[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]





                               BEFORE THE

                            SUBCOMMITTEE ON

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES


                             FIRST SESSION


                           SEPTEMBER 25, 2019


                           Serial No. 116-65


        Printed for the use of the Committee on Foreign Affairs


Available: http://www.foreignaffairs.house.gov/, http://docs.house.gov, 

                           or www.govinfo.gov

 37-708 PDF              WASHINGTON : 2020
                      COMMITTEE ON FOREIGN AFFAIRS

                   ELIOT L. ENGEL, New York, Chairman

BRAD SHERMAN, California             MICHAEL T. McCAUL, Texas, Ranking 
GREGORY W. MEEKS, New York               Member
ALBIO SIRES, New Jersey              CHRISTOPHER H. SMITH, New Jersey
THEODORE E. DEUTCH, Florida          JOE WILSON, South Carolina
KAREN BASS, California               SCOTT PERRY, Pennsylvania
WILLIAM R. KEATING, Massachusetts    TED S. YOHO, Florida
AMI BERA, California                 LEE ZELDIN, New York
JOAQUIN CASTRO, Texas                JIM SENSENBRENNER, Wisconsin
DINA TITUS, Nevada                   ANN WAGNER, Missouri
ADRIANO ESPAILLAT, New York          BRIAN MAST, Florida
TED LIEU, California                 FRANCIS ROONEY, Florida
SUSAN WILD, Pennsylvania             BRIAN FITZPATRICK, Pennsylvania
DEAN PHILLIPS, Minnesota             JOHN CURTIS, Utah
ILHAN OMAR, Minnesota                KEN BUCK, Colorado
COLIN ALLRED, Texas                  RON WRIGHT, Texas
ANDY LEVIN, Michigan                 GUY RESCHENTHALER, Pennsylvania
ABIGAIL SPANBERGER, Virginia         TIM BURCHETT, Tennessee
CHRISSY HOULAHAN, Pennsylvania       GREG PENCE, Indiana
TOM MALINOWSKI, New Jersey           STEVE WATKINS, Kansas
DAVID TRONE, Maryland                MIKE GUEST, Mississippi
JIM COSTA, California
JUAN VARGAS, California


                    Jason Steinbaum, Staff Director

              Brendan Shields,  Republican Staff Director

  Subcommittee on the Western Hemisphere, Civilian Security, and Trade

                   ALBIO SIRES, New Jersey, Chairman

GREGORY W. MEEKS, New York           FRANCIS ROONEY, Florida, Ranking 
JOAQUIN CASTRO, Texas                    Member
DEAN PHILLIPS, Minnesota             TED S. YOHO, Florida
ANDY LEVIN, Michigan                 JOHN CURTIS, Utah
VICENTE GONZALEZ, Texas              KEN BUCK, Colorado
JUAN VARGAS, California              MIKE GUEST, Mississippi

                  Alexander Brockwehl, Staff Director
                            C O N T E N T S



McFarland, The Honorable Stephen, Former U.S. Ambassador to 
  Guatemala......................................................     7
Gonzalez, Mr. Juan, Associate Vice President, The Cohen Group, 
  Former Deputy Assistant Secretary of State for Western 
  Hemisphere Affairs.............................................    17
Jones, Mr. Rick, Senior Technical Advisor for Latin America, 
  Catholic Relief Services.......................................    22
Rooney, Mr. Matthew, Managing Director, Bush Institute-SMU 
  Economic Growth Initiative, The George W. Bush Institute.......    30


Hearing Notice...................................................    49
Hearing Minutes..................................................    50
Hearing Attendance...............................................    51


Opening statement submitted for the record from Chairman Sires...    52


Responses to questions submitted for the record from 
  Representative Guest...........................................    55


