[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]









 TRANSNATIONAL CRIMINAL ORGANIZATIONS: THE MENACING THREAT TO THE U.S. 
                                HOMELAND

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                           COUNTERTERRORISM,
                          LAW ENFORCEMENT, AND
                              INTELLIGENCE

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 7, 2023

                               __________

                           Serial No. 118-16

                               __________

       Printed for the use of the Committee on Homeland Security
                                     



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        Available via the World Wide Web: http://www.govinfo.gov
                             _________
                              
                 U.S. GOVERNMENT PUBLISHING OFFICE
                 
53-960 PDF               WASHINGTON : 2023  
























                     COMMITTEE ON HOMELAND SECURITY

                 Mark E. Green, MD, Tennessee, Chairman
Michael T. McCaul, Texas             Bennie G. Thompson, Mississippi, 
Clay Higgins, Louisiana                  Ranking Member
Michael Guest, Mississippi           Sheila Jackson Lee, Texas
Dan Bishop, North Carolina           Donald M. Payne, Jr., New Jersey
Carlos A. Gimenez, Florida           Eric Swalwell, California
August Pfluger, Texas                J. Luis Correa, California
Andrew R. Garbarino, New York        Troy A. Carter, Louisiana
Marjorie Taylor Greene, Georgia      Shri Thanedar, Michigan
Tony Gonzales, Texas                 Seth Magaziner, Rhode Island
Nick LaLota, New York                Glenn Ivey, Maryland
Mike Ezell, Mississippi              Daniel S. Goldman, New York
Anthony D'Esposito, New York         Robert Garcia, California
Laurel M. Lee, Florida               Delia C. Ramirez, Illinois
Morgan Luttrell, Texas               Robert Menendez, New Jersey
Dale W. Strong, Alabama              Yvette D. Clarke, New York
Josh Brecheen, Oklahoma              Dina Titus, Nevada
Elijah Crane, Arizona
                      Stephen Siao, Staff Director
                  Hope Goins, Minority Staff Director
                       Natalie Nixon, Chief Clerk
                     Sean Jones, Deputy Chief Clerk
                                 ------                                

  SUBCOMMITTEE ON COUNTERTERRORISM, LAW ENFORCEMENT, AND INTELLIGENCE

                    August Pfluger, Texas, Chairman
Dan Bishop, North Carolina           Seth Magaziner, Rhode Island, 
Tony Gonzales, Texas                     Ranking Member
Anthony D'Esposito, New York         J. Luis Correa, California
Elijah Crane, Arizona                Daniel S. Goldman, New York
Mark E. Green, MD, Tennessee (ex     Dina Titus, Nevada
    officio)                         Bennie G. Thompson, Mississippi 
                                         (ex officio)
               Michael Koren, Subcommittee Staff Director
          Brittany Carr, Minority Subcommittee Staff Director
                    Alice Hayes, Subcommittee Clerk   
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable August Pfluger, a Representative in Congress From 
  the State of Texas, and Chairman, Subcommittee on 
  Counterterrorism, Law Enforcement, and Intelligence:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Seth Magaziner, a Representative in Congress From 
  the State of Rhode Island, and Ranking Member, Subcommittee on 
  Counterterrorism, Law Enforcement, and Intelligence:
  Oral Statement.................................................     4
  Prepared Statement.............................................     6
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Prepared Statement.............................................     7

                               Witnesses

Mr. Douglas Farah, Founder and President, IBI Consultants:
  Oral Statement.................................................     9
  Prepared Statement.............................................    11
Mr. Christopher Urben, Former Assistant Special Agent in Charge 
  of U.S. Drug Enforcement Agency, DEA, and Managing Director, 
  Nardello & Company:
  Oral Statement.................................................    20
  Prepared Statement.............................................    21
Ms. Melissa Ford Maldonado, Policy Director, Texas Public Policy 
  Foundation, Secure and Sovereign Texas Campaign:
  Oral Statement.................................................    24
  Prepared Statement.............................................    25
Mr. Jason Blazakis, Professor, Middlebury Institute of 
  International Studies, Director, The Center on Terrorism 
  Extremism and Counterterrorism:
  Oral Statement.................................................    28
  Prepared Statement.............................................    29

 
 TRANSNATIONAL CRIMINAL ORGANIZATIONS: THE MENACING THREAT TO THE U.S. 
                                HOMELAND

                              ----------                              


                        Wednesday, June 7, 2023

             U.S. House of Representatives,
                    Committee on Homeland Security,
                         Subcommittee on Counterterrorism, 
                         Law Enforcement, and Intelligence,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:04 p.m., in 
room 310, Cannon House Office Building, Hon. August Pfluger 
(Chairman of the subcommittee) presiding.
    Present: Representatives Pfluger, Bishop of North Carolina, 
D'Esposito, Crane, Jackson Lee, Thanedar, Garcia, and Ramirez.
    Mr. Pfluger. The Committee on Homeland Security, 
Subcommittee on Counterterrorism, Law Enforcement, and 
Intelligence will come to order. Without objection, the 
subcommittee may recess at any time.
    The purpose of this hearing is to receive testimony from a 
nongovernmental panel of expert witnesses to examine the wide-
ranging operations of Transnational Criminal Organizations, 
TCOs, which have expanded both in size and sophistication as 
well as to explore Federal and other efforts to mitigate and 
disrupt TCO activities. I now recognize myself for an opening 
statement.
    Good afternoon, and welcome to Subcommittee on 
Counterterrorism, Law Enforcement, and Intelligence. Today, we 
are holding an important hearing on the menacing threat posed 
by Transnational Criminal Organizations, TCOs, to our Homeland 
Security and public safety. I'd like to thank all of our 
witnesses for your time and for testifying today.
    TCOs are groups or networks of individuals who engage in 
illegal activities across national borders. They engage in 
multifaceted criminal enterprise from drug trafficking, to 
human trafficking, to human smuggling, and other criminal acts. 
Organized crime is a massive business. In fact, it's a 
multibillion-dollar business.
    TCOs are responsible for trafficking deadly drugs, like 
illicit Fentanyl and other opioids into American communities 
fueling violence and corruption and undermining the rule of 
law. These enterprises exploit our poor Southern Border to 
advance their criminal agendas as they facilitate and profit 
off of smuggling and trafficking of people, often victimizing 
susceptible migrants who are traveling along the treacherous 
journey from Central and South America to the United States.
    According to the DEA, Mexican TCOs, in particular, control 
smuggling corridors, mainly across the Southwest Border and 
maintain the greatest drug trafficking influence in the United 
States. The trafficking of drugs, like illicit Fentanyl into 
American neighborhoods and communities from Texas to New York 
by TCOs have contributed to the deaths of hundreds of thousands 
of Americans. In fact, Fentanyl is the leading cause of death 
for Americans between the ages of 18 to 45, and these deaths 
are occurring in every single State in our Nation 
unfortunately.
    The scourge of Fentanyl has hit every single one of our 
communities. In February, two of my constituents lost their son 
Jackson Lee Warnick, 17 years old, to Fentanyl poisoning. 
Jackson's parents had to live through a nightmare that no 
parent should ever have to endure. Jackson's family has been 
working tirelessly across the Permian Basin to share their 
son's story, to help educate other people in the dangers posed 
by synthetic opioids.
    According to the Centers for Disease Control and 
Prevention, 107,735 Americans died between August 2021 and 
August 2022 from drug overdoses or from the poisoning of 
Fentanyl, with the vast majority of those deaths involving 
synthetic opioids like Fentanyl.
    Just this past April, the head of the DEA, Anne Milgram, 
called the Sinaloa Jalisco New Generation Cartel the greatest 
criminal drug threat that the United States has ever faced, and 
that these ruthless, violent criminal organizations have 
associates, facilitators, and brokers in all 50 States in the 
United States as well as in more than 40 countries around the 
world.
    These cartels purchase precursor chemicals from China which 
are shipped to South America and Mexico and using those 
precursors to produce Fentanyl and even process that Fentanyl 
into counterfeit prescription pills. The cartels then traffic 
the drugs from Mexico into the United States for distribution.
    To put this in perspective, and as noted recently by the 
DEA administrator, it cost the cartels as little as 10 cents to 
produce a Fentanyl-based fake prescription pill that is then 
sold in the United States for as much as $10 to $30. As a 
result, the cartels make billions of dollars from trafficking 
Fentanyl in the United States each year.
    Cartels are also beginning to mix Fentanyl with Xylazine, a 
powerful sedative that the U.S. Food and Drug Administration 
has permitted for veterinary use. It has licit uses, but it 
causes fatal overdoses in this country.
    It is also important to examine the collaboration between 
Asian and Mexican TCOs. In particular, the Asian TCOs play a 
major role in the laundering of the illicit drug proceeds on 
the behalf of Mexican TCOs. Meanwhile, China has ceased all 
counterdrug cooperation with the United States, which raises 
serious concerns about the global effort to curb precursor 
chemicals from going to Mexico for the manufacturing of illicit 
Fentanyl.
    Additionally, these criminal activities by TCOs extend well 
beyond drug-smuggling and money-laundering activities. TCOs are 
also involved in human trafficking, human smuggling, and a wide 
variety of other crimes.
    In fiscal year 2022, Homeland Security Investigation or HSI 
initiated over 1,300 criminal investigations related to sex 
trafficking and forced labor resulting in more than 3,650 
arrests and 630 convictions. We cannot allow these criminal 
networks to operate with impunity and endanger our Homeland 
Security and public safety. We must explore all tools at our 
disposal to detect, disrupt, and dismantle their operations and 
hold them accountable for their actions.
    As we face a growing crisis at the border, and as TCOs 
evolve, both in size and sophistication, it is more important 
than ever that we unequivocally support our dedicated Border 
Patrol Homeland Security Investigation agents as well as our 
State and local law enforcement as they work on the front lines 
to disrupt and dismantle the egregious operations of the TCOs.
    This afternoon, I'm pleased to say that we have a 
distinguished panel of expert witnesses to discuss the TCOs, 
the grave threat that they pose to our homeland, and to have a 
debate in front of the American public on the direction that we 
should go as a whole-of-Government in order to put a stop to 
this scourge that is causing hundreds of thousands of deaths.
    I'd like to thank our witnesses for being with us this 
afternoon, and I look forward to this discussion on a critical 
topic.
    [The statement of Chairman Pfluger follows:]
                  Statement of Chairman August Pfluger
                              June 7, 2023
    Good afternoon, and welcome to the Subcommittee on 
Counterterrorism, Law Enforcement, and Intelligence. Today we are 
holding an important hearing on the menacing threat posed by 
transnational criminal organizations to our homeland security and 
public safety.
    I would like to thank all of our witnesses for testifying today.
    Transnational criminal organizations or TCOs are groups or networks 
of individuals who engage in illegal activities across national 
borders. They engage in a multi-faceted criminal enterprise from drug 
trafficking, human trafficking, human smuggling, and other criminal 
acts.
    Organized crime is a massive business. In fact, it is a multi-
billion dollar business.
    TCOs are responsible for trafficking deadly drugs like illicit 
Fentanyl and other opioids into American communities, fueling violence 
and corruption, and undermining the rule of law.
    These enterprises exploit our porous Southern Border to advance 
their criminal agendas, as they facilitate and profit off of the 
smuggling and trafficking of people, often victimizing susceptible 
migrants who are traveling along the treacherous journey from Central 
and South America to the United States.
    According to the Drug Enforcement Administration (DEA), Mexican 
TCOs, in particular, control smuggling corridors, mainly across the 
Southwest Border and maintain ``the greatest drug trafficking 
influence'' in the United States.
    The trafficking of drugs like illicit Fentanyl into American 
neighborhoods and communities from Texas to New York by TCOs have 
contributed to the death of hundreds of thousands of Americans.
    In fact, Fentanyl is the leading cause of death for Americans 
between the ages of 18 to 45, and these deaths are occurring in every 
State in our Nation.
    The scourge of Fentanyl has hit every single one of our 
communities. In February, two of my constituents lost their son, 
Jackson Lee Warnick, age 17, to a Fentanyl overdose. Jackson's parents 
had to live through a nightmare that no parent should ever have to 
endure. Jackson's family has been working tirelessly across the Permian 
Basin to share their son's story to help educate folks on the dangers 
posed by synthetic opioids.
    According to the Centers for Disease Control and Prevention, 
107,735 Americans died between August 2021 and August 2022 from drug 
overdoses, with the vast majority of those deaths involving synthetic 
opioids like Fentanyl.
    Just this past April, the head of the DEA, Anne Milgram, called the 
Sinaloa and the Jalisco New Generation Cartel the ``greatest criminal 
drug threat the United States has ever faced'' and that ``these 
ruthless, violent, criminal organizations have associates, 
facilitators, and brokers in all 50 States in the United States, as 
well as in more than 40 countries around the world.''\1\
---------------------------------------------------------------------------
    \1\ Fiscal Year 2024 Request for the Drug Enforcement 
Administration: Hearing before the Committee on the Appropriations, 
Subcomm. on Justice, Science, and Related Agencies, 118th Cong. (Apr. 
27, 2023) (testimony of Anne Milgram at 4, Administrator, U.S. Drug 
Enforcement Administration).
---------------------------------------------------------------------------
    These cartels purchase precursor chemicals from China, which are 
shipped to South America and Mexico, and using those precursors to 
produce Fentanyl and even process that Fentanyl into counterfeit 
prescription pills.\2\
---------------------------------------------------------------------------
    \2\ Id.
---------------------------------------------------------------------------
    The cartels then traffic these drugs from Mexico into the United 
States for distribution.\3\
---------------------------------------------------------------------------
    \3\ Id.
---------------------------------------------------------------------------
    To put this into perspective, and as noted recently by the DEA 
administrator, ``[i]t costs the cartels as little as 10 cents to 
produce a Fentanyl-laced fake prescription pill that is then sold in 
the United States for as much as $10 to $30. As a result, the cartels 
make billions of dollars from trafficking Fentanyl into the United 
States.''\4\
---------------------------------------------------------------------------
    \4\ Id.
---------------------------------------------------------------------------
    Cartels are also beginning to mix Fentanyl with Xylazine--a 
powerful sedative that the U.S. Food and Drug Administration has 
permitted for veterinary use--causing fatal overdoses across the 
country.
    It is also important to examine the collaboration between Asian and 
Mexican TCOs. In particular, Asian TCOs play a major role in the 
laundering of illicit drug proceeds on behalf of Mexican TCOs.\5\
---------------------------------------------------------------------------
    \5\ 2020 Drug Enforcement Administration NDTA National Drug Threat 
Assessment at 69, (March 2021) available at https://www.dea.gov/sites/
default/files/2021-02/DIR-008-
21%202020%20National%20Drug%20Threat%20Assessment_WEB.pdf.
---------------------------------------------------------------------------
    The money-laundering tactics used by Asian TCOs involve the 
transfer of funds between China and Hong Kong, using front companies to 
facilitate international money movement.\6\
---------------------------------------------------------------------------
    \6\ Id. at 76.
---------------------------------------------------------------------------
    Meanwhile, China has ceased all counter-drugs cooperation with the 
United States, which raises serious concerns about the global effort to 
curb precursor chemicals from going to Mexico for the manufacturing of 
illicit Fentanyl.
    Additionally, these criminal activities by TCOs extend well beyond 
drug smuggling and money-laundering activities. TCOs are also involved 
in human trafficking, human smuggling, and other crimes.
    In fiscal year 2022, Homeland Security Investigations initiated 
over 1,300 criminal investigations related to sex trafficking and 
forced labor, resulting in more than 3,650 arrests and over 630 
convictions.\7\
---------------------------------------------------------------------------
    \7\ U.S. Dep't of Homeland Sec., DHS Center for Countering Human 
Trafficking Releases Fiscal Year Annual Report (Jan. 31, 2023), https:/
/www.dhs.gov/news/2023/01/31/dhs-center-countering-human-trafficking-
releases-fy-2022-annual-report.
---------------------------------------------------------------------------
    We cannot allow these criminal networks to operate with impunity 
and endanger our homeland security and public safety. We must explore 
all the tools at our disposal to detect, disrupt, and dismantle their 
operations, and hold them accountable for their actions.
    As we face a growing crisis at the border, and as TCOs evolve in 
both size and sophistication, it is more important than ever that we 
unequivocally support our dedicated Border Patrol, Homeland Security 
Investigations agents, as well as our State and local law enforcement 
as they work on the front lines to disrupt and dismantle the egregious 
operations of TCOs.
    This afternoon, we have a distinguished panel of expert witnesses 
to discuss TCOs and the grave threat they pose to the homeland.
    Thank you to all our witnesses for being with us this afternoon, 
and I look forward to our discussion on this critical topic.

