these and other terrorist groups in the 
Middle East and South Asia.''\5\ Similarly, in 2011, Gen. Douglas 
Fraser, then the Commander of United States Southern Command, told 
Members of Congress, ``Hezbollah supporters continue to raise funds 
within the region to finance their worldwide activities. Several 
entities affiliated with Islamic extremism are increasing efforts to 
recruit adherents in the region . . . ''\6\ Criminal sympathizers of 
the group are involved in a long list of illicit activities, including 
arms and drug trafficking, document and currency fraud, money 
laundering, and counterfeiting. Since 2006, over a dozen individuals 
and several entities in the TBA have been sanctioned for providing 
financial support to Hezbollah leadership in Lebanon, according to the 
U.S. Treasury Department.\7\
---------------------------------------------------------------------------
    \5\ U.S. State Department, Office of the Coordinator for 
Counterterrorism, Country Reports on Terrorism 2009, August 5, 2010; 
U.S. State Department, Office of the Coordinator for Counterterrorism, 
Country Reports on Terrorism 2011, July 2012.
    \6\ Southern Command Commander General Douglas Fraser, statement 
before the House Armed Services Committee, March 30, 2011, http://
armedservices.house.gov/index.cfm/files/serve?File_id=fcc6b631-
6b514bdb-b0a0-6b97ea36cb58.
    \7\ Assistant Treasury Secretary for Terrorist Financing Daniel L. 
Glaser, testimony before the House Committee on Foreign Affairs, 
October 13, 2011.
---------------------------------------------------------------------------
                      the tba's crime headquarters
    The four-story Galeria Page shopping center in Ciudad del Este, 
Paraguay, was ``locally considered the central headquarters for 
Hezbollah members'' and served as a source of fundraising for Hezbollah 
in the TBA, the U.S. Treasury Department noted when the center was 
blacklisted in December 2006.\8\ Managed and co-owned by Hezbollah 
operatives, Treasury explained that Galeria Page businesses generated 
funds to support Hezbollah and that some shops had been ``involved in 
illicit activity, including the sale of counterfeit U.S. dollars.''\9\
---------------------------------------------------------------------------
    \8\ U.S. Treasury Department, ``Treasury Targets Hizballah 
Fundraising Network in the Triple Frontier of Argentina, Brazil, and 
Paraguay,'' press release, December 6, 2006.
    \9\ Ibid.
---------------------------------------------------------------------------
    At the hub of Galeria Page activity was Assad Barakat, a known 
Hezbollah operative designated by the Treasury Department in 2004, who 
led a TBA-based network that served as ``a major financial artery to 
Hezbollah in Lebanon.''\10\ Barakat had long been on the radar of law 
enforcement agencies, and international authorities had raided his 
Galeria Page shop twice in 2001. Barakat used his businesses as ``front 
companies for Hezbollah activities and cells,'' Treasury revealed, 
adding that the businesses provided ``a way to transfer information to 
and from Hezbollah operatives.''\11\ The extent of Barakat's criminal 
activity in support of Hezbollah was staggering. From selling 
counterfeit U.S. currency to strong-arming donations from local 
businessmen, Barakat was accused by the Treasury Department of engaging 
in ``every financial crime in the book'' to generate funds for 
Hezbollah.\12\
---------------------------------------------------------------------------
    \10\ Ibid.
    \11\ U.S. Department of the Treasury, ``Treasury Designates Islamic 
Extremist, Two Companies Supporting Hizballah in Tri-Border Area,'' 
press release, June 10, 2004. http://www.treasury.gov/press-center/
pressreleases/Pages/js1720.aspx.
    \12\ Ibid.
---------------------------------------------------------------------------
    Treasury also tied Sobhi Mahmoud Fayad, Barakat's executive 
assistant, to the counterfeit currency scheme, in addition to other 
illicit activities involving drugs.\13\ Fayad, ``a senior TBA Hezbollah 
official,'' was no stranger to law enforcement. In 2001, Paraguayan 
police had searched his Ciudad del Este home and found receipts from 
the Martyrs Organization for donations Fayad had sent that totaled more 
than $3.5 million. Authorities believe Fayad has sent more than $50 
million to Hezbollah since 1995.\14\
---------------------------------------------------------------------------
    \13\ Ibid.
    \14\ Mark S. Steinitz, ``Middle East Terrorist Activity in Latin 
America,'' Center for Strategic and International Studies, Policy 
Papers on the Americas, Vol. XIV, Study 7, July 2003.
---------------------------------------------------------------------------
    Hezbollah often uses charities and front organizations, like the 
Martyrs Organization, to conceal its fundraising activities. In July 
2007, the Treasury Department blacklisted the Martyrs Foundation for 
its ties to the group. Beyond its work raising funds for Hezbollah, in 
several cases the foundation's officials were found to be directly 
involved in supporting terrorism.\15\
---------------------------------------------------------------------------
    \15\ U.S. Department of the Treasury, ``Twin Treasury Actions Take 
Aim at Hizballah's Support Network,'' press release, July 24, 2007.
---------------------------------------------------------------------------
                         beyond the tri-border
    Hezbollah's reach in Latin America extends beyond the borders of 
Brazil, Argentina, and Paraguay, however. The same day the State 
Department released its report, highly respected Argentine prosecutor 
Alberto Nisman, who served as special prosecutor for the investigation 
into the 1994 bombing of the AMIA Jewish community center in Buenos 
Aires, released a 500-page document laying out how the Iranian regime 
has, since the early 1980s, built and maintained ``local clandestine 
intelligence stations designed to sponsor, foster, and execute 
terrorist attacks'' in the Western Hemisphere. Nisman found evidence 
that Iran is building intelligence networks identical to the one 
responsible for the bombings in Argentina across the region--from 
Brazil, Paraguay, Uruguay, Chile, and Colombia to Guyana, Trinidad and 
Tobago, and Suriname, in addition to a number of others.\16\
---------------------------------------------------------------------------
    \16\ ``AMIA Case,'' http://www.defenddemocracy.org/stuff/uploads/
documents/summary_- (31_pages).pdf.
---------------------------------------------------------------------------
    Nisman's earlier 2006 report on the AMIA bombing had already 
demonstrated how Iran established a robust intelligence network in 
South America in the early 1980s.\17\ One document, seized during a 
court-ordered raid of the residence of an Iranian diplomat north of 
Buenos Aires included a map denoting areas populated by Muslim 
communities and suggested an Iranian strategy to export Islam into 
South America--and from there to North America. Highlighting areas 
densely populated by Muslims, the document informed that these ``will 
be used from Argentina as [the] center of penetration of Islam and its 
ideology towards the North American continent.''\18\
---------------------------------------------------------------------------
    \17\ Alberto Nisman and Marcelo Martinez Burgos, ``Office of 
Criminal Investigations AMIA Case,'' Investigations Unit of the Office 
of the Attorney General, October 25, 2006, p. 13, http://
www.peaceandtolerance.org/docs/nismanindict.pdf.
    \18\ Buenos Aires, Argentina Judicial Branch, AMIA Indictment, 
Office of the National Federal Court No. 17, Criminal and Correctional 
Matters No. 9, Case No. 1156, March 5, 2003, p. 61.
---------------------------------------------------------------------------
    Nisman concluded that the driving force behind Iran's intelligence 
efforts in Argentina was Mohsen Rabbani, an Iranian who lived in 
Argentina for 11 years and played a key role in the Islamic Republic's 
intelligence operations in South America. Rabbani, the primary 
architect of the AMIA plot, reportedly had come from Iran for the 
express purpose of heading the state-owned al-Tawhid mosque in Buenos 
Aires, but he also served as a representative of the Iranian Ministry 
of Agriculture, which was tasked with ensuring the quality of Argentine 
meat exported to Iran. The Argentine prosecutor reported that Rabbani 
began laying the groundwork for his spy network after arriving in the 
country in 1983. Indeed, just prior to his departure for South America, 
Rabbani met Abolghasem Mesbahi, an Iranian intelligence official who 
would later defect, and explained to Mesbahi that he was being 
dispatched to Argentina ``in order to create support groups for 
exporting the Islamic revolution,'' according to Nisman's 2006 report. 
Rabbani ultimately executed two large-scale attacks in Argentina. In 
1992, Iran and Hezbollah bombed the Israeli Embassy in Buenos Aires, 
killing 29 people.\19\ Two years later, they targeted the AMIA Jewish 
community center, killing 85 people.
---------------------------------------------------------------------------
    \19\ Alberto Nisman and Marcelo Martinez Burgos, ``Office of 
Criminal Investigations AMIA Case,'' Investigations Unit of the Office 
of the Attorney General, October 25, 2006, http://
www.peaceandtolerance.org/docs/nismanindict.pdf.
---------------------------------------------------------------------------
    Rabbani's terrorist activities in South America, however, did not 
wane despite being indicted in Argentina. According to Nisman and U.S. 
District Court documents from the Eastern District of New York in 
Brooklyn, Rabbani helped four men who were plotting to bomb New York's 
John F. Kennedy International Airport in 2007 and who had sought 
technical and financial assistance for the operation, code-named 
``Chicken Farm.'' All four men were ultimately convicted in Federal 
court.\20\
---------------------------------------------------------------------------
    \20\ Associated Press, ``U.S.: `Unthinkable' terror devastation 
prevented,'' NBC News, June 3, 2007, http://www.nbcnews.com/id/
18999503/ns/us_news-security/t/us-unthinkable-terror-devastation-
prevented/#.UdH4zTvVD_J.
---------------------------------------------------------------------------
    The four men first sought out Yasin Abu Bakr, leader of the 
Trinidadian militant group Jamaat al-Muslimeen, and Adnan el-
Shukrijumah, an al-Qaeda operative who grew up in Brooklyn and South 
Florida and fled the United States for the Caribbean in the days before 
the 9/11 attacks.\21\ Unable to find Shukrijumah, the plotters ``sent 
[co-conspirator] Abdul Kadir to meet with his contacts in the Iranian 
revolutionary leadership, including Mohsen Rabbani,'' according to a 
news release issued by the U.S. attorney's office for the Eastern 
District of New York.\22\
---------------------------------------------------------------------------
    \21\ FBI, ``Most Wanted Terrorists,'' http://www.fbi.gov/wanted/
wanted_terrorists/adnan-g.-el-shukrijumah.
    \22\ FBI, ``Most Wanted Terrorists,'' http://www.fbi.gov/wanted/
wanted_terrorists/adnan-g.-el-shukrijumah.
---------------------------------------------------------------------------
    One co-conspirator was Kareem Ibrahim, an imam and leader of the 
Shiite Muslim community in Trinidad and Tobago. During cross-
examination at trial, Ibrahim admitted that he advised the plotters to 
approach Iranian leaders with the plot and to use operatives ready to 
engage in suicide attacks at the airport. In one of the recorded 
conversations entered into evidence, Ibrahim told Russell Defreitas--a 
plotter who was a JFK baggage handler and a naturalized U.S. citizen--
that the attackers must be ready to ``fight it out, kill who you could 
kill, and go back to Allah.''
    Documents seized from Kadir's house in Guyana demonstrated that he 
was a Rabbani disciple who built a Guyanese intelligence base for Iran 
much like his mentor had built in Argentina. In a letter written to 
Rabbani in 2006, Kadir agreed to perform a ``mission'' for Rabbani to 
determine whether a group of individuals in Guyana and Trinidad were up 
to some unidentified task.
    In the 1990s and 2000s, Rabbani also oversaw the education and 
indoctrination of Guyanese and other South American Muslim youth, 
including Kadir's children, in Iran. Kadir was ultimately arrested in 
Trinidad aboard a plane headed to Venezuela en route to Iran.\23\ He 
was carrying a computer drive with photographs featuring himself and 
his children posing with guns, which prosecutors suggested were 
intended as proof for Iranian officials of his intent and capability to 
carry out an attack.\24\
---------------------------------------------------------------------------
    \23\ U.S. Attorney's Office, ``Russell Defreitas Sentenced to Life 
in Prison for Conspiring to Commit Terrorist Attack at JFK Airport,'' 
press release, FBI, http://www.fbi.gov/newyork/press-releases/2011/
russell-defreitas-sentenced-to-life-in-prison-for-conspiring-to-commit-
terrorist-attack-at-jfk-airport.
    \24\ A. G. Sulzberger, ``Trial Focuses on Iran Ties of Kennedy Plot 
Suspect,'' New York Times, July 24, 2010, http://www.nytimes.com/2010/
07/22/nyregion/22kennedy.html?_r=0.
---------------------------------------------------------------------------
    In 2011, not long before the last defendant in the JFK airport bomb 
plot was convicted, evidence emerged suggesting Rabbani was still doing 
intelligence work in South America. In the words of one Brazilian 
official quoted by the magazine, ``Without anybody noticing, a 
generation of Islamic extremists is appearing in Brazil.''\25\
---------------------------------------------------------------------------
    \25\ Robin Yapp, ``Brazil latest base for Islamic extremists,'' The 
Telegraph, April 3, 2011 http://www.telegraph.co.uk/news/worldnews/
southamerica/brazil/8424929/Brazil-latest-base-for-Islamic-
extremists.html.
---------------------------------------------------------------------------
    In early September 2012, Mexican authorities, in a joint operation 
conducted by migration and state police, arrested three men suspected 
of operating a Hezbollah cell in the Yucatan area and Central America. 
Among them was Rafic Mohammad Labboun Allaboun, a dual U.S.-Lebanese 
citizen, whom Mexican authorities extradited to the United States. 
Before his trip to Mexico, Allaboun had served over 2 years in prison 
for participating in a credit card ``bust-out'' scheme that netted more 
than $100,000. Authorities believed the credit card fraud was linked to 
a U.S.-based Hezbollah money laundering operation.\26\ Allaboun's 
partners, George Abdalah Elders and Justin Yasser Safa, both Lebanese 
immigrants and naturalized Belizeans, ``were participating in financing 
activities in an attempt to bail out incarcerated Hezbollah members 
jailed in the United States,'' according to local media reports.\27\
---------------------------------------------------------------------------
    \26\ United States of America v. Rafic Labboun, Indictment, United 
States District Court, Northern District of California San Jose, Case 
No. CR.-09-0058, January 20, 2009; United States of America v. Rafic 
Labboun, Criminal Complaint, January 9, 2009; ``Mexico Extradites 
Suspected Hezbollah Member,'' Fox News Latino, September 11, 2012.
    \27\ Shane Williams, ``Hezbollah in Belize: Is JP Involved?'' 
Guardian (Belize), September 12, 2012.
---------------------------------------------------------------------------
    At the time of his arrest, Allaboun produced a fake passport 
identifying himself as Wilhelm Dyck, a citizen of Belize. The true 
Wilhelm Dyck had died in 1976, just 2 months after his birth. 
Investigators determined that over a 3-day period in August, Allaboun 
fooled officials into issuing the passport, a valid birth certificate, 
and a driver's license.\28\ But the gaffe is not exclusive to Belize; 
18 Hezbollah members obtained passports by presenting fraudulent visa 
applications at an unnamed U.S. embassy, according to a 1994 FBI 
report.\29\
---------------------------------------------------------------------------
    \28\ Claire O'Neill McCleskey, ``Hezbollah Suspect Obtained Fake 
Belize IDs in 72 Hours,'' InSight Crime, September 13, 2012.
    \29\ Federal Bureau of Investigation, Terrorist Research and 
Analytical Center, ``International Radical Fundamentalism: An 
Analytical Overview of Groups and Trends,'' November 1994.
---------------------------------------------------------------------------
    The speed and ease with which Hezbollah operatives are able to 
secure false documentation in Latin America should not come as a 
surprise. According to Israeli intelligence, the use of such passports 
by Hezbollah operatives is widespread, and the documents are ``used by 
the organization's activists in their travels all over the world.''\30\ 
At times well-placed sympathizers secure documents for operations in 
the region. In 2009, U.S. authorities accused Tarek el Aissami, then 
Venezuela's Interior Minister, of issuing passports to members of Hamas 
and Hezbollah. El Aissami reportedly recruited young Venezuelan Arabs 
to train in Hezbollah camps in southern Lebanon.\31\
---------------------------------------------------------------------------
    \30\ Undated Israeli intelligence report, ``Hizballah World 
Terrorism,'' author's personal files, received August 5, 2003.
    \31\ Robert Morgenthau, ``The Link between Iran and Venezuela: A 
Crisis in the Making?'' speech before the Brookings Institution, 
Washington, DC, September 8, 2009.
---------------------------------------------------------------------------
                  narco-terrorism/criminal connections
    While massive fundraising and procurement schemes underscore the 
extent to which Hezbollah sympathizers, supporters, and operatives are 
active in Latin America, the connection between drugs and terror has 
grown particularly strong. According to the U.S. Drug Enforcement 
Administration (DEA), 19 of the 43 U.S.-designated Foreign Terrorist 
Organizations are definitively linked to the global drug trade, and up 
to 60 percent of terror organizations are suspected of having some ties 
with the illegal narcotics trade.\32\ Hezbollah is no exception, and in 
recent years it has increased its role in the production and 
trafficking of narcotics. In this effort, Hezbollah has leveraged the 
vast Lebanese Shi'a diaspora populations, mainly located in South 
America and Africa, to its advantage.\33\
---------------------------------------------------------------------------
    \32\ ``EXCLUSIVE: Hezbollah Uses Mexican Drug Routes into U.S.,'' 
Washington Times, March 27, 2009.
    \33\ ``Drug Trafficking and Middle Eastern Terrorist Groups: A 
Growing Nexus?'' Washington Institute for Near East Policy, Policy 
Watch 1392, July 25, 2008.
---------------------------------------------------------------------------
    Former Southern Command commander Admiral James Stavridis testified 
in early 2009 about regional counternarcotics takedowns, executed by 
SOUTHCOM and the DEA, in coordination with host nations, targeting 
Hezbollah drug trafficking. ``We see a great deal of Hezbollah activity 
throughout South America, in particular. [The] tri-border of Brazil is 
a particular concern, as in Brazil, Paraguay and Argentina, as well as 
[other] parts of Brazil and in the Caribbean Basin,'' Stavridis told 
lawmakers.\34\ Most of these were only publicly identified as 
counterdrug operations, but a few, including drug rings busted in 
Ecuador in 2005, Colombia in 2008, and Curacao in 2009, were explicitly 
tied to Hezbollah. Such revelations should not be surprising, given the 
long history of Lebanese criminal elements in the drug trade in South 
America in general--and in light of revelations by the U.S. Treasury 
Department three years earlier that Hezbollah operatives like Sobhi 
Fayad have engaged in all kinds of Hezbollah support activities, 
including ``illicit activities involving drugs and counterfeit U.S. 
dollars.''\35\
---------------------------------------------------------------------------
    \34\ Southern Command Commander Admiral James G. Stavridis, 
statement before the Senate Armed Services Committee, March 17, 2009; 
``U.S. Warns of Iran-Hezbollah Influence in Latin America,'' 
voanews.com, March 19, 2009.
    \35\ U.S. Department of the Treasury, ``Treasury Targets Hizballah 
Fundraising Network in the Triple Frontier of Argentina, Brazil, and 
Paraguay,'' press release, December 6, 2006.
---------------------------------------------------------------------------
    Hezbollah's expanding criminal networks have led to closer 
cooperation with organized crime networks, especially Mexican drug 
cartels. In a March 2012 speech at the Washington Institute for Near 
East Policy, Michael Braun, former DEA chief of operations, detailed 
Hezbollah's skill in identifying and exploiting existing smuggling and 
organized crime infrastructure in the region. Braun and other officials 
have noted that the terrain along the Southern U.S. Border, especially 
around San Diego, is similar to that on the Lebanese-Israeli border. 
Intelligence officials believe drug cartels, in an effort to improve 
their tunnels, have enlisted the help of Hezbollah, which is notorious 
for its tunnel construction along the Israeli border. In the 
relationship, both groups benefit, with the drug cartels receiving 
Hezbollah's expertise and Hezbollah making money from its efforts.\36\
---------------------------------------------------------------------------
    \36\ ``Myrick Calls for Taskforce to Investigate Presence of 
Hezbollah on the US Southern Border,'' letter from U.S. Congresswoman 
Sue Myrick to Secretary of the Department of Homeland Security Janet 
Napolitano, June 23, 2010.
---------------------------------------------------------------------------
    In 2008, the Mexican newspaper El Universal published a story 
detailing how the Sinaloa drug cartel sent its members to Iran for 
weapons and explosives training. The article reported that the Sinaloa 
members traveled to Iran via Venezuela, that they used Venezuelan 
travel documents, and that some members of Arab extremist groups were 
marrying local Mexican and Venezuelan citizens in order to adopt 
Latino-sounding surnames and more easily enter the United States.\37\
---------------------------------------------------------------------------
    \37\ Doris Gomora, ``Aprenden Narcoterror con Extrimistas: EU,'' El 
Universal (Mexico City), July 17, 2008.
---------------------------------------------------------------------------
    Also on the U.S. radar is the relationship between Hezbollah and 
the Revolutionary Armed Forces of Colombia (FARC). ``One thing both 
Hezbollah and the FARC have in common is a demonstrated willingness to 
work with outside groups that do not share their same ideology or 
theology, but who share a common enemy,'' notes Latin America expert 
Douglas Farah.\38\ A July 2009 indictment exposed Jamal Youssef, a 
former member of the Syrian military and known international arms 
dealer, who attempted to make a weapons-for-cocaine trade with the 
FARC. Unbeknownst to him, Youssef negotiated the deal with an 
undercover DEA agent. The military-grade arms he agreed to provide had 
been stolen from Iraq and stored in Mexico by Youssef's cousin, who he 
claimed was a Hezbollah member.\39\
---------------------------------------------------------------------------
    \38\ Douglas Farah, testimony before the House Committee on 
Homeland Security, Subcommittee on Counterterrorism and Intelligence, 
July 7, 2011.
    \39\ ``A Line in the Sand: Countering Crimes, Violence and Terror 
at the Southwest Border,'' majority report by U.S. Congress, House 
Committee of Homeland Security, 112th Cong. 2nd sess., November 2012.
---------------------------------------------------------------------------
                     staging ground and safe haven
    Latin America is also strategically significant for Hezbollah and 
other terrorist organizations because of its location: The region 
provides an ideal point of infiltration into the United States. In at 
least one instance, a highly-trained Hezbollah operative, Mahmaoud 
Youssef Kourani, succeeded in sneaking across the border into the 
United States through Mexico in the trunk of a car. Kourani paid the 
owner of a Lebanese cafe in Tijuana $4,000 to smuggle him across the 
border in February 2001. The cafe owner, Salim Boughader Mucharrafille, 
admitted to assisting more than 300 Lebanese sneak into the United 
States in similar fashion over a 3-year period.\40\
---------------------------------------------------------------------------
    \40\ United States of America v. Mahmoud Youssef Kourani, 
Indictment Crim. No. 03-81030, United States District Court, Eastern 
District of Michigan, Southern Division, November 19, 2003; USA v. 
Mahmoud Youssef Kourani, First Superseding Indictment, March 1, 2005; 
Pauline Arrillaga and Olga R. Rodriguez, ``The Terror-Immigration 
Connection,'' MSNBC, July 3, 2005; Associated Press, ``Hizballah 
Fundraiser Sentenced to Prison,'' Los Angeles Times, June 15, 2005.
---------------------------------------------------------------------------
    Over the past several years, U.S. criminal investigations also have 
revealed links between the group's illicit activities in the United 
States and criminal networks in Latin America. An attempt to establish 
a Hezbollah network in Central America, foiled by Mexican authorities 
in 2010, provides even more insight into Hezbollah's foothold in 
Mexico. Hezbollah operatives, led by Jameel Nasr, employed Mexican 
nationals who had family ties in Lebanon to set up a network targeting 
Western interests, the media reported. According to these reports, Nasr 
routinely traveled to Lebanon to receive directions from Hezbollah.\41\
---------------------------------------------------------------------------
    \41\ Jack Khoury, ``Mexico Thwarts Hezbollah Bid to Set Up South 
American Network,'' Haaretz, July 6, 2010.
---------------------------------------------------------------------------
    Indeed, the growth of the Iranian extremist network in this region 
has immediate repercussions for U.S. security. The same day Nisman and 
State released their reports, an Iranian-American used-car salesman 
from Texas was sentenced to 25 years in prison for his role in an 
Iranian plot to assassinate Saudi Arabia's ambassador to the United 
States at a popular Washington restaurant.\42\ In the assessment by DNI 
James Clapper, this plot ``shows that some Iranian officials--probably 
including Khamenei--have changed their calculus and are now more 
willing to conduct an attack in the United States in response to real 
or perceived U.S. actions that threaten the regime.''\43\
---------------------------------------------------------------------------
    \42\ Benjamin Weiser, ``Man Sentenced in Plot to Kill Saudi 
Ambassador,'' New York Times, May 30, 2013, http://www.nytimes.com/
2013/05/31/nyregion/mansour-arbabsiar-sentenced-for-plot-to-kill-saudi-
ambassador.html.
    \43\ Eric Schmitt, ``Intelligence Report Lists Iran and 
Cyberattacks as Leading Concerns,'' New York Times, January 31, 2012, 
http://www.nytimes.com/2012/02/01/world/intelligence-chief-sees-al-
qaeda-likely-to-continue-fragmenting.html?pagewanted=all&_r=0.
---------------------------------------------------------------------------
 prospects for terrorism under administration of new iranian president
    Hassan Rouhani's victory in Iran's presidential election has been 
widely heralded as a protest vote against the hardliners and a window 
of opportunity for diplomatic breakthrough with Western powers.\44\ But 
such assumptions beg the question: How much moderation can be expected 
from a ``moderate'' Iranian president, particularly with regard to 
state sponsorship of terrorism? The past suggests that expectations 
should be tempered.
---------------------------------------------------------------------------
    \44\ Thomas Erdbrink, ``Iran Moderate Wins Presidency by a Large 
Margin,'' New York Times, June 15, 2013, http://www.nytimes.com/2013/
06/16/world/middleeast/iran-election.html?- pagewanted=all; Jason 
Rezaian and Joby Warrick, ``Moderate cleric Hassan Rouhani wins Iran's 
presidential vote,'' Washington Post, June 15, 2013, http://
www.washingtonpost.com/world/iranians-await-presidential-election-
results-following-extension-of-polling-hours/2013/06/15/3800c276-d593-
11e2-a73e-826d299ff459_story.html.
---------------------------------------------------------------------------
    Rouhani is not the first Iranian ``moderate'' to win the 
presidency. Akbar Hashemi Rafsanjani, elected in 1989, was frequently 
described as a moderate as well. According to U.S. intelligence, 
however, he oversaw a long string of terrorist plots during his 8 years 
in office. The CIA linked Rafsanjani to terrorist plots as early as 
1985, when he was serving as speaker of parliament. In a February 15, 
1985 memo, the agency assessed that ``Iranian-sponsored terrorism is 
the greatest threat to U.S. personnel and facilities in the Middle East 
. . . Iranian-backed attacks increased by 30 percent in 1984, and the 
numbers killed in Iranian-sponsored attacks outpace fatalities in 
strikes by all other terrorist sponsors. Senior Iranian leaders such as 
Ayatollah Montazeri, . . . Prime Minister [Mir Hossein Mousavi], and 
Consultative Assembly speaker Rafsanjani are implicated in Iranian 
terrorism.''
    In August 1990, the CIA's Directorate of Intelligence authored a 
more in-depth assessment titled ``Iranian Support for Terrorism: 
Rafsanjani's Report Card.'' According to the agency, the regime's 
sponsorship of terrorist activities had continued unabated since the 
death of Ayatollah Khomeini the previous June: ``Although Rafsanjani 
has sought to improve relations with some Western nations since 
directly assuming the presidency last August, events of the past year 
prove that Tehran continues to view the selective use of terrorism as a 
legitimate tool.''\45\ Iranian terrorist attacks targeting ``enemies of 
the regime'' over the previous year ``were probably approved in advance 
by President Rafsanjani and other senior leaders,'' the report 
assessed, but ``the planning and implementation of these operations are 
. . . probably managed by other senior officials, most of whom are 
Rafsanjani's appointees or allies.''\46\ The CIA concluded that 
``Rafsanjani and [Supreme Leader] Khamenei would closely monitor and 
approve planning for an attack against the U.S. or Western 
interests.''\47\
---------------------------------------------------------------------------
    \45\ US Central Intelligence Agency (CIA). Directorate of 
Intelligence. ``Iranian Support for Terrorism: Rafsanjani's Report 
Card.'' Terrorism Review, August 9, 1990.
    \46\ US Central Intelligence Agency (CIA). Directorate of 
Intelligence. ``Iranian Support for Terrorism: Rafsanjani's Report 
Card.'' Terrorism Review, August 9, 1990.
    \47\ US Central Intelligence Agency (CIA). Directorate of 
Intelligence. ``Iranian Support for Terrorism: Rafsanjani's Report 
Card.'' Terrorism Review, August 9, 1990.
---------------------------------------------------------------------------
    Looking forward, CIA analysts assessed in 1990 that ``Rafsanjani 
and other Iranian leaders will continue selectively using terrorism as 
a foreign policy tool to intimidate regime opponents, punish enemies of 
Islam, and influence Western political decisions.''\48\ Two years 
later, such assessments appeared prescient. In 1992, the CIA recorded a 
long list of Iranian terrorist activities, from attacks targeting 
Israeli, Saudi, and American officials in Turkey, to plots targeting 
Jewish emigres from the former Soviet Union and anti-regime dissidents 
abroad.\49\ Additionally, in May 1997, Muhammad Khatami was elected as 
Iran's fifth president after running on a distinctly reformist 
platform. Supporters of Iranian radicalism, including Hezbollah leader 
Hassan Nasrallah, had strongly supported Khatami's more overtly 
revolutionary opponent, Ali Akbar Nateq Nuri.\50\
---------------------------------------------------------------------------
    \48\ US Central Intelligence Agency (CIA). Directorate of 
Intelligence. ``Iranian Support for Terrorism: Rafsanjani's Report 
Card.'' Terrorism Review, August 9, 1990.
    \49\ US Central Intelligence Agency (CIA). Directorate of 
Intelligence. ``Iran: Enhanced Terrorist Capabilities and Expanding 
Target Selection.'' April 1, 1992.
    \50\ US Central Intelligence Agency (CIA). Directorate of 
Intelligence. ``Hizballah's Reactions to Khatami's Election, December 
22, 1997, http://www.foia.cia.gov/sites/default/files/
document_conversions/89801/DOC_0001280265.pdf.
---------------------------------------------------------------------------
    In a December 1997 memo, the CIA asserted that Hezbollah leaders 
were shocked by Khatami's victory and ``scrambled to ensure that his 
election would not diminish Iran's support'' for the group. Their 
concerns would prove unfounded, however--when Nasrallah visited Tehran 
in October 1997, Khatami and other officials pledged their continued 
support, emphasizing that the regime had not changed its position 
regarding the group or its operations against Israel.\51\
---------------------------------------------------------------------------
    \51\ Ibid.
---------------------------------------------------------------------------
    According to the CIA memo, Khatami ``probably joins other Iranian 
leaders who maintain that support to Hezbollah is an essential aspect 
of Tehran's effort to promote itself as leader of the Muslim world and 
champion of the oppressed.''\52\
---------------------------------------------------------------------------
    \52\ Ibid.
---------------------------------------------------------------------------
    More important, the CIA assessed that Khatami would have been 
unable to withdraw Iran's sponsorship of Hezbollah even if he had 
wanted to. As the memo put it, Khatami ``probably does not have the 
authority to make such a change without the approval of Khamenei, who 
has long been one of the group's foremost supporters.''\53\
---------------------------------------------------------------------------
    \53\ Ibid.
---------------------------------------------------------------------------
    The fact that the least radical candidate won Iran's latest 
presidential election has many observers excited about the prospect of 
more moderate policymaking in Tehran. Yet regardless of how Rouhani's 
election might affect the nuclear impasse, the Islamic Republic's 
history indicates that ``moderate'' or ``reformist'' presidents do not 
translate into moderation of Iran's terrorism sponsorship. Even if 
Rouhani were inclined to curb such policies, there is no evidence that 
he has the authority to do so without the Supreme Leader's approval, 
which seems highly unlikely at present.
                               conclusion
    The State Department's report notes a ``marked resurgence'' of 
Iranian state sponsorship of terrorism over the past 18 months through 
the IRGC and its connections with Hezbollah. As the new Nisman report 
clearly indicates, however, Iran has run intelligence networks in the 
United States' backyard to ``sponsor, foster, and execute terrorist 
attacks'' for decades.
    Some in the region have yet to get serious about the threat 
Hezbollah and Iran pose. The need for attention is perhaps greater 
today than it has been in years past, since Hezbollah--as a result of 
both necessity and opportunity--appears to have renewed operational 
planning focused on South America. Confronting the threat this 
terrorist network poses will require close law enforcement, 
intelligence, and policy coordination throughout the Western 
Hemisphere. And with Hezbollah actively plotting terrorist attacks 
around the world, such cooperation should take shape as quickly as 
possible.
                                 ______
                                 