                     Wednesday, September 25, 2019

                        House of Representatives

                Subcommittee on the Western Hemisphere,

                      Civilian Security, and Trade

                      Committee on Foreign Affairs

                                     Washington, DC

    The subcommittee met, pursuant to notice, at 2 p.m., in 
room 2172 Rayburn House Office Building, Hon. Albio Sires 
(chairman of the subcommittee) presiding.
    Mr. Sires. Well, good afternoon. First of all, I want to 
thank everybody, all our witnesses for being here today. I 
convened this hearing to examine the damage caused by President 
Trump's decision in March to cut $400 million in U.S. 
assistance to the Northern Triangle.
    The Trump Administration did not consult with Congress 
before it decided to cut these funds. Moreover, administration 
officials have openly acknowledged that they did not even 
assess the effectiveness of our existing program or the impact 
of these programs on migrant flows for the United States before 
reaching their decision.
    In other words, the Administration displayed an astonishing 
level of contempt for Congress and a blatant disregard for the 
will of the American people.
    I think I speak for many of my colleagues in saying that 
this is not how the United States should conduct foreign 
policy. In my visit to the region, I have seen firsthand the 
impact of our programs on the ground. The U.S.'s strategy for 
Central America was designed to improve quality of life in 
Honduras, El Salvador, and Guatemala, in order to address the 
root causes of migration.
    This strategy enabled important progress in a short period 
of time. Our assistance helped reduce homicide rates in El 
Salvador by more than 50 percent in municipalities where USAID 
    In Guatemala, our programs helped create over 78,000 new 
jobs in the Western Highlands and Peten Department alone. In 
Honduras, our programs helped lift 90,000 people out of extreme 
poverty. These are certain areas where our strategy could be 
improved upon, and I would welcome an honest conversation about 
ways the U.S. could better advance our objectives in the 
    However, arbitrarily cutting assistance to the region is 
absolutely the wrong approach. I strongly oppose President 
Trump's decision to cut funding for this program. I commend my 
colleagues on both sides of the aisle who have spoken out 
against this illogical decision. It would directly undermine 
U.S. interests.
    I represent a district that is nearly two-thirds Latino. 
Many of my constituents are first-generation and second-
generation immigrants from Central America. I repeatedly hear 
from my constituents that they did not want to leave their home 
countries and leave behind family members. They migrated as a 
last resort.
    The Trump Administration seems to believe that they can 
stop migration by eliminating the right to seek asylum, 
encouraging governments in the region into stopping people from 
leaving the countries at all. The Administration clearly does 
not understand the level of desperation felt by many of those 
who make the dangerous journey north. Criminalizing desperation 
will only make conditions more precarious for those who have 
decided that leaving home is the only option.
    I believe that the U.S. must, instead, work as a partner to 
help create conditions whereby Hondurans, Guatemalans, and the 
Salvadorans can see a future in their home countries.
    I was proud to be an original co-sponsor of the Northern 
Triangle Enhanced Engagement Act led by Chairman Engel and 
Ranking Member McCaul, which passed the House in July. And I 
urge my Senate colleagues to urgently pass this bill.
    I also thank my friend, Congressman Yoho of Florida, for 
working with me on a resolution that highlighted the importance 
of continuing our engagement with the Northern Triangle. I 
appreciate the efforts of Ranking Member Rooney, who worked 
with me, along with Chairman Engel and Ranking Member McCaul, 
on the letter we sent to President Juan Orlando Hernandez of 
Honduras, urging him to extend the mandate of the mission to 
combat corruption and impunity in Honduras.
    There is a tremendous and bipartisan agreement within 
Congress that we must engage the Northern Triangle countries in 
order to enhance security and prosperity and combat corruption.
    I hope we can continue to work together on a bipartisan 
basis to ensure our policy toward the region advances U.S. 
interests and truly addresses the root causes of migration.
    Thank you, and I now turn to Ranking Member Rooney for his 
opening statement.
    Mr. Rooney of Florida. Thank you, Mr. Chairman. Thank you 
for holding this important hearing.
    The United States and the Central American countries of 
Guatemala, Honduras, and El Salvador--the Northern Triangle--
are inextricably linked by geography and deep cultural roots. 
We have mutual concern about the illegal migration into the 
United States and the economic and security challenges which 
precipitate it.
    These countries are among the most violent and poorest in 
the world. The United States' foreign assistance to these 
countries is a critical tool that we can deploy to nurture a 
secure and stable Northern Triangle and improve security in the 
region. Between 2016 and 2018, the United States allocated over 
$800 million in foreign assistance to the Northern Triangle, to 
confront the transnational gangs like MS-13 and to strengthen 
democratic institutions and try to spur economic development.
    We have made some successes like the Feed the Future 
Initiative in Honduras, where beneficiaries are 78 percent less 
likely to immigrate than the Honduran population as a whole.
    U.S. security assistance programs have provided technical 
assistance to prosecutors, and training for investigators, to 
strengthen the justice system in the Northern Triangle 
countries. In El Salvador, from 2015 to 2018, crime dropped 53 
percent, in part because of U.S. assistance programs dealing 
with the prevention of violence and in support of local law 
enforcement to investigate and prosecute MS-13.
    U.S. assistance programs have provided economic 
opportunities to young people, and provided help for victims of 
human trafficking, and have encouraged protection of human 
rights defenders, and have addressed food insecurity during 
times of critical drought.
    Despite this good work, we must acknowledge where our 
efforts have fallen short. Regional migration is overwhelming 
our borders. Between 2018 and August 2019, immigration 
officials at our southern border apprehended approximately 
590,000 migrants from the Northern Triangle, which has 
contributed to the ongoing crisis at the border.
    Further, while violence in the Northern Triangle has been 
reduced, the homicide rate remains excessive--3,800 homicides 
per 100,000 citizens--one of the highest rates in the world, 
and the global average is only 6 per 100,000.
    Systemic corruption plagues the region, and unemployment 
and limited access to jobs are pushing migrants to seek better 
opportunities abroad. We must remain committed to solving these 
issues, and U.S. foreign assistance is a big part of the 
    In the last few months, about $500 million of Fiscal Year 
2017 and 2018 foreign assistance to the Northern Triangle has 
been cut. I am deeply concerned about the negative impact this 
will have on these countries and on flight migration toward the 
United States.
    Congress is responsible for ensuring that any adverse 
results from these cuts are monitored and addressed with future 
funding. Strong oversight of our aid is essential, not only to 
guarantee responsible spending of taxpayer dollars but to 
ensure that we have clear objectives and are adjusting our aims 
for maximum results.
    Moving forward, we need to make sure that our foreign 
assistance improves the region's physical and economic security 
and strengthens civil society. We need to support economic 
development and encourage private sector engagement in order to 
raise wages, create jobs, and boost the regional economies.
    We must also recognize the need to address climate change 
and its impact on regional agriculture. Areas in the Northern 
Triangle have experienced five straight years of drought, 
leading to a continuous crop loss, depletion of food reserves, 
and an increase in the price of basic agricultural products.
    The coffee sector, one of the region's most important 
export industries, has been devastated by a fungus called 
coffee leaf rust, which has led to a significant decline in 
coffee production.
    Let me be clear: U.S. foreign assistance cannot solve all 
of these challenges alone. Ultimately, the governments of the 
Northern Triangle are responsible for addressing their domestic 
needs. New administrations in Guatemala and El Salvador offer 
opportunities for cooperation on issues of mutual importance.
    Just last week President Bukele of El Salvador agreed on an 
asylum cooperation agreement with the United States. This will 
only be successful if El Salvador has the support and resources 
to develop a really functioning asylum system. I am concerned 
about the void in withholding aid would create, a void that 
China is more than willing to fill at the expense of our 
interests, which would erode our regional credibility and allow 
China further to embed their hegemony in our hemisphere; for 
example, like the port that the State Department, fortunately, 
blocked in El Salvador.
    This Congress, I was proud to be an original co-sponsor 
with Chairman Sires and the other leaders of the committee of 
the United States-Northern Triangle Enhanced Engagement Act, 
which authorizes funding and a strategy for addressing the 
drivers of illegal immigration. I hope to work further with the 
Administration to ensure that our foreign assistance is 
    Lastly, I want to commend the Administration and the 
governments of the Northern Triangle for continuing to find 
ways to resume our assistance in the region.
    I look forward to the testimonies and opinions of all of 
you today. Appreciate you coming.
    And, Mr. Chairman, I yield back the rest of my time.
    Mr. Sires. Thank you very much, Ranking Member Rooney.
    I will now introduce The Honorable Stephen McFarland, 
former U.S. Ambassador to Guatemala. McFarland served as 
Ambassador from 2008 to 2011. Prior to his appointment, 
Ambassador McFarland served as a U.S. Foreign Service Officer 
throughout Latin America for over 30 years, specializing in 
democratic transitions, peace processes, human rights, and 
    Most recently, Mr. McFarland directed the implementation of 
USAID's Access to Justice Activity Project in Columbia. We 
welcome you to the hearing.
    We will then hear from Mr. Juan Gonzalez, former Deputy 
Assistant Secretary of State for Western Hemisphere Affairs. 
Mr. Gonzalez has spent his career specializing in Western 
Hemisphere policy. Prior to his appointment, he served as the 
National Security Director for Western Hemisphere Affairs under 
the Obama-Biden administration.
    He was instrumental in the creation of the U.S. strategy 
for engagement in Central America. Mr. Gonzalez holds a 
master's degree from Georgetown University's Walsh School of 
Foreign Service where he is an adjunct faculty member in the 
Center for Latin American Studies. Thank you for being here.
    We will then hear from Mr. Richard Jones, the senior 
technical advisor in Latin America and the Caribbean for the 
Catholic Relief Services. Jones has lived and worked in Latin 
America for nearly three decades and has spent the past 20 
years with Catholic Relief Services, directing programs on 
violence prevention and migration.
    He holds a master's in international relations from Johns 
Hopkins School for Advanced International Studies. Thank you 
for joining us.
    Finally, we will hear from Mr. Matthew Rooney--no relation 
to Mr. Francis Rooney--a former Foreign Service Officer and 
Deputy Assistant Secretary then responsible for relations with 
Canada and Mexico, and for regional economic policy. He also 
served as counselor for economic and commercial affairs at the 
U.S. Embassy in El Salvador and as counsel general in Munich.
    Mr. Rooney holds a master's degree in international 
management at the University of Texas at Dallas. Thank you for 
your service, and thank you for joining us.
    I ask the witnesses to please limit your testimony to 5 
minutes. And without objection, your prepared statements will 
be made part of the record.
    Ambassador McFarland, I now turn to you.

                    AMBASSADOR TO GUATEMALA

    Mr. McFarland. Thank you, Mr. Chairman. Mr. Chairman, Mr. 
Ranking Member, distinguished members of this committee, it is 
a real honor to be present at this hearing, along with my 
esteemed former colleagues, Juan Gonzalez and Matthew Rooney, 
as well as Mr. Rick Jones.
    My work in Central America began in the 1980's under 
President Reagan, continued up to President Obama, and I can 
attest that U.S. policy in that region is strongest when it has 
bipartisan congressional involvement and support.
    As foreign service officer and as an ambassador, I spent a 
lot of time outside the traditional power centers--in the 
countrysides, in poor neighborhoods of Guatemala and El 
Salvador, not to mention Iraq and Afghanistan. I met with 
ordinary people who lacked power and influence, and I came to 
understand how Central Americans become frustrated with 
governments, how many of them migrate to the United States, not 
just for income and safety but also to achieve hope and 
    One time in 2002 I joined a USAID-funded acute child 
malnutrition project, working in Guatemala's countryside. The 
team identified a child who was dying of hunger. We convinced 
the mother and the father to take the girl to the feeding 
station. Two years old, she only weighed 9 pounds, about 40 
percent of what she should weigh.
    As we hiked from the farm to the town, the parents told me 
their story. There was a drought. Their crop had failed. There 
was no government assistance. They had five children, and they 
gave what little food there was to the older boys who could 
work in the fields.
    Droughts returned to Central America this year. One can 
imagine how a family now in a similar situation would decide to 
migrate to the United States, because no matter how risky the 
trip, how harsh the conditions, it is better than watching your 
family starve.
    I also found the fact that an ambassador would go to these 
places and that the U.S. would help these people actually 
helped us to secure Guatemalan respect and support for 
unrelated U.S. policy objectives. The U.S. assistance cutoff, 
sadly, abandons that moral high ground.
    In my written statement, I detailed how the assistance 
cutoff would actually undermine the Administration's migration 
policy, since it would stimulate more migration. I also laid 
out why the cutoff does not provide leverage for the U.S. to 
use effectively with the governments of Central America.
    The aid cutoff not only harms economic and social 
development and civil society, it is also undermining U.S. 
interests in law enforcement, citizen security, and counter 
narcotics by ending U.S. support for police, prosecutors, and 
the courts, even as narcotrafficking and corruption, which is 
an indirect cause of migration, are spreading.
    In the case of Guatemala, this is particularly dangerous 
given the Administration's decision to support the termination 
of the successful anti-corruption effort known as CICIG, and 
the controversy surrounding ongoing efforts to replace that 
country's Supreme Court.
    Earlier this year, DEA arrested a then-Presidential 
candidate in Guatemala for alleged narcotics trafficking. 
Similar arrests have occurred in Honduras. Ongoing efforts to 
retaliate against Guatemalan judges and prosecutors who handled 
anti-corruption cases will inevitably harm the prosecutions of 
narcotics trafficking and organized crime cases of interest to 
the United States.
    The U.S. should remember that a major factor that led to 
Chavez's takeover in Venezuela was the public's perception that 
their institutions were increasingly corrupt; Venezuela of 
course is now in the throes of one of the largest mass 
migrations in recent history.
    Finally, the aid cutoff reduces U.S. credibility. Central 
Americans expect the U.S. to know what it is doing, and 
assistance cutoff that undermines the Administration's own 
policy sends the mistaken message that the U.S. is not serious.
    I believe the Administration should take the following 
steps. One, restore the programs affected by the assistance 
cutoff. Two, seize the opportunity to engage with the newly 
elected president of El Salvador, Mr. Bukele, and the 
president-elect of Guatemala, Mr. Giammattei. Three, support 
anti-corruption efforts, given that corruption indirectly 
stimulates migration. Four, reshape U.S. policy toward Central 
America to reemphasize progress on the systemic factors that 
drive migration and use migration to the U.S. as a pressure 
relief valve.
    The Administration should engage the region's governments, 
civil societies, and private sectors on what has to change and 
how each can contribute more, because what is happening now is 
not sufficient. There should be greater accountability, and the 
Administration should review sanctions as well as incentives to 
stimulate appropriate change.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. McFarland follows:]
    Mr. Sires. Mr. Gonzalez, you are now recognized for your 


