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







                    A LEGISLATIVE PROPOSAL ENTITLED
                     THE ``BANK ACCOUNT SEIZURE OF
                     TERRORIST ASSETS (BASTA) ACT''

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

                                HEARING

                               BEFORE THE

                        SUBCOMMITTEE ON MONETARY

                            POLICY AND TRADE

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 17, 2014

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 113-93
                           
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    JEB HENSARLING, Texas, Chairman

GARY G. MILLER, California, Vice     MAXINE WATERS, California, Ranking 
    Chairman                             Member
SPENCER BACHUS, Alabama, Chairman    CAROLYN B. MALONEY, New York
    Emeritus                         NYDIA M. VELAZQUEZ, New York
PETER T. KING, New York              BRAD SHERMAN, California
EDWARD R. ROYCE, California          GREGORY W. MEEKS, New York
FRANK D. LUCAS, Oklahoma             MICHAEL E. CAPUANO, Massachusetts
SHELLEY MOORE CAPITO, West Virginia  RUBEN HINOJOSA, Texas
SCOTT GARRETT, New Jersey            WM. LACY CLAY, Missouri
RANDY NEUGEBAUER, Texas              CAROLYN McCARTHY, New York
PATRICK T. McHENRY, North Carolina   STEPHEN F. LYNCH, Massachusetts
JOHN CAMPBELL, California            DAVID SCOTT, Georgia
MICHELE BACHMANN, Minnesota          AL GREEN, Texas
KEVIN McCARTHY, California           EMANUEL CLEAVER, Missouri
STEVAN PEARCE, New Mexico            GWEN MOORE, Wisconsin
BILL POSEY, Florida                  KEITH ELLISON, Minnesota
MICHAEL G. FITZPATRICK,              ED PERLMUTTER, Colorado
    Pennsylvania                     JAMES A. HIMES, Connecticut
LYNN A. WESTMORELAND, Georgia        GARY C. PETERS, Michigan
BLAINE LUETKEMEYER, Missouri         JOHN C. CARNEY, Jr., Delaware
BILL HUIZENGA, Michigan              TERRI A. SEWELL, Alabama
SEAN P. DUFFY, Wisconsin             BILL FOSTER, Illinois
ROBERT HURT, Virginia                DANIEL T. KILDEE, Michigan
STEVE STIVERS, Ohio                  PATRICK MURPHY, Florida
STEPHEN LEE FINCHER, Tennessee       JOHN K. DELANEY, Maryland
MARLIN A. STUTZMAN, Indiana          KYRSTEN SINEMA, Arizona
MICK MULVANEY, South Carolina        JOYCE BEATTY, Ohio
RANDY HULTGREN, Illinois             DENNY HECK, Washington
DENNIS A. ROSS, Florida              STEVEN HORSFORD, Nevada
ROBERT PITTENGER, North Carolina
ANN WAGNER, Missouri
ANDY BARR, Kentucky
TOM COTTON, Arkansas
KEITH J. ROTHFUS, Pennsylvania
LUKE MESSER, Indiana

                     Shannon McGahn, Staff Director
                    James H. Clinger, Chief Counsel
               Subcommittee on Monetary Policy and Trade

                  JOHN CAMPBELL, California, Chairman

BILL HUIZENGA, Michigan, Vice        WM. LACY CLAY, Missouri, Ranking 
    Chairman                             Member
FRANK D. LUCAS, Oklahoma             GARY C. PETERS, Michigan
STEVAN PEARCE, New Mexico            BILL FOSTER, Illinois
BILL POSEY, Florida                  JOHN C. CARNEY, Jr., Delaware
STEPHEN LEE FINCHER, Tennessee       JAMES A. HIMES, Connecticut
MARLIN A. STUTZMAN, Indiana          TERRI A. SEWELL, Alabama
MICK MULVANEY, South Carolina        PATRICK MURPHY, Florida
ROBERT PITTENGER, North Carolina     KYRSTEN SINEMA, Arizona
TOM COTTON, Arkansas                 DENNY HECK, Washington
LUKE MESSER, Indiana













                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    July 17, 2014................................................     1
Appendix:
    July 17, 2014................................................    27

                               WITNESSES
                        Thursday, July 17, 2014

Farah, Douglas, President, IBI Consultants LLC...................    15
Fowler, Jennifer L., Deputy Assistant Secretary for Terrorism and 
  Financial Crimes, U.S. Department of the Treasury..............     3
Howes, Thomas R., victim of international terrorism..............    14
Miller, Marshall L., Acting Principal Deputy Assistant Attorney 
  General, U.S. Department of Justice............................     5
Perles, Steven R., Founder and Senior Partner, Perles Law Firm, 
  PC.............................................................    17

                                APPENDIX

Prepared statements:
    Farah, Douglas...............................................    28
    Fowler, Jennifer L...........................................    42
    Howes, Thomas R..............................................    45
    Miller, Marshall L...........................................    66
    Perles, Steven R.............................................    70

              Additional Material Submitted for the Record

Posey, Hon. Bill:
    Affidavit of Keith Stansell..................................    75
    Affidavit of Marc Gonsalves..................................    80
    Affidavit of Thomas Howes....................................    85
    Affidavit of Judith Janis....................................    89
    Affidavit of Christopher Janis...............................    93
    Affidavit of Greer Janis.....................................    97
    Affidavit of Michael Janis...................................   101
    Affidavit of Jonathan Janis..................................   105
    Letter from the U.S. Attorney, Southern District of New York, 
      dated May 27, 2010.........................................   108
    Letter from the U.S. Department of Justice, dated September 
      23, 2010...................................................   113
    Letter from the U.S. Department of Justice, dated December 1, 
      2011.......................................................   117
    Letter from the U.S. Department of the Treasury, dated March 
      19, 2013...................................................   118

 
                    A LEGISLATIVE PROPOSAL ENTITLED
                     THE ``BANK ACCOUNT SEIZURE OF
                     TERRORIST ASSETS (BASTA) ACT''

                              ----------                              


                        Thursday, July 17, 2014

             U.S. House of Representatives,
                           Subcommittee on Monetary
                                  Policy and Trade,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 9:45 a.m., in 
room 2128, Rayburn House Office Building, Hon. Bill Huizenga 
[vice chairman of the subcommittee] presiding.
    Members present: Representatives Huizenga, Posey, Stutzman, 
Mulvaney, Cotton; and Sewell.
    Ex officio present: Representative Hensarling.
    Mr. Huizenga (presiding). The subcommittee will come to 
order.
    Without objection, the Chair is authorized to declare a 
recess of the subcommittee at any time. Also, without 
objection, members of the full Financial Services Committee who 
are not members of this subcommittee may sit on the dais and 
participate in today's hearing.
    And I should make note we did have a Floor update that 
between 10 and 10:15, we will have our first series of votes 
today. But it will be a relatively short one, so we are going 
to try and get through opening statements and get through this 
first panel. And then, we will reconvene 5 minutes after the 
final vote on the Floor.
    So with that, the Chair now recognizes himself for a brief 
opening statement.
    This committee regularly considers matters of great 
technical detail, matters that can have a great effect on the 
world economy or on individual lives. What we don't routinely 
do is consider shooting wars or Americans who spend years in 
captivity by Marxist rebels.
    Today, we will be discussing those difficult topics and 
some matters of extraordinary complexity involving ways to 
fairly compensate victims of these heinous acts.
    In early 2003, Keith Stansell, Marc Gonsalves, Tom Howes, 
and Tom Janis were engaged in a counter-narcotics operation in 
Colombia under the auspices of the Department of Defense when 
their plane crash-landed. They were captured by members of the 
Revolutionary Armed Forces of Colombia (FARC), a violent 
guerrilla group that has funded itself by kidnapping and 
narcotics trafficking while in armed conflict in Colombia since 
the mid-1960s.
    The guerrillas executed Tom Janis at the crash site, and 
the three remaining men were held hostage and tortured for more 
than 5 years until they and a number of their hostages were 
rescued by the Colombian military.
    Today's hearing will focus on matters related to the 
execution of courts' judgments against assets of the FARC for 
actions taken against these American hostages captured in 
Colombia.
    And I have quite a bit more, but in the interest of time, I 
think I am going to dispense with that. And with that, I don't 
know that we have anybody on the other side--not yet. So if 
that is okay, what we will do is recognize Mr. Posey for 3 
minutes for an opening statement.
    Mr. Posey. Thank you, Mr. Chairman. I will be brief. I 
would like to thank Chairman Hensarling for calling this 
hearing, and I thank you for your support and the committee for 
the support to grant justice to the victims of narco-terrorism.
    The three surviving former FARC hostages, Marc Gonsalves, 
Keith Stansell, and my constituent, Tom Howes, are here today. 
We will hear from them in a little while. Unfortunately, the 
family of Tom Janis, who was executed by FARC, cannot be here 
today.
    These men put themselves in harm's way to provide service 
to our Nation and were hostages of the FARC for 5\1/2\ years, 
longer than I have been in Congress. They have endured 
hardships beyond imagination and are American heroes who 
deserve our respect and our admiration.
    Congress gave these men the right to sue FARC captors in 
Federal court. Congress also passed Section 201 of the 
Terrorism Risk Insurance Act (TRIA), which gave the victims of 
terrorism the ability to seize assets of terrorists and their 
agents.
    Unfortunately, TRIA does not currently allow these men to 
seize assets of FARC-related drug smugglers, money launderers, 
and gun runners because they are blocked under the Kingpin Act. 
The Treasury Department has chosen to block FARC assets only 
under the Kingpin Act even though they would be blocked under 
other statutes that would allow them to seize assets.
    Furthermore, the Treasury Department believes that it is 
better to use blocked Kingpin assets to negotiate with narco-
traffickers than to allow victims of these terrorists to have 
access to these funds and settle their court-adjudicated 
claims.
    These men have repeatedly asked Treasury to reclassify FARC 
assets to allow them to seize them, but were either ignored or 
denied. There is no administrative solution, and legislative 
action is necessary.
    Our staff spent months reaching out to the Administration 
to get their comments on the bill. They responded one time, and 
we need massive changes to the bill to address their concerns. 
It is the smallest change in the law necessary to achieve the 
objective.
    I am therefore glad to have this opportunity to demonstrate 
how and why we introduce the BASTA Act to remedy this 
injustice. I thank you, Mr. Chairman, and I yield back.
    Mr. Huizenga. The gentlemen yields back.
    And with that, we are going to move right to our panel. I 
would like to extend a welcome to our first panel of witnesses: 
Jennifer Fowler, Deputy Assistant Secretary for Terrorism and 
Financial Crimes, U.S. Department of the Treasury; and Marshall 
Miller, Acting Principal Deputy Assistant Attorney General, 
U.S. Department of Justice.
    You will each be recognized for 5 minutes to give your oral 
presentation of your testimony. And without objection, your 
written statements will be made a part of the record. And, of 
course, in front on you on the table is a series of lights: 
green; yellow; and red. When it turns red, you will have one 
minute to sum up. And I will be quick with the gavel today. So 
once each of you has finished testifying, each member of the 
committee will have 5 minutes in which to ask questions.
    Ms. Fowler, you are now recognized for 5 minutes.

