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

                      TERRORIST GROUPS IN LATIN AMERICA:
                             THE CHANGING LANDSCAPE

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

                                    HEARING

                                   BEFORE THE

             SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE

                                     OF THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                FEBRUARY 4, 2014

                                   __________

                               Serial No. 113-121

                                   __________

            Printed for the use of the Committee on Foreign Affairs

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                          COMMITTEE ON FOREIGN AFFAIRS

                     EDWARD R. ROYCE, California, Chairman
    CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
    ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American
    DANA ROHRABACHER, California             Samoa
    STEVE CHABOT, Ohio                   BRAD SHERMAN, California
    JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
    MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
    TED POE, Texas                       GERALD E. CONNOLLY, Virginia
    MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
    TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
    JEFF DUNCAN, South Carolina          KAREN BASS, California
    ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
    MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
    TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
    PAUL COOK, California                JUAN VARGAS, California
    GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
    RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, Massachusetts
    SCOTT PERRY, Pennsylvania            AMI BERA, California
    STEVE STOCKMAN, Texas                ALAN S. LOWENTHAL, California
    RON DeSANTIS, Florida                GRACE MENG, New York
    DOUG COLLINS, Georgia                LOIS FRANKEL, Florida
    MARK MEADOWS, North Carolina         TULSI GABBARD, Hawaii
    TED S. YOHO, Florida                 JOAQUIN CASTRO, Texas
    LUKE MESSER, Indiana

         Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director
                   Jason Steinbaum, Democratic Staff Director
                                     ------

             Subcommittee on Terrorism, Nonproliferation, and Trade

                            TED POE, Texas, Chairman
    JOE WILSON, South Carolina           BRAD SHERMAN, California
    ADAM KINZINGER, Illinois             ALAN S. LOWENTHAL, California
    MO BROOKS, Alabama                   JOAQUIN CASTRO, Texas
    TOM COTTON, Arkansas                 JUAN VARGAS, California
    PAUL COOK, California                BRADLEY S. SCHNEIDER, Illinois
    SCOTT PERRY, Pennsylvania            JOSEPH P. KENNEDY III,
    TED S. YOHO, Florida                     Massachusetts

                                C O N T E N T S

                                  ----------
                                                                       Page

                                   WITNESSES

    Gino Costa, Ph.D., president, Ciudad Nuestra (appearing via
      teleconference)................................................     5
    Ms. Celina B. Realuyo, William J. Perry Center for Hemispheric
      Defense Studies, professor of practice of National Security
      Affairs, National Defense University...........................    13
    Mr. Douglas Farah, senior associate, Americas Program, Center for
      Strategic and International Studies............................    27
    Mr. Michael Shifter, president, Inter-American Dialogue..........    59

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Gino Costa, Ph.D.: Prepared statement............................     7
    Ms. Celina B. Realuyo: Prepared statement........................    16
    Mr. Douglas Farah: Prepared statement............................    30
    Mr. Michael Shifter: Prepared statement..........................    61

                                    APPENDIX

    Hearing notice...................................................    76
    Hearing minutes..................................................    77

                      TERRORIST GROUPS IN LATIN AMERICA:
                             THE CHANGING LANDSCAPE

                                  ----------

                           TUESDAY, FEBRUARY 4, 2014

                         House of Representatives,

            Subcommittee on Terrorism, Nonproliferation, and Trade,

                         Committee on Foreign Affairs,

                                Washington, DC.

