[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:]


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                              ----------                              

    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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