STATEMENT OF JENNIFER L. FOWLER, DEPUTY ASSISTANT SECRETARY FOR 
TERRORISM AND FINANCIAL CRIMES, U.S. DEPARTMENT OF THE TREASURY

    Ms. Fowler. Thank you, Mr. Chairman, Ranking Member Clay, 
and members of the subcommittee. I appreciate the opportunity 
to appear today before you to discuss the proposed bank account 
seizure of terrorist assets amendment and its potential effects 
on Treasury's implementation of the Foreign Narcotics Kingpin 
Designation Act, commonly known as the Kingpin Act.
    Before I begin, I want to extend my deepest sympathies and 
that of the Department of the Treasury, to all victims of 
violence, from terrorism and all other crimes, and strongly 
condemn all violent acts by terrorist organizations, including 
the Revolutionary Armed Forces of Colombia or the FARC.
    For nearly 15 years, the Treasury Department has robustly 
implemented the Kingpin Act to disrupt and dismantle narcotics 
trafficking organizations like the FARC and deprive them of the 
resources needed to carry out their violent activities that 
threaten U.S. and global security.
    The Kingpin Act prohibits transitions with foreign 
narcotics traffickers identified by the President and provides 
authority for Treasury's Office of Foreign Assets Control, or 
OFAC, to designate foreign individuals and entities that are 
acting on behalf of the designated kingpins. This authority 
allows OFAC to go after the financial and support networks of 
drug-trafficking organizations, including the money launderers, 
front companies and transportation and communications firms 
facilitating their activities, as well as the assets where they 
store their wealth.
    The Kingpin Act is one of the most powerful and effective 
tools we have to disrupt the financial underpinnings of 
narcotics trafficking organizations. These sanctions have been 
used with great success against traffickers in Mexico, such as 
Los Zetas and the Sinaloa Cartel in Colombia, and throughout 
Central America.
    Particularly in Honduras and Guatemala, the Kingpin Act has 
a global reach and OFAC has targeted drug traffickers around 
the world, including in Afghanistan, Lebanon, and Nigeria. 
Since June 2000, more than 1,600 individuals and entities have 
been named, pursuant to the Kingpin Act, for their role in 
international narcotics trafficking. This authority has been 
enhanced by our robust cooperation with foreign governments and 
law enforcement who have often initiated investigations in 
their own countries, based on our designations.
    These foreign investigations sparked by Kingpin Act 
designations have resulted in numerous seizures and arrests 
abroad. The seizure by the Honduran government in September 
2013 of $500 million in narcotics-linked assets was done in 
close coordination with OFAC on a Kingpin designation. It was 
the largest drug-related asset seizure in Honduran history.
    Financial sanctions have been called a civil death by 
narcotics traffickers themselves, due to their subsequent 
inability to maintain banking and commercial relationships. 
These financial sanctions isolate them from the U.S. financial 
system, and often the financial system in their own country.
    In addition, if the traffickers have assets in the United 
States, these assets are blocked or frozen and access to the 
assets is controlled by the government. Traffickers must then 
petition OFAC and demonstrate a change in their behavior for 
the designation to be lifted and to regain access to those 
frozen assets. Using access to these frozen assets is an 
important point of leverage to effect behavioral change by 
narcotics traffickers.
    Since 2000, 200 Kingpin Act designees have come to us to 
petition for removal. After a thorough investigation, OFAC 
agreed that 137 of them had demonstrated a credible change in 
behavior and therefore removed them from the SDN list. In some 
cases, designated individuals showed proof of credible change 
by agreeing to cooperate with U.S. or foreign enforcement, by 
renouncing any rights to foreign assets derived by narcotics 
trafficking, or by severing their ties to front companies.
    The Terrorism Risk Insurance Act of 2002, commonly known as 
TRIA, allows for a person who has obtained a judgment against a 
terrorist party to attach any blocked assets of that terrorist 
party in aid of satisfying such judgment. Currently, the term 
``blocked assets,'' as defined by TRIA, refers only to assets 
frozen by the United States, pursuant to the Trading with the 
Enemy Act or the International Emergency Economic Powers Act.
    The Kingpin Act, on the other hand, was specifically 
created to address the separate threat to our country's 
international interests posed by the activities of 
international narcotics traffickers. Amending TRIA's definition 
of blocked assets to include property frozen, pursuant to the 
Kingpin Act, could have potentially negative effects. We expect 
that, as applied, this amendment could result in the attachment 
and depletion of blocked assets of non-terrorist-related 
narcotics traffickers, including those operating in Mexico, 
Central America, and Colombia. This could limit Treasury's 
ability to use these blocked assets as leverage against 
dangerous groups such as the Sinaloa Cartel, Los Zetas, Los 
Cachiros, and Colombian criminal gangs involved in the drug 
trade.
    In closing, I want to urge Congress to give careful 
consideration to the potential impact any amendment to TRIA may 
have on the targeting of drug-trafficking organizations under 
the Kingpin Act.
    Thank you very much for the opportunity to be here today, 
and I welcome any questions.
    [The prepared statement of Deputy Assistant Secretary 
Fowler can be found on page 42 of the appendix.]
    Mr. Huizenga. With that, we now recognize Mr. Miller for 5 
minutes.