  Statement of Robert Raben, Executive Director, American Task Force 
                               Argentina
                              July 9, 2013
    My name is Robert Raben, and I serve as the executive director of 
the American Task Force Argentina (ATFA).
    ATFA is an alliance of organizations united for a just and fair 
reconciliation of the Argentine government's 2001 debt default and 
subsequent restructuring. Our members work with lawmakers, the media, 
and other interested parties to vigorously pursue a negotiated 
settlement with the Argentine government in the interests of American 
stakeholders.
    The key obstacle to such a settlement is the Argentine government's 
adamant refusal to conduct good-faith negotiations with its unpaid 
creditors, despite those creditors' repeated attempts to negotiate. 
This refusal has fueled a vicious cycle, whereby Argentina's failure to 
settle its debts has led to other acts of disassociation from the 
international community, more government radicalism and a greater 
determination never to pay.
    Since Argentine President Cristina Fernandez de Kirchner took 
office 5 years ago, this cycle has only intensified. Argentina's self-
imposed insolation has led it to join a small but growing bloc of Latin 
American nations defined by their rejection of international 
institutions and the rule of law, heavy economic intervention including 
the nationalization of assets, restrictions on critical speech and the 
press, and--most troubling--a growing closeness with dangerous rogue 
states, especially Iran.
    We noted with interest, but not surprise, President Kirchner's 
decision to prohibit independent Argentine prosecutor Alberto Nisman 
from appearing to testify at today's hearing. We believe this decision 
serves as a window into the disturbing alliance between Argentina and 
Iran.
    As you know, Mr. Nisman is the prosecutor whose work led to the 
indictments of a group of senior Iranian officials for plotting and 
executing the 1994 bombing of the Argentine Israelite Mutual 
Association (AMIA), a Jewish community center in Buenos Aires. The 
bombing killed 85 people and injured hundreds more. It was one of the 
most devastating terrorist attacks ever committed in the Western 
Hemisphere and the deadliest strike on a Jewish target since World War 
II.
    In January of 2013, President Kirchner's government signed a pact 
with the Iranian government establishing a so-called ``Truth 
Commission'' to re-investigate the causes of the bombing. This 
agreement was forged despite the fact that Mr. Nisman has already 
clearly established Iran's complicity in the bombing and the subsequent 
cover-up. Far from advancing justice and the prosecution of the 
Iranians involved, the Commission's purpose appears to be to obfuscate, 
if not to entirely absolve, Iran's responsibility for the attack.
    The establishment of the Commission immediately caused an outcry 
among representatives of the victims of the bombing. Argentina's two 
largest Jewish organizations, including AMIA itself, said in a joint 
statement: ``To ignore everything that the Argentine justice has done 
and to replace it with a commission . . . constitutes, without doubt, a 
reversal in the common objective of obtaining justice.''
    Members of Congress from both parties also denounced the Commission 
as a potential ``whitewashing of this heinous crime'' (Sens. Gillibrand 
and Kirk) and an attempt to ``exonerate Iran'' (Reps. Salmon and 
Deutch) that can only ``encourage Iran's accelerating support for 
murderous dictators, pursuit of nuclear weapons, and sponsorship of 
global terrorism'' (Reps. Meng and Radel).
    Argentina's ambassador to the United States, the Honorable Cecilia 
Nahon, has attempted to defend this deal in a letter to Members of 
Congress by claiming that it would give Argentine officials ``the 
unprecedented opportunity to interrogate the accused.''
    But her claims are flatly contradicted by Iranian government 
officials themselves, who have stated that ``Under no circumstances 
will Iran ever allow an Argentinean judge and prosecutor in the 
[investigation] to enter Tehran in order to meet with senior Iranian 
officials whom Argentina claims are culpable in this case.''
    In fact, the Iranian security establishment views the agreement as 
something of a diplomatic coup. To this day, Iran insists that the 
bombing was a ``Zionist project'' and that the Truth Commission will 
ultimately reveal that it was perpetrated by Westerners seeking to 
damage relations between Argentina and Iran. One senior Iranian 
official recently said, ``Thanks to Allah, with the collaboration of 
the foreign ministries of Iran and Argentina, a reasonable way to solve 
the AMIA issue is being seen, and there is a greater comprehension of 
the foreign and Zionist factors that were the true causes of this 
regrettable act.''
    Why would Argentina's President hand Iran such a victory? To us, 
the agreement appears to fit within a larger pattern of growing 
cooperation with Iran. The Kirchner government, like the government of 
Venezuela, has aggressively pursued an economic partnership with Iran--
and re-writing the history of the AMIA attack is crucial to that 
partnership. According to The Economist: ``Argentina's interventionist 
policies have forced it to import ever-greater amounts of energy. And 
Iran is likely to offer generous terms to any country willing to thumb 
its nose at the West and buy Iranian oil.'' (January 29, 2013)
    The agreement to deny Iranian involvement in the attack on the AMIA 
is by most accounts one element in a persistent design over the last 
several years to increase economic cooperation between the two 
countries. As the U.S. Government and others have focused on isolating 
Iran, Argentine exports to Iran have increased dramatically in recent 
years, rising from a few hundred million in 2007 to over $1.5 billion 
by 2010.
    In March of 2011, Perfil reported that Argentine Foreign Minister 
Hector Timerman met with Syrian President Bashar al-Assad in January of 
that year to discuss dropping the AMIA investigation in exchange for 
deepening economic relations between Argentina and Iran. Perfil quoted 
a classified memo from Ali Akbar Salehi, the Iranian foreign minister 
to President Mahmoud Ahmadinejad, as saying, ``Argentina is no longer 
interested in solving these two attacks, but would rather improve its 
economic relations with Iran.''
    And according a Washington Post report on the AMIA pact, ``In 2011, 
[Timerman] told The Washington Post that he believed that a `hegemonic 
power'--meaning the United States--had historically blocked efforts to 
unite Latin America and the Muslim world. He said Argentina was 
energetically seeking to build such ties.'' (April 5, 2013)
    Reviewing the evidence, it is difficult to escape the conclusion 
that President Kirchner's decision to block Mr. Nisman from testifying 
before this committee is linked to her government's policies toward 
Iran. As you are aware, Mr. Nisman released a new report in June 
linking the AMIA bombing to a broader effort by Iran to build and 
maintain a network of terror cells tasked with executing attacks 
against targets in the Western Hemisphere.
    Mr. Nisman's testimony on this matter, while extremely important to 
Members of the U.S. Congress, no doubt would have been embarrassing and 
problematic for President Kirchner, raising awkward questions about the 
AMIA ``Truth Commission'' and her other ties to Iran. Why else would 
she have denied Mr. Nisman's request to testify?
    Nor is this the first time Argentine defiance has disrupted the 
proper functioning of a branch of the U.S. Government:
   U.S. courts have handed down over 100 judgments against 
        Argentina in favor of its creditors, which Argentina refuses to 
        pay.
   After the U.S. District Court for the Southern District of 
        New York found that Argentina had violated the terms of its 
        bond contract and ordered Argentina to remedy this violation, 
        Argentina insulted the District Court judge and accused him of 
        practicing ``judicial colonialism.''
   After the U.S. Court of Appeals for the Second Circuit 
        upheld the District Court's decision, Argentina announced that 
        it ``doesn't have to cooperate'' and that it would ``not 
        voluntarily obey'' the Court's order.
    We believe Argentina will persist in such defiant behavior so long 
as it remains in a state of self-imposed isolation from the 
international community of law-abiding nations. We further believe that 
the first step toward rejoining that community is for Argentina to 
settle its outstanding debts by entering into good-faith negotiations 
with its creditors. Such a settlement would have far-reaching benefits, 
not the least of which would be a more economically and politically 
stable Argentina. A more stable Argentina would be less likely to 
assist Iran in its efforts to extend its influence in the Western 
Hemisphere.
    Argentina will likely resist such a settlement as long as the 
Executive branch of the U.S. Government continues to offer the country 
unnecessary legal support against creditors' attempts to assert their 
contractual rights in U.S. courts. The best way to achieve a positive 
outcome for Argentina and its creditors is for U.S. policymakers across 
all three branches to take a unified, zero-tolerance approach to its 
government's increasingly rogue behavior.
    Thank you for holding this important hearing. I look forward to the 
results, and I would be happy to discuss this matter further with any 
interested Member of the committee.
    Mr. Duncan. I now recognize myself for an opening 
statement.
    Iran's perpetual defiance of the U.S. and international 
sanctions, coupled with its propensity for sponsoring 
international terrorism world-wide, constitutes a recipe for 
instability and a threat to the security of the U.S. homeland.
    For years, Iran has been testing Western patience with its 
subversive actions. In the last 2 years, Iran's brazen 
attempted attacks in Azerbaijan, India, Thailand, Georgia, 
Kenya, Cyprus, Bulgaria, and a foiled plot in Washington, DC, 
demonstrate an audacity that we should find chilling. Today, 
Iran employs the capability to mobilize its global network of 
Ministry of Intelligence and Security, or MOIS, the Islamic 
Revolutionary Guards Corps, the IRGC, the Quds Force, and 
Hezbollah operatives to further its objectives and threaten the 
U.S. interests and security.
    It is concerning to me that even though Iran has publicly 
stated that the promotion of all-out cooperation with Latin 
American countries is one of its top priorities and ``among the 
definite and strategic policies of the Islamic Republic of 
Iran,'' this administration refuses to see Iran's presence so 
near the U.S. borders as a threat to U.S. security.
    Last month, the State Department released a report in 
response to legislation that I authored in the last Congress on 
the threat to the United States from Iran. The unclassified 
summary found that Iranian influence in Latin America and the 
Caribbean is waning.
    We know that there is not consensus on this issue. But I 
seriously question the administration's judgment to downplay 
the seriousness of Iran's presence here at home. Congress has 
focused extensively on activities of both Iran and Hezbollah in 
the region. Several House and Senate hearings have been held. 
Members of Congress have traveled to the region to investigate 
for ourselves if reports of Iranian activity in Latin America 
were true. This subcommittee released a report outlining the 
findings from our investigation, and both Houses of Congress 
passed bipartisan legislation highlighting our concerns.
    This administration produced a report that neglected the 
input of our foreign allies in the region, and it did not meet 
the intent of my legislation to address this threat from Iran 
in a comprehensive and coordinated way. Furthermore, the report 
did not consider all the facts by disregarding the recent 
findings from the general prosecutor of the 1994 Argentine-
Israelite Mutual Association AMIA case, Mr. Alberto Nisman's 
investigation. In stark contrast to the State Department's 
assessment, Nisman's investigation revealed that Iran has 
infiltrated for decades large regions of Latin America through 
the establishment of clandestine intelligence stations and is 
ready to exploit its position to execute terrorist attacks when 
the Iranian regime decides to do so.
    Mr. Nisman was invited to share the findings from his 2006 
and 2013 investigations into the AMIA bombing with this 
subcommittee. I see his chair stands empty, as he was refused 
the opportunity to come to share that information with the 
subcommittee. The decision by the government of Argentina to 
deny Mr. Nisman's permission to testify at today's hearing on 
the grounds this hearing has no relation to the official 
mission of the attorney general's office is deeply troubling 
and grossly inaccurate.
    Mr. Nisman sent a copy of his findings to the U.S. 
Department of Justice, and the United States has a vital 
interest in learning more about Iran's operations within this 
hemisphere. It is interesting to note that July 18 is the 
anniversary of those bombings in Argentina, I believe.
    Mr. Nisman's investigation found that Iran was the main 
sponsor of an attempted attack on American soil in 2007 to blow 
up the John F. Kennedy Airport in Queens, New York. Had the 
plot not been uncovered, an untold number of Americans could 
have been killed by this terrorist act. If the administration 
continues to hold that Iran's influence is waning, it needs to 
provide a clear justification for its analysis. Wearing 
blinders to the Iranian threat will not make it go away.
    Consider the direct threat to the U.S. homeland from Iran's 
presence in the region. The GAO found in 2011 that DHS only had 
40 percent of our Southern Border under operational control and 
only 2 percent of the Northern Border was considered secure. 
DHS has never put forth a comprehensive plan to gain and 
maintain operational control of U.S. borders. How then can we 
be sure that Iranian operatives are not today smuggling people, 
drugs, or weapons into the United States through our porous 
Southern Border? The number of illegal aliens other than 
Mexicans, or OTMs, being apprehended by CBP agents has grown 
over the last several years. We do not currently possess a 
concrete mechanism for determining how many OTMs evade 
apprehension and successfully enter the country illegally.
    Since September 11, 2001, the Department of Homeland 
Security has also reported an increase in arrests along the 
Texas-Mexico border of illegal aliens from special interest 
countries. However, it is not just our Southern Border that we 
need to watch. According to a July 2012 report by the Canada 
Border Services Agency, Iran is the No. 1 source country of 
improperly documented migrants who make refugee claims in 
Canada. However, it is from countries in Latin America that 
many of these Iranians are traveling to Canada to make the 
refugee claims.
    Further, there have been numerous reports of individuals 
with fraudulent passports and other false documentation on 
traveling freely within Latin America and the Caribbean due to 
lacking border security measures. According to Dr. Matthew 
Levitt's statement for the record, Israeli intelligence has 
found that the use of such false documentation by Hezbollah 
operatives is widespread, and false passport documents are used 
by the organization's activities in their travels all over the 
world. The United States and our neighbors should be working 
vigorously to close these loopholes.
    We have also already seen Iranian penetration within the 
United States borders. Several Hezbollah supporters have been 
arrested in the United States after crossing the U.S.-Mexico 
border. A Hezbollah cell was discovered in 2002 in Charlotte, 
North Carolina. The New York City Police Department has caught 
Iranian IRGC operatives serving at the Iranian mission to the 
United Nations conducting preoperational terrorist surveillance 
of potential targets, including the New York subway. Only 2 
years ago, the DEA foiled an Iranian plot to assassinate the 
Saudi Ambassador to the United States here in Washington, DC. 
In May, the Iranian American involved in this plot was 
sentenced to 25 years in prison for his role.
    In conclusion, we cannot reject the notion that Iran may be 
planning more attacks in this hemisphere within the U.S. 
borders in the near future. We cannot downplay the threat from 
Iranians seeking to exploit refugee and border security 
loopholes. We need leadership, a strong border security plan, 
and closer ties to our neighbors because we all face 
repercussions if Iran should mobilize its operatives in and 
around the region.
    [The statement of Chairman Duncan follows:]
                   Statement of Chairman Jeff Duncan
                              July 9, 2013
    Iran's perpetual defiance of U.S. and international sanctions, 
coupled with its propensity for sponsoring international terrorism 
world-wide, constitutes a recipe for instability--and a threat to the 
security of the U.S. homeland. For years, Iran has been testing Western 
patience with its subversive actions. In the last 2 years, Iran's 
brazen attempted attacks in Azerbaijan, India, Thailand, Georgia, 
Kenya, Cyprus, Bulgaria, and a foiled plot in Washington, DC 
demonstrate an audacity that we should find chilling. Today, Iran 
employs the capability to mobilize its global network of Ministry of 
Intelligence and Security (MOIS), Islamic Revolutionary Guards Corps 
(IRGC), Quds Force, and Hezbollah operatives to further its objectives 
and threaten U.S. interests and security.
    It is concerning to me that even though Iran has publicly stated 
that ``the promotion of all-out cooperation with Latin America 
countries'' is one of its ``top priorities,'' and ``among the definite 
and strategic policies of the Islamic Republic of Iran,'' this 
administration refuses to see Iran's presence--so near U.S. borders--as 
a threat to U.S. security. Last month, the State Department released a 
report in response to legislation that I authored on the threat to the 
United States from Iran. The unclassified summary found ``Iranian 
influence in Latin America and the Caribbean is waning.'' We know that 
there is not consensus on this issue, but I seriously question the 
administration's judgment to downplay the seriousness of Iran's 
presence here at home.
    Since September 11, 2001, DHS has also reported an increase in 
arrests along the Texas/Mexico border of illegal aliens from ``special 
interest'' countries. However, it is not just our Southern Border that 
we need to watch. According to a July 2012 report by the Canada Border 
Services Agency, ``Iran is the number one source country of improperly 
documented migrants who make refugee claims in Canada.'' However, it is 
from countries in Latin America that many of these Iranians are 
traveling to Canada to make their refugee claims.
    Further, there have been numerous reports of individuals with 
fraudulent passports and other false documentation traveling freely 
within Latin America and the Caribbean due to lacking border security 
measures. According to Dr. Matthew Levitt's statement for the record, 
Israeli intelligence has found that the use of such false documentation 
by Hezbollah operatives is widespread, and false passport documents are 
``used by the organization's activities in their travels all over the 
world.'' The United States and our neighbors should be working 
vigorously to close these loopholes.
    We have also already seen Iranian penetration within U.S. borders. 
Several Hezbollah supporters have been arrested in the United States 
after crossing the U.S.-Mexico border. A Hezbollah cell was discovered 
in 2002 in Charlotte, North Carolina. The New York City Police 
Department has caught Iranian IRGC operatives serving at the Iranian 
Mission to the United Nations conducting pre-operational terror 
surveillance of potential targets including the New York subway. Only 2 
years ago, the DEA foiled an Iranian plot to assassinate the Saudi 
Ambassador to the United States in Washington, DC. In May, the Iranian-
American involved in this plot was sentenced to 25 years in prison for 
his role.
    In conclusion, we cannot reject the notion that Iran may be 
planning more attacks in this hemisphere--within U.S. borders--in the 
near future. We cannot downplay the threat from Iranians seeking to 
exploit refugee and border security loopholes. We need leadership, a 
strong border security plan, and closer ties to our neighbors because 
we all face repercussions if Iran should mobilize its operatives around 
the region.

    Mr. Duncan. The Chairman will now recognize the acting 
Ranking Member of the subcommittee. But before I do, I want to 
mention that the Ranking Member, Mr. Ron Barber, is in Arizona, 
attending a service for the fallen firefighters there along 
with Mr. Salmon, the subcommittee chairman of the Foreign 
Affairs Subcommittee on the Western Hemisphere, who also has a 
vested interested in this topic. So we will keep the folks in 
Arizona and the two gentlemen from Congress that are at that 
service in our prayers and thoughts today.
    So now I will recognize the gentleman from Texas, Mr. 
O'Rourke, for any statement he may have.
    Mr. O'Rourke. Thank you, Mr. Chairman. I want to begin by 
also extending my sympathies and our thoughts and prayers to 
the families of those firefighters and the Representatives who 
are there with them now after this horrible tragedy out West.
    Before I begin my opening statement, I wanted to ask for 
unanimous consent to allow Mr. Vela to join us today in the 
committee.
    Mr. Duncan. Without objection, so ordered.
    Mr. O'Rourke. Thank you. Mr. Chairman, I also want to thank 
you for convening this hearing and bringing together these 
expert witnesses on a subject matter that, frankly, I am not as 
well-versed in as I would like to be. It is one that I probably 
didn't expect to be discussing or working on as a Member of the 
Homeland Security Committee. But it is clear from your opening 
statement and the legislation that you have worked on in the 
past that you take very seriously our responsibility to 
understand and counter these threats before they reach the 
homeland. I think that is really important, and I want to thank 
you for your work on this effort, including convening today's 
hearing.
    I also want to note that we have made some progress in our 
relationship with Iran and in countering their threat globally. 
The international community has joined us in imposing several 
rounds of increasingly stricter sanctions against Iran to deter 
its support for international terrorism, its human rights 
violations, and its efforts to develop a nuclear weapons 
program. I believe and I think the facts bear out that these 
sanctions are having some of the impacts that we want them to 
have. We see significant oil revenue losses and inability to 
participate in the international banking system, a sharp drop 
in the value of Iran's currency, and inflation that is now over 
50 percent. By many accounts, these sanctions have seriously 
weakened Iran and impacted its ability to pose a threat to the 
Western Hemisphere. In accordance with Chairman Duncan's 
Countering Iran in the Western Hemisphere Act, which was signed 
into law in the last Congress, the State Department recently 
issued a report on the threat posed to the United States by 
Iran's presence and activity in the Western Hemisphere. 
According to that report, Iran's influence is on the wane in 
the Western Hemisphere. Moreover, the report found that 
international pressure has significantly weakened the Iranian 
regime and that most of Iran's diplomatic promises to Latin 
America have gone unfulfilled.
    I would like to again thank the Chairman and the State 
Department for their work on this important report and thank 
the State Department for its compliance with the act. This is a 
report that was delivered on time and in accord with the 
legislation that directed the State Department.
    While there are those who are clearly disappointed in the 
findings that are in the State Department report, I don't see 
any reason to believe that the State Department was not 
diligent in its efforts and that the findings are not 
consistent with reality in Latin America and in Iran. I look 
forward though to hearing from the experts on this subject, 
getting their testimony, and hearing the answers to the 
questions. I also want to note that those who are testifying 
today are not Governmental witnesses. It would have been nice 
also to hear from the State Department, especially if we are 
concerned and critical with the findings in that State 
Department report. So hopefully we can either have a follow-up 
hearing or some time with State Department officials to get 
answers to our questions from them.
    So I want to, ahead of time, thank the witnesses for their 
testimony. Again, I thank the Chairman. With that, I yield 
back.
    [The statement of Mr. O'Rourke follows:]
                  Statement of Honorable Beto O'Rourke
                              July 9, 2013
    For over 40 years, mistrust between the governments of the United 
States and the Islamic Republic of Iran has existed.
    The international community has joined the United States in 
imposing several rounds of increasingly stricter sanctions against Iran 
to deter its support for international terrorism, human rights 
violations, and continued development of its nuclear weapons program.
    Fortunately, these sanctions have resulted in significant oil 
revenue losses, an inability to participate in the international 
banking system, a sharp drop in the value of Iran's currency, and 
inflation that is over 50%.
    By many accounts, these sanction efforts have seriously weakened 
Iran and impacted its ability to pose a threat to the Western 
Hemisphere.
    In accordance with Chairman Duncan's Countering Iran in the Western 
Hemisphere Act, which was signed into law in the 112th Congress, the 
State Department recently released a report on the threat posed to the 
United States by Iran's presence and activity in the Western 
Hemisphere.
    According to the State Department report, Iran's influence in Latin 
America is waning.
    Moreover, the report found that international pressure has 
significantly weakened the Iranian regime and that most of Iran's 
diplomatic promises to Latin American countries have gone unfulfilled.
    I would like to applaud the State Department on this important 
report and its compliance with the act.
    The report was issued on time and included an unclassified annex.
    While there are those that are disappointed with its findings, 
there is no reason to believe that the State Department was not 
diligent in its efforts and the findings in its report are consistent 
with many experts and testimony that has been received by Congress.
    I look forward to hearing from today's witnesses on this timely and 
important topic.
    I only wish that the State Department could have been here as well 
to discuss its findings in detail and its methodology for reaching its 
conclusions. This hearing, however, was limited to non-Governmental 
witnesses.

    Mr. Duncan. I thank the gentleman.
    I was just verifying the Chairman of the full committee is 
going to try to attend the hearing but is not going to be 
available for an opening statement. So other Members of the 
subcommittee will be reminded that opening statements may be 
submitted for the record.
    [The statement of Ranking Member Thompson follows:]
             Statement of Ranking Member Bennie G. Thompson
                              July 9, 2013
    The Committee on Homeland Security has conducted numerous hearings 
examining whether Iran poses a threat to the American homeland. While 
views on whether this threat is real or perceived is divided, what is 
clear, is that the United States must remain committed to ensuring that 
Iran cannot succeed in its efforts to expand its nuclear enrichment 
program or assert its influence in neighboring regions.
    Fortunately, the economic sanctions that have been placed on Iran 
have been successful. Experts agree that Iran's economy is weakened, 
the value of Iran's currency is at an all-time low, and inflation has 
increased to over 50%. Without a doubt these sanctions have 
destabilized Iran to the point where it has sought political and 
financial support from countries in the Western Hemisphere, including 
Latin America.
    However, according to U.S. Government officials, this outreach has 
only been marginally successful and the region as a whole has not been 
receptive to Iranian efforts. The State Department agrees. Two weeks 
ago, the State Department released its report pursuant to the 
Countering Iran in the Western Hemisphere Act of 2012 introduced by 
Chairman Duncan. Pursuant to the act, which President Obama signed into 
law in December 2012, the State Department was directed to conduct a 
detailed threat assessment of Iran's growing activity in the Western 
Hemisphere.
    The report, issued on June 27, 2013, found that ``As a result of 
diplomatic outreach, strengthening of allies' capacity, international 
nonproliferation efforts, a strong sanctions policy, and Iran's poor 
management of its foreign relations, Iranian influence in Latin America 
and the Caribbean is waning.''
    Moreover, the death of Venezuela's President Chavez and the 
election of a new President in Iran has changed the landscape of Iran's 
relationship with Venezuela and further weakened Iranian ties in the 
West.
    This does not mean that we must not be mindful of Iran's activities 
and take necessary measures to curb its efforts. It does mean, however, 
that we must be careful not to exaggerate the threat beyond what our 
military, intelligence, and State Department has deemed to be the 
reality. Some have criticized the sanctions we have placed on Iran as 
too soft, and have suggested taking actions that would lead us on a 
path to escalation. Yet, clearly the sanctions have been effective. 
Iran's isolation from the world community is evidence that sanctions 
have not been in vain.

    Mr. Duncan. We are pleased to have a distinguished panel of 
witnesses here today on this important topic. However, we are 
extremely disappointed that Mr. Alberto Nisman was denied the 
opportunity to testify before the subcommittee today by the 
Argentine government. We still have a chair in hopes that he 
will come through the door. His testimony would have provided 
the subcommittee with important information on the threat from 
Iran to the U.S. homeland and we hope to have an opportunity to 
hear from him in the future.
    Let me remind the witnesses that their entire written 
statements will appear in the record. I will introduce each of 
you first. Then I will recognize you in that order for your 
testimony.
    So the introductions. Mr. Ilan Berman is the vice president 
of the American Foreign Policy Council and is an expert on 
regional security in the Middle East, Central Asia, and the 
Russian Federation. He has consulted for both the U.S. Central 
Intelligence Agency and the U.S. Department of Defense as well 
as provided assistance on foreign policy and National security 
issues to a range of Governmental agencies and Congressional 
offices. Mr. Berman is a member of the associated faculty at 
Missouri State University's Department of Defense and Strategic 
Studies. He also serves as a columnist for Forbes.com and The 
Washington Times and is the editor of The Journal of 
International Security Affairs.
    Mr. Joseph Humire is the executive director of the Center 
for a Secure Free Society. Mr. Humire has testified before the 
Canadian Parliament and regularly provides assistance to 
numerous committees in the U.S. Congress. He publishes 
regularly and has written feature articles in the Small Wars 
Journal and The Journal of International Security Affairs. Mr. 
Humire is a co-founder of the Cordoba Group International LLC, 
a strategic consulting firm that offers research and analytical 
services to U.S. and international clients. Mr. Humire is an 8-
year veteran of the U.S. Marine Corps, having served combat 
tours in Iraq and Liberia. Thank you for your service, sir.
    Mr. Blaise Misztal is the acting director of foreign policy 
at the Bipartisan Policy Center. He joined BPC as a senior 
policy analyst in 2008. As part of the Foreign Policy Project, 
Mr. Misztal directs a new initiative aimed at developing 
recommendations for U.S. public diplomacy to address 21st 
Century security challenges. He has contributed to all three of 
BPC's meeting the challenges reports concerning nuclear 
proliferation in Iran as well as a report focused on how to 
stabilize fragile states. In addition, Mr. Misztal has launched 
BPC's cybersecurity initiative by directing the 2009 cybershock 
wave simulation and has spoken at numerous conferences on 
cybersecurity and the need for better public-private 
partnerships to respond to cyber attacks.
    Mr. Douglas Farah is president of IBI Consultants and is a 
senior fellow at the International Assessment and Strategy 
Center. In 2004, Mr. Farah worked with the Consortium for the 
Study of Intelligence, studying armed groups and intelligence 
reform. For two decades before that, he was a foreign 
correspondent and investigative reporter for The Washington 
Post and other publications covering Latin America and West 
Africa. As a reporter, he traveled extensively to Latin 
American countries and investigated the exploding drug war, the 
emergence of Russian organized crime groups in Latin America 
and the Caribbean, and the growth of Mexican drug cartels 
within the United States. In West Africa, he traveled and 
revealed the truths about the brutal civil wars in Sierra Leone 
and Liberia and broke the story of al-Qaeda's ties to diamonds 
for weapons trade networks.
    Thank you, gentlemen, for being here.
    Mr. Berman, we will start with you. Thank you for being 
here today. I look forward to your testimony, and I will 
recognize you for 5 minutes.