    Mr. Pfluger. I would now like to recognize the Ranking 
Member of the subcommittee, Mr. Magaziner for his opening 
statement.
    Mr. Magaziner. Thank you, Chairman. Thank you for calling 
this hearing on such an important topic and to our witnesses 
for being here today and for your work and your expertise. I am 
glad that we are having this hearing to examine threats posed 
by Transnational Criminal Organizations to the U.S. homeland.
    TCOs are broad-ranging, originate all over the globe, and 
engage in many forms of criminal activity, from drug and arms 
trafficking, to human smuggling, to cyber crime, and illegal 
fishing and mining. In carrying out criminal activity, TCOs are 
often violent, degrading the security and stability of the 
countries they have a presence in, harming and killing 
civilians of those countries, and threatening the national 
security of the United States.
    In our neighboring country of Mexico and in Central and 
South America, violent crime has steadily been on the rise at 
the hands of drug trafficking organizations. It has been 
estimated that between 40 and 65 percent of all homicides in 
Mexico are organized-crime-related. It is possible that the 
percentage is higher. As it is well-known that the cartels have 
threatened journalists and government officials in attempts to 
cover up the identities of homicide victims.
    Mexican citizens are unfortunately not alone in living in 
fear of extreme violence under TCOs. Guatemala, Honduras, and 
El Salvador have some of the highest homicide rates in the 
world. Women and girls are disproportionately affected by TCO 
violence.
    In response, Central Americans and Mexicans flee their 
homes to avoid the threat of violence, and often travel to the 
U.S. Border for safety. More than 2 million people are 
estimated to have left El Salvador, Guatemala, and Honduras 
from 2014 through 2022. Many hoping to escape the violence in 
their home countries end up facing danger and extortion from 
TCOs on their journey.
    TCOs are connected to migrant smugglers who will charge a 
fee before allowing the smugglers and migrants to pass through 
territories under their control. Streamlining asylum processing 
and allowing migrants to apply for legal protection before they 
get to our border is a smart policy that is good for our 
national security, because it undermines the financial model of 
human traffickers and creates more order at our border and 
points of entry. I am encouraged that the administration is 
exploring these policies, so that those who are eligible for 
legal asylum don't have to make the dangerous journey under the 
extortion of smugglers. Those who are not eligible can find 
out--because as we all know the cartels and the smugglers, the 
traffickers will tell people anything in order to convince them 
that if they do come to the United States, they'll have no 
problem getting in, even what that's not true.
    So by creating these opportunities, we can undercut the 
cartels' ability to exploit traffic and profit from vulnerable 
people.
    It is also critical that the United States collaborate with 
our partners in Mexico and Central America to stop the primary 
harm from TCOs to the U.S. homeland illicit drug trafficking. 
Mexican drug traffickers are the primary wholesalers of U.S.-
bound cocaine from the major supply countries of Colombia, 
Peru, and Bolivia, and are also largely responsible for the 
procurement of Fentanyl precursors from China, and control the 
cross-border trafficking of Fentanyl, a drug DEA Administrator 
Anne Milgram has declared the single, deadliest drug threat our 
Nation has ever encountered.
    As we hold today's hearing, we also need to focus on 
another source of the cartels' strength, the illegal export of 
guns from the United States across our Southern Border. ATF 
estimates that as many as 597,000 firearms are trafficked from 
the United States into Mexico each year, 597,000 each year. It 
is shameful, and it is fueling the cartels' violence which only 
exacerbates the problems we face here at home. We cannot call 
ourselves fully committed to the fight against threats posed by 
transnational crime groups, particularly, those operating in 
Mexico and Central America until we act on illegal gun 
trafficking.
    So my hope for today's hearing, in addition to objectively 
examining the TCO threat landscape, is that we begin a 
discussion in how we in Congress can support the U.S. 
Government's efforts to stifle the cartel and all TCO activity. 
It is critical that we examine the efforts of the Department of 
Homeland Security, which through several components, including 
Homeland Security Investigations, and the Office of 
Intelligence and Analysis, develop intelligence, interdict 
illicit money and goods, and investigate the TCOs. We must 
ensure that DHS has the resources and the authorities it needs 
to protect Americans from TCO violence. With that, once again, 
I thank the witnesses for being here, and I yield back.
    [The statement of Ranking Member Magaziner follows:]
               Statement of Ranking Member Seth Magaziner
                              June 7, 2023
    I am glad to be holding this hearing to examine threats posed by 
transnational criminal organizations to the U.S. homeland. TCOs are 
broad-ranging, originate all over the globe, and engage in many forms 
of criminal activity, from drug and arms trafficking to human smuggling 
to cyber crime and illegal fishing and mining. And in carrying out 
criminal activity, TCOs are often violent--degrading the security and 
stability of the countries they have a presence in, harming and even 
killing citizens of those countries, and threatening the national 
security of the United States.
    In our neighboring country of Mexico, and in Central America, 
violent crime has steadily been on the rise at the hands of drug 
trafficking organizations. It has been estimated that between 40 and 65 
percent of all homicides in Mexico are organized-crime-related, and it 
is possible that the percentage is much higher--as it is well-known 
that the cartels have threatened journalists and Mexican government 
officials in attempts to cover up the numbers and identities of 
homicide victims.
    Mexican citizens are unfortunately not alone in living in fear of 
extreme violence under TCOs. Guatemala, Honduras, and El Salvador have 
some of the highest homicide rates in the world, and women and girls 
are disproportionately affected by TCO violence. In response, Central 
Americans and Mexicans flee their homes, to avoid the threat of 
violence, and travel to the U.S. border. More than 2 million people are 
estimated to have left El Salvador, Guatemala, and Honduras from 2014-
2022. Many--hoping to escape violence in their home countries--end up 
facing danger and extortion from TCOs on their journey. TCOs are 
connected to migrant smugglers and will charge a fee before allowing 
the smugglers and migrants to pass through territories under their 
control.
    Streamlining asylum processing and allowing migrants to apply for 
legal protection before they get to our border is smart policy that is 
good for our national security because it undermines the financial 
model of human traffickers and creates more order at our border and 
points of entry. I am encouraged that the Biden administration is 
exploring these policies in the interest of American security.
    So far, I have also been pleased with the Biden administration's 
handling of Title 42's expiration, as recent numbers indicate 
encounters are down significantly since the week of its expiration, and 
even lower than the average daily encounters in March. This is further 
evidence that expanding legal pathways for migrants and a more humane 
approach to our immigration system is better for our country and better 
for migrants. By creating further opportunities, we can undercut the 
cartels' ability to exploit, traffic, and profit from vulnerable 
people.
    It is also critical that the United States collaborate with our 
partners in Mexico and Central America to stop the primary harm from 
TCOs to the U.S. homeland--illicit drug trafficking. Mexican drug 
traffickers are the primary wholesalers of U.S.-bound cocaine from the 
major supply countries of Colombia, Peru, and Bolivia. We also know 
that the Mexican cartels are largely responsible for the procurement of 
Fentanyl precursors from China and control the cross-border trafficking 
of Fentanyl--a drug DEA Administrator Anne Milgram has declared ``the 
single deadliest drug threat our Nation has ever encountered.''
    As we hold today's hearing we also need to focus on another source 
of the cartel's strength: the illegal export of guns from the United 
States across our Southern Border. ATF estimates that as many as 
597,000 firearms are trafficked from the United States into Mexico each 
year.
    Five hundred ninety-seven thousand. Each year.
    It is shameful and it is fueling the cartels' violence, which only 
exacerbates the problems we face here at home. We cannot call ourselves 
fully committed to the fight against threats posed by transnational 
crime groups--particularly those operating in Mexico and Central 
America--until we act on illegal gun trafficking.
    My hope for today's hearing--in addition to objectively examining 
the TCO threat landscape--is that we begin a discussion on how we in 
Congress can support the U.S. Government's efforts to stifle cartel 
activity. It is also critical that we examine the efforts of the 
Department of Homeland Security, which through several components, 
including Homeland Security Investigations and the Office of 
Intelligence & Analysis, develop intelligence, interdict illicit money 
and goods, and investigate various TCOs. We must ensure that DHS has 
the resources and the authorities it needs to protect Americans from 
TCO violence.

    Mr. Pfluger. Thank you, Ranking Member Magaziner. Other 
Members of the committee are reminded that opening statements 
may be submitted for the record.
    [The statement of Ranking Member Thompson follows:]
             Statement of Ranking Member Bennie G. Thompson
                              June 7, 2023
    I am pleased the subcommittee is exploring threats to the homeland 
from transnational criminal organizations (TCOs) and the fact that 
violence perpetrated by TCOs is one of many reasons that people migrate 
to the U.S. Southern Border. Violent crime has caused thousands across 
the globe to flee in fear for their lives, particularly in Central 
America, a region that experiences some of the highest crime rates in 
the world.
    As migrants seek a better, safer life, and embark on a journey to 
the United States, they face extortion and violence on migration routes 
through Mexico which the cartels control and charge large sums to allow 
the migrants to pass.
    Increasingly, we hear awful stories of migrants being assaulted, 
robbed, abandoned, and even murdered along the way. Some experts assess 
that the increased violence toward and extortion of migrants may be a 
result of heightened profit competition among the various cartels. That 
is important for us to factor into today's conversation--the cartels 
are profit-driven. They are violent, and criminal, but they are not 
political. They act with callousness toward migrants, perpetrate 
horrendous acts of gun violence, profit from illicit drug trafficking 
at the expense of American lives, and disrupt the much-needed border 
trade helping to lift millions of our Latin American neighbors out of 
poverty.
    However, designating Mexican cartels as Foreign Terrorist 
Organizations will do nothing to stop them. They are not deterred by 
anything unless it affects their bottom line--which terrorist 
designations will not accomplish. What designating these transnational 
criminal organizations as terrorists will succeed in is damaging our 
relationship with the government of Mexico. Comments from Republicans 
suggesting we invade Mexico only make matters worse.
    As I have said before, and will say again, it is high time the 
Majority stop focusing on trying to score political points--especially 
when those ``points'' work to our Nation's detriment. I urge my 
colleagues across the aisle to join Democrats in seeking real solutions 
to address the threats posed by heinous TCOs. For example, we ought to 
reinstate the interagency Joint Task Force-Investigations--which 
coordinated efforts across the Federal Government to dismantle TCOs, 
prevent their reconstitution, and reduce illicit flows. Unfortunately 
for us and fortunately for the cartels, the Trump administration shut 
this task force down.
    We must improve the Department of Justice's Transnational Organized 
Crime Actor Detection Program.
    At my request, the Government Accountability Office recently 
conducted a review of this program and recommended that DOJ build on 
its success by increasing participation and information sharing among 
partner agencies and developing analysis from the shared data.
    We must support DHS's surge operation against Fentanyl, known as 
``Operation Blue Lotus,'' which in its first month of operation stopped 
over 4,000 pounds of Fentanyl at ports of entry, where more than 90 
percent of Fentanyl is trafficked.
    We must also support our Customs and Border Protection officers at 
points of entry since they are on the front lines of the battle against 
Fentanyl.
    Democrats were disappointed to see Republicans vote down our 
amendments to their border bill that would have authorized Operation 
Blue Lotus and ensured CBP is well-staffed and resourced to seize 
Fentanyl.
    I am hopeful we can begin to work together to further address the 
dangers posed by the cartels.

    Mr. Pfluger. I am pleased to have the distinguished panel 
of witnesses before us today on this very important topic, and 
I ask our witnesses to please rise and raise their right hands.
    [Witnesses sworn.]
    Mr. Pfluger. Thank you. You may be seated. Let the record 
show that the witnesses have answered in the affirmative.
    I would now like to formally introduce our witnesses. Mr. 
Douglas Farah is the founder and president of IBI Consultants, 
a security consulting firm that specializes in field research 
study and security challenges in transnational organized crime 
in Latin America. From September 2013 to September 2022, Mr. 
Farah was a visiting senior fellow at the Center for Strategic 
Research, the National Defense University, where he led the 
Western Hemisphere Illicit Network Review Project under the 
auspices of Deputy Secretary of Defense for counter narcotics 
and global threats. In that position, Mr. Farah briefed his 
research findings across the interagency and intelligence 
communities, including U.S. Southern Command.
    Farah also testified before Congress more than a dozen 
times on important matters related to Western Hemisphere and 
U.S. homeland. Thank you.
    Mr. Christopher Urben is a former assistant special agent 
in charge of U.S. Drug Enforcement Agency, DEA. Currently, he 
is the managing director of Nardello & Company in which Mr. 
Urben supports the firm's efforts to target organized crime 
groups operating in the ports and borders of the United States, 
Mexico, Panama, and Colombia. Mr. Urben started his career with 
DEA in 1996 as a special agent in the New York division. He was 
later assigned to the New Jersey division where he worked on 
several high-profile investigations involving Colombian and 
Mexican drug cartels. Mr. Urben also served on two overseas 
tours in Europe, working with international law enforcement 
agencies.
    Mr. Urben's most recent position was assistant special 
agent in charge of the Special Operations Division for Europe, 
Africa, the Middle East, and the Far East. In particular, Mr. 
Urben has led sensitive global undercover DEA operations that 
targeted Chinese organized crime groups that facilitated money 
laundering for Mexican drug cartels. Thank you for being with 
us.
    Ms. Melissa Ford is the policy director for the Texas 
Public Policy Foundation's secure and sovereign Texas campaign 
which helps to keep our country safe and free. Ms. Ford's work 
is focused on policies that secure the border and restore the 
rule of law.
    Prior to joining the foundation, Ms. Ford served at the 
White House first in the Office of American Innovation, and 
later in the Domestic Policy Council. Ms. Ford has written 
extensively about foreign policy, public safety, drug cartels, 
and organized crime. Thank you for being with us.
    Last, Mr. Jason Blazakis is a professor at Middlebury 
Institute of International Studies where he focuses on threat 
financing, sanctions, and violent extremism, and special 
operations-related research. He is the director of the Center 
on Terrorism Extremism and Counterterrorism where he directs 
research on domestic terrorism, terrorism finance, recruitment 
propaganda, and the use of special operations to counter 
transnational threats.
    In 2008 to 2018, he served as the director of 
Counterterrorism Finance and Designations Office, Bureau of 
Counterterrorism, U.S. Department of State.
    I would like to welcome all of our witnesses and thank you 
for your professional experience.
    I know that you have submitted statements for the record. 
Some of those will exceed 5 minutes. In the interest of time, 
please summarize your statements to 5 minutes so that we go 
along the committee lines here and ask questions.
    I now recognize Mr. Douglas Farah for your 5 minutes in an 
opening statement.