        The subcommittee met, pursuant to notice, at 2 o'clock
    p.m., in room 2172 Rayburn House Office Building, Hon. Ted Poe
    (chairman of the subcommittee) presiding.
        Mr. Poe. The committee will come to order.
        Without objection, all members may have 5 days to submit
    statements, questions, extraneous materials for the record,
    subject to the length limitation of the rules.
        Transnational criminal and terrorist groups in Latin
    America are a threat to the United States national security.
    Some of the main players on this battlefield are FARC in
    Colombia, and Shining Path in Peru, and even Hezbollah. The DEA
    has solid evidence showing stronger ties between FARC and
    Hezbollah.
        Hezbollah operative Ayman Joumaa smuggled over 90,000 tons
    of cocaine into America and laundered over $250 million for the
    cartels. Jamal Yousef, also a Hezbollah agent, agreed to
    provide military grade weapons to FARC in exchange for hundreds
    of kilograms of cocaine.
        Hezbollah and FARC maintain an operational alliance, much
    of which occurs under the protection of the Venezuelan regime.
    Other illicit Hezbollah activity occurs in the dangerous tri-
    border area. The activities of these groups include drug
    trafficking, money laundering, human trafficking, and weapons
    shipments.
        In Peru, Shining Path is the main terrorist organization.
    Shining Path recruits children to participate in the drug
    activity, also forcing them to fight on the front lines. We
    have seen progress, however, in the fight against Shining Path.
    U.S. assistance was critical to kicking them out of an area
    called San Martin. Our assistance helped eradicate cocaine
    crops, give farmers alternative crops to plant, and take out
    leaders of Shining Path.
        This past August, two of the group's top leaders were
    killed. I had the opportunity to go to San Martin last fall. I
    saw Peruvians working in the heat of the day pulling up one by
    one the cocaine crops. They were trying to make their country a
    safer place.
        I also visited a farm that stopping growing cocaine. The
    matriarch was a strong-willed woman whose husband was killed by
    drug violence. When this happened, she decided she had seen
    enough, and now she grows some of the best quality chocolate in
    the world. Ten years ago, even the Peruvian Government could
    not set foot in the region. Today Shining Path is nowhere to be
    found, and it is known as the San Martin Miracle.
        The war is not won. Up to 500 members of the Shining Path
    are holding on in a hard region known as VRAEM. More than 50
    percent of all cocaine produced in Peru comes from this region.
    There are few roads that go in and out of the rugged terrain,
    but drug traffickers fly about six flights a day out of VRAEM
    into neighboring countries.
        President Humala has doubled down on the taking out of
    Shining Path. For the first time in its history, the Government
    of Peru is now spending its own money on drug eradication, and
    now President Humala is preparing to go into VRAEM and smoke
    these bandits out.
        Now is not the time, when we have the Shining Path on the
    run, for the United States to stop its help. We need to help
    Peru finish this job. In Colombia, the FARC is the main enemy.
    Thanks in part to over $100 million of U.S. assistance and
    training the FARC has never been weaker. FARC went from 20,000
    members in 2004 to 7,000 today, but FARC is still a serious
    threat.
        No longer able to execute large and high profile attacks,
    they are going back to their guerrilla warfare. They have
    increased small scale attacks on the military and government
    workers in the last 2 years. They are getting more involved in
    the drug trade. Some say they are even morphing into their own
    criminal organization.
        The Colombian Government is negotiating with FARC as we
    speak. So far, the two sides have tentatively agreed on what
    political participation would look like in some of the rural
    development and land reform.
        Now the ball is in FARC's court to see if the talks are
    going to progress. FARC has to decide if it is willing to give
    up its weapons and change their criminal behavior. It is not
    clear if these negotiations are going to work. Any deal is not
    necessarily a good deal. FARC senior leaders might enjoy a
    deal, but the foot soldiers won't benefit much. If that
    happens, there is a chance that the lower ranks will fracture
    and form their own separate criminal or terrorist
    organizations, and the problem may only grow.
        We have seen progress in both Colombia and Peru, and I want
    to know from our witnesses what lessons we can learn from this
    progress and how we can help fight other terrorist
    organizations. It remains to be seen if this progress can be
    sustained. We have not yet achieved victory against these two
    groups, and I look forward to hearing what our witnesses think
    U.S. policy should be going forward to make sure we can finish
    the job.
        I will now turn over for his opening statement the ranking
    member, Mr. Sherman from California.
        Mr. Sherman. Thank you, Judge, for holding these hearings.
    We will focus particularly on Colombia and Peru, which have
    struggled with insurgencies for decades. These conflicts have a
    long and complicated history. Additionally, the neighboring
    states and various non-state actors have used the region as a
    battleground and as a base to advance their interests.
        I want our witnesses to particularly focus on three
    things--the involvement of Hezbollah, the exportation of drugs,
    and human trafficking.
        The insurgent activity in Peru has been reduced in strength
    and territory from its peak in the 1980s and the 1990s. Current
    assessments of the insurgency known as Shining Path consist of
    only a few hundred armed members. At one point, this insurgency
    had at least 5,000 armed fighters.
        Shining Path operations have been mostly limited to the
    most remote rural areas, and Shining Path is a militant
    movement founded by a former university professor who is now in
    prison. Its goal was to destroy the Peruvian Government and
    replace it with a revolutionary peasant authority using Mao-
    style guerilla warfare.
        Engaging in massacres and assassinations, Shining Path
    posed a threat to the Peruvian Government and institutions at
    the height of its activity. The conflict led to 70,000 deaths,
    most of whom were civilians. Alberto Fujimori, then President,
    led a counterinsurgency campaign that improved national
    security, but according to many human rights groups came at the
    cost of many human rights violations.
        Shining Path began a minor resurgence in 2001. It currently
    has two competing factions constituting a low level threat in
    certain mountainous and hard-to-reach Andean regions. There was
    a split over whether or not to pursue a peace process, with one
    faction expressing interest in those negotiations.
        According to the State Department's most recent country
    report on terrorism, Shining Path committed 87 acts of
    terrorism in 2012 killing 1 civilian and 13 members of the
    military, 5 police officers, for a total of 19 people.
        Turning to Colombia, the State Department's annual report--
    annual Country Reports on Terrorism in 2012, which was issued
    in May of last year, indicates that the majority of terrorist
    acts in Latin America were perpetrated by the FARC--one
    organization, the majority of terrorist acts on the entire
    continent, in fact the entire region.
        FARC is a group of mostly rural insurgents who, since the
    organization's founding in 1964, have sought to overthrow the
    Colombian Government. FARC grew steadily over the decades and
    drew resources from drug trafficking, extortion, other illicit
    activities. The FARC portrays itself as a struggle against the
    Colombia systematic inequality. The FARC was declared to be a
    foreign terrorist organization by the United States in 1997,
    and in that same year so was the Shining Path of Peru. Both are
    still listed.
        It is believed that at its high point in the early 2000s
    FARC had approximately 16,000, even 20,000 troops. It is now
    down to about half that strength. Reports indicate that some
    220,000 people have died in the course of Colombia's conflict,
    and of course the vast majority of those were civilians.
        The war with FARC entered a very different phase over the
    course of the implementation of Plan Colombia. The United
    States appropriated over $9 billion this century to carry out
    that plan. I know our witnesses will assess for us the impact
    of that aid.
        Under Plan Colombia and its subsequent strategies, the
    country has made considerable progress in combatting drug
    trafficking and insurgent activities. However, here again we
    hear human rights groups citing elements with the Colombian
    military, working with right wing paramilitary forces, and
    abusing human rights.
        There have of course been tensions with Colombia's
    neighbors, most especially Venezuela, but there also has been
    FARC operations in Ecuador, Panama, and Peru. And I look
    forward to learning more from our witnesses, and I yield back.
        Mr. Poe. I thank the ranking member. Without objection, all
    of the witnesses' prepared statements will be made part of the
    record, and I will ask that each witness keep their
    presentation to 5 minutes.
        I will introduce all four witnesses, and then we will hear
    from our first witness. Dr. Gino Costa is the head of the
    Ciudad Nuestra, an NGO specializing in citizen security and
    police reform. Prior to that he worked in the U.N. Center for
    Human Rights in Geneva and the U.N. Mission to Nicaragua,
    Honduras, and El Salvador. He served as executive secretary of
    the Ad Hoc Pardons Commission set up by the Peruvian Government
    in 1996 to review terrorism conviction and was Deputy Ombudsman
    for Human Rights from '97 to 2000.
        Ms. Celina Realuyo--is that right? Close enough? Is
    professor of practice at the William J. Perry Center for
    Hemispheric Defense Studies at the National Defense University
    where she focuses on U.S. national security, illicit networks,
    transnational organized crime, counterterrorism, and threat
    finance issues in the Americas. She is a former U.S. diplomat,
    international banker with Goldman Sachs, and a U.S. foreign
    policy advisor under the Clinton and Bush administrations.
        Mr. Douglas Farah is the senior non-resident associate of
    the Americas Program at the Center for Strategic and
    International Studies. Since January 2005, he has also been the
    president of the IBI Consultants. His focus is on the
    transnational criminal organizations, terrorism, and their
    effects on states and corruption with a focus on the Western
    Hemisphere. And he serves as consultant to several U.S.
    Government departments, agencies, combatant commands, and
    leading academic centers in the United States and overseas.
        Mr. Michael Shifter is the president of the Inter-American
    Dialogue. Since '93, he has been adjunct professor of Latin
    American Politics at Georgetown University School of Foreign
    Service. Before joining the Dialogue, he directed the Latin
    American and Caribbean Program at the National Endowment for
    Democracy and the Ford Foundation Governance and Human Rights
    Program in the Andean region in Southern Cone.
        Dr. Costa will give his opening statement, and we will
    proceed directly to members' questions from him. We will then
    end the video conference with him and hear from our remaining
    witnesses.
        Dr. Costa, thank you for joining us from Peru. Thank you
    also for waiting some time. And you may now give us your
    statement, and then we will go directly to questions from the
    panel, and then hear testimony from our other three witnesses.

       STATEMENT OF GINO COSTA, PH.D., PRESIDENT, CIUDAD NUESTRA
                     (APPEARING VIA TELECONFERENCE)

