    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

        YEAR IN REVIEW: U.S. POLICY TOWARD A CHANGING WESTERN HEMISPHERE

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                             THE WESTERN HEMISPHERE

                                     OF THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                DECEMBER 9, 2015

                                   __________

                               Serial No. 114-129

                                   __________

            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         BRAD SHERMAN, California
    DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
    STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
    JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
    MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
    TED POE, Texas                       BRIAN HIGGINS, New York
    MATT SALMON, Arizona                 KAREN BASS, California
    DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
    TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
    JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
    MO BROOKS, Alabama                   AMI BERA, California
    PAUL COOK, California                ALAN S. LOWENTHAL, California
    RANDY K. WEBER SR., Texas            GRACE MENG, New York
    SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
    RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
    MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
    TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
    CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
    SCOTT DesJARLAIS, Tennessee
    REID J. RIBBLE, Wisconsin
    DAVID A. TROTT, Michigan
    LEE M. ZELDIN, New York
    DANIEL DONOVAN, New York

         Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

                   Jason Steinbaum, Democratic Staff Director
                                     ------

                     Subcommittee on the Western Hemisphere

                     JEFF DUNCAN, South Carolina, Chairman
    CHRISTOPHER H. SMITH, New Jersey     ALBIO SIRES, New Jersey
    ILEANA ROS-LEHTINEN, Florida         JOAQUIN CASTRO, Texas
    MICHAEL T. McCAUL, Texas             ROBIN L. KELLY, Illinois
    MATT SALMON, Arizona                 GREGORY W. MEEKS, New York
    RON DeSANTIS, Florida                ALAN GRAYSON, Florida
    TED S. YOHO, Florida                 ALAN LOWENTHAL, California
    DANIEL DONOVAN, New York

                                C O N T E N T S

                                  ----------
                                                                       Page

                                   WITNESSES

    The Honorable Roger Noriega, visiting fellow, American Enterprise
      Institute (former Assistant Secretary for Western Hemisphere
      Affairs, U.S. Department of State).............................     6
    The Honorable Mary Beth Long, founder and chief executive
      officer, Metis Solutions (former Assistant Secretary for
      International Security Affairs, U.S. Department of Defense)....    23
    Cynthia J. Arnson, Ph.D., director, Latin American Program,
      Woodrow Wilson International Center for Scholars...............    30

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    The Honorable Roger Noriega: Prepared statement..................     9
    The Honorable Mary Beth Long: Prepared statement.................    26
    Cynthia J. Arnson, Ph.D.: Prepared statement.....................    32

                                    APPENDIX

    Hearing notice...................................................    52
    Hearing minutes..................................................    53

        YEAR IN REVIEW: U.S. POLICY TOWARD A CHANGING WESTERN HEMISPHERE

                                  ----------

                          WEDNESDAY, DECEMBER 9, 2015

                           House of Representatives,

                    Subcommittee on the Western Hemisphere,

                         Committee on Foreign Affairs,

                                Washington, DC.