    STATEMENT OF DOUGLAS FARAH, FOUNDER AND PRESIDENT, IBI 
                          CONSULTANTS

    Mr. Farah. Thank you, Chairman Pfluger and Ranking Member 
Magaziner, and Members of the subcommittee for the opportunity 
to be here today talk about the issue of Transnational Criminal 
Organizations and the threats they pose to their homeland. The 
multi-billion-dollar illicit economies in Latin America 
centered on the cocaine trade but diversifying to new 
commodities and activities are undergoing profound 
restructuring with long-term strategic repercussions for United 
States and its allies in the hemisphere.
    New actors, new markets, and new products are driving 
fragmentation among traditional groups, consolidation of 
criminalized economies, and convergents among different actors 
are driving instability and corruption. The growing 
ideologically-agnostic criminalized authoritarian model that's 
spreading across Latin America with leaders staying in power 
through alliances with transnational criminal structures that 
render ideology almost meaningless.
    While the world of illicit economies and TCO structures are 
undergoing the seismic realignment across the hemisphere, many 
of our strategies to combat these threats remain rooted in the 
past.
    Much of the law enforcement and intelligence community 
analysis do not grasp the significant implications of states 
and governments that actively seek the participation of TCOs as 
part of their national strategic endeavors. Often relying on 
old paradigms of ideologically-driven actors, model product 
cartel structures, and shared values of once-friendly 
government. Yet, as General Richardson, the commander of 
USSOUTHCOM recently stated, the Western Hemisphere is under 
assault from ``A host of cross-cutting trans boundary 
challenges that directly threaten the homeland.''
    Already the staunchly anti-U.S. bloc of countries led by 
Venezuela is ensconced in power, while deeply corrupt 
authoritarian governments in El Salvador, Guatemala, and 
Honduras are no longer viable partners for the United States.
    In Colombia, which has been the strongest partner of the 
United States for the past three decades, President Gustavo 
Petro campaigned on moving away from that alliance, and since 
taking office has consistently bolstered the Maduro regime in 
Venezuela.
    Most of Colombia's counter-narcotics efforts have been 
brought to a standstill by budget cuts, loss of experience, 
personnel, and a lack of political will. This leaves us with 
the very real possibility of a traditionally robust alliance 
that U.S. strategic partners in Latin America will be reduced 
to a handful of the smallest countries rather than regional 
economic and political leaders.
    Amid these changes, new actors such as Albanian organized 
crime, Turkish criminal groups, Libyan fixer groups, and 
Italian mafia groups are emerging as significant new players 
across the region changing the dynamics of the traditional 
criminal economics and offering new paths to expand profits to 
product and market diversification.
    I and my colleagues at the international coalition against 
illicit economies in the spring 2023 policy brief identified 
several emerging threats that we believe need to be dealt with 
quickly. The first is the trafficking of natural resources, 
especially gold. That is a primary contributor to massive 
environmental degradation, health hazards, child labor, human 
trafficking, and sexual slavery, and loss of state legitimacy. 
It also brings broad new avenues of almost untraceable money 
laundering that's being taken advantage of by criminalized 
states and criminal groups.
    The second is the diversification and the expansion of the 
cartels, Jalisco Nueva Generacion. Jalisco in the past 3 years 
has emerged as the most prominent cocaine trafficking 
organization in Latin America and is expanding its operation 
and corruptive influence in different parts of the world. A 
primary area of expansion is into the diversified economic 
portfolio of growing fake and counterfeit pharmaceuticals, a 
new multibillion-dollar industry, as well as the Fentanyl 
industry mentioned by the Chairman and the Ranking Member.
    The second is the evolution of the MS-13 and the PCC gangs 
and the Transnational Criminal Organizations. Since the 1990's, 
the MS-13 are Mara Salvatrucha in Central America and the PCC. 
In Brazil, it has been identified primarily as street thugs 
knows for their ruthless violence, flashy tattoos, neighborhood 
extortion rings, and cultural insularity. These groups have now 
moved far beyond being that type thing and are what we have 
termed in the academic community, Community Embedded 
Transnational Armed Groups. Working in informal and imperfect 
alliances to become part of the multinational trafficking 
structures that are effectively challenging U.S. strategic 
interest in the region and make the U.S. ability to respond to 
the broadening instability much more difficult.
    The third one that we identified is the emergence of new 
extra regional criminal structures as noted with the 
diversification of markets and products. The face of 
transnational organized crime in Latin America is going much 
more diverse.
    Now, there is a growing presence of Eastern European, 
Chinese, Turkish, Italian, Balkan, syndicates all vying for 
space across the transnational criminal world in the 
hemisphere, and this is most visible in the crisis in Ecuador.
    In conclusion, as illicit networks expand their territorial 
control, ecosystems of corruption, and political power, they 
are aided and abetted by extra regional actors, such as China, 
Russia, and Iran. They will undercut the rule of law and 
directly challenge U.S. goals and initiatives across the 
hemisphere.
    As traditional Transnational Organized Criminal Groups form 
new alliances with non-state extraregional networks and emerge 
with regional criminal state actors, the United States is very 
likely facing an unprecedented loss of key allies and influence 
in the hemisphere. The United States has an underutilized 
toolbox that can be deployed to reverse these worrisome trends, 
but new policy initiatives back by resources to carry them out 
must be deployed quickly or the cost of these trends will be 
even higher. I thank you for your time.
    [The prepared statement of Mr. Farah follows:]
                  Prepared Statement of Douglas Farah
                              June 7, 2023
    Chairman Pfluger, Ranking Member Magaziner, and Members of the 
subcommittee: Thank you for the opportunity to discuss with you today 
the issue of Transnational Criminal Organizations and the threat they 
pose to the homeland.
    The multi-billion dollar illicit economies in Latin America, 
centered on the cocaine trade but diversifying to new commodities and 
activities, are undergoing profound restructuring with long-term 
strategic repercussions for the United States and its allies in the 
hemisphere.
    New actors, new markets, and new products are driving fragmentation 
among traditional groups, consolidation of criminalized economies 
within the Bolivarian Joint Criminal Enterprise (BJCE) \1\ and 
convergence among different actors that are driving instability and 
corruption.
---------------------------------------------------------------------------
    \1\ We define the Bolivarian Joint Criminal Enterprise as an 
alliance of criminalized states and non-state actors, led by the Maduro 
regime in Venezuela, the Revolutionary Armed Forces of Colombia (FARC) 
in Colombia and the Daniel Ortega regime in Nicaragua. For a full 
discussion of the BJCE see IBI Consultants deliverable for DAS-D CNGT 
March 28, 2019, ``Maduro's Last Stand: Venezuela's Survival Through the 
Bolivarian Joint Criminal Enterprise.''
---------------------------------------------------------------------------
    The growing, ideologically agnostic criminalized authoritarian 
model is spreading across Latin America. Authoritarian cliques are 
staying in power through alliances with transnational criminal 
structures that renders ideology almost meaningless. This new approach 
has opened new possibilities for formerly antagonistic groups. One-time 
ideological opponents are no longer considered enemies, but potential 
partners who can provide or purchase specific criminal services and 
financial rewards.
    The sustained ability of the Bolivarian authoritarian criminal 
structures to consolidate and endure in Venezuela, Nicaragua, Bolivia 
and elsewhere has emboldened new leaders across the political spectrum. 
These new leaders follow the same playbook to gain a chokehold on state 
power and the wealth generated by the alliance of states and 
transnational criminal organizations (TCOs).
    This necessitates using the same type of state partnership with an 
array of illicit actors in order to generate revenues, withstand U.S. 
economic sanctions, evade accountability and maintain a grip on power. 
Because they are politically agnostic, leaders of criminalized states 
often merge across ideological boundaries to move their illicit 
products or hide their illicit fundings through a shared network of 
fixers and facilitators.
    This dynamic cripples democratic governance and the rule of law by 
embedding the criminal alliances at the most senior levels of multiple 
governments. Weakened democratic governance and growing criminal 
authoritarianism, in turn, greatly undermine U.S. strategic interests 
and influence by undermining its key allies in the region.
    While the world of illicit economies and TCO structures are 
undergoing a seismic realignment across the hemisphere, many of our 
strategies to combat these threats remains rooted in the past, often 
attacking problem sets and issues that were relevant years ago but are 
no longer are part of the landscape.
    Much of the law enforcement and intelligence community analysis do 
not fully grasp the significant implications of the ideologically 
agnostic criminalized states--that is, states and governments that 
actively seek the participation of TCOs as part of their national 
strategic endeavors. This leads to gaps in understanding how illicit 
activities are undertaken and who profits from them. The law 
enforcement and intelligence communities often rely on old paradigms of 
ideologically-driven actors, mono-product cartel structures, and shared 
values with once-friendly countries. Unfortunately, these paradigms no 
longer describe the context that allows these illicit economies to 
flourish, and they do not help law enforcement develop viable 
strategies to address them.
    Few states are wholly criminalized and most operate along a 
continuum. At one end are strong criminalized states, where the state 
acts as a partner of TCOs and/or use TCOs as an instrument of state 
policy. In addition to Venezuela, Nicaragua, Bolivia, and Cuba of the 
Bolivarian bloc these include the countries of the Northern Triangle of 
Central America (El Salvador, Honduras, Guatemala); while Paraguay and 
Argentina are moving closer to that end of the spectrum.
    At the other end are weak and captured states, where certain nodes 
of governmental authority have been seized by TCOs, where officials are 
the primary beneficiaries of the proceeds from the illicit activity but 
where the state as an entity is not integrated into the enterprise.\2\
---------------------------------------------------------------------------
    \2\ Douglas Farah, ``Transnational Organized Crime, Terrorism and 
Criminalized States in Latin America: An Emerging Tier-One National 
Security Priority,'' U.S. Army War College, Strategic Studies 
Institute, August 2012, accessed at: https://press.armywarcollege.edu/
cgi/viewcontent.cgi?article=1551&context=monographs.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The framework of the convergence paradigm posits that multiple 
transnational criminal and terrorist groups--and their enablers, 
regardless of ideology--work collaboratively when economic or political 
interests align, and under state protection when such cooperation is 
mutually beneficial.\3\ In too many places in the hemisphere, these 
threat networks co-opted governance structures and penetrated key 
public institutions and markets. Yet this framework, although 
repeatedly validated in recent years, is seldom used to analyze threat 
structures and illicit product pipelines.
---------------------------------------------------------------------------
    \3\ For an examination of convergence theory see: Michael Miklaucic 
and Jaqueline Brewer, eds. Convergence: Illicit Networks and National 
Security in the Age of Globalization (Washington, DC, NDU Press, 2013); 
Douglas Farah, ``Convergence and Criminalized States: The New 
Paradigm,'' in Beyond Convergence: World Without Order, Ed. Hilary 
Matfess and Michael Miklaucic, Center for Complex Operations, NDU 
Press, October 2016.
---------------------------------------------------------------------------
    The result is that now Latin America is facing a ``perfect storm of 
reinforcing economic, criminal, and political stresses that is eroding 
its institutions and economic prospects, radicalizing its people, and 
undermining its commitment to democracy and the rule of law.''\4\
---------------------------------------------------------------------------
    \4\ Evan Ellis, ``Latin America's Perfect Storm,'' Global 
Americans, August 31, 2022, accessed at: https://
theglobalamericans.org/2022/08/latin-americas-perfect-storm/.
---------------------------------------------------------------------------
    The massive levels of corruption and multiple, persistent armed 
conflicts among and between state and non-state actors are key drivers 
of the regional decline in democratic governance and the wave of 
authoritarian populism in the hemisphere. The Biden administration 
designated corruption as a ``core United States national security 
interest'' in December 2021,\5\ noting that
---------------------------------------------------------------------------
    \5\ ``Strategy on Countering Corruption,'' The White House, 
December 2021, accessed at: https://www.whitehouse.gov/wp-content/
uploads/2021/12/United-States-Strategy-on-Countering-Corruption.pdf.

``In today's globalized world, corrupt actors bribe across borders, 
harness the international financial system to stash illicit wealth 
abroad, and abuse democratic institutions to advance anti-democratic 
means . . . Corruption threatens United States national security, 
economic equity, global anti-poverty and development efforts, and 
democracy itself.''\6\
---------------------------------------------------------------------------
    \6\ United States Strategy on Countering Corruption, December 2021.

    While the United States has revoked the U.S. visas of several dozen 
Latin American leaders for corruption, these are executed in a 
haphazard, episodic manner that do not dismantle criminal structures or 
lead to asset forfeiture, the true life blood of the corrupt. 
Significantly more political will and a broader, more coordinated and 
coherent set of enforcement efforts will have to be employed to 
dismantle kleptocracies and criminal ruling elites.
    This significant reordering of illicit networks structure in the 
Western Hemisphere is not taking place in a vacuum. The malign 
influence of China, Russia, and Iran adds new layers of complexity to 
regional anti-crime strategies.
    This is in part because, at the same time illicit economies are 
expanding, traditional U.S. allies are shifting away from strategic 
partnerships with the United States to either openly antagonistic 
relationships or ones of dramatically less strategic engagement.
    As Gen. Richardson, commander of U.S. Southern Command, recently 
stated, the Western Hemisphere is under assault from ``a host of cross-
cutting, transboundary challenges that directly threaten'' the 
homeland. She added that:

``Transnational criminal organizations (TCOs), which operate nearly 
uncontested, and blaze a trail of corruption and violence that create 
conditions that allow the PRC and Russia to exploit, threaten citizen 
security, and undermine public confidence in government institutions. 
These threats, along with Iran, corruption, irregular migration, and 
climate change, all overwhelm the region's fragile state institutions, 
springing unrest and increasingly frustrated populations. This 
combination of factors pushes many political leaders to seek resources 
and support from all sources, including our adversaries who are very 
eager to undermine U.S. presence and public image.''\7\
---------------------------------------------------------------------------
    \7\ Statement of General Laura Richardson, Commander, United States 
Southern Command, Before the 117th Congress, House Armed Services 
Committee, March 8, 2022, accessed at: https://www.southcom.mil/Media/
Special-Coverage/SOUTHCOMs-2022-Posture-Statement-to-Congress/.