        Mr. Costa. Chairman Poe, Ranking Member Sherman, and
    members of the Subcommittee on Terrorism, Nonproliferation, and
    Trade, I very much appreciate the opportunity to appear before
    you today.
        In 1992, 12 years after the beginning of the armed
    conflict, the most important leaders of the Shining Path and
    the Tupac Amaru Revolutionary Movement were captured by the
    police, and their military forces were almost completely
    dismantled. Since then, the leaders of both groups have been in
    prison and military actions have almost disappeared.
        This victory was the result of excellent police
    intelligence in urban areas and an alliance between the armed
    forces and rural peasants in the countryside. Holdovers from
    the Shining Path retreated to mountainous, inhospitable, and
    inaccessible areas located in the coca-growing regions of the
    VRAEM and the Upper Huallaga valleys, where they engaged in
    sporadic actions to obstruct efforts by the security forces to
    eradicate illicit crops and fight drug trafficking.
        In February 2012, 20 years later, Comrade Artemio, the
    Shining Path leader in the Huallaga Valley, was detained by the
    police. Thus, one of the two armed holdovers of the Shining
    Path was effectively dismantled. Artemio's downfall was the
    result of a prolonged and successful intelligence effort, which
    involved the counternarcotics and counterterrorism police.
        Previously, police actions had led to the arrest or killing
    of Artemio's most important supporters. Progress in security
    went hand in hand with the eradication of illicit coca,
    alternative development efforts, and a growing state presence.
    Although illicit crops remain, they are shrinking in number,
    and the Valley has turned into a peaceful region, a condition
    which has been described as the ``San Martin miracle.''
        Unlike the Huallaga Valley, the strategy against the
    Shining Path in the VRAEM was led by the military, and the role
    of the police was negligible until fairly recently. The
    strategy, implemented a decade ago, was basically defensive and
    consisted of the establishment of military bases for the
    purpose of containing the Shining Path's expansion.
        Between 2008 and 2009, the armed forces went on the
    offensive in order to take control of the Shining Path
    headquarters in the Vizcatan region. After initially
    retreating, the Shining Path counterattacked by ambushing and
    killing dozens of soldiers and police agents, and even
    disrupting its air support, forcing the military to withdraw in
    defeat with not one Shining Path soldier detained or killed.
        Artemio's capture made evident that the unsuccessful
    military strategy in the VRAEM had to be replaced by the
    successful police strategy carried out in the Huallaga Valley.
    It was not easy for the military to acknowledge that the police
    had to play the lead role in the counterterrorist effort.
        The decision was finally made by President Humala, who
    decided to integrate the intelligence activities of the
    counternarcotics police, the counterterrorist police and the
    Peruvian Navy, which together formed a special intelligence
    brigade under police leadership. This brigade, with the support
    of all the branches of the armed forces, made it possible to
    strike on an ad hoc basis.
        It was this new strategy that led to the killing of Comrade
    William in September 2012, and Comrades Alipio and Gabriel in
    August 2013, the three most important Shining Path military
    leaders and the number 5, 2, and 4 of its command structure,
    respectively.
        The Shining Path has been dealt a very hard blow, but it is
    still a long way from being defeated. Estimates of its strength
    in the VRAEM vary between 140 armed men and somewhere between
    400 and 500. It is essential to take advantage of its current
    weakness to capture and kill what is left of its leadership--
    Comrades Jose, Raul, and Olga--and dismantling its military
    apparatus. U.S. assistance, through DEA, has been instrumental
    in the progress thus far achieved and should be sustained to
    ensure the defeat of what is left of the Shining Path.
        The achievements of the last 2 years demonstrate the
    effectiveness of the new strategy, which could be helpful to
    confront terrorist groups elsewhere. This strategy consists of
    prioritizing police intelligence work, which should combine
    human intelligence with electronics, telephone and radio
    listeners. Good intelligence facilitates more precise police
    operations in the field to capture or hit the main leaders of
    the terrorist organizations.
        Military involvement in these command operations can be
    very helpful. It is crucial to ensure the legality of
    intelligence and operational actions, so that these cases may
    be prosecuted by the judicial system. An effort of this nature
    requires only a small number of participants, but highly
    professional ones, that generally come from various units and
    institutions. Thus, it is essential that their actions be
    properly coordinated and conducted at the highest possible
    level.
        [The prepared statement of Mr. Costa follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                  ----------

        Mr. Poe. Thank you, Dr. Costa. It is good to see you again.
    I will start with the questions. There are reports that the
    United States Government is looking at cutting some of the aid
    to Peru. What impact will this have on the fight against
    Shining Path? And, second, what impact will it have on drug
    eradication?
        Mr. Costa. The U.S. Government has already been cutting
    down its cooperation to Peru. So the information that it might
    cut it further is not good news for the fights against what is
    left of Sendero and the fight against drug trafficking in Peru.
    So we do hope that an effort can be made to sustain the support
    provided by the U.S. Government to the Peruvian Government,
    especially to make sure that we can finish what is left of the
    Shining Path.
        I do think that the U.S. support is crucial. It has been
    crucial, and we need to continue with that support.
        Regarding the fight against drug trafficking and illicit
    crops, the Peruvian Government has been increasing its budget
    to finance what periods ago was exclusively an effort funded by
    U.S. resources. And we hope that in the coming years that
    national effort will increase to make sure that we can deal on
    our own with, you know, the need to confront drug trafficking
    in Peru.
        Still, we also need in this regard sustained support by the
    U.S. Government. But I want to stress the type of thing that,
    you know, the most important threat now is to deal with the
    violent expression of drug trafficking in Peru, and there is a
    need to get the job finished before retreating from Peru.
        Mr. Poe. If you would be a little more specific on U.S.-
    Peruvian counterterrorism efforts and give us some detail as to
    what has been effective, what has been the most successful
    strategy between Peru and the United States on
    counterterrorism.
        Mr. Costa. Chairman Poe, as I said in my statement, it has
    been crucial for the progress achieved regarding the Shining
    Path to ensure that quality of the intelligence work that has
    been carried out. And in this regard, the support of the U.S.
    has been very important in terms of training, in terms of
    providing equipment for electronic intelligence, and in terms
    of following and accompanying the efforts of the security
    forces in Peru.
        There have also been resources provided by the U.S.
    Government to recompense us to compensate for those that
    provide information that could lead to the detention of Shining
    Path leaders. So I think that that would be the most important
    aspects of U.S. cooperation with Peruvian security forces.
        Regarding the fight against the Shining Path, of course the
    drugs program in Peru, which is also very important, it has
    been instrumental for the success of the San Martin experience
    regarding the eradication of illicit crops and alternative
    development strategies. But as I said before, the Peruvian
    Government in the last 2 years has been investing of its own
    resources to be able to compensate for the reduction in the
    U.S. support in this regard.
        Mr. Poe. Do you know of any evidence that Shining Path is
    working with FARC or other Mexican drug cartels?
        Mr. Costa. No. We don't have any--I don't have any
    information regarding relations between what is left of the
    Shining Path and Hezbollah or the FARC, or even the Mexican or
    Colombia cartels themselves. There is no doubt that the Shining
    Path is related to the drug traffic.
        The most important source for the funding of its activities
    comes from drug trafficking and mainly from the support and
    protection that it provides drug trafficking in the VRAEM. But
    I don't have information as to direct relations between the
    Shining Path and the Mexican and the Colombian cartels.
        Mr. Poe. Thank you, Dr. Costa.
        Now the ranking member, Mr. Sherman, for his questions.
        Mr. Sherman. Thank you, Chairman.
        The Shining Path is split into two organizations, one with
    the initials SL.FRAEM, the other SL.UHV. Would you think either
    one of these will reach a peace accommodation with the Peruvian
    Government?
        Mr. Costa. Actually, the two--I mentioned that after the
    defeat of the Shining Path, the strategic defeat of the Shining
    Path in the early '90s, there were two armed holdovers, one in
    the Huallaga Valley and one in the VRAEM. The holdover in the
    Huallaga Valley, headed by Artemio, wanted a peace accord with
    the government, and Artemio followed the line, the political
    direction, of Abimael Guzman imprisoned for life in the
    Peruvian naval base.
        But Artemio was detained, as I said in my statement, 2
    years ago. And after his detention the whole military apparatus
    led by Artemio collapsed and was dismantled. So actually today
    we only have one Shining Path group, which is one left in the
    VRAEM. They have no relation with the leadership of Abimael
    Guzman and Artemio. They believe that Guzman has betrayed the
    Peruvian Revolution, and they follow a different line.
        So in military terms, all we have left today is one Shining
    Path group concentrated in the VRAEM that has no relation with
    historical leadership of the Shining Path.
        Mr. Sherman. Thank you for that update. President Fujimori
    was convicted not only of corruption but also of stated crimes
    against humanity and human rights abuses. How does the human
    rights behavior of the current Peruvian Government compare to
    those who practice under President Fujimori?
        Mr. Costa. I do believe that we have learned the lesson.
    Currently, there are no serious allegations of human rights
    abuses against the security forces in the context of the fight
    against the Shining Path in the VRAEM, or previously the
    Shining Path in the Huallaga Valley, nor any serious
    allegations regarding the conduction of our anti-drug policy in
    those two valleys and a number of other valleys where the coca
    leaf is produced.
        Mr. Sherman. Obviously, the Shining Path is a much less
    dangerous organization than it was in its heyday. Peru is a
    mid-income country. Why can't the Peruvian Government deal with
    this and other issues of national security and drug
    interdiction without help from the United States taxpayer?
        Mr. Costa. We are certainly dealing with the problem, but
    we certainly benefit a lot from U.S. assistance. We are well
    aware of, you know, the budgetary and fiscal problems you are
    facing in the United States. And as I said before, we have been
    making a very important effort to compensate for the reduction
    in U.S. cooperation regarding the fight against drugs and the
    fight against Shining Path.
        As I said before, I think it would be very important to
    ensure that U.S. cooperation can be sustained at least until we
    finish what is left of the Shining Path, and that is what I
    would hope. I think it is also, as Chairman Poe said at the
    beginning of his presentation, that this is also in the
    interest of--the international interest of the U.S. Government.
        Mr. Sherman. Thank you.
        Mr. Poe. We will now hear questions from the gentleman from
    Illinois, Mr. Kinzinger.
        Mr. Kinzinger. Thank you, Mr. Chairman.
        And, sir, thank you for being here. I am actually--I fly an
    RC26, which is an intelligence surveillance reconnaissance
    airplane, and I believe Peru actually has the same asset. You
    talked a lot about the use of intelligence in terms of
    finishing off these groups or in terms of taking the fight to
    them anywhere else that this replicates.
        Where does Peru stand right now in terms of having enough
    of those assets without U.S. help? And, you know, where do they
    need to be in order to be able to effectively take--to finish
    this fight and take it to the bad guys?
        Mr. Costa. We do have the wherewithal to deal with the
    problem, but part of that wherewithal is being provided by the
    U.S. Government. So, as I said before, that is one of the
    reasons why I do believe that it would be helpful to continue
    receiving U.S. assistance, especially regarding intelligence,
    electronic intelligence.
        Mr. Kinzinger. Okay. Also, so now to kind of tie this to
    the issue we deal with in the Middle East and in other places,
    what is the risk right now? What do you see the risk of--if we
    let up on this fight in Peru, what do you see the future as?
    Are they going to stay, you know, 500 people? Do you see the
    risk of this expanding yet again?
        And on top of that, I want you to talk about the difference
    between what drives this group, Shining Path, and what drives,
    for instance, al-Qaeda? Al-Qaeda, which is a jihadist group
    driven by religion versus kind of a political ideology. Could
    you talk about the difference in the risk associated with that
    issue?
        Mr. Costa. Yes. If we would be having this conversation 2
    years ago, we would certainly be much more concerned, because
    that strategy to deal with Sendero was failing until we managed
    to strike Artemio in the Huallaga, and then implement the new
    strategy to deal with the Shining Path in the VRAEM. And now we
    expect to be able to conclude the job if we insist in applying
    this new strategy.
        But 2 years ago the feeling was that we were losing this
    battle, that the Shining Path--especially in the VRAEM was
    growing, its area of influence was increasing, and its military
    presence was threatening the transportation of natural gas from
    the Camisea region in Cusco to the coast and mainly to the
    capital in Lima. That natural gas accounts for around 40
    percent of the energy we consume in the country.
        That threat is still there. We know that part of the
    funding of Sendero comes from extortion to the gas companies
    that are responsible for the transportation of the natural gas
    from Cusco to Lima. So that is the kind of threat, and what
    concerns us the most with Sendero, the possibility of Sendero
    recovering the lost territory it had in the early '90s,
    threatening the supply of natural gas, 40 percent of the energy
    we consume in the country.
        But we are aware that it is more a local than an
    international threat in this moment. As I said before, we don't
    have information that it has contacts with international
    terrorist groups. This discussion within Peru where Sendero is
    today, the military expression of drug trafficking in Peru, or
    if it is still a political group, I do believe that it is still
    a political group, although its interests with drug trafficking
    and illegal logging and extortion to gas companies have--makes
    this group also an organization involved in common crime.
        But I think there are great differences between the Shining
    Path and al-Qaeda and these sort of movements in the Middle
    East.
        Mr. Kinzinger. Thank you. And I will just conclude by
    saying I think it is important when you have a group like this
    on their heels, this is where we tend to sometimes make the
    decision to let up, because we are not eager to have a fight
    over--and I think this is when it is important to double down
    pressure and extinguish existing terrorist groups.
        Mr. Chairman, I will yield back.
        Mr. Poe. I thank the gentleman. Five minutes for the
    gentleman from Arkansas, Mr. Cotton.
        [No response.]
        All right. He yields back his time.
        Mr. Costa, I want to--Dr. Costa, I want to thank you for
    joining us today by video conference. We appreciate your
    testimony and your answers to all of the questions. And I also
    want to thank the U.S. Embassy for helping to set this up. So
    thank you very much.
        Mr. Costa. Thank you, Mr. Chairman.
        Mr. Poe. We will now turn to the witnesses at the--present
    in the hearing room. Thank you for waiting. Ms. Realuyo, you
    have 5 minutes.