    Mr. Gonzalez. Mr. Chairman, Mr. Ranking Member, 
distinguished members of the committee, thank you for the 
opportunity to testify before you today on this very important 
topic. It is a particular honor to be among such august 
company, but in particular that of Ambassador McFarland, whom I 
met when I was a Peace Corps volunteer in the Western Highlands 
of Guatemala, which incidentally is one of the major sources of 
migration from Guatemala to the United States.
    I was asked to focus on the lessons we drew upon when 
designing the original U.S. strategy for Central America, as 
well as progress achieved, recommendations for U.S. policy, and 
the tangible impacts of cutting aid to the Northern Triangle. 
As such, my testimony outlines a few of the many lessons 
learned, good and bad, from my time as special advisor to Vice 
President Joe Biden from 2013 to 2015 when we designed the 
strategy, and then as deputy assistant secretary of State with 
responsibility over its execution in the final year of the 
Obama Administration.
    The bottom line as it relates to this hearing is that U.S. 
foreign assistance provides effective leverage to protect our 
national security interests and promote democratic values in 
Central America. It is a fundamental tool for addressing the 
drivers of migration, and cutting it will only serve to 
undermine U.S. regional influence.
    The first and most important lesson that we learned early 
on was that migration enforcement and border security alone 
would not stop irregular migration to the United States.
    Current migration trends are the result of economic and 
social conditions in Guatemala, Honduras, and El Salvador, 
countries where poverty, corrupt and ineffective public 
institutions, and violence, are compelling people to begin a 
dangerous journey to the United States. So we developed a U.S. 
strategy in Central America to focus on the drivers of 
    Second, Northern Triangle governments are unable to prevent 
outward migration on their own without equal parts pressure and 
support from the United States. Political pressure is key, as 
no amount of foreign assistance will make a lasting difference 
without political will on the part of regional governments.
    That requires senior administration officials to engage in 
candid discussions with regional governments on their 
respective private sectors and to press them for reforms that 
in many cases go against vested interests. We engaged the 
senior-most levels of government and measured political will in 
terms of quick results on near-term actions, like targeting 
smuggling operations, while advancing structural reforms to 
address the systemic challenges over time.
    Congress was key to maintaining the pressure, most notably 
by including robust conditionality in the appropriations bills.
    Third, large and complex strategies cannot be managed 
solely from Washington. The Vice President, the State 
Department, and USAID set the priorities, negotiated political 
commitments, established metrics, and briefed anyone and 
everyone on Capitol Hill willing to listen. But when it came to 
program design and implementation, we had hired our country 
teams, all of which serve under Chief of Mission Authority.
    Fourth, migration is a byproduct of a broader problem set 
in the Northern Triangle that has broader implications for U.S. 
national security. All three countries suffer from a predatory 
elite that benefit from the status quo and who for generations 
have opposed reforms that would alleviate migration drivers. 
The most marginalized communities are also the ones most likely 
to migrate.
    And, finally, as historic rivals, the only way to get 
Guatemala, Honduras, and El Salvador to cooperate on regional 
security and economic issues was for the United States to 
facilitate and set the pace. In this regard, migration serves 
as a sort of canary in a coal mine, foreshadowing much worse 
things to come if these countries are unable to maintain the 
rule of law, create stable and formal work force, provide 
alternatives to criminality, and address rampant corruption.
    I cannot emphasize enough just how central combatting 
corruption was to our entire approach or how disappointing it 
is to see the Central American anti-corruption movement in 
retreat. Today the forces of corruption are winning in 
Guatemala after successfully ending the mandate of the U.N.-
backed Commission Against Impunity following years of strong 
backing from both Republican and Democratic administrations.
    So, too, the continued erosion of democracy in Honduras 
that culminated in a questionable Presidential result in 
November 2017. If the United States is not leading the battle 
against corruption in Latin America and the Caribbean nobody 
    Lastly, bipartisan congressional support is the only way to 
institutionalize a multi-year strategy to reduce irregular 
migration at the source. We learned that most Members of 
Congress supported addressing the root causes of migration from 
the Northern Triangle, albeit with varying degrees of nuance.
    Republicans, for the most part, preferred to focus on 
security assistance and called for robust monitoring and 
evaluation mechanisms. Democrats, skeptical of the region's 
political will, pushed for increased conditionality related to 
human rights and emphasized the importance of supporting 
justice and rule of law institutions over military support.
    We argued successfully for balance, using our experiences 
with Plan Colombia and the Merida Initiative to make the case 
that affecting positive change required sustained international 
assistance that balances both security and development and is 
accompanied by strong political will from regional governments 
and the private sector.
    But we did not get it right on our first try, and 
congressional Democrats and Republicans worked with us to tweak 
the strategy that ultimately became the product of 
collaboration between the Administration and Congress.
    My final point is this: the migration crisis at our 
southern border serves as a stark reminder that the State of 
security and prosperity in Central America and Latin America 
and Caribbean writ large has significant implications for our 
national security. Without active leadership and support from 
the United States, the situation in the Northern Triangle will 
only continue to deteriorate.
    We cannot play line defense indefinitely, and it is vital 
to our interest to provide foreign assistance and exert 
pressure on regional governments to create the necessary 
conditions for migrants to stay home.
    I urge Congress to continue its bipartisan support for the 
U.S. strategy for Central America. Thank you for the 
opportunity to testify.
    [The prepared statement of Mr. Gonzalez follows:]

    Mr. Sires. Thank you.
    Mr. Jones, you are recognized for your testimony.