   STATEMENT OF MARSHALL L. MILLER, ACTING PRINCIPAL DEPUTY 
     ASSISTANT ATTORNEY GENERAL, U.S. DEPARTMENT OF JUSTICE

    Mr. Miller. Mr. Chairman, distinguished members of the 
subcommittee, thank you for inviting me to speak at this 
hearing. The Department of Justice is fully committed to using 
all of our prosecutorial tools to combat terrorists and 
narcotics-trafficking organizations. The primary approach 
employed by the dedicated prosecutors at the Department of 
Justice is the prosecution of members and associates of such 
groups for their criminal acts. We also employ our forfeiture 
authorities to seize assets and we vigorously pursue 
restitution for crime victims.
    The Department works with crime victims on a daily basis to 
ensure they receive justice for the harms they have suffered. 
Specifically, the seizure and forfeiture of assets that 
represent the proceeds of Federal crimes or that were used to 
facilitate those crimes are covered by the Department of 
Justice's Asset Forfeiture Program.
    The program's primary mission is to use asset forfeiture to 
enhance public safety and security by ensuring that crime does 
not pay. To accomplish that mission, the Department forfeits 
the proceeds of crime or other substitute assets directly from 
the criminals themselves. Asset forfeiture, thus, takes the 
profit out of crime, disrupts criminal organizations, lessens 
their economic influence, and serves as a deterrent to future 
criminal activity.
    In addition, the laws governing asset forfeiture provide 
pretrial preservation tools to prevent criminal defendants from 
dissipating crime proceeds, ensuring that such proceeds remain 
available for forfeiture or restitution.
    The Criminal Division's Asset Forfeiture and Money 
Laundering Section, or AFMLS, spearheads the asset forfeiture 
program, and more generally, the Department's asset forfeiture 
and anti-money-laundering enforcement efforts.
    Most importantly for today's hearing, AFMLS leads the 
Department's efforts to return forfeited criminal proceeds to 
those harmed by crime by through the administration of victim 
claims. The Department works to ensure that victims of crime 
are fairly and equitably compensated. The authority to 
distribute forfeited funds has been entrusted to the Attorney 
General. This makes sense legally, because once property or 
funds are forfeited, ownership of the property or funds in 
question transfers to the government. But it is also sensible, 
as it allows the government to finalize and execute forfeiture 
orders fairly without prejudicing the rights of any claimants.
    The process by which the Department distributes forfeited 
assets is known as remission. Under the applicable regulatory 
framework governing remission, the Department has provided 
compensation to thousands of victims for a wide variety of 
crimes, ranging from Ponzi schemes, mail and wire fraud, and 
health care fraud, to identity theft, intellectual property, 
and trademark violations.
    Since 2001, nearly $4 billion in forfeited assets has been 
disbursed to victims by the Department, under the Attorney 
General's authority. Over $203 million has been returned to 
victims so far this year. The remission process is governed by 
Federal regulations that define a victim as an innocent person 
who has suffered a pecuniary loss as a direct result of the 
crime underlying the forfeiture or a related offense. It is 
important to note that the remission regulations give no 
preferential treatment to any particular victims. All victims 
must submit and document their losses with supporting 
documents.
    When the forfeited funds are not sufficient to compensate 
multiple victims for the entirety of their losses, the funds 
are generally distributed on a pro rata basis in accordance 
with each victim's verified pecuniary loss amount.
    An important purpose of these regulations is to prevent 
victims of crime from being doubly harmed, first by the 
underlying criminal conduct and a second time as resources are 
dissipated as victims are forced to compete over a limited pot 
of money. The Department remains steadfast in its commitment to 
ensuring that forfeiture plays a key role in helping victims 
recover from the crimes committed against them.
    If I might take a brief moment, I would like on behalf of 
the Department of Justice to express our strong feelings of 
sympathy, respect, and admiration for the FARC hostage-taking 
victims, particularly Mr. Howes, Mr. Stansell, and Mr. 
Gonsalves, who are here today, as well as the families of those 
who lost their lives during that crime.
    Their resolve, tenacity, and dedication to this country in 
the face of horrific treatment from their FARC captors is truly 
inspiring, and the Department of Justice will not rest in our 
efforts to bring their captors to justice.
    I would like to again thank the subcommittee for holding 
this hearing and providing the Department with the opportunity 
to explain our forfeiture efforts, remission procedures, and 
commitment to compensating the victims of crime. I am happy to 
answer any questions that you may have, and I yield back any 
time that I still have.
    [The prepared statement of Mr. Miller can be found on page 
66 of the appendix.]
    Mr. Huizenga. The gentleman yields back. Thank you for 
doing that. At this time, the Chair yields himself up to 5 
minutes for questions. And with that, I will start with you, 
Mr. Marshall.
    So as we were talking about--this is rather technical. Help 
me understand the technical differences between blocked, 
frozen, seized, and forfeited assets, and really what the 
circumstances are; I know you were touching on that.
    I want to make sure that as you were talking about the 
pecuniary damages that have happened, how this has--I am 
assuming part of this is, how do you quantify monetarily what 
the damage is? Is that where part of the hang-up is?
    Mr. Miller. Thank you, Mr. Chairman. To begin with the 
first part of your question, there is a significant difference 
between blocked and frozen assets on the one hand, and seized 
and forfeited assets on the other.
    And I can let my colleague from the Department of the 
Treasury speak a little more about frozen and blocked assets, 
but essentially those are assets that remain under the 
ownership of the original party whose assets were blocked. They 
can't access those assets. They can't use those assets, but 
they remain in their ownership.
    Seized or frozen assets mean assets that the Department of 
Justice has taken action to actually assume ownership of. So 
when a criminal prosecution is filed and forfeiture allegations 
are included against particular assets, we, the Department of 
Justice, get a warrant to seize those assets and then begin the 
process of actually taking ownership of them.
    So when the assets are ultimately forfeited, ownership 
transfers to the Government of the United States. Those are 
important tools that we use in criminal cases, the forfeiture 
authorities, to stop criminals from dissipating those assets 
during the penancy of a criminal prosecution, making sure that 
those assets are seized, and thus at the end of a criminal 
prosecution they can be provided to victims through restitution 
or forfeiture or ultimately forfeited to the United States.
    Mr. Huizenga. In your testimony, though, you talked about 
focusing on victims who have suffered ``quantifiable pecuniary 
harm.'' As the regulations set forth, quantifying nonpecuniary 
harm is a very difficult process. Is there no way of 
determining financially what the harm was here?
    Mr. Miller. One way that takes place, Mr. Chairman, is in 
the restitution process. So in an individual criminal case, 
there is a--at times, courts can attempt to quantify harms to 
individuals that aren't the loss of particular funds. So in a 
nonfraud case for example, when funds are forfeited, the 
regulations that govern the remission process do require proof 
of some sort of quantifiable pecuniary harm.
    To attempt to quantify a non-pecuniary harm is not called 
for within the regulations and is, as the Chair recognized, a 
difficult process, one that could consume significant resources 
as the Department or some independent body attempts to figure 
out what dollar figure should attach to nonpecuniary harm and 
then resolve the differences amongst potentially numerous 
victims with respect to that harm.
    Mr. Huizenga. All right. I have a minute-and-a-half left, 
and we did just have votes called, but we are going to try and 
get through this.
    Ms. Fowler, help me--we have a minute left. Help me 
understand the decision-making process, if this is blocked 
under the Kingpin Act as drug trafficker's assets rather than 
terrorist assets, even though the FARC has been designated a 
terrorist organization.
    Ms. Fowler. So yes, the FARC is designated as a terrorist 
organization, but it is also designated by the President as a 
kingpin under the Kingpin Act.
    We have pursued designations of kingpin leadership and 
other elements of its financial and support network under the 
Kingpin Act. That is the authority that we use to go after drug 
trafficking activities globally, as I said in my statement.
    We have been focused on depriving the FARC of its money-
making capabilities, and that revolves around the drug trade. 
So, we have focused on our actions against the FARC under the 
Kingpin Act.
    There is also a robust law enforcement cooperation that 
goes on within the auspices of the Kingpin Act. We rely on 
information from law enforcement, from our partners 
domestically to carry out those designations. So that is how we 
have chosen to sort of dismantle their financial support 
network.
    Mr. Huizenga. Okay. My time has expired. With that, the 
Chair recognizes Mr. Posey for 5 minutes.
    Mr. Posey. Thank you, Mr. Chairman. Ms. Fowler, in your 
testimony you said--I am assuming that you oppose the 
legislation we are looking at now?
    Ms. Fowler. We haven't taken a position on the legislation. 
I am here to be a resource to provide information about 
potential consequences. But we haven't taken a position yet.
    Mr. Posey. So Treasury doesn't care one way or the other? 
Is that correct?
    Ms. Fowler. We are still assessing it.
    Mr. Posey. When are you going to finish assessing it? It 
has been months and months and months. These victims have been 
looking to you for years to do something. When are you going to 
come up with an assessment? When are you going to really care 
one way or the other?
    Ms. Fowler. We have provided--
    Mr. Posey. If you don't have an answer for that, that is 
okay. In your testimony you said this bill, by allowing these 
people to be eligible for compensation for being murdered and 
tortured, ``could limit the Treasury's ability to use blocked 
assets as leverage against dangerous groups such as'' and you 
listed them.
    These people have been harmed by dangerous groups. Could 
you explain to me how letting these guys recover from narcotics 
dealers and terrorists is going to harm your ability to deal 
with other narcotics dealers and terrorists?
    Ms. Fowler. So the amendment as drafted, what we would 
expect its application to include would be assets of non-
terrorist-related drug trafficking groups, non-FARC-related 
groups. So groups like Los Atos and other groups in Central 
America that are involved in the direct distribution of drugs 
into the United States.
    That application would make assets that are not terrorist-
related available to terrorist victims. That is the potential 
consequence. And as I said in my statement--
    Mr. Posey. Okay. So, if I was just watching this on C-SPAN, 
I would think Treasury is more interested in protecting the 
assets of drug runners and terrorists than they are for 
compensating the victims of those people, and I think that is 
why it was set up originally under TRIA.
    My time is running short here. Mr. Miller, you talk about 
the variety of crimes that you all have provided--helped 
recover compensation for victims of Ponzi schemes, mail and 
wire fraud, health care fraud, identify theft, intellectual 
property and trademark violations. Since 2001, nearly $4 
billion in forfeit. And those are crimes for which people 
should be compensated.
    But I think above all of those are victims who have been 
physically tortured and murdered. And I think they should have 
some priority in this process. You said that the Justice 
Department won't rest until they bring the perpetrators to 
justice. And you know, and I know, that you never will.
    So I would think the best thing that you could do is 
endorse at this time trying to get the victims compensated. And 
I should ask you to begin with, do you oppose this bill?
    Mr. Miller. To begin, Congressman, I think this bill, as 
currently drafted, really doesn't address Department of Justice 
equities directly. It is really more in the Department of the 
Treasury's name.
    Mr. Posey. Do you oppose it or support it?
    Mr. Miller. We defer to the Department of the Treasury as 
it affects them.
    Mr. Posey. And they don't care one way or the other at this 
point, and you don't care one way or the other at this point. 
Is that correct?
    Mr. Miller. I wouldn't put it that way, Congressman. The 
Department of Justice is, as I said, committed to bringing to 
justice the captors, and we have had some--
    Mr. Posey. I know you never will, and I think you know in 
your heart you never will. And I would like to stick to this 
bill. You said you defer to the Treasury, and they say they 
really don't care that they haven't had time to possibly 
analyze this since 2002 and don't know when they are going to 
be able to finish analyzing it.
    We are basically interested in solving problems up here. 
And nobody has come up with any other better idea to solve the 
problem. They have only come up with ways or objections or 
treading water to stop us from solving a problem, which is 
narcoterrorists murdering and torturing people without any 
remedy for the victims.
    Mr. Miller. Congressman, as I think you know, we have 
charged over 15 defendants with these crimes. One of them has 
pled guilty and is due to be sentenced. At least, it is 
scheduled for next week. It may get pushed off, as I understand 
it, but I am not certain about that. But as of now, it is 
scheduled for next week. An additional defendant was sentenced 
to 60 years in prison.