    STATEMENT OF MS. CELINA B. REALUYO, WILLIAM J. PERRY CENTER FOR
    HEMISPHERIC DEFENSE STUDIES, PROFESSOR OF PRACTICE OF NATIONAL
             SECURITY AFFAIRS, NATIONAL DEFENSE UNIVERSITY

        Ms. Realuyo. Thank you, Chairman Poe, Ranking Member
    Sherman, and members of the subcommittee for the opportunity to
    appear today before you to testify on the convergence of
    illicit networks in Latin America.
        I am a professor of practice at the William J. Perry Center
    for Hemispheric Defense Studies, but the views expressed today
    are my own and do not necessarily reflect the views of the
    Perry Center, the National Defense University, or the Defense
    Department.
        Globalization has transformed our lives positively with the
    free flow of goods, services, information, and technology.
    However, at the same time, globalization has empowered illicit
    networks, including terrorists, criminals, and proliferators
    that undermine our prosperity and security.
        Terrorists have political objectives while criminals seek
    to maximize profits. What we are witnessing today is a
    disturbing convergence of terrorism and crime from the
    mountains of Afghanistan to the jungles of Latin America that
    threatens the rule of law, governments, the economy, and
    society.
        In contrast to indigenous terrorist groups like the FARC in
    Colombia and the Shining Path, Hezbollah, the Shia Muslim
    political group in Lebanon, designated by the United States as
    a foreign terrorist organization, operates inside and outside
    of Lebanon. It relies on significant support from Iran and the
    Lebanese Shiite diaspora community around the world.
        As you know, before the tragic attacks of September 11
    perpetrated by al-Qaeda, Hezbollah was the terrorist group
    responsible for the most U.S. casualties from terrorist attacks
    since its founding in 1982. More recently, Hezbollah has been
    in the headlines for actively supporting and fighting alongside
    President Bashar Al-Assad's regime in Syria.
        Hezbollah and its global facilitators represent an emerging
    terror-crime nexus through its networks in the Middle East,
    Africa, and the Western Hemisphere. Since the 1990s, Hezbollah
    has enjoyed ideological and financial support from the Lebanese
    community in the tri-border area of Argentina, Brazil, and
    Paraguay, a region known for arms, drugs, counterfeit, and
    human trafficking.
        Three more recent cases illustrates Hezbollah's increasing
    reliance on facilitators engaged in criminal activities beyond
    the tri-border of South America. In 2008, Operation Titan, a 2-
    year joint U.S.-Colombian investigation, dismantled an
    international cocaine smuggling and money laundering ring that
    allegedly directed part of its profits to Hezbollah.
        Among the 138 suspects arrested was Lebanese kingpin Chekry
    Harb, accused of being a world-class money launderer. According
    to Colombian officials, he laundered millions of dollars each
    year from Panama to Hong Kong and paid some 12 percent of his
    profits to Hezbollah.
        In a separate case, Ayman Joumaa, a Lebanese-Colombian
    national and critical facilitator for Hezbollah, was indicted
    in absentia in November 2011 for distributing 85,000 kilograms
    of cocaine from Colombia through Central America to the Los
    Zetas cartel in Mexico. He is also accused of laundering $850
    million of drug money from Mexico, Europe, and West Africa, to
    Colombia and Venezuela.
        Joumaa allegedly charged between 8 to 14 percent for
    laundering the funds and directed some of his profits to
    Hezbollah. This partnership between a prominent Hezbollah
    facilitator and Los Zetas, Mexico's most violent cartel, is a
    disturbing development illustrating the convergence of
    terrorism and crime.
        The most recent case of Hezbollah's global facilitators
    involved the now-defunct Lebanese Canadian Bank, Lebanon's
    eighth largest bank with assets worth over $5 billion.
    According to the DEA, this bank and some Lebanese exchange
    houses wired at least $329 million from 2007 to 2011 to the
    United States to finance a sophisticated illicit trade and
    money laundering scheme.
        This network moved drugs from South America to Europe and
    the Middle East, and purchased used cars in the U.S. to be
    shipped and sold in West Africa. Cash from the car sales, as
    well as from the drug trafficking, were funneled to Lebanon
    through Hezbollah-controlled money laundering channels.
        On June 23, 2013, Lebanese Canadian Bank agreed to pay here
    in the United States a settlement of $102 million. It is just a
    fraction of the amount of money allegedly laundered by this
    institution.
        In the age of globalization, the convergence of terror
    crime networks is capitalizing on global resources, supply
    chains, markets, and facilitators. The Operation Titan, Ayman
    Joumaa, Lebanese Canadian Bank cases illustrate how Hezbollah
    relies on criminal activities and support from overseas among
    the Lebanese diaspora in Latin America.
        Drug trafficking, money laundering, and illicit trade in
    Latin America that fund Hezbollah are impacting U.S. consumers,
    financial institutions, and markets. While according to the
    State Department, Hezbollah may not be currently plotting
    terrorist acts in the United States or Latin America, we must
    remain vigilant and prepare for potential threats.
        The 2011 White House Strategies to Combat Terrorism and
    Transnational Organized Crime seek to channel the appropriate
    USG resources to address these threats. To confront the
    convergence of illicit networks, we need to promote more
    effective interagency and international cooperation to better
    understand, analyze, and counter these illicit networks.
        Thank you for your time and attention. I look forward to
    your questions.
        [The prepared statement of Ms. Realuyo follows:]