    Mr. Jones. Chairman Sires, Ranking Member Rooney, thank you 
for calling this hearing and for the opportunity to look more 
deeply at the impact of cutting foreign aid to Central America.
    My name is Rick Jones. I am a senior technical advisor for 
Catholic Relief Services in Latin America and the Caribbean, 
where I have lived and worked for nearly 30 years.
    Cutting foreign aid to Central America, a region which has 
become one of the most violent in the world, where rural 
poverty is on the rise and people are fleeing for their lives 
is counterproductive. It is likely to erase the gains that have 
been made, increase the costs, and undermine the credibility 
and the security of the United States and the people living in 
the region.
    There have been gains. Between 2015 and 2018, the CARSI 
program achieved a significant reduction of 50 percent in 
homicides in El Salvador and 35 percent reduction in Honduras. 
Homicides are one of the principal causes of out-migration. 
Cutting aid to those programs is likely to only increase the 
loss of life and increase the cost of addressing people who are 
fleeing the region due to violence.
    In CRS, we worked with USAID, the U.S. Department of Labor, 
and INL in our Youth Employment Program. We have been able to 
reach 10,000 youth who are out of school and unemployed and at 
risk of joining gangs or being recruited into them and placed 
75 percent of them in jobs, business startups, or back in 
    An independent study by the Department of Labor 
demonstrated that graduates from these programs saw their 
incomes continue to rise 2 years after leaving the program. 
Aid, in this way, is very effective. The alternative says to 
young people there is no hope for you; the only thing you have 
to do is to leave the region.
    We asked young people in these programs if they have ever 
thought about migrating, and 40 percent of them said yes. We 
asked them why they stayed, and they said, ``Because this 
program gives us hope and a reason to stay.'' And this program 
is also cost effective. It costs about $1,000 per young person 
for a 6-month training program and placement into a job, 
whereas apprehending a young person at the U.S. border costs a 
minimum of $50,000 for the same period. Cutting off the aid is 
going to only increase the expense to the U.S. taxpayer.
    In another positive example of foreign aid, USAID sponsored 
CRS to address chronic malnutrition and food insecurity in 
Guatemala. And while rural poverty tripled in Guatemala, and 
extreme poverty doubled, we were able to reach 100,000 people, 
cutting in half extreme poverty, and chronic malnutrition 
dropped five times the national rate. We do not need to cut the 
aid; we need to put it on steroids.
    The FAO has estimated that 1.4 million people in the dry 
corridor in Central America are suffering food insecurity due 
to drought. This is another driver of migration north.
    In June this year, CRS conducted a study in 18 
municipalities that were drought affected in the eastern part 
of El Salvador, and we found 80 percent of the families were 
suffering hunger just from this past year, and we have had 5 
years of drought.
    When we went to the Office of Foreign Disaster Assistance, 
they said they could not support a response to that drought 
crisis because aid was getting cut. Right now, as we speak, two 
of our programs are being cut--a food security project in the 
dry corridor in Guatemala, where we were about to reach 7,400 
families, or an estimated 30,000 people, with direct services.
    We are also going to have to roll back our program in over 
200 communities in Guatemala that was strengthening their 
capacity for their own development.
    Cutting off the aid in Central America sends a message, and 
it says, ``You are on your own.'' And it undermines--not only 
do we roll back the gains that we have made, it creates 
mistrust, and mistrust translates into people not cooperating 
with government, not denouncing organized crime.
    Cutting back the aid, in summary, is going to erase the 
gains that we have made, increase the cost, undermine the 
credibility and the security of the United States, and create a 
vacuum, and somebody else is likely to step into that 
leadership role.
    We need to increase the aid. We need to use the best 
results that we get to catalyze transformation at scale. The 
poor and the vulnerable people in Central America and the 
stability of the region is depending on it.
    Thank you very much.
    [The prepared statement of Mr. Jones follows:]

    Mr. Sires. Thank you.
    Mr. Rooney, you are recognized for your testimony.