    Already the staunchly anti-U.S. bloc of the BJCE is ensconced in 
power in Venezuela, Bolivia, and Nicaragua while deeply corrupt 
authoritarian governments in El Salvador, Guatemala, and increasingly 
Honduras, are no longer viable partners for the United States.
    In Argentina, President Alberto Fernandez announced his country as 
the gateway to Russian expansion in the hemisphere on the eve of the 
Russian invasion of Ukraine and following a face-to-face meeting with 
Vladimir Putin.\8\ He has also granted the PRC privileged access to 
strategic Argentine state infrastructure and key minerals. These 
concessions included the construction of an autonomous deep space 
station, control of a key access point to Antarctica, and access to 
lithium deposits under opaque contracts.
---------------------------------------------------------------------------
    \8\ Federico Rivas Molina, ``Alberto Fernandez le ofrece a Rusia 
que Argentina sea su puerta de entrada a America Latina,'' El Pais, 
February 4, 2022, accessed at: https://elpais.com/internacional/2022-
02-04/alberto-fernandez-le-ofrece-a-rusia-que-argentina-sea-su-puerta-
de-entrada-a-america-latina.html.
---------------------------------------------------------------------------
    Brazil's right-wing populist leader Jair Bolsonaro also visited 
Russia just before the invasion of Ukraine. Bolsonaro declared his 
solidarity with Russia after meeting Putin and falsely bragged that he 
had negotiated a peaceful resolution to the looming conflict.\9\
---------------------------------------------------------------------------
    \9\ Giovanna Galvani, ``Bolsonaro em encontro com Putin: `Somos 
solidarios a Russia,'' CNN Brasil, February 16, 2022, accessed at: 
https://elpais.com/internacional/2022-02-04/alberto-fernandez-le-
ofrece-a-rusia-que-argentina-sea-su-puerta-de-entrada-a-america-
latina.html.
---------------------------------------------------------------------------
    In a sequence that clearly demonstrates blurred ideological lines, 
Bolsonaro's successor, long-time leftist leader Luiz Inacio Lula da 
Silva (Lula), went out of his way to downplay Russia's aggression in 
Ukraine, declare the United States was partly to blame for Russia's 
actions, and publicly embraced Maduro and the region's other 
authoritarian regimes.\10\
---------------------------------------------------------------------------
    \10\ Will Grant and Jaroslov Lukiv, ``Lula welcomes back banned 
Venezuelan leader Maduro,'' BBC News, May 30, 2023, accessed at: 
https://www.bbc.co.uk/news/world-latin-america-65750537.
---------------------------------------------------------------------------
    In Colombia, which has been the strongest partner of the United 
States over the past three decades, President Gustavo Petro campaigned 
on moving away from that close alliance. Since taking office, Petro has 
consistently bolstered the Maduro regime in Venezuela and used his 
large social media following to repeat Russian propaganda talking 
points. Most of Colombia's counter-narcotics efforts have been brought 
to a standstill by budget cuts, loss of experienced personnel, and lack 
of political will.
    This opens the door to the real possibility that the traditionally 
robust alliance of U.S. strategic partners in Latin America will be 
reduced to a handful of the smallest countries rather than regional 
economic and political leaders.
    This erosion of alliances comes while traditional actors in 
criminal economies have remained active--including the Sinaloa Cartel 
(Mexico), the Cartel Jalisco Nueva Generacion--CJNG (Mexico), and 
several thousand dissident members of the Revolutionary Armed Forces of 
Colombia--FARC (Colombia/Venezuela/Ecuador) divided into different 
groups.
    Amid these changes, new actors such as Albanian organized crime, 
Turkish criminal groups, Libyan actors, and other mafia groups are 
emerging as significant new players. These groups are changing the 
dynamics of traditional criminal economies, challenging and upsetting 
current relationships, and offering new paths to expand profits through 
product and market diversification. Each group brings added prospects 
of globalization for products, money laundering, and exchanges of 
lessons learned.
    New actors, new markets, and new products are driving fragmentation 
among traditional groups, consolidation of criminalized economies 
within the BJCE and convergence and competition among different actors 
that are driving instability and corruption. The Mexican CJNG has 
displaced the Sinaloa cartel as the dominant criminal network, 
expanding its illicit pipelines from primarily trafficking in cocaine 
to dominating Fentanyl markets, fake pharmaceuticals, precursor 
chemicals, methamphetamines, and a host of other products.
    Traditional criminal actors based in Colombia and Mexico are now 
competing with--and sometimes collaborating with--new actors such as 
transnational gangs in Brazil and Central America, as well extra-
regional, non-traditional actors. New actors such as Albanian organized 
crime, Turkish criminal groups, Libyan actors and Italian mafia groups 
are emerging as significant new players that are changing the dynamics 
of these traditional groups, challenging and upsetting current 
relationships, and offering new paths to expand profits through product 
and market diversification. Each group brings added prospects of 
globalization for products, new technologies, money-laundering 
methodologies, and exchanges of lessons learned.
    As attention in the United States is focused heavily on the Russia-
Ukraine conflict, and will likely remain so for the foreseeable future, 
the space for criminal actors and state-sponsored criminal groups to 
expand under the protection of regional and extra-regional governments 
will likely continue to grow.
    Among the most visible effects of the on-going reordering of 
illicit economies and networks in Latin America under the protection of 
a criminalized state is the massive refugee and humanitarian crisis 
arising from the Maduro regime's repression, corruption, and 
mismanagement. Some 6 million people have fled Venezuela in the past 5 
years, with more than half remaining in camps in Colombia and millions 
more scattered around the region. This crisis is not the focus of this 
report but must be noted not only because of the human toll, but 
because supporting the Venezuelan migrant community strains the 
humanitarian resources of surrounding countries.
    Long-term results of these two major blows to the regions' 
economies has been to force the state to retrench, leaving broadening 
gaps for illicit economies to flourish while empowering non-state armed 
actors that can replace the state. These issues, in turn, make finding 
viable, sustainable strategies to combat these trends in the near- and 
mid-term very difficult, even in the countries where the political will 
to do so exists.
    In this context I and my colleagues at the International Coalition 
Against Illicit Economies (ICAIE), where I am a senior adviser, in a 
recent Spring 2023 Policy Brief (https://icaie.com/2023/04/spring-
icaie-policy-brief-emerging-transnational-organized-crime-threats-in-
latin-america-converging-criminalized-markets-illicit-vectors/) 
identified several emerging security trends that offer new challenges 
to law enforcement and policy communities in the region that are far-
reaching, and threaten to accelerate the negative trends unless dealt 
with effectively. I summarize our findings in the Policy Brief, below.
    Trafficking in Natural Resources.--The illicit trafficking of 
natural resources not only opens new revenue streams for transnational 
criminal organizations and money-laundering avenues, but it is a 
primary contributor to massive environmental degradation, health 
hazards, child labor, human trafficking and loss of state legitimacy. 
The most lucrative commodity is gold--especially illegally-mined gold--
a largely unregulated trade booming across the hemisphere from 
Venezuela, Colombia, Ecuador, Guyana, and in the north to the Madre de 
Dios regions of Peru and Bolivia and the Amazon Basin in Brazil.
    Gold has several advantages that make it increasingly attractive to 
criminal groups as the formal financial system has put anti-money 
laundering laws and regulations in place. As the Organization of 
American States (OAS) noted in a series of reports, illicit gold mining 
provides fungible assets that are easy to transport, largely impossible 
to trace once out of the ground, and readily convertible in markets 
around the world.\11\
---------------------------------------------------------------------------
    \11\ ``Tipologias y senales de alerta relacionadas con el lavado de 
activos provenientes de la mineria illegal en America Latina y el 
Caribe,'' Organization of American States, Department Against 
Transnational Organized Crime, January 2022, accessed at: https://
www.flipsnack.com/dcmmcenter/doc-tipolog-as-y-se-ales-de-alerta-
mineria-ilegal-esp.html.
---------------------------------------------------------------------------
    The price of gold has risen sharply in recent years, meaning in 
many places, mining gold illegally is more profitable for miners in the 
jungles of South America than planting coca crops to produce 
cocaine.\12\ If gold is moved at 95 percent purity or below it does not 
legally have to be declared a financial instrument. This makes it easy 
to move nearly pure gold to a financial hub without declaring it, 
refine it in situ and have gold that can be turned into cash 
immediately in ways that avoid the formal banking system. This process 
enables criminals and kleptocrats to exploit gold markets as a way to 
launder dirty money.
---------------------------------------------------------------------------
    \12\ Javier Villalba, ``Colombia Drug Trafficking Money Laundered 
Through Modified Gold,'' InSight Crime, June 17, 2021, accessed at: 
https://insightcrime.org/news/urabenos-gold-launder-drug-money-
colombia/.
---------------------------------------------------------------------------
    The Maduro regime in Venezuela has raised hundreds of millions of 
dollars through the sale of illegally mined gold, often with the 
support or proxy actions of Colombian non-state armed actors affiliated 
with different groups of the Revolutionary Armed Forces of Colombia 
(FARC) dissident factions. Large gold refineries in the United Arab 
Emirates, United States, and elsewhere have been sanctioned for their 
massive failure of their own ``know your customer'' rules and due 
diligence. One refinery in Suriname helped the FARC, the Maduro regime, 
and Mexican cartel launder hundreds of millions of dollars through 
illicit gold and falsified gold invoices.\13\
---------------------------------------------------------------------------
    \13\ Douglas Farah and Kathryn Babineau, ``Suriname: New Paradigm 
of a Criminalized State,'' Global Dispatch, Center for a Secure Free 
Society, March 2017, accessed at: https://www.securefreesociety.org/wp-
content/uploads/2017/03/Global-Dispatch-Issue-3-FINAL.pdf.
---------------------------------------------------------------------------
    As U.S. pressure to stem the flow of what human rights groups and 
others call ``blood gold'' to the international market has increased, 
growing amounts of gold have flowed from Venezuela, Nicaragua, 
Suriname, Ecuador, and elsewhere to state actors and criminal 
enterprises operating outside of the hemisphere, including Turkey, 
China, Kenya, the United Arab Emirates and elsewhere.\14\ In recent 
years, China has become an increasingly important market for gold mined 
by the Maduro regime, which often the allied regime of Daniel Ortega in 
Nicaragua to move the gold to market.\15\ A group of Libyan middlemen 
who had long ties to the Gadhafi regime's sanctions evasion efforts in 
the 1990's are key facilitators in this new criminal convergence 
space.\16\
---------------------------------------------------------------------------
    \14\ See for example: Carina Pons and Mayela Armas, ``Venezuela 
sold 73 tonnes of gold to Turkey, UAE last year: Legislator,'' Reuters, 
February 6, 2019, accessed at: https://www.reuters.com/article/us-
venezuela-politics-gold/venezuela-sold-73-tonnes-of-gold-to-turkey-uae-
last-year-legislator-idUSKCN1PV1XE; and ``Gold and Grief in Venezuela's 
Violent South,'' International Crisis Group, February 28, 2019, 
accessed at: https://www.crisisgroup.org/latin-america-caribbean/andes/
venezuela/073-gold-and-grief-venezuelas-violent-south.
    \15\ Yalile Loiza, ``La OEA advirtio sobre el incremento de 
comercio de oro desde Ecuador a China,'' Infobae, February 1, 2023, 
accessed at: https://www.infobae.com/america/america-latina/2023/02/01/
la-oea-advirtio-sobre-el-incremento-del-comercio-ilegal-de-oro-desde-
ecuador-a-china/.
    \16\ For details see: Douglas Farah and Marianne Richardson, 
``Dangerous Alliances: Russia's Strategic Inroads in Latin America,'' 
Institute for National Strategic Studies, National Defense University, 
Strategic Perspectives 41, December 2022, accessed at: https://
inss.ndu.edu/Portals/68/Documents/stratperspective/inss/strategic-
perspectives-41.pdf.
---------------------------------------------------------------------------
    The Ascent, Diversification, and Expansion of the Cartel Jalisco 
Nueva Generacion (CJNG): The CJNG in the past 3 years has emerged as 
the most prominent cocaine trafficking organization in Latin America, 
surpassing the Sinaloa Cartel and other Mexican and Colombian 
trafficking structures. It now operates in at least 29 of Mexico's 33 
states, as well as northern Central America, Ecuador, Colombia, and 
Venezuela.\17\ It is also expanding its operation and corruptive 
influence in different parts of the world.
---------------------------------------------------------------------------
    \17\ IISS Armed Conflict Survey, 2022. Data from the Mexico 
Ministry of Finance and Public Credit.
---------------------------------------------------------------------------
    In order to achieve this, the CJNG has successfully focused on:
   Expanding its territorial control in multiple jurisdictions 
        in order to control all illicit activities rather than just 
        operating as a cocaine plaza;
   The indiscriminate use of wide-spread violence to combat 
        other cartels, law enforcement, perceived enemies such as 
        journalists, and would-be competitors and successfully 
        targeting high-profile targets;
   A rapid scaling up of its business opportunities inside and 
        outside of Mexico while moving to diversify its portfolio and 
        develop new methodologies for laundering and moving its illicit 
        proceeds.
    A primary area of the CJNG's expanded and diversified economic 
profile now includes a growing dominance in the trafficking of fake 
medicines and counterfeit pharmaceuticals, a multi-billion illicit 
industry repeatedly traced back to this cartel. In Mexico, 60 percent 
of commercially-sold pharmaceuticals are counterfeit, expired, or 
stolen.\18\ Pirated pharmaceuticals are most common in Guanajuato, 
Jalisco, Guerrero, and Michoacan. The medicines are sold on-line, in 
the informal economy, and in professional brick-and-mortar pharmacies, 
where CJNG liaisons force pharmacists and storekeepers to sell and 
store them alongside real medicine.
---------------------------------------------------------------------------
    \18\ Castillo Garcia, Gustavo. ``Se apodera el `CJNG' de la 
produccion de medicinas `piratas' ''. La Jornada, 17 March 2020. 
https://www.jornada.com.mx/ultimas/politica/2020/03/17/se-apodera-el-
cjng-de-la-produccion-de-medicinas-piratas-9877.html.
---------------------------------------------------------------------------
    Counterfeit pharmaceuticals are often sold for a fifth of the price 
of real medicine. Fake medicine has included treatments for HIV, 
cancer, osteoporosis, diabetes, blood pressure, cholesterol, and 
obesity.\19\ Pharmacists who oppose the sale of the counterfeit 
medicines, do so at risk to their own lives.\20\
---------------------------------------------------------------------------
    \19\ ``El CJNG extiende sus tentaculos criminales: asi trafica 
medicamentos piratas en Mexico.'' Infobae, 17 March 2020. https://
www.infobae.com/america/mexico/2020/03/17/el-cjng-extiende-sus-
tentaculos-criminales-asi-trafica-medicamentos-piratas-en-mexico/.
    \20\ Castillo Garcia, Gustavo. ``Se apodera el `CJNG' de la 
produccion de medicinas `piratas' ''. La Jornada, 17 March 2020. 
https://www.jornada.com.mx/ultimas/politica/2020/03/17/se-apodera-el-
cjng-de-la-produccion-de-medicinas-piratas-9877.html.
---------------------------------------------------------------------------
    The cartels' expanded trafficking in counterfeit pharmaceuticals 
includes pills that are cut with illegal drugs, notoriously Fentanyl, 
or Fentanyl disguised as other pharmaceutical products. Many 
counterfeit pharmaceuticals connected to the CJNG and other cartels 
contained Fentanyl, including counterfeit Oxycodone, Xanax, and 
Roxicodone.\21\ These pills were milled in pill presses to mimic 
legitimate pharmaceuticals. Including Fentanyl in the recipe for these 
drugs makes drug trafficking even more profitable and harder to detect, 
as cartels can package the substances into ever-smaller bags, spread 
them among an ever-wider network of distributors, and achieve the same 
or greater levels of usage.\22\ Increasingly, the cartels have also 
started mixing Fentanyl with Xylazine--a sedative used in cow and 
horses--and found in many cities across the United States which causes 
severe skin ulcerations, necrosis, and can result in amputations if 
left untreated.
---------------------------------------------------------------------------
    \21\ Atlanta-Carolinas High Intensity Drug Trafficking Area's 2019 
Threat Assessment. https://www.scstatehouse.gov/CommitteeInfo/
HouseLegislativeOversightCommittee/AgencyWebpages/AlcoholDrugAbuse/
Drug_Trafficking_Threat_Assessment.pdf.
    \22\ ``La estrategia del CJNG y el Cartel de Sinaloa para inundar 
Estados Unidos con fentanilo.'' Infobae, 12 May 2022. https://
www.infobae.com/america/mexico/2022/05/13/la-estrategia-del-cjng-y-el-
cartel-de-sinaloa-para-inundar-estados-unidos-con-fentanilo/.
---------------------------------------------------------------------------
    The CJNG is sourcing the precursor chemicals for Fentanyl 
production from the same suppliers--largely Chinese and Indian--used by 
other cartels, including the Sinaloa cartel.\23\ The Asian suppliers 
sell to precursors to large Mexican companies and primarily imported 
through the Lazaro Cardenas and Manzanillo ports.
---------------------------------------------------------------------------
    \23\ Asmann, Parker. ``Mexico's Sinaloa Cartel, CJNG Share Fentanyl 
Chemical Suppliers.'' InSight Crime, 16 November 2022. https://
insightcrime.org/news/mexico-sinaloa-cartel-cjng-chemical-suppliers-
Fentanyl/.
---------------------------------------------------------------------------
    The link between expanded Fentanyl production and supply of 
precursor chemicals makes controlling ports, especially vital ports 
such as Lazaro Cardenas and Manzanillo, critical for cartel economic 
supremacy. Whoever controls the ports has a stranglehold on the 
production of the new synthetic production line, and related illicit 
markets.
    The Evolution of the MS-13 and PCC Gangs into Transnational 
Criminal Organizations: Since their emergence in the criminal landscape 
as prison-based gangs in the mid-1990's both the MS-13 (Mara 
Salvatrucha) in Central America and the PCC (Primeiro Comando da 
Capital) in Brazil have been identified primarily as street thugs known 
for their ruthless violence, flashy tattoos, neighborhood extortion 
rings, and cultural insularity. While that typology was true for many 
years, both groups have now grown into transnational criminal threats, 
making the past nomenclature both obsolete and inaccurate.
    As I have argued in recent academic publications and policy 
discussions that this coalescing of transnational criminal groups that 
have moved beyond gangs to Community Embedded Transnational Armed 
Groups (CETAGs) in informal and imperfect alliances, pose enormous and 
little-understood challenges to U.S. strategic interests and the U.S. 
ability to effectively respond to broadening hemispheric instability. 
Rooted in their communities, this type of criminal group is likely to 
expand across the hemisphere.
    The MS-13, primarily operating in the Northern Triangle of Central 
America (El Salvador, Honduras, Guatemala) and the PCC, based in Sao 
Paulo (and active in most Brazilian States), are now both tier one 
criminal/political/military threats to hemispheric stability.\24\ The 
groups--no longer gangs but transnational criminal structures--are 
becoming more deeply enmeshed in the global drug trade, the body 
politic, and armed conflicts in the hemisphere. Both structures are 
rapidly amassing formal political power and seek new alliances with 
each other and other state and non-state armed actors to achieve their 
goals of becoming major criminal enterprises embedded in the state. In 
addition, both groups share important characteristics. These include:
---------------------------------------------------------------------------
    \24\ A tier one, or existential threat is considered to be among 
the most serious of all threats to national security, and has been 
defined as a threat that would ``deprive the United States of its 
sovereignty under the Constitution, would threaten the territorial 
integrity of the United States or the safety within U.S. borders of 
large numbers of Americans, or would pose a manifest challenge to U.S. 
core interests abroad in a way that would compel an undesired and 
unwelcome change in our freely chosen ways of life at home.'' See Louis 
Jacobson, ``Is ISIS an existential threat to the United States,'' 
PolitiFact, November 16, 2015.
---------------------------------------------------------------------------
   A hierarchical structure that is both rigid and allows for 
        local autonomy. At the highest levels, the hierarchies are 
        pyramid-shaped. Leaders achieve coordination through bodies 
        known as sintonias (PCC) and ranflas (MS-13), but local groups 
        have significant freedom in implementing the strategic 
        decisions the leadership makes;
   Members aspire to visible trappings of wealth and economic 
        success (weapons, cars, luxury houses, beautiful women, 
        jewelry);
   An increasing reliance on local, retail drug sales (narco 
        menudeo) to create local demand and provide income that allows 
        them to diversify their criminal portfolios and move away from 
        deeply unpopular revenue streams such as extortion in the 
        neighborhoods they control. The retail sales include cocaine, 
        crack cocaine, chemical-laced marijuana called krispy and 
        generate the bulk of revenues for both groups; prostitution; 
        human smuggling and other high-end illicit activities;
   A reliance on territorial control in heavily populated areas 
        such as national and regional capitals, as well as key drug 
        trafficking routes, to gain political and economic leverage and 
        vertically integrate their trafficking structures;
    In addition, both groups have reached some understanding with the 
Maduro regime in Venezuela and allied criminal structures operating in 
Venezuelan territory to acquire cocaine and weapons, and both rely on 
territorial control as their primary claim to legitimacy.
    These groups have replaced the state as the arbiter of power across 
most of the areas where they operate; they have more legitimacy in many 
ways than government institutions.
    The MS-13 remains largely confined to northern Central America and 
the United States, with a growing presence in Mexico. The MS-13 poses 
an existential threat to the governments of El Salvador and Honduras, 
both small countries whose primary strategic importance derives from 
their proximity to the United States. The group is expanding 
territorial control, infiltrating the police and negotiating pacts with 
governments that have increased the group's engagement in cocaine 
trafficking, production, and retail. While moving aggressively to take 
over cocaine trafficking routes in the region, the MS-13 is far less 
involved in the transnational drug trade than the PCC. However, most of 
the MS-13 activities directly impact the United States, making it a 
more direct challenge.
    The MS-13--initially formed in prisons in Los Angeles, California 
in the 1980's before many were deported back to post-conflict Central 
America in mid-1990's \25\--has long been recognized as a significant 
strategic challenge for the United States, in part because of its U.S. 
roots and on-going proximity and engagement across the United States. 
In 2012 the group was declared ``significant transnational criminal 
organization'' by the U.S. Treasury Department.
---------------------------------------------------------------------------
    \25\ In the mid-1990's, as the civil wars in Central America ended, 
the Clinton administration began deporting thousands of gang members as 
they completed their prison terms in the United States, primarily 
California, flooding the Northern Triangle with thousands of violent 
felons the reconfigured back into the mirror images of the gangs they 
had formed in the United States. For a detailed look at the policies 
and history of the gang deportations and enormous difficulties this 
policy has caused in Central America, see Ana Arana, ``How Street Gangs 
Took Central America,'' Foreign Affairs 84, no. 3 (May/June 2005): 98-
110.
---------------------------------------------------------------------------
    While the PCC, unlike the MS-13, does not have operational U.S. 
branches and does not operate near a U.S. border, this CETAG has a 
demonstrated capacity to disrupt and destabilize multiple countries in 
the hemisphere--most notably Paraguay and Bolivia--as well as the 
operational capacity to deliver cocaine and other illicit products to 
Brazil, Africa, and Europe. This broad reach, now extending into 
Colombia, Peru, and Venezuela, in turn, drives massive corruption and 
is spurring the groundwork for State collapse in multiple countries. 
The cumulative impact poses a significant strategic threat to the 
United States and its hemispheric allies.
    The Emergence of New Extra-Regional Criminal Structures: For most 
of the history of large-scale cocaine production and shipments in Latin 
America, the primary operational groups were Colombian or Mexican, with 
Caribbean groups and Central American structures playing a lesser role. 
With the diversification of both markets and products, the face of 
transnational organized crime in Latin America is growing much more 
diverse.
    Now, operating alongside--and sometimes in competition with--the 
fragmenting and realigning regional structures, there is a growing 
presence of Eastern European, Chinese, Turkish, Italian, and Balkan 
syndicates vying for space.
    There are many other indicators of growing extra-regional actors in 
the region. Albanian, Kosovar, and Greek criminal groups are competing 
alongside Mexican cartels for power in Ecuador.\26\ An Albanian 
national, reportedly an important link between South American drug 
trafficking networks and Balkan criminal networks, was shot to death in 
a restaurant in Guayaquil in late January 2022.\27\
---------------------------------------------------------------------------
    \26\ https://www.wsj.com/articles/drug-trail-from-europe-to-
ecuador-inside-the-hunt-for-elusive-narco-suspect-dritan-rexhepi-
11637756980.
    \27\ Mistler-Ferguson, Scott. ``Albanian drug traffickers jockey 
for position in Ecuador.'' InSight Crime, 28 February 2022. https://
insightcrime.org/news/albanian-drug-traffickers-jockey-for-position-in-
ecuador/.
---------------------------------------------------------------------------
    The Ecuadoran media has confirmed at least 6 murders of Albanians 
since 2019. Turkish organized crime has been developing inroads into 
Venezuela since at least 2020 \28\ and in November 2022, Panama's role 
as a central logistics hub for extra-regional criminal organizations 
came to light. Authorities arrested 49 people in Dubai, Spain, France, 
Belgium, and the Netherlands, all with alleged ties to the so-called 
`Super Cartel'. Defendants were allegedly coordinating a massive drug 
trafficking operation out of Panama with support from leading cartels 
in Ireland, Italy, Bosnia, the Netherlands, and Morocco.\29\ According 
to Panama's attorney general, Panamanian nationals had been helping the 
Super Cartel move drugs and maintain communications around the world.
---------------------------------------------------------------------------
    \28\ ``Turkish organized crime boss: to evade DEA and ship cocaine 
to middle east, Erkan Yildirim, son of former Prime Minister and 
Parliament Speaker Binali Yildirim, close friend of Interior Minister 
Suleyman Soylu, recently established `New Headquarters' in Venezuela.'' 
Memri, 26 May 2021. https://www.memri.org/reports/turkish-organized-
crime-boss-evade-dea-and-ship-cocaine-middle-east-erkan-yildirim-son.
    \29\ Ballestin, Raquel. ``Panama becomes logistics hub for drug 
trafficking `Super Cartel'. InSight Crime, 9 December 2022. https://
insightcrime.org/news/panama-logistics-hub-drug-trafficking-super-
cartel/.
---------------------------------------------------------------------------
    Italian organized crime, in particular groups with ties to the 
`Ndrangheta, are also active in Argentina and Chile, with ties in 
Central America along drug trafficking routes to Europe.\30\ Cocaine 
seizures in Portugal in August 2022 also indicate comprehensive 
collaboration between prominent Brazilian criminal groups, in 
particular the PCC, and West African groups operating out of Angola and 
Guinea Bissau.\31\ Guinea Bissau has long been identified as a narco-
state, with drug kingpins able to live freely and openly outside the 
capital with no threat from law enforcement.\32\
---------------------------------------------------------------------------
    \30\ Alvarado, Isaias. ``Este pais de America es el nuevo `paraiso' 
de carteles y su fama de tranquilo se esta diluyendo.'' Univision, 25 
July 2021. https://www.univision.com/noticias/narcotrafico/este-pais-
es-el-nue
    \31\ Ford, Alessandro. ``Portugal fighting back against rising tide 
of cocaine.'' InSight Crime, August 2022. https://insightcrime.org/
news/portugal-fighting-back-against-rising-tide-cocaine/
    \32\ Dalby, Chris. ``Record cocaine hauls confirm Guinea-Bissau's 
`narco-state' reputation.'' InSight Crime, 25 September 2019. https://
insightcrime.org/news/analysis/guinea-bissau-colombia-cocaine-hauls/
---------------------------------------------------------------------------
                              conclusions
    Latin America is facing a ``host of cross-cutting, transboundary 
challenges'' that directly threaten not only U.S. strategic interests, 
but the key pillars that have sustained long-standing partnerships 
across the region to jointly face myriad common issues. As illicit 
networks expand their territorial control, ecosystems of corruption, 
political power, and product lines, they are aided and abetted by 
extra-regional actors such as China, Russia, and Iran who undercut the 
rule of law and directly challenge U.S. goals and initiatives in the 
Western Hemisphere.
    As traditional transnational organized criminal groups have formed 
new alliances with non-state extra-regional networks and merged with 
regional criminalized state actors, the United States is very likely 
facing an unprecedented loss of key allies and U.S. influence in the 
hemisphere. The terrain that is lost will likely prove very difficult 
to regain as states continue to deal with the fallout of the COVID-19 
pandemic and the on-going Venezuelan humanitarian crisis.
    Russia and China view Latin America as a key theater of great power 
competition, and act accordingly. The United States must forgo the 
complacency inherent in having been most of the region's international 
partner of choice for a century, and seek creative new engagements with 
its partners. Higher-quality, more comprehensive, and more sustained 
engagement with the right communities will go far to strengthen 
democracy, civil society, and regional stability.
    The sheer number of violent, criminal networks now controlling 
territory and wielding political power--some of them protected by 
member states of the BJCE--mean the desired end-state of stability will 
prove elusive for many communities. The same forces wield massive 
corruption networks to undermine rule of law, hollow out state 
institutions, weaken civil society, and drive violence and irregular 
migration.
    The United States has an underutilized toolbox that can be deployed 
to reverse these worrisome trends, but new policy initiatives, backed 
by resources, must be deployed quickly or the costs of these trends 
will be even higher.
    In order to counter the current trends in Latin America, the United 
States must take short-term actions that support a long-term strategy 
of re-engagement and partnership. These include:
   Getting U.S. Ambassadors confirmed and in place in key 
        countries across the region would be an important and 
        achievable first step. The lack of Ambassadors feeds the 
        perception that the United States does not prioritize the 
        region and provides less robust engagement at senior policy 
        levels.
   Redefine who the United States is willing to strategically 
        partner with away from the traditional right vs. left paradigm 
        to one that prioritizes democratic governance, rule of law, and 
        anti-corruption efforts. This would open the doors to 
        meaningfully engage with the new governments of Chile and 
        Honduras more robustly while making countries like Argentina 
        and Brazil less central for policy initiatives.
   Fully embrace the Biden administration's twin policies of 
        combatting transnational organized crime and corruption as 
        priorities. This includes funding and implementing unfulfilled 
        and unfunded initiatives to create task forces to work with 
        regional partners on these issues and empower civil society to 
        participate in these struggles.
   As part of the whole-of-Government agenda, refine and 
        prioritize combatting illicit networks, particularly those 
        linked to state actors such as Venezuela and Nicaragua. This 
        not only combats corruption but weakens the criminalized states 
        and their non-state actors.
    Use the Summit of the Americas event in June 2022 to reset U.S. 
        engagement in the region with a clear articulation of 
        priorities, while highlighting the advantages partnership with 
        the United States offers as opposed to the consequences of 
        allying with Russia, China, or Iran.