        The subcommittee met, pursuant to notice, at 2:04 p.m., in
    room 2200, Rayburn House Office Building, Hon. Jeff Duncan
    (chairman of the subcommittee) presiding.
        Mr. Duncan. We will go ahead and call the meeting to order.
    Take your time, Dr. Arnson. That is fine. We are going to have
    votes shortly. So I want to try to get as far along as we can.
    And a quorum being present, the subcommittee will come to
    order.
        And I would like to recognize myself for an opening
    statement. This year, we have seen many changes in the Western
    Hemisphere, economic and security factors, migration, natural
    disasters, and deepening ties with Iran, China, and Russia have
    greatly impacted the region. Elections in multiple countries
    have shifted governments and political power. The Organization
    of American States has a new Secretary General who has affirmed
    a commitment to revitalizing the organization, and his public
    statements related to Venezuela have underscored that
    commitment. Panama hosted the Seventh Summit of the Americas.
    And it had the inclusion of Cuba for the first time. And the
    United States began its 2-year chairmanship of the Arctic
    Council. Furthermore, Colombia has made progress in its peace
    talks with the FARC. And both houses of its legislature voted
    this month to approve a proposal for a referendum on an
    eventual peace deal. In Brazil, economic woes continue. And
    impeachment proceedings against a sitting President have begun.
    Moreover, crime and violence in the region have also risen with
    an ever-proliferating network of transnational criminal
    organizations. This year, Latin America has also experienced
    its worst economic performance since 2009.
        The purpose of today's hearing is to examine the Obama
    administration's policies and programs in the Western
    Hemisphere, to assess their impact, and to consider the
    progress of the countries in the region in furthering
    democracy, freedom of religion, and of the press; strengthening
    the rule of law and judicial institutions; growing economic
    prosperity; and providing a safer and more secure region.
        As a side note, I would like to congratulate the ranking
    member on passage, in the Foreign Affairs Committee, of a bill
    dealing with freedom of the press. Hopefully that bill will
    make it to the floor, and we will get to vote on it. I was a
    proud cosponsor, no doubt.
        This subcommittee has held 16 hearings this year to provide
    oversight of the Obama administration's efforts in the
    hemisphere and bring public awareness to key developments in
    the region. Of the hearings this subcommittee has held this
    year, two have focused on the budgetary issues and the $1
    billion request for Central America. Two have examined the
    energy opportunities in the Western Hemisphere, focusing on
    Canada and Mexico in particular. Three highlighted the
    challenges to press freedoms, religious liberties, and human
    rights abuses in Cuba and Venezuela. Two focused on the U.S.-
    Cuba policy shift, the impact on U.S. citizens and national
    security, and the unresolved property claims issue. And one
    hearing explored the opportunities the United States has on
    arctic issues in the region.
        In January, the death of special prosecutor Alberto Nisman
    in Argentina raised questions about Iran's networks in the
    region and the Kirchner government's relationship with Iran and
    Venezuela. This subcommittee has maintained a focus on Iran and
    Hezbollah's activities in the region and expanded our oversight
    to include hearings on China and Russia's growing presence, as
    well. Whereas these countries have shown great attention to the
    Western Hemisphere, the Obama administration's own response has
    been minimal. With the exception of altering the U.S.
    relationship with Cuba without requiring any substantive
    changes from the Castro regime in return, a tactical response
    to the migration crisis in Central America, and an emphasis on
    LGBTI and climate change initiatives, the Obama administration
    has shown little strategic vision for United States leadership
    and has failed to make an effective case for why countries in
    the region should make the United States their partner of
    choice. That has got to change.
        In my view, the United States should be prioritizing
    relations with the democratic free countries in the region
    instead of capitulating to leftist governments in Cuba,
    Venezuela, Ecuador, Nicaragua, and Brazil. Rather than
    rejecting the Keystone pipeline with Canada, limiting U.S.
    economic potential, and ignoring important security dimensions
    in the U.S. relationship with Mexico, the United States should
    recognize that North America's greatest potential lies within
    even stronger relations with Canada and Mexico.
        In Central America, we have seen no changes in the root
    causes of migration to the United States. And I remain
    concerned with the high levels of migrant flows we have seen
    within the last few months into Mexico from Central America and
    at the U.S. southern border. In addition, we are seeing, from
    my understanding of a meeting with the Panamanians today, a
    large number of Cubans also transiting. The $1 billion request
    from the Obama administration will not solve these problems
    without active U.S. leadership and tight oversight of U.S.
    taxpayer dollars; real and measurable political will from the
    countries themselves to address the rampant corruption; and
    strong and independent national institutions that are
    transparent and accountable to the people.
        In addition, I believe we are missing opportunities to
    create stronger partnerships on trade and energy issues in the
    hemisphere. In particular, we ought to consider ways to more
    highly prioritize U.S. relations with the Pacific Alliance
    countries of Chile, Colombia, Mexico, and Peru, which
    reportedly represent 36 percent of Latin America's economy, 50
    percent of its international trade, and 41 percent of all
    incoming foreign direct investment. In addition, energy
    cooperation in North America, Central America, the Caribbean,
    and South America should be more foundational for U.S. policy
    and underscore our efforts in the region. With the Western
    Hemisphere home to nearly a third of the world's oil, U.S.
    reserves of oil and natural gas and shale gas resources, and
    the growing investment opportunities for U.S. businesses in
    multiple countries in the region, energy is a positive area for
    cooperation that we simply have not explored enough.
        Indeed, with this year's elections in the hemisphere, I am
    hopeful that we will see greater economic and security
    partnerships between the United States and many more countries.
    Longtime ruling parties were kicked out in Trinidad and Tobago,
    Guyana, Saint Kitts and Nevis. Mexico saw several surprise
    victories from independent, nonparty candidates in its June
    legislative and local elections. And Guatemala saw a rare
    victory against corruption with the unseating of a sitting
    President, the resignation of a Vice President, and the
    election of a political outsider as the President in October,
    one who promised to clean up corruption. After years of delay
    and extended political crisis, Haiti has had two rounds of
    elections this year, with a final round scheduled for later
    this month. Even our best partner on trade and energy issues,
    Canada, saw the turning out of the incumbent government, after
    several years of consecutive leadership. With the results of
    center-right Mauricio Macri's victory in Argentina last month
    and the first-ever runoff election in Argentina's history, I am
    excited about the possibilities of improved bilateral relations
    and greater Argentine leadership in the hemisphere. In
    addition, this past weekend's election in Venezuela marked an
    important turning point for that country with the opposition's
    landslide victory over Chavismo or the Maduro government.
        So we are going to see--and I look forward to you guys
    talking, Ambassador, about that a little bit more, by the way.
        Our subcommittee began this year by engaging with regional
    Caribbean leaders over the issue of finding better ways to
    partner on energy issues and looking at how the energy boom in
    the United States could benefit our friends who have
    historically depended on Venezuela to meet their energy needs.
    Next year, I look forward to deepening U.S. engagement in the
    region and maintaining our attention on Iran, China, and
    Russia's actions in the hemisphere and particularly focusing on
    energy, business, and trade opportunities, terrorism, border
    security threats, and counterdrug efforts in the region.
        As we take time today to assess the Obama administration's
    approach to the Western Hemisphere and the status of specific
    countries in the region, I look forward to using the
    perspective shared here today by our panel of witnesses in
    order to help shape and sharpen U.S. engagement in the region
    next year.
        So, with that, I look forward to the hearing.
        And I will turn to the ranking member from New Jersey, Mr.