    Mr. Rooney. Thank you, Mr. Chairman. Mr. Chairman, Mr. 
Ranking Member, members of the subcommittee, it is an honor to 
be with you today to discuss the need for robust engagement 
with the nations of Central America, particularly El Salvador, 
Guatemala, and Honduras. And it is a particular pleasure to 
share this tribunal or this table with such an esteemed group 
of colleagues and friends.
    The George W. Bush Institute is perhaps not widely known 
outside the Dallas Beltway. We are a think-and-do tank founded 
by President and Mrs. Bush upon their departure from the White 
House in 2009. Our Economic Growth Initiative, which I lead, 
focuses on North American economic integration and 
competitiveness, immigration reform, the roll of cities in 
growth, and the conditions for growth in Central America.
    Mr. Chairman, Mr. Ranking Member, members of the committee, 
the heartbreaking images of Central Americans risking their 
lives to enter the United States have produced an unsatisfying 
debate among Americans. There are those who believe that the 
poverty and violence in the region are the responsibility of 
the United States, and there are those who believe that the 
corruption and social dysfunction of the region are entirely 
the fault of the Central Americans themselves.
    As usual, the truth is more complicated. It is true that 
all of the Central American countries have been sovereign 
nations for two centuries, and all have had functioning 
democracies with market-driven economies for three decades or 
more. As a result, they bear ultimate responsibility for 
conditions in their countries.
    At the same time, the United States has been deeply engaged 
in those countries for decades. In particular, the region 
embraced free trade in response to a U.S. trade policy approach 
that holds that trade is a better tool for economic development 
than assistance. Over a decade later, their continued poverty 
calls the American approach into question and opens the field 
to others. We must prove that our approach works.
    As a result, the fact is that the security of our borders 
and our communities and the credibility of the concept of 
trade-led development are at stake. The challenges are 
daunting. The region remains trapped in a cycle of political 
uncertainty, institutional weakness, and persistent poverty. 
This instability on our extended security perimeter drives 
immigration and reduces growth opportunities for the United 
    Driven by this recognition, the United States has offered 
strategically focused assistance to the region. The U.S. 
commitment has been significant, yet U.S. peace and security 
assistance to the region is a fraction--3 percent or less--of 
what those countries spend out of their own resources.
    More importantly, dozens of Salvadoran, Guatemalan, and 
Honduran law enforcement officers have lost their lives in the 
line of duty in the last several years. The Central Americans 
are working hard and making sacrifices to address their own 
    Our foreign assistance has been instrumental in helping the 
Central Americans focus their own efforts to address the 
region's challenges, reduce corruption, and enhance 
transparency. At the same time, it is true that to break this 
vicious cycle once and for all, the United States needs the 
region to develop and pursue a long-term growth agenda.
    In an effort to encourage the emergence of a growth agenda, 
the Bush Institute about a year ago created our Central America 
Prosperity Project. At the center of the CAPP approach is a 
working group that brings together 30 thought leaders from 
Guatemala, El Salvador, and Honduras. Half of our group members 
are women, and a third are under the age of 35. Participants 
represent business, policy, politics, academia, journalism, and 
civil society.
    The group came together and agreed that wider use of 
digital technologies would curtail corruption and reduce 
informality. The Bush Institute, in May 2019, in support of 
this conclusion, urged the three countries to develop and 
implement a regional digital strategy in cooperation with the 
business communities and civil societies.
    This proposal has been welcomed across the region, and our 
working group in particular felt empowered by the call for 
digital inclusion in H.R. 2615, the United States-Northern 
Triangle Enhanced Engagement Act.
    In the remaining months of 2019, we are working with our 
network to organize a series of workshops in the region to 
identify the policy impediments to mobile services and develop 
national implementation plans. Of course, the region's 
challenges go well beyond digital services.
    The value of our proposed digital agenda is not that it 
addresses every challenge, but it represents a commitment by a 
broad network of Central American leaders to the hard political 
work of driving the reforms that are needed to strengthen the 
foundation for future prosperity.
    We believe that this model can make a down payment on the 
reforms needed to put Central America on a more robust and more 
inclusive growth trajectory, leveraging U.S. foreign assistance 
dollars to further promote U.S. interests.
    Mr. Chairman, Mr. Ranking Member, members of the committee, 
thank you again for the opportunity to be here today. I look 
forward to the opportunity to engage with your questions and 
    Thank you.
    [The prepared statement of Mr. Rooney follows:]
    Mr. Sires. Thank you very much. We will now move to 
questions. I will lead the questioning, and then the ranking 
    I believe strongly that combatting of corruption should be 
at the center of our policy toward the Northern Triangle. How 
could the funding cuts impact our efforts to combat corruption, 
particularly in Honduras where the mandate of the anti-
corruption mission is due to expire on January 2020? 
    Mr. McFarland. Mr. Chairman, I agree with you that the 
combatting corruption should be front and center of our agenda. 
Corruption has the following impacts on U.S. interests. One is 
indirectly it leads to a lot of factors that drive migration. 
It serves as a de facto tax on the formal and informal 
economies, and it limits opportunities. It also is an enabler 
for narcotics-related activity.
    It also harms the interests of U.S. citizens in the 
country, as well as U.S. businesses in the country. And, 
finally, it creates a situation where, should things go wrong, 
the Central American countries could move toward a populist 
alternative as happened in Venezuela. I think the things that 
we can do are to support local efforts to strengthen courts, 
prosecutions, police, prisons. The U.S. leadership and message 
is important.
    And, finally, the use of sanctions--selected, careful, 
legal, but the use of sanctions is critical to sending a 
message on corruption.
    Mr. Sires. Anyone else?
    Mr. Gonzalez. If I may, Mr. Chairman, just I would use--you 
referred to the Honduras example. I think we need to look no 
further than the experience in Guatemala where, I had the honor 
to--when I was at the State Department earlier on, I actually 
put together the assistance package for CICIG, the U.N.-backed 
anti-corruption commission.
    And, as a matter of fact, it was a congressional earmark, 
so we were compelled by the U.S. Congress to fund CICIG, and it 
was something where over the years it was the United States, 
Canada, and Spain that were the main supporters of CICIG's 
    So on the assistance side the, I think it is, over 1,600 
prosecutions in which CICIG supported the judiciary is a direct 
example of how you get results in combatting corruption. But 
more importantly, I would say, is the assistance also provides 
important leverage.
    So in addition to the support directly for CICIG, the work 
that we are doing throughout Guatemala, the work that we are 
doing with the private sector, and, frankly, high-level 
engagement by the Administration and leadership in the U.S. 
Congress, I think is perhaps just as important as direct 
programmatic support to organizations like CICIG and other 
civil society organizations.
    At the end of the day, the United States--and the 
Ambassador knows this better than anybody--the United States 
carries an outsized presence in Guatemala, Honduras, and El 
Salvador. And if we are demanding results on corruption, and 
using foreign assistance as a tool of leverage, it is 
incredibly effective, and it has actually allowed CICIG's 
mandate to continue up until this year.
    Thank you.
    Mr. Sires. Yes, sure.
    Mr. Jones. Corruption is certainly a critical issue to be 
addressed, but we think it needs to be combined also with 
development aid. The development aid, for example, through the 
McGovern-Dole School Feeding Program allowed us a seat at the 
table with the Ministry of Education, where they eventually 
adopted a national school feeding law which now Guatemala is 
going to take on and take over 50 percent of the feeding in 
2018 and 2019, and local purchases, and in 2020.
    So we think anti-corruption programs need to be combined 
with development that allow us a seat at the table to continue 
to foster good governance and good spending.
    Mr. Rooney. Thank you, Mr. Chairman. Just to observe, as I 
mentioned in my remarks, the working group of Central American 
leaders that we convened under our Central America Prosperity 
Project identified corruption as one of the core problems 
facing the region. Our working group included members of--
leaders of the major business associations from all three 
countries, leaders and owners of some of the major corporations 
in all three countries, as well as representatives of 
regulatory agencies and civil society, and there was a 
unanimous sense among that group that corruption was a serious 
    The idea of using digital services to attack that problem 
kind of starts with the assumption that it is a tough problem 
to crack, because ultimately it is difficult to come to any 
form of prominence in Central America without being compromised 
to some extent or another by corrupt activities.
    And the ability to make tax payments, receipt of social 
benefits, customs payments, registration of companies, 
registration of work relationships, and contracting transparent 
through digital services is a remarkable opportunity to break 
the cycle.
    Mr. Sires. Thank you.
    I now recognize the ranking member, Mr. Rooney.
    Mr. Rooney of Florida. Thank you, Mr. Chairman.
    I would like to ask Mr. Gonzalez and Ambassador McFarland 
first, but then anyone, how you see climate change affecting 
the regional agriculture and subsistence economy. Last week 
MSNBC had a great story about that. They had the reporter 
embedded in Guatemala. And, particularly, how effective is our 
assistance trying to help with that? And what do you forecast 
how bad it is going to be before we can finally do something 
about it?
    Mr. Gonzalez. Thank you, Mr. Ranking Member, for that 
question. It is a salient issue, particularly in places like 
Guatemala where a lot of the migration, as you mentioned I 
think in your opening remarks, the eastern part of Guatemala, 
due to drought, has driven a significant amount of the 
    Throughout Latin America, you have this rapid phenomenon of 
urbanization. Even though Latin America is a water-rich region, 
the urban sectors are very far from water, and increasingly 
agricultural practices are done in an environment where, as you 
mentioned, climate change is making it more and more difficult 
to produce crop yields.
    This scenario will only deteriorate over time, and I think 
right now what you are seeing in eastern Guatemala is the 