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

    Mr. Berman. Thank you, Chairman Duncan and Congressman 
O'Rourke. Thank you, Chairman Duncan, in particular for your 
leadership on this issue because it is one that I believe is of 
significance to the security of the United States and the 
safety of the U.S. homeland.
    Let me start by attempting to frame where Latin America 
fits in Iranian strategy because I think it is necessary to 
understand that in order to understand whether or not Iran is 
actually succeeding in what it is trying to do in the region.
    It is useful to understand that in geopolitical contexts, 
Iran's activities in the Western Hemisphere are a part of a 
larger peripheral strategy, what could be called a peripheral 
strategy, in order to respond to its growing diplomatic and 
economic isolation as a result of the sanctions that Mr. 
O'Rourke talked about that are being levied by the West, by the 
United States and its allies over its nuclear program. There is 
also an attempt by the Iranian leadership to combat the 
diplomatic isolation that has been part of a series of 
alienating Iranian policies that have taken place throughout 
the Middle East. In effect, what the Iranian regime is doing 
is, as it has become constrained in its immediate periphery, it 
has begun to look further afield for allies in various regions 
of the world.
    That means that what Iran is doing in Latin America is not 
unique. In fact, you can see the same pattern of behavior on 
the part of the Iranian regime in places like Africa and in 
places like Asia where Iran is making serious inroads as well. 
The difference is that Latin America is arguably more mature as 
an Iranian foreign policy project as a result of the large 
unregulated spaces that exist in the region and as a result of 
the existence of sympathetic regimes.
    What Iran has managed to do over the last 8, 9 years has 
really been focused on four major lines of diplomatic and 
strategic attack. The first has to do with political outreach. 
Since the mid-2000s, Iran has invested heavily in political 
contacts with the region, and it has done so on a number of 
levels. Diplomatically, it has more than doubled its diplomatic 
presence, the presence of its embassies and missions in the 
region, from 5 in 2005 to 11 today.
    On the public diplomacy front, Iran has, since 2011, 
created a dedicated Spanish language outreach broadcasting 
channel known as HispanTV which broadcasts in more than 10 
countries throughout the region. In addition and arguably most 
important, Iran has built extensive cultural ties throughout 
the region, leveraging the 17 existing cultural centers that it 
has established in the region but also a network of what could 
be called ``informal ambassadors'' around the region in order 
to spread its influence and also to make Latin American 
audiences acclimated to its message.
    This, I want to point out, is not strictly a defensive 
goal. Although what Iran is doing in the region is a reaction 
to Western pressure, it goes beyond that. It involves a type of 
coalition building that is intended to make the region more 
hospitable for Iran and more inhospitable for the United 
States.
    The second line of attack that Iran has pursued involves 
economic activity. Iran has historically used Latin America as 
a theater of support activity, generating money through gray 
and black market transactions that funnel back to benefit the 
Iranian regime or its terrorist proxies. Over time, however, 
Iran has leveraged that informal activity with almost 500 
cooperative agreements with regional governments. It should be 
noted that the vast majority of those agreements remain 
unfulfilled with the exception of what Iran has concluded with 
Venezuela. However, Iran's overall trade with the region has 
grown considerably in recent years. Between the year 2000 and 
the year 2005, it averaged approximately $1.33 billion a year. 
Today, as of last year, this figure had more than doubled and 
now stands at $3.67 billion. So objectively, Iran's economic 
footprint in the region is increasing.
    In terms of strategic resources, Iran is at least looking 
for minerals such as lithium, tantalum, and thorium which have 
strategic applications for both its nuclear weapons program and 
its ballistic missile program. There are also reports that Iran 
has begun prospecting for uranium, including in eastern 
Venezuela on the border with Guyana and possibly in eastern 
Bolivia around the town of Santa Cruz. These reports, however, 
are spotty. They are unconfirmed. But there is concrete 
evidence that Iran is lifting other minerals in support of its 
strategic programs.
    Finally, Iran is pursuing an asymmetric presence in the 
region. The formal presence that Iran has built and has erected 
over the last 8 years has been mirrored by the growth of a 
paramilitary infrastructure and one that has given both itself 
and its proxies increasingly robust capabilities in the region, 
including leverage against the U.S. homeland.
    Director of National Intelligence James Clapper noted in 
his testimony to the Senate in January 2012 that Iran's 
regional alliances, quote, can pose an immediate threat by 
giving Iran directly through the IRGC, the Quds Force, or its 
proxies like Hezbollah a platform in the region to carry out 
attacks against the United States, our interests, and our 
allies.
    I think it is worth noting that time does not stand still, 
and Iran's geopolitical footprint in Latin America is now in a 
state of profound flux. In large part, this is because Iran's 
strategic gateway into the region--the regime of Hugo Chavez in 
Venezuela--has seen both economically and politically 
significantly better days. The death of Chavez back in April 
and his succession by Nicolas Maduro has also witnessed a 
transition to an increasingly rickety economy, one that is 
experiencing shortages on everything from sugar to flour to 
toilet paper. It calls into real question Venezuela's ability 
to promote Iran and support Iranian objectives in the region.
    But it is worth noting that Iran's presence in the region 
is not on the decline, at least not yet. It is very hard to 
assess that Iran's strategic presence is waning when, in fact, 
objectively along every line of attack that I mentioned in my 
statement Iran is either maintaining its level of activity or 
actually expanding it. I think it is useful to understand that 
in the grand sweep of Iranian strategy, Iran is much more 
robustly positioned in the region today than it was 8 years 
ago.
    Thank you, sir.
    [The prepared statement of Mr. Berman follows:]
                   Prepared Statement of Ilan Berman
                              July 9, 2013
    Chairman Duncan, Ranking Member Barber, distinguished Members of 
the subcommittee: Thank you for inviting me to appear before you today 
to address the issue of Iran's presence in the Western Hemisphere. I 
strongly believe that it represents an issue of high importance to the 
safety and security of the United States. Over the past 2 years, my 
organization, the American Foreign Policy Council, has extensively 
studied Iran's presence and activities in Latin America. This has 
entailed three separate fact-finding missions to Central and South 
America to date, the most recent in May 2013. What follows are my 
observations and conclusions gleaned from those visits.
                           iran's objectives
    To properly grasp the challenge posed by Iran's activities in the 
Western Hemisphere, they need to be understood in proper geopolitical 
context: As part of a larger ``peripheral strategy'' on the part of the 
Iranian regime. To a significant degree, they are a response to growing 
diplomatic and economic pressure levied against Iran by the West over 
its nuclear program, and represent an attempt by Iran's leadership to 
combat their regime's growing international isolation. As such, they 
are far from unique; Iran's activities in Latin America follow the same 
broad pattern as its outreach in other areas of the world, including 
Asia and Africa.\1\
---------------------------------------------------------------------------
    \1\ See, for example, Ilan Berman, ``Assessing Iran's Asia Pivot,'' 
STRATAGEM, January 2013, http://www.ilanberman.com/12881/assessing-
iran-asia-pivot.
---------------------------------------------------------------------------
    Yet Iran's presence in the Americas is arguably more mature than it 
is elsewhere, owing to the permissive, ideologically-sympathetic 
environment that prevails throughout much of the region. Over the past 
decade, Iran's exploitation of this environment has proceeded along 
several lines:
Political Outreach
    Since the mid-2000s, Iran has invested heavily in political 
contacts with the Americas on a number of levels. It has more than 
doubled its diplomatic presence in the region over the past decade, 
increasing its embassies from 5 in 2005 to 11 today.\2\ Iran currently 
has an official diplomatic presence in Argentina, Bolivia, Brazil, 
Chile, Colombia, Cuba, Ecuador, Mexico, Nicaragua, Uruguay, and 
Venezuela.
---------------------------------------------------------------------------
    \2\ ``Obama Signs Law against Iran's Influence in Latin America,'' 
Agence France Presse, December 29, 2012, http://www.dailynewsegypt.com/
2012/12/29/obama-signs-law-against-irans-influence-in-latin-america.
---------------------------------------------------------------------------
    It likewise has expanded its public diplomacy outreach, launching a 
dedicated Spanish-language television channel, known as HispanTV, in 
early 2011.\3\ HispanTV is funded by the Iranian government's state 
Islamic Republic of Iran Broadcasting company (IRIB), broadcasting out 
of Tehran to some 14 countries in the region.\4\ The goal of this 
effort, according to Iranian officials, is to broaden the Iranian 
regime's ``ideological legitimacy'' among friendly governments in the 
region--and to diminish the influence of ``dominance seekers,'' a 
thinly-veiled reference to the United States.\5\
---------------------------------------------------------------------------
    \3\ Hugh Tomlinson, ``Tehran Opens 24-hour News TV,'' Times of 
London, February 1, 2012, http://www.thetimes.co.uk/tto/news/world/
middleeast/article3304624.ece.
    \4\ See ``Iran Se Escuchara en Espanol con El Canal Hispan TV,'' 
Correo de Orinoco (Caracas), July 18, 2011, http://
www.correodelorinoco.gob.ve/multipolaridad/iran-se-escuchara-espanol-
canal-hispan-tv/. A list of countries where HispanTV is broadcast is 
available on-line at http://hispantv.com/Distribucion.aspx. Notably, 
the United States is among those countries where cable providers both 
accept and distribute the Iranian channel.
    \5\ Ian Black, ``Iran to Launch Spanish-Language Television 
Channel,'' Guardian (London), September 30, 2010, http://
www.guardian.co.uk/world/2010/sep/30/iran-spanish-language-television; 
``Iran Launches Spanish TV Channel,'' Associated Press, January 31, 
2012, http://www.guardian.co.uk/world/2012/jan/31/iran-launches-
spanish-tv-channel.
---------------------------------------------------------------------------
    Perhaps most significantly, Iran has engaged in extensive cultural 
contacts throughout the region. It has done so via 17 formal cultural 
centers throughout South and Central America, as well as through 
outreach to the various indigenous populations which represent 
important bases of political support for regional leaders like 
Bolivia's Evo Morales, Ecuador's Rafael Correa and Peru's Ollanta 
Humala.\6\ These contacts, and concurrent proselytization activities 
(known as daw'ah), are carried out through a network of ``informal 
ambassadors'' operating in the region--a network that has been nurtured 
and trained by Mohsen Rabbani, a former Iranian cultural attache to 
Argentina who is known to have masterminded the 1994 AMIA attack.\7\
---------------------------------------------------------------------------
    \6\ Author's interviews, Quito, Ecuador, May 2012.
    \7\ Joseph Humire, ``Iran's Informal Ambassadors to Latin 
America,'' Fox News Latino, February 18, 2012, http://
latino.foxnews.com/latino/politics/2012/02/18/joseph-humire-irans-
informal-ambassadors-to-latin-america/.
---------------------------------------------------------------------------
    At its most basic, this outreach is intended to shore up support 
for the Iranian regime's nuclear effort, and to fracture the fragile 
international consensus concerning the need for sanctions in response 
to Iranian behavior. But Iran's activism also extends to 
proselytization activities designed to promote its particular brand of 
political Islam, and ideological coalition-building intended to make 
the region more inhospitable to the United States than it is currently. 
``Iran continues to seek to increase its stature by countering U.S. 
influence and expanding ties with regional actors while advocating 
Islamic solidarity,'' the Pentagon noted in its April 2012 Annual 
Report on Military Power of Iran.\8\ Latin America is among the regions 
where this strategy is being actively implemented.
---------------------------------------------------------------------------
    \8\ Department of Defense, Office of the Secretary of Defense, 
``Executive Summary: Annual Report on Military Power of Iran,'' April 
2012, http://www.fas.org/man/eprint/dod-iran.pdf.
---------------------------------------------------------------------------
Economic Activity
    Latin America has long functioned as a ``support'' theater for Iran 
and its proxies, with money generated there through gray and black 
market activities sent back to benefit the Iranian regime or groups 
like Hezbollah.\9\ With the growth of Iran's strategic partnership with 
Venezuela, the Chavez regime became part of this activity as well. With 
the active cooperation of Caracas, the Iranian government has exploited 
the Venezuelan financial sector--via joint financial institutions, 
shell companies, and lax banking practices--to continue to access the 
global economy in spite of mounting Western sanctions.\10\
---------------------------------------------------------------------------
    \9\ Rex Hudson, Terror and Organized Crime Groups in the Tri-Border 
Area (TBA) of South America, Library of Congress, Federal Research 
Division, December 2010, http://www.loc.gov/rr/frd/pdf-files/
TerrOrgCrime_TBA.pdf; U.S. Department of Defense, Office of the 
Secretary of Defense, Unclassified Report on Military Power of Iran, 
April 2010, http://www.iranwatch.org/government/us-dod-
reportmilitarypoweriran-0410.pdf.
    \10\ Norman A. Bailey, ``Iran's Venezuelan Gateway,'' American 
Foreign Policy Council Iran Strategy Brief No. 5, http://www.afpc.org/
files/getContentPostAttachment/213.
---------------------------------------------------------------------------
    In recent years, these illicit financial flows have been 
supplemented by formal trade agreements and contracts between Iran and 
various regional states. To date, the Iranian regime is estimated to 
have signed approximately 500 cooperative agreements with regional 
governments, many of them economic in nature. But, with the notable 
exception of those concluded with Venezuela, the vast majority of these 
commitments have yet to materialize. Nevertheless, Iran's overall trade 
with the region has grown considerably in recent years. In the years 
between 2000 and 2005, it averaged approximately $1.33 billion 
annually. As of last year, this figure had more than doubled, to $3.67 
billion.\11\
---------------------------------------------------------------------------
    \11\ Figures derived from the International Monetary Fund's 
Direction of Trade Statistics database (Compilation in author's 
collection).
---------------------------------------------------------------------------
    Two countries in particular have emerged as significant trading 
partners for Iran in the region. The first is Argentina, which--despite 
Iran's involvement in the 1994 bombing of the Argentine-Israel Mutual 
Association (AMIA) in Buenos Aires--has adopted an increasingly 
sympathetic attitude toward Tehran over the past several years. This 
has been manifested, most concretely, in Argentine president Christina 
Fernandez de Kirchner's recent acquiescence to the creation of a 
``truth commission'' to reexamine the AMIA case--and which, ostensibly, 
can be expected to rewrite history in Iran's favor.\12\ Trade ties 
reflect this warming trend as well; since 2005, Iran-Argentine trade 
has increased by more than 500 percent, and now rests at $1.2 billion 
annually.\13\
---------------------------------------------------------------------------
    \12\ ``Diplomat Says Tehran Approves Deal to Probe 1994 Argentinian 
Bombing,'' Radio Free Europe/Radio Liberty, May 21, 2013, http://
www.rferl.org/content/iran-argentina-bombing-investigation-truth-
commission/24992241.html.
    \13\ Figures derived from the International Monetary Fund's 
Direction of Trade Statistics database (Compilation in author's 
collection).
---------------------------------------------------------------------------
    The second is Brazil. Political ties between Tehran and Brasilia 
have taken a turn for the worse since the ascension of Dilma Roussef to 
the Brazilian presidency in January 2011. Roussef, a former women's 
rights activist who herself spent time in prison, has made a point of 
distancing herself from Iran, repeatedly rebuffing Iran's diplomatic 
overtures and signaling her displeasure at Iran's troubling human 
rights record. Nevertheless, trade ties between the two countries are 
still active--and significant, from Iran's perspective. Brazil 
currently represents Iran's largest trading partner in the region, with 
an annual bilateral turnover of nearly $2.2 billion.\14\ A 
reinvigoration of the warm ties that prevailed during the era of 
Roussef's predecessor, Luiz Inacio Lula da Silva, remains a priority 
for Iran, and for good reason. By dint of its global economic stature, 
Brazil represents a geopolitical prize for Iran in the region--the 
cooperation of which would greatly hamper Western efforts to 
economically isolate the Islamic Republic.\15\
---------------------------------------------------------------------------
    \14\ Ibid.
    \15\ For a more extensive examination of Iranian interests in 
Brazil, see Ilan Berman, ``Why Iran Covets Brazil,'' Weekly Standard, 
June 20, 2012, http://www.weeklystandard.com/blogs/why-iran-covets-
brazil_647662.html.
---------------------------------------------------------------------------
Strategic Resources
    Over the past decade, as its strategic programs have matured, the 
Iranian regime has significantly expanded its efforts to acquire 
resources for them from abroad. Consequently, since the mid-2000s Iran 
has become a major speculator in Latin America's resource wealth.
    Beginning late last decade, it has engaged in mining activity in 
the uranium-rich Roraima Basin on Venezuela's eastern border, adjacent 
to Guyana, where it is believed to be involved in the extraction of 
uranium ore for its nuclear program.\16\ More recently, it is believed 
to have begun prospecting for the same mineral in locations outside of 
the Bolivia's industrial capital, Santa Cruz, in the country's 
east.\17\ Significantly, the extent of this activity--and whether Iran 
has actually begun to acquire sizeable quantities of uranium from Latin 
America--remains a subject of considerable debate among experts and 
observers, both in the region and in Washington.
---------------------------------------------------------------------------
    \16\ Stephen Johnson, Iran's Influence in the Americas (Washington, 
DC: Center for Strategic & International Studies, March 2012), xiv, 
http://csis.org/files/publication/
120312__Johnson_Iran%27sInfluence_web.pdf.
    \17\ Author's interviews, La Paz and Santa Cruz, Bolivia, January-
February 2012.
---------------------------------------------------------------------------
    More concrete evidence exists of Iran's acquisition of other 
strategic minerals with potential weapons applications from the region. 
For example, Iran has become a ``partner'' in the development of 
Bolivia's reserves of lithium, a key strategic mineral with 
applications for nuclear weapons development, pursuant to a formal 
agreement signed with the Morales government in 2010.\18\ Iran is also 
known to be seeking to acquire at least two other minerals utilized in 
nuclear work and the production of ballistic missiles: Tantalum and 
thorium.\19\ In September 2012, Bolivian police seized two tons of what 
at the time was suspected to be uranium ore destined for Iran's nuclear 
program.\20\ The shipment was later ascertained to be tantalum.
---------------------------------------------------------------------------
    \18\ ``Iran `Partner' in the Industrialization of Bolivia's Lithium 
Reserves,'' MercoPress, October 30, 2010, http://en.mercopress.com/
2010/10/30/iran-partner-in-the-industrialization-of-bolivia-s-lithium-
reserves.
    \19\ Author's interviews in Chile, Bolivia, and Argentina, January-
February 2012.
    \20\ ``Gobierno Boliviano Rectifica Hallazgo de Uranio en La Paz,'' 
El Tiempo (Bogota), August 29, 2012, http://www.eltiempo.com/archivo/
documento/CMS-12174392.
---------------------------------------------------------------------------
An Asymmetric Presence
    Iran's growing formal presence in the region has been mirrored by 
an expansion of Iranian covert activities. In its 2010 report to 
Congress on Iran's military power, the Department of Defense noted that 
the Quds Force, the elite paramilitary unit of Iran's Revolutionary 
Guards, is now deeply involved in the Americas, stationing ``operatives 
in foreign embassies, charities, and religious/cultural institutions to 
foster relationships with people, often building on existing socio-
economic ties with the well-established Shia Diaspora,'' and even 
carrying out ``paramilitary operations to support extremists and 
destabilize unfriendly regimes.''\21\
---------------------------------------------------------------------------
    \21\ U.S. Department of Defense, Office of the Secretary of 
Defense, Unclassified Report on Military Power of Iran, April 2010, 
http://www.iranwatch.org/government/us-dod-reportmiliarypoweriran-
0410.pdf.
---------------------------------------------------------------------------
    Iran has likewise invested in regional paramilitary infrastructure. 
Most prominently, it has helped establish and subsequently administer 
the ``regional defense school'' of the Bolivarian Alliance for the 
Americas (ALBA), headquartered outside Santa Cruz in eastern Bolivia. 
Iran is known to have provided at least some of the seed money for the 
school's construction, and no less senior a figure than Iranian Defense 
Minister Ahmad Vahidi presided over the school's inauguration in May 
2011. Iran--itself an ALBA observer nation--is now said to be playing a 
role in training and indoctrination at the facility.\22\
---------------------------------------------------------------------------
    \22\ Jon B. Purdue, The War of All the People: The Nexus of Latin 
American Radicalism and Middle Eastern Terrorism (Dulles, VA: Potomac 
Books, 2012), 154-156.
---------------------------------------------------------------------------
    In parallel with its investments in paramilitary infrastructure, 
Iran has also forged links with an array of radical groups active in 
the region, either directly or through its main terrorist proxy, 
Hezbollah. These ties have the potential to significantly augment 
Iran's capabilities. As Director of National Intelligence James Clapper 
noted in remarks to the Senate in January 2012, Iran's regional 
alliances ``can pose an immediate threat by giving Iran--directly 
through the IRGC, the Qods force, or its proxies like Hezbollah--a 
platform in the region to carry out attacks against the United States, 
our interests, and allies.''\23\
---------------------------------------------------------------------------
    \23\ James Clapper, testimony before the Senate Select Committee on 
Intelligence, January 31, 2012.
---------------------------------------------------------------------------
                         crisis and opportunity
    Iran's historic presence in Latin America dates back to the mid-
1980s. During that period, the Islamic Republic assisted Hezbollah in 
establishing a presence in the so-called ``Triple Frontier'' that lies 
at the intersection of Brazil, Paraguay, and Argentina.\24\ The decade 
that followed saw Iran erect an extensive terror support infrastructure 
throughout South America. As detailed in Argentine federal prosecutor 
Alberto Nisman's May 2013 report, this network spanned eight countries 
(Argentina, Brazil, Paraguay, Uruguay, Chile, Colombia, Guyana, 
Trinidad & Tobago and Suriname) and was made up of intelligence bases 
and logistical support centers, enabling Iranian-supported terrorists 
to subsequently carry out the 1994 AMIA attack.\25\
---------------------------------------------------------------------------
    \24\ Rex Hudson, Terrorist and Organized Crime Groups in the Tri-
Border Area (TBA) of South America (Washington, DC: Congressional 
Research Service, revised edition December 2010), 5, http://
www.loc.gov/rr/frd/pdf-files/TerrOrgCrime_TBA.pdf.
    \25\ Republic of Argentina, Ministerio Publico de la Nacion, 
``Dictamina,'' May 29, 2013 (in Spanish). Complete report in author's 
collection. An English-language summary is available at http://
www.defenddemocracy.org/stuff/uploads/documents/summary_(31_pages).pdf.
---------------------------------------------------------------------------
    Iran's contemporary outreach to the region, however, is 
comparatively new. It can be said to have begun in earnest in 2005, 
following Mahmoud Ahmadinejad's assumption of the Iranian presidency. 
Ahmadinejad's radical, revolutionary worldview found a compatible 
partner in the ``21st Century Socialism'' promoted by Venezuelan 
strongman Hugo Chavez, fostering close personal bonds between the two 
leaders and strengthening the political ties between Tehran and 
Caracas. Over time, these commonalities blossomed into a major 
strategic partnership, encompassing extensive economic contacts, 
significant defense-industrial cooperation, political coordination on 
an array of foreign policy issues, and a joint opposition to Western, 
and specifically American, imperialism.\26\ In this fashion, Venezuela 
became Iran's ``gateway'' into the region, providing material support 
and safe haven to Iranian irregulars and their proxies, and 
facilitating the regime's political and economic inroads among an array 
of other sympathetic regional regimes (chief among them those of Evo 
Morales in Bolivia and Rafael Correa in Ecuador).\27\
---------------------------------------------------------------------------
    \26\ For a detailed overview, see Sean Goforth, Axis of Unity: 
Venezuela, Iran & the Threat to America (Washington, DC: Potomac Books, 
2012).
    \27\ Norman A. Bailey, ``Iran's Venezuelan Gateway,'' American 
Foreign Policy Council Iran Strategy Brief No. 5, http://www.afpc.org/
files/getContentPostAttachment/213.
---------------------------------------------------------------------------
    But this partnership is now in a state of profound flux. The April 
2013 death of Venezuelan President Hugo Chavez following a protracted 
battle with cancer removed one half of the Iranian regime's most 
vibrant personal relationship in the region. The end of Mahmoud 
Ahmadinejad's tenure as Iran's president in June 2013 has removed the 
other.
    In Venezuela, Nicolas Maduro, Hugo Chavez's hand-picked successor 
as president, is now presiding over an all-out implosion of the 
National economy, complete with shortages of commodities such as toilet 
paper, sugar, and flour.\28\ As a result, even though Maduro--who as 
foreign minister presided over his government's contacts with Iran--is 
likely to mimic Chavez' sympathetic attitude toward the Islamic 
Republic, it is far from clear that his regime will have either the 
political stability or economic solvency to serve as Iran's regional 
gateway in coming years.
---------------------------------------------------------------------------
    \28\ See, for example, James Hider, ``Toilet Paper Running out as 
Venezuela's Economy Goes Down The Pan,'' Times of London, May 17, 2013, 
http://www.thetimes.co.uk/tto/news/world/americas/article3766919.ece.
---------------------------------------------------------------------------
    In Iran, too, there is a significant degree of uncertainty relating 
to the region. It is unclear, at least at this stage, whether incoming 
Iranian president Hassan Rowhani--who handily won the Islamic 
Republic's June 14 election--will enjoy similarly close bonds with the 
``Bolivarian'' regimes of Latin America. More significantly, Iran's 
Supreme Leader, Ali Khamenei, has not yet given a clear indication that 
the region remains a key regime interest. This is salient given that 
Iran's extensive involvement in the Syrian civil war over the past 2 
years has sapped the regime's economic resources and political capital, 
diminishing its activism beyond the Middle East in the process. 
(Iranian officials have taken pains to reaffirm their government's 
commitment to the region, however; in early July, Ahmadinejad met in 
Moscow with Bolivian president Evo Morales and assured him that Iran's 
outreach to Latin America is unwavering, and will be sustained by his 
successor.)\29\
---------------------------------------------------------------------------
    \29\ ``Ahmadinejad Holds Talks with Bolivian President in Moscow,'' 
Tehran Times, July 1, 2013, http://tehrantimes.com/politics/108937-
ahmadinejad-holds-talks-with-bolivian-president-in-moscow-.
---------------------------------------------------------------------------
    As a result, it is possible to envision that Iran's footprint in 
the region could erode over time. Yet it is far too early to conclude 
that the Islamic Republic's regional presence is on the wane--or that 
Iran no longer constitutes a threat to U.S. regional interests. In 
fact, along every prong of its outreach to the Americas, the Iranian 
regime is objectively maintaining, if not expanding, its level of 
activity. Moreover, a number of political scenarios could afford Iran 
even greater opportunity to influence regional politics in coming 
years. These include the potential for a post-Chavez ``surge,'' as 
Iranian allies (such as Ecuador's Correa) ascend to regional leadership 
roles, or the peace process now underway in Colombia, which could lead 
to the political rehabilitation of the radical Revolutionary Armed 
Forces of Colombia (FARC), an Iranian ally.
                     crafting an american response
    Today, evidence of Iran's strategic presence in Latin America is so 
extensive as to be incontrovertible. So, too, are indications that 
these activities constitute a potential (and in some cases an actual) 
threat to American security. Yet, to a large extent, this challenge 
remains poorly understood by the U.S. Government as a whole, while the 
Executive branch in particular has been hesitant to truly examine and 
address it.
    Thus, the State Department's June 2013 report on Iranian activities 
in Latin America, released pursuant to the Countering Iran in the 
Western Hemisphere Act of 2012, depicts Iran's regional presence as one 
that is in decline, and downplays Iran's involvement in fomenting 
instability in the region.\30\ These conclusions contradict the 
findings of Argentine state prosecutor Alberto Nisman, whose 
comprehensive May 2013 report details the existence of an extensive 
Iranian terror support infrastructure in the region which has been 
instrumental in facilitating not only the 1994 AMIA attack but more 
recent plots as well. They also ignore compelling evidence that, to a 
notable degree, Iran's regional activities in recent years have 
targeted the United States. Over the past decade, at least two Iranian-
linked terror plots originating in Latin America have targeted the U.S. 
homeland. The first was the unsuccessful 2007 attempt by Guyanese 
national Abdul Kadir to blow up fuel tanks at New York's John F. 
Kennedy Airport.\31\ The second was an October 2011 plot by Iran's 
Revolutionary Guards to assassinate Saudi Arabia's ambassador to 
Washington, Adel al-Jubeir, at a DC restaurant.\32\
---------------------------------------------------------------------------
    \30\ Guy Taylor, ``State Secrets: Kerry's Department Downplays 
Iran's Role in Latin America; Likely to Anger Congress,'' Washington 
Times, June 23, 2013, http://www.washingtontimes.com/news/2013/jun/23/
state-department-downplays-iran-role-in-latin-amer/?page=all.
    \31\ Colin Moynihan, ``Life Sentence for Leader of Terror Plot at 
Kennedy,'' New York Times, February 17, 2011, http://www.nytimes.com/
2011/02/18/nyregion/18plot.html.
    \32\ Charles Savage and Scott Shane, ``Iranians Accused of a Plot 
to Kill Saudis' U.S. Envoy,'' New York Times, October 11, 2011, http://
www.nytimes.com/2011/10/12/us/us-accuses-iranians-of-plotting-to-kill-
saudi-envoy.html?pagewanted=all.
---------------------------------------------------------------------------
    These incidents reflect what amounts to a sea change in Iranian 
strategy. Whereas in the past the Islamic Republic has exhibited an 
opportunistic approach to Latin America, leveraging its activities in 
the region when and where possible, Iran's presence and activities in 
the regional today are more extensive--and more operational in nature. 
Director of National Intelligence James Clapper highlighted this shift 
in his January 2012 testimony to the Senate Select Committee on 
Intelligence when he noted that, in response to the deepening 
international crisis over their nuclear program, ``Iranian officials--
probably including Supreme Leader Ali Khamenei--have changed their 
calculus and are now willing to conduct an attack in the United 
States.''\33\
---------------------------------------------------------------------------
    \33\ James Clapper, testimony before the Senate Select Committee on 
Intelligence, January 31, 2012.
---------------------------------------------------------------------------
    The broad, multifaceted challenge posed today by Iran in our 
Hemisphere requires a comprehensive American response capable of 
addressing Iran's operations and capabilities. In particular, U.S. 
strategy would be well served to focus on three dimensions: Legal, 
economic, and intelligence.
   Latin America as a whole is typified by the absence of an 
        overarching approach to terrorism, and much of the region lacks 
        basic legislation criminalizing membership in terrorist groups 
        and providing legal frameworks for their prosecution. A recent 
        research survey conducted by the American Foreign Policy 
        Council found that just 11 countries in all of Latin America 
        have existing laws that make terrorist-related activities a 
        crime under national law.\34\ Moreover, in many of the places 
        where such laws do exist, terrorism is treated largely as 
        analogous to crime, and in some they have occasionally been 
        used for political purposes (such as in Chile, where there have 
        been incidents of the indigenous Mapuche population being 
        prosecuted under this legislation for basic crimes).
---------------------------------------------------------------------------
    \34\ June 2013 internal study conducted at the direction of the 
author (Author's collection).
---------------------------------------------------------------------------
    This has allowed terrorist operatives and assorted radicals to 
        exist in a state of legal grace. Legislatively, acts such as 
        money-laundering, narcotrafficking, and counterfeiting, which 
        are often employed by terrorist organizations in fundraising, 
        are generally criminalized. However, no corresponding 
        restrictions or penalties exist for participation in extremist 
        organizations per se. (A notable example in this regard is the 
        case of Khaled Hussein Ali, a known financier and recruiter for 
        al-Qaeda based in Sao Paulo, Brazil. Despite the publication of 
        an April 2011 expose in the prominent newsmagazine Veja 
        outlining his ties to terror,\35\ Ali continues to reside in 
        Sao Paulo and operate businesses there.)\36\
---------------------------------------------------------------------------
    \35\ Leonardo Coutinho, ``A Rede o Terror Finca Bases no Brasil,'' 
Veja (Sao Paulo), April 6, 2011, 89-96.
    \36\ Author's interview, Sao Paulo, Brazil, April-May 2012.
---------------------------------------------------------------------------
    This state of affairs is not permanent, however. Brazil alone is 
        slated to host two major global events in coming years: The 
        FIFA World Cup in 2014 and the Olympic Games in 2016. As a 
        result, there is now greater domestic focus on counterterrorism 
        on the part of the Brazilian government, and at least six 
        separate pieces of counterterrorism-related legislation have 
        been presented to the Brazilian parliament. If passed, these 
        laws would significantly strengthen the legal framework 
        governing counterterrorism in Brazil, and empower greater 
        investigatory and prosecution powers on the part of the 
        country's intelligence and security services. Legal assistance 
        from the U.S. Government to appropriate Brazilian government 
        institutions could greatly aid in the establishment and 
        solidification of such counterterrorism authorities. Similar 
        efforts could be employed elsewhere in the region as well, 
        including in Mexico and Colombia.
   In large measure, Iran's economic intrusion into Latin 
        America has taken place on an informal level, embodied by licit 
        and illicit commercial activities in the region's various free 
        trade zones and numerous black markets. Such activities must be 
        addressed through the imposition of stricter counterterrorism 
        regulations--and the active enforcement of anti-money 
        laundering and counterterrorism (AML/CTF) rules now in force in 
        other jurisdictions and regions. Also of concern, however, are 
        Iran's formal trade relations with a number of countries in the 
        region--contacts which could provide Iran with access to the 
        U.S. economy and its operatives with greater mobility in the 
        Americas.
    A case in point is Ecuador. Ecuador's membership in OPEC, its 
        participation in the ALBA bloc of nations, its dollarized 
        economy and its lax immigration controls all make it an 
        attractive partner for the Islamic Republic. So, too, does the 
        prominent role that Ecuadorian president Rafael Correa is now 
        seeking to play in the region as a successor to the late Hugo 
        Chavez. Correa has made no secret of his aspirations to 
        regional political leadership, and has promoted himself over 
        competitors such as Bolivia's Evo Morales (whom he has depicted 
        as too backward) and Nicaragua's Daniel Ortega (whom he has 
        sought to characterize as too unreliable) as the logical head 
        of ALBA. For these reasons, the Iranian regime is believed to 
        be carrying out illicit financial activities in Ecuador, using 
        banking agreements and bilateral commerce as cover.
    The United States, however, has the ability to significantly limit 
        Ecuador's interaction with the Islamic Republic. Strong signals 
        from the U.S. Treasury Department about Iran's exploitation of 
        the Ecuadorian economy, and potential consequences for 
        continuing to provide Iran with such access, could help to 
        significantly limit bilateral economic relations between Tehran 
        and Quito. This is so because the Ecuadorian public is 
        overwhelmingly supportive of the U.S. dollar, and would 
        represent a powerful constituency against cooperation if it 
        felt that its standing vis-a-vis the U.S. economy might be 
        threatened as a result.
   Latin America's favorable geopolitical climate, typified as 
        it is by vast unregulated areas and widespread anti-
        Americanism, has made it an important focal point of Iran's 
        international activism. So, too, has the region's flourishing 
        informal economy, which affords Iran significant ability to 
        engage in the transshipment and smuggling of contraband. This 
        activity, moreover, is poised to expand significantly.
    Specifically, a massive, multi-year expansion of the Panama Canal 
        is now underway. Once completed, it is expected to increase the 
        capacity of the canal from its current volume of 4 million 
        containers daily to some five times that by the end of 2014. 
        According to Panamanian officials, as much as 60 percent of 
        that cargo will be warehoused, at least temporarily, in the 
        nearby free-trade zone of Colon.\37\ Notably, there is little 
        indication that Panamanian authorities have a comprehensive 
        strategy to increase screening and customs oversight of the 
        planned expansion of cargo volume. This state of affairs will 
        provide Iran with an attractive transshipment hub for its 
        strategic programs and contraband commerce, and increases the 
        incentives for Iran to expand its presence in adjacent free 
        trade areas (including Colon). Significant efforts must be made 
        by the U.S. Department of Homeland Security to strengthen 
        oversight of Canal operations, and to provide Panamanian 
        authorities with timely, actionable intelligence on Iranian 
        shipping activities of concern taking place in the Western 
        Hemisphere.
---------------------------------------------------------------------------
    \37\ Author's interviews, Panama City, Panama, May 29-30, 2013.
---------------------------------------------------------------------------
                           a gathering threat
    In sum, Iran's presence in Latin America and its partnership with 
regional radicals represents far more than simply an ``axis of 
annoyance,'' as some scholars have contended.\38\ Rather, Iran's 
inroads are part of a systematic, long-term strategy on the part of the 
Islamic Republic to expand its influence and capabilities in the 
Western Hemisphere. Moreover, irrespective of temporary setbacks, these 
efforts have steadily expanded in recent years, as the Iranian regime 
has been progressively squeezed both politically and economically in 
its immediate periphery.
---------------------------------------------------------------------------
    \38\ See Cynthia J. Arnson, Haleh Esfandiari, and Adam Stubits, 
eds., ``Iran in Latin America: Threat or `Axis of Annoyance'?'' Woodrow 
Wilson Center Reports on the Americas no. 23, July 2008, http://
www.wilsoncenter.org/sites/default/files/Iran_in_LA.pdf.
---------------------------------------------------------------------------
    As Iran's presence in the region continues to grow, so too will its 
ability to hold at risk America's regional allies, its interests in the 
Hemisphere, and even the U.S. homeland itself. We ignore this gathering 
threat at our peril.

    Mr. Duncan. Thank you for your testimony.
    The Chairman will now recognize Mr. Humire for his 
testimony.