    Sires, for any opening statement he may have.
        Mr. Sires. Good afternoon.
        Thank you, Chairman, for holding this timely hearing. And
    thank you to the witnesses for joining us today.
        The Western Hemisphere has seen a significant change over
    the past year. The region has undergone multiple elections at
    both the head of states and legislative level. Elections are
    bringing about change in Argentina, Guatemala, Haiti, and
    Venezuela, just to name a few. In Argentina, voters went to the
    polls on November 22 and voted for change by electing Mauricio
    Macri of the opposition. Macri's election ends the rule of the
    so-called ``Kirchnerismo,'' which has been the ruling ideology
    for 12 years. In Guatemala, massive corruption schemes
    uncovered by the United Nations' International Commission
    Against Impunity in Guatemala led to the resignation and
    indictment of both the President and Vice President.
        Most recently, Venezuela's opposition coalition, known as
    Democratic Unity Roundtable, MUD, triumphed in the country's
    December 6, 2015 legislative elections, despite Maduro's
    efforts to imprison and eliminate the opposition and intimidate
    voters. The MUD Party won a decisive victory by capturing a
    supermajority over Maduro's ruling party. The elections
    represent a major defeat for Chavismo and signal a potential
    shift away from the failed and oppressive socialist policies to
    a more progressive society. Despite these agents for change,
    there are still troubling changes facing the region. Cuba still
    remains as oppressive and dictatorial as ever, imprisoning
    innocent civilians at an alarming rate and making no effort to
    shift its attitude to more equitable policies. The
    administration's misguided effort to reengage with the island
    has prompted record numbers of Cubans to flee the island,
    spurring a migrant crisis in Central America as thousands await
    passage.
        Additionally, Central America is continuing to deal with
    its own crisis as children and women continue to flee to the
    northern triangle to escape violence engulfing their home
    states. Mexico has greatly increased its enforcement efforts on
    the southern border. And we must help build that capacity so
    they can adequately screen and process these people, who are
    overwhelmingly eligible for asylum. We must stay committed to
    addressing the root causes of this crisis and ensure Central
    America is making strident efforts to reform its institutions
    and absorb a potential increase in U.S. funding through the
    Alliance for Prosperity proposal.
        These are just a few examples of changes undergoing in the
    hemisphere over the past year. I have always said that the U.S.
    must prioritize engagement with our neighbors. And I look
    forward to hearing from our witnesses on this year's activities
    and how we can improve relations in the coming year.
        Thank you.
        Mr. Duncan. I will allow a brief opening statement if any
    other members would like to.
        Mr. DeSantis from Florida is recognized for a brief
    statement.
        Mr. DeSantis. Thank you, Mr. Chairman.
        The title of the hearing is the ``Changing Western
    Hemisphere,'' but the one place still stuck in its totalitarian
    past is Cuba. It was almost a year ago when the President
    announced major, major changes in our policy toward the Castro
    regime. I think we can see now that these were essentially a
    list of unilateral concessions that really represent an
    unprecedented surrender to an anti-American regime that
    continues to oppress its own people.
        Think about it. Cuba got a massive influx of cash that
    really props up the intelligence services and the regime. It
    provided legitimacy to the Castro regime by opening the
    Embassy, as if they are just one of a community of nations. We
    released the last members of the Cuban Five terrorists and, of
    course, removed Cuba from the list of state sponsors of
    terrorism. Those were major concessions.
        And, yet, a year later, what have we gotten in return? Cuba
    released 53 political prisoners. Most of them have been re-
    arrested now. There has been no extradition for terrorists like
    Joanne Chesimard, who remains on the FBI's Most Wanted
    Terrorists list. No political reforms. In fact, the crackdown
    is probably worse today than it was prior to this deal.
        So there are a lot of changes in the Western Hemisphere. I
    appreciate all the subjects you brought, Mr. Chairman, before
    us. But freedom in Cuba is not a change that we have seen. And
    this is not a policy that has succeeded.
        And I yield back.
        Mr. Duncan. Absolutely. Thanks for recognizing that. I will
    now recognize the gentleman from New York, Mr. Meeks, for an
    opening statement.
        Mr. Meeks. Thank you, Mr. Chairman.
        You know, a few decades ago, Latin America and the
    Caribbean was a region known more for political turmoil and
    dictatorship than for political and economic advancements.
    Times have changed in my estimation. There have been sustained
    democratic advancements in the region for years now. And I
    think that we should acknowledge that and applaud that shift.
    It is also important that we adjust our policies to reflect
    these advancements. I commend the Obama administration for
    demonstrating to the region that our Nation is interested in a
    real partnership, a partnership with mutual interests and
    benefits on security, trade, immigration, human rights, and so
    much more.
        While Cuba is the one exception to the democratic trend,
    the Obama administration's decision to formally engage Cuba, in
    my estimation, is promising. And it puts America in sync with
    our allies in the region that have long urged more mature U.S.
    policy in the Western Hemisphere. I also appreciate the
    administration's commitment to diplomatic engagement, even
    where there have been challenges in our relationship. For
    example, as I was just talking with my good friend, the ranking
    member, here, and recent elections in Venezuela confirm that
    the democratic process in that nation remains very much alive.
    And it is good to see that there is change happening there. And
    I think that is important. And it reinforces the need for the
    United States to stay engaged. That is the key. We must be
    engaged. There are many elections ahead in the coming months.
    And there are notable challenges remaining.
        Haiti held elections in October rather peacefully. But
    subsequent violence and protest over the election results is
    deeply concerning. But we have got to stay focused on it.
        Democracy is not just about elections. Citizens of any
    nation don't just want to vote; they want to feel that their
    representatives are making a difference in their lives and
    livelihoods. For that reason, focus on poverty reduction and
    now on the equality gap is similarly an important regional
    trend. I have seen for myself the success that dedicated
    governments in Brazil, Peru, Mexico, Chile, Jamaica, and others
    have had on this front. It has been remarkable. Economic
    reforms, trade liberalization, and innovative and cost-cutting
    approaches are making positive change for vulnerable
    populations. The most affected communities for too many
    generations have suffered benign and deliberate neglect and
    discrimination.
        The progress I have seen can and has been instructive to
    our struggle to eliminate poverty and achieve a more equal and
    just society here in the United States. Our hemisphere is more
    consequently connected than ever before in both our struggles
    and successes.
        And I look forward to hearing the perspectives of our
    witnesses.
        And I want to thank the chair and the ranking member for
    holding this timely and critical review.
        Mr. Duncan. I want to thank the gentleman from New York for
    his participation in the hearings this year. A lot of times in
    Congress, we have subcommittee hearings that members just don't
    show up for. So I appreciate your participation, and as well as
    Ron and some of the others.
        So we are going to go ahead and get started. They are going
    to call votes at some point in time. We will get as far as we
    can. And I want to thank the witnesses for being here today. We
    don't have a lighting system. I am going to ask you to try to
    stay within 5 minutes. I will be timing here. If I start
    tapping the gavel, that is just to try to wrap up as soon as
    possible. And we will try to stick to that 5-minute rule. Then
    members will be able to ask questions.
        The witnesses are the Honorable Roger Noriega, visiting
    fellow with the American Enterprise Institute and former
    Assistant Secretary for Western Hemisphere at the U.S.
    Department of State; the Honorable Mary Beth Long, founder and
    chief executive officer of Metis Solutions, a former Assistant
    Secretary for International Security Affairs at the U.S.
    Department of Defense; and Dr. Cynthia J. Arnson, director of
    Latin America Program at the Woodrow Wilson International
    Center for Scholars.
        So, Ambassador, I will recognize you for 5 minutes.