    Mr. Pfluger. Thank you, Mr. Farah. I now recognize Mr. 
Urben for your opening statement.

STATEMENT OF CHRISTOPHER URBEN, FORMER ASSISTANT SPECIAL AGENT 
 IN CHARGE OF U.S. DRUG ENFORCEMENT AGENCY, DEA, AND MANAGING 
                  DIRECTOR, NARDELLO & COMPANY

    Mr. Urben. Chairman Pfluger, Ranking Member Magaziner, and 
distinguished Members of this subcommittee, thank you for the 
opportunity to address you today on this important issue. I 
spent 24 years working for the DEA where I worked as an agent 
as well as a supervisor to investigate and disrupt and 
dismantle significant transnational organized crime within the 
United States and around the world.
    During the last several years of my career with DEA, I 
worked in DEA's Special Operations Division, SOD, with an 
interagency group to target what we identified as a growing 
threat. The collaboration between Chinese and Mexican TCOs in 
the trafficking of Fentanyl and in the money-laundering 
activities associated with it. It is a development that I and 
others at SOD dedicated substantial efforts to understanding 
and addressing. This may be relevant to the subcommittee's 
consideration as it seeks to address threats to the homeland 
posed by these TCOs.
    To understand how this collaboration works, it's important 
to understand how it developed in the past. Mexican cartels, 
including Sinaloa and CJNG have long established control over 
territory in Mexico and access to supply and distribution 
chains extending into the United States. This dates from their 
trafficking time in cocaine and heroin and other drugs that are 
produced south of the U.S. border and moved into the United 
States for sale.
    The cartels used that control and access to move into the 
Fentanyl marketplace as the source of supply for these deadly 
drugs. They became available primarily via precursor chemicals 
supplied by Chinese TCOs. This development presents an 
unprecedented challenge by itself.
    But there is another part of this growing relationship that 
helps fuel the success of Fentanyl production and 
distribution--the growing role of Chinese organized crime that 
they have taken in the laundering drug proceeds. The Mexican 
cartels, they laundered these proceeds for the Mexican cartels 
in a way that's safer, quicker, and more profitable for the 
cartel.
    As reflected by the graphic in exhibit 1 to my testimony 
that you have, here is how it works. Every day in the United 
States, Chinese money brokers pick up narcotics proceeds from 
the sales of Fentanyl and other drugs, such as cocaine and 
heroin in the form of bulk U.S. cash. A distribution gang, 
let's say, in New York, or any other city in the United States 
that owes payment to the Mexican cartel delivers bulk cash to 
the Chinese broker in the United States. That Chinese broker 
then sells the U.S. dollars to Chinese customers who want to 
spend their money in the United States, acquiring real estate, 
paying for college tuition, gambling, or other investments. 
These Chinese customers pay in China for the cash they receive 
in the United States. It doesn't cross borders. Proceeds in 
China are used to buy goods for exports in Mexico or South 
America where the goods are sold by Chinese brokers located in 
Mexico to recoup their funds.
    Some of the proceeds are also used to pay for precursor 
chemicals that enable to cartels to produce more synthetic 
opioids then bound for the United States. These Chinese brokers 
accomplish all this with a trusted electronic encryption 
communications network that allows this to happen instantly. It 
is called WeChat.
    While the threat posed by the collaboration between Chinese 
and Mexican TCOs is real and growing, more can be done to 
combat it. More investigative resources such as translators, 
data scientists, and experienced targeting analysts will enable 
law enforcement to have the tools needed to detect and 
investigate these networks, where they operate.
    Both the Trump and Biden administrations have authorized 
the imposition of sanctions or participants in the global trade 
of Fentanyl and synthetic opioids. Recent sanctions on Chinese 
brokers of precursor chemicals and Mexican suppliers of 
synthetic opioids are an encouraging development. But further 
investments in the sanctions program, along the lines of the 
effective sanctions program targeting those involved in the 
Russian aggression against the Ukraine would help address this 
threat.
    In the private sector where I now work on Nardello & Co, 
the global investigative firm, I am also seeing greater 
awareness by the business community that needs to understand 
this emerging threat and develop the tools to address it. More 
investments in training and detection will facilitate private 
sector's organization's compliance with anti-money laundering 
laws and help protect the integrity of our financial system as 
well as reduce the flow of dangerous synthetic opioids in the 
United States.
    Congress can also play a vital role by providing resources, 
incentives, and authority for Government and the private sector 
to work together to combat this threat. Thank you for the 
opportunity to speak with you today about this important issue.
    [The prepared statement of Mr. Urben follows:]
                              June 7, 2023
                Prepared Statement of Christopher Urben
    Chairman Pfluger, Ranking Member Magaziner, and distinguished 
Members of this subcommittee, thank you for the opportunity to address 
you today on this important issue.
    I spent 24 years working for the United States Drug Enforcement 
Administration (``DEA''), where I worked as an agent and supervisor to 
investigate and disrupt or dismantle significant transnational criminal 
organizations (``TCOs'') within the United States and around the world.
    During the last several years of my career with DEA, I worked in 
DEA's Special Operations Division (``SOD'') with an interagency group 
to target what we identified as a growing threat: the growing 
collaboration between Chinese and Mexican TCOs in trafficking of 
Fentanyl and in money-laundering activities. It's a development that I 
and others at SOD dedicated substantial efforts to understanding and 
addressing, and that may be relevant to this subcommittee's 
consideration as it seeks ways to address threats to the homeland posed 
by TCOs.
    To understand how this collaboration works, it's important to 
understand how it developed. Mexican cartels, including the Sinaloa and 
Cartel Jalisco New Generation (``CJNG''), have long-established control 
over territory in Mexico and access to supply and distribution chains 
extending into the United States. This dates from their time 
trafficking cocaine, heroin, and other drugs that are produced south of 
the U.S. border into the United States for sale.
    The cartels used that control and access to move into the Fentanyl/
synthetic opioid marketplace as the source of supply for these deadly 
drugs became available, primarily via precursor chemicals supplied by 
Chinese TCOs. Prior to approximately 2019, the cartels and drug dealers 
within the United States were receiving Fentanyl in shipments directly 
from chemical brokers in China and selling it in the United States. 
Then, the Chinese government started cracking down on the production of 
pure Fentanyl in mainland China and its shipment and sale into the 
United States. Now, Mexican cartels increasingly are receiving what are 
known as precursor chemicals via chemical brokers in China and using 
them to produce Fentanyl themselves in territory they control in Mexico 
for distribution into the United States.
    The potency of the synthetic opioids created in Mexican cartel-run 
drug labs has made them particularly dangerous--as the DEA has reported 
previously, 1 kilogram of pure Fentanyl has enough opioid to kill 
500,000 people. Because of the Mexican cartels' powerful existing 
distribution networks, it's relatively easy for them to smuggle 
Fentanyl into the United States. Where once the cartels might have had 
to smuggle tractor trailers full of cocaine, heroin, or other drugs 
into the United States to supply the market, now just a few kilos 
smuggled via passenger cars or individual travelers, or via the mail, 
can supply equivalent potency to local drug trafficking organizations 
(``DTOs'') here in the United States, which mix the Fentanyl with other 
chemicals for consumption or process them into counterfeit pills for 
sale on the street or over the internet.
    This development presents an unprecedented challenge by itself. But 
there's another part of this growing relationship that helps fuel the 
success of synthetic opioid production and distribution: the growing 
role that Chinese TCOs have taken in laundering drug proceeds for the 
Mexican cartels in a way that's safer, quicker, and more profitable for 
the cartels.
    The most predominant laundering scheme that had been employed by 
the Mexican cartels, known as the Black-Market Peso Exchange 
(``BMPE''), was complex and dangerous, resulting in high transaction 
costs of 7-10 percent of the total amount laundered and lengthy delays 
of a week or more. Moreover, because of the BMPE connection to the 
cartels, laundering involved a constant risk of violence, theft, or law 
enforcement intervention.
    The method used by the Chinese TCOs avoids the costs, delays, and 
risks of the BMPE by employing brokers in three countries--China, the 
United States, and Mexico--and by addressing needs of other 
participants in the global economy that are in China or that do 
business with China.
    As reflected by the graphic in Exhibit 1 to my testimony, here's 
how it works:
    Every day in the United States, Chinese money brokers pick up 
narcotics proceeds--from sales of Fentanyl and other synthetic opioids 
as well as heroin, cocaine, and other drugs--in the form of bulk U.S. 
cash. A drug distribution gang in New York or another U.S. city that 
owes payment to the Mexican cartel delivers the bulk cash to the 
Chinese broker. The Chinese broker then sells the U.S. dollars to 
Chinese customers who want to spend money in the United States, 
acquiring real estate, paying college tuition, gambling, or making 
other investments. These Chinese customers pay in China for the cash 
they receive in the United States. The proceeds in China are used to 
buy goods for export to Mexico or South America, where the goods are 
sold by the Chinese brokers in Mexico to recoup their funds. Some of 
the proceeds also are used to pay for the precursor chemicals that 
enable the cartels to produce more synthetic opioids. The Chinese 
brokers accomplish all of this with trusted electronic encrypted 
communications that allow all of this to happen instantly.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    What makes this so effective and hard to detect?
   First, it minimizes movement of funds. Dollars don't leave 
        the United States, pesos don't leave Mexico, and RMB does not 
        leave China.
   Second, it takes advantage of the huge and increasing volume 
        of trade with China, and the existence of capital controls 
        within China, by ensuring a constant stream of customers and 
        making it harder to separate legitimate from illegitimate 
        transactions.
   Third, it uses technology to its advantage, advertising the 
        sale of dollars in internet chat rooms and communicating 
        primarily via WeChat, an encrypted network that is resistant to 
        surveillance by U.S. law enforcement and that facilitates speed 
        and trust within the Chinese organized crime network.
    While the threat posed by collaboration between Chinese and Mexican 
TCOs is real and growing, more can be done to combat it. More 
investigative resources such as translators, data scientists, and 
experienced targeting analysts will enable law enforcement to have the 
tools needed to detect and investigate these networks where they 
operate. Both the Trump and Biden administrations have authorized 
imposition of sanctions for participants in the global trade of 
Fentanyl and synthetic opioids. Recent sanctions on chemical brokers in 
China for precursor chemicals and Mexican suppliers of synthetic 
opioids are an encouraging development, but further investments in the 
sanctions program along the lines of the effective sanctions program 
targeting those involved in Russian aggression against the Ukraine, 
would help address the threat. Additional investigative tools and rules 
addressing this money-laundering scheme also can play an important 
role.
    In the private sector, where I now work for Nardello & Co., the 
global investigative firm, I am also seeing greater awareness by the 
business community that it needs to understand this emerging threat and 
develop tools to address it. More investments in training and detection 
will facilitate private-sector organizations' compliance with anti-
money laundering laws, help protect the integrity of the financial 
system, and help reduce the flow of dangerous synthetic opioids into 
the United States.
    Congress can play a vital role by providing resources, incentives, 
and authority for the Government and the private sector to work 
together to combat this threat.
    Thank you for the opportunity to speak with you about this 
important issue.

    Mr. Pfluger. Thank you, Mr. Urben. I now recognize Ms. 
Ford, for your openingstatement of 5 minutes.

  STATEMENT OF MELISSA FORD MALDONADO, POLICY DIRECTOR, TEXAS 
 PUBLIC POLICY FOUNDATION, SECURE AND SOVEREIGN TEXAS CAMPAIGN