STATEMENT OF JOSEPH M. HUMIRE, EXECUTIVE DIRECTOR, CENTER FOR A 
                      SECURE FREE SOCIETY

    Mr. Humire. Thank you, sir. Good afternoon, Chairman 
Duncan, Mr. O'Rourke, and distinguished Members of the 
subcommittee. Thank you for inviting me here to appear before 
you today and address an issue that I have been researching 
very closely over the last 3 years.
    Let me begin by saying that after this 3-year very lengthy 
investigation that has taken me to 15 countries throughout the 
hemisphere and after close examination of the data that I have 
collected, I have arrived at the conclusion that Iran's 
influence in the hemisphere is definitely growing. But let me 
put this into context.
    Some analysts, when studying Iran's influence in Latin 
America, will compare them to other extra-regional state 
actors, such as China or perhaps Russia. Some may even go as 
far as to compare them to the United States, but this is a 
faulty analysis. When examining Iran's trajectory in the 
region, it is imperative to get the benchmark right. Comparing 
Iran to other extra-regional state actors is comparing apples 
to oranges. The only way to get an accurate sense of whether 
Iran's influence is evolving, growing, or perhaps even waning 
is to compare their influence today to what it was yesterday, 
essentially comparing apples to apples. When you look at this 
data set, in almost every indicator--whether it is trade, 
diplomacy, culture exchange, or some of the more dangerous 
asymmetric indicators, the trajectory is upward. This upward 
trajectory has had at least four significant bites since the 
1979 Iranian Revolution. The first two in 1983 and 1993 were 
indicative of geopolitical events in the Middle East. The 
latter two, 2005 and 2008, are indicative of geopolitical 
events in this hemisphere--specifically, in Latin America.
    In 2005, Venezuela and Cuba established the political power 
project known as the Bolivarian Alliance for the Americas, more 
affectionately known as ALBA. By 2008, in just 3 years, this 
alliance had already captured target governments in Bolivia, 
Ecuador, Nicaragua as well as several satellite Caribbean 
countries, effectively shifting the balance of power in the 
region toward Iran's favor. In fact, both Iran and Syria now 
sit as de facto observing members to this alliance. Yet some 
may say, so what? After all, the ALBA alliance is made up of 
some of the poorest smaller countries in Latin America with 
weaker militaries. But this is only mostly true, and it is only 
true if you choose to examine each ALBA member as an individual 
nation-state. However, if you study the ALBA through the lens 
in which they view themselves as a unified block, then you 
realize that they are much more powerful. If you include de 
facto members such as Argentina, which has become closer and 
closer to the Bolivarian brothers, then the geopolitical 
alliance is comprised of a population of 100 million, a gross 
domestic product $1 trillion U.S., and spanning across 3.5 
million square kilometers, this effectively makes them bigger 
than Mexico and a rival to Brazil.
    So how does this relate to Iran's influence in the region? 
Quite simply, Iran's influence in Latin America is dependent on 
ALBA's influence in Latin America. Frankly, the Bolivarians 
have been able to dominate the narrative in the region over the 
last decade. Latin America today is not the same Latin America 
as it was yesterday and Iran has had over 30 years to study the 
political patterns and the socioeconomic trends in the region.
    Much of this was detailed in the detailed reporting of 
Argentine prosecutor Alberto Nisman, whose research identified 
several precedents for Iran's contemporary asymmetric 
activities that provide a current threat to the homeland. The 
use of culture exchange and trade of commerce as official and 
unofficial covers to insert Iranian spies and subversives, 
creating and underwriting dual-use mosques and other Islamic 
associations that operate as covert intelligence centers, and 
cultivating and radicalizing native Latin American Muslim 
converts to act as agents of influence on behalf of the Iranian 
Revolution. This was before Iran had regional state sponsors 
for the asymmetric activity, as they do now. Today Iran uses 
the same modus operandi that they used 30 years ago that led to 
the worst Islamic terrorist attack in the Western Hemisphere 
prior to 9/11 but has only enhanced their asymmetric 
capabilities to de facto legitimacy of ALBA that offers Iran 
political cover.
    I detail some of these asymmetric capabilities in my 
written testimony, but let me provide a quick summary. No. 1, 
through Venezuela and Ecuador, Iran has established 
preferential banking relationships, providing them with a 
strategic advantage to skirt U.S. and international sanctions. 
Through a Cuban and Venezuelan intelligence operation, Iran has 
capitalized on a variety of fraudulent identification schemes 
all throughout the hemisphere that has camouflaged their entry 
into North America. Canada, as you mentioned, Mr. Chairman, is 
particularly vulnerable from this threat. Last, Venezuela and 
Bolivian state-owned or -controlled enterprises in the energy 
and transportation sector provide a veil for Iran's ever-
growing military industrial footprint in the region, a 
footprint that did not exist more than a decade ago. Each of 
these capabilities provides a unique threat to the U.S. 
homeland security.
    Mr. Chairman, too often we, as analysts, make the mistake 
of looking for the smoking gun--the activist terrorist plot, a 
million-dollar wire transfer, or the missile silo on a 
peninsula. But in reality, Iran and their Bolivarian allies are 
too clever for that. After all, Iran is the country that 
invented chess. After every move they make in the hemisphere, 
everything is calculated, thinking at least two steps ahead. 
But just because we don't see anything on the surface does not 
mean that there is nothing beneath the surface. Better said, 
the absence of evidence is not the evidence of absence. A 
threat is the potential for harm. From my 3-year investigation, 
I have discovered that Iran definitely has the potential to 
harm the United States and our allies in the Western 
Hemisphere.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Humire follows:]
                 Prepared Statement of Joseph M. Humire
                              July 9, 2013
    Chairman Duncan, Ranking Member Barber, and distinguished Members 
of the subcommittee: Good afternoon, and thank you for inviting me to 
appear before you today to address an issue that I have been studying 
closely over the last 3 years.
    This research has taken me to 15 countries throughout the 
hemisphere on fact-finding trips documenting numerous eyewitness 
accounts, collecting investigative records of various countries in the 
region, and analyzing confidential reports produced by sources 
developed from over a decade of work in Latin America. Most of the 
information and data collected has been corroborated with open-source 
research and verified by regional and U.S. Government officials as well 
as subject-matter experts.
    What follows are my analysis and findings related to Iran's 
presence, activities, and influence in the region, and recommendations 
as it relates to U.S. Homeland Security.
                      a joint asymmetric strategy
    To properly understand Iran's influence in the Hemisphere, we have 
to understand their strategy, globally and in the region, which 
increasingly relies on its asymmetric capabilities to compensate for 
its conventional shortcomings. And connect this to the regional 
strategy of the most fervent anti-American alliance in the Hemisphere, 
the Bolivarian Alliance of the Americas, or ALBA.
    In April of 2010, the U.S. Department of Defense (DoD) released an 
unclassified report on Iran's military power. In this report, DoD 
mentions the use of asymmetric warfare as a principal means towards 
achieving Iran's end goal--to ``become the strongest and most 
influential country in the Middle East and to influence world 
affairs.''\1\ Moreover, Iran has quite often publicly stated the role 
of asymmetric warfare in their country's military doctrine, as quoted 
by Brigadier General Attaollah Salehi on January 12, 2011: ``All 
divisions of the Islamic Republic's military pay close attention to 
events in neighboring states and incorporate these into their 
asymmetric warfare training.''\2\
---------------------------------------------------------------------------
    \1\ U.S. Department of Defense, Office of the Secretary of Defense, 
``Unclassified Report on Military Power of Iran,'' April 2010, http://
www.iranwatch.org/government/us-dod-reportmiliarypoweriran-0410.pdf.
    \2\ Stephen Johnson, ``Iran's Influence in the Americas,'' 
Washington, DC: Center for Strategic & International Studies, March 
2012.
---------------------------------------------------------------------------
    Likewise, in Latin America, the use of asymmetric warfare has 
become a common unifying doctrine among economically and militarily 
weaker nation-states in the region, namely the ALBA block. This 
Venezuela- and Cuba-led alliance has captured targeted governments in 
Bolivia, Ecuador, Nicaragua, as well as several satellite Caribbean 
countries--all acting as official member nations for this unified 
political power partnership. Haiti, Syria, and Iran have also been 
admitted as non-voting observer nations to the ALBA alliance.
    In early 2004, the same year that the ALBA alliance was formed, the 
``1st Military Forum on Fourth-Generation Asymmetric War,'' was held at 
the Military Academy auditorium in Caracas, Venezuela, where the late 
President Hugo Chavez Frias directed the National Armed Forces (FAN) to 
develop a new military doctrine for contemporary conflict, as he 
stated: ``I call upon everybody to start an . . . effort to apprehend . 
. . the ideas, concepts, and doctrine of asymmetric war.''\3\
---------------------------------------------------------------------------
    \3\ Max G. Manwaring, ``Venezuela's Hugo Chavez, Bolivarian 
Socialism, and Asymmetric Warfare,'' Strategic Studies Institute, U.S. 
Army War College, October 2005.
---------------------------------------------------------------------------
    Chavez then proceeded to pass the microphone to Jorge Verstrynge, 
current professor of political science at the Universidad Compultense 
de Madrid, who offered a keynote address on his book: ``Peripheral 
Warfare and Revolutionary Islam: Origins, Rules and Ethics of 
Asymmetrical Warfare.'' Chavez and his top military commander at the 
time, General Raul Isaias Baduel, were so intrigued by Vestrynge's 
exposition that they published a special edition of his 174-page tome 
into a pocket-sized field manual, adorned with the Venezuelan Army's 
coat of arms stamped on the inside cover.\4\ Verstrynge would later 
become an advisor to the FAN in 2005, and Chavez, along with the Castro 
brothers of Cuba, would embark upon a regional and extra-regional 
agenda to shift the balance of power in Latin America.
---------------------------------------------------------------------------
    \4\ Joseph M. Humire, ``An Islamo-Bolivarian Revolution,'' Journal 
of International Security Affairs, Spring/April 2012: Book Review on 
Jorge Vestrynge's ``Peripheral War and Revolutionary Islam''.
---------------------------------------------------------------------------
ALBA and Iran: A force to be reckoned with
    2005 is coincidentally the same year, in which Iran decided to 
increase its engagement with Latin American countries, particularly 
using Venezuela as its gateway.\5\ Iran understood that the wave of 
authoritarian populism known as ``21st Century Socialism'' that was 
sweeping through the region, offered the Islamic Republic a permissive 
environment to carry out its global agenda against the West. Since 
2005, the former Iranian President Mahmoud Ahmadinejad visited Latin 
America 7 times and more than doubled the number of embassies (from 5 
to 11) in the region. Moreover, Iran has since signed more than 500 
bilateral agreements with a half-dozen nations in Latin America, and 
more than doubled their trade in the region, with a significant spike 
in 2008.\6\
---------------------------------------------------------------------------
    \5\ Norman A. Bailey, ``Iran's Venezuelan Gateway,'' American 
Foreign Policy Council Iran Strategy Brief No. 5, http://www.afpc.org/
files/getContentPostAttachment/213.
    \6\ Iran continually boasts about its bilateral agreements with 
Latin America, often stating that as Washington is ``building a wall'' 
with Latin America, Tehran is ``building a bridge.'' The number of 
agreements and trade estimation was taken from various reports on 
Iran's bilateral relationship with Latin American countries as well as 
the International Monetary Fund's Direction of Trade Statistics 
database.
---------------------------------------------------------------------------
    Skeptics will point out that many of the agreements signed between 
Iran and Latin American countries, remain unfulfilled, and that most of 
these visits, agreements, and trade is primarily with the ALBA block. 
The latter being only partly true, considering non-ALBA nations, namely 
Brazil and Argentina, are Iran's largest trade partners in the region. 
There is a point to be made that Iran has not come through on many of 
its promises to the region, but the absence of evidence is not the 
evidence of absence. Upon closer examination, one can determine that 
Iran's investments in the region are strategically placed in particular 
sectors, such as energy, agriculture, transportation, and banking--
which all offer cover for Iran's dual-use activities that will be 
discussed later in the testimony.
    Other detractors may suggest that the ALBA block has only had 
success in the poorer and smaller countries in Latin America, with 
weaker militaries. This is only mostly true, if you choose to examine 
each ALBA member as an individual nation-state. If you study, however, 
ALBA through the lens in which they view themselves, as a unified 
block, you realize that their cohesive nature operates as a 
``revolution with borders'' in which the sum of its parts is greater 
than any single member nation. Moreover, if you add some of the 
unofficial de-facto members of this alliance, such as Argentina, then 
ALBA becomes much more powerful.
    During her tenure, Argentine President Cristina Fernandez de 
Kirchner has led the country to economic ruin and begun the process of 
dismantling institutions (media, civil society, etc.) and 
``criminalizing'' the state through the narco-trade, much like her 
Bolivarian brothers.\7\ Therefore, if you add Argentina as a third-
party enabler to ALBA, the geopolitical landscape of this alliance has 
a population of over 100 million, a gross domestic product of over US 
$1 trillion, and a territory of approximately 3.5 million square 
kilometers.\8\ In effect, this would make the ALBA alliance-plus larger 
than Mexico and a rival to Brazil in the region.
---------------------------------------------------------------------------
    \7\ Douglas Farah, ``Back to the Future: Argentina Unravels'' 
International Assessment Strategy Center, February 2003, http://
www.strategycenter.net/docLib/20130227_BacktotheFuture.pdf.
    \8\ Joel D. Hirst, ``A Guide to ALBA,'' Americas Quarterly, http://
www.americasquarterly.org/hirst/article.
---------------------------------------------------------------------------
    Iran has followed the Bolivarian's lead in Argentina, ratifying a 
highly controversial memorandum of understanding earlier this year to 
essentially rewrite history in their favor. Responsible for the largest 
Islamic terrorist attack in the Western Hemisphere prior to September 
11, Iran is creating a ``truth'' commission with Argentina that will 
re-investigate the 1994 bombing of the AMIA Jewish community center in 
Buenos Aires that killed 85 people and left hundreds more injured. The 
deal signed on January 27, 2013 was ratified by the Argentine congress 
by a margin of only 18 votes on February 28, 2013 \9\ and later was 
approved by the Iranian government on May 19, 2013, without ever being 
submitted to the Iranian parliament.\10\
---------------------------------------------------------------------------
    \9\ Helen Popper, ``Argentina's Congress approves pact with Iran to 
probe bombing,'' Reuters, February 28, 2013, http://www.reuters.com/
article/2013/02/28/us-iran-argentina-bombing-idUSBRE91R11F20130228.
    \10\ Radio Free Europe, Radio Liberty, ``Diplomat Says Tehran 
Approves Deal to Probe 1994 Argentinean Bombing,'' July 8, 2013, http:/
/www.rferl.org/content/iran-argentina-bombing-investigation-truth-
commission/24992241.html.
---------------------------------------------------------------------------
    Most recently, there are on-going attempts to infuse the ALBA 
alliance into Central America, namely through the ``northern triangle'' 
of El Salvador, Guatemala, and Honduras, which runs parallel to soft 
subversive elements on behalf of Iran and Hezbollah who have started 
establishing a small presence in these countries.\11\
---------------------------------------------------------------------------
    \11\ Author Interviews with regional officials during a fact-
finding trip in 2013.
---------------------------------------------------------------------------
    an iranian network of non-state actors & native muslim converts
    A significant part of Iran's asymmetric strategy in Latin America 
has been creating, positioning, and underwriting non-state proxies 
providing a deterrence capability to attack their adversaries (the 
United States and Israel) without direct attribution to themselves. The 
long-standing relationship between Iran and Hezbollah has been the 
premier example of this state-to-nonstate dichotomy, but Venezuela's 
relationship with the Revolutionary Armed Forces of Colombia, or FARC, 
can also be examined with this same lens. Both cases serve as a lesson 
on how armed non-state actors can become an instrumental tool for the 
foreign policy and national security of a state.
    Hezbollah, however, is not the only proxy force Iran has positioned 
in Latin America. Increasingly, Iran has become adept at using non-
state actors that are not armed but instead appear ``legitimate'' to 
the uninitiated. Through the use of Islamic charities, associations, 
and even mosques, Iran has proved skillful at using these 
``legitimate'' non-state actors as force multipliers for its terrorist 
operations, as well as the ``eyes and ears'' of the Islamic revolution.
    These non-state actors are generally camouflaged in the form of 
``cultural exchange,'' providing a vehicle for Iran to portray 
solidarity with its sympathetic Latin American counterparts, while 
establishing plausible deniability for its covert activities. In the 
threat finance domain, these Islamic organizations also present a 
complex web of non-profit charities that receive anonymous cash 
donations and are set up as assets or stores of value (SoV) utilized to 
finance terrorist operations in the region and/or abroad.
The AMIA case as a precedent for Iran's capabilities in Latin America
    The 1994 attack on the Asociacion Mutual Israeli-Argentino, known 
as AMIA, in Buenos Aires, Argentina, provides a case study for 
understanding the asymmetric nature of Iran's strategy in Latin 
America. The AMIA bombing was one of the most successful Islamist 
terrorist operations in this hemisphere, and many of the Hezbollah 
cells and their Iranian sponsors are still active in the region today.
    According to a recently-released 502-page report by the special 
prosecutor of the AMIA attack, Alberto Nisman, Iran has been developing 
a covert intelligence network in Latin America for close to 30 
years.\12\ Dating back to a conference in 1982 in Tehran, the newly-
established Islamic Republic made a conscious decision to infiltrate 
its subversive elements in Latin America using the non-official cover 
of businessman and Islamic deities, as well as the conventional cover 
of diplomats. Significantly detailed in Nisman's report was Iran's 
sophisticated use of ``cultural'' activity as a means to blur the lines 
between political and covert activity, as well as to establish the 
state-to-nonstate relationship.
---------------------------------------------------------------------------
    \12\ The information provided in this section is taken from the 
502-page report (labeled ``Dictamina'') produced by Alberto Nisman, to 
which this author has a copy and has studied in great detail.
---------------------------------------------------------------------------
    The primary personality of interest in Nisman's report was the 
infamous Iranian cleric, Mohsen Rabbani, who first touched down in 
Buenos Aires on August 27, 1983, on a tourist visa. Rabbani was sent to 
Argentina on the order of Mohammad Ali Taskhiri, from the Ministry of 
Culture and Islamic Guidance of Iran, or Ershad. The Ershad, along with 
five other entities, plays an influential role in establishing the 
terror-support infrastructure sponsored by Iran.\13\
---------------------------------------------------------------------------
    \13\ Chapter 2, section (b) of Nisman's report details the role of 
Iran's Ministry of Intelligence and Security (MOIS or Vevak), the 
Ministry of Foreign Affairs, the Iranian Revolutionary Guards Corps and 
their special operations wing Quds Force (IRGC-QF or Pasdaran), and the 
Ministry of Construction Jihad (Jihad e-Sazandegi) in exporting the 
Iranian revolution.
---------------------------------------------------------------------------
    By July 1984, Rabbani had received permanent residence in Buenos 
Aires and fully established his dual-cover as a businessman in the beef 
industry, as well as an Imam within the newly created At-Tahuid Mosque 
in the Floresta neighborhood of Buenos Aires.
    It is important to note that Rabbani's first non-official cover was 
as an Iranian businessman operating within Argentina's agricultural 
industry. Iran set up a state-owned enterprise, the Government Trading 
Corporation (G.T.C.), to inspect livestock on behalf of Iran's Ministry 
of Agriculture. This is significant because the agro-industry was then, 
and remains today, one of Iran's principal imports from Latin America.
    This dual-cover allowed Rabbani to communicate with counterparts in 
Brazil, Uruguay, and Colombia, who are also heavy agro-exporters to the 
Middle East, while creating local cells in Chile, Guyana, and Paraguay, 
where he was able to connect with local Islamic leaders. This 
successful operation provides precedent for additional Iranian 
``businessman'' and cultural officers to come to Latin America using a 
similar dual-cover within trade, commerce, and religious entities, 
extending Iran's terrorist network in the region.
Abdul Kadir: the prototype for an indigenous ``Agent of Influence''
    Iran's use of Islamic charities and mosques as cover for their 
intelligence and terror-support operations, as described in the 
aforementioned section, has grown and evolved since the AMIA attack. 
Rabbani disciples, who have risen through the ranks to gain the trust 
of the Islamic Republic, are now coordinating the contemporary Iranian 
intelligence network in Latin America.
    The prototype for this new type of ``agent of influence'' is Aubrey 
Michael Seaforth better known as Abdul Kadir, a Guyanese who was 
arrested in 2007 for plotting to attack the JFK airport in New 
York.\14\ As a young Muslim-convert, Kadir developed an intelligence 
structure in Guyana and the Caribbean that mirrored Rabbani's efforts 
in Argentina and the Southern Cone. Through the ``Islamic Information 
Center of Guyana,'' which Kadir founded and directed, he gained 
influence among the Islamic communities in the Caribbean that led to 
his position as the General Secretary of the Secretariat of the Islamic 
Caribbean Movement. A civil engineer by trade, Kadir also had political 
aspirations that led him to become the mayor of Linden from 1994 to 
1996, and eventually a parliamentarian (2001-2006) through the People's 
National Congress, a socialist political party in Guyana.\15\
---------------------------------------------------------------------------
    \14\ FBI Press Release: ``Abdul Kadir Sentenced to Life in Prison 
for Conspiring to Committ Terrorist Attack at JFK Airport,'' U.S. 
Attorney's Office, Eastern District of New York, December 15, 2010, 
http://www.fbi.gov/newyork/press-releases/2010/nyfo121510a.htm.
    \15\ Chapter 3, section (c) of Nisman's report, describes in great 
detail Abdul Kadir's ascension in the Islamic community of Guyana, as 
well as his overall connections to Mohsen Rabbani and the Iranian 
regime.
---------------------------------------------------------------------------
    Abdul Kadir's profile was particularly attractive for Iran, since 
his political aspirations allowed him to gain influence in Guyanese 
society, particularly among the afro-indigenous people. Moreover, his 
devout and radical Islamic beliefs established him as an authority 
among targeted Islamic communities in the Caribbean. Through his 
handler, the Iranian Ambassador in Venezuela, Kadir recruited, 
proselytized, and radicalized a parallel network in the Guyana and the 
Caribbean that mirrored the Rabbani network in the Southern Cone. Like 
Rabbani, Kadir was also ordered to mobilize this network once Iran made 
the calculation that a terrorist attack was plausible. Fortunately, 
Kadir's 2006 operation against the JFK airport in New York was 
neutralized.
Using native Muslim converts as ``Agents'' of the Iranian Revolution
    Abdul Kadir served as the prototype for a new generation of local 
Latin American Islamic leaders that Iran has cultivated and 
strategically positioned throughout the region. The most notable are 
two Argentine Muslim-converts, one of which worked directly under 
Rabbani in the 1980's and 1990's, and the other continues to direct 
Rabbani's network in Latin America from Venezuela and Iran.
    Santiago Paz Bullrich, better known by his Muslim name Abdul Karim 
Paz, came from an aristocratic lineage in Argentina.\16\ Reportedly 
converting to Islam around 1983, Karim Paz was one of Rabbani's first 
disciples in Buenos Aires and worked at the At-Tahuid Mosque to produce 
a local radio program that was used to radicalize the Islamic 
communities in Argentina.\17\ After spending several years in Qom, 
Iran, Karim Paz would return to Argentina to eventually succeed Rabbani 
as the Imam of the At-Tahuid Mosque. Using the lessons learned from his 
``terrorist professor,'' Karim Paz would spread the Iranian 
intelligence network to growing Islamic communities in Argentina's 
border countries. In Bolivia, Karim Paz was the co-founder of the first 
Shia Islamic association in La Paz and was influential in the creation 
of the Islamic Cultural Center in Puerto Montt, Chile.\18\
---------------------------------------------------------------------------
    \16\ His grandfather, Horacio Bullrich, created the prominent 
``Patio Bullrich,'' a chain of commercial centers and restaurants well 
known to tourists of Buenos Aires. Educated in Argentine Catholic 
schools and raised in a Judeo-Christian household, Karim Paz is the 
only known Muslim in the Bullrich family tree.
    \17\ M. Angelica Perez Ferrada, ``La insolita historia de un lider 
musulman sudamericano'' El Mercurio (Chile), September 19, 2004.
    \18\ Joseph M. Humire, Report on Bolivia for the ``World Almanac of 
Islamism,'' American Foreign Policy Council, uploaded June 27, 2013, 
http://almanac.afpc.org/Bolivia.
---------------------------------------------------------------------------
    Married to a sociologist named Roxana ``Masuma'' Assad, Karim Paz 
now works in conjunction with his brother-in-law, Edgardo Ruben Assad, 
better known by his Muslim name Suhail Assad. Highly educated and 
fluent in Arabic, Farsi, Spanish, and English--Suhail Assad has become 
a leading figure in the propagation of radical Islamic communities all 
throughout Latin America.\19\ Based out of the Center for Iranian-Latin 
American Cultural Exchange (Centro de Intercambio Cultural Irani-
Latinoamericano, CICIL) in Caracas, Venezuela, Assad spends about half 
the year on a lecture circuit traveling to various countries throughout 
Latin America, and the other half of the year teaching the young, 
recently, or soon-to-be converted Latin American Muslims at the Al 
Mustafa International University in Qom, Iran.\20\
---------------------------------------------------------------------------
    \19\ After the AMIA bombing, the Assad family moved to Chile, where 
Suhail Assad received his bachelor's degree in philosophy from the 
Adolfo Ibanez University (Santiago). After college, Assad moved to 
Lebanon to study Islamic culture and language, and eventually traveled 
to Qom to study in prominent madrasahs. In the 1990's, Assad received 
his PhD in Islamic Theology from the Open University of Islamic 
Civilization in Beirut, Lebanon.
    \20\ In a 2011 documentary produced by the leading Spanish language 
U.S. television network, Univision, a young Mexican student named Jose 
Carlos Garcia Tolentino infiltrated this Iranian network in Latin 
America by enlisting in a 2-month course on Islam in Qom. In the 
transcript of his interview, Jose mentioned that his primary 
instructors in Qom were ``two sheiks [Karim Paz and Assad] that were 
Argentine, born in Argentina, but more well versed [on Islam] than 
those from Iran.''
---------------------------------------------------------------------------
    Together, these two Argentine Muslim-converts are extending Iran's 
influence in Latin America by propagating additional mosque's and 
Islamic cultural centers, and performing the exact same type of 
intelligence, information, and influence operations that Abdul Kadir 
carried out in Guyana, and their mentor, Mohsen Rabbani successfully 
implemented in Argentina.
The abuse of Free Trade Zones (FTZ) and emergence of a New Tri-Border 
        Area (TBA)
    Many of the Islamic organizations and native Muslim-converts 
working on behalf of the Iranian regime are operating within Free Trade 
Zones (FTZ) in Latin America.
    In March 2010, the London-based Financial Action Task Force 
published a report titled ``Money-Laundering Vulnerabilities of Free 
Trade Zones (FTZ).''\21\ The upshot of this report is that many FTZs, 
as they are currently structured, provide systematic weaknesses that 
make them vulnerable to abuse and misuse by money laundering and 
terrorist financing. Jurisdictional weaknesses such as relaxed 
oversight and lack of cooperation and coordination with state customs 
authorities, as well as institutional weaknesses such as poor record 
keeping and inadequate information technology systems, have enabled 
these FTZs to become plagued with criminal-terrorist franchises from 
around the world.
---------------------------------------------------------------------------
    \21\ Financial Action Task Force (FATF), ``Money Laundering 
vulnerabilities of Free Trade Zones,'' March 2010, http://www.fatf-
gafi.org/media/fatf/documents/reports/ML%20vulner- 
abilities%20of%20Free%20Trade%20Zones.pdf.
---------------------------------------------------------------------------
    In Latin America, the most historic Free Trade Zone abused by 
criminal-terrorist franchises is the infamous Triple Frontier, or Tri-
Border Area (TBA) where Ciudad del Este, Paraguay has one of the 
largest concentrations of Lebanese Diaspora in Latin America. As noted 
by Nisman's reports, this historic TBA was exploited by Iran and 
Hezbollah to carry out the AMIA attack.
    The abundance of FTZs in Latin America has created other hotbeds of 
radical Islamic activity that take advantage of the relative regulatory 
laxity and premium on discretionary services to launder proceeds of 
criminal activity and finance terrorism. Aside from the TBA, the 
following FTZs in Latin America have been identified as hotbeds for 
Islamic extremist groups: Tacna (Peru); Iquique (Chile); Maicao 
(Colombia); Colon (Panama), and Margarita Island (Venezuela).\22\ The 
latter, Margarita Island, has eclipsed the TBA as the regional hub or 
Hezbollah and Iranian infiltration.
---------------------------------------------------------------------------
    \22\ Ibid, 13.
---------------------------------------------------------------------------
    But if Margarita Island and Venezuela are considered the gateway 
for Iran and Hezbollah in Latin America, than another TBA is emerging 
as the back door. Arica and Iquique (Chile), Tacna (Peru), El Alto 
(Bolivia) and other smaller areas in between are all designated FTZs 
that are experiencing an emergence of Iranian agents permeating this 
region. Both Bolivia and Chile have an embassy of the Islamic Republic, 
with the former, having reported to contain at least 145 registered 
Iranian officials in La Paz.\23\ And the latter, in Santiago, is one of 
Iran's oldest embassies in the region, where Mohsen Rabbani continually 
visited in the 1990's leading up to and after the AMIA attack.
---------------------------------------------------------------------------
    \23\ Jorge Marirrodriga, ``Iran se lanza a la conquista de 
Latinoamerica'' El Pais (Spain), June 23, 2012, http://
internacional.elpais.com/internacional/2012/06/23/actualidad/
1340465739_- 921466.html.
---------------------------------------------------------------------------
    Chile and Bolivia historically have clandestine smuggling routes 
used by narcotraffickerrs and terrorists, notably the infamous Barakat 
brothers, to launder funds and move illicit products through front 
companies in Iquique and Arica, Chile.\24\ These same routes can, and 
are, being used to smuggle WMD effects.
---------------------------------------------------------------------------
    \24\ Rex Hudson; Terrorist and Organized Crime Groups in the Tri-
Border Area (TBA) of South America; Federal Research Division, Library 
of Congress (USA); July 2003 (revised December 2010)--http://
www.loc.gov/rr/frd/pdf-files/TerrOrgCrime_TBA.pdf.
---------------------------------------------------------------------------
    On August 28, 2012, Brazilian and Bolivian authorities found two 
tons of tantalite in garbage bags in the office garage of the 
Venezuelan military attache in La Paz. This strategic mineral, with 
dual-use military grade applications, was reported be mined out of 
Guajara-Mirim in Brazil and transported via smuggling routes through 
Bolivia in route to Arica, Chile by land where it was allegedly going 
to be docked and transported by boat to Venezuela and then to Iran.\25\
---------------------------------------------------------------------------
    \25\ German Rojas, ``Tantalita hallada en La Paz fue extraida en 
Brasil y tenia como destino Iran,'' Eju.tv (Bolivia), September 21, 
2012, http://eju.tv/2012/09/tantalita-hallada-en-la-paz-fue-extrada-en-
brasil-y-tena-como-destino-irn/.
---------------------------------------------------------------------------
    Across the northern border of Arica (Chile) is Tacna (Peru) with a 
growing Islamic community (primarily Pakistani) that is becoming 
increasingly connected to radicalized Shi'a communities in Lima, Puno 
and Abancay in Peru.\26\
---------------------------------------------------------------------------
    \26\ On September 13, 2011 Suhail Assad was invited as a guest of 
honor to attend the ``2nd National Congress of Casas de ALBA in Peru.'' 
in the town of Abancay, the capital of the Apurimac province in south-
central Peru. The Casas de ALBA, are an offshoot of the Bolivarian 
circles in Venezuela and act as a ``Trojan horse'' to inject the 
Bolivarian message into indigenous communities in Peru. This initial 
encounter, established an on-going relationship between Assad and 
leaders of the Etnocaceristas of Peru, a militant ethnic-nationalist 
movement with ties to the Humala administration. Similar efforts are 
being made with the Aymara community on the border between Peru and 
Bolivia.
---------------------------------------------------------------------------
        alba as the crux of the iranian threat in latin america
    During the late 20th Century, when Mohsen Rabbani was developing 
the intelligence network of Iran in Latin America--the geo-political 
environment of the region was drastically different. At that time, 
there were no known Latin American nation-states (except perhaps Cuba) 
that sponsored Rabbani's activities or the Iranian asymmetric presence 
writ large. But at the turn of the century the region began to 
drastically reshape. Following the ``lost decade'' of the 1980's and 
the perceived socio-economic inequality of the 1990's an authoritarian 
populist movement began to surge in Latin America.
    Beginning with the election of Hugo Chavez in 1998 and extending to 
Daniel Ortega's resumed power in Nicaragua in 2007, the Bolivarian 
Alliance of the Americas (ALBA) was forged, using the rhetoric of 
``democracy'' and the cover of ``sovereignty'' to win the hearts and 
coerce the minds of many from the Rio Grande (Mexico) to Tierra El 
Fuego (Argentina-Chile).\27\ This significantly shifted the balance of 
power in the region toward Iran's favor.
---------------------------------------------------------------------------
    \27\ Joel D. Hirst, The ALBA: Inside Venezuela's Bolivarian 
Alliance; CreateSpace Independent Publishing Platform, 2012.
---------------------------------------------------------------------------
    Through these regional state sponsors, Iran has been able to 
significantly expand its asymmetric as well as official presence. The 
ALBA block not only provides political cover for Iran's asymmetric 
activities, but in many instances is also complicit in helping Iran 
skit sanctions, propagate terrorist networks, and initiate a military 
industrial footprint in the Hemisphere, that is unprecedented.
The SUCRE: An elaborate Trade-based Money-laundering Scheme
    One of the ways in which Iran has used the ALBA alliance to gain a 
strategic advantage in Latin America is through preferential bilateral 
banking relationships that can be used to effectively skirt sanctions 
and provide Iran with access to the international financial system.
    On January 2008, the Banco Internacional de Desarrollo, C.A. (BID) 
was launched in Venezuela. For all intended purposes, the BID appeared 
to be a regular financial institution in Caracas; however, after closer 
examination it was learned that it is wholly owned by the infamous 
Toseyeh Saderat Bank, making it an independent subsidiary of the Export 
Development Bank of Iran (EDBI). The EDBI was sanctioned by the United 
States for providing financial services to Iran's Ministry of Defense 
and Armed Forces Logistics (MODAFL), an entity tasked with advancing 
Iran's missile and WMD programs. This earned the Venezuelan BID a 
distinction as a Specially Designated National (SDN) on the U.S. 
Department of Treasury's Office of Foreign Assets and Controls (OFAC) 
targeted sanctions list on October 2008.\28\
---------------------------------------------------------------------------
    \28\ Robert M. Morgenthau, ``The Emerging Axis of Iran and 
Venezuela''; The Wall Street Journal, Sept. 8, 2009-- http://
online.wsj.com/article/SB100014240529702034401045744007- 
92835972018.html.
---------------------------------------------------------------------------
    Iran believed this to be a winning strategy, even purporting to set 
up additional chapters or affiliates of the Vene-Iran BID in other 
South American countries. That was until a better opportunity presented 
itself further south along the Andean ridge in Ecuador.
    Ecuador, as part of the ALBA block, has been leading the effort to 
set up an alternative banking system and virtual currency in Latin 
America, known as the Sistema Unico de Compensacion Regional (Unified 
System of Regional Compensation) or SUCRE. This idea was initially 
agreed upon at an ALBA summit in Venezuela on November 2008 and 
formally ratified by the ALBA congress a year later. Around the same 
time, in December 2008, Iran's EDBI signed a ``protocol of 
cooperation'' with the Central Bank of Ecuador, extending a credit line 
of US $120 million. This agreement between Ecuador and Iran formally 
established a bilateral banking structure that can be used by the 
Islamic Republic to skirt sanctions through an innovative, elaborate, 
and state-sponsored trade-based money-laundering (TBML) scheme.\29\
---------------------------------------------------------------------------
    \29\ Otto J. Reich & Ezequiel V. Ger, ``Iran's stealth financial 
partners in Latin America,'' Miami Herald, March 14, 2012--http://
www.newsmax.com/Newsfront/Iran-Ecuador-money-laundering/2012/07/18/id/
445807.
---------------------------------------------------------------------------
    To date, the SUCRE has been used as a virtual accounting system to 
denominate trade between ALBA nations. The process is fairly 
straightforward:\30\
---------------------------------------------------------------------------
    \30\ Rosales, A., 2010b. ``El Banco del Sur y el SUCRE: (des) 
Acuerdos sobre una Arquitectura Financiera Alternativa''; In: Jornadas 
de Economia Critica; Zaragoza, Spain--Feb. 15, 2010.
---------------------------------------------------------------------------
   Each central bank within an ALBA member nation maintains a 
        list of commercial banks in their country that is authorized to 
        use the SUCRE system.
   These commercial banks are called ``authorized operative 
        banks'' and can deposit funding (in the local currency) into a 
        specific account within the central bank of their own country.
   The central bank of the host country then transfers the 
        funds to a specific account in the central bank of a targeted 
        country within the ALBA block.
   This transfer is cleared through a central clearinghouse 
        that converts the currency into sucres, at an exchange rate of 
        one sucre: per $1.25 USD.
   The central bank in the targeted country receives the 
        transfer in sucres then converts the funds into its local 
        currency and credits the host country's account.
    Herein underlies the importance of the banking agreement signed 
between Iran and Ecuador in 2008. Regardless of which ALBA nation 
decides to trade with Ecuador, this agreement affords Iran the ability 
to leverage its financial activity in Latin America through one 
principle entity, minimizing the risk. Moreover, it affords Iran the 
possibility to offset their accounts directly, without making use of 
U.S. correspondent accounts in Latin America. 
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Once the framework was established, the former Ecuadorian central 
bank chief, along with representatives of a small state-controlled 
commercial bank called Corporacion Financiera Ecuatoriana, S.A. 
(COFIEC), traveled to Moscow and Tehran to hold several meetings with 
Iranian state-owned commercial banks, namely Bank Melli and the 
Pasargad Bank, both of which have been sanctioned by the U.S. 
Treasury's OFAC.\31\ This meeting is important because it nominated 
these state-owned commercial banks as ``authorized operative banks'' 
within their respective countries, a function that is core to the SUCRE 
system as illustrated in Figure 2 below.
---------------------------------------------------------------------------
    \31\ The Iranian Pasargard bank later sent a request to the COFIEC 
bank in Ecuador to register its name internally in Ecuador's financial 
system on an account with an ``alternative currency'' and a year 
earlier the Constitutional Tribunal of Ecuador approved a trade 
agreement with Iran to establish payments in ``freely convertible 
currencies'' making reference to the SUCRE system.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Traditional TBML schemes often include under and over invoicing, 
phantom shipments and other falsification of the value or quantity of a 
shipment including multiple invoicing of good in order to justify the 
transfer of value from one jurisdiction to another. Internal documents 
from Ecuador's tax collection agency and custom officials' show that 
these symptoms already exist within the SUCRE system, particularly as 
it relates to fictitious trade transactions between Venezuela and 
Ecuador.\32\
---------------------------------------------------------------------------
    \32\ Ezequiel Vazquez-Ger, ``Laundering Venezuela's Dirty Money,'' 
Miami Herald, July 1, 2013, http://www.miamiherald.com/2013/06/29/
3475717/laundering-venezuelas-dirty-money.html.
---------------------------------------------------------------------------
    This state-sponsored TBML scheme has the potential to provide Iran 
with a significant strategic advantage in Latin America, as it can 
attract billions of dollars in interbank deposits, and repeatedly 
extend the maturities of these deposits and use the discretionary cash 
for purposes harmful to U.S. security interests in the region and 
elsewhere.
The dual-use of PDVSA to aid and abet Iran's missile and WMD programs
    Given Iran's privileged banking relationships, and subsequent 
money-laundering schemes in Latin America, the superfluous cash could 
be used to shop for much-needed equipment, technology, and raw 
materials in Latin America that aid and abet its ballistic missile and 
WMD programs in their homeland.
    The central bank relationship between Ecuador, Venezuela, and Iran 
provides an example of how state-owned or -controlled enterprises can 
potentially facilitate higher-risk, security-related undertakings--but 
this only describes the threat in the banking sector. There are several 
other sectors in Latin America to which Iran are utilizing state-owned 
or -controlled companies to engage in WMD proliferation and other 
illicit procurement activity.
    These sectors are intertwined in a complex web of illicit 
procurement that relies on what the former Under Secretary for 
Terrorism and Financial Intelligence, Stuart Levy, has called ``a maze 
of financial entities'' that ``essentially hoodwink those still doing 
business with Iran into facilitating illicit transactions for the 
procurement and transport of dual-use, missile-related items.''\33\
---------------------------------------------------------------------------
    \33\ Quote taken from television interview.
---------------------------------------------------------------------------
    A majority of these illicit procurement activities in Latin America 
are taking place within the energy and transportation sectors of 
Venezuela and Iran, in collusion with their respective defense sectors. 
At the highest level, these exchanges are between the military 
industries of both nations. On behalf of Iran, this is manifested 
through the Defense Industries Organization (DIO) and its sister 
organization the Aviation Industries Organization (IAIO), both under 
the larger umbrella of the Ministry of Defense and Armed Forces 
Logistics (MODAFL). On behalf of Venezuela, their military industrial 
arm--Compania Anonima Venezolana de Industria Militares (CAVIM)--
facilitates this military cooperation. While both the MODAFL and CAVIM 
have been sanctioned under the Iran, North Korea, and Syria 
Nonproliferation Act (INKSNA), many of their subsidiaries, affiliates, 
and contractors have not.\34\
---------------------------------------------------------------------------
    \34\ ABC Spain.
---------------------------------------------------------------------------
    In one case, a known affiliate of IAIO was financing the 
construction of a manufacturing plant in Maracay, Venezuela that was 
assembling Iranian-designed, Venezuelan-built unmanned aerial vehicles, 
UAVs--drones. This known affiliate, Kimiaa Sanat, Co. is an alias for 
the Iranian firm Qods Aviation, which is sanctioned by the United 
States, United Kingdom, and is prominently listed in the Annex to 
United Nations Security Council Resolution--UNSCR 1747 as an ``entity 
of concern for WMD-related procurement.''\35\
---------------------------------------------------------------------------
    \35\ Joseph M. Humire, ``Iranian Weapons on Americas Doorstep,'' 
Washington Times, July 4, 2012, http://www.washingtontimes.com/news/
2012/jul/4/iranian-weapons-on-americas-doorstep/?page=all.
---------------------------------------------------------------------------
    In January 2011, another military site in Maracay went up in flames 
when an unusual explosion rocked the city and damaged the UAV 
facilities. This explosion was more characteristic of a blast that 
might have happened in the petrochemical town of Moron, less than 100 
miles away. In fact, it is in Moron that Iran is helping build various 
chemical plants alongside CAVIM. Suspected of being involved in these 
joint chemical projects is the notorious Iranian front company Parchin 
Chemical Industries (PCI), a subsidiary of the Defense Industries 
Organization, a branch of the MODAFL. PCI is heavily-sanctioned and 
listed as a premier entity in UNSCR 1747 for aiding and abetting Iran's 
ballistic missile and WMD programs.\36\
---------------------------------------------------------------------------
    \36\ Casto Ocando, ``A look inside the mysterious Venezuelan-
Iranian gunpowder plant,'' Univision, January 12, 2012, http://
univisionnews.tumblr.com/post/15741649531/a-look-inside-the-mysterious-
venezuelan-iranian.
---------------------------------------------------------------------------
    In effect, these military projects are camouflaged through the 
dual-use of Venezuela's national oil company, Petroleos de Venezuela, 
S.A. (PDVSA), who has facilitated contracts with several sanctioned 
Iranian oil and gas companies, as well as constructions companies. In 
December 2006, the Iran Marine Industrial Company, also known as SADRA, 
inked a deal with PDVSA through a subsidiary--PDV Marina, S.A. 
Considering SADRA is an offshoot of the heavily sanctioned Khatam al-
Ambia shipbuilding company of Iran, this led to PDVSA being sanctioned 
by the United States for ``delivering at least two cargoes of reformate 
to Iran.''
    These sanctions only prohibited PDVSA from competing for U.S. 
Government procurement contracts, obtaining U.S. export licenses, and 
from securing financing from the Banco Inter-Americano de Desarrollo 
(BID), which is the U.S. export-import bank in Latin America. This 
financial setback was offset by increased business with China, but most 
importantly these sanctions do not apply to PDVSA subsidiaries nor do 
they prohibit the export of crude oil to the United States, effectively 
rendering PDV Marina, a subsidiary to PDVSA, unaffected by the U.S. 
sanctions; therefore, continuing to operate advancing its agreements 
with Iran.
    In July 2012, SADRA completed the construction of the first of four 
Aframax oil tankers for Venezuela, and delivery is scheduled to arrive 
``soon'' to its Venezuelan owner, PDV Marina.\37\ A follow-on agreement 
has been signed by PDV Marina with the Islamic Republic of Iran 
Shipping Lines (IRISL) to create a joint maritime oil transport 
company. This joint venture is reportedly going to be called TC 
Shipping, Co. and will be a direct affiliate of the National Iranian 
Tanker Company (NITC), who is heavily complicit in the proliferation of 
Iran's WMD and ballistic missile programs.
---------------------------------------------------------------------------
    \37\ Press Release by PDVSA: ``PDV Marina signed agreement with 
Iranian company to build 4 tankers,'' December 22, 2006, http://
www.pdv.com/index.php?tpl=interface.en/design/salaprensa/
readnew.tpl.html&newsid_obj_id=3393&newsid_temas=1 and now Press 
Release by Fars News Agency where Iranian VP announced ``Giant Oil 
Tanker Ship Ready for Delivery to Venezuela,'' July 2, 2103, http://
english.farsnews.com/newstext.aspx?nn=13920411000649.
---------------------------------------------------------------------------
    These state-owned, or -controlled enterprises in Venezuela and 
Iran's energy, transportation, and construction industries provide a 
veil over Iran's growing and unprecedented military industrial 
footprint in the region.
Exploiting Canada's refugee process through fraudulent passports and 
        visas
    ALBA countries have been instrumental in providing fraudulent 
passports and visas to Iranians and other Islamic extremists seeking to 
slip into North America. Canada is particularly vulnerable to these 
schemes because of their high level of acceptance (86%) of refugee 
claims made on behalf of Iranians.
    According to a declassified intelligence report produced last year 
by the Canadian Border Services Agency (CBSA), Iran is the No. 1 source 
country of improperly documented \38\ migrants to Canada. Most of these 
improperly documented migrants make a claim for refugee status, the 
majority of which achieve such status, and arrive by air from third-
party countries (very few arrive through land-border crossings) and 
residing in the Greater Toronto Area (GTA).\39\
---------------------------------------------------------------------------
    \38\ The report uses the term ``improperly documented'' to refer to 
migrants who travel on false, altered, stolen, or otherwise improperly 
issued/obtained travel documents.
    \39\ Canada Border Services Agency (CBSA), ``Irregular Migration of 
Iranians to Canada,'' July 2012, released under the access to 
information act.
---------------------------------------------------------------------------
    Most of these third-party countries are in Latin America. From 2009 
to 2011, Latin America was the largest prior embarkation region for 
improperly documented Iranians, comprising almost half of the total 
number. The majority passed through Caracas, Venezuela (and a good 
number went through Mexico City as well). In another report by the 
CBSA's Miami Liaison Unit, Canadian border officials indicated that 
some airport and airline staff in Caracas was implicated in providing 
fraudulent documentation to recently arrived Iranians in Venezuela.
    In 2002, General Marcos Ferreira, who resigned as director of 
Venezuela's National Guard border control (Departamento de Extranjera, 
DX), blew the whistle on how Cuban intelligence is managing Venezuela's 
intelligence apparatus.\40\ He specifically pointed to former interior 
minister Rodriguez Chacin, testifying that the minister repeatedly 
pressured him to launder the identities of terrorist and 
narcotraffickers transiting through Venezuela.
---------------------------------------------------------------------------
    \40\ Martin Arostegui, ``Chavez Plans for a Terrorist Regime,'' 
Insight Magazine, December 24, 2002, http://www.freerepublic.com/focus/
news/813499/posts.
---------------------------------------------------------------------------
    A decade later the problem has only gotten worse. In 2009, Tarek 
Al-Aissami, a Venezuelan born in Lebanon and of Syrian descent, became 
the Interior Minister after heading up Onidex, the Venezuelan passport 
and naturalization agency. Al-Aissami appointed a close friend, Dante 
Rivas Quijada as the head of Onidex, and together they have worked with 
Ghazi Nasr-Din, a Venezuelan diplomat also born in Lebanon, to funnel 
Venezuelans to the Middle East and Iranians and Lebanese to North 
America.\41\ Ghazi Nasr-Din is listed as a ``Specially Designated 
Global Terrorist'' by the U.S. Treasury Department.
---------------------------------------------------------------------------
    \41\ Anna Mahjar-Barducci, ``Venezuelan Minister Hangs out with 
Hezbollah,'' Gatestone Institute, February 11, 2011, http://
www.gatestoneinstitute.org/1878/venezuelan-minister-hezbollah.
---------------------------------------------------------------------------
    It is estimated that tens of thousands of fraudulent identification 
(passports, driver license, birth certificates, national ID cards, 
etc.) has been produced in Venezuela. Much of this has been delivered 
to Iran, Hezbollah, and other extremist groups seeking to use Latin 
America as a springboard to enter North America.
               recommendations for u.s. homeland security
    Mr. Chairman, what has been described above presents a clear and 
present threat to U.S. Homeland Security and I am convinced that Iran's 
influence in Latin America has grown and is evolving rapidly to include 
not just ALBA but other countries throughout the region.
    Some analysts may disagree, but often the mistake these analysts 
make is that they compare Iran's influence in Latin America to other 
extra-regional state actors, such as China, or perhaps even Russia. 
This is a faulty analysis.
    When examining Iran's influence in the region it is imperative to 
get the benchmark right. Comparing Iran to other extra-regional state 
actors is comparing apples to oranges. The only way to get an accurate 
sense of whether Iran's influence is evolving, growing, or perhaps even 
``waning'' is to compare their influence today to what it was 
yesterday. Essentially comparing apples to apples. And when you look at 
this data set, in almost every indicator, whether its trade, diplomacy, 
cultural exchange or the more dangerous asymmetric indicators described 
in this written testimony--the trajectory is upward.
    This upward trajectory is due in large part to the influence ALBA 
has had in the region. Simply stated, Iran's influence in Latin America 
is dependent on ALBA's influence in Latin America and quite frankly the 
Bolivarians have dominated the narrative in the region for over a 
decade.
    The ALBA alliance has written the playbook on how to use asymmetric 
warfare in Latin America, because it understands that the moral war for 
legitimacy is the primary center of gravity in the region. The strength 
of the Bolivarian revolution lies in their ability to establish de-
facto legitimacy within the general populace of the region, while 
delegitimizing all prior governments as well as opposition movements 
within their countries. In Bolivarian terms, this is a resistance 
movement within Latin America that is liberating the marginalized, 
oppressed, and indigenous people of the Americas from illegitimate 
occupying regimes that have governed the region since the Spanish 
conquest.\42\
---------------------------------------------------------------------------
    \42\ Max G. Manwaring, ``Venezuela as an Exporter of 4th Generation 
Warfare Instability,'' Strategic Studies Institute, U.S. Army War 
College, December 2012.
---------------------------------------------------------------------------
    Within this context, it is the legitimacy that the Bolivarians have 
established, which has paved the way for Iran to penetrate Latin 
America.
    Given the details of this testimony, along with the highly-detailed 
reporting of Argentine prosecutor Alberto Nisman, our findings point to 
the conclusion that the Iran-Hezbollah-ALBA axis is an imminent threat 
to U.S. National security interests in the Western Hemisphere.
    The following is a recommendation for where the U.S. Government can 
focus a whole-of-Government approach to neutralize this threat:
    (1) The most effective way to counter the ALBA narrative in Latin 
        America is to establish a counter-narrative with a new alliance 
        that serves as a counterweight to ALBA's influence in Latin 
        America. This alliance has already formed and is called the 
        Pacific Alliance (Chile, Peru, Colombia, and Mexico), however, 
        this newly formed alliance is still fragile. Each country faces 
        a myriad of internal political, economic, social, and 
        asymmetric challenges that could at any moment subvert internal 
        institutions to corrupt them and sway the balance of power back 
        towards the Bolivarians. Therefore, a robust public diplomacy 
        and intelligence effort needs to be established with the 
        Pacific Alliance that not only works with Governmental entities 
        within this alliance, but also with civil society counterparts 
        and the media to expose the nefarious actions by Iran and ALBA. 
        This sort of initiative should be aimed at legitimizing the 
        Pacific Alliance, while delegitimizing the ALBA alliance and 
        their Iranian connections and must be done from the bottom-up.
    The following are some initiatives that the U.S. Department of 
Homeland Security could commence or expand upon with allies in the 
Western Hemisphere:
    (2) In a recent survey, it was determined that approximately half 
        of the countries in Latin America and the Caribbean have 
        existing laws that make terrorist-related activities a crime 
        under national law.\43\ The lack of anti-terrorism legal 
        framework is a loophole that is being exploited by a wide range 
        of Islamist terrorist groups in several countries throughout 
        the region. This is especially true in Brazil, where Islamic 
        extremist groups have been growing at an alarming rate. Over 
        the years there has been a handful of anti-terrorism 
        legislative proposals introduced before the Brazilian 
        Parliament, six of which are being currently reviewed by the 
        Chamber of Deputies. Given the momentum of the 2014 FIFA World 
        Cup and the 2016 Summer Olympics set to take place in Brazil, 
        U.S. Homeland Security should provide legal, technical, and 
        other assistance to Brazil, to pass and implement effective 
        anti-terrorism legislation.
---------------------------------------------------------------------------
    \43\ The American Foreign Policy Council took this anti-terrorism 
legal survey.
---------------------------------------------------------------------------
    (3) The abuse of Free Trade Zones (FTZ) by Iran and Hezbollah is of 
        concern to U.S. Homeland Security. With the expansion of the 
        Panama Canal, so comes the expansion of Free Trade Zones such 
        as Colon. Regional officials estimate that with the expansion 
        of the canal, more than half of the containers passing through 
        will be warehoused in the Colon FTZ. This provides Iran and 
        their proxies an attractive transshipment point to move 
        terrorism-related products and WMD/effects. U.S. Homeland 
        Security should strengthen intelligence sharing with Panamanian 
        counterparts to ensure they receive timely and actionable 
        intelligence on Iranian vessels passing through the Canal. And 
        also expand the ``Container Security Initiative,'' managed by 
        the U.S. Customs and Border Protection, to additional free 
        trade zones in the region, most notably along the Tri-Border of 
        Chile, Peru, and Bolivia.
    (4) Lastly, U.S. Homeland Security should work with Canadian 
        counterparts to identify, screen, and perform enhanced-due 
        diligence on visa applications coming from ALBA countries. In 
        instances where an improperly documented case is discovered, 
        visas should be denied and the applicant should be placed on a 
        watch list for further monitoring.