      STATEMENT OF THE HONORABLE ROGER NORIEGA, VISITING FELLOW,
     AMERICAN ENTERPRISE INSTITUTE (FORMER ASSISTANT SECRETARY FOR
         WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE)

        Ambassador Noriega. Thank you very much, Mr. Chairman, and
    members of the committee. I thank you for this opportunity to
    review an eventful year in the Americas and to discuss the
    future of our policy. I believe we have a significant
    opportunity to recapture the initiative where our priorities
    are at stake: Democracy, security, and prosperity.
        In the last 15 years, representative democracy has been
    undermined by authoritarian populism, statist economic
    policies, and unsustainable government spending. In some very
    dramatic cases in the last year, some of our neighbors have
    decided to change course. Sunday's parliamentary elections in
    Venezuela gave the democratic opposition a landslide victory
    and a supermajority in the national assembly beginning in
    January. President Maduro had no choice but to accept the
    results of those elections. But his history suggests that his
    regime will resort to any means necessary to deny the
    opposition its rightful authority. That is why friends of
    democracy must do what we can to help.
        And to get straight to the point, for example, some of the
    same men who menace Venezuela's democratic opposition today
    also shovel tons of cocaine into the United States. And I
    believe we should move quickly to identify and punish these
    thugs to put them on the defensive. In Argentina, a majority of
    the voters rejected the statist, authoritarian, and
    economically ruinous policies of the Kirchners. As a result,
    the pro-free-market candidate, Mauricio Macri, was elected to a
    4-year term. He has pledged to lift currency and price
    controls, to lower taxes, to restore Argentina's credit
    worthiness, and to pursue a positive relationship with the
    United States. And I note that just today, his Foreign Minister
    said that she would be open to the renewal of a regional trade
    agreement, like was pushed 10 years ago. Argentina's new
    President has an opportunity to show that free market remedies
    can right size government and jump start stagnant economies.
        In Brazil, the decision last week to impeach Dilma
    Rousseff, impeach the President reflects the anxiety about the
    future that permeates South America's most populous country and
    largest economy. Several parallel investigations are continuing
    as well, which are being led by independent prosecutors and
    judges. This political crisis is, obviously, not good for
    Brazilians. However, the fact that they are confronting their
    challenges by relying on the rule of law and checks and
    balances shows that when it comes to answering to popular will,
    constitutions are more reliable than caudillos.
        A second major point, one of the greatest threats to U.S.
    security in the Americas today is the breakdown of regional
    consensus to confront illegal drugs and transnational organized
    crime. In the last 15 years, key drug-producing and transit
    countries, among them, Bolivia, Ecuador, and Venezuela, have
    effectively ended their cooperation with U.S. antidrug efforts.
    Now, Colombia intends to make peace with the guerilla group
    that is the world's largest producer of cocaine. It has
    already, at the peace process, gutted the government's coca
    eradication program and ended extraditions to the United
    States. For the first time in memory, if not ever in history,
    Colombia refused to extradite someone sought by the United
    States. In the face of this crumbling regional alliance, U.S.
    foreign policy has failed to respond effectively, leaving us
    more vulnerable to the onslaught of illegal drugs than we have
    been in decades.
        On a related front, the deadly terrorist attacks in San
    Bernardino and Paris underscore the vital contribution of
    neighboring governments to our own security. In the last
    several weeks, including in the last day or so, border
    officials in the region have interdicted at least a dozen
    Syrian nationals with false or stolen documents bound for the
    United States. These particular people are not suspected of
    being terrorists, but they relied on a criminal network that
    terrorists can use to enter the United States.
        One of our biggest vulnerabilities in this regard in this
    hemisphere emanates from Venezuela, which supports Syria's
    Assad regime and provides resources, recruits, and safe haven
    to Hezbollah and Iranian operatives, groups that have vowed
    publically to carry their asymmetrical war to our homeland.
    Venezuela also has provided thousands of phony IDs, passports,
    and visas to persons of Middle Eastern origin.
        Mr. Chairman, U.S. security demands much more vigorous
    efforts to confront that criminal regime as well as, in
    general, transnational organized crime that is destabilizing
    our neighborhood. The President must use all of his tools in
    his toolkit, including investigative cooperation, intelligence
    sharing, and sanctions to identify, isolate, and prosecute
    traffickers, money launderers, complicit officials, and corrupt
    businesses. To help put the region back on the road to
    prosperity, we should invigorate the positive, proactive
    partnerships that encourage countries to adopt policies that
    bring spending under control, incentivize private sector led
    development, root out corruption, and put capital in the hands
    of innovative entrepreneurs.
        One final point, Mr. Chairman. None of our pressing
    priorities in this region--democracy, security, and free market
    prosperity--are advanced, in my opinion, by the ongoing U.S.
    capitulation to the Castro dictatorship. Arguably, things have
    gotten worse for the Cuban people on the island since President
    Obama moved to normalize diplomatic ties with Castro.
    Reasonable terms for restoring normal economic relations with a
    post-Castro Cuba were approved by a three-fourths majority of
    this House and our Senate and signed by President Clinton. The
    awful reality is that Cuba is the only country in the Western
    Hemisphere that cannot meet any of those standards in terms of
    the defense of democracy, human rights, and labor rights. The
    benefits of normal economic ties with the United States should
    be used to encourage a post-Castro government to treat its
    people decently, not to reward a government that refuses to do
    so.
        Thank you.
        [The prepared statement of Ambassador Noriega follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                  ----------

        Mr. Duncan. Thank you.
        And we will get to the questions and be able to elaborate a
    little bit more.
        Ms. Long, you are recognized for 5 minutes.