    Ms. Ford Maldonado. Chairman Pfluger, Ranking Member 
Magaziner, and Members of the subcommittee, thank you for the 
opportunity to testify today. My name is Melissa Ford 
Maldonado, and I'm a policy director at the Texas Public Policy 
Foundation; a nonprofit and nonpartisan research institute. 
We're based in Austin, Texas, but I'm originally from Bolivia.
    My work focuses on the relationship between the United 
States and Mexico. I have done extensive research on Mexican 
drug cartels and why they pose a huge threat to the United 
States and Texas.
    What I've learned is that cartels have complete control 
over the Southern side of the border. The border that the 
United Nations recently labeled the deadliest land crossing in 
the world. There are record numbers of people dying while 
attempting to cross in the worst conditions possible, and this 
is all being orchestrated by cartels.
    People who have lived and worked on the border for decades 
are saying that they have never seen tragedies of this 
magnitude. Officials in Eagle Pass evening are having to keep a 
refrigerated truck to hold the bodies of migrants that are 
drowning in the Rio Grande. Across the river in Piedras Negras, 
families often report seeing bodies floating under the bridge.
    Less than a year ago, a trailer with over 60 migrants 
locked inside was abandoned by a smuggler near San Antonio, and 
53 of them died after being left in the heat.
    To cartels, these human beings are just commodities to be 
exploited and discarded. That's what cartels do; they prey on 
the vulnerable. Workers that aid migrants at the border 
estimate that most females encounter some sort of sexual 
assault on their way to the United States. They're also telling 
us that there's been a significant rise of sex trafficking 
cases involving children.
    The cartels won't stop. They're richer, and they are bolder 
than ever, and they will continue to take advantage of our weak 
border to extend their operations into the United States.
    The effect on Texans is just as heartbreaking. We've spoken 
to ranchers and homeowners who no longer feel safe in their 
homes, who can't walk around their property unarmed, or let 
their children play outside because they have encountered armed 
smugglers on their land, breaking in, stealing, destroying 
their property, and many have had to move away because of this. 
Texas communities are also facing a growing number of high-
speed car chases.
    In March, in Ozona, a 7-year-old girl named Emilia and her 
grandma were killed, along with 2 of the 11 migrants due to a 
high-speed car chase that ended in a wreck.
    We are also seeing an increase in American teenagers being 
recruited on social media by cartels to transport migrants. We 
saw it with a 15-year-old in Mission, and a 12-year-old and 15-
year-old in San Antonio, and then with a 15-year-old in El Paso 
as well. DPS there in El Paso when we were there a few weeks 
ago told us that is a daily occurrence for them, and sometimes 
they see multiple of these high-speed car chases in just 1 day.
    Another problem we are having is these officers are 
increasingly assaulted; 248 border agents have been assaulted 
just this fiscal year. This is all having a huge impact in the 
quality of life of communities in Texas, but it's not just a 
Texas problem. Our entire country is feeling the effects of the 
deadliest drug crisis in history. Texas alone has seized 418 
million lethal doses of Fentanyl since 2021. To put that into 
perspective, that's enough to kill every man, woman, and child 
in America.
    One of the most disturbing parts of this is that the 
cartels are processing deadly amounts of Fentanyl into pills 
made to look like any other prescription pill, but they're 
laced with Fentanyl.
    One mother, Rebecca, shared in testimony how both her sons, 
Kyler and Caleb, 18 and 20, were killed by pain pills that were 
laced with Fentanyl.
    Chairman Pfluger, Ranking Member Magaziner, and Members of 
the subcommittee, I believe that cartels are the largest threat 
to the United States right now. Texas is working really hard to 
fight them, but we need help. This crisis is happening because 
the Federal Government has failed to do their job to secure the 
border and protect the people of Texas and the United States. I 
ask you to be realistic about what we are up against.
    We must face the facts that the border is already 
militarized from the Southern side. Cartels control 30 to 40 
percent of Mexico's territory right now. There is extensive 
evidence of collusion between the state and the cartels. This 
is a new scenario that demands new solutions; new solutions 
from policy makers like you who need to understand that the 
Mexican state as a meaningful partner against cartels is a 
thing of the past. Therefore, I think we need to use every 
option on the table to fight back against them. Thank you for 
your time. I am grateful for your leadership and ready to 
answer any questions.
    [The prepared statement of Ms. Ford Maldonado follows:]
              Prepared Statement of Melissa Ford Maldonado
                        Wednesday, June 7, 2023
    Chairman Pfluger, Ranking Member Magaziner, and Members of the 
subcommittee, thank you for the opportunity to testify today. My name 
is Melissa Ford Maldonado, and I am the policy director for Secure & 
Sovereign Texas, an initiative of the Texas Public Policy Foundation, a 
nonprofit and nonpartisan research institution based in Austin, Texas.
    Much of my work focuses on the relationship between the United 
States and Mexico, and the center of that relationship, Texas and 
Mexico. Texas and Mexico not only share a heritage and culture, but 
also 1,200 miles of common border and a massively important trade 
alliance. However, this close relationship and proximity has left a 
door open for illegal activity from Mexico to harm the United States, 
especially Texas.
    The Secure & Sovereign Texas campaign has done extensive research 
on Mexican transnational criminal organizations, specifically drug 
cartels, and why they pose a grave and imminent threat to the safety 
and well-being of families and communities in Texas and in the United 
States. I want to share with you what we've seen and learned.
    Today, the flow of humans being smuggled, opioids, and poisonous 
illegal narcotics are driven by Mexican drug cartels. These drug 
cartels are ruthless, strategic, highly organized money-making entities 
that continue to evolve in strength and sophistication. They are 
running a billion-dollar slave trade, and are richer, more armed, and 
bolder than ever. This is leading to a lot of suffering at the border 
and beyond the border as well. Texas citizens and communities are being 
devastated by crime, drugs, a humanitarian crisis, and an unprecedented 
level of violence.
    Smugglers are profiting from pushing people across our border, and 
it has been heartbreaking to see literally millions of migrants being 
smuggled--and often abused--across the Texas-Mexico border in the worst 
conditions possible. Mexican drug cartels have complete control over 
the southern side of the border. There are record numbers of migrants 
dying at the U.S.-Mexico border, and a U.N. report recently labeled it 
the most dangerous and deadliest land crossing in the world.
    Maverick County Sheriff Tom Schmerber, who grew up in the area, 
called the border a graveyard, saying he's been working on the border 
for almost four decades but has never seen tragedies of this magnitude. 
Local officials in Eagle Pass, Texas, are having to keep a refrigerated 
truck to hold the bodies of migrants who drown in the currents of the 
Rio Grande while trying to cross the border into the United States. 
Across the river, families having picnics or walking along the 
waterfront promenade of Piedras Negras, Mexico, say they sometimes see 
bodies floating by or bobbing among the reeds under a bridge. ``We had 
times when we received four or five bodies a week,'' said Hugo 
Gonzalez, owner of Funerarias Gonzalez in Piedras Negras. ``At one 
point, there were a lot of corpses and there was nowhere to put them. 
We just didn't have enough refrigerators at the funeral home.''
    In the 2022 fiscal year that ended in September, the bodies of more 
than 890 migrants, a record number, were recovered by U.S. authorities 
along the border, a 58 percent increase over 2021, and far higher than 
the 247 to 329 deceased found each year between 2014 and 2020. 
Unfortunately, the number of actual deaths is likely higher, as other 
local agencies often recover bodies without involvement from U.S. 
Customs and Border Patrol.
    There are countless heartbreaking stories of cartel-orchestrated 
human smuggling in Texas. Less than a year ago, a trailer with more 
than 60 migrants locked inside was abandoned by a smuggler near San 
Antonio. Fifty-three of them died after being left in the heat. This is 
terribly sad. The men, women, and children who died in that hot trailer 
were just looking for a better life, but cartels saw them as disposable 
commodities to be exploited and discarded. That's why we must work hard 
to target those that are using them and profiting from their illegal 
crossings the most.
    Regrettably, it is a grim reality that cartels exploit the most 
vulnerable, specifically targeting women and young girls. Rape, 
assault, and sexual slavery are everyday life for the women and 
children who attempt to cross. In our investigations, we have conducted 
interviews with Border Patrol agents and engaged with individuals 
involved in supporting and safeguarding female migrants. They estimate 
that an overwhelming majority of female migrants face some form of 
sexual assault during their journey toward the United States. 
Furthermore, they have alerted us to a concerning surge in instances of 
child sex trafficking.
    The impact on the Texas side of the border is equally 
disheartening. Exploiting the porosity of our border, cartel operatives 
have expanded their operations into the United States, inflicting 
turmoil upon our border communities. Texan ranchers and homeowners 
often find themselves confronted with armed smugglers trespassing on 
their land, engaging in theft, destruction, arson, and property 
invasion.
    Individuals residing in border towns have shared with us their 
profound sense of insecurity within their own homes. Many now find 
themselves unable to roam their properties unarmed, and their children 
are no longer allowed to play outside. One of these women is Dolores 
Chacon, whom we met about 3 weeks ago in El Paso. She lives in a small 
home on the El Paso-Mexico border. In 2008, a fence was erected right 
behind her home, which she now calls her freedom wall. Before that, she 
says her property was constantly getting broken into and vandalized, 
which left her constantly terrified in her own home. Many of her 
neighbors moved away because of this.
    Many Texas communities are also seeing an increasing number of 
high-speed car chases in usually quiet little towns, placing residents 
at risk. In March, a human smuggler in Ozona, Texas, killed Emilia, a 
7-year-old girl and her 71-year-old grandmother while trying to escape 
police. The smuggler also killed 2 of the 11 illegal immigrants he was 
transporting.
    Another disturbing trend we are witnessing involves the recruitment 
of American teenagers by cartels through popular social media platforms 
such as Snapchat, Facebook, Instagram, TikTok, and others. These 
platforms serve as avenues for enticing young individuals with the 
promise of quick cash in exchange for transporting migrants into the 
United States.
    In February, a 15-year-old led police on a high-speed chase in 
Mission, Texas, that ended with 7 migrants bailing out of the vehicle 
on a dirt road. That same month, a 12-year-old and 15-year-old 
transporting illegal immigrants near San Antonio, Texas, crashed their 
vehicle while trying to outrun cops in a high-speed chase. Last August, 
a 15-year-old girl transporting migrants in El Paso led police on a 
high-speed chase which ended in a multi-vehicle wreck.
    The smuggling of migrants is often used as a diversion to overwhelm 
Border Patrol agents, who are increasingly assaulted doing their job. 
Since October of last year, 248 Border Patrol agents have been 
assaulted at the Southern Border.
    All these occurrences have a huge impact on the local economy and 
quality of life of communities in Texas, but it is not just a local 
issue anymore--this is affecting the entire country.
    Mexican drug cartels are responsible for the smuggling not only of 
humans but of record amounts of illegal drugs into the United States, 
the former being used to help facilitate the latter.
    Whether transported by the criminals themselves or smuggled by the 
migrants on the orders of their coyotes, drugs are coming across the 
border in record amounts, and people are dying in record numbers in 
what has become the deadliest drug crisis in history.
   Texas law enforcement has seized 418 million lethal doses of 
        Fentanyl since the beginning of Operation Lone Star in 2021. 
        That is enough to kill every man, woman, and child in America.
   Over 107,000 Americans died from drug overdoses in the 12-
        month period ending in January 2022, and we've had more than 
        1,000,000 American drug overdose deaths since 1999.
   Fentanyl is involved in more deaths of Americans under 50 
        than any cause of death, including heart disease, cancer, 
        homicide, suicide, and accidents.
   More Americans are dying each year from drugs than were 
        killed in the entire Vietnam War--and the death toll is rising 
        every day.
    One of the most disturbing parts of this is that Mexican drug 
cartels often process deadly amounts of Fentanyl into pills made to 
look like any other prescription medicine. One mother, Rebecca 
Kiessling, shared her story when she testified before the Homeland 
Security Subcommittee on Border Security earlier this year, after both 
her sons, Caleb, 20, and Kyler, 18, were killed by prescription pain 
pills that ended up being laced with Fentanyl.
    Chairman Pfluger, Ranking Member Magaziner, and Members of the 
subcommittee, I believe that Mexican criminal organizations are the 
largest criminal threat to the United States right now. Texas is 
working hard to fight them with every means possible, but we need help, 
and it is past time to take decisive action to protect American 
communities.
    I'd like to conclude by making two points:
    1. The Federal Government has failed to fulfill its duty to secure 
        the border and protect the people of Texas and the United 
        States.
    2. The Mexican state is no longer a partner to the United States. 
        There is irrefutable evidence of extensive collusion between 
        the Mexican state and criminal cartels at all levels of 
        government. Cartels effectively control 30 to 40 percent of 
        Mexico's territory and together, they are conducting a deadly 
        export trade, trafficking in Fentanyl, corruption, and worst of 
        all, literally millions of fellow human beings. This collusion 
        makes it impossible for the United States and Mexico to have a 
        reliable border security partnership.
    It is crucial that we approach the border situation with a 
realistic perspective and respond accordingly. The border is already 
militarized from the southern side, and the cooperation with the 
Mexican state ceased a long time ago because the Mexican government 
would much rather cooperate with cartels than with us. In light of 
these circumstances, we must implement robust measures and utilize the 
full strength and capabilities of the United States to effectively 
address the border crisis.
    Thank you for your time. I am grateful for your leadership, and I 
am happy to answer any questions you may have.
                               Attachment
    [A copy of the document has been retained in committee files and it 
can also be accessed at the following: https://www.texaspolicy.com/wp-
content/uploads/2022/09/2022-09-RR-SST-Abrazos-no-Balazos-The-Mexican-
State-Cartel-Nexus-paper1.- pdf.]

    Mr. Pfluger. Thank you, Ms. Ford. The Chair now recognizes 
Mr. Blazakis for his opening statement of 5 minutes.

STATEMENT OF JASON BLAZAKIS, PROFESSOR, MIDDLEBURY INSTITUTE OF 
   INTERNATIONAL STUDIES, DIRECTOR, THE CENTER ON TERRORISM 
                 EXTREMISM AND COUNTERTERRORISM