beginning of more to come.
    Mr. McFarland. Thank you, Mr. Ranking Member. I think 
climate change is going to be driving a lot of food insecurity 
in the Northern Triangle, in Guatemala in particular where I 
have been out in the countryside. One of the impacts it has is 
that, since you have a government that traditionally does not 
provide a safety net, and people who do not have the mobility 
or the ability to simply go to the big cities to look for jobs, 
they are in trouble.
    It also affects people because it is not just the crops, 
the individual farmer's crops that are affected. A lot of these 
farmers depend on seasonal labor, in the sugar cane plantations 
and in the coffee fincas. And this current year a lot of the 
plantations, the sugar plantations, decided not to hire labor 
because of a combination of prices and weather. The same for 
coffee, so it has that effect as well.
    Mr. Rooney of Florida. Does our assistance have any impact 
on this?
    Mr. McFarland. Sir, I believe it does, or at least it has 
until it has been cutoff. It provides various ways of 
alternative--of working on alternative crops, trying to 
maintain some sort of resiliency and families' access to food, 
and, in some cases, emergency food supplies.
    Mr. Jones. If I could respond to that. What we need to 
understand I think about drought-driven climate change or 
climate-driven drought in Central America is that the impacts 
are cumulative. In the first year of drought, families eat 
less, increasing malnutrition in children. In the second year, 
they start to sell their household assets, increasing poverty. 
In the third year, they sell the land and they leave.
    So we need to understand the cumulative effects of what is 
happening in Central America, and this is going to continue to 
drive migration. We have had drought 5 out of the last 6 years, 
and 6 years of the hottest on record. And so I think this is 
what the future is going to look like.
    There are specific practices. We have worked with over 
3,000 farmers in Central America in the dry corridor to 
develop, improve practices, and last year farmers that did not 
use our water-smart practices lost 80 percent of their crop 
where other farmers only lost 10 percent. That is the 
difference between watching your family starve and having to 
work a few extra weeks at the end of the year in something 
other than farm activities. There are practices that need to be 
scaled up throughout the dry corridor in Central America.
    Mr. Rooney of Florida. Are you familiar with the World Food 
Programme's activities there? The MSNBC article mentioned 
showed a couple of feeding opportunities by the World Food 
Programme there.
    Mr. Jones. Yes. The World Food Programme is very active in 
the region, both delivering food aid as well as starting to try 
and change the soil and water management practices. We, at 
Catholic Relief Services, work very closely with them to 
develop the kinds of practices that small farmers can afford.
    Mr. Rooney of Florida. Thank you. I yield the rest of my 
    Mr. Sires. We will just keep asking questions. I have 
another question. I am concerned about these cuts. I think they 
could not have come at a worse time. Guatemala just had 
elections with record low turnout. Obviously, this reflects the 
discontent within that country.
    The Honduran government is facing large street protests. 
What can that lead to? Mr. Rooney? Are we going to have another 
Nicaragua or Venezuela on our hands?
    Mr. Rooney. Thank you, Mr. Chairman. I hesitate to 
speculate about that specifically, but I do think that the 
course that these countries are on is not sustainable, socially 
or politically. We do have an opportunity with the new 
Salvadoran government, and with the Guatemalan government about 
to take office, certainly there is a renewed opportunity to 
engage with those governments in a constructive way.
    I think both have signaled that they want to work closely 
with the United States. They have set priorities. To harp for a 
moment on my Central America prosperity project, Hobby Horse, 
both have set priorities that are consistent with the digital 
priority that my working group has identified, so we are 
hopeful that they can reverse course and set their countries on 
a more constructive course.
    Mr. Sires. Anybody else? Ambassador? I am sorry, Mr. Jones, 
I will get back to you.
    Mr. McFarland. Yes, Mr. Chairman. I would say in the case 
of Guatemala, Mr. Chairman, there is a real opportunity for the 
United States to engage with the president-elect. There is a 
new president, new congress, and that is something positive. 
Same with El Salvador. Honduras is a different story. Could 
this discontent somehow lead to a Venezuela situation? As 
somebody who served twice in Venezuela and has watched it 
closely, it has been on my mind for many years. The two big 
factors that led to Venezuela were an economic decline and 
increasing popular dissatisfaction, loss of faith in their 
institutions, and a wild card, Chavez.
    We do not see the wild card on the scene in Central 
America, but that does not mean that the person could not 
appear. But I think the lack of confidence in elected 
institutions and the lack of confidence, the popular concern 
about corruption, are warning signs that the U.S., as well as 
the leaders in this country, should take into consideration.
    Thank you.
    Mr. Sires. Thank you.
    Mr. Jones.
    Mr. Jones. Yes. Thank you, Mr. Chairman. I think, first, we 
are very concerned about the loss of human life due to removing 
foreign assistance for security issues. And, second, what gets 
us at the table with the governments is the humanitarian aid 
and development assistance. And as we take that off the table, 
the government is only left with taking away the carrots and we 
leave them with only sticks. And when that has happened in the 
history of Central America, that has been a recipe for 
repression and increased violence.
    Mr. Sires. Thank you.
    Mr. Yoho.
    Mr. Yoho. Thank you, Mr. Chairman.
    Thank you all for being here. Thank you for your testimony, 
and I hope you can help us paint--or not paint--yes, paint a 
different direction on what we do, helping countries with our 
taxpayers' foreign aid.
    We have given Central America over $6 billion since 2007, 
and that money goes to good governance, rule of law, war on 
drugs, and it can go--you know, job development. It goes 
through all of these. We have MCC compacts we have done, USAID; 
they are there, and they have been there. It is not like they 
have been there for 5 years. We have been there for a long 
    And I hear from all of you that it is that people are 
leaving because it is a lack of rule of law, it is a lack--or 
it is the increase in corruption, it is the increase in crime 
that we have got to do more. What do we want to do more of? 
Things have got to change, and I am probably one of the 
dissenting people up here because I think there has to be a 
strong language going back to the leaders of those countries to 
say, ``We are not going to put money back in here until you 
change what you are doing.''
    We had the president of El Salvador before he got sworn in, 
and I was the dissenting voice. You know, we have had the war 
on drugs since 1971. We have spent over a trillion dollars of 
the American taxpayers, and I will ask all of you, are we ahead 
on the war on drugs?
    You know, you talk about Plan Colombia. There is a lot of 
celebration about that, but yet the country of Colombia today 
has over 500,000 acres of cocaine growing, and so we are going 
backward. And I know they have got a plan to reduce that, and I 
hope President Duque is successful because we want to do that 
and we helped work to make sure they did not get decertified by 
the Trump Administration. But strong signals need to go out.
    I think what we have done is we have legitimized illegal 
narcotrafficking and have gone into different businesses, yet 
the Central American countries have now become the transit of 
cocaine coming out of Colombia. It is going through Mexico. 
Mexico drug cartels are controlling it, and the country of 
Mexico is producing over 70,000 acres of heroin.
    And then we have heard the allegations of the past 
president of Mexico offering I think it was $350 million to El 
Chapo to let him kind of roam free. And so we know the root of 
this. It is not a lack of money. It is not a lack of what you 
guys do because you are the boots on the ground and I applaud 
you for being there for 30 years trying to bring sanity to 
this. But it is, how do you hold these leaders accountable?
    Morales, you know, threw out the U.N. because he did not 
want that much scrutiny. There will be a vacuum created, I 
agree, and China and/or Russia or Iran or, you know, Cuba has 
already got their influences in there, will have that. But what 
in the heck do we need to do different? And how can we get 
these people to say, ``We are going to change''?
    And I challenge the new president of El Salvador. What are 
you going to do different than your predecessors, so that they 
can look back and say, ``This is the man that changed the 
direction of Central America in my country.''
    What do we need to do? Because the feel-good stuff that we 
have done over and over and over again, and by doing that there 
has been a lot of tragedy and suffering, and we see these 
people coming across our southwest border; it is not enough.
    I came up here to get rid of foreign aid, but I wound up 
passing the largest reform to foreign aid and boosted it, so 
that we could move countries from aid to trade quicker. Where 
can we work in Latin America or Central America to make a 
regional difference that shows the rest of those people around 
them that is what I want, and that is what I want to hear from 
    We will start with, Mr. Gonzalez, you are ready.
    Mr. Gonzalez. Congressman, thank you for the question. I 
think I would start by saying that the provision of foreign 
assistance, while completely insufficient, as you mentioned, to 
transforming the situation on the ground, I would argue that 
the provision of foreign assistance is not a blank check to 
these countries.
    In fact, we provide foreign assistance to advance our own 
national interests, and an example I would give you, sir, is 
that we increased the size of anti-gang units that collaborate 
with the FBI, and in 2015 that led to a massive arrest of MS-13 
gang members, both in El Salvador and in Charlotte, North 
Carolina. That is a direct impact.
    And outside experts have evaluated USAID programs in El 
Salvador and demonstrated that the drop in violence led to a 
drop in migration. So it does take time, and it is frustrating, 
but I would say it is because no amount of money makes a bit of 
difference if you do not have partners that are rising to the 
crisis at hand.
    Mr. Yoho. Exactly.
    Mr. Gonzalez. And so I would say some specific 
recommendations, number 1 is demand that these leaders take 
immediate steps on short-term and long-term reforms that----
    Mr. Yoho. Can I put you on pause for a minute?
    Mr. Chairman, I am out of time. Do you have time to have 
him answer?
    Mr. Sires. Absolutely.
    Mr. Yoho. Thank you.
    Go ahead.
    Mr. Gonzalez. Thank you, sir. So demanding very clear and 
measurable action items on the part of these regional leaders 
that will demonstrate to U.S. taxpayers that it is worth the 
cost. In Guatemala, the effective tax rate is one of the lowest 
in the hemisphere because the private sector benefits from the 
export of migrants that send remittances back home.