     STATEMENT OF THE HONORABLE MARY BETH LONG, FOUNDER AND CHIEF
    EXECUTIVE OFFICER, METIS SOLUTIONS (FORMER ASSISTANT SECRETARY
    FOR INTERNATIONAL SECURITY AFFAIRS, U.S. DEPARTMENT OF DEFENSE)

        Ms. Long. Thank you, Mr. Chairman, Ranking Member, members
    of the committee. I appreciate being invited to be here today.
        A stable if not more peaceful, democratic, and prosperous
    Western Hemisphere is in the interest of all the citizens of
    the Americas and is in our interest. Unfortunately, in the last
    year, by having failed to consistently and meaningfully engage
    our hemispheric neighbors, we have managed to make the United
    States and our neighbors neither more secure, nor more
    prosperous.
        This has been a challenging year for our near and far
    hemispheric neighbors. Just in November, an unanticipated surge
    in immigration of Cubans through Guatemala, Honduras, and El
    Salvador has nearly overwhelmed our Customs and Border
    officials and made the United States and its neighbors even
    more vulnerable to the problems that these individuals
    represent and bring with them. The economic ills and lack of
    stability suffered by many of our southern neighbors are, and
    will continue to be, transmitted to the United States in the
    form of child immigrants and refugees, violence, the spread of
    criminal activities, and opportunities for terrorists and state
    rivals from undergoverned or ungoverned spaces, who could
    operate there in order to do us harm.
        It is not much of a stretch, and certainly not as much of a
    long possibility, as it used to be. Just in 2010, Abdul Kadir,
    a Guyanese convert to Islam, under the guidance of the Iranian
    cultural attache in Argentina, Mr. Rabbani, was sentenced to
    life for planning to detonate bombs in pipes lines leading to
    the JFK network. Rabbani was the leader of the recruiters for
    the Iranian Islamic radicals and was one of those people that
    was responsible for the 1994 bombing of the cultural center in
    Argentina. The sudden death of Argentine special prosecutor Mr.
    Nisman the day before he was scheduled to testify on this
    matter remains unsolved and certainly hints to continued
    Iranian involvement in Argentina.
        Mexico's Zetas employ drug traffickers and launderers Mr.
    Harb and Ayman Joumaa, both of whom have channeled some of the
    proceeds to Hezbollah. And don't forget that the Zetas were
    involved in a nexus with terrorist planning and threatened the
    life, in the United States, of the Ambassador from Saudi
    Arabia.
        More recently, Muamad Armadar, a Guyanese arrested in Lima
    just in October of last year, was identified as a likely
    Hezbollah operative, who was stockpiling explosives in his
    apartment. This year, Argentina arrested six Syrians who
    arrived on a flight bearing false Greek passports. And before
    that, five Syrian men were also carrying passports and were
    detained in Honduras on the way to the U.S. having already
    passed through Brazil, Argentina, and Costa Rica on their way
    north.
        In October, Brazil detained eight Iraqi nationals also
    bearing Greek passports. And while there is no open information
    indicating that these individuals were either involved in
    terrorism or had violent thoughts, the fact is the networks
    that have long been used by drugs and illicit activities are
    now open and smuggling people, weapons, and drugs, and are
    available to terrorists.
        In the last decades, Latin America and the Caribbean have
    experienced generally positive trajectories in internal
    reconciliation, interstate peace, and growing democratic
    processes and institutions. Regrettably, this progress is
    counterbalanced--and perhaps even threatened--by worsening
    problems. Most notably, in the last months alone, Cuban
    migration that represents approximately three times the Cuban
    migration of 1994 and perhaps the largest since the Mariel
    boatlift has come across the borders and have overwhelmingly
    threatened Panama, Ecuador, and other Central American states.
    Relations with key allies, such as Mexico and Canada in
    particular, have been strained. At one point, in fact, one
    observer describing the upcoming meeting between the
    administration and Mexico said, ``There is really not much to
    talk about,'' in relation to U.S. policy. The escape of Mexican
    drug cartel leader Joaquin ``El Chapo'' Guzman exasperated the
    existing chill. In extraditions, President Pena Nieto's
    government is proceeding at a rate that will be substantially
    less than half of the extraditions of his predecessors.
        In Canada, our largest trading partner is increasingly
    looking to Asian markets. And although Canada no doubt remains
    a steadfast military ally, its newly elected Prime Minister,
    Mr. Justin Trudeau, recently followed through with early
    indications that he would end Canada's participation in
    airstrikes against ISIS targets and restrict its military
    efforts to training alone.
        Sadly, what stands out in many observers' minds as symbols
    of American engagement in the hemisphere in the last few years
    are our executive order on immigration; outreach to anti-
    American governments, such as Cuba, with very little to show
    for it, and Venezuela; the Department of Justice welcomed
    investigation of FIFA; and, with few exceptions, not much else.
    The region simply has not been a priority for U.S. efforts or
    U.S. engagement.
        Meanwhile, from a security perspective, China and Russia
    have joined Iran in reaching out to countries in the
    hemisphere, seeking its allies and its markets. These
    interactions go well beyond the interactions of those countries
    with the Cuba regime. They are, in fact, actively engaged in
    anti-U.S. activities and rhetoric. While China has been busy
    undercutting the region's multilateral organizations, they have
    moved to take a naval flotilla across the Pacific, where for
    the first time, it conducted combat exercises with bilateral
    nations.
        Moving forward to security cooperation, while Colombia has
    long been the recipient of rigorous U.S. security assistance
    and related support, SOUTHCOM is limited in its ability to
    engage. Furthermore, as to resettlement, disarmament, and
    reintegration of the FARC, many of whom, even if they reconcile
    from a political perspective, are criminals and will continue
    to engage in criminal activity.
        Meaningful engagement from the United States is necessary
    to mitigate the impact of these and other threats. Security
    cooperation should be enhanced. It promotes cooperation in the
    hemisphere, encourages transparency, and even interoperability.
    And we need to do more along these lines, particularly through
    the Combating Terrorist Fellowship Program, the drug
    interdiction and other programs, the Ranger School training,
    and the training of additional Colombian and Mexican military
    to engage in more U.S. support. Looking ahead, the biggest
    issue is to immediately reinvigorate our national engagement
    and signal unwavering support and attention to our continental
    partnerships.
        Thank you. I look forward to your questions.
        [The prepared statement of Ms. Long follows:]

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                                  ----------

        Mr. Duncan. Thank you.
        They have called votes. We will go ahead and try to get Dr.
    Arnson--welcome back--and probably one question per side.
        And then we will go--Ron, if you want to stay, I am going
    to defer to you first because I am coming back. So if you want
    to hang and ask a question after Dr. Arnson, whatever you want
    to do.
        Okay.
        Dr. Arnson.

    STATEMENT OF CYNTHIA J. ARNSON, PH.D., DIRECTOR, LATIN AMERICAN
       PROGRAM, WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS

        Ms. Arnson. Thank you, Chairman Duncan, Ranking Member
    Sires, other members of the subcommittee, for this opportunity
    to testify about the challenges in the Western Hemisphere over
    this past year and per U.S. policy.
        I share and identify myself with the comments of others
    that have spoken before me that the recent elections in
    Argentina and Venezuela are historic and represent a
    fundamental change in the region. They have a common
    denominator of the failure of populist economics, which
    sustained generous but inefficient social programs, that were
    based on high commodity prices. Now that those prices have
    plummeted, along with other macroeconomic imbalances, the
    economic distress has had a major impact on the pocketbooks of
    average households, leading to the vote to punish existing
    leaders.
        The fall in commodity prices has had different effects
    across the hemisphere. But it has contributed to an overall
    economic slowdown in most parts of the region. Regional growth
    projections have dropped, now for the fifth consecutive year,
    to under 1 percent this year and next. There is, therefore, the
    deep concern over the ability of people who left poverty over
    the last decades to remain out of poverty; little chance that
    those who are still impoverished, the tens of millions of
    people who are still in poverty, to leave poverty; and there
    will be a reversal of the modestly improving patterns of social
    mobility. And I think these trends will have important
    political consequences.
        It should not be surprising that the countries that have
    fared best over the last 2 years, Mexico, Colombia, Chile, and
    Peru, precisely the countries that are part of the Pacific
    Alliance, are those that have pursued economic opening and
    liberal international trade among themselves and with other
    partners in North America, in Europe, and especially in Asia.
        Economic and social change in the region has contributed to
    higher living standards. But it has also contributed to civil
    societies that increasingly demand more of their political
    leaders and institutions. From Chile to Guatemala, Brazil,
    Peru, we have seen millions taking to the streets in recent
    years to demand better quality education, improvements in
    public services, from transportation to garbage collection.
    What would appear as a negative--the seeming epidemic of
    corruption scandals in numerous countries in the region--I
    think can also be viewed positively as a reflection of
    citizens' demands for higher ethical standards and more
    accountable and transparent government.
        The free press has played a critical role in bringing these
    scandals to light. In looking at the challenges ahead, I would
    note that U.S. relations with the hemisphere--and here I think
    I differ with those who have spoken before me--have improved
    significantly over the last year. Part of that has to do with
    the normalization of U.S.-Cuban relations, which removed what
    many countries in the hemisphere saw as an outdated relic of
    the Cold War. I think this was seen most dramatically at the
    Summit of the Americas in Panama in April, a meeting that many
    heads of state had actually threatened to boycott if Cuba was
    excluded one more time.
        The Obama administration's commitment to working
    multilaterally on a range of issues, from protecting the
    environment to promoting Venezuelan democracy, has also been
    viewed favorably. There is a recent poll by the Public Opinion
    Project, LAPOP, based at Vanderbilt University, which
    demonstrates that 51 percent of citizens in the region believe
    that the United States is the most influential country in Latin
    America. The comparable figure for China is 12 percent.
        I want to briefly highlight three areas where I think U.S.
    policy and engagement are critical. One has to do with
    relations with Colombia. If there is a peace accord that is
    signed early next year, whether or not it coincides with the
    deadline that has been announced, there will be a need for
    continued U.S. assistance and engagement. This is something
    that did not happen after the end of the Central American wars.
    And I believe that once the FARC has demobilized and has
    transformed itself as a political actor subject and under
    Colombian law, it would be appropriate for the U.S. Government,
    the Congress, and the executive branch to review the FARC's
    designation as a terrorist organization.
        Several of you have mentioned the Central American policy.
    I agree that more border enforcement is necessary. But there
    must also be a concerted effort to improve the conditions on
    the ground, the insecurity, and lack of opportunity that
    continue to impel Central American youth, in particular, to
    take this perilous journey.
        I see that people are looking to head out. I would say that
    it would be critical to maintain high-level but very discreet
    U.S. engagement on Venezuela. There are important new allies in
    the effort in the hemisphere, including OAS Secretary General
    Luis Almagro, President-elect Macri, who will be inaugurated
    tomorrow. They have demonstrated that they will take a leading
    role in pushing for respect for human rights and democratic
    freedoms.
        The U.S. administration and Congress, and here I conclude,
    should speak out publicly and frequently on important matters
    of principle but also be mindful that the Venezuelan Government
    currently thrives on confrontation and has used accusations of
    foreign interference to its own political advantage.
        Thank you very much. I look forward to your questions.
        [The prepared statement of Ms. Arnson follows:]