    Mr. Blazakis. Good afternoon, Chairman Pfluger, Ranking 
Member Magaziner, and distinguished Members of the committee. 
Thank you for the opportunity to testify today. I request that 
my full written statement be put into the record.
    Since the beginning of the Trump administration, the U.S. 
National Security Architecture has pivoted to the challenge of 
tackling state foreign threats. While there is little question 
that Russia, China, and Iran pose significant threats to U.S. 
national security interests, we must not ignore the broad array 
of transnational actors that seek to harm the United States. 
This is why your hearing today is so important. It gives us a 
chance to examine the transnational threat landscape.
    Prior to joining the Middlebury Institute as a professor, I 
worked in the Federal Government for nearly 20 years. Of those 
years in Government service, I worked across both Republican 
and Democratic administrations. While in Government, I worked 
directly on counterterrorism, counter-narcotics, and 
intelligence issues. These experiences of working in 
counterterrorism, law enforcement, and intelligence for the 
U.S. Government really has influenced my views about which 
policy options are most suitable for countering terrorist 
groups and criminal organizations like drug cartels.
    Today, I was asked to focus my testimony on the question of 
whether or not the Mexican drug cartels should be designated as 
foreign terrorists organizations or FTOs for short. It's also 
very important to emphasize that the question of whether to 
label the Mexican cartels as FTOs has come up before. In fact, 
President Trump said that he was going to designate the 
cartels, but he did not do so.
    Here are some of the reasons why I think designating the 
Mexican drug cartels as FTOs is a bad policy idea. I also like 
to note in my written testimony there are other reasons that I 
can't address in my oral.
    First, the FTO list is comprised of organizations that are 
guided by an ideological belief system. The Mexican drug 
cartels are guided by one thing: A desire to make money. They 
don't peddle drugs because they want to uproot the powers that 
be. They have no interest in governing. Simply put, unlike 
ISIS, they have no interest in creating a caliphate-like 
structure. They don't have an interest overthrowing the Mexican 
government.
    Second, if the State Department starts designating criminal 
groups as terrorists, the number of eligible targets that could 
be added to the FTO list would increase significantly. Hundreds 
of new organizations would be added to the FTO list, not just a 
Mexican cartel. Many more would be eligible for listing--
Brazilian gangs, Central American gangs, Italian mafia groups, 
the Yakuza crime syndicate, and many more. That's a recipe for 
disaster. It's a recipe for bureaucratic inertia, especially 
when you consider the amount of work that goes into every FTO 
designation.
    Each FTO designation takes hundreds, or in some cases, 
thousands of hours to complete. There is one significant 
advantage, though, to applying the FTO regime against Mexican 
cartels. Adding the Mexican cartels to the terrorist list would 
trigger the material support benefits that come with FTO 
designations. Simply put, that means more time behind bars for 
those who try to provide material support to the cartels. But 
on the other hand, there is a negative to this benefit. I can 
easily imagine scenarios where drug consumers may run afoul of 
the material support clause when they buy drugs trafficked by a 
Mexican cartel.
    I provide a few examples of such hypothetical scenarios in 
my written testimony.
    Fourth, the designation of the Mexican drug cartels would 
damage U.S.-Mexico relations. If the U.S. Government pushes the 
Mexican government on the FTO designation, it does run the risk 
that Mexico will distance itself from the United States and 
strengthen relations with countries like China and Russia. For 
these reasons and for others mentioned in my written testimony, 
adding the Mexican drug cartels to the FTO list would do very 
little to solve this immense national security challenge.
    There are better alternatives to meaningfully counter the 
cartels. First, the United States needs to look inwards. The 
Mexican drug cartels are well-armed. It has been well-
documented that the cartels are getting their guns from the 
United States. The United States should explore arms control 
options that the diminish the cartels' access to weapons.
    Second, the United States should engage in capacity 
building to build up the Mexican financial sector, not just the 
governmental sector.
    Third, the State Department should make more cartel 
individuals subject to the Narcotics Rewards Program.
    Fourth, we must treat the demand side of this problem. This 
means investing more in health and educational policies that 
can cut down America's insatiable appetite for drugs.
    Finally, we must not forget the challenge that is posed by 
groups like ISIS, al-Qaeda, the Wagner Group in Iran's threat 
network, these transnational actors throw--or pose a 
significant threat to the U.S. homeland. I look forward to your 
questions. Thank you.
    [The prepared statement of Mr. Blazakis follows:]
                  Prepared Statement of Jason Blazakis
                              introduction
    Good afternoon, Chairman Pfluger, Ranking Member Magaziner, and 
distinguished Members of the committee. Thank you for the opportunity 
to testify today. I request that this written statement be put into the 
record.
    Since the beginning of the Trump administration, the U.S. national 
security architecture has pivoted to the challenge of tackling state-
borne threats. While there is little question that Russia, China, and 
Iran pose significant threats to U.S. national security interests, we 
must not ignore the array of transnational actors who seek to harm the 
United States. This is why your hearing today is so important--it gives 
us a chance to examine the transnational threat landscape.
    Before diving into the substance, I want to share with you some of 
my past and current work experiences that qualify me to speak to the 
issues that I am going to cover in my testimony below.
    My name is Jason Blazakis and I am a professor at the Middlebury 
Institute of International Studies in Monterey, California. I am also 
the director of Middlebury's Center on Terrorism, Extremism, and 
Counterterrorism (or CTEC for short). I have served in these dual roles 
since July 2018. At the same time, I am also a senior research fellow 
at the Soufan Center, a non-profit and non-partisan think tank based in 
New York City.
    Prior to joining the Middlebury Institute, CTEC, and the Soufan 
Center, I worked in the Federal Government for nearly 20 years. Of 
those years in Government service, I worked across both Republican and 
Democratic administrations. The last 10\1/2\ years of my Government 
service was spent at the Counterterrorism (CT) Bureau at the U.S. 
Department of State.
    Additionally, I was the head of Embassy Kabul's Narcotics Affairs 
Section (NAS) for much of 2004 and worked at the State Department's 
Bureau of International Narcotics and Law Enforcement Affairs Bureau 
(INL). Finally, I spent nearly 4 years in the U.S. intelligence 
community (USIC). In the USIC, I worked at the Bureau of Intelligence 
and Research (INR). These experiences working on counterterrorism, law 
enforcement, and intelligence issues for the U.S. Government influence 
my views on which policies are most suitable for countering terrorist 
groups and criminal organizations, like drug cartels.
    At the CT Bureau between early 2008 and July 2018, I directed the 
activities of the Office of Counterterrorism Finance and Designations. 
Simply put, I, and my team, at the CT Bureau were responsible for 
evaluating and compiling the underlying evidence that ultimately 
contributed to the Secretary of State's labeling of Foreign Terrorist 
Organizations (FTOs) pursuant to the Immigration and Nationality Act. 
My office was also responsible for recommending which groups or 
individuals should be designated as Specially Designated Global 
Terrorists (SDGTs) pursuant to Executive Order (EO) 13224. Furthermore, 
my team developed the evidence required for listing state Sponsors of 
Terrorism consistent with various legal statutes. In my time at the 
Department of State I oversaw the designations of hundreds of 
individuals, organizations, and countries as terrorists. 
Simultaneously, my office was responsible for reviewing hundreds of 
Treasury Department proposed terrorist designations under EO 13224. 
Finally, I served as the CT Bureau's representative to the U.S. 
Government's review group responsible for activities related to the 
Rewards for Justice (RFJ) program, the U.S. Department of State's 
national security rewards program that was established in 1984.\1\
---------------------------------------------------------------------------
    \1\ U.S. Department of State. ``Program History and Statutory 
Authorities.'' https://rewardsforjustice.net/about/program-overview/. 
Accessed on June 1, 2023.
---------------------------------------------------------------------------
                        the mexican drug cartels
    Today, I was asked to devote a significant portion of my testimony 
to the question of whether the ``Mexican drug cartels should be 
designated as FTOs.'' In my time at the CT Bureau at the State 
Department the issue of whether to designate the ``Mexican cartels'' as 
FTOs was raised periodically. Every time the debate arose, I expressed 
my opposition to leveraging the FTO tool against the ``Mexican drug 
cartels.'' Before getting into the substance of my reasons for this I 
want to note two things. First, I was not alone in opposing these 
designations. Many others at the State Department, Department of 
Defense, intelligence community, and law enforcement community believed 
this was a bad idea. This remains the case today. It is also very 
important to emphasize that this is why the Trump administration did 
not designate any Mexican drug cartels as an FTO, despite promising to 
do so.\2\ Second, the Mexican drug cartels are not monolithic. As such, 
when someone calls for designating the drug cartels, we need to inspect 
what this precisely means. There are dozens of drug cartels based in 
Mexico. Not all of them are created equal and some, quite frankly, are 
not significant threats to U.S. national security, much less the 
homeland. Yet, while I oppose the use of terrorism tools to counter 
cartels, I want to be clear: several Mexican drug cartels are a threat 
to the homeland. For example, a recent press release by the Department 
of Justice noted, ``the Sinaloa Cartel is one of the most powerful drug 
cartels in the world and is largely responsible for the manufacturing 
and importing of Fentanyl for distribution in the United States.''\3\ 
The Sinaloa Cartel is a clear and present danger to U.S. national 
security, especially when you consider that Fentanyl is more than 50 
times more potent than heroin and is the leading cause of death for 
Americans ages 18 to 49.\4\
---------------------------------------------------------------------------
    \2\ https://www.npr.org/2019/11/27/783449704/president-trump-says-
he-will-designate-mexican-drug-cartels-as-terrorist-groups.
    \3\ https://www.justice.gov/opa/pr/justice-department-announces-
charges-against-sinaloa-cartel-s-global-
operation#:?:text=The%20Sinaloa%20Cartel%20is%20one,times%20more%20poten
t- %20than%20heroin.
    \4\ Ibid.
---------------------------------------------------------------------------
    Nevertheless, designating any of the Mexican drug cartels as FTOs 
at this time is a bad idea.
    Here's why: First, the FTO list is comprised of organizations that 
are guided by an ideological belief system. The Mexican drug cartels 
are guided by one thing--a desire to make money. They do what they do, 
sling drugs, to make money. They don't peddle drugs because they want 
to uproot the powers that be. They have no interest in governing. 
Simply put, unlike ISIS, they have no interest in creating a caliphate-
like structure. They don't have any interest in overthrowing Mexican 
President Andres Manuel Lopez Obrador. The U.S. Government must not 
conflate terrorism and crime. It is a slippery slope when the State 
Department gets into the business of identifying criminal organizations 
as terrorist groups. As of June 1, 2023, the FTO list has 68 groups on 
it. If the State Department starts designating criminal groups as 
terrorists, the number of eligible targets that could be added to the 
FTO would significantly increase. Hundreds of new organizations could 
be added to the FTO list--not just Mexican drug cartels, but Brazilian 
gangs, Central American gangs, Italian mafia groups, the Yakuza crime 
syndicate, and many more. That's a recipe for disaster. It's a recipe 
for bureaucratic inertia, especially when you consider the amount of 
work that goes into every FTO designation package. Each FTO designation 
takes hundreds, in some cases thousands, of combined person hours to 
complete. Each FTO designation package is the equivalent of writing a 
Ph.D. dissertation. My old office responsible for this work has fewer 
than 10 people who are exclusively dedicated to sanctioning FTOs. As 
such, they must carefully prioritize the targets they select for 
designation. If the CT Bureau at State gets into the business of 
designating criminal groups as terrorists, it gets out of the business 
of designating terrorist groups. This is a bad tradeoff.
    However, there is one very significant advantage of applying the 
FTO regime against the Mexican drug cartels. Adding the Mexican cartels 
to the terrorist list would trigger the material support benefits that 
come with FTO designations.\5\ Simply put, that means more time beyond 
bars for those who try to provide material support to the cartels.\6\ 
On the one hand, that's a net positive. However, this is also a 
possible benefit with downsides. I can easily imagine scenarios where 
drug consumers may run afoul of the material support clause when they 
buy drugs trafficked by a Mexican drug cartel. I can imagine a scenario 
where a high school junior, let's name him Henry, buys Fentanyl from a 
Mexican drug cartel and an overly enthusiastic prosecutor decides to 
pursue a material support case against Henry because he provided 
funding to an FTO. Similarly, I can see a college sophomore, let's call 
her Sally, who goes to spring break in Acapulco and ends up buying 
drugs from a Mexican cartel. In this scenario, let's assume when Sally 
returns home from spring break that she has the illicit drugs in her 
checked bag. This results in Sally being arrested at the airport. She's 
eventually charged for providing material support to a Mexican drug 
cartel that had been already designated by the U.S. Department of State 
as an FTO. These types of theoretical scenarios worry me--and should 
worry every one of you. Sadly, because of America's drug epidemic, 
there are a lot of Sallys and Henrys hooked on drugs. I don't think the 
solution is branding Henry and Sally as terrorists. Yet, adding the 
Mexican drug cartels to the list of terrorist organizations increases 
the chances that many more Americans could be prosecuted for terrorism. 
Their drug addiction is already a tragedy. It seems unnecessary to 
compound the error, but adding the Mexican drug cartels to the list of 
terrorist organizations would do just that.
---------------------------------------------------------------------------
    \5\ https://www.latimes.com/opinion/story/2023-03-17/dont-
designate-mexican-drug-cartels-as-foreign-terrorist-organizations.
    \6\ Many of the cartels are treated as transnational criminal 
organizations already and as a consequence individuals who support 
these groups can face stiff prison sentences. Yet, low-level material 
supporters of FTOs often receive 20 to 25 years behind bars.
---------------------------------------------------------------------------
    Moreover, a U.S.-driven FTO designation of drug cartels holds a 
variety of consequences for asylum seekers. For example, victims 
coerced into carrying out material support are frequently discounted 
from receiving any humanitarian assistance or asylum.\7\ In this way, 
an FTO designation fails to distinguish those who act willingly on 
behalf of the cartel from those that are forced to do so. Conversely, 
an FTO designation could aid those attempting to flee for politically-
motivated reasons--an FTO automatically identifies a terrorist or 
terrorist group as a political actor.\8\ Should civilians speak out 
against the cartels, they are more likely to obtain asylum for 
expressing a suppressed political opinion; nonetheless, only a limited 
group of individuals can receive this benefit. Even those asylum 
seekers that are capable of resisting recruitment may not be considered 
``politically persecuted,'' much less those forced to carry out the 
cartel's illicit activities.\9\
---------------------------------------------------------------------------
    \7\ https://michiganlawreview.org/ms-13-as-a-terrorist-
organization-risks-for-central-american-asylum-seekers/.
    \8\ Ibid.
    \9\ Ibid.
---------------------------------------------------------------------------
    One of the strengths of the FTO regime is the fact that the 
designation requires financial institutions to block any assets 
associated with the designated entity. Because the most dangerous 
Mexican drug cartels are already designated pursuant to the Foreign 
Narcotics Kingpin Designation Act,\10\ they are already subject to 
having their property and interests blocked. Of note, hundreds of 
entities and individuals have been designated as Kingpins and there 
have been tangible results. According to a 2019 GAO study, OFAC has 
``reported that it has frozen more than half a billion dollars of 
sanctioned individuals' or entities assets under the Kingpin Act 
between 2000 and 2019.''\11\ Simply put, the FTO designation would 
bring nothing new to the table when it comes to accessing the wealth of 
the Mexican drug cartels.
---------------------------------------------------------------------------
    \10\ https://www.ecfr.gov/current/title-31/subtitle-B/chapter-V/
part-598.
    \11\ https://www.gao.gov/assets/gao-20-112.pdf.
---------------------------------------------------------------------------
    Fifth, one of the benefits of the FTO regime is that it renders 
individuals associated with the designated terrorist group inadmissible 
to the United States. According to the same GAO study, one of the 
consequences of sanctions pursuant to the Kingpin Act is that it 
provides a basis for denying visa requests. Specifically, ``Treasury 
provides information to State so it can decide whether to cancel 
existing visas and deny visa applications of Kingpin Act 
designees.''\12\ Yet again, an FTO designation would not benefit the 
U.S. Government when it comes to denying drug traffickers access to the 
United States. The ability to do that already exists thanks to the 
Kingpin Act.
---------------------------------------------------------------------------
    \12\ Ibid. Page 12.
---------------------------------------------------------------------------
    Finally, the designation of the Mexican drug cartels would damage 
U.S.-Mexico relations. In 2019, when the Trump administration explained 
that it was considering the FTO designation, President Obrador was 
categorical in his opposition. To counter the Mexican drug cartels, the 
United States must work with the Mexican government. Foreign Minister 
Marcelo Ebrard emphasized this point in an Op-Ed earlier this year. He 
criticized U.S. efforts to seemingly undermine Mexican authority and 
indicated that an FTO designation would ultimately increase violent and 
illicit activities within both countries.\13\ It is clear that U.S. 
calls for intervention in Mexico have increased tensions between the 
two countries writ large; to defend Mexican authority and geopolitical 
interests, Ebrard stressed that the United States' sheer plethora of 
available weaponry remains a major contributing factor to increased 
cartel violence.\14\ To maintain our own image and secure our 
relationships with our Central American partners, it is in the United 
States' best interest to secure avenues of collaboration--not 
competition. While Mexico can certainly do much more to fight the drug 
cartels, we would be mistaken to think that they are sitting on their 
hands. We would also be mistaken to think that the Mexican drug cartel 
challenge is only Mexican-made. Some have irresponsibly argued \15\ 
that the designation would allow for more direct U.S. military action 
against the cartels. This notion is highly problematic, likely would 
result in a violation of Mexico's sovereignty and poison the well for 
any cooperation with the Mexican government. Even worse, it could push 
Mexico further into the orbit of America's fiercest economic (China), 
military (Russia), and ideological (Iran) opponents.
---------------------------------------------------------------------------
    \13\ https://www.reuters.com/world/americas/mexicos-top-diplomat-
stresses-cooperation-with-us-versus-intervention-2023-03-11/.
    \14\ https://www.wsj.com/articles/mexico-foreign-minister-drug-
cartels-bill-barr-ag-91345214.
    \15\ https://www.usatoday.com/story/news/nation/2023/04/16/mexican-
drug-cartels-terrorist-organizations-senators-fentanyl-mexico-border/
11666432002/.
---------------------------------------------------------------------------
    China's investment in Mexico has grown in leaps and bounds over the 
last several years. In fact, in 2021, Chinese and Mexican trade 
exceeded $100 billion.\16\ In 2022, Chinese foreign direct investment 
(FDI) in Mexico was significant at $282 million--indicative of Chinese 
industry's vested interest in expanding its global reach and 
overarching sphere of influence.\17\ Moreover, evidence of criminal 
collusion between Chinese chemical companies and the Sinaloa cartel are 
noteworthy; an unsealed indictment in April revealed that a Chinese 
company sold illicit Fentanyl-producing ingredients to cartel 
personnel, thus perpetuating America's burgeoning opioid crisis.\18\ A 
U.S.-driven FTO designation could serve to facilitate and sustain 
Chinese and Mexican illicit trade routes, should the Mexican and 
Chinese governments fail to adequately address this expanding 
criminality. The United States' volatile relationship with the CCP in 
addition to its mounting tensions with Mexican authorities have the 
potential to isolate U.S. influence from conversations on mitigating 
the Fentanyl trade--a trade that ultimately reaps severe consequences 
among the American public.
---------------------------------------------------------------------------
    \16\ https://www.brookings.edu/on-the-record/how-is-china-involved-
in-organized-crime-in-mexico/.
    \17\ https://www.dallasfed.org/research/swe/2023/swe2303.
    \18\ https://www.washingtonpost.com/health/2023/04/27/fentanyl-
china-chemical-compa- nies/.
---------------------------------------------------------------------------
    Russia similarly continues to cultivate relationships and strategic 
business ventures in the LATAM region. While limited in quantity, 
Russia previously supplied Mexico with military equipment and continues 
to expand its presence among the United States' central and South 
American neighbors, likely to sow geopolitical discord and sour 
perceptions of U.S. authorities.\19\ Evidently, given growing interest 
and investment from our adversaries in Mexico, the United States must 
work to ensure our partnerships in Central America are strong and 
cooperative in nature. There have also been reports that the notorious 
Russian mercenary organization, PMC Wagner, tried to establish an 
office in Mexico prior to the outbreak of COVID-19.
---------------------------------------------------------------------------
    \19\ https://www.csis.org/analysis/russia-western-hemisphere-
assessing-putins-malign-influence-latin-america-and-caribbean.
---------------------------------------------------------------------------
    All this to say, if the U.S. Government pushes Mexico on the FTO 
designation, it runs the risk that Mexico will distance itself from the 
United States and strengthen relations with countries like China and 
Russia.
    These are but handful of reasons why designating the Mexican drug 
cartels as terrorist groups would be a mistake. Yet, there is much more 
that should be done to counter these groups. The next section of my 
testimony explores some possible ways the U.S. Government can expand 
its efforts to counter the drug cartels.
          what should be done about the mexican drug cartels?
    Militarizing the border, putting U.S. troops into Mexico, and 
sanctioning the cartels as FTOs are not appropriate policy responses to 
countering the drug cartels. As noted earlier, the Mexican cartels are 
not only a Mexican-made problem. The trafficking of arms, ammunition, 
and other weaponry from the United States across the border into Mexico 
broadens cartels' breath of resources and facilitates continued 
violence. Mexican authorities found that approximately 70 to 90 percent 
of guns found during criminal investigations are linked to the United 
States.\20\ This figure tells us that the availability and 
accessibility of guns within the United States renders their feasible 
illicit transfer. Moreover, it indicates U.S. complicity in the 
cartel's violent crimes. In fact, a gun used to carry out the 
kidnapping and subsequent murder of two Americans in Mexico during 
March of this year was trafficked by way of the United States.\21\ More 
recently, in April 2023, a U.S. citizen was caught plundering 5,680 
rounds of pistol ammunition from Southern Texas to his home in 
Mexico.\22\ In addition to arms and ammunition, U.S. Customs and Border 
Control officials uncovered 50,000 pounds of Fentanyl crossing into the 
U.S. Southern Border in 2022 alone.\23\ These examples serve as a 
snapshot of a much broader problem, implicating both the United States 
and Mexico in furthering transnational cartel crime. There are no 
simple solutions to this problem, but one obvious policy is to adopt 
stricter arms control laws in the United States. Simply put, America is 
arming the Mexican drug cartels and that must stop.
---------------------------------------------------------------------------
    \20\ https://news.harvard.edu/gazette/story/2022/02/stopping-toxic-
flow-of-gun-traffic-from-u-s-to-mexico/.
    \21\ https://abcnews.go.com/International/gun-kidnapping-americans-
mexico-allegedly us/story- ?id=98012006.
    \22\ https://www.justice.gov/usao-sdtx/pr/american-living-mexico-
caught-trying-export-5680-rounds-ammunition.
    \23\ https://www.nbcnews.com/politics/national-security/fentanyl-
gun-smuggling-us-mexico-border-deal-rcna75782.
---------------------------------------------------------------------------
      narcotics rewards program/rewards for justice (rfj) program
    When I was at the State Department, I managed the CT Bureau's 
involvement in the RFJ program that focused on countering terrorists. 
That program has been used more frequently than the U.S. Department of 
State's ``Narcotics Rewards Program (NRP).'' The RFJ program is 
administered by the Bureau of Diplomatic Security (DS), but the NRP 
program is administered by the State Department's INL bureau. This is a 
bureaucratic inefficiency and folding NRP under the authority of the DS 
Bureau may improve the pace of narcotics-related designations. The NRP 
should be used more. The program is designed to incentivize individuals 
to provide tips on the activities of drug dealers so that they can be 
prosecuted for their misdeeds. Adding more individuals from the Mexican 
drug cartels to the NRP list would be useful. If the program expands, 
it is very likely that some of the best lead information will come from 
within the cartels. After all, criminals like their money, especially 
informants within crime groups. It is important to acknowledge that on 
April 14, 2023, the U.S. Department of State used the NRP to announce 
rewards offers for information leading to the arrest and conviction of 
27 individuals involved in illicit Fentanyl trafficking. Expanding 
these efforts would be better than labeling drug cartels as FTOs.
                           capacity building
    According to the U.S. Department of State, between 2008-2021, the 
United States spent $3.3 billion in equipment, training, and capacity 
building for Mexican justice and law enforcement sectors.\24\ Much of 
this security cooperation assistance has focused on assisting Mexican 
police, prosecutors, and judges' efforts to better track criminals, 
drugs, arms, and money to disrupt organized crime groups. Moving 
forward, funds for countering the drug cartels should aim to build 
Mexico's Financial Intelligence Unit (FIU) capacity. Further, 
specialized attention and training in the area of anti-corruption is 
critical. Based on my experience of working in the NAS in Embassy 
Kabul, building up judiciary and law enforcement capacity is crucial. 
However, winning the fight against blood money will require an 
expansion of regulatory efforts, as well as the strengthening of 
Mexico's FIU and most importantly the private sector. The solution to 
countering the financing of the cartels will require reinforcing and 
bolstering Mexico's banking compliance systems. In my experience of 
countering illicit actor financing, the private sector's buy-in is 
critical. Like the Financial Action Task Force (FATF),\25\ I define 
private sector broadly, to include accountants, lawyers, precious gem 
dealers, among many others. In its last Follow-Up Report regarding its 
FATF mutual evaluation, Mexico scored a ``non-compliant'' on FATF 
recommendation 23. As such, the United States should focus on capacity 
building efforts that aim to strengthen Mexico's Designated Non-
Financial Businesses and Professions (DNFBPs). The Mexican drug cartels 
need accomplished lawyers and accountants to make their money look 
clean as they try to insert their dirty money back into the formal 
financial system. Improving Mexico's DNFBPs' abilities to detect and 
report suspect transactions and money laundering is a cost-effective 
way to counter Mexico's drug cartels.
---------------------------------------------------------------------------
    \24\ https://www.state.gov/u-s-relations-with-mexico/
#:?:text=The%20United%20States%20and- 
%20Mexico%20partner%20to%20combat%20transnational%20organized,justice%20
and%20- law%20enforcement%20'sectors.
    \25\ FATF sets guidelines for countries to follow in countering 
terrorism financing and money laundering.
---------------------------------------------------------------------------
                social, health, and educational policies
    As much as the Mexican drug cartels are a national security 
challenge, the broader challenge of drugs in America is, frankly, more 
of a health, social, and educational challenge. In my view, the Federal 
Government is not allocating enough time, money, and resources to 
health, education, and social policies that can decrease America's 
appetite for drugs. We must address the demand side of this problem 
while also countering the suppliers and traffickers.
    In the 2022 fiscal year, the U.S. total Federal drug control 
spending was $41 billion. In response to the increase of substance use 
disorders, namely the ever-growing Fentanyl crisis, the budget requests 
for 2023 and 2024 were slightly increased.\26\ The misuse of 
prescription drugs and the opioid epidemic are a major focus of U.S. 
drug control strategies and spending. The death rates caused by the 
misuse of opioids and synthetic variants such as heroin continue to 
rise. From 1999 to 2014, the number of annual deaths caused by Fentanyl 
overdoses hovered just underneath 3,000 deaths per year. After 2015, 
there has been a massive spike in Fentanyl overdoses. In 2021, 
overdoses dramatically increased to 70,601. This jump is alarming--this 
new potent synthetic opioid is the No. 1 cause of drug-related death in 
the United States.\27\ Yet, when compared to other types of spending, 
our efforts to fight the drug problem on the demand side can be best 
characterized as unserious, especially when we compare that $41 billion 
to the current Department of Defense (DoD) budget. DoD's budget for 
fiscal year 2023 was over $2 trillion.\28\ Simply put, killing, 
prosecuting, and sanctioning the supply-side entities and individuals 
(the Mexican drug cartels) of this problem is not enough. It may not be 
sexy policy to invest in educational, medical, and social-policy 
initiatives to fight the drug scourge, but this is an area where 
lawmakers must invest more financial resources.
---------------------------------------------------------------------------
    \26\ https://www.statista.com/statistics/618857/total-federal-drug-
control-spending-in-us/.
    \27\ https://www.statista.com/statistics/895945/fentanyl-overdose-
deaths-us/.
    \28\ https://www.usaspending.gov/agency/department-of-
defense#:?:text=Each%20year%20Fed- 
eral%20agencies%20receive,making%20financial%20promises%20called%20oblig
ations%20.
---------------------------------------------------------------------------
                      other transnational threats
    The United States faces a broad array of transnational threats, to 
include gangs, terrorist groups, and private military companies. In my 
view, the groups noted below represent the most serious transnational 
threats to the U.S. homeland.
                                 ms-13
    The Mara Salvatrucha (MS-13) originated in the 1970's and 1980's in 
Los Angeles, California.\29\ Formed by Salvadorian immigrants escaping 
civil war, the transnational street gang now has outreach in El 
Salvador, Honduras, Mexico, and the United States. Engaging in crimes 
such as murder, narcotics, weapon trafficking, and extortion, MS-13 
continues to pose a serious threat to U.S. security.\30\ Despite its 
American origin, the gang's cultural ties to Central America have 
enabled their influence to spread rapidly among communities in El 
Salvador, Honduras, Guatemala, and Nicaragua. Chasing the reputation of 
being the most murderous gang in the world, MS-13 is on the road to 
just that: in March 2022 the gang's death toll reached an all-time high 
of 62 deaths within a 24-hour period.\31\ Unsurprisingly, their 
barbaric practices have become well-known to the U.S. Department of the 
Treasury, who recently sanctioned members of the gang residing in 
Nicaragua and Honduras in February 2023. Freezing their property rights 
and blocking their financial transactions, the U.S. Department of the 
Treasury hopes their response will prevent further extortion, money 
laundering, and drug trafficking across the U.S.-Mexico border.\32\ MS-
13's violence, sadly, is unlikely to end because of these designations, 
or any designation for that matter. Indeed, MS-13's violence has 
sparked the flow of refugees--innocents who want to escape the violent 
world MS-13 has created in Central America. Sadly, as I have previously 
described, this violence has American roots.
---------------------------------------------------------------------------
    \29\ https://insightcrime.org/el-salvador-organized-crime-news/
mara-salvatrucha-ms-13-pro- file/.
    \30\ https://www.ojp.gov/ncjrs/virtual-library/abstracts/ms-13-
gang-profile.
    \31\ https://www.bbc.com/news/world-latin-america-60893048.
    \32\ https://apnews.com/article/drug-crimes-crime-caribbean-
honduras-central-america-812e435334860ae703110202fa64c008.
---------------------------------------------------------------------------
                    terrorist threats (isis and aq)
    The Salafi-jihadist threat posed groups like ISIS and al-Qaeda. 
These groups, while not the potent forces they once were, still have 
the capacity to inspire home-grown extremists to carry out acts of 
violence. Frequently, we can still read Department of Justice media 
releases documenting a new arrest, prison sentence, or guilty verdict 
for individuals associated with ISIS and al-Qaeda. Recently, not far 
from where we sit today, in Virginia, the U.S. Government arrested an 
alleged ISIS supporter. In early May 2023, Virginia resident Mohammed 
Chhipa was arrested for sending nearly $200,000 overseas to ISIS.\33\ 
Chhipa could face decades behind bars for providing material support to 
a designated FTO. This underscores that ISIS sympathizers remain active 
in the United States. Second, it underlines the point that terrorist 
financing is also a persistent threat to U.S. national security 
interests. As the February 2023 Annual Threat Assessment of the U.S. 
Intelligence Community, ``ISIS's ideology and propaganda . . . almost 
certainly will continue to inspire attacks in the West, including the 
United States.''\34\ This challenge is likely to intensify because of 
the ham-fisted way the United States left Afghanistan. This spring, 
General Michael Kurilla, head of U.S. Central Command, told the U.S. 
Senate Armed Services Committee that ISIS's province in Afghanistan, 
ISIS-Khorasan, ``can do an external operation against U.S. or Western 
interests abroad in under six months with little or no warning.''\35\
---------------------------------------------------------------------------
    \33\ https://www.fox5dc.com/news/virginia-man-accused-of-sending-
money-to-isil-remains-behind-bars-following-court-appearance.
    \34\ https://www.dni.gov/files/ODNI/documents/assessments/ATA-2023-
Unclassified-Report.- pdf.
    \35\ https://www.usnews.com/news/national-news/articles/2023-03-16/
u-s-commander-isis-in-afghanistan-6-months-away-from-foreign-attack-
capability.
---------------------------------------------------------------------------
    Like ISIS, al-Qaeda remains a threat to U.S. national security 
interests, despite that the group's leader was killed in 2022.\36\ Of 
particular concern is the sanctuary al-Qaeda now has in Afghanistan by 
virtue of the Taliban \37\ taking over the country. As the Annual 
Threat Assessment of the U.S. intelligence community explains, ``al-
Qaeda remains committed to attacking U.S. interests.'' The group also 
continues to inspire home-grown extremists and the group is well-known 
for playing the long game. Unlike ISIS, al-Qaeda is more patient. In 
many ways, this makes the group more difficult to infiltrate and 
counter. One of many examples of al-Qaeda's careful planning culminated 
in the group's deadly December 2019 attack at a Naval Air Station in 
Pensacola, Florida. The perpetrator of the attack was part of the Royal 
Saudi Air Force and the investigation following the attack revealed 
operational ties between the attacker and al-Qaeda's affiliate in 
Yemen.\38\
---------------------------------------------------------------------------
    \36\ https://www.csis.org/analysis/zawahiris-death-and-whats-next-
al-qaeda.
    \37\ Al-Qaeda is a long-time ally of the Taliban and the ties 
between the groups remain strong.
    \38\ https://www.cnn.com/2020/05/18/politics/pensacola-shooting-al-
qaeda/index.htm.
---------------------------------------------------------------------------
                         iran's threat network
    The Iranian regime and its many proxies represent a clear threat to 
the United States. While Iran's proxies, including Hizballah, operate 
in the United States, Iran's menacing activities are a greater threat 
to U.S. overseas interests. Nonetheless, Hizballah's U.S.-based 
terrorist financing schemes have made the group millions of dollars. 
Iran has also plotted to assassinate Americans, most notably John 
Bolton. This month the U.S. Department of the Treasury sanctioned 
Mohammad Reza Ansari and Shahram Poursafi pursuant to E.O. 13224 for 
their plot to assassinate Americans.\39\
---------------------------------------------------------------------------
    \39\ https://home.treasury.gov/news/press-releases/jy1513.
---------------------------------------------------------------------------
                              pmc (wagner)
    Private Military Companies (PMCs), such as the Russia-based Wagner 
Group represent a threat to U.S. national security interests. Indeed, 
the Treasury Department emphasized the transnational criminal aspects 
of the Wagner Group on January 26, 2023, when it designated the group 
as a transnational criminal organization (TCO) pursuant to Executive 
Order 13581.\40\ In justifying the Wagner Group's criminal designation, 
the Treasury Department explained, ``Wagner personnel have engaged in 
an on-going pattern of serious criminal activity, including mass 
executions, rape, child abductions, and physical abuse.''\41\ While it 
has been well-documented in numerous reports that the Wagner Group 
carries out terrorism and criminal acts in Ukraine and throughout the 
African continent, what is less well-known is that the organization 
leverages American-made social media tools to recruit U.S. citizens and 
others to its cause.
---------------------------------------------------------------------------
    \40\ https://home.treasury.gov/news/press-releases/jy1220.
    \41\ Ibid.
---------------------------------------------------------------------------
    In May 2023, Politico published an article noting that PMC Wagner 
was trying to recruit, via Facebook and Twitter, individuals to fill 
positions as medics, drone operators, and psychologists to assist in 
the group's war effort in Ukraine.\42\ According to Logically, a U.K.-
based disinformation-focused research group, the posts were in multiple 
languages and received more than 120,000 views.\43\ The Wagner Group 
has grand ambitions, and its founder has admitted to meddling in U.S. 
elections. In a post over Russia social media site VK, Prigozhin 
explained, ``we have interfered in U.S. elections, we are interfering, 
and we will continue to interfere.''\44\ The Wagner Group is a threat 
to the United States. That is why I have argued that the group should 
be added to the State Department's list of Foreign Terrorist 
Organizations. It is also why I support the bipartisan HARM Act, which 
would require the State Department to designate the Wagner Group as an 
FTO.\45\
---------------------------------------------------------------------------
    \42\ https://www.politico.eu/article/russia-ukraine-war-
mercenaries-wagner-group-recruit-twitter-facebook-yevgeny-prigozhin/
?utm_campaign=Readbook&utm_medium=K-
email&_hsmi=260770258&_hsenc=p2ANqtz-9yPLN20j9Zz7stblBhK5trA8vxwCc- 
_CH9DJf3B2_dmNWEusDazbwgk4RB8c45f3Dz2MrxkB5kXkdzvFo0hVqrCJYcIw&utm- 
_content=260770258&utm_source=hs_email.
    \43\ Ibid.
    \44\ https://www.reuters.com/world/us/russias-prigozhin-admits-
interfering-us-elections-2022-11-07/
#:?:text=LONDON%2C%20Nov%207%20(Reuters),efforts%20to%20influence%20Amer
i- can%20politics.
    \45\ https://www.Congress.gov/bill/118th-congress/house-bill/
506?s=1&r=50.
---------------------------------------------------------------------------
                               conclusion
    The threat posed by a broad range of transnational groups remains 
significant. The drug trafficking organizations, terrorist groups, and 
mercenaries I have highlighted in my testimony only represent a very 
small component of the overall threat picture. Books are quite 
literally written about each one of these dangerous groups. What is 
contained in the testimony above is a surface-level examination. 
Moreover, there are many other types of transnational threats that 
persist, such as the growing threat posed by racially- and ethnically-
motivated violent extremists (REMVE). The REMVE threat has become 
increasingly interconnected with U.S.-based Nazis linked to overseas 
REMVE groups like the Russian Imperial Movement (RIM). RIM was 
designated as a terrorist group by the U.S. Department of State on 
April 7, 2020, pursuant to Executive Order 13224.\46\
---------------------------------------------------------------------------
    \46\ https://2017-2021.state.gov/united-states-designates-russian-
imperial-movement-and-leaders-as-global-terrorists/.
---------------------------------------------------------------------------
    I want to close my testimony by emphasizing that while I 
strenuously oppose the terrorist designation of the Mexican drug 
cartels, I can understand the desire to label them as FTOs. They are a 
menace and more must be done to counter them. Congress certainly has an 
important role in ensuring this is done by holding the Executive branch 
accountable for failed approaches. While I encourage Congress to not 
designate the cartels as FTOs, Congress does have every right to pursue 
that objective. I speak from direct experience when I say that without 
Congressional pressure, the State Department would not have moved as 
quickly as it could have to designate Boko Haram and the Haqqani 
Network as FTOs. In the case of the Mexican drug cartel issue, however, 
I would encourage all to examine some of the recommended policy 
approaches I offer instead. Unlike a Mexican cartel FTO designation, 
these alternative approaches are more likely to impact the cartels' 
blood-stained wallets.