    So I think we do continue to fight for justice in terms of 
actual prosecutions of the individuals involved in this 
offense, and I don't think we view it as something that can 
never happen. We fight every day to make sure that it does 
happen.
    Mr. Posey. Why would you want to block us from allowing 
these people to recover court-awarded damages from 
narcoterrorists?
    Mr. Miller. I don't think the Department's position is that 
we look to stop people from obtaining restitution where we can 
fight to make that happen. We pursue restitution orders for 
terrorism victims in cases across the country.
    Mr. Huizenga. The gentleman's time has expired. And in the 
interest of time, we have about 4 minutes left, I think, to 
vote. I'm sorry. My eyes are getting bad. I am trying to see 
the screen; 7 minutes left of voting. And with that, we will 
recognize Mr. Mulvaney for 5 minutes.
    Mr. Mulvaney. Thanks. And I will try and be ``un-Southern'' 
and talk fast for a little bit. Ms. Fowler, Mr. Miller, I am 
going to do something unusual for a politician, which is admit 
to you in advance that I don't know that much about what we are 
dealing with. So I am going to do something rare, and actually 
ask questions with a desire to simply learn about the topic.
    Ms. Fowler, you mentioned during your testimony, and I have 
it in front of me, that one of the--TRIA added Trading with the 
Enemy and IEEPA as this fund that victims could get to. And you 
say in your testimony that you are against adding Kingpin to 
that because it would limit your ability to use them as 
leverage. I don't get that. Why was using Trading with the 
Enemy okay, and IEEPA okay, but Kingpin is not?
    Ms. Fowler. The reality is that Kingpin was in place as law 
when TRIA was put in place as law. So--
    Mr. Mulvaney. Right.
    Ms. Fowler. --I don't know why it wasn't brought in as part 
of that legislation. It is clearly not part of TRIA. The assets 
blocked, pursuant to the Kingpin Act, are not available to 
victims under TRIA. I didn't say in my testimony that we oppose 
the amendment that is being proposed. We are still assessing 
it. What I have tried to do is explain what the potential 
consequences are, if this amendment goes through. And what we 
have seen is--
    Mr. Mulvaney. But you all didn't oppose adding IEEPA and 
Trading with the Enemy, right?
    Ms. Fowler. I really couldn't speak to what our position 
was at that point. It was 10 years ago.
    Mr. Mulvaney. My notes say that you didn't. So I am trying 
to figure out the distinction. What is the difference between 
these two things? Why is it okay to use IEEPA and TRIA, but not 
Kingpin?
    Ms. Fowler. Under Kingpin--there are a variety of non-
terrorist-related narcotics trafficking groups that are 
targeted under Kingpin.
    Mr. Mulvaney. Right.
    Ms. Fowler. They are not involved in terrorist activity. 
What they are is motivated by profit. They are involved in this 
dangerous criminal activity that is bringing drugs into the 
United States. So they are not terrorist groups. The FARC, 
however, happens to be both a terrorist group and a drug-
trafficking organization. So they are blocked under both 
authorities. What some of the testimony submitted today 
suggests is that any group that is involved in cocaine trade 
anywhere should be considered part of the FARC. Under our 
authorities, there are very clear definitions about who is part 
of the FARC and who is not. We have groups like Los Zetas, 
other groups in Honduras and Guatemala that are--
    Mr. Mulvaney. You mentioned that. And you say that the 
proposal could limit Treasury's ability to use these blocked 
assets as leverage.
    Ms. Fowler. For the assets that we have blocked for 
terrorist groups, there are many points of leverage that we 
have under our authorities. One point of leverage is the frozen 
assets that could be blocked in the United States.
    Mr. Mulvaney. Right.
    Ms. Fowler. If you are a drug trafficker motivated by 
profit, you certainly want to regain access to the assets that 
are blocked. We have had examples over the years where drug 
traffickers or people who are facilitating their financial 
activities, motivated by profit, are named under Kingpin. They 
find themselves exposed publicly for what they are doing, 
involved in criminal activity, supporting drug traffickers. 
They can't do business in their host countries anymore. They 
can't do business in the United States. They have no access to 
their assets. So every point of leverage we have under our 
authority is a way to convince these drug traffickers to 
disassociate from those activities--potentially and in many 
cases--
    Mr. Mulvaney. And I don't want to cut you off.
    Ms. Fowler. --typically law enforcement and help us in 
continuing investigations.
    Mr. Mulvaney. But--
    Ms. Fowler. And that has been one of the benefits of this--
    Mr. Mulvaney. Right. But I guess my point is that drug 
traffickers are bad people, terrorists are bad people. It looks 
as though Treasury was okay with giving up that leverage 
against terrorists in TRIA, but not on Kingpin. I am trying to 
get a handle around the disparate impact, not only on, I guess 
on the law, but on the victims. It is almost like if you are a 
victim of a terrorist attack, we have systems set up to help 
people. But if you are a victim of a drug dealer, you are not. 
And that is what I am trying to get my hands around as to why 
Treasury sort of makes the distinction between the two. 
Shouldn't we have consistency across those two things?
    Ms. Fowler. I don't think Treasury is making a distinction. 
TRIA makes a distinction. It doesn't include Kingpin.
    Mr. Mulvaney. Right. By my understanding. And again, I 
could be wrong, and maybe you weren't there. I certainly wasn't 
here when TRIA was passed in 2002. But all the history that I 
have been presented with seems to say that Treasury supported 
the addition of IEEPA to TRIA. If I am wrong about that, then I 
am wrong about that.
    Ms. Fowler. I am really--I'm sorry, I can't speak to what 
our position was on that 10 years ago.
    Mr. Mulvaney. All right. Help me--either of you, what have 
you done to actually help the victims who are here today? I 
don't have their names and I am sorry. Mr. Howes, Mr. Stansell, 
Mr. Gonsalves. What have we actually done to try and help these 
folks?
    Mr. Miller. At the Department of Justice, as I said a few 
moments ago, we have been working very hard to bring to justice 
those who perpetrated crimes against the individuals who are 
here today.
    Mr. Mulvaney. Sure. And that helps everybody in the room, 
right? I am asking you specifically, what have you done to help 
these folks?
    Mr. Miller. I think going after the people who harmed them 
and committed crimes against them is an important part, at 
least from the Department of Justice's perspective, of how we 
go about helping victims. We think--our core mission is to 
prosecute the individuals who commit horrific crimes and to 
bring them to justice. And we stand committed to doing that in 
this case and in any other case. Through that process, we also 
pursue restitution. And where we can, we forfeit assets from 
the individuals who have committed and the organizations that 
commit offenses. So that is what we do to try to look out for 
victims. And we work very hard on--
    Mr. Mulvaney. Again, Mr. Miller, I don't know that much 
about the individual case, but I will ask the question, has 
restitution been made in this circumstance or not?
    Mr. Miller. I believe that--my understanding is that the 
individuals who have, so far, been prosecuted had insufficient 
funds to satisfy, for example, the $300 judgment that has been 
entered. But we continue to work very hard to bring to justice 
those who were involved in the offenses.
    Mr. Mulvaney. Thank you.
    Mr. Huizenga. And with that--I have been an inattentive 
committee chairman. I am trying to figure out our votes here, 
so we did go a bit over time. But I think we can squeeze one 
more Member in. Mr. Stutzman from Indiana is recognized for 5 
minutes.
    Mr. Stutzman. Thank you, Mr. Chairman. At this time, I will 
yield to the gentleman from Florida.
    Mr. Posey. I thank the gentleman for yielding. Just to 
follow up on Mr. Mulvaney's question, the individuals whom you 
ultimately convict conveniently never have any assets by the 
time they are convicted, so they can make no restitution. 
Bernard Madoff, by the time he basically turned himself in, 
still had some assets that you were able to help get and give 
back to some of his victims.
    But I am concerned that there seems to be no interest in 
compensating the victims of narco-terrorism. You have the whole 
laundry list of white-collar crimes for which you have helped 
compensate the victims. And I just haven't heard any 
justification yet.
    And I was hoping I would hear it today, if there was, in 
fact, a fair and realistic justification for not wanting to see 
the victims of narco-terrorists, people who were in prison for 
5\1/2\ years, people who were tortured, people who didn't 
endure the torture and died, and their families. I think some 
restitution is due there and I see you two, right now, maybe 
wrongly, but I see you and your agencies for whatever reason, I 
don't know, standing in the way of seeing justice for the 
victims.
    And I wish you would tell me why that is not true. I have 
heard you say, well, if we let the victims get the money, then 
we can't use their assets to maybe stop them from doing 
something else. Freezing their assets, I think, is probably 
less beneficial to leveraging against terrorists and narcotics 
operations, less threatening to them than actually allowing a 
court-adjudicated access to it for victims that they have 
victimized. Wouldn't you agree?
    Ms. Fowler. Congressman, we are not opposed to victims 
having access to assets that are properly available for 
attachment under TRIA. The issue here is that Kingpin assets 
are not covered by TRIA.
    Mr. Posey. All right. Repeat that.
    Ms. Fowler. And in the case of the FARC--
    Mr. Posey. Just repeat that, because I didn't hear that 
very clearly.
    Ms. Fowler. We are not opposed to assets that are properly 
available for attachment under TRIA being made available to 
victims. The issue here is the Kingpin Act assets are not 
covered by TRIA.
    Mr. Posey. And the--
    Ms. Fowler. And in the case of the FARC, there are no 
assets in the United States that would be available to victims.
    Mr. Posey. The argument is if we don't have access--the 
argument is there is no good reason not to have them accessible 
under TRIA and under Kingpin. That is why we are here. We are 
here, saying, the system that is in place to compensate victims 
is not working. And we are here to try and fix that. We think 
people--American citizens, heroes, people who were imprisoned, 
tortured, murdered, trying to do the right thing for this 
country to protect the citizens of this country--we think we 
shouldn't turn a deaf ear. And we think that it appears that we 
favor sometimes the people who perpetrated the crimes over the 
the victims. And you say, they are not covered under Kingpin, 
well, that is why we are here. We are trying to see that they 
are covered under Kingpin. They should be covered under 
Kingpin. And nobody is giving me one reason, compelling or even 
frivolous, why they shouldn't be yet.
    Ms. Fowler. What I am trying to do is explain that the 
amendment that we are currently discussing, as applied, would 
go far beyond FARC assets. It would go into other drug-
trafficking organizations that have no relation to terrorism, 
no relation to the FARC, under our authorities. And those 
assets are a point of leverage that we have. They are one of 
many points of leverage that we have to try to dismantle those 
kinds of groups and prevent them from doing the kinds of things 
that the FARC has done to the victims in this case.
    Mr. Posey. We don't have time. And I am sure you can't tell 
me the type of assets we are talking about. But I just don't 
know how anybody could turn a blind eye to compensating the 
people who have suffered so much for trying to protect the 
people who work hard and play by the rules in this country to 
turn a blind eye to that. And I would think that Department of 
the Treasury and the Department of Justice would be advocating 
for anything that would help compensate our victims, not 
standing in the way of anything that would help these people 
seek a legal remedy that the courts have already ordered to be 
justified.
    Mr. Huizenga. The gentleman's time is expiring.
    And with that, I would like to thank our panel of witnesses 
for their testimony today.
    I will note that you see a third microphone set up. The 
State Department was invited 2 weeks ago, but the State 
Department decided not to show up. And I find that personally 
very unfortunate. Again, I would like to extend my thanks to 
our panelists today.
    With that, we are going to recess until 5 minutes after 
this series of votes.
    [recess]
    Mr. Huizenga. The subcommittee will come to order. And I 
would like to now extend to our second panel a warm welcome.
    And again, I was remiss I think, in expressing specifically 
when I pulled in that first panel, but having learned a little 
bit about the story, my condolences to the family and the 
victims and those who have had to live through this.
    I had a political science major but a concentration in 
Latin American history and Latin American politics. And I 
studied the FARC, and I have studied a lot of those things, 
those conflicts that have happened from the Sandinistas on 
down, and know how nasty those folks are. So again, just to the 
families and the victims, you are in our thoughts and prayers.
    So with that, I would like to extend a welcome to Mr. Tom 
Howes. And sir, you will be given 5 minutes.
    Each of you on the panel, as we talked about before, will 
be recognized for 5 minutes to give your oral presentation. And 
without objection, your written statements will be made a part 
of the record.
    And of course, the light that is in front of you on the 
table will start out green, go to yellow, and then turn red. 
When your time is up, please suspend. After your presentations, 
each Member up here will be given 5 minutes, and I understand 
we may have some other folks on their way as well, to ask 
questions.
    So with that, Mr. Howes, you are recognized for 5 minutes.