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                                  ----------

        Mr. Duncan. Thank you.
        And the committee looks forward to asking some questions
    and digging into this a little bit more. But, unfortunately, we
    are going to recess and go vote and come back. It is a two-vote
    series. It shouldn't take long. They are already into the time
    for the first one.
        So we are going to stand in recess pending call of the
    chair. And we will be back shortly.
        [Recess.]
        Mr. Duncan. All right.
        The subcommittee will come back to order.
        I thank the witnesses for your patience.
        And we will enter into the questioning phase. Each member
    will be given 5 minutes to ask questions. Since there are only
    two of us right now, we may exceed that a little bit.
        I have to figure out what I want to ask you here a little
    bit. There has been a series of recent large-scale and high-
    profile corruption scandals in Latin America, whether it is
    Petrobras in Brazil or whether it is Guatemala and the deposing
    of the President and Vice President and regime change there. So
    the question I have is this: Is corruption getting worse in the
    region? And is it spiraling out of control? Let's talk about
    corruption. And I will start with Ambassador Noriega.
        Ambassador Noriega. Well, Mr. Chairman, when governments
    settle in for a long spell, when they are undemocratic, for
    example, as in the case of Venezuela or in Brazil, where the PT
    managed to stay in power for a considerable period of time and
    then in Argentina where the Kirchners handed the Presidency
    between them, the culture becomes about satisfying the
    President and the President's inner circle or the President's
    political party. So, yes, I think corruption, when there isn't
    this alternating of power, alternancia, corruption tends to
    build up and become a bigger problem. Certainly the oil
    revenues--I mean $1.3 trillion in oil revenue since Chavez took
    power in Venezuela. Where did all that money go? When you look
    at the disintegrating infrastructure and about $250 million in
    the central bank reserves looted. Astronomical levels of
    corruption in Venezuela. And then the involvement also in
    narcotrafficking precisely because there are no checks and
    balances. There is no Congress that can hold officials
    accountable.
        Mr. Duncan. Ms. Long, do you think just changing the guy at
    the top or the female at the top, the President in Guatemala or
    President in Argentina, possibly in Brazil, you think that is
    enough to change corruption in these countries?
        Ms. Long. No, I don't. And I think one of the things that
    we do as Americans is we tend to look at corruption at the top
    of a government. And one of the changes probably in the last
    decade, I believe, is that because of a lack of U.S.
    involvement and lack of emphasis on the traditional drug or
    counternarcotics or counternarcoterrorism activities, that the
    corruption at the top, for all the reasons the Ambassador
    explained, has gotten worse. But the types of corruption have
    gotten worse. It is not just drugs any more. It is all kinds of
    movements of transnational crimes. It is involvement of Russian
    mafia. It is involvement of Hezbollah. It is involvement of
    Chinese triads in addition to Chinese markets. And then they
    have spread, as well. I think there is a study, actually from
    the Mexicans, that some 75 percent of Mexican municipalities
    are either totally corrupt or unreliable to the central
    government. So because of the frustrations of the economic--
    lack of economic opportunities, the constant flow across
    borders, the sieve that has become at least Central America,
    you have worse corruption at the top; you have the spread of
    corruption throughout the bureaucracy; you have got the types
    of corruption that has gotten worse. And all of that bears very
    ill.
        Mr. Duncan. Let me ask you this just as a quick followup.
    Do you think the economic situation exacerbates that or doesn't
    change it any?
        Ms. Long. It certainly exacerbates it. And one of the good
    things about some of the changes that we have been talking to
    at the top is there are opportunities. But those opportunities
    have got to be pushed all the way down. And they are going to
    have to have U.S. support. But as the doctor mentioned, even
    with the economic opportunities, the expectations have really
    risen where there has been change. I think there is going to be
    tremendous expectations of advancements in Argentina with Macri
    and in Venezuela. And being able to deliver that is going to be
    a challenge.
        Mr. Duncan. Dr. Arnson, with what you have heard, knowing
    that changing the person at the top isn't dramatically going to
    affect anything, what are some of the solutions as you answer
    this question?
        Ms. Arnson. Sure. Thank you, Mr. Duncan.
        With respect to your question about whether corruption is
    getting worse, I think the answer is yes and no. I don't think
    the world has seen anything on the scale of the Petrobras
    scandal, the billions of dollars that have been--that were not
    accounted for or used for purposes other than the correct ones.
    So that is--I think my colleague in the Brazil Institute has
    described that as a corruption scandal of biblical proportions.
    And I think that is an accurate statement. I also think that it
    is true for all the good reasons that I pointed out in my
    testimony, that we are finding out more about corruption now
    than almost ever before because of the demands from civil
    society, because people are fed up, especially at a time when
    they feel that the quality of the services or the amount of
    benefits that they are receiving is extremely poor.
        The check, or the improvement in combating inequality, has
    to do with what I think political scientists call mechanisms of
    horizontal accountability. Vertical accountability is from the
    voters to the people that they elect. Horizontal accountability
    is within a government and refers to having checks and balances
    and institutions within a state that can serve to monitor and
    control and investigate. The bodies, such as the Congress,
    asking the executive branch for information, whether
    voluntarily or by subpoena, the Congress has that power. The
    GAO also can investigate and is an investigative arm of the
    Congress. So reinforcing those kinds of institutional
    mechanisms--and I think people have referred to them earlier
    today--to the sort of pervasive weakness of institutions of
    democracy, that has to be a fundamental focus of our efforts in
    the region.
        Mr. Duncan. Thank you all for that. The new President of
    Argentina, who gets sworn in and takes office tomorrow at
    night, won 51.4 percent of the vote. His party doesn't have a
    majority in the Argentine Congress. So he is going to have some
    challenges. How long do you think the Argentine people will
    give him to turn things around?
        Ambassador Noriega. I think there will be a honeymoon of
    some duration because the dissatisfaction comes, as well, from
    others in Peronism. He could not have won unless there was a
    good part of Peronism that was disgusted by the levels of
    corruption and the authoritarian ways of the Kirchners. So he
    will have some who are within Peronism who are willing to
    cooperate with him. He will have to cobble together sort of ad
    hoc coalitions in order to have initiatives move through the
    Congress. But it was a closer than expected result. And so the
    Peronists bounce back pretty quickly. They already took steps
    to sort of pass some Kirchner-supported measures through the
    lower house in defiance of what the President-elect had asked.
    So the Peronists have the bit in their teeth, and they are
    going to put up a fierce level of opposition, that is to say,
    those that are particularly loyal to Kirchner and the outgoing
    government. But there are some, for example, Mr. Massa, who
    competed in the first round, was a rebel within the--or a
    dissident within Peronism. So I think people from his bloc will
    be looking for opportunities to cooperate with Macri and get
    the economy moving again.
        Mr. Duncan. Ms. Long, do you want to chime in on that?
        Ms. Long. I don't really have much to add except for I
    think a little bit of time may have been bought to the extent
    that the population that voted for Macri are disgusted by the
    latest 2 days of machinations of money transfers and other
    measures that have at least attempted to tie his hands from a
    fiscal and other sense. Perhaps there will be some sympathy
    there.
        Mr. Duncan. Before Dr. Arnson answers, so I traveled for
    the first time to Argentina in 2002, March, early April. The
    day before I got there, they devalued their currency, went from
    1 to 1, to 3 to 1 with the dollar. I know they have done it at
    least one other time since 2002. Inflation is extremely high in
    Argentina. Anyone that has traveled there prior to 2002 and
    traveled there now has experienced that. Plus, there are a lot
    of dead issues out there with bondholders and what not. So how
    do you think--and maybe this was a campaign issue during the
    Presidential campaign. I don't know. I didn't follow it that
    closely. So we have got this bond issue that Argentina needs to
    really pay, and we have got rampant inflation. So how do you
    think, from an economic standpoint, does President-elect Macri
    address that?
        Dr. Arnson.
        Ms. Arnson. Sir, you have added a difficult question on top
    of a difficult question, but I will try my best. You were right
    in pointing out that President-elect Macri does not control the
    Congress. In point of fact, the Argentine Senate is dominated
    by the FPV, the ruling party of President Fernandez de
    Kirchner. But there are large areas of economic policymaking
    that are in the purview of the executive branch.
        And I think that is where, in conjunction with his advisers
    and his cabinet and his senior ministers, he will have to take
    some very prudent steps to control inflation, to unify the two
    exchange rates. The official exchange rate right now, if it was
    3 to 1 back in 2002, the official rate now is about 9.5 to 1.
    But can you walk to any street corner and exchange dollars for
    15 to 1? So that contributes to inflation. And one of his goals
    is to have a unified exchange rate and prevent that parallel
    black market. In bringing those together, he has also
    announced, as a way of restoring the confidence of the private
    sector and of the international investor community, that he
    would lift controls on repatriation of capital. He has to do
    that very carefully because to simply allow a mass exodus of
    dollars would create even more deflationary pressures on the
    currency. And if Argentines go through another massive
    devaluation as a product of the kind of adjustment that he
    trusts to put into place, he is very rapidly going to lose
    political support. And people like Scioli, the principal
    opposition candidate, will be pointing their fingers and
    saying: See, I told you so. We told you this was going back to
    the days when the IMF and neoliberalism ruled the day. So I
    think he has to be very careful.
        Mr. Duncan. Let me ask you this. You mentioned repatriation
    of capital. What is attractive about Argentina giving high
    inflation for Argentine investors to bring money back--maybe
    from U.S. investments, maybe from other investments--to Buenos
    Aires or to anywhere in Argentina? What is attractive?
        Ms. Arnson. Well, there is a very extensive middle class.
    There is a consumer base in the country that is extremely
    broad. The levels of education in Argentina are really, I
    think, at the top of the list of the hemisphere. It is an
    extremely wealthy country in terms of natural resources, both
    land, oil and gas, which has been exploited only in the last
    few years. So there are enormous opportunities. Buenos Aires,
    for all of the things you could say, happens to be one of the
    most active tech and innovation hubs in Latin America,
    something that it shares with Santiago, Chile, Montevideo in
    Uruguay, and Guadalajara in Mexico. But there is enormous
    capacity and enormous human talent and human capital. So it is
    a very attractive country for investment. There is an internal
    market. There is also the ability to export within Mercosur,
    although Brazil's ability to absorb exports from other
    countries is very limited.
        But the real question is that there is not only a pent-up
    demand for dollars but also a pent-up demand to get pesos out
    of the country because the current regime has made that very