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                                  ----------

        Mr. Poe. The chair recognizes Mr.--is it Farrah or Farah?
        Mr. Farah. Five minutes. Thank you, sir.

      STATEMENT OF MR. DOUGLAS FARAH, SENIOR ASSOCIATE, AMERICAS
        PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES

        Mr. Farah. Thank you, sir. Chairman Poe, Ranking Member
    Sherman, and members of the committee, thank you for the
    opportunity here to talk about the FARC and lessons learned for
    the United States. I should clarify that I am speaking on
    behalf of myself and not any institution.
        I believe the U.S. Government--the U.S.-Colombia
    partnership is one of the most successful in recent times. I
    have had the privilege of working in Colombia since 1989 and
    have seen the nation teeter on the edge of the abyss in the
    1990s to emerge as a regional model of democracy and economic
    development.
        The FARC, despite the ongoing peace talks with the
    government of President Juan Manuel Santos in Cuba, remain
    engaged in criminal enterprises and terrorist activities that
    stretch from Colombia to Argentina and northward to Central
    America and Mexico. Recent cases by the DEA show the direct and
    growing criminal and drug ties between the FARC and Hezbollah.
        As I detail in my testimony, the FARC, since at least 1999,
    has established a relationship with the Government of Iran
    designated by the United States Government as a state sponsor
    of terrorism. The FARC was designated in 1997 following the
    kidnapping and executions of seven American missionaries. The
    European Union followed suit in 2005.
        Under the protection of the Governments of Venezuela,
    Ecuador, Nicaragua, and Bolivia, as well as powerful friends
    elsewhere, the FARC maintains a robust international
    infrastructure that produces thousands of kilos of cocaine and
    launders hundreds of millions of dollars. It has emerged as a
    prototype hybrid criminal/terrorist insurgency.
        It is not for me as a non-Colombian to judge the wisdom of
    holding peace talks, but what I can say is that the FARC is a
    central part of the revolutionary project of bringing together
    armed groups and terrorist organizations under the umbrella of
    the Bolivian Revolution with the aid and support of Iran.
        The glue that binds these groups is a shared vision of
    creating a new world order in which the United States, Europe,
    and Israel are enemies to be destroyed. Their common doctrine
    of asymmetrical warfare explicitly endorses the use of weapons
    of mass destruction against their perceived enemies.
        Over the past 15 years, Colombia has undergone a profound
    transformation. This is testament to Colombia's own innovative
    and courageous policies and the sustained bipartisan U.S.
    support that span three administrations and has led to a
    partnership that is unique in Latin America.
        During the 3-year peace negotiations that ended in February
    2002 in Colombia, the FARC significantly expanded its outreach
    to other terrorist groups to increase its technical
    capabilities and establish relationships that endure to this
    day.
        Among the visitors to the FARC territory during the talks
    were the Iranian Government officials, ostensibly to build a
    refrigerated meat storage facility. The plant was never built,
    but it provided the FARC leadership with direct contact with
    Iranian officials, a relationship that endures today through
    the Venezuelan Government.
        ETA terrorists and other groups trained the FARC, and by
    2003 the FARC was using techniques from these organizations in
    attacks that took hundreds of civilian lives. In my written
    testimony, I detail the support based on documents captured by
    Colombian security forces when they killed Raul Reyes in 2008.
    Of these groups, as well as Hugo Chavez, Rafael Correa, Daniel
    Ortega, and Salvador Sanchez Ceren, the leading candidate for
    President of El Salvador, and his fellow FMLN leader, Jose Luis
    Merino.
        The FARC's Central American Network is among the most
    important in the current discussion because it is still active.
    Nicaraguan President Ortega offers refuge and financial aid to
    the FARC, and the Reyes documents show that when Reyes was
    killed Merino and El Salvador was brokering a deal that
    included the sale of grenade launchers, 50-caliber machine
    guns, sophisticated explosives, and possibly surface-to-air
    missiles.
        Former U.S. Ambassador to El Salvador, William Walker, a
    friend of Merino, recently wrote an op-ed in The New York Times
    defending the FMLN and dismissing its ties to the FARC, which
    he called a leftist movement rather than a terrorist
    organization. The right of the FMLN to participate in the
    electoral process is not in discussion as Ambassador Walker
    mistakenly argues. But defending its leaders who supply weapons
    to a terrorist organization is shocking for a former U.S.
    Envoy.
        There is significant evidence showing the FARC's
    operational alliance with Hezbollah and Hezbollah's allies
    based in Venezuela under the protection of the Maduro
    government. The evidence is compelling that both the FARC and
    Hezbollah are now engaged in a series of business relationships
    that involve the cocaine and weapons trades.
        Despite the support, the FARC did not win. The Colombian
    people ultimately wanted to save their country. It was this
    will, welded to the political will of successive U.S.
    administrations, to support them that is perhaps our greatest
    lesson to be drawn. The U.S.-Colombia Strategic Partnership
    must continue for the foreseeable future, even if peace talks
    are successful.
        With or without a peace agreement, the Colombian Government
    will require not only ongoing military and police support but
    support in other areas of their vast undertaking of
    reestablishing a positive state presence in huge areas of the
    country where the government has been absent for generations.
    Failure to adequately address the continuing challenges could
    put at risk many of the hard-won gains achieved by the
    Colombians.
        There are several key lessons one can draw from Colombia
    that are applicable in other theaters. First is that there has
    to be a significant level of trust in a successful partnership
    or there will be conflicts, as we see in Afghanistan today. In
    Colombia, the trust led the United States to support some of
    the Colombian Government's riskiest operations, including a
    hostage rescue, that it would be almost impossible to image
    with any other ally.
        Second is that hybrid groups like the FARC, the Taliban in
    Afghanistan, and many others thrive in the seams of the world's
    illicit trade pipelines. The money from cocaine that the FARC
    has garnered has ensured that it has endured far longer than it
    would have as a simple insurgent group.
        All of these new groups are dangerous and far more
    difficult to attack than terrorist groups of the past, given
    their enormous access to financial resources. None of these
    groups operate in a vacuum. Governments like those of
    Venezuela, Nicaragua, Bolivia, and Ecuador create a permissive
    operational environment in which the FARC, Hezbollah, Iranian
    officials, ETA, and others can safety meet, exchange lessons
    learned, and work to build alliances.
        This is not to say there is one giant alliance of all these
    groups aimed at the United States. Rather, it is a deliberately
    created environment where these groups can trade expertise and
    make temporary alliances of mutual convenience, none of which
    will be of benefit to the United States. This is the danger of
    the FARC, and that danger is unlikely to diminish even with a
    successful peace process in El Salvador--in Colombia, I am
    sorry.
        Thank you.
        [The prepared statement of Mr. Farah follows:]

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                                  ----------

        Mr. Poe. Mr. Shifter, you have 5 minutes. Thank you.