STATEMENT OF THOMAS R. HOWES, VICTIM OF INTERNATIONAL TERRORISM

    Mr. Howes. Good morning. My name is Tom Howes. I am a U.S. 
citizen living in Congressman Posey's district.
    I was a copilot flying a Department of Defense counter-
narcotic surveillance mission in Colombia when we went down in 
FARC territory. The FARC executed our pilot, Tom Janis, a 
former Delta Force member.
    I was held hostage for 5\1/2\ years, during which time I 
was tortured, chained, and starved. My fellow hostages, Keith 
Stansell and Marc Gonsalves, are also here today. We were 
awarded the Secretary of Defense Medal for the Defense of 
Freedom for our services and sacrifice to the country.
    We sued the FARC under the Anti-Terrorism Act, and in 2010 
the Federal court in Tampa awarded us a judgment against the 
FARC and 80 individual FARC leaders. The FARC itself has no 
blocked assets in the United States. Foreign terrorist 
organizations do not open bank accounts in their own name. 
Instead, they operate through drug trafficking, partner 
cartels, and their money launderers, the kingpins.
    In 1995, President Clinton declared a national emergency of 
cocaine traffickers centered in Colombia. Blocking narco-
trafficker assets in an Executive Order under Congress, the 
International Emergency Economic Powers Act (IEEPA), which we 
talked about earlier today.
    TRIA authorizes terrorism victim judgment holders to 
execute on the blocked assets of agencies or instrumentalities 
of the terrorist party, even though the agency or 
instrumentality itself is not named in the judgment. TRIA 
allows us to execute on IEEPA assets, but not assets blocked 
under the Kingpin Act.
    The Kingpin Act of 1999 is modeled on IEEPA and expanded 
sanctions worldwide, not just on Colombian traffickers under 
IEEPA. The FARC and its leaders are all designated under the 
Kingpin Act, not under IEEPA.
    Since 2010, the Administration has blocked all narco-
trafficking assets under the Kingpin Act instead of IEEPA. In 
2013, the 11th Circuit Court ruled that assets blocked under 
the Kingpin Act were not included in TRIA's definition of 
blocked assets.
    So we lost the money and it went back to the former FARC 
money launderer. We made several requests to Justice and 
Treasury for administrative relief, and all our requests were 
denied.
    The BASTA Act corrects this injustice by adding the Kingpin 
Act blocked assets to the list of blocked assets under TRIA. It 
makes no sense that TRIA allows terrorism victims to seize 
terrorist narco-trafficker assets blocked under one Act of 
Congress, IEEPA, but not assets blocked on another Act of 
Congress, the Kingpin Act.
    BASTA will have no effect on the government's ability to 
designate, extradite, convict, and forfeit blocked assets of 
drug kingpins. In fact, allowing terrorism victims to go after 
narco-trafficker assets will only increase the Administration's 
leverage because the blocked parties will want to be delisted 
as fast as possible.
    We have repeatedly asked Treasury to reclassify FARC assets 
to allow us to seize them, but were either ignored or denied. 
There is no administrative solution, and legislative action is 
necessary.
    Thank you very much.
    [The prepared statement of Mr. Howes can be found on page 
45 of the appendix.]
    Mr. Huizenga. We will now recognize Mr. Doug Farah. And 
sir, you have 5 minutes as well.