    Mr. Duncan. Thank you so much.
    The Chairman will now recognize Mr. Misztal to testify for 
5 minutes.

STATEMENT OF BLAISE MISZTAL, ACTING DIRECTOR OF FOREIGN POLICY, 
                    BIPARTISAN POLICY CENTER

    Mr. Misztal. Thank you, Chairman Duncan, Mr. O'Rourke, 
Members of the subcommittee, I appreciate the opportunity to 
appear before you today. I am honored to testify together with 
such a distinguished panel. But I also regret that Alberto 
Nisman was not allowed to present his findings. His case 
highlights the difficulty of gathering facts about Iranian 
involvement in Latin America, making today's proceedings all 
that more important.
    Designing effective policies to counter any threat to the 
American homeland posed by Iran's terrorist activities in our 
hemisphere requires understanding its strategy and intentions. 
The Bipartisan Policy Center's National security program 
combines several unique approaches to do exactly that. Over the 
last 6 years, we have studied Iran's grand strategy and its 
pursuit of a nuclear weapons capability. Our homeland security 
project, led by former 9/11 Commission Co-chairs Kean and 
Hamilton studies emerging terrorist threats, and we are proud 
to host former president of Colombia Alvaro Uribe. As a senior 
fellow, he keeps a close eye on regional developments.
    This combination of perspectives on Iran, terrorism, and 
the Western Hemisphere allows us to examine Iran's strategic 
ambitions and how they might shape its tactics and behavior in 
our region. Iran's activities in the Western Hemisphere have 
three primary motivations: First, cultivating stronger ties 
with nations that oppose the United States; second, finding 
economic assistance; and, third, establishing tactical 
asymmetric capabilities to target U.S. interests. Dynamics that 
play today could significantly impact Iran's ability by either 
negatively or positively to succeed in any of these areas.
    With the passing from the stage of both Iranian President 
Mahmoud Ahmadinejad and the Venezuela President Hugo Chavez, 
Iran's bilateral ties to Latin America have arrived at a 
natural inflection point. Chavez' death weakened the Venezuelan 
Government and its anti-American allies in Havana, La Paz, and 
Quito, who form Iran's natural constituency in the region. 
Their anemic economic performance will further weaken these 
regimes and limit their ability to assist Iran, creating an 
opportunity to drive a wedge between these partners.
    If left unchecked, however, the anti-American block in the 
region will likely grow both ideologically more fervent and 
increasingly desperate for allies. Similarly, Iran's own 
political and economic isolation as a result of sanctions will 
drive it to seek friends and money wherever it can. Thus, the 
bond between Iran and Venezuela, as long as these regimes stay 
in power, is unlikely to be broken. But unable to help each 
other, both are likely to turn to a third party--Russia or 
China, perhaps--for assistance.
    The Islamic Republic of Iran, however, is not just 
interested in political and economic support. It is determined 
to impose its brand of theological totalitarianism on the 
Middle East. This ambition translates into rooting out U.S. 
influence in the region and undermining its power wherever 
possible, including Latin America. Iran has systematically 
pursued this aim through the use of violence, but its tactics 
have evolved over the 30 years of its existence.
    The first half of Iran's existence under its current regime 
was dominated by a direct confrontation with its enemies. The 
second half has seen Iran develop asymmetric warfare and 
terrorist capabilities, including the creation of the Quds 
Force within the Islamic Revolutionary Guard Corps and its 
strong ties to the Lebanese terrorist group Hezbollah. There is 
still doubt that these capabilities exist to attack American 
interests. But Iran uses them tactically to further their 
strategic ambitions indiscriminantly or haphazardly. Iran's 
current tactical considerations are likely to restrain it from 
inciting terror in the Western Hemisphere for now.
    Recent attacks tied to the Quds Force or Hezbollah have 
largely been retaliatory in nature. This trend is likely to 
continue. Iran dares not risk any action that would be blatant 
or bloody enough to illicit direct U.S. military reprisal. 
Iran's leaders know that to provoke American ire now when Iran 
is closing in on nuclear weapons capability would be to 
sacrifice what they have long been working towards. But this 
does not mean that Iran will always have reason for such 
restraint. Indeed, the closer that the United States and Iran 
draw to direct conflict, whether in Syria or over Iran's 
nuclear program, the greater the chance of Iranian-sponsored 
terrorist activity in our hemisphere.
    There are still concrete steps that should be taken now to 
better prepare the eventuality that Iran's tactical calculus 
changes.
    First, good police work can foil terrorist plots. The 
United States has a strong track record of working with law 
enforcement agencies throughout the Western Hemisphere, 
particularly in Colombia. But these efforts should be further 
bolstered. Particularly critical to this task will be the 
Department of Homeland Security's Federal Law Enforcement 
Training Centers and the air national capacity building branch.
    Second, improving U.S. intelligence cooperation with 
regional partners could further contribute to our ability to 
detect and prevent Iranian terrorist plots. One way to do this 
is to expand the representation of foreign countries and their 
intelligence services at the El Paso Intelligence Center.
    Iran's use of asymmetric capabilities and terrorist allies 
is likely to remain limited for now. It is only those cases 
where Iran believes that they can be used to bring its nuclear 
dreams closer to reality. We should use this opportunity to 
better secure our homeland while the regime in Tehran is still 
exercising restraint.
    Thank you. I look forward to your questions.
    [The prepared statement of Mr. Misztal follows:]
                  Prepared Statement of Blaise Misztal
                              July 9, 2013
    Chairman Duncan, Ranking Member Barber, Members of the Committee, I 
appreciate the opportunity to appear before you today, alongside such 
distinguished panelists, to discuss Iran's influence in the Western 
Hemisphere.
           bipartisan policy center national security project
    Through the National Security Project, the Bipartisan Policy Center 
maintains two task forces that have worked to develop recommendations 
that are particularly important to the work of this committee.
Homeland Security Project
    The Homeland Security Project's (HSP) core mission is to be an 
active, bipartisan voice on homeland and National security issues. The 
project is co-chaired by former Governor Tom Kean and former 
Congressman Lee Hamilton who led the 9/11 Commission's bipartisan 20-
month investigation into the September 11 attacks and forged unanimous 
agreement on its 41 recommendations--the vast majority of which were 
enacted into law.
    With terrorist threat and tactics becoming more complex and 
diverse, the project works to foster public discourse, provide expert 
analysis, and develop proactive policy solutions on how best to respond 
to emerging challenges. The critical role played by co-chairs Kean and 
Hamilton in creating the Department of Homeland Security, and their 
continued analysis of its successes and shortcomings in the face of 
evolving threats, make the work of HSP salient to the question of how 
to protect our homeland from Iranian threats.
Iran Task Force
    Iran's role in sponsoring terrorism is not the only cause for 
concern, however. Its pursuit of nuclear weapons capability is the most 
urgent National security threat facing the United States. For that 
reason, almost 6 years ago the Bipartisan Policy Center convened a task 
force of distinguished former Members of Congress, Government 
officials, military leaders, and experts to study this threat and 
articulate and advocate a realistic and robust approach to this 
pressing problem. Since the return of one of the original co-chairs, 
Dan Coats, to the Senate, the task force has been led by Senator 
Charles Robb and General (ret.) Charles Wald. Others taking part in the 
task force include former members: Christopher Carney, Dan Glickman, 
and John Tanner.
    Our first report was entitled ``Meeting the Challenge: U.S. Policy 
Toward Iranian Nuclear Development'' and issued in September 2008.\1\ 
In it we stated that ``continued Iranian enrichment of uranium and 
ineffectively monitored operation of the light water reactor at Bushehr 
threaten U.S. and global security, regional stability, and the 
international nonproliferation regime.'' Consequently, we concluded 
that ``a nuclear weapons-capable Islamic Republic of Iran is 
strategically untenable,'' and we recommended a triple-track strategy 
for preventing a nuclear weapons-capable Iran. Those three tracks are 
diplomacy, sanctions, and the credible threat that force may be used if 
the other two tracks fail.
---------------------------------------------------------------------------
    \1\ http://bipartisanpolicy.org/library/report/meeting-challenge-
us-policy-toward-iranian-nuclear-development.
---------------------------------------------------------------------------
    The BPC task force on Iran proceeded to issue four additional 
reports on Iran: ``Meeting the Challenge: Time Is Running Out'' in 
September 2009,\2\ ``Meeting the Challenge: When Time Runs Out'' in 
June 2010,\3\ ``Meeting the Challenge: Stopping the Clock'' in February 
2012,\4\ and ``The Price of Inaction: An Analysis of Energy and 
Economic Effects of a Nuclear Iran'' in October 2012.\5\ As suggested 
by the titles of the reports, we believe the Iranian nuclear threat has 
been growing steadily since 2008, and we have continued to recommend a 
triple-track strategy to prevent a nuclear weapons-capable Iran.
---------------------------------------------------------------------------
    \2\ http://bipartisanpolicy.org/library/report/meeting-challenge-
time-running-out.
    \3\ http://bipartisanpolicy.org/library/report/meeting-challenge-
when-time-runs-out.
    \4\ http://bipartisanpolicy.org/library/report/meeting-challenge-
stopping-clock.
    \5\ http://bipartisanpolicy.org/library/report/price-of-inaction.
---------------------------------------------------------------------------
    In the 5 years since we published our first report, Iran has made 
significant progress in its nuclear program despite vigorous efforts at 
diplomacy, increasingly tough sanctions, due in large part to the 
unflagging efforts of the U.S. Congress, and a determined campaign of 
cyber attacks and other covert activities. It has also sought to 
accumulate political influence, build economic ties, and develop a 
network of criminal and terrorist assets around the world, but 
particularly in the Western Hemisphere. For this reason I applaud the 
leadership of this committee in drafting and passing last year H.R. 
3783, the Countering Iran in the Western Hemisphere Act, as well as 
continuing to study this important topic.
           iran & latin america: relationship at a crossroads
    This is a critical moment to examine Iran's influence in the 
Western Hemisphere and to consider what can be done to limit its 
influence. Iran's interest in Latin America has three primary 
motivations: (1) Cultivating stronger diplomatic ties with nations that 
oppose the United States, (2) finding economic assistance amidst 
sanctions, and (3) establishing strategic capabilities for terrorist 
and asymmetric operations. Dynamics at play today could significantly 
impact Iran's ability, both positively and negatively, to succeed in 
any of these areas. If these dynamics are properly understood and 
exploited, they represent a unique opportunity to undo the nexus of 
political, economic, criminal, and terrorist ties that span from Tehran 
and Beirut to Caracas and the Tri-Border Area of Brazil, Paraguay, and 
Argentina.
    Iran's efforts to secure political backing and economic assistance 
from Latin America have met with mixed results over the last decade. 
Now, with the passing from the stage of the two personalities that, 
over the course of the last decade, most drove the Iranian-Latin 
American relationship--Iranian President Mahmoud Ahmadinejad, whose 
second and final term just ended, and Venezuelan President Hugo Chavez, 
recently deceased--they have arrived at a natural inflection point.
    Regional dynamics are currently in the favor of the United States. 
Chavez's death weakened the Venezuelan government and, by extension, 
its anti-American sympathizers in Havana, La Paz, and Quito, who form 
Iran's natural constituency in the region. But their weak economic 
performance will prove an even more destabilizing force for these 
regimes, and limit their ability to assist Iran, presenting an 
opportunity for the United States.
    At the same time, Iran's own political and economic isolation, as a 
result of sanctions, will drive it ever more desperately to seek 
friends and money wherever it can. In this way, we should understand 
Iran's interest in strengthening diplomatic and economic ties with 
Latin America as perhaps a sign of the effectiveness of U.S. efforts to 
isolate it. That should be a reason to only further tighten sanctions 
on doing business with Iran and to ensure that it does not find an 
economic lifeline in the Western Hemisphere.
    Iran, however, is not just interested in political and economic 
support. It is the world's largest state sponsor of terrorism and has 
already been tied to two terrible attacks in Argentina and several 
other dastardly plots in region. Yet, Iranian tactical use of terror 
has of late tended toward retaliatory attacks, suggesting a concern for 
not provoking a U.S. military reprisal that would disrupt its nuclear 
program. This presents both an opportunity and challenge for U.S. 
policy. An opportunity to bolster regional law enforcement and 
intelligence cooperation to disrupt any Iranian terror networks in 
hemisphere while the regime in Tehran is exercising restraint. It will 
be challenging, however, to avoid any changes to Iranian tactical 
calculus that might render terrorism against U.S. targets and interests 
attractive. Designing effective policies to counter the threat posed by 
Iran's continuing terrorist activities to the American homeland 
requires understanding both the scope of its presence in our hemisphere 
as well as its strategy and intentions.
  iranian political and economic activities in the western hemisphere
    While Iran has undoubtedly demonstrated greater interest in 
strengthening diplomatic and economic ties with the region, mediocre 
trade and economic figures and lack of any allies outside of South 
America's Chavez-inspired anti-American bloc indicate that Iran's 
influence in the region is insufficient to yield it great benefit.
Overview
    Iran's interest in Latin America is not recent--dating back over a 
century--but it has little natural constituency in the region.
            Iranian and Muslim populations in Latin America
    Iranian immigration to Latin America has been historically low and 
is significantly smaller than the already small number of Arabs in the 
region, with Arabs comprising less than 4 percent of Argentina's 
population and 1 percent of Brazil's.\6\ Persian immigration into the 
region--most of which occurred in the run-up to or aftermath of Iran's 
1979 Islamic Revolution--is far less, as a 1996 report from Worldwide 
Persian Outreach gave a rough estimate of only 100,000 persons of 
Iranian descent living outside of the United States in ``other parts of 
the world.''\7\ The overall Muslim population in Latin America and the 
Caribbean is also quite small, numbering roughly 1.5 million, two-
thirds of whom live in Argentina and Brazil. Most of Argentina's 
Muslims are Syrian and Sunni, and Brazil's Muslims are mostly recent 
Sunni and Shia immigrants from Palestine and Lebanon living in the 
southern city Curitiba and the Tri-Border Area (TBA) that borders 
Argentina and Paraguay.\8\
---------------------------------------------------------------------------
    \6\ ``Brazil,'' CIA World Factbook, May 15, 2013, https://
www.cia.gov/library/publications/the-world-factbook/geos/br.html.
    \7\ ``Persian Diaspora Census 1996,'' Worldwide Persian Outreach, 
1996. http://www.farsinet.com/pwo/diaspora.html.
    \8\ Stephen Johnson, ``Iran's Influence in the Americas,'' Center 
for Strategic and International Studies, March 2012. http://csis.org/
files/publication/120312_Johnson_Iran%27sInfluence_- web.pdf.
---------------------------------------------------------------------------
            Iran-Latin America relations to 2000
    Iran's first association with a Latin American government came in 
1889 when Iran exchanged diplomatic representatives with Mexico. 
Argentina and Brazil followed suit in 1902 and 1903, respectively, and 
further interaction came when Iran and Venezuela came together in the 
1940s to call for better treatment from international oil companies.\9\ 
Iran's ties to the region continued to be based on oil and resources. 
In 1960, it founded the Organization of the Petroleum Exporting 
Countries (OPEC) with Venezuela along with Iraq, Kuwait, and Saudi 
Arabia. And under the reign of U.S. ally Shah Muhammad Reza Pahlavi, 
Iran in the 1970s began to import raw materials from Latin America and 
established its first embassies in the region in Argentina, Mexico, and 
Venezuela, at that time all mutual allies of the United States.\10\
---------------------------------------------------------------------------
    \9\ Ibid., 4.
    \10\ Ibid.
---------------------------------------------------------------------------
    Just as Iran's 1979 Islamic Revolution radically changed the nature 
of the regime in Tehran, so too did it initiate a shift of Iran-Latin 
America relations. Supreme Leader Ruhollah Khomeini's hatred of the 
United States manifested itself in Iran's increased ties with pro-
communist, anti-Western Latin American governments, namely Castro's 
Cuba and Sandinista-led Nicaragua. In 1981 Castro invited Iran to open 
an embassy in Havana, and in 1983 Nicaragua's minister of education 
flew to Tehran on a visit that included a meeting with Ayatollah 
Khomeini. While Iran's relations with Cuba and Nicaragua were largely 
symbolic and ideological, Iran's economic needs in the 1980s led to 
increased wheat imports from Argentina and discussions with Brazil on 
supplying equipment for power plants and expanding trade to $1.5 
billion.\11\ Iran's push to develop ties with anti-U.S. governments and 
secure alternate economic markets ended, however, in 1989, with the 
death of Ayatollah Khomeini. Khomeini's death opened the way for the 
relatively more pragmatic policies of President Ali Akbar Hashemi 
Rafsanjani, whose agenda included improving relations with the West and 
expanding free enterprise, a path that placed less emphasis on 
cultivating ties with the developing countries of Latin America.
---------------------------------------------------------------------------
    \11\ Ibid.
---------------------------------------------------------------------------
    The first major instance Iranian-sponsored terrorist activity in 
the region occurred midway through Rafsanjani's presidency. In March 
1992, the Israeli embassy in Argentina was bombed. Islamic Jihad 
Organization, considered a front for Hezbollah, claimed responsibility 
for the 1992 bombing, stating that it was in response to Israel's 
assassination of Hezbollah Secretary General Sayed Abbas al-Musawi. Two 
years later, in July 1994, another bombing targeted the Argentine-
Israelite Mutual Association (AMIA) community center, killing 85 and 
wounding over 200. Though the community center bombing is still an open 
investigation due to Argentina's failure to properly seek and collect 
evidence following the attack, recent research concludes that high-
ranking members of Iran's Islamic Revolutionary Guard Corps (IRGC) 
directed the Lebanese terrorist group Hezbollah to carry out the 
attack.\12\ In 1999, Argentina issued an arrest warrant for high-
profile Hezbollah operative Imad Mughniyeh for his believed involvement 
in both bombings, however Mughniyeh was assassinated in 2008 and never 
brought to trial in Argentina.
---------------------------------------------------------------------------
    \12\ ``Buenos Aires bomber `identified,' '' BBC News, November 10, 
2005. http://news.bbc.co.uk/2/hi/americas/4423612.stm.
---------------------------------------------------------------------------
    Despite Iran's involvement in such atrocities, it continued to find 
ready partners in Latin America. Rafsanjani's successor as president, 
Muhammad Khatami, laid the foundations of Iran's warm relations with 
the anti-U.S. bloc in the region. He started joint economic initiatives 
with Venezuela to build tractor, cement, and automobile factories both 
to show political ties and to develop export outlets for Iran's 
sanctions-stricken economy.\13\
---------------------------------------------------------------------------
    \13\ Stephen Johnson, ``Iran's Influence in the Americas,'' Center 
for Strategic and International Studies, March 2012. http://csis.org/
files/publication/120312_Johnson_Iran%27sInflu- ence_web.pdf, 10.
---------------------------------------------------------------------------
Iranian Bilateral Relations and Diplomacy in Latin America
    Since his election in 2005, President Mahmoud Ahmadinejad increased 
the efforts of his predecessors in the region, aggressively seeking to 
strengthen trade and diplomatic ties, primarily with the anti-U.S. 
block of Venezuela, Bolivia, Ecuador, Nicaragua, and Cuba. Until the 
recent end of his second, and final, term in office, Ahmadinejad 
visited the region eight times, most recently for Hugo Chavez's March 
2013 funeral. Originally scheduled to travel to Ecuador for Rafael 
Correa's May 2013 inauguration, Ahmadinejad sent his vice president, 
Ali Saeedlou, instead. Latin American leaders also beat a path to 
Tehran during this period: Hugo Chavez visited nine times; Nicaraguan 
President Daniel Ortega thrice; Bolivian President Evo Morales twice; 
and one visit each from Brazil's Luiz Ignacio Lula da Silva, Ecuador's 
Rafael Correa, and Guyana's Bharrat Jagdeo.
    The biggest political benefit to Iran from this diplomatic outreach 
to Latin America came not from one of the usual anti-American suspects, 
but from Brazil. A brief period of warm relations between Ahmadinejad 
and then Brazilian President Luiz Ignacio Lula da Silva culminated in 
Lula's 2010 visit to Tehran in an effort to negotiate a diplomatic 
agreement that would resolve international concerns about Iran's 
nuclear program. While in Tehran, Lula, along with Ahmadinejad and 
Turkish Prime Minister Recep Tayyip Erdogan, agreed to exchange Iranian 
low-enriched uranium for reactor fuel, a plan quickly scrutinized and 
rejected by the West. This would-be deal was intended to deliver to 
each of the orchestrators--Ahmadinejad, Lula, and Erdogan--what they 
wanted most: Easing of international sanctions and a domestic victory 
for Ahmadinejad; increased influence on the world stage for the other 
two. Once the deal fizzled, so too did this uneasy and unnatural 
alliance. With the 2010 election of President Dilma Rousseff, Brazil's 
relations with Iran began to cool. They suffered further from Brazil's 
2011 support of a Washington-led United Nations investigation of 
purported human rights abuses in Iran.
    By the time of President Ahmadinejad's January 2012 visit to Latin 
America, Iran's ties in the region were once again limited to the anti-
imperial bloc. Though unable to visit Bolivia, he was greeted warmly in 
Venezuela, Nicaragua, Cuba, and Ecuador, but not invited to Brazil, 
Mexico, Colombia, or Argentina, a sign of Iran's diminished political 
standing in the region.\14\ Ahmadinejad did make a low-key visit to 
Brazil in June 2012, but as one out of many leaders attending the Rio 
Earth Summit on environmental issues.\15\ The disinterest that most 
responsible regional governments have demonstrated for closer political 
ties to Iran is largely shared by their citizens. With few exceptions, 
Iran is extremely unpopular throughout Latin America; a 2011 poll found 
that, when asked their opinion about a list of nine countries, citizens 
of the region ranked Iran last. The United States was ranked first.\16\
---------------------------------------------------------------------------
    \14\ Simon Romero, ``Iranian Adviser Accuses Brazil of Ruining 
Relations,'' New York Times, January 23, 2012. http://www.nytimes.com/
2012/01/24/world/americas/ahmadinejad-adviser-accuses-brazil-of-
ruining-relations.html?_r=0.
    \15\ ``Rio +20 summit begins under a cloud of criticism,'' Reuters, 
June 21, 2012. http://uk.reuters.com/article/2012/06/20/us-un-climate-
idUKBRE85H19320120620.
    \16\ Cynthia J. Arnson, ``Cold Welcome for Iran in Latin America; 
`Vigilance' Still Needed, Testimony before the Senate Foreign Relations 
Committee, Feburary 16, 2012. http://www.wilsoncenter.org/article/cold-
welcome-for-iran-latin-america-%E2%80%98vigilance%- E2%80%99-still-
needed.
---------------------------------------------------------------------------
Iranian Trade and Economic Influence in Latin America
    Many of those fearful of Iran's growing economic presence in the 
region cite trade statistics as an indicator of Iran's strong ties with 
the region, and such figures may seem large when isolated from the 
those reflecting Iran's trade with other global economies. When 
properly interpreted, however, the figures reflecting trade between 
Iran and Latin America--even among Iran's strongest allies in the 
region--reveal that Iran's economic relationship with the region is 
more symbolic than substantive.
    Despite the strong personal friendship of Ahmadinejad and 
Venezuelan President Hugo Chavez of recent years, Venezuela does not 
even rank among Iran's top 50 trade partners, and in 2011 Venezuela 
imported less than $14 million of Iranian goods, ranking below 
countries like Afghanistan, Georgia, and Guatemala. Additionally, 
Venezuela in 2011 was ranked as Iran's 48th largest export partner at 
$8 million.\17\ Nor does Iran export much to Venezuela, ranking as its 
45th largest import partner, lower than even North Korea. Even those 
economic initiatives used to strengthen political ties between Iran and 
Venezuela are economically negligible, as it is reported that the joint 
automobile and tractor factories in Venezuela chronically under-produce 
what are deemed to be substandard products. Similar joint projects for 
dairy and cement production are also reported to lack economic 
viability.\18\ These statistics give clear evidence that Iran's 
relationship with Venezuela is more political than economic, more 
rhetoric than real. The majority of the $17 billion in joint-venture 
agreements made between Iran and Venezuela throughout Chavez's 12-year 
rule never came to fruition.\19\
---------------------------------------------------------------------------
    \17\ ``Iran: EU bilateral trade and trade with the world,'' 
European Union, May 23, 2013. http://trade.ec.europa.eu/doclib/docs/
2006/september/tradoc_113392.pdf.
    \18\ Stephen Johnson, ``Iran's Influence in the Americas,'' Center 
for Strategic and International Studies, March 2012, http://csis.org/
files/publication/120312_Johnson_Iran%27sInflu- ence_web.pdf, 4.
    \19\ Martin Arostegui, ``Iran's National Oil Company Eyes Bolivia 
Energy Investment,'' Wall Street Journal, May 27, 2013. http://
online.wsj.com/article/BT-CO-20130527-703663.html.
---------------------------------------------------------------------------
    Cuba, Ecuador, and Bolivia, despite their warm diplomatic ties with 
Tehran over shared opposition to the United States, also lack any 
significant trade ties to Iran, as neither country counts Iran among 
their top 50 trade partners.\20\ Ahmadinejad and Bolivian President Evo 
Morales have signed economic agreements worth $1.1 billion in mostly 
energy infrastructure, and it has been recently reported that Iran's 
national oil company is considering investing in Bolivian oil and 
natural gas sectors. To date, however, Iran's investment in Bolivia 
totals roughly $10 million--a figure, once again, more symbolic than 
economically viable.\21\ Unfulfilled 2007 and 2008 pledges from Iran to 
contribute $350 million for the construction of a deep-water port in 
Nicaragua, additional funds for a large embassy in Nicaragua, and 
funding for an oil refinery in Ecuador are further examples of Iran's 
stagnant initiatives with its regional political allies.\22\ These 
figures are perhaps the best indication that neither Iran's mullahs nor 
self-styled, Latin American emancipators are capable of effectively 
managing a modern economy. Unable to produce any desirable goods, other 
than natural resources, they have nothing to sell.
---------------------------------------------------------------------------
    \20\ ``Argentina: EU bilateral trade and trade with the world,'' 
European Union, May 23, 2013. http://trade.ec.europa.eu/doclib/docs/
2006/september/tradoc_113344.pdf; ``Brazil: EU bilateral trade and 
trade with the world,'' European Union, May 23, 2013. http://
trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113359.pdf.
    \21\ Martin Arostegui, ``Iran's National Oil Company Eyes Bolivia 
Energy Investment,'' Wall Street Journal, May 27, 2013. http://
online.wsj.com/article/BT-CO-20130527-703663.html.
    \22\ Joshua Goodman, ``Iran Influence in Latin American Waning, 
U.S. Report Says, Bloomberg, June 26, 2013. http://www.bloomberg.com/
news/2013-06-26/iran-influence-in-latin-america-waning-u-s-report-
says.html.
---------------------------------------------------------------------------
    Ironically, those Latin American countries lacking warm diplomatic 
relations with Iran enjoy stronger trade links, precisely because their 
freer economies produce viable goods that Iran is eager to import. 
Nevertheless, when put in context this trade is also trifling at best. 
Brazil and Argentina, two of the region's largest economies, comprised 
a combined 3 percent of Iran's import partners. Despite the doubling of 
trade volume with Brazil since 2005, Iran's 2011 trade volume with 
Brazil and Argentina was at $2.3 billion and $1 billion, respectively. 
Statistics show that Iran relies more on this trade relationship than 
do Brazil and Argentina. While Brazil is Iran's 10th largest trade 
partner, Iran is only Brazil's 33rd largest. As Iran's 18th largest 
trading partner, Argentina only ranks Iran 26th on its list.\23\ 
Further, trade volume between Iran and Latin America's largest economy 
behind Brazil, Mexico is a dismal $50 million. Given these statistics, 
the perceived threat of Iran's growing economic influence in the region 
is largely unsubstantiated.
---------------------------------------------------------------------------
    \23\ ``Iran: EU bilateral trade and trade with the world,'' 
European Union, May 23, 2013. http://trade.ec.europa.eu/doclib/docs/
2006/september/tradoc_113392.pdf.
---------------------------------------------------------------------------
    These meager trade statistics led the U.S. State Department to 
report ``Iran's influence in Latin America and the Caribbean is 
waning.''\24\ No doubt, the ebb of Iranian economic activity in the 
region is due in large part to sanctions imposed on Iranian firms and 
banks by the UN Security Council, United States, European Union, and 
other actors. But it is also precisely these barriers to the global 
marketplace that make Iran increasingly desperate to find willing 
trading partners. Most important to Tehran is to find buyers for its 
crude oil. Latin American countries, with abundant regional energy 
supplies, are unlikely to take up any of the drop in demand for Iranian 
oil created by sanctions. Thus, it is not probable that the region will 
provide Iran with economic salvation, but it can help to ease the pain. 
There might be Latin American countries willing to provide Iran with 
critical goods that it is increasingly unable to procure elsewhere: 
Refined petroleum products, especially gasoline, which it is unable to 
produce domestically; high-tech equipment for its nuclear program; or 
simply cash for its exports. It is therefore imperative to monitor 
Iran's economic ties with the region, to ensure they are not helping it 
undermine and circumvent the sanctions regime that is critical to 
stopping its nuclear program.
---------------------------------------------------------------------------
    \24\ Ibid.
---------------------------------------------------------------------------
   iran's criminal and terrorist activities in the western hemisphere
    Though Iran has been unable to find much political or economic 
purchase in the region, it does not require great influence to be able 
to inflict damage on the United States as well as its regional 
interests and allies. Evidence that Iran, but more often the Lebanese 
terrorist organization Hezbollah, one of Iran's favorite proxies, is 
establishing ties to the region's militaries, criminal syndicates, and 
terrorist groups suggests that it is seeking, and might have, the 
capability to conduct illicit operations in the Western Hemisphere.\25\
---------------------------------------------------------------------------
    \25\ Simon Romero, ``Prosecutor in Argentina Sees Iranian Plot in 
Latin America,'' New York Times, May 29, 2013. http://www.nytimes.com/
2013/05/30/world/americas/prosecutor-in-argentina-says-iran-plotted-
with-hezbollah-in-latin-america.html.
---------------------------------------------------------------------------
Iranian Military Cooperation with Regional Allies
    While Iran's growing relationship with its Latin American allies is 
primarily diplomatic and economic, there has been some military 
cooperation, particularly with Venezuela. In 2008, in return for 
Venezuela's help in shipping missile parts to Syria--with whom Iran had 
signed a military cooperation pact--Iran provided IRGC and Quds Force 
members to train Venezuelan police and secret services.\26\ Venezuela 
has reportedly purchased military equipment from Iran in addition to 
$23 million in military equipment upgrades and an explosives 
factory.\27\ Iran-Bolivian military cooperation includes arms sales and 
the investment in the Venezuelan-led construction of a multinational 
military training center in the Bolivian town of Warnes, described by 
President Evo Morales at the center's 2010 opening as a tool to counter 
the influence of U.S. training programs in the region.\28\
---------------------------------------------------------------------------
    \26\ AFP, Iran Using Venezuela Ties to Duck UN Sanctions: Report, 
December 21, 2008. http://www.google.com/hostednews/afp/article/
ALeqM5h1fferlbgjsi06XFgTklru3hbatA.
    \27\ Kenneth Katzman, ``Iran: U.S. Concerns and Policy Responses,'' 
CRS, June 17, 2013, 51. http://www.fas.org/sgp/crs/mideast/RL32048.pdf.
    \28\ Brandon Fite, ``U.S. and Iranian Strategic Competition: 
Peripheral Competition in Latin America and North Africa,'' Center for 
Strategic and International Studies, November 7, 2011. http://csis.org/
files/publication/111107_Iran_Chapter_XII_Peripheral_States.pdf.
---------------------------------------------------------------------------
Hezbollah Operations within the TBA
    Hezbollah's presence in Latin America goes back to the mid-1980s, 
when its operatives established themselves in the crime-ridden Tri-
Border Area (TBA) of Brazil, Paraguay, and Argentina, an ideal location 
for operatives seeking to build financial and logistical support 
networks within existing Shi'a and Lebanese diaspora communities.\29\ 
Operating from here, Hezbollah has solicited donations for fake 
charities, extorted Arab merchants in protection schemes, smuggled arms 
and drugs, counterfeited and laundered money, and made and sold pirated 
goods. These illicit activities in the TBA were estimated in 2004 to 
earn Hezbollah $10 million annually; by 2009 that amount had doubled to 
around $20 million,\30\ making these operations Hezbollah's most 
significant source of independent funding.\31\
---------------------------------------------------------------------------
    \29\ Matthew Levitt, ``South of the Border, a Threat from 
Hezbollah,'' Washington Institute for Near East Policy, 2013. http://
www.washingtoninstitute.org/uploads/Documents/opeds/Levitt20130515-
JISA.pdf.
    \30\ Arthur Brice, ``Iran, Hezbollah mine Latin America for 
revenue, recruits, analysts say,'' CNN, June 3, 2013. http://
www.cnn.com/2013/06/03/world/americas/iran-latin-america.
    \31\ Ibid.
---------------------------------------------------------------------------
    In December 2006, the U.S. Treasury Department blacklisted nine 
individuals and two entities that provided extensive financial and 
logistical support to Hezbollah through narco-trafficking, selling 
counterfeit U.S. currency, and other illegal activity, sending funds to 
Hezbollah members in Lebanon and Iran through well-established lines of 
communication with the organization's top leadership.\32\ One of these 
individuals--Hamza Ahmad Barakat, a Lebanese national and Hezbollah 
member operating a major Hezbollah ring in the TBA--was arrested in May 
2013 by Brazilian authorities, showing that illicit activity aimed at 
funding Hezbollah remains an issue in the area.\33\
---------------------------------------------------------------------------
    \32\ ``Treasury Targets Hizballah Fundraising Network in the Triple 
Frontier of Argentina, Brazil, and Paraguay,'' U.S. Treasury 
Department, December 6, 2006. http://www.treasury.gov/press-center/
press-releases/Pages/hp190.aspx.
    \33\ ``Businessman Linked by U.S. to Hezbollah is Arrested in 
Brazil in a Fraud Scheme,'' New York Times, May 20, 2013. http://
www.nytimes.com/2013/05/21/world/americas/man-linked-by-us-to-
hezbollah-is-arrested-in-brazil.html?_r=0.
---------------------------------------------------------------------------
Hezbollah Beyond the TBA: Drug Trafficking and Other Activities
    In addition to activities in the TBA, illicit Hezbollah activity 
includes the trafficking of South American cocaine throughout the 
region in cooperation with notorious cartels and criminal organizations 
such as Colombia's FARC and Mexico's Sinaloa Cartel. In 2008, U.S. and 
Colombian authorities executed Operation Titan, dismantling a cocaine-
smuggling and money-laundering organization that allegedly paid 12 
percent of its proceeds to Hezbollah. The operation led to the seizure 
of over $23 million and the arrest of over 130 individuals including 
Lebanese national Cherki Mahmoud Harb, one of the organization's 
kingpins who in 2010 pled guilty to conspiracy to manufacture and 
distribute cocaine.
    In 2011, the Treasury Department identified the Lebanese Canadian 
Bank as facilitating the laundering of over $250 million of Hezbollah's 
proceeds from narcotics trafficking and indicted Lebanese citizen Ayman 
Joumaa for conspiring to coordinate sales and shipments of cocaine from 
Colombia to Mexican cartel Los Zetas and of laundering money and 
channeling profits from his drug operation to Hezbollah. A year later, 
Treasury designated three dual Lebanese-Venezuelan citizens for 
involvement in Joumaa's narcotics network and designated a Lebanese-
Colombian national--Ali Mohamad Saleh--as a Specially Designated Global 
Terrorist for his role in directing Hezbollah's activities in Colombia. 
Nor is Hezbollah's narco-trafficking activity limited to Colombia, as 
2009 testimony by former Southern Command chief Admiral James Stavridis 
identifies explicit Hezbollah-tied drug rings broken up in Ecuador in 
2005 and Curacao in 2009.\34\
---------------------------------------------------------------------------
    \34\ Admiral James G. Stavridis, Posture statement before the 
Senate Armed Services Committee, March 17, 2009. http://www.armed-
services.senate.gov/statemnt/2009/March/Stavridis%2003-17-09.pdf.
---------------------------------------------------------------------------
    Hezbollah has also found ways to profit from other illicit 
activities in the region. In 2009, Hezbollah operatives were involved 
in the transfer of at least $329 million to purchase used cars from 30 
car dealerships in the United States to be shipped to West Africa for 
sale, whereupon the cash proceeds would be transferred to Hezbollah in 
Lebanon.\35\ That same year, Hezbollah affiliate and international arms 
trafficker Jamal Yousef was arrested for attempting to provide the 
Revolutionary Armed Forces of Colombia (FARC), a Marxist guerrilla 
group turned drug cartel, with a large cache of automatic rifles and 
hand and rocket-propelled grenades being stored in Mexico in exchange 
for over 8,000 kilograms of cocaine.\36\
---------------------------------------------------------------------------
    \35\ Representative Michael T. McCaul, ``A line in the sand: 
Countering crime, violence, and terror at the Southwest Border,'' a 
majority report by the United States House Committee on Homeland 
Security Subcommittee on Oversight, Investigations, and Management, 
November 2012. http://mccaul.house.gov/uploads/
Final%20PDF%20Line%20in%20the%20Sand.pdf.
    \36\  Ibid.
---------------------------------------------------------------------------
    This relationship with FARC is perhaps the most troubling of 
Hezbollah's activities in the region, as it marks the connection of its 
criminal and state-sponsored terrorist activities. Hugo Chavez created 
a permissive security environment, allowing FARC guerrillas to operate 
within Venezuelan territory, a freedom that Hezbollah and other 
terrorist groups might have partaken of as well. Of even greater 
concern is that Iran's close ties to Chavez and those of FARC to 
Hezbollah, also brought Venezuela closer to Hezbollah. In 2008 the 
Treasury Department imposed sanctions on two Venezuelans--Ghazi Nasr al 
Din and Fawzi Kan'an--for providing financial and other support to 
Hezbollah. And, in 2010, it was reported that Chavez hosted a summit 
for Hamas, Hezbollah, and Islamic Jihad leaders at the Venezuelan army 
headquarters.\37\
---------------------------------------------------------------------------
    \37\ Johnson, Iran's Influence, 50.
---------------------------------------------------------------------------
                      iranian strategy and tactics
    It is impossible, on the sole basis of this open-source data about 
Iranian activities in the Western Hemisphere, to determine how grave or 
imminent the threat to our homeland may be. It is clear that Iran has 
demonstrated a strong interest in building criminal connections and 
terrorist networks in the region. And the hostility of Iran's current 
regime to the United States is indubitable. But from these two data 
points it is difficult to ascertain either the extent of Iranian 
capabilities in the Western Hemisphere or, if they exist, how and when 
it might put them to use. The answer to the first of those questions 
can only be obtained through intelligence gathering; but some guidance 
on the second can be derived from careful analysis of Iran's evolving 
strategy and its possible intentions.
Iranian Strategic Ambitions
    The foundation of Iran's strategic ambition derives the particular 
brand of revolutionary Shi'ism espoused by the regime's founder, 
Ayatollah Khomeini, but it is also reinforced by Persian's long history 
of imperial domination. He developed an interpretation of Shi'i 
doctrine according to which senior clergy could act as a place-holder 
for the Hidden Imam, a position which would force their direct 
involvement in governance. This innovation, called the doctrine of 
velayat-e faqih (guardianship of the jurisprudent), provided 
theological justification for the establishment of clerical rule in 
Iran after the 1979 Revolution. But by rendering Iran's Supreme Leader 
the will of God on earth, velayat-e faqih justifies his reign not only 
over Iran, but over all Muslims. And indeed, since coming to power, 
Iran's government has sought to extend its influence across the region.
    This theological ambition is reinforced by the strength of Persian 
nationalism. With only brief interludes of foreign conquest, an Iranian 
entity has occupied the same area for more than 2,500 years. In that 
time, Persians have presided over empires that spanned from the edges 
of Europe to well into Asia. Iran's imperial legacy remains vital to 
Iranian self-awareness. Most Iranians, be they Islamist or secular, 
believe that Iran is a great civilization that deserves to be treated 
as a regional hegemon, if not a great power. Arabs, Afghans, and the 
Turkic peoples of Central Asia complain that Iranians treat them with 
disdain and as cultural inferiors. Iran's sense of superiority is a 
constant irritant between Iran and its neighbors.
    Together, these two strands--religious and historical--have created 
an Iran determined to spread its brand of theological totalitarianism 
from the edge of the Mediterranean to Asia.
Iranian Tactics
    This ambition requires the destruction of neighboring apostate 
Sunni regimes, but first and foremost translates into rooting out U.S. 
influence in the region and destroying the state of Israel. Iran has 
systematically pursued these aims for the three decades of its 
existence.
    In doing so, it has shown a great predilection for the use of 
violence in achieving its ends. But its tactics have evolved. If the 
first half of the Islamic Republic of Iran's existence was dominated by 
brash actions and direct confrontation with its enemies, the second 
half has seen a marked turn toward subterfuge and asymmetric warfare. 
It is no coincidence that this pivot toward less visible operations 
occurred as the U.S. presence and involvement in the Middle East peaked 
during the Afghan and Iraqi wars.
    Iran's experience during its own war with Iraq--a drawn-out and 
bloody conflict that over its 8-year course cost Iran as many as a 
million lives and ended in a stalemate, despite Iran's use of chemical 
weapons--caused the regime to rethink undertaking future conventional 
military campaigns. The complete defeat that Saddam's Hussein forces 
suffered at the hands of the U.S.-led coalition, in just a matter of 
days, several years later convinced Tehran that it could not afford a 
direct confrontation with the United States.
    Out of those lessons grew a two-pronged approach. The first of 
those has been Iran's nuclear program. Multiple examples have 
demonstrated to Iran's leaders both that atomic weaponry can protect a 
country from external meddling (North Korea), but that it also enables 
a country to undertake aggressive campaigns in its neighborhood without 
fear of reprisal (Israel). A nuclear weapon would thus not just serve 
as a deterrent, but as cover for Iran to coerce its neighbors. Second, 
Iran has invested heavily in developing asymmetric warfare capabilities 
that can enable it to both take on a much larger and better-equipped 
opponent, but also stage attacks that could not be traced back to it. 
The most important asymmetric capabilities for this discussion are 
Iran's creation of the Quds Force within the Islamic Revolutionary 
Guard Corps (IRGC) and its strong ties to the Lebanese terrorist group 
Hezbollah.
            The Quds Force
    The IRGC was originally created to guard the Revolution and handle 
domestic threats, but has since become heavily involved in foreign 
intelligence operations. The Quds Force functions as the external 
operations wing of the IRGC and, while operating largely independently, 
is constitutionally mandated to share information it collects with the 
Ministry of Intelligence and Security (MOIS). The MOIS provides 
logistical support to the Quds Force and organizations that work with 
it, such as Hezbollah.
    The Supreme Leader is commander-in-chief of the armed forces, 
controls intelligence, and sets the direction of foreign policy. 
Because of this, the MOIS and IRGC report directly to him. However, the 
president exercises some influence over MOIS. The president appoints 
the head of the ministry, although the Supreme Leader must approve the 
appointee, who then cannot be removed without the Supreme Leader's 
approval. The Supreme Leader strongly supports the IRGC and has 
elevated it to the most powerful entity in the political, military, and 
intelligence arenas. The IRGC and MOIS started to separate during 
Khatami's presidency in the early 2000s and continued after 
Ahmadinejad's election due to disagreements between him and the Supreme 
Leader. Effectively, the Quds Force and IRGC intelligence work parallel 
to MOIS and despite the constitutional requirement, do not always share 
information with MOIS.\38\
---------------------------------------------------------------------------
    \38\ Library of Congress, Federal Research Division, Iran's 
Ministry of Intelligence and Security: A Profile, December 2012, 15. 
http://www.fas.org/irp/world/iran/mois-loc.pdf.
---------------------------------------------------------------------------
    The Quds Force has been declared a Specially Designated Global 
Terrorist Organization by the U.S. Treasury and is heavily linked to 
Hezbollah, engaging in joint activities all over the world, and is 
similarly involved in the drug trade. Through the Quds Force, Iran is 
allegedly infiltrating ``foreign embassies, charities, and religious/
cultural institutions to foster relationships with people, often 
building on existing socio-economic ties with the well-established Shia 
Diaspora.''\39\
---------------------------------------------------------------------------
    \39\ ``Unclassified Report on Military Power of Iran,'' United 
States Department of Defense, April 2010, 7. http://www.fas.org/man/
eprint/dod_iran_2010.pdf.
---------------------------------------------------------------------------
            Quds Force-Hezbollah Operations
    In 2010, Iran and Hezbollah set out their larger plans and goals 
for their operations against the West. Both sides agreed to a three-
tier system targeted to Israeli tourists, government figures, and 
targets broadly representative of Israel and Jewish communities, with 
Hezbollah focusing on the tourist tier and the Quds Force targeting 
Western interests and high-profile political and diplomatic targets 
using the newly-formed Special External Operations Unit, Unit 400.\40\ 
The overarching goals of these operations was: Revenge for the 
assassination of high-level Hezbollah member Imad Mughniyeh, to carry 
out retaliatory attacks for those targeted towards Iran's nuclear 
program, and to repair Iran's image and convince the West that an 
attack on Iran would result in worldwide asymmetric attacks.\41\
---------------------------------------------------------------------------
    \40\ Matthew Levitt, ``Hizballah and the Qods Force in Iran's 
Shadow War with the West,'' Washington Institute for Near East Policy, 
Policy Focus 123, January 2013, 4. http://www.washingtoninstitute.org/
policy-analysis/view/hizballah-and-the-qods-force-in-irans-shadow-war-
with-the-west.
    \41\ Ibid., 4.
---------------------------------------------------------------------------
    This restructuring of international asymmetric warfare focused 
heavily on retaliatory, tit-for-tat attacks. Iran's counter-attacks are 
often quite literally tit-for-tat. Most recently this translated into a 
Quds Force and Hezbollah-planned 13-month series of attacks against 
diplomats in at least 7 countries in response to assassinations of 
Iranian nuclear scientists. Most of these plans fizzled. Hezbollah and 
Quds Force operatives killed an Israeli diplomat in a bombing in 
Turkey; however they did not kill their intended target, the Israeli 
consul-general to Istanbul. A series of raids in Azerbaijan stopped 
operations there.\42\ Additionally, Hezbollah plans to attack Israeli 
tourists were thwarted in Bulgaria, Greece, and most dramatically in 
Thailand, where Israeli officials found a Hezbollah explosives-making 
hub. These failures can at least in part be attributed to the objective 
of the Quds Force and Hezbollah to stage quick responses to covert 
attacks against Iran's nuclear program; prioritizing speed over careful 
preparation has been the downfall of their operations.
---------------------------------------------------------------------------
    \42\ Joby Warrick, ``U.S. Officials among the Targets of Iran-
Linked Assassination Plots,'' Washington Post, May 27, 2012. http://
articles.washingtonpost.com/2012-05-27/world/35458558_1_assassination-
plots-nuclear-program-iran; ``Members of Group Accused of Terrorist 
Acts against Israeli Citizens Sentenced,'' News.Az (Azerbaijan), 
September 26, 2012. http://news.az/articles/society/68967.
---------------------------------------------------------------------------
Implications for the Western Hemisphere
    There can be little doubt that Iran is determined to attack 
American interests. However, its recent known terrorist activities do 
not suggest that it will do so indiscriminately and haphazardly.
    The most blatant attacks ascribed to the Quds Force and/or 
Hezbollah have largely been retaliatory in nature. This stems from its 
fear of U.S. conventional forces. It dares not risk a confrontation, 
whether against Israeli or American targets, that would be blatant or 
bloody enough to risk direct U.S. reprisals. Iran's leaders know that 
to provoke American ire now, when Iran is closing in on a nuclear 
weapons capability, would be to sacrifice what they have long been 
working towards.
    Instead, its use of asymmetric capabilities, for now, will be 
limited to only those cases where Iran believes they can be used to 
bring its nuclear dreams closer to reality, predominantly warding off 
further Israeli covert activities. Thus, while Iran is perched just on 
this side of the nuclear threshold it is likely to hold off from 
directly attacking U.S. interests or the United States itself by any 
means that could be traced back to Tehran and require an armed 
response. The failure of its recent global campaign against Israel and 
the quick connection of those attacks to Hezbollah and Iran should 
deter similar acts in the Western Hemisphere.
    There are several factors, however, that could make Iran more 
willing to engage in terror in America's backyard. First, the dwindling 
American presence in the Middle East might convince Tehran that the 
United States no longer has the ability or will to engage in another 
military region. If so, Iran's leaders might think they have license to 
once again take a more aggressive approach to their strategic 
ambitions. Second, the closer that Iran and the United States grow to 
direct conflict, the less hesitation Iran will have to unleash its 
terrorist proxies. If Iran's leaders are showing restraint to avoid 
such a conflict, the more likely it becomes the less inhibited they 
will be. Thus, we might expect Iran to attempt to use its terrorist 
connections in Latin America not only in the case of U.S. military 
strike against Iranian nuclear facilities, but also if the United 
States gets drawn further into the Syrian civil war. Finally, if Iran 
acquires a nuclear capability despite U.S. and international efforts, 
it is almost certain to be emboldened in its use of terror. It will no 
longer have to fear having its nuclear program destroyed and it will 
have the benefit of a nuclear deterrent to ward off any retaliation for 
its terrorist attacks.
                         countering the threat
    Although tactical considerations might dissuade Iran from attacking 
U.S. interests in the Western Hemisphere at the moment, it is possible 
that they will have less reason for restraint in the near future. There 
are several concrete steps that can be taken now to better prepare for 
the eventuality that Iran's tactical calculus changes.
Deny Permissive Environments
    As proven by recently thwarted global Hezbollah operations against 
Israeli targets, good police work can successfully prevent terrorist 
plots. The United States has a strong track record of working with law 
enforcement agencies throughout the Western Hemisphere--particularly in 
Colombia--but these efforts should be further bolstered. Particularly 
critical to this task will be the Department of Homeland Security's 
Federal Law Enforcement Training Centers and their International 
Capacity Building Branch. These training programs are largely tailored 
towards drug interdiction and combating gang violence. New curricula 
that draw on the lessons learned also from the U.S. experience in 
training security forces to detect insurgent cells in Iraq and 
Afghanistan would help transform local police in allied regional 
countries into more effective counter-terrorism forces.
Establish Intelligence Sharing
    One of the lessons of 9/11 has been the need for better sharing of 
intelligence across agencies. Great strides have been made in this 
regard, thanks in no small part to work of this committee. Expanding 
U.S. intelligence sharing with regional partners could further 
contribute to our ability to detect and prevent Iranian terrorist 
plots. One way to do this is to expand the representation of foreign 
countries at the El Paso Intelligence Center (EPIC) a multi-agency law 
enforcement center that houses 25 Federal, State, and local agencies in 
addition to representatives from Mexico and Colombia. Already EPIC has 
contributed to the seizure of $150 million in connection with 
Hezbollah's money-laundering activity through the Lebanese Canadian 
Bank.