      STATEMENT OF MR. MICHAEL SHIFTER, PRESIDENT, INTER-AMERICAN
                                DIALOGUE

        Mr. Shifter. Thank you very much, Chairman Poe, Ranking
    Member Sherman, and members of the subcommittee, I appreciate
    this opportunity today.
        Latin America's landscape is indeed changing. On balance,
    the changes have been positive. The region has had sustained
    growth, lowered its levels of poverty and inequality, and is
    moving toward more democratic, pragmatic politics.
        On the negative side of the ledger, there is spreading
    criminality in many countries, often fueled by the drug trade
    and other illicit activities. The result is institutional
    weakness, corruption, and challenges to the rule of law.
        Colombia and Peru are among Washington's closest South
    American allies. The U.S. has trade agreements with both
    countries and cooperates with them in a variety of key areas.
    Both countries have ample experience in battling insurgencies
    designated as terrorist groups by the State Department that
    have sought to topple democratically elected governments.
        Fortunately, both the Shining Path in Peru and the FARC in
    Colombia have been substantially weakened militarily. They are
    still capable of inflicting some damage, but they no longer
    pose an existential threat to either the Peruvian or Colombian
    states.
        The Shining Path, the Maoist movement that started in 1980,
    is perhaps one of the most ruthless insurgencies in Latin
    America. It stopped being a significant strategic threat when
    its leader, Abimael Guzman, was captured in September 1992. The
    success was the result of old-fashioned, painstaking police
    work and sound intelligence-gathering. This was a top-down
    group, and when the leader went, the rest crumbled.
        Today, the Shining Path, as we just heard, is operating
    mainly in VRAEM region in Peru. It is sustained by drug-related
    income. The Peruvians have applied intelligence techniques and
    other approaches that have been used successfully in Colombia
    with United States support to engage successful policy against
    the Shining Path in the VRAEM region.
        The U.S. provides currently about $55 million in
    counternarcotics aid to Colombia--I am sorry, to Peru. 2014 is
    a big year. There are ambitious targets to destroy crops and
    illegal airstrips in Peru.
        There is one risk, which is that eradicating--focusing on
    eradication of coca crops in Peru could possibly deprive
    peasant growers of their most viable source of income and
    heighten resentment against the Colombian military and the
    Colombia Government--Peruvian military and the Peruvian
    Government.
        In the case of Colombia, the U.S. has provided far more
    substantial support, some $9 billion since Plan Colombia was
    approved by the U.S. Congress in July 2000. This has been
    complemented by support in intelligence-gathering and
    coordination. This is a positive story of international
    cooperation.
        At a time when the FARC and the Self Defense Forces of
    Colombia posed a threat in the late 1990s or early 2000s and
    everybody was talking about a failed state, there was a
    response by the United States and by the Colombian Government
    and by its society.
        The figures of success are dramatic--a reduction in
    homicides, a reduction in kidnappings, an expansion of the
    defense budget, and police presence now in all of the country's
    municipalities. The sustained U.S. bipartisan support over a
    dozen years to Colombia, with the initial focus on security and
    increasingly on institutional support and alternative
    development, contributed to the turnaround.
        As the GAO report of 2008 indicated, there has been more
    progress on the security than on the drug issue, which remains
    a significant challenge for Colombia. The key to success was
    the commitment and will on the part of the Colombian Government
    and major sectors of its society to mobilize and turn around a
    deteriorating situation.
        Today, faced with a militarily and politically weakened
    FARC, the Colombian Government is pursuing a peace process.
    Colombians clearly support that process. It has moved a bit
    more slowly than many expected. Two of the five issues on the
    agenda have been covered, and President Santos now says he
    plans to conclude it this year.
        Thanks to the efforts of the Colombian Government,
    including 8 years under the presidency of Alvaro Uribe, the
    process has a better chance of succeeding than it did in the
    past. It will not be easy. There is no guarantee. The most
    difficult, vexing question, in my opinion, is how to deal with
    the FARC, who are guilty of serious human rights crimes. This
    is an issue that remains to be addressed. Most Colombians want
    the FARC to pay for their crimes.
        The U.S. should sustain its support to a key strategic ally
    in South America. If a peace accord is reached, assistance will
    be helpful in post-conflict scenarios. And if an agreement is
    not reached, then Colombia would continue to benefit from aid
    for its social and justice reform agenda.
        The U.S. is rightly supporting President Santos' peace
    effort. There will be issues that will need to be addressed
    regarding U.S. counterdrug policy, but the goal should be to
    try to reach an agreement. That would be a big boost for
    Colombia, for the region, and for U.S. interests.
        At the same time, peace will not immediately come to pass.
    The FARC is likely to fragment and fracture. Other groups will
    look and take over the illicit activities that are now
    controlled and dominated by the FARC.
        If we look at the broader situation on Hezbollah, clearly
    there are a few cases when they sought to advance their cause
    in the region in Argentina in the early 1990s aimed against
    Jewish targets.
        There is information, reliable information, about
    ideological and financial support for these groups in the
    region, but no evidence that we know of of operational cells.
    There is a lot of speculation and a lot of allegations, but a
    high standard of credible proof is critical.
        Organized crime is a major concern in many countries of the
    region. Colombia, fortunately, is now using U.S. support to
    help train Central American police and others to deal with
    their problem.
        Mr. Poe. If I could ask you to sum up your testimony,
    please.
        Mr. Shifter. Thank you very much. The main emphasis of the
    U.S. should be to try to encourage development of democratic
    institutions, justice systems, and police forces.
        Thank you very much.
        [The prepared statement of Mr. Shifter follows:]

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                                  ----------