   STATEMENT OF DOUGLAS FARAH, PRESIDENT, IBI CONSULTANTS LLC

    Mr. Farah. Mr. Chairman, members of the subcommittee, thank 
you for this opportunity to testify about FARC in Colombia, the 
world's premier hybrid terrorist drug trafficking organization.
    I have had the privilege of being deeply involved in 
Colombia since 1989. And over the past quarter of a century, I 
have lived in Colombia for a number of years, and I visit there 
regularly.
    The FARC, despite ongoing peace talks with the government 
of President Juan Manuel Santos, remains at the center of a 
multitude of criminal enterprises and terrorist activities that 
stretch from Colombia to Argentina and northward to Central 
America into direct ties with the Mexican drug cartel, 
primarily the Sinaloa organization. It is involved in the 
massive laundering of drug money, and recent cases by the Drug 
Enforcement Administration have shown direct and growing 
criminal ties between the FARC, Hezbollah, and other terrorist 
organizations.
    The Treasury Department representative earlier pointed out 
that if we try to tie all the drug trafficking back to the 
FARC--I would say that if there is one grocery store in the 
neighborhood, everybody goes there to buy groceries. And the 
DEA tells us that at least 80 percent of the cocaine consumed 
in the United States is fabricated by the FARC. So yes, I think 
you can tie a great deal of the drug trafficking organizations 
directly to the FARC production.
    The FARC is one of only three organizations in the world 
that is designated by the U.S. Government as both a major drug 
trafficking organization and an international terrorist entity. 
The European Union, Canada, and other countries share this 
assessment. And they have been designated in part initially as 
a terrorist organization because of the execution of U.S. 
citizens, something that is often forgotten.
    In 1993 and 1994, in different incidents, they kidnapped 6 
U.S. missionaries, and killed them all while in captivity. In 
March 1999, the FARC abducted three Native American activists 
and killed them as well, on the spot. And of course, we have 
the incident that brought us here today with these gentlemen 
who were serving their country and were taken hostage by the 
FARC for 5\1/2\ years.
    In 2001, shortly after the 9/11 attacks, the FARC was 
designated as a Specially Designated Global Terrorist 
Organization, which gave expanded power to the government to go 
after them. And in 2003, they were designated under the Kingpin 
Act.
    Under the protection of the governments of Venezuela, 
Ecuador, Nicaragua, Bolivia, and El Salvador, the FARC now 
maintains a robust international infrastructure that is 
producing and moving thousands of kilos of cocaine and 
laundering hundreds of millions of dollars. It has emerged as a 
pioneer hybrid criminal terrorist insurgency.
    The FARC is a central part of the revolutionary project 
that is bringing together armed groups and terrorist 
organizations under the umbrella of the Bolivarian Revolution 
with the aid and support of Iran. The U.S. Treasury 
Department's Office of Foreign Assets Control, which has 
carried out at least 18 designations of FARC entities, 
describes the group as a narco-terrorist entity.
    There is now a significant body of evidence showing the 
FARC's operational alliance with Hezbollah and Hezbollah-based 
allies and other terrorist organizations in the region. A clear 
example of the breadth of the emerging alliances among criminal 
and terrorist organizations is Operation Titan, executed by 
Colombian and U.S. officials in 2008.
    They found, after a 2-year investigation, that they were 
able to dismantle the drug trafficking organization that 
stretched from Colombia to Panama, Mexico, West Africa, the 
United States, and the Middle East. The cocaine path used in 
that massive network was mostly derived from the FARC.
    Colombian and U.S. officials say that one of the key money 
launderers in the structure, Chekry Harb, aka ``Taliban'' acted 
as a central go-between among Latin American drug-trafficking 
organizations selling FARC-produced cocaine, and Middle East 
radical groups.
    There has been little public acknowledgement of the 
Hezbollah ties to Latin American transnational criminal 
organizations. But recent indictments based on U.S. DEA cases 
point to the growing overlap of these groups.
    In December 2011, U.S. officials charged Ayman Joumaa, an 
accused Lebanese drug kingpin and Hezbollah financier, with 
smuggling tons of FARC-made cocaine to the United States, and 
laundering hundreds of millions of dollars on behalf of the 
Zetas cartel in Mexico, while operating in Panama, West Africa, 
and elsewhere. Joumaa was tied to a broader case of massive 
money laundering that led to the collapse of the Lebanese 
Canadian Bank, one of the primary financial institutions used 
by Hezbollah to finance its worldwide activities.
    Other cases include the July 6, 2009, indictment of Jamal 
Yousef in the U.S. Southern District Court of New York, 
alleging the defendant, a former Syrian military officer 
arrested in Honduras, was seeking to sell weapons to the FARC, 
exchanging those weapons for cocaine, with the weapons coming 
initially from Hezbollah.
    The FARC is an unusual hybrid criminal terrorist 
organization that is among the largest cocaine producers in the 
world, deriving an increasing amount of its revenue from 
relationships with multiple terrorist and criminal 
organizations. The FARC maintains documented ties to Hezbollah, 
the ETA Basque separatist movement, armed remnants of the IRA, 
and various armed groups in Latin America. It has maintained 
ties to state sponsors of terrorism such as Iran and Muammar 
Gaddafi when he ruled Libya.
    It also maintains well-documented ties to the Sinaloa 
cartel and into computers when they killed another senior 
leader of the FARC. They have found photos of Sinaloa cartel 
leaders sitting around drinking whiskey in parties with senior 
FARC leadership. There is no doubt that there is a direct link 
there.
    The ideological underpinnings of the FARC are Marxism and 
deeply anti-American. And the veneer of ideology that formed 
the basis of the relationship with Chavez and other terrorist 
organizations is now finally coming to light.
    I will leave it there. Thank you very much.
    [The prepared statement of Mr. Farah can be found on page 
28 of the appendix.]
    Mr. Huizenga. Thank you. The gentleman's time has expired. 
You have submitted quite an extensive written testimony as well 
on that, and I appreciate it.
    And with that, we will go to Mr. Steven Perles for 5 
minutes.