    difficult. And so all of those capital controls and adjustments
    in the exchange rate are going to need to be done slowly so
    that you don't see just a massive----
        Mr. Duncan. My time has expired, but I agree with you that
    it is a very attractive country. If the government can get it
    right, I absolutely believe there will be investment coming
    back. I don't believe you are going to see, at $40 a barrel, I
    don't think you are going to see a whole lot of oil and gas. We
    can't even get oil and gas investment at $40 a barrel in this
    country right now. So, as oil prices creep back up, assuming
    that they do over time, absolutely. There was oil and gas
    prospecting going on in Argentina in 2002, and I know it has
    probably continued. But it is hard for that at $40 a barrel.
        So I am going to yield to the gentleman from New Jersey for
    as much time as he needs.
        Mr. Sires. Thank you, Mr. Chairman.
        You know, to continue this conversation, I just find it
    very difficult for people to invest in Argentina if they don't
    pay their debt. Why would I, as a businessman, even consider
    going into some sort of a partnership when they have the issue
    that they don't pay what they owe now? So I think it is almost
    a catch-22. You know, you want the investment, but you don't
    want to pay.
        But my question really is toward Venezuela more because I
    was very excited about the elections. I am very concerned where
    we go from here. Actually, I was talking to my colleague, and I
    told him, I said: You know, I was very surprised how far away
    the army stood from this election. And I was wondering if you
    have any ideas? Because you know, as we know, usually the army
    controls a lot of the elections or the process. So why do you
    think it was an advantage to them to stay far away from this
    election? Although I had heard rumors that Maduro was trying to
    create problems there.
        Ambassador Noriega. Yes, Mr. Chairman, and Mr. Sires, if I
    could jump in there, I believe that first off, a 2-to-1 margin,
    67 percent of the vote going one way, even the most clever or
    sophisticated corruption couldn't have overcome that deficit.
    But, having said that, the last several seats were settled by
    less than 100 votes. So the electoral apparatus was allowed to
    proceed in a normal fashion. But it didn't just happen. The
    information I have from sources on the ground in Venezuela, all
    that day, the ruling party was expecting a massive defeat. And
    as it became more and more clear, there were some people--and
    one of them whose name I already mentioned, Diosdado Cabello,
    who is President of the National Assembly, who has perhaps the
    most to lose for various different reasons because he can't
    withstand the kind of accountability that will come from an
    opposition Congress--was urging that the party put people on
    the street to stress the vote using these colectivos, these
    armed people that go around on motorcycles and shooting into
    crowds to disrupt the day and to sort of provoke some sort of a
    crisis. And the information I got was that the military
    establishment, particularly the Minister of Defense, Padrino
    Lopez, said if that happens, the military will deal with those
    people who are trying to incite violence. And so there was sort
    of a tense standoff up until just after midnight, when they
    announced these devastating results. But Padrino Lopez is no
    longer the Minister of Defense, from what I have been told, in
    the last 24 hours. He--along with the other Cabinet Ministers--
    he is being replaced in that case by someone--Reverol, General
    Reverol, who used to head the National Guard as Minister of
    Defense now. You know, in 2013 he did put National Guardsmen on
    the streets to attack these student demonstrators. So you
    already see this tug of war going on. The military did play a
    decisive role apparently by preventing the ruling party from
    putting sort of this thuggish apparatus on the street to
    suppress the vote. We will see now where that balance will be
    as the opposition begins to assert itself and make moves as a
    supermajority in the National Assembly can hold the executive
    more accountable, to call for the amnesty of these political
    prisoners and other moves.
        Mr. Sires. Ms. Long, do you have anything to add to that?
        Ms. Long. No. In fact, the one thing I would add is it
    really is a double-edged sword. And I think it is one of those
    places where U.S. active engagement, although in a subtle and
    productive way, is really needed. I agree with the Ambassador.
    I think the military is in very much a wait-and-see mode. I
    don't think they wanted to go against the population where the
    politics were trending. I do think that with the recent
    changes, they will come out if there is violence in order to
    maintain the social order in their minds. But I think most
    people who actually know the individuals within the Venezuelan
    military will actually tell you that they are very interested
    in closer relationships with the United States. They have had
    them in the past. They have some U.S. equipment. They don't
    believe they have been well supported over the years. They see
    themselves as having been deteriorating. And this could be
    under a new regime, if it gets legs underneath it, a real
    opportunity for us to engage them in a productive manner.
        Ms. Arnson. If I could first address your question, your
    statement about Argentina and the holdouts, I think Mr. Macri
    has made it clear that he wants to move quickly early in the
    new year to begin to negotiate with the holdouts. Ninety-three
    percent of bond holders that held Argentine debt did settle
    with the Argentine Government. And it was 7 percent that have
    resisted that or refused to do it. And I think to come to an
    agreement is going to take some real compromise on both sides.
    It is just, I think, unrealistic to think that 100 percent of
    the face value of the bonds that were bought at very, you know,
    favorable rates and were seen as high risk, you know, which is
    part of the risk is that they are going to lose value, I think
    it is unrealistic to think that the holdouts, the so-called
    holdouts will get 100 cents on the dollar.
        Mr. Sires. You don't think they sell because they thought
    she was going to win?
        Ms. Arnson. No, I think they decided that it was a deal
    they could accept, that there was some number--I haven't spoken
    directly with people who took that buyout, but there was a
    sense that this was a government that went into default, that
    was destroyed economically back in 2001 and 2002, that it was
    unable to pay the face value of the debt. And so as you do with
    bad debts everywhere, you renegotiate and you come up with some
    terms that you can live with. And there was a certain number of
    people--again, a very small minority, 7 percent--who refused to
    do that. And it is a priority of the new government to come to
    some agreement precisely to be able to re-access international
    capital markets because they have been frozen out of financial
    markets over the holdout issue.
        If I could address the Venezuela issue just briefly, I
    think that it is important to understand that Chavismo has
    always depended for part of its legitimacy on the sense that it
    is an elected government. Elections have been a feature, in
    fact an all-too-frequent feature, referendums on this, that,
    and the other thing, something like 12 elections between the
    time that Chavez was first elected and the time that he died,
    where people are called, and the elections serve as a way for
    the regime to almost hold a plebiscite on its own rule. So
    there is a sense that elections are ways that political change
    happens, but also the way things are legitimized. So I was,
    frankly, quite surprised to see the very prudent and moderate
    language that President Maduro used in accepting the electoral
    defeat. This was a man who only 10 days before had said, you
    know, we will see you at the ballot box or we will see you in
    the streets, raising this fear that there would be post-
    electoral violence and that an opposition victory would not be
    respected.
        I also think that the actions of the electoral council, the
    CNE, were in my view very surprising. I would have never
    imagined that the two-thirds majority would have been ratified
    so quickly. I expected that there would be prolonged protests,
    accusations of fraud between the opposition and the CNE. So I
    am not saying that Venezuelan institutions function, but I just
    would say the results and the way that they happened were, to
    me, a pleasant surprise.
        Mr. Sires. Do you think that this populist ideology is
    dead?
        Ambassador Noriega. Absolutely not. But as a columnist--I
    will give him credit for this, although I should steal the line
    myself--Andres Oppenheimer said, ``Populism runs out of steam
    when the politicians run out of money.'' And that is precisely
    what has happened in a couple of these countries. The tide has
    gone out, and now there are the repercussions as some of these
    institutions step up and point out corruption, as what has
    happened in Brazil, or the fact you have had an economic
    meltdown----
        Mr. Sires. It is always interesting to me because the
    President, the speaker--I don't know what they call the
    speaker--he calls for the President to be----
        Ambassador Noriega. Impeached.
        Mr. Sires [continuing]. Impeached. Yet he is under
    investigation himself. He may wind up being kicked out.
        Ambassador Noriega. Right. There was some horse trading
    going on. That is why the decision took so long because the
    word was that he was trying to get people to sort of get off
    his back if he sort of didn't go along with the impeachment of
    the President. So it is a political process. But as I mentioned
    in my statement, there are parallel investigations and various
    levels of corruption by the courts that will have ramifications
    no matter what happens with this impeachment.
        Mr. Duncan. I want to follow up on that. Brazil is going to
    be in the world's spotlight--is in the world's spotlight--due
    to the Olympics. We have got a terrorist attack in Paris,
    threatened to blow up--terrorists threatened to blow themselves
    up in a stadium. It has got to be a huge issue of concern for
    Brazil, as it is for all the countries attending the Olympics,
    sending their star athletes there in the wake of a corruption
    scandal that is going to possibly bring down the President and
    the speaker of the house. We see impeachments just hanging out
    there. Not been impeached yet, but--and little things like the
    inability to clean up areas where swimmers and kayakers are
    going to be, the inability to provide water to a major city in
    Sao Paulo last year.
        So what does the Petrobras government corruption scandal
    and the impeachment mean for security? Let's just focus on
    security. What does it mean? Because if I was the head of an
    Olympic committee in the United States--or maybe even Spain or
    somewhere else--thinking about sending my athletes down to swim
    in the waters of Brazil, I would be concerned about their
    health. And I would be concerned about my soccer players and
    the fans that are going to attend the games in the stadiums. So
    we saw the World Cup. Did they learn anything from that? And
    how has that applied? Let's delve into that for just a second.
        Ms. Long, I am going to start with you.
        Ms. Long. Absolutely. I don't think it bodes well. And I
    think, as a practical matter, the political maneuverings
    regarding the Petrobras and other scandals are on a much larger
    scale status quo. But it really doesn't have any favorable
    outcome for security. There are two things, and you hit upon
    them both. While the U.S. is distracted a lot with ISIS and
    other Middle East events, the populations on the tri-border
    area, that have long been suspected as Hezbollah enclaves, have
    increased significantly. And, in fact, neither Argentina,
    Paraguay, nor Brazil can speak to exactly what is going on in
    those areas. We know that they have long served perhaps as
    resting areas for Hezbollah. They certainly have served as
    places where moneys and funds are laundered, if not
    transportation hubs. But there has been very little attention
    and almost no sincere ability on the part of Brazil to actually
    understand what is happening in that border area and to gauge
    what implications it will have for the Brazil games.
        As to the games, if you speak to any of the U.S. entities
    that are normally engaged at this period in time for internal
    security for helping with the favelas, with taking a look at