        Mr. Poe. Thank you. I will start with questions. Mr. Farah
    and Ms. Realuyo, I don't know if any State Department officials
    are present for your testimony, but the State Department takes
    the position, insists that there is no real Hezbollah threat in
    Latin America, even though the Defense Department and the DEA
    have said otherwise.
        Do you know of why the State Department would take the
    position there is no Hezbollah? And both of you just talked
    about it. Ladies first.
        Ms. Realuyo. And having been a U.S. State Department
    official in the Counterterrorism Office, if you recall, after
    September 11 we actually added, as well as al-Qaeda and
    affiliates, we added Hezbollah to Hamas, as well as the FARC
    and Tamil Tigers to that.
        And, more importantly, I am sad that we don't have a State
    Department colleague here with us to explain, but the bigger
    question is, perhaps we need to take a look at the mistakes we
    have committed in the past. We considered in the 1990s Osama
    Bin Laden as just merely a money man for al-Qaeda.
        What we have described I think between Doug's and my
    testimony, and we actually work collaboratively together, is a
    lot of the fund-raising you can't separate out when you look at
    terrorist organizations, because we consider the money as the
    oxygen for any activity, legal or illegal, and, more
    importantly, for these lethal operations.
        So I think that is actually why the different agencies look
    and define Hezbollah and its activities in the Western
    Hemisphere differently than perhaps a diplomatic stance. So as
    the State Department----
        Mr. Poe. Well, diplomatically, we are in denial. And the
    ones that do the hard work, the DEA and the Department of
    Defense, say, ``Yeah, those folks are really down in Latin
    America.'' You don't know why they--I mean, you have been
    pretty diplomatic in your statement. You used to work for the
    State Department.
        Mr. Farah, are you going to weigh in on this issue?
        Mr. Farah. I have had many discussions with senior State
    Department officials about this. Their view is that the
    intelligence community does not have compelling evidence of
    Hezbollah's operational activities in the region. I think part
    of the issue is resources, and part of the issue is that there
    are overwhelming issues, both in Latin America and other parts
    of the world, that make it difficult to isolate this out and
    focus on it as I think they should, perhaps a little more
    aggressively.
        And I think that one of the things that is lost in this is
    that starting in 2008, the DEA particularly, but other
    agencies, built a series of what are now public cases in a
    judicial record that clearly shows this involvement in
    transnational organized activities and the--not the merging,
    the alliances between the FARC Hezbollah, Hezbollah and many
    other trafficking organizations in the region.
        And it has not been put together into a timeline that can
    show, unless you really study it, to put the pieces together
    and say, ``Holy cow, it is really there.'' We keep hearing it
    is not there, we don't see the evidence, but it is there, it is
    just in many little pieces.
        And I think that that is one of the frustrations of people
    who deal with the issue on the ground and see it is that it is
    hard to get through the policy perception that it is not there.
    And why that is I honestly don't know.
        Mr. Poe. Ms. Realuyo, let me be--I want you to be specific.
    You said that Hezbollah works with the brutal drug cartel, the
    Zetas, operates out of Mexico. Be a little more specific about
    how they are partners in outlawry, if you will.
        Ms. Realuyo. So actually what is quite interesting is if
    you think about the Lebanese-Colombian community, those who
    support Hezbollah--and this is actually very important in terms
    of qualifying that it is a subset of the Lebanese diaspora
    community that supports Hezbollah and, more importantly,
    actively moves money and product for them, what they are doing
    is actually offering a service to cartels such as the Mexican
    Los Zetas cartel.
        What they were doing in the case of Ayman Joumaa, in the
    indictment that has been unsealed, is actually describe how
    they were helping to move cocaine toward the Mexican cartels
    and then also launder the money in the backflow. So there is a
    big question, when we take a look at these types of groups of
    illicit actors, which includes terrorists, proliferators, and,
    more importantly, criminals, a lot of them are actually
    offering and brokering services.
        They may not espouse the same kind of ideological fervor
    that other groups have, but what we are really disturbed by is
    the fact that they are finding a lot of these very specialized
    services to which Doug has actually written about these terror
    pipelines where you see this very unholy alliance between
    terrorist groups and criminal groups who in the end, have a
    win-win because they actually meet their long-term objectives
    in terms of that. And that is the one case that we have seen
    specifically documented through legal--kind of an actual
    indictment of Ayman Joumaa's interaction with Los Zetas.
        Mr. Poe. And then Hezbollah uses the money maybe for other
    Hezbollah activities somewhere else.
        Ms. Realuyo. And that is the part that is actually worrying
    us. As they step up operations in the Middle East, they need to
    finance and support their militants.
        Mr. Poe. And, Mr. Farah, briefly explain in a little more
    detail the connection between Hezbollah and the FARC in
    Colombia.
        Mr. Farah. I think if you look at Operation Titan, which
    then grew into--going forward into the Ayman Joumaa cases, they
    are all interconnected. You saw for the first time in 2008
    Hezbollah operatives directly buying product from the FARC.
    That hadn't been seen before. There were rumors of it. There
    were suspicions of it.
        But in large quantities, and where a significant amount of
    the profits--the FARC benefitted on the front end directly from
    selling the cocaine, and then the sale profits, large parts of
    them filtered back directly into Hezbollah. And that was well
    documented, again, an open source judicial case that the
    Colombians worked with the Americans on for 2 years.
        An Ayman Joumaa case grew out of that. Again, you had
    direct purchase from FARC, 48th Front on the Ecuadorian border,
    and others, where the money then moved--so the FARC benefits
    clearly on the front end. Hezbollah benefits from skimming off
    the percentages as was mentioned of the money that--it doesn't
    all go to Hezbollah, but a significant amount of that revenue
    does.
        And then you have to look I think at the state sponsorship
    or the protection of the states like Venezuela that allow these
    groups to operate with impunity, which really cuts down on
    their operating costs. If you are not worried about getting
    caught, you can do a lot more things than you otherwise would
    do. And I think that is one of the primary issues. And where
    you see the FARC being very active with a heavy Iranian
    presence is in Bolivia, and I think you have to look at how
    state support mitigates the cost and the threat to these
    groups.
        Mr. Poe. Thank you.
        Ranking member Mr. Sherman.
        Mr. Sherman. Thank you. We are focused here on Colombia and
    Peru. If we were going to focus on a third or fourth country,
    what would it be? Where should we be concerned?
        Ms. Realuyo. Probably a region. It is actually Central
    America, because of the fact that, actually, if we think about
    the balloon effect, which we have talked about a lot in terms
    of this topic, as Colombia and Peru become much more effective
    in terms of countering and have real assets, and are actually
    growing economies, Central America, unfortunately, has become
    now the new ungoverned territory, if you want to call it that,
    for these cartels to move, not just drugs by the way; there are
    tons of other illicit products and activities. And, sadly,
    human trafficking has become now in the headlines, which I know
    it is a topic of interest to you.
        Mr. Sherman. Thank you.
        Mr. Farah.
        Mr. Farah. I would add Argentina. I think if you look at
    the funnel of--the way the drug trafficking patterns have
    developed as the movement of cocaine downstream, you have
    Bolivia now producing HCL and large quantities. Peru--Brazil
    has cut off its borders, Chile has protected its borders, and
    you have one giant funnel going down to the one country, that,
    one, has a very high consumption rate; and, two, uncontrolled
    border traffic to West Africa and Europe, which is Argentina.
        Mr. Sherman. So from a drug perspective, Argentina. What
    about from the perspective of ideologically driven terrorist
    organizations?
        Mr. Farah. I think you see both--I think you see the REA
    program between Argentina and Iran, which I think is one of the
    really troubling areas. I think in terms of where they are
    active and where they are raising money, Panama is where
    Hezbollah is probably----
        Mr. Sherman. There are people in Panama who take money out
    of their own pocket and----
        Mr. Farah. No. This is where they take money from other
    people's pockets and buy dual-use equipment and all kinds of
    weapons in a completely uncontrolled--and then the free trade
    zones particularly, I would say that where the money flows
    through, not where they are generating the revenue----
        Mr. Sherman. So Panama is a place for Hezbollah to go on a
    shopping spree, not a place where they are going to----
        Mr. Farah. As well as Iran, yes, absolutely.
        Mr. Sherman. Yes. Mr. Shifter?
        Mr. Shifter. I would say Central America, especially the
    northern triangle of Central America, Honduras and Guatemala,
    in terms of the drug trafficking. And in terms of ideological
    affinity, you know, I think you could find--I mean, Venezuela
    is still--is a problem that deserves a lot of attention as
    well.
        Mr. Sherman. Now, Plan Colombia has cost us $9 billion. The
    request for the administration is $323 million, including
    almost half of that for economic support. Colombia is
    considerably better off economically than many countries that