  STATEMENT OF STEVEN R. PERLES, FOUNDER AND SENIOR PARTNER, 
                      PERLES LAW FIRM, PC

    Mr. Perles. Good morning, Mr. Chairman. With your 
permission, I will submit my written testimony for the record. 
And frankly, carry on from where Mr. Mulvaney left off.
    Before I do that, if I might very briefly introduce Mr. 
Chandler Derbyshire to you. Mr. Derbyshire is my summer intern. 
His uncle, Captain Vince Smith, was killed in the Beirut 
Marines barracks bombing. His grandfather, General Keith Smith, 
was the organizer of what is now known as the Beirut Marines 
Barracks Bombing litigation, in which we have used TRIA as a 
vehicle for restraining in excess of $1.8 billion of Iranian 
securities positions that were illicitly transiting New York.
    I would also like to introduce my son, who is with me. I 
sent him out to Michigan to get an education. And he served on 
the staff of Senator Mark Kirk as a Senate Fellow in China 
Policy, using his Mandarin language fluency to hunt Iranian 
assets in China for Senator Kirk.
    Let me really start where Congressman Mulvaney left off and 
talk about how the process should work, rather than what 
everybody else has been talking about today, and that is what 
is broken and not working. And let me put this in a context of 
first the Beirut Marine Barracks Bombing matter.
    Then-Under Secretary Levy and I discussed the potential for 
seizing Iranian securities positions in New York that were 
outside his scope of authority to seize, but for which he had 
intelligence data. So effectively, we formed a public-private 
partnership. And under that partnership, we sent the Treasury a 
subpoena.
    The Treasury obtained a protective order from the court 
system so that the intelligence data would be constrained in 
its public dissemination. And we used that intelligence data to 
seize Iranian assets in New York.
    As part of that discovery process, we have now obtained in 
excess of 100,000 pages of material about the movement of 
Iranian securities positions through the U.S. banking system. 
The government in turn issued us a subpoena. And we are 
actually under grand jury subpoena in the southern district in 
New York. So we turned all of our discovery material over to 
the U.S. Attorney's Office.
    The net effect of this public-private partnership is that 
the victims get compensated and the government winds up with 
intelligence data that it didn't otherwise have. That is the 
way the system should work.
    In another case there was a man from Michigan, Jack 
Armstrong, who was publicly beheaded on Al Jazeera television 
at the beginning of the Gulf War. We obtained a judgment for 
the Armstrong family against the government of Syria, the 
material supporter of Al Qaeda in Iraq at the time of the 
beheading.
    And again, we started this public-private partnership with 
the Treasury under TRIA where we issued what I would call a 
friendly subpoena to the Treasury. They turned data over to us. 
We secured something in excess of $80 million of Syrian blocked 
assets in the United States.
    And that process is just winding up now. We in turn will 
take a portion of that money and reinvest it into asset 
location exercises. And when those exercises are complete, we 
will voluntarily turn all of that data back over to the 
government.
    Again, you really want to have this public-private 
partnership where we get data, we start the process, that 
process brings in data, and we turn it back to the government 
so that the victim's interests are advanced and the 
government's interests are advanced.
    I see very little merit in this notion that the 
government's interests are different than the interests of 
private citizenry. It doesn't have to be that way. That is a 
cultural gap which exists between the executive and the private 
bar.
    It certainly existed in 2000, when we really started this 
process for terror victims. And over the last 10 or 15 years, 
at least in the world of terror victims, a lot of those culture 
barriers between the private bar and the government have really 
broken down so that we are in very good shape in terms of going 
out and assisting each other.
    [The prepared statement of Mr. Perles can be found on page 
70 of the appendix.]
    Mr. Huizenga. Okay. The gentleman's time has expired. And 
with that, I recognize myself for 5 minutes of questioning.
    So, Mr. Perles, just to make sure I am understanding you, 
this PPP that you were talking about, this hybrid public-
private partnership that has worked previously is not happening 
now. Correct?
    Mr. Perles. Not in the case--
    Mr. Huizenga. In this particular case.
    Mr. Perles. --of FARC and FARC assets.
    Mr. Huizenga. Why do you believe that it is not? And is 
that something viable that should be pursued?
    Mr. Perles. I don't make public policy here. I am really a 
technician. But if you are asking as a policy matter, would I 
like to see it pursued, yes. I think--
    Mr. Huizenga. Is there--okay. So let me sharpen it. Is 
there any reason why we couldn't or shouldn't be doing that in 
this case?
    Mr. Perles. No. Actually, I would encourage you to do it.
    Mr. Huizenga. Or encourage Treasury to do that.
    Mr. Perles. Encourage Treasury to do it.
    Mr. Huizenga. Do you need to have a willing Treasury to be 
able to do that?
    Mr. Perles. You need either a willing Treasury or a willing 
Congress.
    In the first instance, I would hope that Treasury would do 
it voluntarily. From what I heard today, the mindset of 
Treasury is very much like the mindset we saw at the State 
Department in 1998, 1999, and 2000, which is that they want 
their blocked assets for other purposes.
    Mr. Huizenga. Other projects?
    Mr. Perles. Right, other projects. I think in 1998 it was 
really more the legacy of Jimmy Carter's negotiation of the 
Algiers Accord facilitating the release of the Tehran hostages. 
State wanted that money in order to be able to bribe out the 
release of American diplomats.
    I happened to be on the Senate staff at the time that 
agreement was negotiated. I didn't care for it then and I don't 
care for it now. I don't think it is an appropriate way for the 
United States to conduct--
    Mr. Huizenga. In your opinion, is BASTA a bill that is 
careful to avoid unintended consequences?
    Mr. Perles. I think it is. I was actually quite flattered 
when Congressman Posey's office called me and asked me if I 
would give some pro bono time to reviewing the bill.
    I have not gone through the current draft. I have gone 
through several early iterations of the bill. I think it is 
very narrowly focused.
    I would encourage the committee to seek other people's 
views. You have to be very careful here not to do anything 
unintended. As far as I know, the bill does not do anything 
unintended. I would still seek other people's opinions.
    Mr. Huizenga. Mr. Howes, again, thank you for being here. 
And I am sure I could tell just as you were starting to talk 
about it, this must be very difficult to relive and to talk 
about. But it is an important story, so thank you for sharing 
that.
    But would you please describe your efforts to receive 
compensation for your treatment by the FARC and kind of what 
you have gone through so far?
    Mr. Howes. We have done a number of things. We started out 
in 2010, 2011. We made three separate requests for crime victim 
relief for the Justice Department, and everything was denied.
    In 2013, we made another 3 separate requests to the 
Treasury Department to get license to execute on blocked 
kingpin assets of seven FARC--or the instrument agencies or 
instrumentalities. One of them was a FARC commander. Everything 
was again denied.
    And we asked the Treasury to re-designate the kingpin--
these kingpins under IEEPA. Again, denied. And the LFAC 
response was--I have it here--that LFAC does not respond to 
requests to designate individuals or entities pursuant to 
certain authorities. It was basically ignored or denied, I 
guess you could say.
    And we have also provided copies of all this information, 
of the Administration's denials here for the record.
    Mr. Huizenga. Do you believe that there is sufficient 
evidence that FARC or those commanders and those designated 
people have assets to be able to go and seize? Or are we going 
to have to go at them through other drug kingpins who may have 
assets here as well?
    Mr. Howes. I think for the FARC themselves, it is fairly 
difficult. As I mentioned earlier, they don't put bank 
accounts--
    Mr. Huizenga. Yes.
    Mr. Howes. --and that sort of thing together. It is mostly 
the agencies and instrumentalities that handle the money for 
the FARC.
    Mr. Huizenga. But certain individuals could?
    Mr. Howes. Certainly.
    Mr. Huizenga. And do you know of any that have or do have 
those kinds of assets?
    Mr. Howes. As far as the--
    Mr. Huizenga. Agents' role.
    Mr. Howes. --instrumentalities of the FARC?
    Mr. Huizenga. Those individuals. Those commanders or--
    Mr. Howes. There were seven that we looked at here. And we 
were denied on all of them under the Kingpin Act, so yes.
    Mr. Huizenga. Okay.
    My time has expired. The Chair recognizes Mr. Posey for 5 
minutes of questioning.
    Mr. Posey. Thank you very much, Mr. Chairman.
    The written testimony for today's hearing is compelling. It 
is lengthy. It is highly detailed, technically perfect as far 
as I can see. And it really gives a lot of insight into a 
system that is just not working right and not working as it was 
intended.
    In fairness, I think DOJ should be commended for their 
ability to track the assets. That is not simple. That is good 
intel work, hard work. And their persistence in trying to bring 
many of these criminals to justice has taken many, many years.
    It took I guess maybe 11 years to get one of the guys who 
was responsible for Mr. Howes. And it just took a lot of 
persistence and I want to commend DOJ for that.
    But it is troubling that it appears to me that the 
Executive Branch would enter into a lawsuit in which they were 
not originally a party. Is that correct, Mr. Howes? Did you 
have a lawsuit in the 11th Circuit Court of Appeals, and did 
the agency inject itself into the lawsuit at that point? Or had 
they already been a party to it?
    Mr. Howes. I believe they injected themselves into it.
    Mr. Posey. Yes.
    Mr. Howes. Yes.
    Mr. Posey. Yes. We have a law-abiding American citizen, a 
victim of narcotics trafficking terrorists, and somebody who 
has been imprisoned by them, tortured by them, and watched a 
senior colleague be murdered by them. And he is trying to get 
justice against the criminals.
    And if I read this correctly, the Executive Branch jumped 
in and challenged the definition of blocked asset, which really 
kind of was the first big rock thrown into the cause here to 
stop the process from functioning probably as it intended. Am I 
reading this correctly?
    Mr. Howes. Yes.
    Mr. Posey. It is a stretch for anyone to wonder why an 
agency would do that. You know why they would do that? Their 
logic that well, if we control all their blocked assets, it 
harms them more than people whom they have harmed getting some 
of those assets.
    I see with blocked assets--if I am a bad guy and you block 
my assets, at some point, someday I may be able to recover 
them. Maybe a technicality in the court of law or whatever, 
transform somehow.
    But if people I have harmed are allowed, through the 
courts, absolutely proper, legal jurisdiction to get those 
assets, I think that probably hurts the narcotics trafficker 
and terrorist more than just having his assets blocked. Does 
that seem like a logical conclusion? Do any of the witnesses 
disagree with that?
    Mr. Howes. It certainly should. It seems the opposite of 
having these assets returned to actual drug launderers and drug 
traffickers.
    Mr. Posey. Yes.
    And so the next question is, what happens--what are the 
different things that happen to blocked assets? Does anybody 
know? Did they just stay blocked forever until they maybe 
arrest and convict the guy?
    And then what happens to the assets if they are convicted? 
Maybe--
    Mr. Howes. In one case, and I think we have the record on 
file, but a percentage of it is returned to the drug 
trafficker, money launderer, returned to them.
    Mr. Posey. Does the agency keep any of the money? Does 