    immigration, the fact that these events will be taking in 12 or
    16 different fora and require trains and significant airplane
    and other movement of athletes and spectators is a nightmare.
    And there is very little planning that has been done just on
    the transportational issues alone, not to mention the fact that
    there are health and other concerns.
        Mr. Duncan. Stadiums and that sort of thing.
        Ms. Long. Yeah. At this point, I think they are housing or
    planning to house a number of the athletes offshore, with very
    little significant plans, upgrade in activity and coordination
    on the maritime security that will be required just to guard
    these--I think they are going to use former cruise ships in
    order to put the athletes on them. It is going to be a
    disaster, and it is going to go to the last minute, and then
    everyone is going to rush.
        Mr. Duncan. Anyone else like to--Ambassador?
        Ambassador Noriega. For example, the FIFA that they hosted,
    it was a bit of a carrier landing; that is to say a controlled
    crash: I mean, the Brazilians waiting to the very last minute
    until they took measures and involved some foreign advisers to
    get things up to snuff. But as you mentioned, the Petrobras
    corruption scandal, part of the problem is the fiscal crisis.
    The country is now in a 4-percent contraction. A recession
    started a couple years ago. So the resources may not be there
    for this to--well, they are going to have to take extraordinary
    moves to find the resources to get the sort of advice, do the
    sort of physical improvements at some of these sites. But I
    think, again, it is going to be a bit of a carrier landing.
        Mr. Duncan. I think the Brazilians generally get security
    right. A little heavier hand than maybe the U.S., but
    generally, I think they do so. Everyone is holding out hope
    that we do.
        We could talk about Chile and their economy and the
    downturn in mining. We could talk about Peru and private
    property rights, civil society all over Latin America. You
    know, the GTMO six, attempted terrorist attack in Montevideo.
        I mean, there is so much we could delve into. I think our
    committee has done a good job this year talking about the FARC;
    and talking about energy; and talking about Venezuela and Cuba
    and changes there; and Mexico and energy opportunities there;
    but also the children that were killed. We have delved into so
    much. But there is so much left uncovered.
        We could talk about your trip to Colombia recently, Ms.
    Long, and the FARC, and what you think--let me ask you that.
    Just briefly, tell us your experience and what the U.S. can do
    with regard to the FARC negotiations just quickly because I
    know you were just there, right?
        Ms. Long. I think there is a lot of optimism in the
    government about the FARC negotiations, and expectations are
    high. And I think that certainly the will on the government's
    side to get there will be--will get them there. I think that
    expectations are going to be very difficult to meet. And there
    will be resource strain on the government that will sort of
    pull from traditional security and other expenditures that may
    be significant. I worry, more importantly, about--the FARC has
    long since, I believe, been a theological bulwark for political
    organizations, and they are significantly criminal
    organizations. And those people are not going to lay down their
    arms, and they are not going to integrate, and they are not
    going to be willing to accept jobs. And what they are going to
    do is become a different kind of threat, a domestic threat that
    is basically either stealing the gold, or engaging in
    narcotrafficking, or basically running ungoverned areas.
        Mr. Duncan. But now they want to be part of the government.
    They want to have the opportunity to run for elections and be a
    viable political party. Is that being cut out of this deal? I
    don't think the Colombian people will go along with that,
    personally.
        Ms. Long. I don't think the Colombian people will go along.
    And, frankly, why would they take that harder path to actually
    be elected and hold office when the path that they have right
    now, frankly, is working very well for them?
        Mr. Duncan. Is there going to be jail time for any of the
    FARC leaders?
        Ms. Long. I don't think that has been determined. I doubt
    it.
        Mr. Duncan. Well, we are looking forward to hearing more
    about that. The last question I have, and that is for each of
    you, going forward, you have heard all of the things we have
    done this year in this committee and things we have delved
    into, but we have got a whole nother year in this session of
    Congress. So give me just a brief, real brief, your ideas on
    what we should delve into going forward. I have got a year to
    plan here.
        Ambassador Noriega. Great. Two things. Focusing on the
    threat of transnational organized crime, the crosscutting
    impact that criminality has in the hemisphere and transit
    zones, weak states in Central America, even a strong state in
    Mexico, sorely tested to meet that international threat. And it
    is an asymmetrical threat that has asymmetrical responses; that
    is to say, rifle shots, executive sanctions, OFAC sanctions
    against individuals who are laundering money. You could have a
    dramatic impact with that sort of move.
        And then an emphasis on the economic revitalization. Start
    talking about how do you get--encourage countries to retool
    their economies? You know, we are not going to be talking about
    grand international trade agreements, but we have to get back
    to basics. All prosperity is local. These countries need to
    retool their economies so they can invite investment; they can
    incentivize sustainable private sector growth, create jobs, and
    start to meet the basic needs of their people. That happens,
    you know, with free market policies. And I think we should be
    unabashed advocates for that kind of program.
        Mr. Duncan. Ms. Long, your top one or two.
        Ms. Long. I will adopt the Ambassador's number one.
        Number two is we are quickly losing our role as the
    security cooperation partner of choice, in part because we
    haven't engaged, and one would argue we can't engage. But there
    is going to be real implications, not to what China is doing in
    the Pacific and not to what Russia is doing in Ukraine, but
    those two actors are moving in significant ways into the
    region. It is still nascent, and we haven't seen the results of
    it yet, but when you have 140 or 170-plus Russian advisers in
    Nicaragua, which we can all count on that being at least 10
    times that amount--and it is not the numbers; it is the roles.
    One recent person just told me there are Spetsnaz. Whatever
    they are doing, we have got artillery delivered. We certainly
    know there are artillery advisers. Just having that in our
    backyard--with all of the problems that we have got with porous
    borders, corruption, money, and other flows--is really
    dangerous. And that chicken will come home to roost when it is
    too late. And we have an opportunity now to reengage and
    reengage effectively, and we need to do so.
        Mr. Duncan. Doctor?
        Ms. Arnson. I would say that a key priority is to support
    the peace process in Colombia and the post-accord era. I think
    it is unrealistic to expect that a peace accord is going to
    mean the end of violence; it is going to mean that all FARC
    members are going to lay down his or her weapons. That did not
    happen with the AUC paramilitary demobilization, many of whom
    have recycled into the so-called bacrim, the criminal bands.
    And I think some portion of the FARC will do that. I also think
    that there is an ongoing threat from the ELN and that there
    will be an important role in trying to end the insurgency by
    the ELN. In a bipartisan way, the United States has provided
    approximately $9 billion to Colombia. A big mistake would be to
    reduce our assistance in the post-accord era to the current
    levels of maintaining a couple of hundred million a year.
    Colombia is going to face enormous challenges. The resources
    available to the state at a time of low oil prices are much
    diminished. And I think it will be incumbent on the
    international community, including the United States, to
    support, financially and politically, the peace process.
        I think another important issue for the committee will be
    to pay attention to what is happening to those who became
    middle class during the boom decade of the 2000s, those who
    remained as vulnerable, and what is happening to them both
    economically and, more importantly, politically in the coming
    year or two, in the foreseeable future.
        And then a third, if I might permit myself, is to continue
    to help with institutional strengthening, to bolster the
    ability of governments and civil societies to combat corruption
    through strengthening of institutions and independent
    mechanisms for control and oversight.
        Mr. Duncan. Well, I want to thank each of you for that. I
    mean how many committee chairmen ask for your input on what we
    should look at going forward? But I think it is important
    because of your expertise in the region.
        I look at Latin America this way. We spend a lot as a
    Nation, we spend a lot of time and money and effort in parts of
    the world where people don't like us very much; where they
    don't speak the language; we have different cultural
    backgrounds. I look at Latin America and I see a shared
    culture; I see a shared religion than I see in most countries;
    and I just see a lot of commonality and a lot of opportunity
    for America, not only American businesses, but for American
    Government to get reengaged in this region with our friends and
    our neighbors here. And that is really what I hope we will
    continue to push forward in this subcommittee.
        And so I appreciate your excellent testimony here today. I
    apologize more members weren't here to ask questions because I
    think they missed a very prime opportunity to delve into some
    of the key issues in the region.
        But I will say the ranking member and I are focused. We
    work very well together, and I look forward to working with him
    going forward and each of you.
        And with there being no further business, we will stand
    adjourned.
        The ranking member.
        Mr. Sires. Before we end, I just want to thank you,
    Chairman, for the work that we have done throughout the year.
    It has been a very bipartisan, very good relationship. I was
    very fortunate; I had Matt Salmon also as chairman. And it is
    the best times that I have had here in Congress, regardless of
    being in the minority, working with these two chairmen.
        And South America, Central America, and, obviously, being
    from Cuba, I am very concerned about what is happening in Cuba.
    You know, since all this--over 7,000 people put in jail, and
    everything that is going on on the island--it is becoming more
    oppressive than before. And it is funny, we mentioned Brazil,
    because I was in Brazil a month--we were in Brazil with the
    previous chairman and almost a month to the day when all the
    riots started. And they took us through Maracana Stadium, where
    they spent $500 million, to see the construction. And it was
    chaotic, but they got it done. But I think one of the things
    that ignited a lot of the people in the area was that they took
    away the ability of the common people to go to this Maracana
    Stadium and watch the football games because it became more
    expensive. Whereas, before, you had the common people--I
    shouldn't say ``common people''--but you had people able to
    afford to go into the football games. And, you know, they
    showed us everything. They showed us all the railroads and
    everything else. Then, when we came back, we were very excited.
    But a month later, all hell broke loose. People started
    demonstrating. I think it hasn't stopped, quite frankly.
        But, again, Chairman, thank you very much. It has been a
    great year.
        And I look forward to having you in the future as panelists
    with us.
        Mr. Duncan. I assure the ranking member we aren't going to
    take our eye off Cuba, and look forward to continuing to look
    into that.
        You know, you are talking about cutting the common man out
    of being able to go a sports game, a soccer or football game in
    Brazil; I would say the NCAA here is about to price the common
    person out of going to a college football game. It is crazy.
        With that, there being no further business, we will stand
    adjourned. And Merry Christmas to everyone.
        [Whereupon, at 3:55 p.m., the subcommittee was adjourned.]

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