    get little or no economic support from the United States.
        Colombia has been substantially successful. Why do we need
    to honor the President's request for $323 million, particularly
    his request for $140 million of economic support? Mr. Shifter.
        Mr. Shifter. Well, I mean, I think Colombia, first of all,
    is assuming a larger responsibility than they had in the past,
    and I think that number requested has gone down from what it
    was a number years ago. I also think that, you know, the United
    States has made a huge investment in Colombia over a dozen
    years. This is a success story, and I think it is in our
    interest to do what we can to make sure----
        Mr. Sherman. I see in foreign policy, everywhere we do
    something, that is where we have got to put more. Where we put
    our blood, we have to put more of our blood; where our money,
    more of our money. Iraq is the most important country in the
    Arab Middle East because Americans have died there. And
    everywhere we have made an effort we have a stake in continuing
    that effort.
        It is frustrating. I would like to see somebody come before
    us and say, ``We have been so successful we don't need any more
    money.'' How large--I mean, the natural affinity for Hezbollah
    will come among some portion of the Lebanese Shiite community.
    How large a Lebanese Shiite community is there in several of
    the countries we have talked about? And what portion of that
    community has an ideological adherence to Hezbollah?
        Mr. Farah. I think--if I might, I think that is not
    necessarily a correct--excuse me? It is on. My light is on.
        Mr. Poe. They are all off. Mine is working.
        Mr. Farah. Okay. I will talk loud. I think that there is a
    misconception that the primary issue is the Lebanese diaspora
    community or I think they are very important. I think more
    important to understand is this--is anybody else's mic working?
    No?
        Okay. I think one needs to look at the broader issue of
    the--as I said before, the state protection that allows--it is
    not so much that you have people who are profoundly--who have a
    profound affinity for radical Islam or Hezbollah activities.
        It is that you have states in the region that are willing
    to allow those groups to operate with impunity in their
    national territory, issue them, as Venezuela has done, has
    Ecuador has done, as Panama has done, hundreds, if not
    thousands, of valid passports, so they are no longer tracked as
    Iranians, where they can move their money with impunity.
        One of the great black holes in the Iranian sanctions is
    the Venezuelan economy, the Panamanian economy, the Ecuadorian
    banking sector. And so I think that if you look at what they
    are doing in Latin America, it is not so much the recruitment
    and this massive conversion effort, it is having a safe haven
    in which they can operate, get to know each other, cross-
    pollinate, and raise a lot of money with groups like the FARC
    and others, which is not to say that you should dismiss the
    Lebanese diaspora community, which provides some of the fixer
    opportunities, but in those states where they are protected
    many other types of things can happen that wouldn't happen
    without that state protection.
        Mr. Poe. And they get that protection because the
    governments want money or they just want to stick it to us?
        Mr. Farah. I think if you read their literature and what
    they talk about and what they want, it is heavily anti-
    American, is part of the glue that goes to--that binds these
    groups together, as part of--they have developed a whole
    theology that equates liberation theology with Shia Islam. They
    have entire books now about the new theology that is possible.
    It is strange, but if you read----
        Mr. Sherman. You are saying that books that equate
    liberation theology with Shiite Islam then motivate the
    Panamanian or Ecuadorian Governments to take action which
    otherwise wouldn't be in their national interest?
        Mr. Farah. I don't think it motivates them. I think it is a
    justification for creating--as I say, I think that there is a
    common--the commonality is the desire to inflict hurt on the
    United States, pain on the United States.
        Mr. Sherman. Thank you.
        Mr. Poe. The gentleman from Florida, Mr. Yoho.
        Mr. Yoho. Thank you, Mr. Chairman. Appreciate it.
        You just touched on what I wanted to talk about.
        [Loud noise.]
        Are we all right?
        What I wanted to touch on here was the coming together of
    all of these organizations--FARC, Hezbollah, the Shining Path--
    it seems like they are on the run--coming together for that
    commonality, and that is against the United States, European
    powers, and to me that is the danger.
        And what we saw was FARC had been--there was good control
    put on them and their numbers went down, but yet what we are
    seeing seems like an increase in the techniques, the military
    capabilities of them, bombing and roadside bombs on the
    military and the police in Colombia. They seem to become more
    violent and more dangerous.
        And with this coming together with us as the targets, my
    questions are, is there any idea how much illicit traffic and
    trade, and what type of that, is coming through our southern
    borders? Not just our southern but our eastern and western
    shores, and maybe even our northern borders. So this
    organization of the TOCs.
        Mr. Farah. I think that--in my research, I think that that
    is the--I don't think we know how much, but I think that if you
    look at what crosses our border in terms of illicit products,
    they probably have a better delivery rate than FedEx or UPS.
    You know, if you put something in an illicit pipeline from
    Venezuela and want it to get across our border, it will get
    there.
        Mr. Yoho. Where do you see most of that coming through, the
    southern border or the coast?
        Mr. Farah. The southern border. I think that they now have
    the capability to use submersibles now that can get all the way
    to California. I think one of the concerns in the security
    community is that they know that the submersibles exist. They
    can carry 10 tons of anything, and they can reach our coast
    without refueling now, and we can't find them very easily. And
    I think that that is one of the great unknowns out there.
        Mr. Yoho. Okay. So not just our southern border but our
    shorelines, east and west, is a national security interest that
    we should monitor these and secure them. Would you say that--we
    are in agreement there from a national security standpoint?
        Mr. Farah. Sure.
        Mr. Yoho. Okay.
        Mr. Farah. I think securing borders is----
        Mr. Yoho. How about the other two members? Are you guys in
    agreement with that?
        Ms. Realuyo. Yes.
        Mr. Yoho. It is a national security threat that we should
    address?
        Ms. Realuyo. Yes. Because if you think about the types of
    people and products that are actually penetrating the borders,
    that are marketed and pushed by these illicit networks, they
    are actually directly affecting American consumers.
        So we have this tragic case of this very famous actor who
    was found, we allegedly think, from a heroin overdose. And many
    people who work in this field are suspecting that the heroin
    probably originated from or was trafficked by Mexican cartels,
    because there have been reports now that consumption in the
    United States of cocaine is actually at its lowest levels ever,
    but that is not to say--prescription drugs, methamphetamine,
    and heroin is actually on the rise.
        So since there is a market still here in the United States
    for these types of illicit drugs, we are creating a market, and
    obviously because of the financial incentive and to empower
    themselves these groups look for the governance gaps on our
    borders, maritime or land, in order to actually get the product
    and people here into their market.
        Mr. Yoho. And what we are seeing is the rise of heroin. I
    read a report the other day that said children under the age of
    18 to 25, in the last 5 or 10 years 20 percent of them have
    tried heroin. And it is a rise because drugs like oxycontin
    have gotten so high that heroin is so cheap, and I think it is
    a very dangerous thing that we need to bring under control.
        The other thing is I know several people in the Coast
    Guard. The people are out there and they are running into these
    people, if not yet, they are going to, and these people are
    going to be well armed with military assets, and it is going to
    put our military and our Coast Guard at a high risk, and this
    is something that we need to bring under control.
        What other ways do you see that we can fight this war on
    the narco-terrorist organizations, other than a perpetual war
    on drugs or a war on terror, through maybe policy change or a
    paradigm shift in the United States of America?
        Ms. Realuyo. Well, here in the United States we have to
    start to raise awareness of the average citizen. I am from New
    York City. There was tons of campaigns and ads about human
    trafficking, which we had never seen, at a large major
    metropolis sporting event.
        Mr. Yoho. We are running those in our district, too.
        Ms. Realuyo. And you saw that as well.
        Mr. Yoho. Yes, ma'am.
        Ms. Realuyo. There was a huge takedown of the syndicates
    that were actually trafficking not just people but also
    counterfeit goods that could actually harm consumers. So there
    is a big push for awareness on the demand side.
        And then on the actual supply side and interdiction, we
    have actually seen--I think the cases of Peru and Colombia
    illustrate how good intelligence and good cooperation and
    coordination, tactically but also strategically, in terms of
    political will, can actually bear some kind of influence to
    constrain the operating environments of the----
        Mr. Yoho. Thank you. I am out of time. I have to cut you
    off. Thank you, ma'am.
        Mr. Poe. I want to thank all the witnesses for their
    testimony. It has been very informative, and thank you for the
    information that you have given us.
        This subcommittee hearing is adjourned.
        [Whereupon, at 3:30 p.m., the subcommittee was adjourned.]

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