    Mr. Duncan. Thank you so much, Mr. Misztal.
    I will now recognize Mr. Farah for 5 minutes for his 
testimony. Welcome back.

     STATEMENT OF DOUGLAS FARAH, PRESIDENT, IBI CONSULTANTS

    Mr. Farah. Thank you, Chairman Duncan, Congressman 
O'Rourke, and the subcommittee, for holding this hearing, which 
I also agree is one of the most pressing National security 
issues that we face. I want to clarify I am speaking on behalf 
of myself and not CSIS.
    My assessment is that contrary to the State Department's 
recent statement that Iran's influence in Latin America is 
waning, it is in fact growing. To understand how this is 
happening, one must understand the changing context in which 
Iran is operating in Latin America and the threat that it 
represents. The threat, as outlined in my written testimony, 
now includes not only traditional transnational organized crime 
activities such as drug trafficking but the potential for WMD-
related trafficking. Iran is allied with regional state actors 
whose leaders are deeply enmeshed in criminal activity. These 
same leaders have publicly articulated a doctrine of 
asymmetrical warfare against the United States and its allies 
that explicitly endorses as legitimate the use of weapons of 
mass destruction. I wanted to underscore that this remains a 
clear statement of intention rather than a statement of 
capabilities. But history has shown that intention can come to 
fruition if left unchecked.
    Iran's direct influence comes through its 11 embassies, in 
its intelligence services, as well as through proxy states in 
the self-described ALBA alliance, as others have mentioned 
here, led by Venezuela, including Ecuador, Bolivia, and 
Nicaragua. Argentina, under the government of Cristina 
Fernandez de Kirchner, is rapidly becoming one of Iran's most 
important allies in the hemisphere. The ALBA states provide a 
host of services to Iran, including the granting of citizenship 
to hundreds and perhaps thousands of Iranian nationals. The 
extensive use of banking structures to allow Iran to move and 
hide resources and avoid sanctions and a hospitable environment 
in which to operate unimpeded in their intelligence activities. 
In addition to state allies, Iran relies on non-state actors 
and sympathizers often tied to Hezbollah, Iran's proxies, and 
often through its cultural centers, as mentioned before.
    As Dr. Nisman had eloquently laid out in his recent report, 
the radical theocratic regime of Iran has a long-standing 
highly-developed structure in Latin America whose primary 
purpose is to spread the Iranian Revolution by any means 
necessary, including terrorist attacks. This is shown by the 
AMIA bombings, as mentioned earlier, and at least three 
publicly-known failed attacks inside the United States, 
exploding the myth that we often have that Iran will not attack 
the U.S. homeland. This includes the 2007 attempt to bomb gas 
pipelines beneath JFK Airport in New York City in 2007, the 
October 2011 plot by elements of the Quds Force to hire a hit 
man from a Mexican cartel to assassinate the Saudi Ambassador 
inside the United States, and attempts to hack into and launch 
cyber attacks on U.S. defense and intelligence facilities in 
coordination with Cuba and Venezuela as shown in the December 
2011 investigative piece by Univision, the Spanish language TV 
network. It is important to note that all three efforts were 
authorized at the highest levels of the Iranian government.
    These are manifestations of the core belief of every 
Iranian government since the 1979 revolution, including the 
current so-called moderate leadership. In a declassified 
terrorism review from October 22, 1987, now posted on its 
website, the CIA stated that Iranian leaders view terrorism as 
an important instrument of foreign policy that they use both to 
advance National goals and to export the regime's Islamic 
revolutionary ideals. They use terrorism selectively and 
skillfully in coordination with conventional diplomacy and 
military tactics. We believe most Iranian leaders agree that 
terrorism is an acceptable policy option, although they may 
differ on the appropriateness of a particular act of terrorism.
    This is a fundamental reality enshrined in the preamble to 
the Iranian Constitution itself, which explains much of the 
relationship between Iran and the ALBA nations in Latin 
America. The preamble states that the Iranian Revolution is ``a 
movement for the victory of all oppressed peoples who are 
confronted with aggressors and shall pave the way for the 
perpetuation of this revolution within and outside Iran, 
particularly in terms of the expansion of international 
relationships with other Islamic and popular movements. This 
Constitution seeks to lay the groundwork for the creation of a 
single world nation and perpetuate the struggle to make this 
Nation a reality for all of the world's needy and opposed 
nations.''
    It is indisputable that Iran has been unable to fulfill the 
vast majority of its public promises made in the Western 
Hemisphere, but it is a mistake to think that those economic 
agreements were ever meant to be fulfilled. Rather, they were 
designed to allow the ALBA nations and Iran to carry out state-
to-state transactions of mutual benefit, including trafficking 
in illicit substances, acquisition and transportation of 
important mineral resources and dual-use technology, and the 
free movement of people.
    As requested, I have dealt with the Iranian recruitment of 
students in the Western Hemisphere, now numbering well over 
1,000, in my written testimony, and I will be happy to address 
that in questions. I would like to emphasize the importance of 
the banking structures that Iran is taking advantage of in the 
ALBA nations as well. I have outlined much of that in my 
written testimony.
    Measuring how many memorandums of understanding or trade 
agreements are fulfilled while omitting the multiple other 
covert and overt activities in which Iran is engaged does not 
give the full picture of Iran's influence. The United States 
should focus on impairing Iran's financial activities in Latin 
America. There are multiple banks and joint investment 
companies established in Venezuela, Bolivia, and Ecuador that 
allow Iran to move hundreds of millions of dollars into the 
world's financial markets and avoid sanctions.
    Another recommendation would be to focus on the thousands 
of passports being issued by ALBA nations to Iranian citizens, 
to make it more difficult for them to travel and particularly 
to enter the United States.
    Finally, I would recommend a clear focus on the 
triangulated deals among Argentina, Venezuela, and Iran which 
seem designed to help Iran gain access to Argentina's nuclear 
know-how while allowing Iran to sell petroleum.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Farah follows:]
                  Prepared Statement of Douglas Farah
                              July 9, 2013
    Chairman Duncan, Ranking Member Barber, and Members of the 
committee, thank you for the opportunity to testify today on what I 
believe is one of the most important issues facing the United States 
and its security. I am speaking for myself and not on behalf of CSIS.
    The subcommittee asked me to address several specific issues 
relating to Iran's expanding influence in the Western Hemisphere, each 
of which is complex, and the threat that this influence might present 
to the U.S. homeland. My testimony will address them as themes, with a 
focus on the areas where, in my experience, our policy is operating on 
incorrect assumptions or where the true dangers are misunderstood or 
downplayed. I spend a great deal of time in Latin America, where I have 
worked for almost 40 years, and much of the information here comes from 
trusted sources who have proved reliable in the past and who are deeply 
concerned not only for the welfares of their own countries but of the 
United States.
    My assessment is that, contrary to the State Department's recent 
statement that Iran's influence in Latin America and the Caribbean is 
waning, it is in fact growing on multiple fronts. To understand how 
this is happening one must understand the changing context in which 
Iran is operating in Latin America, including the bloc of nations 
allied with Iran and the transnational criminal pipelines that traverse 
the hemisphere and successfully breach our Southern Border thousands of 
times each day.
    This threat includes not only traditional transnational organized 
crime (TOC) activities such as drug trafficking and human trafficking, 
but others, including the potential for WMD-related trafficking. These 
activities are carried out with the participation of Iran with regional 
state actors whose leaders are deeply enmeshed in criminal activities. 
These same leaders have a publicly articulated doctrine of asymmetrical 
warfare against the United States and its allies that explicitly 
endorses as legitimate the use of weapons of mass destruction.
    I want to underscore that at this point this remains a clear 
statement of intention, rather than a statement of capabilities. But as 
Iran, al-Qaeda and other regimes and non-state armed groups have shown, 
intention will come to fruition if left unchecked.
    Iran's influence is wielded both directly and indirectly: The 
direct influence is through Iranian embassies, intelligence services 
and economic interests, as well as through proxies the self-described 
Bolivarian bloc of nations (ALBA) led by Venezuela and including 
Ecuador, Bolivia, and Nicaragua. Argentina under the government of 
Cristina Fernandez de Kirchner, while not formally a member of ALBA, is 
rapidly becoming one of Iran's most important allies in the hemisphere 
and strongly allied with the ALBA nations.
    The ALBA states, each of them highly criminalized in which senior 
members of the government are directly involved in transnational 
organized crime ventures, provide a host of services to Iran, including 
the granting of citizenship and travel documents to hundreds--and 
perhaps thousands--of Iranian nationals; the extensive use of banking 
structures to allow Iran to move and hide resources while using the 
money to evade sanctions and purchase sanctioned goods on the 
international market; and a hospitable environment in which to operate 
unimpeded in their intelligence activities.\1\
---------------------------------------------------------------------------
    \1\ For a full discussion of the concept of criminalized states and 
their functioning in Latin America see: Douglas Farah, ``Transnational 
Organized Crime, Terrorism and Criminalized States in Latin America: An 
Emerging Tier-One National Security Priority,'' Strategic Studies 
Institute, U.S. Army War College, Carlisle Barracks, PA, August 2012, 
accessed at: http://www.strategicstudiesinstitute.army.mil/pubs/
display.cfm?pubID=1117.
---------------------------------------------------------------------------
    Fernandez de Kirchner, in an opaque process, has taken a series of 
steps with Iran clearly aimed at absolving senior Iranian leaders of 
their responsibility in a major terrorist attack. At the same time her 
government, riddled with corruption and facing growing popular 
dissatisfaction, has embraced a series of seemingly irrational economic 
and political policies that favor transnational organized crime, are 
overtly hostile to U.S. interests, and could offer Iran a lifeline in 
both its economic crisis and its nuclear program.
    In addition to state allies, Iran relies on non-state actors and 
sympathizers, often tied to Hezbollah, Iran's proxy in the region. 
These include non-governmental organizations (NGOs) tied to Hezbollah 
and often funded by Venezuelan oil money; Islamic cultural centers and 
mosques that act as centers for indoctrination and training for a 
growing number of students; the recruitment of young people to study 
and train in Iran in intelligence, counter-intelligence, and theology; 
and links to drug trafficking organizations that provide millions of 
dollars to support radical Islamist activities, as the Ayman Jumaa case 
clearly shows.\2\ This includes the Revolutionary Armed Forces of 
Colombia (Fuerzas Armadas Revolucionarias de Colombia-FARC), the 
hemisphere's oldest insurgency and a designated terrorist organization 
by the United States and the European Union.
---------------------------------------------------------------------------
    \2\ Sebastian Rotella, ``Government says Hezbollah Profits From 
U.S. Cocaine Market via Link to Mexican Cartel,'' ProPublica, December 
11, 2011.
---------------------------------------------------------------------------
    As I wrote in 2012:

``This emerging combination of threats comprises a hybrid of criminal-
terrorist, and state- and non-state franchises, combining multiple 
nations acting in concert, and traditional TOCs and terrorist groups 
acting as proxies for the nation-states that sponsor them. These hybrid 
franchises should now be viewed as a tier-one security threat for the 
United States. Understanding and mitigating the threat requires a 
whole-of-government approach, including collection, analysis, law 
enforcement, policy and programming. No longer is the state/non-state 
dichotomy viable in tackling these problems, just as the TOC/terrorism 
divide is increasingly disappearing.''\3\
---------------------------------------------------------------------------
    \3\ Farah, op cit., p. 2.

    As Dr. Nisman has so eloquently laid out in both his 2006 
indictment of senior Iranian figures for the 1994 AMIA attack and his 
subsequent report released earlier this year on Iran's activities in 
the region, the radical theocratic regime of Iran has a long-standing, 
highly-developed structure in Latin America whose primary purpose is to 
fuse state and non-state force to spread the Iranian revolution by any 
means necessary, including terrorist attacks, as shown by the AMIA 
bombing and two failed attacks on the United States.
    The fallacy of the current conventional wisdom is the belief that 
Iran does not already engage in specific attempts to carry out 
terrorist attacks inside the United States. There are three clear cases 
that show that is not true:
   The 2007 attempt to bomb pipelines underneath JFK airport in 
        New York City, as Dr. Nisman has outlined;
   The October 2011 plot by elements of the Quds Force, the 
        elite arm of the Iranian Revolutionary Guard Corps, to hire a 
        hit man from a Mexican cartel to assassinate the Saudi 
        ambassador in the United States;\4\
---------------------------------------------------------------------------
    \4\ Evan Perez, ``U.S. Accuses Iran in Plot: Two Charged in Alleged 
Conspiracy to Enlist Drug Cartel to Kill Saudi Ambassador,'' Wall 
Street Journal, October 12, 2011.
---------------------------------------------------------------------------
   Attempts to hack into U.S. defense and intelligence 
        facilities and launch widespread cyber attacks in the United 
        States in coordination with Cuba and Venezuela, as shown in the 
        December 2011 investigative piece by Univision, the Spanish-
        language TV network.\5\
---------------------------------------------------------------------------
    \5\ ``La Amenaza Irani,'' Univision Documentales, aired December 8, 
2011.
---------------------------------------------------------------------------
    All three efforts were authorized by senior Iranian government 
officials, and were not operations of some rogue agents.
    These are the manifestations of the core belief of each and every 
Iranian government since the 1979 revolution, including the current 
``moderate'' leadership, that informs my view of Iran's activities in 
the region, and why I believe metrics other than purely economic or 
diplomatic are necessary in order to discern Iran's actions and 
motivations.
    As far back as 1987 the U.S. intelligence community shared this 
assessment. In a declassified Terrorism Review from October 22, 1987 
now posted on its website, the Central Intelligence Agency reported 
that:

``Iranian leaders view terrorism as an important instrument of foreign 
policy that they use both to advance national goals and to export the 
regime's Islamic revolutionary ideals. They use it selectively and 
skillfully in coordination with conventional diplomacy and military 
tactics. We believe most Iranian leaders agree that terrorism is an 
acceptable policy option, although they may differ on the 
appropriateness of a particular act of terrorism.''\6\
---------------------------------------------------------------------------
    \6\ Central Intelligence Agency, Directorate of Intelligence, 
``Terrorism Review,'' October 22, 1987, p. 11.

    This is a fundamental reality, enshrined in the preamble to the 
---------------------------------------------------------------------------
Iranian constitution, which states that:

``With due consideration for the Islamic Element of the Iranian 
Revolution, which has been a movement for the victory of all oppressed 
peoples who are confronted with aggressors, the constitution shall pave 
the way for perpetuation of this revolution within and outside the 
country, particularly in terms of the expansion of international 
relationships with other Islamic and popular movements. The 
Constitution seeks to lay the groundwork for the creation of a single 
world nation . . . and perpetuate the struggle to make this nation a 
reality for all the world's needy and oppressed nations.''

    It goes on to say that:

``In establishing and equipping the country's defense forces, we will 
allow for the fact that faith and ideology constitute the foundation 
and the criterion we must adhere to. Therefore, the army of the Islamic 
Republic of Iran and troops of the Revolutionary Guard will be created 
in accordance with the objective mentioned above, and will be entrusted 
with the task not only of protecting and preserving our borders, but 
also an ideological mission, that is to say, Jihad in the name of Allah 
and the world.''\7\
---------------------------------------------------------------------------
    \7\ Preamble to the Iranian Constitution of 1979, accessed at: 
http://parliran.ir/index.aspx?siteid=84&pageid=3053#preamble.

    Today Iran enjoys more state and non-state support in the region 
than ever before, giving the regime ample room to maneuver, create 
alliances, and expand its network. The expansion is observable not only 
in Argentina, but in Bolivia and Ecuador, where the Iranian presence 
has grown and become more identifiable.
    While formal trade and other traditional metrics may indicate a 
less robust presence or Iran's inability to carry out its formal 
commitments, these activities were never the primary purpose or focus 
of Iran's activities in the region.
    It is true that Iran has fulfilled few of the hundreds of promises 
it has made for investment and completed few of myriad Memorandums of 
Understanding signed across the region. Yet the underlying purpose was 
to benefit the Iranian regime in ways formal trade statistics and MOUs 
never touched.
    Now Iran has a disproportionately large diplomatic corps--far 
larger than regional superpower Brazil--in most ALBA countries, staffed 
with hundreds of ``economic attaches'' despite negligible commerce; a 
growing number of embassies; and diplomatic and non-diplomatic safe 
havens for Quds Force, MOIS, and other intelligence services to 
operate, plan, network and reap significant financial gain. Dr. 
Nisman's latest report lays out in great detail the role each of these 
intelligence institutions plays in furthering Iran's revolutionary 
interests in the hemisphere, which can include the use of terrorism as 
an acceptable methodology.
    Iran is able to do this because the ALBA-Iran relationship has far 
deeper roots and is a much broader alliance that is usually recognized. 
But understanding the depth of the relationship is fundamental to 
understanding Iran's actions in the Western Hemisphere and the threat 
it poses to the United States.
    While Iran's revolutionary rulers view the 1979 revolution in 
theological terms as a miracle of divine intervention in which the 
United States, the Great Satan, was defeated, the Bolivarians view it 
from a secular point of view as a roadmap to defeat the United State as 
the Evil Empire. To both it has strong political connotations and 
serves a model for how asymmetrical leverage, when applied by Allah or 
humans, can bring about the equivalent of David defeating Goliath on 
the world stage.
    Among the first to articulate the possible merging of radical Shite 
Islamic thought with Marxist aspirations of destroying capitalism and 
U.S. hegemony was Illich Sanchez Ramirez, better known as the terrorist 
leader ``Carlos the Jackal'', a Venezuelan citizen who was, until his 
arrest in 1994, one of the world's most wanted terrorists.
    In his writings Sanchez Ramirez espouses Marxism tied to 
revolutionary, violent Palestinian uprisings. In the early 2000s after 
becoming a Muslim, turned to propagating militant Islamism. Yet he did 
not abandon his Marxist roots, believing that Islamism and Marxism 
combined would form a global ``anti-imperialist'' front that would 
definitively destroy the United States, globalization, and imperialism.
    In his 2003 book Revolutionary Islam, written from prison where he 
is serving a life sentence for killing two French policemen, Sanchez 
Ramirez praises Osama bin Laden and the 9/11 attacks on the United 
States as a ``lofty feat of arms'' and part of a justified ``armed 
struggle'' of Islam against the West. ``From now on terrorism is going 
to be more or less a daily part of the landscape of your rotting 
democracies,'' he writes.\8\
---------------------------------------------------------------------------
    \8\ `` `Jackal' book praises bin Laden,'' BBC News, June 26, 2003.
---------------------------------------------------------------------------
    In this context, the repeated, public praise of the late Hugo 
Chavez for Sanchez Ramirez can be seen as a crucial element of the 
Bolivarian ideology and an acceptance of his underlying premise as 
important to the Bolivarian ideological framework. In a 1999 letter to 
Sanchez Ramirez, Chavez greeted the terrorist as a ``Distinguished 
Compatriot'' and wrote that:

``Swimming in the depths of your letter of solidarity I could hear the 
pulse of our shared insight that everything has its due time: time to 
pile up stones or hurl them, to ignite revolution or to ignore it; to 
pursue dialectically a unity between our warring classes or to stir the 
conflict between them--a time when you can fight outright for 
principles and a time when you must choose the proper fight, lying in 
wait with a keen sense for the moment of truth, in the same way that 
Ariadne, invested with these same principles, lays the thread that 
leads her out of the labyrinth . . . 

``I feel that my spirit's own strength will always rise to the 
magnitude of the dangers that threaten it. My doctor has told me that 
my spirit must nourish itself on danger to preserve my sanity, in the 
manner that God intended, with this stormy revolution to guide me in my 
great destiny.''

``With profound faith in our cause and our mission, now and 
forever!''\9\
---------------------------------------------------------------------------
    \9\ Paul Reyes (translator) and Hugo Chavez, ``My Struggle,'' from 
a March 23, 1999 letter to Illich Ramirez Sanchez, the Venezuelan 
terrorist known as ``Carlos the Jackal'', from Venezuelan president 
Hugo Chavez, in response to a previous letter from Ramirez, who is 
serving a life sentence in France for murder. Harper's, October 1999, 
http://harpers.org/archive/1999/10/0060674.