    Now, specific recommendations for----
    Mr. Yoho. Well, we did not bring up our policies. Our 
failed policies on immigration is also a magnet that makes this 
situation worse. And I do not mean to get you off track.
    Mr. Gonzalez. No. I agree, sir, and I would say just a 
couple of very specific perhaps technocratic recommendations. 
Number 1 is you need to get the private sector involved. When I 
was in government, we started to do that.
    Mr. Yoho. Private sector where?
    Mr. Gonzalez. In the region and in the U.S., because often 
there is a lack of open competition for U.S. companies to 
compete in the region, but also these are governments that have 
for generations--the private sectors have fought against some 
of these reforms that would have prevented migration.
    So finding a way to provide incentives, I think the Build 
Act that was passed on a bipartisan basis that creates the 
USDFC, the Development Finance Corporation, is a good tool to 
create opportunities for U.S. business to get involved in 
large-scale and smaller scale projects.
    But, very specifically, I would say maybe two things that I 
think Congress can do. Number 1 is one of the things we toyed 
with but never moved forward with: a proposal of creating a 
regional account. When Plan Colombia was first started, there 
was what is called the Andean Counterdrug Initiative.
    Most of that money went to Colombia, but it is a flexible 
way to actually be able to move the money in Central America, 
so that you are rewarding those countries that are taking the 
measures that they need to take. And that money can be either 
security or development assistance. So it is a very effective 
tool that we used during Plan Colombia.
    And then the second, I would say, is one of the most 
difficult challenges we had was that the delivery of foreign 
assistance is a very slow mechanism. Part of that is how the 
State Department manages the appropriation, and part of it is 
the negotiation with the Hill. And I think there is a way to 
resolve this without reducing the oversight role of Congress 
and expediting the delivery of funds to Central America.
    Mr. Yoho. Thank you.
    Mr. Rooney. If I might, sir, thank you for that question. I 
certainly agree that ensuring that we have political buy-in and 
political support is the most challenging thing, and in general 
U.S. assistance carries out U.S. priorities, and matching those 
with internal priorities and collecting the kind of political 
support you need internally is a challenge.
    My own view is that I think the most powerful tool that we 
have is the Central America Free Trade Agreement, which was 
structured not just to open the U.S. market to Central American 
products and open Central American markets to U.S. products, 
but to encourage the Central Americans to integrate among 
themselves and to open Guatemalan markets to products from 
other Central American countries, and so on.
    And so to the extent that our assistance can be modulated 
to ensure full implementation of CAFTA, which requires the buy-
in of the Central American business community, as Mr. Gonzalez 
says, those are interests that have not always been in favor of 
increased economic openness and economic policy reform in the 
region, because they have a comfortable situation where they 
    That is, I think, a very powerful tool that we do not make 
enough use of. And the ability to encourage regional 
integration, both on the political level and on the economic 
level, I think would also be useful. The idea, for example, 
that the Millennium Challenge Corporation might be able to make 
a regional grant as opposed to bilateral grants, correct, yes.
    So that is an important opportunity to encourage that 
regional economic integration. At the end of the day, the 
region is ultimately only going to thrive as a combined region 
of whatever it is, 35 million people, rather than a collection 
of small markets. Foreign investors, in general, are not going 
to be attracted to the Salvadoran market, although they may be 
attracted to the Central American market as a whole.
    So those things I think, you know, after CAFTA was signed 
and implemented, there was a burst of activity by the U.S. 
Government to try to carry out programs that would encourage 
the business communities to get ready and encourage the 
governments to pursue that economic integration. I think that 
has tapered off to a certain extent, and that I think is a tool 
that we have.
    It is more powerful than any attraction that any of our 
competitors in the region might offer. The proximity of our 
market, size of our market, the commercial and ethnic and 
social ties that already exist make it an extremely attractive 
market, and I think that tool is underutilized.
    Mr. Sires. Do you want to add--do you want to answer that?
    Mr. Jones. I would like to add something.
    Mr. Sires. I will give him another 20 minutes. Go ahead.
    Mr. Jones. We work with over 300 small and medium-sized 
businesses that hire the young people who are graduates from 
our programs. They get almost no incentives to do so. Providing 
incentives to small and medium-sized businesses to hire young 
people helps to stem immigration and foster development.
    We work with over 1,500 coffee growers in Honduras, and by 
supporting them to negotiate--improve the quality and negotiate 
the price, they got 15 cents more per pound and earned over 
$900,000 selling coffee into the United States. Improving the 
ties and the trade between the coffee producers and buyers in 
the United States--needs to be incentivized here in the U.S. 
and supported.
    And I think one of the things that we are talking to as 
well is OPIC is talking about investing in one of our projects 
that expands a trust fund and loans to rural communities to 
expand water services to people. They are paying for those 
services, and they are repaying the loans. And OPIC investing 
represents a public-private partnership that I think is the 
essential way for development to move forward.
    Mr. McFarland. If I may, Mr. Congressman, I agree. The 
assistance has been effective. However, it has not been enough 
to get the lasting, sustainable change that is the U.S.'s 
objective. Why is that?
    I would argue that the assistance probably isn't large 
enough to try to do that, but the key factor--the key factor is 
not the size of the assistance. The key factor are the 
counterparts that we have to work with in these countries. And 
we have a mix there. There are some very good people, and there 
are people of vision in all sectors.
    But, by and large, there is not a critical mass. We do not 
have enough people--we do not have enough counterparts there 
who are willing to identify the changes that have to be made so 
that Central America is less violent, less inclined to migrate, 
and a more prosperous partner.
    How do we get there? How do we get there? I remember in 
Guatemala 9 years ago, I attended a meeting with then-ex-
president Uribe of Colombia who explained to the private sector 
how it was that they did Plan Colombia. And one of the things 
he mentioned--I was there because I have friends in the private 
sector_One of the things he mentioned, well, the private sector 
in Colombia decided it would pay additional taxes in order to 
fight the war, and at that point he lost them. They were not 
interested in increasing taxes.
    So you will have some elites who the incentives we offer 
are not enough for them to change. I would say, going back to 
our time in the region in the 1980's, sometimes you have to be 
tough. Sometimes you have to hold people accountable. Sometimes 
you have to use sanctions. It should be careful. It should be 
legal. But sometimes you have to press people where they hurt 
and induce them to change.
    Thank you, sir.
    Mr. Sires. Well, you know, one of the countries that I do 
not know what happened to it is Nicaragua. It seemed that 
Nicaragua was moving forward. And as my colleague Mr. Rooney 
said, he does not know what happened, but there seems to be a 
turnaround in Daniel Ortega. He has now become the Somoza of 
Nicaragua, someone who he fought against.
    And to me, when I look at that, I said how can the people 
of Nicaragua not be disenchanted, not be depressed, not be 
without hope, when they see someone who originally was fighting 
for them, got voted out of office, came back, and turned out to 
be a real creep.
    So I am concerned about these other countries that are 
going to wind up in the same way. I am concerned I keep hearing 
now that in Guatemala they are growing a lot of coca. That is 
very disturbing to me. In Honduras, obviously, they are also 
doing the same thing.
    So are we losing this battle? You know, I mean, the 
president has been given money, but are we losing this battle, 
even with the money?
    Mr. Gonzalez. I would say yes. I mean, right now we are. 
But I think it is--because if the United States is not--and, 
you know, I applaud the leadership of Congress that has filled 
the space here, but if the United States is not present at a 
very senior level, to put it directly to ``knock heads'' on key 
reforms, it is not going to happen.
    That is plain and simple, and I think that, I am 
speculating that, you know, when you have a lack of 
institutions that ensure transparency, ensure that there is no 
corruption, and that you are providing services to the people 
that elected a government, you open a space for populous and 
charismatic leaders, like Chavez in his time, like Daniel 
Ortega in his time, to make promises, and then ultimately you 
end up with what you have today in Venezuela which is 
essentially a criminal regime.
    And in Nicaragua, you have Daniel Ortega, who is taking 
advantage of the fact that everybody is focused on Venezuela to 
do horrible things, including having snipers shoot protesters 
because they can get away with it.
    So I think we need to hedge against future Maduros and 
Chavez's--but I would argue as well that allowing the violence 
and poverty to fester, combined with what will be approximately 
6 million young Central Americans joining the work force over 
the next 10 years, is a recipe for disaster in terms of not 
just corruption but the presence of criminal organizations, or 
even worse, that this committee I think has held hearings on.
    And so I do not want to be alarmist, but I do think that if 
we actually do not have functioning governments in Central 
America, there isn't, frankly, a wall big enough to keep those 
problems from our doorstep.
    Mr. Sires. Mr. Rooney.
    Mr. Rooney. I would also add, if I might, sir, that the 
situation has grown more acute in the sense that back in the 
day the United States could engage or disengage with the 
region. The problems were what they were, but there was no 
particular alternative out there at moments when the United 
States disengaged to make things worse.
    Under the current circumstances, we have extra regional 
actors who are happy to fill the void, and happy to actually 
facilitate and encourage the kinds of developments that cause 
us concern. That means that we do not get a do-over, but that 
the situation could get away from us if we turn away and stay 
turned away for too long.
    So I do think that that is a new factor that we should keep 
in mind as we make policy toward the region.
    Mr. Sires. Ambassador, what do you think?
    Mr. McFarland. Mr. Chairman, I believe the U.S. has 
definitely lost ground. I would not say that we have lost this 
war. I think we are still in it, but we have definitely lost 
ground in the last 12 months, the last 18 months.