anybody know? Mr. Perles?
    Mr. Perles. I can't answer that question with respect to 
FARC assets because I don't practice in that area.
    I think a good example, though, is the case of Libya. Libya 
saw a whole series of lawsuits marching in its direction, 
whether it was Lockerbie, which was one of my cases, or Libya's 
bombing with the La Belle discotheque, which was one of my 
cases.
    And the total reparations paid by Libya to U.S. citizens I 
suspect was in excess of $3 billion. Those reparations were 
paid because Libya understood at the end of the day its blocked 
assets in the United States were going to be used to satisfy 
impending judgments.
    When the United States and Libya reached an agreement and 
those reparations were paid, the United States then released 
Libya's governmental blocked assets as part of the 
normalization agreement between the United States and Libya.
    Mr. Posey. Was the entire $3 billion awarded to victims?
    Mr. Perles. The $3 billion represented prejudgment 
settlements between Libya and the U.S. victims, and parties 
were paid. That is correct.
    Mr. Posey. Okay.
    Mr. Huizenga. Sorry. The gentleman's time has expired.
    But without objection from the panelists, we wanted to do a 
second round of--
    Mr. Posey. Thank you.
    Mr. Huizenga. --questioning. I know I have some questions 
as well. So, if that is all right with our panelists who have 
time, then all is good on this side as well. So, granting 
myself 5 minutes here.
    Mr. Farah, your testimony says that FARC is ``under the 
protection of the governments of Venezuela, Ecuador, Nicaragua, 
and Bolivia.'' And certainly all of them have had their own 
issues over the years. How well-documented is that 
``protection?'' Is it well-documented enough to describe these 
governments as instrumentalities of FARC with assets to go 
after there or to block?
    Mr. Farah. Thank you. I think that is a really interesting 
question.
    The documentation on Venezuela is overwhelming. And we 
have, including OFAC designations of very senior Venezuelan 
officials for both their relationship with the FARC and drug 
trafficking. At least six of Chavez--when he was alive, Chavez 
posted his advisors were designated. And they continue to be 
very powerful in the current administration of Nicolas Maduro.
    Bolivia, I think again the evidence is overwhelming. I 
think you have to understand that to the Bolivarian system, set 
up by Chavez, which was his goal of creating a united 
Bolivarian set of nations, the FARC was due to the primary 
instrument for achieving that.
    And he supported very openly the FARC as an armed movement, 
and called for other armed groups to join an armed insurrection 
against the democratic countries in the region, and chose to 
use his oil mine to finance the election of Rafael Correa, Evo 
Morales, and then Daniel Ortega.
    So I think that if you understand the FARC is in their view 
an instrument of foreign policy, which their support for the 
groups is I think overwhelming, especially if you look at the 
documentation that comes from captured FARC documents in the 
Raul Reyes computer and in the Armando Hahoy computers where 
you have the internal communication of the FARC discussing in 
great detail the relationships with Bolivia, with Correa, with 
Chavez, where they specifically ask President Correa, for 
example, in Ecuador to move certain commanders from the border 
area because they were being too aggressive against the FARC.
    And they write back and say sure, we will move. Who would 
you like to see placed there? That is a pretty direct 
relationship.
    Mr. Huizenga. But that would need to be proven in court, I 
would assume.
    Mr. Farah. The court--the documents showing that exists, 
and actually in that particular case, are a matter of public 
record and have been published.
    Mr. Huizenga. Okay.
    Mr. Perles, what do you think of this sort of line and--
obviously FARC is not a state or a country, per se, which is 
what your previous lawsuits had been trying to do, correct, tie 
that in with that sponsorship? And wouldn't permanently 
attaching funds of FARC instrumentalities be noticeably 
different for state sponsors somehow? What are your thoughts on 
this?
    Mr. Perles. I don't see any interference between the kind 
of litigation that I bring against state sponsors and expanding 
TRIA--you are asking me, if I understood the question properly, 
do I see any potential conflict between the kind of litigation 
that I brought against state sponsors of terrorism and 
expanding TRIA to include the FARC. And the answer is, I don't 
see any conflict at all.
    The whole notion of TRIA really goes back to an Iranian 
weapons account that we tried to seize on behalf of the family 
of Alisa Flatow who was killed in a bus bombing in Israel, Matt 
Eisenfeld who was killed in a bus bombing in Israel, Sarah 
Duker who was killed in a bus bombing in Israel, and Father 
Lawrence Martin Jenco who was taken hostage in Beirut, Lebanon.
    This litigation really occurred in the late 1990s. And we 
heard many of the same objections from the State Department 
that I listened to this morning.
    Congress passed legislation called the Victims Act 2000, 
which freed up this weapons account or these families. And then 
went on 2 years later and fixed the problem generically in 
TRIA.
    The U.S. Government has historically taken the position 
that when an asset is blocked, the mantle of U.S. Governmental 
immunity protects that asset. So that even if a terrorist state 
had lost its immunity under the Foreign Sovereign Immunities 
Act, we still couldn't pierce through to that asset because of 
U.S. Governmental immunity.
    TRIA really fixes that immunity question. I look at TRIA as 
a congressional waiver of the government's immunity when it 
holds blocked assets. The same thing would be true for FARC 
assets.
    And if you look at it from that perspective, there is just 
no potential interference or collision between the enforcement 
of a judgment against a terrorist state against a blocked 
terrorist state asset or a judgment against FARC under ATA 
against a blocked FARC asset.
    Mr. Huizenga. Thank you. I appreciate that perspective.
    And with that, I will grant 5 minutes to Mr. Posey for 
questioning.
    Mr. Posey. Thank you, Mr. Chairman.
    I am still trying to get my arms around why the government 
would block recovery by an American citizen who has been harmed 
by a foreign terrorist group. It is still hard to grasp that we 
would do that.
    And we tend to want to look at consent decrees again, how 
much of the seized assets at the end of the day ever go to the 
victims, and how much is gobbled up by the Federal agencies.
    I have asked DOJ for a list of consent decrees before and 
they were not forthcoming so they didn't have time to tell me 
the details. So it will be a while, but eventually we will get 
them.
    And a question for Mr. Howes, what did you do to petition 
the Treasury to change their designation of FARC assets and 
FARC agent instrumentality assets from Kingpin to IEEPA so that 
you can seize assets under TRIA?
    Mr. Howes. We made the request to re-designate the kingpin 
accounts, but we were turned down.
    Mr. Posey. Okay.
    Mr. Howes. Does that answer your question?
    Mr. Posey. All right. When you go after FARC assets, do you 
claim that every blocked narco-trafficking asset blocked under 
Kingpin is subject to seizure? Or are you careful about who you 
go after?
    Mr. Howes. We are certainly careful who we go after. We go 
after only blocked assets of the foreign kingpin narco-
traffickers which the Federal court determines are agencies or 
instrumentalities of the FARC.
    We don't go after, for example, kingpins who do not traffic 
in FARC cocaine. We don't go after narcotics traffickers that 
traffic drugs for the Taliban. So it is specific to 
instrumentalities and agencies of the FARC.
    Mr. Posey. I read your testimony and it is--it really could 
be a great mystery novel, a whodunit, because it is really 
difficult for anyone who reads this to understand why the 
Federal Government would block you. It is a mystery.
    I can't imagine the thought that, again, the Federal 
Government would have more ability to work against traffickers 
if they don't let you recover their assets for the crimes they 
committed. Did they ever give you any logical explanation for 
that?
    Mr. Howes. No. And again, the court--there was a judgment 
in our favor by the court. And yet it feels like we are blocked 
by the Department of Justice and the Treasury. It is a mystery 
to us.
    Mr. Posey. Mr. Chairman, I am just bedazzled over this 
whole thing. And I have a lot of questions that I would like to 
ask the Treasury and DOJ again. Maybe, we could think about 
bringing them back in here.
    Sometimes when we have the government witnesses first, we 
hear some things that really make a lot less sense after we 
hear from the second panel of private sector witnesses. And 
this is another one of those cases.
    The testimony and discussion with these gentlemen has 
generated a significant number of questions that I would like 
to address to Treasury and DOJ again. And normally, I would 
just write them a letter and ask for a response, but I have 
been relatively unsuccessful in getting information in that 
manner before. And in some instances, it takes 9 months to get 
an answer to a relatively simple question that I have asked a 
Federal agency.
    So, I would like to have a discussion with you about maybe 
extending this hearing for another round. I yield back, and I 
thank you, Mr. Chairman.
    Mr. Huizenga. The gentleman yields back. And we of course 
do have an opportunity for you to do some things here on the 
official side.
    But I would like to thank our witnesses for being here 
today. It has been very illuminating, and I think frustrating, 
for a number of us to hear your testimony, and some of the 
answers that we have had are non-answers that we have had to 
what has been going on from our own government.
    And again, Mr. Howes, and to the other gentlemen, we 
appreciate your perseverance and your willingness to come and 
join us today, and share this amazing story. And we offer 
blessings and prayers for the best for each of you as you move 
forward.
    Mr. Posey. Mr. Chairman, may I add one more comment?
    Mr. Huizenga. Without objection.
    Mr. Posey. Today, we are talking about an injustice that 
has been done to one of my constituents and two of his 
colleagues.
    If you could see what is happening in the narcotics 
trafficking world--I had an occasion to go visit the border at 
Nogales earlier this year, and I was overwhelmed by the 
conditions that are there, the narcotics trafficking, the human 
trafficking, the arms trafficking that is going unabated.
    The reality is that it is becoming more and more prevalent 
in this country. It is permeating us more and more and more 
every day. And while we just see 5\1/2\ years of imprisonment 
and torture from my constituent in South America today, 
tomorrow it could be your constituent or any Member's 
constituent in this country.
    If you could see what I have seen about how the narcotics 
traffickers, the cartels, deal with people who get in their way 
or don't cooperate with them, it is chilling. It is 
frightening. And it is a threat to every man, woman, and child 
in the United States of America.
    While we may be talking about justice for three gentlemen 
today, this could affect any man, woman, or child in the United 
States of America in the coming years.
    And I again want to thank you, applaud you and Mr. 
Hensarling for addressing this issue to do whatever we can to 
man up or try and stop the flow of terror that goes with 
narcotics coming into this country, and saluting the gentlemen 
who try to do something about it. Thank you.
    Thank you, Mr. Chairman.
    Mr. Huizenga. Thank you. And I appreciate your bringing 
this to everyone's attention and to light.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    Without objection, this hearing is adjourned.
    [Whereupon, at 11:44 a.m., the hearing was adjourned.]
    
    
    
    
                            A P P E N D I X



                             July 17, 2014
                             
                             
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