    In fact, the Bolivarian fascination with militant Islamist thought 
and Marxism did not end with the friendship between Chavez and the 
jailed terrorist. Acolytes of Sanchez Ramirez continued to develop his 
ideology of Marxism and radical Islamism rooted in the Iranian 
revolution.
    The emerging military doctrine of the ``Bolivarian Revolution,'' 
officially adopted in Venezuela and rapidly spreading to Bolivia, 
Nicaragua, and Ecuador, explicitly embraces the radical Islamist model 
of asymmetrical or ``fourth generation warfare,'' and its heavy 
reliance on suicide bombings and different types of terrorism, 
including the use of nuclear weapons and other WMD. This is occurring 
at a time when Hezbollah's presence in Latin America is growing and 
becoming more identifiable.\10\
---------------------------------------------------------------------------
    \10\ In addition to Operation Titan there have been numerous 
incidents in the past 18 months of operatives being directly linked to 
Hezbollah have been identified or arrested in Venezuela, Colombia, 
Guatemala, Aruba, and elsewhere in Latin America.
---------------------------------------------------------------------------
    Venezuela has adopted as its military doctrine the concepts and 
strategies articulated in Peripheral Warfare and Revolutionary Islam: 
Origins, Rules, and Ethics of Asymmetrical Warfare (Guerra Periferica y 
el Islam Revolucionario: Origenes, Reglas y Etica de la Guerra 
Asimetrica) by the Spanish politician and ideologue Jorge 
Verstrynge.\11\ The tract is a continuation of and exploration of 
Sanchez Ramirez's thoughts, incorporating an explicit endorsement of 
the use of weapons of mass destruction to destroy the United States. 
Verstrynge argues for the destruction of United States through series 
of asymmetrical attacks like those of 9/11, in the belief that the 
United States will simply crumble when its vast military strength 
cannot be used to combat its enemies.
---------------------------------------------------------------------------
    \11\ Verstrynge, born in Morocco to Belgian and Spanish parents, 
began his political career on the far right of the Spanish political 
spectrum as a disciple of Manuel Fraga, and served as a national and 
several senior party posts with the Alianza Popular. By his own 
admission he then migrated to the Socialist Party, but never rose 
through the ranks. He is widely associated with radical anti-
globalization views and anti-U.S. rhetoric, repeatedly stating that the 
United States is creating a new global empire and must be defeated. 
Although he has no military training or experience, he has written 
extensively on asymmetrical warfare.
---------------------------------------------------------------------------
    Although he is not a Muslim, and the book was not written directly 
in relation to the Venezuelan experience, Verstrynge moves beyond 
Sanchez Ramirez to embrace all strands of radical Islam for helping to 
expand the parameters of what irregular warfare should encompass, 
including the use of biological and nuclear weapons, along with the 
correlated civilian casualties among the enemy.
    In a December 12, 2008 interview with Venezuelan state television, 
Verstrynge lauded Osama bin Laden and al-Qaeda for creating a new type 
of warfare that is ``de-territorialized, de-stateized and de-
nationalized,'' a war where suicide bombers act as ``atomic bombs for 
the poor.''\12\
---------------------------------------------------------------------------
    \12\ Bartolome, op cit. See also: John Sweeny, ``Jorge Verstrynge: 
The Guru of Bolivarian Asymmetric Warfare,'' www.vcrisis.com, Sept. 9, 
2005; and ``Troops Get Provocative Book,'' Miami Herald, Nov. 11, 2005.
---------------------------------------------------------------------------
    This ideological framework of Marxism and radical Islamic 
methodology for successfully attacking the United States is an 
important, though little examined, underpinning for the greatly 
enhanced relationships among the Bolivarian states and Iran. These 
relationships are being expanded and absorb significant resources 
despite the fact that there is little economic rationale to the ties 
and little in terms of legitimate commerce.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    It is indisputable that the economic sanctions have had an impact 
on Iran, and that Iran has generally been unable to fulfill the vast 
majority of the public obligations it has assumed in the Western 
Hemisphere. But it is a mistake to think those economic agreements were 
ever meant to be fulfilled. Rather, they were designed to allow the 
ALBA nations and Iran to carry out state-to-state transactions of 
mutual benefit, including trafficking in illicit substances, 
acquisition and transportation of important mineral resources and dual 
use technology, and the free movement of people.
    My field research over the past 5 years has found that the actions 
and lines of effort of Iran and the governments of the Bolivarian 
states, in conjunction with non-state armed actors in the region 
designated as terrorist entities, comprise a pattern of activity 
designed primarily for three purposes: Create mechanisms that allow 
Iran to blunt the impact of international sanctions; aid Iran's nuclear 
ambitions and facilitate the potential movement of WMD components, 
including dual-use technology; pre-position personnel and networks 
across Latin America both to help spread Iran's revolutionary vision 
and to carry out attacks against the U.S. and Israeli targets, 
particularly in retaliation if there were a strike on its nuclear 
facilities.
    Contrary to some other reporting, I have found no evidence that 
uranium was being mined, a view shared in reporting by the 
International Atomic Energy Agency.\13\
---------------------------------------------------------------------------
    \13\ Author interview with IAEA member in November, 2011. The 
official said the agency had found Iran had enough uranium stockpiled 
to last a decade. Rather, he said, the evidence pointed to acquisition 
of minerals useful in missile production. He also stressed that dual-
use technologies or items specifically used in the nuclear program had 
often been shipped to Iran as automotive or tractor parts. Some of the 
principal investments Iran has made in the Bolivarian states have been 
in a tractor factory that is barely operational, a bicycle factory that 
does not seem to produce bicycles, and automotive factories that have 
yet to be built.
---------------------------------------------------------------------------
    More specifically these activities include:
   The clandestine or disguised extraction of minerals useful 
        for nuclear and missile programs, largely of the coltan family, 
        useful for missile production and other military applications;
   Access to a series of ``safe havens'' currently controlled 
        by non-state actors for illicit trafficking activities, 
        particularly in border regions, that would allow for the free 
        movement of virtually any product across the northern tier of 
        South America through Central America and across the homeland's 
        Southern Border;
   The creation of numerous financial institutions and monetary 
        mechanisms designed to aid Iran in avoiding the impact of 
        multilateral sanctions;
   The expansion of diplomatic ties across the region with 
        credible reports that these facilities are being used as 
        sanctuary for accredited diplomats who belong to the Quds Force 
        and other Iranian intelligence services;
   The establishment of multiple agreements to permit 
        economically unwarranted Iranian shipping activities in the 
        region, primarily run by sanctioned shipping lines controlled 
        by the IRGC and known to be used to further Iran's illicit 
        nuclear ambitions;
   The acquisition by hundreds and perhaps thousands of Iranian 
        nationals of legitimate, original passports, codulas, and other 
        national identity documents from Ecuador, Panama, Venezuela, 
        and Bolivia. These are generally granted to Quds Force 
        operatives, Ministry of Intelligence (MOIS) operatives, and 
        other intelligence services that move across the region 
        relatively undetected because they are no longer identifiable 
        as Iranians.\14\
---------------------------------------------------------------------------
    \14\ For a fuller elaboration of these lines of efforts see: Farah, 
``Transnational Organized Crime, Terrorism and Criminalized States in 
Latin America: An Emerging Tier-One National Security Priority,'' op 
cit.; and Douglas Farah, ``Iran and Latin America: Strategic Security 
Issues,'' Defense Threat Reduction Agency, Advanced Systems and 
Concepts Office, May 2011.
---------------------------------------------------------------------------
    Given this background, I would like to focus on three specific 
issues the subcommittee asked me to address.
    The first is the recruitment of students in the Western Hemisphere. 
I have had the opportunity in Central America to interview a handful of 
students who have been recruited and trained in Qom, Iran. My contacts 
were all recruited in El Salvador. Univision, the TV network, also 
documented the recruitment and sending of Mexican students to Qom, and 
other researchers have interviewed students from other Latin American 
nations. Each independently have told similar and consistent stories of 
their recruitment and training.
    The recruitment is initially done through individuals linked to the 
ALBA governments, often in mosques or cultural centers such as the 
Islamic Cultural Center in San Salvador. Most are presented with the 
opportunity to attend ``revolutionary'' indoctrination courses in 
Venezuela dealing with revolutionary ideology. These meetings bring 
together several hundred students at one time from across Latin 
America, all with their travel fees and expenses paid by the Venezuelan 
government.
    During the youth festivals in Venezuela a much smaller group of is 
selected to attend training in Iran, where Venezuelan instructors 
(because of the need for the training to be in Spanish), under the 
direction of Moshen Rabbani, sort the small group into even smaller 
units. Training can range from 30-120 days, and specializations include 
intelligence, counter-intelligence, theology, crowd control, and how to 
incite crowd violence in street marches. Regardless of the topic, each 
course contains strong components of radical Shi'ite theology and anti-
U.S. preaching, including statements of the United States as the great 
Satan, the enemy of humanity, while justifying its destruction and that 
of Israel.
    While most of those attending the training are university-aged, 
there are also some older individuals, generally sent by their 
governments. They are given different, more specialized training that 
my contacts were not privy to. These reports primarily center on 
Nicaragua.
    These students, upon their return to their home countries, are 
generally not registered as arriving from Iran. They pass through 
Venezuela on their return, thus their travels register a round trip to 
Caracas. This in turn makes it difficult to track who has been there 
and what they do on their return to Latin America.
    What is the potential threat? That Iran is creating a small group 
of sleeper cells across the region, people with specialized training 
who are not Iranian citizens and therefore subject to much less 
scrutiny both by their home governments and the United States should 
they travel here. The clandestine nature of the recruitment, the use of 
cultural centers as meeting points to exchange lessons learned and 
build networks, and the ability of these students to plug into existing 
Hezbollah and radicalized networks are all significant dangers. The 
recruitment efforts have been continuous and on-going since at least 
2007, and each year hundreds of recruits--and possibly into the 
thousands--are taken to Iran for training. After 6 years, well over 
1,000 people have made the trip and, even if only a relatively small 
group remains loyal to the Iranian regime, it is a significant network.
    Since Dr. Nisman is not here, I think it is worth highlighting the 
growing ties of Iran and Argentina on a number of issues much broader 
than the AMIA bombing. Much of the ties, particularly on missile 
technology and possibly nuclear technology, also run through Venezuela. 
In February 2013, one of Argentina's leading newspapers published an 
investigation saying that, beginning in September 2012, the missile 
technology was being shared with CAVIM (Compania Anonima Venezolana de 
Industrias Militares), the industrial component of Venezuela's 
military. The exchanges are part of the new strategic military 
agreement signed between Argentina and Venezuela.\15\
---------------------------------------------------------------------------
    \15\ Daniel Gallo, ``El proyecto de un misil liga al pais con Iran: 
El plan avanze con acuerdo de una firma venezolana sancionada por 
EEUU,'' La Nacion, February 17, 2013, accessed at: http://
www.lanacion.com.ar/1555490-el-proyecto-de-un-misil-liga-al-pais-con-
iran.
---------------------------------------------------------------------------
    In turn CAVIM, under sanction by the U.S. State Department for 
aiding Iran's missile program,\16\ is already jointly manufacturing 
Unmanned Aerial Vehicles (UAVs or drones) with Iran.\17\ Iran has many 
other technological exchanges with Venezuela, many suspected of 
aiding--or intended to aid--Iran's nuclear and missile programs. 
Knowledgeable observers have said for several years that Iran is trying 
to acquire solid fuel missile technology around the world in order to 
enhance its delivery systems for a potential nuclear weapon.
---------------------------------------------------------------------------
    \16\ U.S. Department of State, ``Iran, North Korea and Syria 
Nonproliferation Act: Imposed Sanctions,'' February 12, 2013, accessed 
at: http://www.state.gov/t/isn/inksna/c28836.htm.
    \17\ Brian Ellsworth, ``Venezuela says building drones with Iran's 
help,'' Reuters, June 14, 2012, accessed at: http://www.reuters.com/
article/2012/06/14/us-venezuela-iran-drone-idUSBRE- 85D14N20120614.
---------------------------------------------------------------------------
    ``The way it works is that Argentina gives Venezuela the 
technology, and Venezuela passes it on to Iran,'' said one source 
familiar with the program. ``The argument from Cristina's government 
will be, if caught, that they are not responsible for where the 
technology ends up once it gets to Venezuela. But they are aware of how 
it will be shared.'' Argentina's planning minister Julio de Vido 
categorically denied there was any plan to ``make missiles with 
Venezuela, much less with Iran.''\18\
---------------------------------------------------------------------------
    \18\ ``De Vido nego un pacto con Venezuela para hacer un misil,'' 
La Nacion, February 18, 2013, accessed at: http://www.lanacion.com.ar/
1555695-de-vido-nego-un-pacto-con-venezuela-para-hacer-un-misil.
---------------------------------------------------------------------------
    There are other indications that Argentina's warming with Iran 
could be predicated on aiding the Islamic republic's nuclear program. 
There is a precedent for such cooperation, but new forms of working 
together would represent a clear rupture with the international 
community aligned with the United States and Europe.
    While many international analysts view the possibility of nuclear 
cooperation as remote, the little-studied precedents make such 
collaboration feasible, particularly when seen in the light of the 
possible technology transfer on the missile front described above.
    At the time of the 1992 bombing of the Israeli Embassy, Argentina 
was engaged in discussions about training Iranian scientists at 
Argentina's nuclear facility, and, through 1993, it delivered promised 
shipments of low-enriched uranium for Iran's nuclear program. All 
collaboration was cut off after the AMIA attack, but in 2002 Iran made 
additional overtures to Argentina on the nuclear front, which were 
rebuffed. In 2007, Chavez reportedly interceded with Kirchner on behalf 
of Iran in order to acquire nuclear technology.\19\ In 2009, Iran 
publicly stated its willingness to buy nuclear fuel from ``any 
supplier, including Argentina.'' As Asia Times reported, there are 
multiple reasons for what on the surface seems an unusual statement:
---------------------------------------------------------------------------
    \19\ Pepe Eliaschev, ``Argentina negocia con Iran dejar de lado la 
investigacion de los atentados,'' Perfil (Argentina), March 26, 2011; 
Casto Ocando, ``Possible Nuclear Cooperation Between Venezuela, 
Argentina and Iran,'' Univision Noticias, July 12, 2011, accessed at: 
http://univisionnews.tumblr.com/post/7546036783/possible-nuclear-
cooperation-between-venezuela.
---------------------------------------------------------------------------
    The Tehran reactor, though initially built by the United States, 
was redesigned and had its core refitted by Argentina in the 1980s. 
This means that for all practical purposes, it is an Argentinean-made, 
and -fueled, reactor. In 1988, the IAEA governing board approved 
Argentina's delivery of highly-enriched uranium (19.75%) to Iran, which 
was delivered in the autumn of 1993.
    Second, during 1993-1994, Iran and Argentina engaged in serious 
negotiations on further nuclear cooperation. Among the issues discussed 
were the training of Iranian scientists at an Argentinean nuclear 
institute, and a fuel fabrication plant for Iran. These discussions, as 
well as the distinct and deepening nuclear relations between Iran and 
Argentina, came to a sudden halt in July 1994 with the bombing of the 
Jewish center.
    Third, despite negative comments such as those by Kirchner that 
overlook the irrefutable record of the nuclear talks between Tehran and 
Buenos Aires in early 1994--talks that raised Iranian hopes that the 
fuel delivery of 1993 would be followed up with more extensive deals--
the idea of replenishing the Tehran reactor with fuel from Argentina 
has never quite disappeared from Iran's nuclear energy policy. Iran has 
adamantly rejected allegations that it played any role in the 
bombing.\20\
---------------------------------------------------------------------------
    \20\ Kaveh L. Afrasiabi, ``Iran Looks to Argentina for nuclear 
fuel,'' Asia Times, November 6, 2009, accessed at: http://
www.atimes.com/atimes/Middle_East/KK06Ak02.html.
---------------------------------------------------------------------------
    Given this history, in addition to the growing ties between 
Fernandez de Kirchner and Venezuela's Chavez and now Maduro goverments, 
which publicly have stated their desire to help Iran with its nuclear 
program regardless of international sanctions, the assumption that Iran 
is pressing its relationship with Argentina for nuclear advantage is 
plausible. The dangers of such a relationship were already demonstrated 
in the history of the AMIA bombing.
    I would also like to touch briefly on the banking structures that 
Iran is taking advantage of, both to highlight the role of Ecuador in 
Iran's strategy and to address the issue of loopholes or laxness in our 
policies that allow Iran's financial structures to operate with 
relative freedom in the hemisphere.
    One case that I have looked at in detail is that of COFIEC Bank and 
Ecuador's largely-ignored role in helping Iran evade international 
sanctions, with no penalties for its actions.
    Since November 2008, when the Central Bank of Ecuador agreed to 
accept $120 million in deposits from the internationally sanctioned 
Export Development Bank of Iran (EDBI), Iran's desire to use the 
Ecuadoran financial system to access the world banking system has been 
evident. In 2008 EDBI was sanctioned by the U.S. Treasury's Office of 
Foreign Assets Control (OFAC) for ``providing financial services to 
Iran's Ministry of Defense and Armed Forces Logistics (MODAFL),'' in an 
effort to ``advance Iran's WMD programs.''\21\
---------------------------------------------------------------------------
    \21\ ``Export Development Bank of Iran Designated as a 
Proliferator,'' U.S. Department of Treasury, Oct. 22, 2008.
---------------------------------------------------------------------------
    When this relatively straightforward plan was uncovered by 
investigative journalists in Ecuador, President Rafael Correa received 
a formal demarche from the U.S. Embassy and denied any deposits had 
been made, although the two banks at the very least maintained SWIFT 
communications capabilities for at least 2 years after the denial. It 
seemed the efforts had halted.
    Yet what has emerged since early 2012 is a far more sophisticated 
plan to use a little-known Ecuadoran bank in state receivership known 
as COFIEC to open correspondent accounts with sanctioned Iranian 
banking institutions through a state-owned Russian bank. There have 
also been serious discussions of clandestinely selling the Ecuadoran 
bank to sanctioned Iranian banks, talks that senior government 
officials have acknowledged are still underway.
    If successful, (and the record to date, while inconclusive suggests 
that at least parts have been), the impact of these new moves could be 
significant, opening up new and relatively easy ways for Iran's banks, 
largely shut out of the Western banking exchanges, to move large sums 
of money in ways that would be almost impossible to detect.
    The COFIEC case, which I have written on extensively, (http://
www.strategycenter.net/research/pubID.304/pub_detail.asp)\22\ offers a 
template for understanding how Iran is working around international 
banking sanctions that are badly hurting its economy. Given Iran's 
documented strategy of using the same sanctions-busting methodology in 
different countries until those avenues are shut down, it is likely a 
methodology that is being repeated in multiple other venues.
---------------------------------------------------------------------------
    \22\ See: Douglas Farah, ``Ecuador's Role in Iran's Latin America 
Financial Structure: A Case Study in the Use of COFIEC Bank,'' 
International Assessment and Strategy Center, February 2013, accessed 
at: http://www.strategycenter.net/research/pubID.304/pub_detail.asp.
---------------------------------------------------------------------------
    The COFIEC case illustrates (as the BID case in Venezuela did) that 
dealing with sanctioned Iranian banks, is far from being the work of a 
few rogue officials trying to take unauthorized activities without the 
knowledge of their superiors. Rather, the efforts at banking 
collaboration are part of multi-state coordinated and publicly 
articulated policy of aiding Iran in to break its international 
political and economic isolation.\23\
---------------------------------------------------------------------------
    \23\ In a joint statement the foreign ministers of Venezuela, 
Bolivia, Ecuador, Nicaragua, and other members of the Chavez-led ALBA 
alliance vowed to ``continue and expand their economic ties with 
Iran.'' ``We are confident that Iran can give a crushing response to 
the threats and sanctions imposed by the West and imperialism,'' 
Venezuelan foreign minister David Velasquez said at a joint press 
conference in Tehran. See: ``Venezuela/Iran ALBA Resolved to Continue 
Economic Ties with Iran,'' Financial Times Information Service, July 
15, 2010.
---------------------------------------------------------------------------
    Ecuador plays a unique and vital role in the Bolivarian structure 
and Iran's efforts in the Western Hemisphere because it offers a 
singular advantage--the U.S. dollar is the official currency of the 
country. This means that any banking transactions are already in 
dollars, not a currency that needs to be converted to dollars for use 
on the international market. This process of conversion is both costly 
and a key point of vulnerability and detection in international 
transactions. It also gives any country or institution doing business 
there access to dollars, something Iran is desperate for.
    The specific case of COFIEC shows that President Rafael Correa 
engaged directly with Iranian president Mahmoud Ahmadinejad on the 
banking issue and that, based on those presidential conversations and 
authorization, the president of the Central Bank of Ecuador and other 
senior officials have:
   Systematically and repeatedly sought to engage with Iranian 
        banks sanctioned by the United States, the European Union, and 
        the United Nations to help blunt the impact of international 
        trade sanctions regime on Iran;
   Met with the leadership of the Iranian banks despite clearly 
        understanding the banks were under international sanction and 
        writing risk analysis reports before the meetings;
   Engaged in activities that would allow Iran to operate 
        through state-owned Ecuadoran banks and explored ways of 
        encrypting communications and other ways of hiding the 
        relationship and communications;
   Worked with Iran to set up correspondent bank accounts in 
        the same bank in a third country, so no activities between two 
        accounts would be reported as an international transaction. In 
        this case the bank was in Russia, one of the few countries that 
        has banks that maintain correspondent relationships with 
        Iranian banks.
    Given Iran's growing engagement with Argentina, the expansion of 
Iran's use of ALBA nations' financial institutions and its growing 
recruitment efforts, its presence may be changing but it is not waning. 
In a time of intense economic difficulties in Iran and the Bolivarian 
nations, both sides continue to put resources into the relationship, 
indicating the priority both sides place on maintaining and expanding 
the relationship.
    The failure to take significant action against Ecuador for its 
flagrant violation of international sanctions on Iran, under direct 
presidential orders, is one example of the lacunas in U.S. policy 
toward Iran's presence in the hemisphere. As in the past, there have 
been moderate U.S. Government protests, yet no consequences for the 
action.
    In the case of Argentina there is considerable reluctance to take a 
more direct approach with the Fernandez de Kirchner government on Iran, 
drug trafficking, or any other issue of bi-national importance, fearing 
that any confrontation would drive Argentina into the arms of Iran and/
or China. But this ignores the fact that the Argentine president has 
already made her decision to curtail DEA activities, publicly and 
repeatedly attack the United States as an imperialistic, war-mongering 
nation, and re-open relations with Iran that make a mockery of the rule 
of law. What has not confronting these issues gained U.S. interests in 
the region?
    In order to address Iran's strategy, operations, capabilities, and 
intentions in the Western Hemisphere there first has to be a clear and 
common understanding of the issues. This understanding has to be based 
on an understanding of the Iranian revolutionary regime's underlying 
acceptance of terrorism as a legitimate method to achieve its goals, 
including the overriding goal of regime survival.
    My first recommendation would be to look at Iran's presence in 
Latin America in a more holistic manner, using the significant 
understanding gleaned by the intelligence community in the years 
following the AMIA bombing, of what the Iranian network is, how it 
operates and the threat it poses.
    Measuring how many MOUs or trade agreements are fulfilled, while 
omitting the multiple other covert and overt activities in which Iran 
is engaged in does not give the full picture of Iran's influence.
    My second recommendation would be to use every available tool, and 
the Treasury Department and others in the government have a significant 
array of options, to impair Iran's banking activities in the region. 
There are multiple banks and joint investment companies established in 
Venezuela, Bolivia, and Ecuador that allow Iran to move hundreds of 
millions of dollars into the world market. These financial instruments 
are little understood or monitored yet they are vital economic 
lifelines for the Iranian regime.
    My third recommendation would be to focus on the thousands of 
passports being issued by ALBA nations to Iranian citizens, to make it 
more difficult for them to travel and, particularly to enter the United 
States. The vast bulk of the hundreds or thousands of people receiving 
these passports by complicit governments are not tourists. They are 
intelligence agents whose primary objective is to find vulnerabilities 
and points of entry into the United States, identify vulnerable targets 
in the region, and prepare a military response if Iran's nuclear 
program were to be attacked.
    Finally, I would recommend a clear focus on the deals that 
triangulate among Argentina, Venezuela, and Iran, which seem designed 
to help Iran gain access to Argentina's nuclear know-how while allowing 
Iran to sell petroleum. Iran is desperate for Argentine support in its 
nuclear program, while Argentina is paying $12 billion a year to import 
energy, while sinking into economic chaos. Venezuela is already 
brokering numerous deals between the two, and China also seems to be 
playing a role through its recently acquired bank in Argentina. This 
represents a potential threat that would make keeping a nuclear warhead 
from Iran much more difficult.
    Thank you and I look forward to any questions you may have.