    I think I share your concern about Nicaragua, and I was 
actually a desk officer back in the early 1980's when the 
Sandinista regime had just taken over. And it is just bizarre 
to see how Daniel Ortega has in fact, as you say, become a 
repeat of Somoza.
    One of the reasons he did that, though, was that he was 
able to persuade the Nicaraguan private sector and their party 
to enter a deal with them where a minority party like the 
Sandinistas could in fact occupy a majority of power. And so 
there is that kind of short-sighted dealing by political and 
economic elites is one thing that we have to watch out for.
    Mr. Sires. Thank you.
    Ranking Member.
    Mr. Rooney of Florida. Thank you, Mr. Chairman.
    I would like to just continue that just a tad bit. I have 
got another question, too, but my understanding is that in 
Nicaragua you have a very low requirement for getting elected, 
best way to put it, like 30, 35 percent. That was part of the 
thing that we--in the Bush Administration we worked against 
with Ortega, too, came up in 2007.
    And I have got a lot of friends and partners down there, 
and they have given me statistics last year about the low 
immigration, the low unemployment, the lowering drug use. I 
mean, the place was going very well, and all of a sudden, wham, 
this guy just flips on a dime.
    Is there any--that is what the chairman and I were talking 
about the other day. How can anybody explain how he made that 
flipflop so abruptly? Ambassadors always have the answers, so--
    Mr. Sires. Do not answer all at once. Just one.
    Mr. McFarland. Mr. Ranking Member, I confess I do not have 
a good answer for that. I think part of it comes down to 
personalities. Chavez was a fluke, but a very powerful one. 
Ortega, and particularly Ortega as influenced by his wife, has 
somehow become the mirror image of the person he sought to 
overthrow. How that happens I do not know.
    What can the U.S. do about it? I think the U.S.--I think it 
is appropriate for the U.S. Government to be sanctioning people 
as hard as they can, and perhaps try to work harder with the 
neighboring countries to see what they can do.
    Mr. Gonzalez. If I may, Congressman. So I was actually in--
as part of the electoral observation mission that observed the 
2006 elections in Nicaragua--and previous to that Ortega always 
made it through the first round. But because the requirement to 
win was lowered, he was able to actually win.
    Mr. Rooney of Florida. But there was a third candidate in 
there, too.
    Mr. Gonzalez. That is correct.
    Mr. Rooney of Florida. We tried to get that guy out of 
there, and he would not quit.
    Mr. Gonzalez. It would be--once they went to second round, 
it was everybody but Ortega that they would vote for. Then he 
changed the constitution to allow him to run for office, and 
that has allowed him to endure. So you have there, number 1, is 
something that happens throughout Latin America, which is 
leaders--political leaders who change the rules in order to 
stay in power. And that is true of people that we love to work 
with and people that we do not like to work with.
    Mr. Rooney of Florida. Right.
    Mr. Gonzalez. But I have got to tell you, I think Ortega 
revealed his stripes, but that was always part of the plan. And 
the plan was to maintain a dynasty of power in Nicaragua. I 
think once he leaves, he is going to want his wife to stay, he 
is going to want his family to stay in power, and he is going 
to continue to change the rules of the game so that he can do 
    And I have got to single out an initiative from the House 
actually, the NICA Act, that said that the United States should 
vote against multilateral development bank loans that went to 
the government until they changed. I think that is real 
leadership, and I think it caught the attention of the private 
sector. And those sorts of initiatives I think are examples to 
be modeled in other parts of Central America.
    Mr. Rooney of Florida. Can I ask one more? One quick one. 
Several of you have mentioned the role that the local elites 
and local large family companies in those countries have played 
in dealing with taxes and things like that. I wonder if you 
have any information on how they have stymied competition and 
have made it difficult or disincentivized American companies 
from going to work there. I have got a little firsthand 
experience in some of that, so I am asking.
    Mr. Gonzalez. So two things very briefly, sir. First, when 
as part of the Peace Accord in Guatemala it called for actually 
increasing taxes, the private sector sued and successfully won. 
So they have used litigation.
    But then there is another statistic that when I was in 
government we did an internal study and found that in Guatemala 
in particular roughly 30 percent of private sector contracts 
fell through because of corruption. That is a big number. And 
when you are a U.S. company and you see that, maybe you do not 
expose yourself to that level of corruption, but, you have to 
ask yourself, why aren't U.S. companies involved in the 
infrastructure space or active in energy integration in Central 
    And I would say that the first reason is that these 
countries do not work on a regional basis, so the market is not 
as large. And the second one is corruption. People aren't 
willing to take the risk.
    Mr. Rooney of Florida. Yes. We have done construction work 
all over that area, and our motto is never contract with the 
government. If it is a government agency, stay away; only 
private people.
    Thank you, Mr. Chairman.
    Mr. Sires. Mr. Vargas.
    Mr. Vargas. Thank you very much, Mr. Chairman and Ranking 
Member for holding this hearing. Again, I thank the witnesses 
for being here.
    I do want to followup a little bit on Nicaragua, in 
particular Father Jose Alberto Idiaquez, who is the Jesuit 
rector of the UCA, the Universidad Cetroamericana Simeon Canas. 
The church there has been denouncing the violence, as you know, 
and I know that his life a couple times was threatened. And I 
wanted you to respond, if you could, at the level of threat 
that a number of these church officials have and what the 
danger is to them and what we can do to help.
    I do not know who wants to handle that. Mr. Jones, why 
don't you go ahead and give it a shot first.
    Mr. Jones. OK. I do think we know of--I know personally of 
at least 10 different clergy, religious men and women, who have 
been threatened in Nicaragua. I think what we need to do to 
support them is that they have access to moving to other 
countries similar to what the church did in Colombia for 
decades, to be able to move people who are threatened, to 
provide them asylum, to protect them, as well as to assist the 
people who are working in Nicaragua.
    Mr. Vargas. If I can interrupt you for a second, though. I 
was in El Salvador as a Jesuit back in the 1980's, and most of 
the priests do not want to leave. That is the whole point. I 
mean, it is their communities, it is the people, you know, who 
they administered to as Jesuit priests and as other priests. 
They do not want to leave.
    So what can we do in the sense of keeping them there in the 
country and providing some sort of safety, some sort of help to 
these people? Because they actually do not want to leave. I 
mean, there are some priests that may want to leave and should 
leave because the danger is so high. But most of them do not. 
Most of them want to stay with their flock, as they say.
    Mr. Jones. Yes. I think in that regard recognizing them and 
supporting them in the work that they do and recognizing that 
publicly can provide a certain level of recognition and respect 
in that we are watching these particular individuals and 
following them, and that is publicly known. I think that can 
help to protect people.
    I think also continuing to foster the dialogue, that the 
Catholic Church has been very much engaged in trying to bring 
things back to the dialogue and the table, and I think we need 
to continue to push for that in general in Nicaragua; continue 
to push for monitoring of human rights abuses and those people 
who have been imprisoned in Nicaragua needs to happen.
    Mr. Vargas. Anyone else want to take--yes, Ambassador 
McFarland, go ahead.
    Mr. McFarland. Yes, Congressman. I had the privilege of 
knowing two of the Jesuits who were killed.
    Mr. Vargas. Yes. I knew all of them. They were my 
superiors. They were at the UCA at the time. I was in 
Chalatenango, so I knew them all. Which ones did you know, just 
out of curiosity? Father Ignacio Ellacuria?
    Mr. McFarland. Father Ignacio Ellacuria and Father Segundo 
    Mr. Vargas. Oh. Segundo Montes. He was my actual superior.
    Mr. McFarland. I am so sorry.
    Mr. Vargas. Yes.
    Mr. McFarland. I understand that priests do not want to 
leave their flock. So I think the first question is we need to 
ask whether the threat is sort of generalized or whether it is 
specific, and what we saw in El Salvador, and also in 
Guatemala, were specific, deliberate attacks. These are people 
well-loved by their people.
    How to deter that? I think there are a couple of ways. I 
think it is possible, although I do not know how feasible it 
is, for the Catholic Church, for the Jesuit orders, to have 
people go with them, so that there are witnesses. And that has 
a slight deterrent effect. It might help. They are not armed, 
but they are there. They are witnesses.
    And I think the other thing is the voice of the 
international community, the United States, the House of 
Representatives. This makes a difference. It can push off an 
attack. It can--``well, maybe we will go after somebody else, 
maybe we will do something else, but maybe we won't kill.''
    Mr. Vargas. OK. Well, thank you. I hope that we do more, 
and we can do more, as a body. And, last, I would just like to 
comment that I think it is obvious that if we are not more 
engaged in Central America, their problems are going to get 
bigger. And us defunding some of the programs that we have I 
think is going the wrong way. And, as you all know, China is 
very interested in the area, and all of Central and South 
America. So I think we need to be engaged, and I hope we get 
more engaged, not disengaged.
    And I also happen to represent San Diego. I represent the 
entire California/Mexico border, and the migration coming up 
from people of course that is escaping violence and poverty 
continues to grow. So I, again, hope that we do not disengage. 
I hope we continue to engage.
    I know my time is almost up. But, again, I want to thank 
all of you for being here, and I hope that we remain very 
vigilant in Nicaragua, especially when it comes to the Catholic 
Church. Last time, in El Salvador, the military took it upon 
themselves to go into the UCA and murder all the priests there 
because they had the opportunity. I hope that opportunity does 
not come up in Nicaragua, that we are more vigilant.
    Thank you.
    Mr. Sires. Thank you, Congressman.
    I thank you all for being here today for this important 
hearing. I am deeply concerned about the Administration's 
assistance cuts. I look forward to continuing to work with my 
colleagues on a bipartisan basis to push back against this 
illogical approach and return to a policy that advances the 
shared interests of the United States and the people of 
Guatemala, El Salvador, and Honduras.
    I thank the witnesses and other members for being here 
today. With that, the committee is adjourned.
    [Whereupon, at 3:21 p.m., the subcommittee was adjourned.]

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