    Mr. Duncan. Thank you Mr. Farah.
    I thank the witnesses for their testimony.
    We are going to back up a little bit and recognize the 
Chairman of the full committee, the gentleman from Texas and my 
good friend, Chairman McCaul, who has been following this issue 
along with me over the last 2 or 3 years. So Chairman McCaul is 
recognized for an opening statement.
    Mr. McCaul. I thank the Chairman and my good friend Mr. 
Duncan and the Ranking Member for holding this hearing. I view 
Iran as one of the greatest threats to the Western Hemisphere. 
The Chairman and I had a great honor to go down to Latin 
America, Argentina to visit the Jewish Community Center down 
there, saw where the bombing took place, participated in a 
ceremony. We were briefed by the Israeli delegation there. What 
I was concerned most about was the difference in the 
narratives, the narrative of the State Department downplaying 
the threat of Iran versus the narrative of other intelligence 
services and the IC in particular that viewed Iran as a much 
greater existential threat to the United States and the Western 
Hemisphere.
    I wanted to just personally stop by this hearing today to 
also register my disappointment that the government of 
Argentina has silenced the special prosecutor in the Jewish 
Community Center investigation who was honored by letter to 
appear here today, was planning to appear here today. But at 
the last minute, the attorney general for Argentina--I am 
assuming going to the highest levels--Argentina decided to 
silence him and not allow him to come to this country to 
testify about the truth and what happened in the bombing that 
took place at the Jewish Community Center and also the truth 
about the extent of Iran's involvement in Latin America, which 
I believe he would have told us is very extensive. I received a 
letter from the general prosecutor basically stating that the 
attorney general of Argentina, chief of all public prosecutors 
in our country, has considered the subject of this 
subcommittee's hearing has no relation to the official mission 
of the general attorney's office and, therefore, under those 
grounds permission was denied by highest Argentine competent 
authority with legally binding capacity to provide the needed 
endorsement to allow my testimony before the authorities of a 
foreign country, in this case the United States.
    I consider this to be a slap in the face not only to this 
committee but to the United States Congress, and I hope that 
the Secretary of State will take notice of this, and I 
certainly hope the Secretary of Homeland Security will also 
take notice of this.
    So with that, I want to thank, again, the Chairman for 
having this very, very important hearing. We all know after the 
Saudi Ambassador plot--and I just met with him. I just came 
from my office with him. We know how big of a threat Iran is 
not only in the Middle East but in this hemisphere as well.
    So I look forward to the questions. I know the witnesses 
will provide us with very valuable testimony in determining 
what this Nation can do to better protect itself from the 
threat of Iran. With that, I yield back.
    Mr. Duncan. I thank the Chairman for his participation and 
for leading the trip to Argentina to investigate this and 
Argentina, the tri-border region as well. I think you hit on 
it, the narrative, the differences in the narrative, and we are 
seeing the differences in the narrative with Argentina's 
refusal to allow the special prosecutor to come to America to 
share his information, not to be on the stand to be 
interrogated but to share his information with this committee 
and with America about what he has learned. So I am 
disappointed and I share that sentiment. So thanks for being 
here.
    The Chairman recognizes himself for 5 minutes for 
questions.
    The March 2013 posture statement of the U.S. Southern 
Command to Congress stated this, quote, Members and supporters 
of Iran's partner, Lebanese Hezbollah, have an established 
presence in several countries in the region. We witnessed that 
presence in the tri-border region in Paraguay, the Ciudad del 
Este, where we were told by the intelligence and security 
forces of the Paraguayan Government about all the financial 
transactions that were taking place within that city to fund 
terrorist operations around the world for Hezbollah. We were 
told about the connection of Hezbollah operatives possibly 
coming into that area and changing out documents so that they 
could travel more freely throughout the region. That concerns 
me.
    However, the May 2013 release of the U.S. State 
Department's 2012 Country Report on Terrorism stated there were 
no nonoperational cells of either al-Qaeda or Hezbollah in the 
hemisphere, and international terrorist organizations do not 
have a known operational presence in Mexico.
    So we have got a dichotomy there of opinions about the real 
threat, one from the Southern Command that says there is an 
established presence, and one from the State Department that 
says: Well, there is really not any known presence in the 
region.
    How can both assessments be true, Mr. Berman?
    Mr. Berman. Thank you, Mr. Chairman. I think it is a very 
interesting question. It is also a very politically sensitive 
question. So let me answer this as diplomatically as I can.
    In judging the veracity of these statements, obviously I 
think the ground truth tends to be with those folks that are 
actually on the ground, that have spent time in theater that 
have taken a look at the presence not simply from documents or 
from cables and reports but have actually traveled to these 
regions. One of the most important aspects of the research that 
I have done in Iran and Latin America involves actually going 
to these places to take a look first-hand at the regional 
presence and whether or not the footprint matches up with the 
press reporting that you see here in the United States. In many 
cases, it does not. But in many cases it does and it goes 
beyond what is being reported here. I think in an accurate 
assessment of intelligence in terms of Iran's presence in the 
region, there is no substitute for an on-the-ground presence.
    Mr. Duncan. Okay. Well, I appreciate that. I will shift 
gears just a minute. I want to say that this investigation 
isn't just about Argentina, although the largest loss of life 
from an act of terror in the Western Hemisphere prior to 9/11 
happened in Buenos Aires. So we can't go through this type of 
hearing looking at threats in this hemisphere with blinders on 
and not acknowledge the fact that that operation was hatched in 
the tri-border region, and it did happen in Buenos Aires, and 
we did have Mr. Nisman and his excellent 502-page report that 
identifies who originated the act and where it came from and 
that is Iran.
    Mr. Farah, you say in your testimony that Argentina and 
Iran recently signed a new strategic military agreement but 
that there are other indications that Argentina's warming with 
Iran could be predicated on aiding the Islamic Republic's 
nuclear program. So with Argentina's refusal to allow the 
general prosecutor of the AMIA case to testify today, do you 
believe that Argentina wants to assist Iran in its illicit 
nuclear activities?
    Mr. Farah. Thank you, Chairman. I don't know if I can say 
what Argentina's motivations are. I think that if you look 
closely at what they have done since January of this year when 
they signed the memorandum of understanding with Iran that is 
aimed at basically exculpating major Iranian leaders from their 
guilt in that particular attack and getting the red notices 
issued by Interpol for their arrest lifted plus a series of 
other very opaque dealings that the Argentinean Government has 
carried out with Iran and given the fact that Argentina does in 
fact have a very robust nuclear program and a very robust space 
program that has so far, since their inception, remained 
relatively insulated from the outside political pressures of 
the central government, I think that Iran clearly wants to get 
its hands on that technology. You have to remember that the 
nuclear reactors in Tehran, when they first began in the 1980s, 
were retrofitted and are, in fact, Argentine reactors. One of 
the triggers for the 1994 AMIA bombings, according to Mr. 
Nisman, was the fact that Argentina had cut off nuclear 
cooperation. After training many Iranian scientists for many 
years, they cut off the cooperation. That triggered the AMIA 
bombings. Argentina very much wants to get back into that.
    What is confusing I think to many people in the region and 
myself who have spent a lot of time down there is what 
Argentina could possibly be thinking in doing this. Here you 
have a well-documented, as you noted, the largest terrorist 
attack carried out by the state of Iran using Hezbollah and 
other proxies to carry out the attack. It would be akin in my 
mind to us deciding that we could just let bin Laden's attack 
in New York just go and move on as if nothing had happened. It 
is really sort of a starkly dysfunctional response to what has 
happened in that country.
    Mr. Duncan. Thank you.
    Mr. Berman, you may not be the best one to ask this 
question. But we have Chavez gone. We have got the new Maduro 
government in Venezuela. How do you see that relationship 
between Tehran and Caracas evolving under this new government?
    Mr. Berman. I think that is an excellent question because 
the Iranian intrusion into Latin America has been very much a 
function of personality politics between Chavez on the one hand 
and Mahmoud Ahmadinejad, the Iranian president, on the other. 
Both sides of that coin are now reshuffled in a sense. Chavez 
is dead. Ahmadinejad has left the political scene. But I think 
there are indicators that there is at least a desire on both 
sides for political continuity, for the relationship to 
continue into perpetuity if possible. Nicolas Maduro, the new 
Venezuelan president, as Foreign Minister under the Chavez 
regime actually spearheaded and oversaw contacts with Iran. So 
he can be expected to take a sympathetic attitude towards 
continuing this conversation. He does have, as I mentioned 
before, political and economic constraints but I think that the 
desire is there.
    On the Iranian side, it is not clear yet whether the new 
Iranian president, the incoming Iranian president Hassan 
Rowhani, is going to make outreach to Latin America as high of 
a priority as his predecessor did. But it is useful to remember 
that ultimate strategic decision making in Iran doesn't rest 
with the president. It rests with the Supreme Leader. The 
Supreme Leader has demonstrated over time that Latin America 
does not rank at the highest level of Iranian foreign policy, 
but it is certainly up there in terms of its significance 
because of the potential benefits that could accrue to the 
ballistic missile program, to the nuclear program.
    I think there is sort of a note of nuance that needs to be 
injected here. If you look at what Iran has experienced in 
diplomatic terms over the last 2\1/2\ years, its involvement in 
the Syrian civil war has had a significant effect upon its 
global posture in general both in terms of the available cash 
that it has to invest in outreach to different regions and also 
in terms of the receptiveness with which it is accepted in 
these various regions.
    That said, I think Latin America will continue to remain an 
area of priority for Iran. How high is a matter of some 
dispute. But it seems to me that what we are looking at is a 
period where there is going to be more continuity than change.
    Mr. Duncan. Thank you for that. My time has expired. I 
would like to get Mr. Humire to opine on that just for a 
second.
    Mr. Humire. Thank you, Mr. Chairman. I just want to expand 
on what Mr. Berman was saying.
    I think one of the misconceptions of the Iranian-Latin 
America relationship was that it started with Hugo Chavez. It 
actually started, according to Mr. Nisman's heavily detailed 
reporting, that the relationship started since the dawn of the 
revolution in 1979. The main primary actor at that time the 
gateway was Cuba and to this day in a post-Chavez world remains 
with Cuba. Nicolas Maduro, his base of power in Venezuela is 
predicated upon his alliance with the Cuban regime that has 
penetrated his intelligence services as well as with his 
security apparatus. So I think looking forward, a lot is 
dependent on which way the trajectory of Cuba and their 
political power maneuvering in the region will go.
    If you permit me just to say one quick comment on the 
distinction of why the State Department said there is no known 
Hezbollah cells but the narrative in the region is that there 
is active terrorist cells in Latin America. I think this 
actually presents a challenge and an opportunity. On one end, 
the challenge is that in Latin America--and this is according 
to the research at the American Foreign Policy Council--there 
is 22 countries in the region and about half have anti-
terrorism legislation. So the majority of the countries don't 
have anti-terrorism legislation. What that means is there is no 
legal framework to identify a terrorist group for what it is, a 
terrorist group. Brazil is a case in point. In Brazil, if you 
ask Brazil, are there Islamic terrorist groups in your country? 
They will say ``no'' because they are legally in their country. 
They don't designate Hezbollah, al-Qaeda, or any other group 
that are designated by many other countries, including the 
United States, as terrorist groups in their own country. Just a 
few months ago, there was a known Hezbollah agent, one of the 
infamous Barakat brothers that was arrested for a fraudulent 
contraband scheme that he was doing within the clothing 
industry. He was actually arrested and condemned as a criminal 
but never once mentioned as a terrorist. I think that might be 
one of the distinctions that is often confusing when looking at 
the narrative in the region relative to the narrative of some 
of the U.S. policy analysts today. But it presents an 
opportunity because I think the U.S. Homeland Security as well 
as the U.S. Government as a whole can help a lot of Latin 
American countries to understand the legal, technical, and 
other know-how about how to create anti-terrorism legislation.
    Mr. Duncan. Thank you for that. My time has expired. I will 
now recognize the Ranking Member, Mr. O'Rourke, for 5 minutes.
    Mr. O'Rourke. I want to start by again thanking the 
Chairman for his leadership on this issue, for focusing us on 
the threat that Iran poses in the Western Hemisphere, Latin 
America, and at our borders and within our country. So I 
appreciate that. I am learning a lot today and will continue to 
do so with the answers from these questions.
    For Mr. Berman, I want to better understand the threat and 
disconnect between your analysis and that from the State 
Department and even some of our other witnesses today. 
SOUTHCOM's assessment was also mentioned earlier, and quoting 
from General Kelly, Commander of SOUTHCOM, this year he said 
that Iran's outreach has been only marginally successful and 
that the region as a whole has not been receptive to Iranian 
efforts. Mr. Misztal said that he felt it was unlikely that 
Iran would precipitate a direct response from the United States 
by doing something egregious or bloody enough to have a 
reaction directly from our country. You know, within recent 
history, this country has gone to war because of sensational, 
unsubstantiated threats from countries in this region.
    I will add to that by saying closer to the homeland and 
more in concert with our purview, following 9/11, we built 600 
miles of wall between us and Mexico, we doubled the size of the 
Border Patrol, and we are thinking about doing the same thing 
again as part of another piece of legislation right now. This 
could add fuel to the fire.
    So especially in my role and my responsibility in this 
committee, I want to understand precisely what you view as a 
threat to the homeland and what you think the proportionate 
response to that threat should be.
    Mr. Berman. Sir, I think that is an excellent question, and 
let me just start by saying that I think it is useful, exactly 
as you mentioned, to put it in proper context. The sum of a 
threat is both capability and intent, so it is useful to 
understand both the capabilities that Iran has in the region 
and also when it might be incentivized to activate those 
capabilities.
    I would quibble a little bit with Mr. Misztal's statement, 
because he did talk about restraint in the Iranian context, but 
as you heard from Mr. Farah, the Iranian regime has not shied 
away from targeting the U.S. homeland or individuals within--
residing or operating within the U.S. homeland over the last 
decade, and I think it is useful to understand that that 
constitutes in and of itself a shift in Iranian policy.
    A decade ago we could talk about Latin America serving as a 
support theater for Iranian activities, but in increasingly 
over the last decade, you have seen Iran build the necessary 
capacity to reach out and touch the United States or touch 
individuals within the United States in a malicious way, and I 
think that shouldn't be underestimated, it shouldn't be 
overblown, as you said, but when we talk about proportional 
responses, I think that that is precisely where we should 
focus.
    It seems to me that there are three areas of potential 
improvement that we could work on. One has to do with, as Mr. 
Humire said, counterterrorism legislation. The edifice of U.S. 
counterterrorism policy rests upon a 1996 law called the 
Antiterrorism and Effective Death Penalty Act, which is the 
founding legislation for the State Department's foreign 
terrorist organizations list and all sorts of ancillary 
judgments that we now make about terrorist entities.
    In not the vast majority of the region, but a plurality of 
the countries in Latin America, you don't have such a lodestone 
for counterterrorism policy. You have movement towards it. 
Brazil, as Mr. Humire mentioned, exists in this state of grace, 
but future events, such as the FIFA World Cup next year, the 
Olympics in 2016, present an opportunity for the United States 
to reach out and engage with our allies in those governments 
and talk to them about the need for a more robust 
counterterrorism framework that would criminalize and also 
incentivize regional law enforcement to go after what is now 
essentially an unaddressed threat.
    The second has to do with transshipment and smuggling. When 
I was in Panama recently and I was told first-hand about the 
level of expansion that is now undergoing--the Panama Canal is 
now undergoing, by the end of next year the Panama Canal is 
going to have a five-fold increase in potential container 
volume. That container volume currently is at 4 million 
containers a day. It is about to go up by the end of next year 
to 20 million containers a day. That is poorly regulated, it is 
poorly understood what is actually in those containers, in part 
because we don't have proper eyes upon the transshipment 
routes. It also has--there is a potential nexus for very 
significant, very significant illicit activity because of the 
adjacent nature of the Colon Free Trade Zone with the Panama 
Canal.
    The third avenue of approach is something that the Chairman 
mentioned in his opening statement, discussions about stronger 
border security, stronger oversight over visa regulations, and 
the tightening of what is now in many places in the region a 
lax visa regime that allows Iranian agents, Iranian operatives 
to move around.
    A case in point is in Ecuador, where Ecuador, despite being 
a dollar-ized economy with very intimate bonds with the U.S. 
economy, now allows visa-free travel for Iranian individuals 
and it also allows--has a lax oversight environment that 
encourages Iran to exploit the Ecuadoran economy.
    So I think in those areas as well as others, there is real 
room to improvement and there is room for improvement on the 
part of not only the Department of the Homeland Security, but 
other agencies in the U.S. Government as well.
    Mr. O'Rourke. Just real quickly, because my time has 
expired, for Mr. Misztal, with the new election--or the 
election of a new president in Iran, Mr. Rowhani, and Mr. 
Maduro in Venezuela and the fact that it is clear Iran does 
have an anchor in Latin America through these countries there, 
including Venezuela, what is our opportunity to work 
diplomatically, economically to find some way to compel these 
countries to do what we want them to do, which is to tighten 
the--to increase the pressure on Iran economically, afford it 
less avenues to trade, to bank, to survive the sanctions that 
we are leading globally and meet the threat in that way?
    Mr. Misztal. Thank you, Mr. O'Rourke. As you know, the 
United States, largely through the initiative of the Congress, 
has been passing ever-more-stringent sanctions against Iran 
over the course of the last 5 years. As, Mr. Chairman, you 
pointed out in your opening statement, they have had a 
significant impact on Iran's economy, but in asking whether we 
can have those same sanctions applied to the relationship of 
Iran apply to America, we have to first understand sort of the 
nature of the countries and the regimes that we are dealing 
with in Latin America. On the one hand, we have regimes that 
have close ties with the United States and are generally 
democratic and friendly to us. I am thinking here primarily of 
countries like Columbia, Chile, Peru, which cooperate with the 
United States. We have sort-of regimes on the opposite end of 
that spectrum that are undemocratic and unfriendly to the 
United States, which is the ALBA block that Mr. Humire 
mentioned, led by Venezuela, Cuba, with Bolivia and Ecuador in 
that mix. Then we have countries that are sort of in the gray 
zone in between, Argentina, more recently Brazil, at times in 
the past have sort-of not been clear where they stand.
    I think that in order to be able to get countries to want 
to adopt those sanctions and help us in imposing tighter 
controls on Iran, we first have to move them towards being 
democratic. If we have regimes that are in place, as we do with 
President Maduro in Venezuela or in Cuba or in Bolivia or 
Ecuador where they pride themselves on standing up to the 
United States, where not following the lead of the United 
States in the international community, and in fact six United 
Nations security council resolutions, is a point of pride and 
seen as a sign of strength, that gives them greater legitimacy 
domestically, then we are not going to be able to successfully 
work with them to try to get those sanctions imposed.
    So I think this is first and foremost a question of the 
sort of regimes that we find in the region. In fact, as I think 
all of us have pointed out today, the sort of the common bond 
of anti-Americanism and the anti-imperial rhetoric that we 
hear, whether it is in Tehran or Caracas, is the form of this 
bond between Iran and countries in the Western Hemisphere.
    So I think if we are looking to break Iran's footprint in 
the hemisphere and try to get sanctions imposed ever more 
stringently by ever more countries on Iran, then we really have 
to think about how we talk more about democracy and creating 
better institutions in these countries first.
    Mr. Duncan. Thank you, Mr. O'Rourke. The Chairman will now 
recognize the gentleman from Pennsylvania, Mr. Barletta, for 5 
minutes.
    Mr. Barletta. Thank you, Mr. Chairman.
    Mr. Farah, in your testimony, you claim that Iran's 
influence in Latin America and the Caribbean is growing. How 
safe do you believe our territorial borders are, especially the 
U.S. Virgin Islands and Puerto Rico?
    Mr. Farah. Thank you, Congressman. I would say that if 
there is not a particular economic benefit to be derived from--
I think--Puerto Rico, I think, is much more of a concern 
because it is part of the U.S. homeland. I think if you look at 
how Iran is operating in the acquisition of travel documents 
from other countries in the region, they are not getting false 
documents, they are getting legitimate, real Ecuadoran, 
Bolivian, Venezuelan passports, which we have--we cannot stop 
them, because they are actually legitimate travel documents.
    I think passing through territories where the scrutiny will 
be far less and where we have detected on occasion this type of 
use being done, it is usually at places where the Homeland 
Security personnel is much more experienced and much more 
alert. I think as a point of penetration, those would be ideal. 
I think what you are seeing now looking out at Iran's 
experience in the region is in particularly the Hezbollah 
operatives that are second-, third-generation Latin Americans, 
you have people that will pass through completely unnoticed. I 
think the more remote and the more isolated the places are, the 
less experienced they are in looking for this type of activity, 
the higher probability of getting across is.
    Mr. Barletta. We know that the Dominican illegal immigrants 
have tried to cross into Puerto Rico. Do you know if Iran has 
tried to exploit this weakness in any way through the 
Dominican?
    Mr. Farah. I have examined for--with the Department of 
Homeland Security the Dominican phenomenon and am intimately 
familiar with it. I have not seen in my experience Iran using 
that.
    Mr. Barletta. Again, do you believe that Hezbollah has been 
able to enter the United States through our open borders, 
Southern Border, or through visas?
    Mr. Farah. Sir, I think there are numerous now open-source 
accounts of Hezbollah operatives being apprehended crossing the 
U.S.-Mexican border. I think that as the access to other 
Government travel documents becomes more available, that is 
much less a necessary option. I think if you can get on an 
airplane and fly into New York with a legitimate passport, it 
is a lot less risky than going across the Mexican desert and 
trying your luck crossing the border. So, yes, I think that 
they come. I think that we have seen--I have seen flight 
manifests from countries in the region where you have Iranian 
nationals with Ecuadoran passports flying out of New Jersey, 
Newark airport, multiple U.S. airports into the region and 
flying back to the region, Iranian nationals with other folks' 
travel documents, so I think it happens every day and 
routinely, yes, sir.
    Mr. Barletta. I think it is a good point here today, why it 
is so important that as we consider immigration reform here in 
Washington and the policy, that we really focus on making sure 
we are protecting our National security. You know, I am 
troubled by the lack of focus on the background checks that are 
being proposed or won't be done on 11 million, since we already 
know there are people who want to do America harm who have 
already entered the country, why it is so important that 
whatever we do here that we are making sure that we are doing 
background checks into the country of origin, not just simply 
sending paperwork in that could be stamped by some bureaucrat 
here, but doing proper background checks to protect the 
American people. Why when we talk about border security we must 
include visa, the loopholes in the visa system here and visa 
overstays as part of border security if we really want to 
protect the American people.
    Thank you, Mr. Chairman, for this very important hearing 
today.
    Mr. Duncan. Absolutely. Thank you so much.
    I ask unanimous consent that the gentlelady from Texas and 
the Ranking Member of the Border and Maritime Security 
Subcommittee, Ms. Jackson Lee, be allowed to participate in 
today's hearing. Without objection, so ordered.
    The Chairman will now recognize Ms. Jackson Lee, who I 
spent some time with down at the Summit of the Americas a year 
or so ago investigating some of these same issues.
    Ms. Jackson Lee. Very much so.
    Mr. Duncan. Talking with our Latin American neighbors about 
some of these things, so I thought it was enlightening, and I 
recognize you for 5 minutes.
    Ms. Jackson Lee. Mr. Chairman, I thank you very much for 
this hearing, and I thank the Ranking Member, Mr. Barber, and 
offer to him, as I know we would, enormous concern and sympathy 
for the loss of 19 firefighters. It seems like this has been a 
year for firefighters, west Texas and then Houston, Texas, of 
recent that we know, and we certainly want to keep them in our 
prayers.
    Just as an aside for being in the Homeland Security, Mr. 
Chairman, I hope that our committee, I know the Chairman of the 
full committee and the Ranking Member are very concerned about 
firefighters. I hope we will have an opportunity to look at how 
we can be helpful to them as well.
    Let me thank the witnesses. I think this is a very 
important hearing, and I am delighted to have it. As my time 
goes away, I do want to make just a comment. I think our 
friends in Latin America have been friends with the United 
States for a very long time, and we were meant for each other. 
It is North and South America. There is a lot of commonality. I 
want to make it very clear that I hope we can get past who can 
be the toughest on America. We are all--with our diplomatic 
challenges, this hemisphere has worked with each other through 
trade and a number of other issues, and so as I watch the 
occurrences with Mr. Snowden and the alleged acceptance of his 
travels based upon who can be the strongest against the United 
States, might I say on the record, I don't view that as being 
constructive. I think we are better when we work together and I 
think we are better when we understand each other's sovereign 
rights, and I certainly respect the sovereign rights of any 
Latin American country, but I hope they will likewise respect 
ours and we will find a way to address Mr. Snowden based upon 
his citizenship and his rights to due process. I think his 
family would like that.
    I take issue with the fact of America being, in essence, 
the actor of inappropriate behavior. I think that we are trying 
to do what is best in securing the American people and keeping 
with the civil liberties and due process rights of any citizen.
    So I think this is important, because we are talking about 
relationships with Iran, but also with Latin America, so let me 
pose this question to Mr. Misztal about Iran's capacity for 
nuclear weaponization and how far along do you think they are 
and how great a threat are they, Mr. Misztal?
    Mr. Misztal. Thank you. I think the question of how far 
along is wrong. To put it another way, how close is Iran, is 
one of the trickier questions today, because people ask the 
question about timing but don't really ask the question time 
until what. I think people count down to a lot of different 
thresholds, and so really it should be a discussion about what 
is the nuclear threshold that we should be worried about with 
Iran. To that extent, it is important to know that a nuclear 
weapon consists of three different elements: One is the 
delivery mechanism by which you get the weapon to its target, 
whether that is a missile or some unconventional means; the 
second is the weapon itself, what actually makes the explosion; 
and the third is the fissile material, which makes the weapon 
nuclear.
    Often when people talk about weaponization, they are 
talking about the construction of all three of those elements 
into a working interconnected ballistic missile. How far along 
Iran is in that process is hard to know, because it depends on 
getting access to their military program, which we do not have 
access to. They have denied IAEA inspectors access to those 
facilities numerous times, as therefore, largely discussed 
based on classified information, which I do not possess.
    However, an argument that I think is important to make is 
that Iran becomes dangerous not at the moment at which it has 
assembled all three of those--all of those elements, but at the 
point at which we no longer know whether we are able to detect 
that they actual--whether they have put those elements together 
or not.
    The case of North Korea is instructive. The United States 
intelligence community made the assessment in 1996 that North 
Korea might have already a nuclear weapons capability, at which 
point our military planning had to change to----
    Ms. Jackson Lee. So are we at that point? My time is 
running out. Are we at that point with Iran? Might you also 
comment on the impact of sanctions as opposed to a combination 
of sanctions and diplomatic engagement?
    Mr. Misztal. So very quickly, I think the appropriate 
question to ask is: How quickly is Iran capable of producing 
enough highly enriched uranium for a nuclear weapon? My 
assessment is that within the next year, their time for being 
able to do that will drop to between 6 weeks to 1 month, which 
would be faster than I think we would be able to detect through 
open investigations by the IAEA, which I think would be very 
troubling.
    The effect on sanctions has been, I think very hard for the 
Iranian people and the Iranian economy. It has done absolutely 
nothing to slow down Iran's nuclear program. In fact, it has 
been speeding up remarkably over the time that sanctions have 
been getting tougher.
    Ms. Jackson Lee. Well, can I just pose, if I might just 
follow up, Mr. Chairman. Then--and I may have missed your 
testimony--what should we get our hands around in terms of 
working with Iran in this context? Do we look to youth and 
technology? Do we look to the middle class? Do we look to the 
idea of a newly-elected leader? What is it that may be a, if I 
use the word stabilizing, but a slowing process for where Iran 
is today and where it might be in terms of nuclear 
weaponization?
    Mr. Misztal. I think the question of how do we get Iran's 
leadership to take a different tack towards America is a very 
important one. I don't think that we have the tools or 
mechanisms to do anything about that within the time frame in 
which their nuclear program becomes very, very worrisome and 
very dangerous to the United States.
    I think in that respect the most important thing we can do 
is to continue to stand up for democratic principles and values 
in the greater Middle East. I think from the prospect of the 
youth and the people who might want to see a change in the 
Iranian government, the lack of our response to the 2009 Green 
Revolution was very troubling. So to the extent that we can 
continue to support democracy as people fight for it in the 
rest of the region, that will send a strong signal to the 
people in Iran who might want to see a change of government.
    Ms. Jackson Lee. Okay. I thank the Chairman, and I 
reluctantly yield back.
    Mr. Duncan. Okay. I will be glad to give you some leeway, 
Ms. Jackson Lee, if you would like.
    Ms. Jackson Lee. If I could just get one more in, I would 
appreciate it.
    I am struggling to pull on to Mr. Misztal's comments, so 
let me try to just pose that question to both Mr. Farah and Mr. 
Berman. The last question that I have is, you know: What form 
of intervention should there be? I appreciate Mr. Misztal in 
terms of he mentioned the 2009 Green Revolution. Where are we 
now with Iran in sort of getting his question, which is 
changing their attitude or helping to change their attitude 
toward the West or toward the United States?
    Mr. Berman. Let me start. Thank you very much for the 
question. It is actually the $64,000 question when it comes to 
formulating policy towards Iran. I think Mr. Misztal is 
entirely correct when he talks about the fact that sanctions 
have been in effect a tactical success but a strategic failure. 
Tactically they have had a lot of moving parts and a lot of 
progress in terms of diminished oil capacity, diminished 
exports, increase in the rate of inflation, sort of all of 
these different empirical metrics. Strategically, though, that 
inflection point, the point at which the Iranian regime 
calculates that its nuclear effort is more trouble than it is 
worth, hasn't been reached yet. It is not clear that sanctions 
alone will be able to do that.
    I think it is abundantly evident to those of us that have 
followed sanctions over the last decade or so that, while that 
is the aspiration and while we hope that that is the objective 
and that is sort of the ultimate resolution, it may not be 
possible to achieve this simply with economic pressure alone.
    The human terrain question, I think, is decisive. There was 
tremendous initial promise from what we now know colloquially 
as the Green Movement when it coalesced in the summer of 2009, 
but I think because of our inattention and because of the 
systematic repression of the Iranian regime, those hopes have 
really been dashed. The way we know this definitively is 
because in the run-up to the last Iranian election, which took 
place last month, when the green movement did come out, it 
didn't come out to advocate a different pathway for Iranian 
politics, it came out to simply argue about whether or not it 
was going to participate in the election or it was simply going 
to boycott. That is not a sign of relevance. That leaves us, 
quite frankly, with very few actionable choices.
    I am sort-of not in the business of saying that I know 
better than the U.S. Government what those choices should be. I 
would only point out that for the Iranian regime to become 
convinced that there is no day after nuclearization, we need to 
be more robust both on the economic front, but also to present 
convincingly that all options do actually in fact remain on the 
table.
    Right now the Iranian regime is operating from the 
assumption that if they move fast enough, if they are resilient 
enough, there is a day after sanctions, because after all, 
sanctions are intended to prevent them from going nuclear. If 
they cross the threshold, it is back to business as usual.
    We need, both through diplomatic measures, but also through 
the way we posture ourselves militarily, to convince them 
beyond a shadow of a doubt that that day, frankly, will not 
come, and if they don't comply with U.S. and European policy 
currently, there are worse options in the offing.
    Mr. Farah. Thank you. I would just add that I think that 
there are many things that we could be doing to weaken the 
Iranian regime economically that we are not doing. I think that 
is one of the hearts of the issues in Latin America, where you 
see hundreds of millions of dollars flowing through Ecuadoran 
and Venezuelan banks into the Panama Colon Free Trade Zone and 
others, where sanctions are being broken, busted with impunity, 
where we know and understand what is happening and where no 
action is taken. So I think if you wanted to, instead of going 
after the--or not necessarily going--changing the current 
sanctions policy, but requiring compliance with actual current 
international re-acceptance sanctions, you could hurt Iran a 
great deal more than we are doing without going to the next 
step that Mr. Berman talked about the military side.
    I think also one of the things that has weakened the United 
States tremendously in this process is that at every issue 
where they have acted, including the attempt to kill the Saudi 
Ambassador to the United States, we have done essentially 
nothing, which convinces them, as one Iranian expert told me, 
that there is no line in the sand that they cannot cross.
    We keep saying they won't attack in the United States. We 
have multiple documented attacks--or attempted attacks within 
the United States territory, and there has been no consequence 
attached to that. Until they believe there are consequences for 
their action, including attacking inside the U.S. homeland, I 
don't think we have much chance of persuading them to behave 
differently.
    Ms. Jackson Lee. Mr. Chairman, I want to thank you. I just 
want to conclude by just making this point on the record. I 
noticed that you were looking as I was speaking, and I guess we 
were dealing with parts south of the capital and South, Central 
America. You know I am from a border State. We engage a lot. 
Though this may not be directly to the point, I think it has 
been brought to a point both with this discussion, but also 
with the travels of Mr. Snowden, I am not prepared to give up 
on the diplomacy and interaction with South and Central 
America, we have a lot of allies there. I am not sure why we 
have come to a point where countries believe that they have to 
show a challenge to the United States when we have worked 
together over the years. So we have got to find--as we relate 
to protecting the homeland, we have got to penetrate what is 
going on in South and Central America, Latin America when we 
have had so many allegiances. Iran has found an opening, and it 
is an opening based on divisiveness and threat, and I think we 
have to recognize that, but I do believe that we cannot throw 
out diplomacy, we cannot throw out having a way to assert 
democracy without the next step being war.
    Certainly non-proliferation is not the direct topic here, 
but we need to be very direct on what Iran is doing since we 
understand that they are seconds away from possible success, 
but I think we have to be aggressive in both our diplomacy and 
the protection of the people of the United States of America.
    So I yield back, Mr. Chairman.
    Mr. Duncan. Yeah. I thank the gentlelady from Texas for her 
comments. Just for a second round of questions, if the 
witnesses don't mind, because it looks like it is going to be 
me, and so I have got some questions to ask to further this 
conversation.
    To follow up on what Ms. Jackson Lee said about diplomacy, 
when I reviewed the State Department's report, and I am not 
finished with it yet, much of which is classified, but one 
thing and one question I had for the Assistant Secretary 
Jacobson was what other countries in Latin America did they 
talk to as they put together that report. Her answer was none. 
It took me aback.
    So when I think back about the Iranian influence and 
activity in this hemisphere, I think about the Lebanese Canada 
Bank, which was more of a financial transaction. I think about 
the foiled assassination attempt on the Saudi Ambassador, where 
we got lucky. We had a DEA agent in the right place at the 
right time. They were trying to contact--the Iranians were 
trying to contact a Mexican drug cartel member to transit the 
porous Southern Border to come into this country to assassinate 
the Ambassador from Saudi Arabia in this town at a local 
restaurant. That was the plan. We thwarted that, because I felt 
like we had the right assets at the right place.
    I think about the Venezuela hacking attempt and the outing 
of the consulate general, I believe, from Miami over that. 
Univision reported on, I think it was talked about that 
earlier. I think about the JFK attempt that we talked about 
earlier.
    Then the State Department fails to contact and communicate 
and ask questions of our neighbors in this hemisphere and Latin 
America about what they are seeing on the ground, what they are 
seeing, what are their intelligence services picking up; is 
this threat real? They just relied on our intelligence 
services.
    So I am going to start with Mr. Berman. Why do you think 
that the State Department failed to communicate or at least 
talk with our neighbors here in the Western Hemisphere?
    Mr. Berman. Well, let me answer this a little bit 
obliquely, sir, because I certainly don't know the decision-
making process that went into the internal deliberations in the 
formulation of the report. I can tell you that I am constantly 
admonished by colleagues of mine----
    Mr. Duncan. Just take it that they did not talk to a single 
other country. That is what Ms. Jacobson told me, so----
    Mr. Berman. To that point, I am constantly admonished by 
friends of mine in the intelligence community that there is no 
such thing as bad intelligence, there is just bad questions. 
This seems to me to be a case where there were questions, 
legitimate questions about Iranian diplomatic presence in 
places like Bolivia, Iranian economic activity in places like 
Ecuador. These are beyond the level of Iranian activity in--on 
the territory of allied countries like Chile and Columbia, that 
where there would have been very salient data points that would 
have been uncovered had there been that line of questioning. It 
seems to me that the State Department report, at least the 
unclassified annex that I have seen, is poor for not having had 
that line of questioning.
    Mr. Duncan. They didn't even talk to our neighbors in 
Canada, our largest and best trading partner, about the 
Iranians that are using fraudulent documentation and refugee 
status that are coming through Latin America generally to 
Canada. The Canadians understand that there is fraud, and with 
an attempt of Iranians to infiltrate Canada.
    So Mr. Humire, what do you make? Why do you think that our 
State Department didn't talk to our neighbors here?
    Mr. Humire. Thank you, Mr. Chairman. Unfortunately, I don't 
think this is actually a coincidence. This Bolivarian project 
that we have all alluded to, this ALBA alliance, has 
systematically and asymmetrically found ways to create an anti-
access strategy to the United States.
    You know, I have spent over a decade in the region 
developing sources and talking to numerous individuals from 
different constituencies, from civil society, to the media, to 
others. You know, when I come up with information data points 
related to the Iranian threat in the hemisphere, I generally 
ask them has anyone from the U.S. embassy or any U.S. official 
contacted you, and generally, unfortunately, the answer is no.
    I think in most instances, the United States has--you know, 
this is all related to booting out the Drug Enforcement 
Administration, booting out the United States Agency of 
International Development, booting out--and basically creating 
an aura of anti-U.S. access into these countries. This is done 
essentially by driving--and this is a principal component of 
any asymmetric conflict, is the narrative. This is a conflict 
that is not managed by bombs or bullets. This is a conflict 
that is managed by words, images, and ideas. The Bolivarians 
have been able to create an image that the United States is 
anti-Latin American, is anti-endogenous, that they just want to 
manipulate through their multinational and imperialist 
companies to exploit the marginalized and the oppressed. In 
their terms, in Bolivarian terms, they view themselves as a 
liberation movement, and that message has been resonating. But 
as Mr. Misztal mentioned, there is an inflection point, there 
is weaknesses, they aren't perfect, they have made mistakes. 
There is an alliance forming today, and endogenous alliance in 
Latin America that, you know, the United States could 
definitely use and partner with to be able to counter this 
counter-narrative, and that is called the Pacific Alliance. The 
Pacific Alliance is made up of the countries of Mexico, 
Colombia, Chile, and Peru. Now, this is, in honesty, in its 
infancy stage, but has basic--a lot of growth potential.
    Unfortunately, when I go to these countries and I ask, you 
know, what is their relationship with the United States, yeah, 
they have normal bilateral relations, in some cases there is 
trade and there are other things that indicate, but actions 
without a message, without a narrative are just that, are just 
actions. You have to develop a narrative that the people can 
resonate with and so that the wave of popular opinion and 
public opinion moves towards their side.
    Each one of these countries is facing internal struggles, 
if it is the peace process in Colombia, the resurgence of the 
Shining Path, a decade-long revolutionary movement in Peru, the 
socialist activists in Chile, or the drug trafficking in 
Mexico, it has a fragile balance, and at any given moment, the 
Bolivarians can subvert these countries and shift that to go 
back into their favor, but--you know, so I would just say that 
there is opportunities, but the United States has to be aware 
of them and has to act on them in order to capitalize on it.
    Mr. Duncan. I agree with you there is opportunities here, 
and I understand some of the instability in the economy in 
Argentina and that the president has her hands full down there, 
and some of the things you made, the comments you made about 
Chile and other countries.
    So I want to highlight one thing that you said, though, in 
your written statement, is that, I think it was detailed in Mr. 
Nisman's report that Iran's sophisticated use of cultural 
activity as a means to blur the lines between political and 
covert activity, as well as to establish state to non-state 
relationships. A lot of this isn't, you know, Iranian embassy 
and activity around the embassy. It is cultural centers, it is 
mosques, it is some of the things that they are using that are 
just sort of below the radar screen. I get some of that.
    Let me just shift gears real quick, and we will finalize 
this, this hearing, but we talked in the earlier statement 
about the Other Than Mexicans, OTMs, that have been apprehended 
coming across our Southern Border or actually inside the 
country. So, Mr. Farah, you talked about in your written 
statement that Iran's influence in Latin America and the 
Caribbean is growing on multiple fronts, with a threat coming 
not only from transnational organized crime with a potential 
for WMD-related trafficking.
    So would you explain how the government of Iran exploits 
the criminal networks and what types of materials are 
trafficked and which could be trafficked?
    Mr. Farah. Thank you, Mr. Chairman. I think that the 
basic--my basic premise is that there are multiple trans-
criminal, organized criminal-type lines that cross the northern 
part of South America through Central America, across Mexico 
and cross our borders with impunity thousands of times every 
day. It doesn't make much difference to the people trafficking 
that if it is 30 illegal Chinese or 30 illegal AK-47's or 30 
kilos of cocaine. That product will move and will be delivered 
on our side of the border with probably a higher rate of 
effectiveness than UPS or FedEx.
    So I think that if you--given that those pipelines exist 
and given the stated motivation--or the stated doctrine of the 
Bolivarian Alliance, the ALBA nations, that--of the use--of 
legitimacy of the use of weapons of mass destruction against 
the United States, that you cannot rule out, given the access 
that Venezuela has, that Argentina has, that others have to 
different types of nuclear materials for dirty bombs and other 
things, that that could easily--relatively easily be 
transported across our borders, because we don't catch about 90 
percent, 95 percent of what comes across.
    The counter-argument, and I have been dealing with the U.S. 
Government with this, is that nobody would take a bomb across 
the United States, and I think that that is true. If you walked 
up to someone and said, I am Hezbollah. Please take this bomb 
across and blow up the United States, they would say no, thank 
you. If you look like me and speak native Spanish, like I do or 
as Joseph does, and you have enough money to pay for your 
package to be delivered and you hand it over or you hand 
yourself over to be trafficked, you will arrive. I think that 
that is one of the core threats and one of the core challenges, 
because you are dealing with multi-networked pipelines that are 
interrelated, they are not all the same thing, they are doing 
different things, they are moving different products, but 
basically the products will cross the same choke points across 
the same countries, cross our border the same ways. Once--and 
if you have that--so you have that element in there, and then 
you also have the element of the submersible craft that they 
are finding in Ecuador and Colombia that are primarily used by 
drug traffickers that can carry 10 tons of anything from the 
coast of Ecuador to California. They don't even have to stop to 
refuel in Central America. If you can carry 10 tons of cocaine, 
you can carry 10 tons of just about anything else you want in 
those things. Our inability to detect the movement of those 
ships, our inability to--the submersibles, our inability to get 
a handle on how they are moving and where they are moving is 
deeply troublesome.
    I think if you take those factors together with the 
statement of intent, that is why I keep going back to statement 
of intent, by the Bolivarians themselves with Iran that weapons 
of mass destruction are not only acceptable, are necessary to 
inflict great damage on the United States, I don't think you 
can discount the statement of intent and rationale that they 
have and what they might move.
    Mr. Duncan. Thank you so much.
    I want to thank all the witnesses today for your valuable 
testimony, and the Members of the committee for their 
questions. Some of the Members of the committee may have 
additional questions. We are going to leave the record open and 
ask you guys, if you will, to respond to any questions in 
writing that may come forth. Without any further ado and 
without objection, the subcommittee will stand adjourned.
    [Whereupon, at 3:35 p.m., the subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              

          Questions From Chairman Jeff Duncan for Ilan Berman
    Question 1. According to your written statement, ``Iran's 
activities in Latin America follow the same broad pattern as its 
outreach in other areas of the world, including Asia and Africa.'' What 
are Iran's patterns in these regions and how can the United States 
better recognize them?
    Answer. Iran's current efforts in Latin America are clustered 
around three main areas. The first deals with diplomatic and economic 
outreach, which is designed to lessen the Iranian regime's 
international isolation and expand its political maneuver room in the 
face of mounting Western sanctions. The second is resource acquisition, 
including efforts to acquire strategic minerals for both its nuclear 
and ballistic missile programs. The third is the creation of an 
asymmetric presence by regime or regime-linked elements--such as the 
Iranian Revolutionary Guard Corps (IRGC) and Lebanon's Hezbollah 
militia.
    To a very large extent, these priorities transcend the Latin 
American theater, and are present in Iran's outreach to other parts of 
the globe. For instance, in Asia, Iran has focused heavily upon the 
procurement of nuclear and ballistic missile-related technologies via 
its strategic partnership with North Korea, and on the creation of a 
robust paramilitary capability in the region (visible through recent 
Hezbollah and IRGC activities in India, Thailand, and elsewhere). In 
Africa, too, Iran has sought to engage countries such as Nigeria and 
The Congo in the acquisition of uranium ore, and has manifested an 
asymmetric presence by the IRGC in Sudan.
    Underlying these efforts are several key factors. The Iranian 
nuclear program, although robust and increasingly mature, still 
requires both technological and resource inputs to continue its 
functioning. Likewise, Iran consistently seeks to augment its 
diplomatic and political engagement in a given region with a 
paramilitary presence on the part of the IRGC and its proxies. Finally, 
Iran is now weathering significant domestic instability as a result of 
Western sanctions, and has sought to ``leapfrog'' over its immediate 
geographical periphery to engage with various sympathetic governments 
throughout the world in an effort to maintain its economic and 
political solvency. Understanding these dynamics can help the U.S. 
Government to better monitor Iranian activities and, even more 
importantly, to more accurately predict Iran's next steps in the 
international arena.
    Question 2. In 2009, Iran and Ecuador signed a mining agreement 
that could involve uranium cooperation. Have you seen any measurable 
progress from that agreement or Iran's acquisition of other raw 
materials in Latin America that may aid Iran's illicit nuclear program?
    Answer. With regard to Iranian-Ecuadorian relations specifically, 
it is fair to say that they remain mostly aspirational. Although the 
government of Rafael Correa in Quito has taken pains to express its 
support for the Iranian regime, and has expanded both its political and 
economic ties with Tehran considerably over the past decade, in the 
main these ties remain limited. Despite apparent readiness on both 
sides, the Iranian regime has not yet fully engaged Ecuador, and much 
of its initial promises--including its plans to begin mining and 
resource exploration there--have yet to be realized.
    The same, however, cannot be said of Iran's mining activities 
elsewhere in the region. Most glaringly, Iran is believed to be mining 
for uranium in eastern Venezuela's Roraima Basin. However, also notable 
have been Iran's recorded efforts to acquire strategic minerals, 
including tantalum, thorium, and lithium, from Bolivia. These 
initiatives suggest that the Iranian regime is actively exploring the 
feasibility of Latin America becoming a resource base for its strategic 
programs.
    Question 3. According to your written testimony, you recommend 
three dimensions for U.S. strategy to counter Iran's presence in the 
Western Hemisphere. Can you provide more detail on how DHS can help 
Panama strengthen its container security initiatives in preparation for 
the multi-year expansion of the Canal?
    Answer. The expansion of the Panama Canal, which is currently 
slated to be completed by the end of 2014, poses a considerable 
international security risk, insofar as there is currently no 
comprehensive strategy in place by Panama to increase intelligence 
sharing with allied nations as the volume of commerce carried by the 
Canal increases. This will make the Canal an increasingly attractive 
transshipment point for proliferation-related technologies by 
interested states, including Iran. (Indeed, the July apprehension of a 
North Korean vessel transiting the Canal carrying missile system 
components suggests that such activities are already taking place--and 
that they are likely to expand greatly as Canal traffic expands).
    A large part of this problem originates in Panama City. Authorities 
there have proven willing to investigate suspect containers and vessels 
when prompted by the U.S. Government to do so, and when provided with 
actionable intelligence to that effect. But my first-hand investigation 
in the country and conversations with Panamanian officials leave me 
with serious doubts about the proactive ability of the Panamanian 
government to do such screening. As important, there appears to be 
little appetite on the part of the Martinelli government to identify 
potential ``bad actors'' (such as shipping companies that do business 
with Iran, and could be carrying illicit cargo as a result), or to more 
closely monitor commerce in the adjoining free trade zone of Colon, 
where a large percentage of the cargo transshipped via the expanded 
Canal is expected to be warehoused.
    The U.S. Government in general, and DHS specifically, can take 
concrete steps to assist in this regard. These include: (1) Closer 
intelligence cooperation with Panamanian authorities on proliferation-
related activities that have been flagged by U.S. intelligence 
agencies, as they pertain to the Western Hemisphere; (2) briefings for 
Panamanian authorities regarding the strategic programs of threat 
actors such as North Korea and Iran, to increase awareness of 
components and resources those countries might be seeking in Latin 
America, and (3) where possible, a greater on-the-ground oversight 
presence by relevant specialists, to augment oversight over Canal 
traffic and activity.
        Questions From Chairman Jeff Duncan for Joseph M. Humire
    Question 1. According to your written testimony, ``Iran's 
investments in the region are very strategically placed in particular 
sectors, such as energy, agriculture, transportation, and banking.'' 
Why is Iran seeking to make these types of investments? How many of 
them have come to fruition?
    Answer. Response was not received at the time of publication.
    Question 2. Since the release of Alberto Nisman's recent 
investigation, have any Latin American countries taken any new actions 
to secure their borders?
    Answer. Response was not received at the time of publication.
    Question 3. According to your written testimony, you stated that 
Iran has been able to exploit free trade zones (FTZs) in the Tri-Border 
Area as well as others in Peru, Chile, Colombia, Panama, and Venezuela. 
How is Iran exploiting these FTZs? What types of materials are usually 
smuggled through these routes? What can the United States and its 
regional allies do to prevent this exploitation?
    Answer. Response was not received at the time of publication.
         Questions From Chairman Jeff Duncan for Douglas Farah
    Question 1. Your testimony stated that ``Iran has a 
disproportionately large diplomatic corps--far larger than regional 
super power Brazil--in most ALBA countries, staffed with hundreds of 
`economic attaches' despite negligible commerce.'' Why does Iran have 
such a large cadre of diplomatic corps? What are they doing in Latin 
America?
    Answer. Response was not received at the time of publication.
    Question 2. Your testimony referred to Iranian recruitment of 
students in the Western Hemisphere to train in Qom, Iran, noting that 
recruitment efforts have been ``continuous and on-going since at least 
2007'' and that ``after 6 years, well over 1,000 people have made the 
trip'' to Iran for training. What is the role of the governments of 
Venezuela and Nicaragua in sending these students to train in Iran? Are 
there any other countries involved? How can DHS better identify 
individuals in Latin America who have traveled to Iran for training?
    Answer. Response was not received at the time of publication.
    Question 3. Venezuela, Belize, Cuba, Bolivia, Ecuador, and other 
countries in the region have proven to have the ability to create 
fraudulent identities (passports) for Islamic radicals. While every 
embassy and consulate has a fraud prevention manager responsible for a 
post-specific fraud prevention program, how can DHS and the CBP's 
National Targeting Center do a better job to prevent this type of 
fraud?
    Answer. Response was not received at the time of publication.

                                 
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