    Mr. Pfluger. Well, thank you, Mr. Blazakis, for your 
statement, for all the witnesses' statements. Members will now 
be recognized by order of seniority for 5 minutes of 
questioning, and an additional round of questioning may be 
called after all Members have been recognized. I now recognized 
myself for 5 minutes of questioning.
    Hearing the discussion that the first thing that I'll 
address is that there's this narrative that seems to be that 
the problem is in the United States and not with the lack of 
rule of law at our border and to the south. So immediately I 
would like to push back on that suggestion that the rule of law 
and the lack of rule of law, as we see it, is directly 
responsible for this.
    I'll start with Mr. Urben. In April, you testified before 
the House Oversight Committee and the Accountability Committee. 
In your testimony, you discussed how Chinese organized crime 
networks launder money, or Mexican Transnational Criminal 
Organizations. You stated more needs to be done. What steps can 
the United States take to undercut this budding relationship 
between the Chinese organized crime networks and Mexican TCOs?
    Mr. Urben. So it is two-fold. One is certainly on the 
government-law enforcement side. There's is an opportunity to 
leverage data that's judicially acquired by law enforcement. 
One component or an access point or a weakness of Chinese 
organized crime is that you can hold that data in and map the 
network out, identify the targets that the Government should go 
after in terms of prosecution. So that's on the Government 
side.
    Also, on the Government side, we have used the term whole-
of-Government approach in the past. What I mean by that is 
using specific authorities that the Government has that we can 
leverage to impact the Chinese money-laundering network.
    For example, sanctions. For example, pulling visas of 
identified Chinese money laundering that we decide we're not 
going to prosecute. There's a limited amount of resources to 
prosecute high-valued targets in leadership. So that's on the 
Government side.
    On the private-sector side, I think training, I think 
enhanced compliance at banks, financial institutions, wire 
remitters. This is an evolving threat, so I think there needs 
to be essentially a partnership, to some degree, with 
Government in the private sector where we provide the 
intelligence, not sensitive intelligence, but the information 
that will allow them to enhance their compliance programs to 
impose what I call cost on Chinese money launderers, make it 
more difficult for them, whether again through Government, 
arrest and prosecutions, or on the private-sector side with 
compliance.
    Mr. Pfluger. Well, thank you, Mr. Urben. I am hearing that 
strength works best when dealing with these thugs. Ms. Ford, 
I'll go to you. This narrative that illegal immigration from 
some of my counterparts on the other side of the aisle has 
absolutely nothing to do--the wide open borders has nothing to 
do with the rise of transnational criminal organizations, 
trafficking of drugs, the trafficking of people. You mentioned 
the 53 tragic deaths on the tractor south of San Antonio. What 
is illegal immigration, and the surge, over 5 until since Biden 
took office, doing to allow the flow of drugs and trafficking 
of people into in country?
    Ms. Ford Maldonado. Thank you, Chairman Pfluger. A lot of 
people do say that the problem with legal immigration is 
sometimes we use the cartels as a guise to go after illegal 
immigration, right? But I would say two things about that. The 
problem is not about immigration. This is about border security 
and national security. I also think that if people care about 
migrants, they should realize that the most inhumane thing that 
we can do to them is let things run the course that they're 
continuing to run. They're being smuggled. They're being 
abused. They are often being killed at the border. So we need 
to crack down on the border and crack down on the people that 
are taking advantage of them, if we want to do something about 
illegal immigration.
    Now, I also think that illegal immigration is posing a 
threat to what's happening, because we are seeing numbers come 
in like they've never come in before. We're seeing so much 
insecurity at the border, and that's taken away a lot of 
limited resources and attention that should be going toward 
protecting the homeland.
    Mr. Pfluger. Thank you very much. Mr. Farah, the evidence 
that links the Sinaloa cartel and Hizballah, has been well-
documented by the DOJ through arrest and indictments and the 
relationship between the two organizations as fueled 
instability between Latin America and the Middle East for the 
last decade. Can you describe that relationship to us today?
    Mr. Farah. The Mexican cartels and Hizballah have primarily 
a financial relationship that allows them to move money to 
designated terrorist organizations in the Middle East in 
exchange for access to ports and the import of illegal products 
or smuggled products or products, counterfeit products into our 
hemisphere.
    I think my work is primarily focused on the tri-border area 
of Paraguay, Argentina, and Brazil where you see this network 
of now Essesay, which is the main gang with Hizballah 
operatives and with Colombian and Mexican drug cartels moving 
into ever-expanding circles of collaboration, not out of 
ideology or religion, but simply for the ability to profit. 
When I talked about the new groups that are emerging in the 
hemisphere, it's this type of new specialization that comes in. 
This ability of Hizballah to provide new things that the 
cartels didn't have before access to new methodologies, et 
cetera.
    So I think that it is an economic relationship that is 
primarily going into a different types of specialization, which 
is being harmful to the countries in place as well as posing an 
increasing threat to the homeland.
    Mr. Pfluger. Thank you. My time has expired. I now 
recognize the gentleman from Rhode Island, the Ranking Member, 
Mr. Magaziner, for 5 minutes of questioning.
    Mr. Magaziner. Thank you, Chairman. You know, the reality 
is that because these TCO treats emanate from outside our 
border, because the violence, the taking advantage of people 
who are fleeing poverty, fleeing persecution all originates or 
primarily originates in Central, South America, and beyond. We 
need to work with our foreign partners in order to crack down 
on TCO violence. We have to do that. Some of those countries 
that we must work with are more reliable partners than others. 
That is the case. It has always been the case. But if we are 
truly going to get to the root causes of these threats, it 
requires multilateral coordination.
    So on that theme, Mr. Blazakis, you talk about building 
capacity in our partner countries in your written testimony? 
Can you expand on what the opportunities are in working with 
Mexico and ourselves and Central American allies to crack down 
on TCO activity?
    Mr. Blazakis. I would highlight one specific example from 
my written testimony. I highlighted the need for Mexico for 
instance, to improve its financial action task force or FATF 
rating related to recommendation 23, which focuses on 
designated nonfinancial businesses and professions DNFBPs for 
short. This area is especially important in Mexico and is one 
of some countries really that has struggled with trying to 
strengthen the designated nonfinancial business and 
professional sector. It is really important to build that up 
for a lot of reasons, especially in Mexico.
    When we're talking about DNFBPs, we're talking about 
lawyers, accountants, and many others in similar professions 
who are enabling transactions. The drug cartels can't wash 
their money in the way that Mr. Urben discussed really 
eloquently without having some sort of legitimate business or 
invest in real estate without having an army of enablers. These 
enablers are areas where the U.S. Government should focus a lot 
of its capacity building moving forward, in addition to trying 
to build the capacity of prosecutors, especially in the area of 
corruption.
    Mr. Magaziner. Thank you. On a related note, Mr. Farah, I 
was struck by a portion of your written testimony. You wrote: 
Russia and China view Latin America as a key theater of great 
power competition and act accordingly. The United States must 
forego complacency and see creative new engagements with its 
partners. Higher quality, more comprehensive, and more 
sustained engagement with the right communities will go far to 
strengthen democracy, civil society, and regional stability.
    Can you expand on that a bit? In so doing, what can we do? 
What can we the United States do to motivate our foreign 
partners to be better partners and more effective partners in 
tracking down on TCO activity?
    Mr. Farah. Thank you. I think it's a challenging 
environment because we are now facing numerous governments that 
have--for example, the government of Argentina, which has 
declared itself as Russia's doorway to Latin America and has 
allowed China to come with nuclear programs, deep space 
stations, et cetera. So I think that there's more constraint 
space to operate with trusted partners. I think at the same 
time, the vast majority of folks in the military and in the law 
enforcement community prefer the United States as their first 
partner of choice. I think that if you look at--and we mapped 
this out for SOUTHCOM and others over time--the level of high-
level visits by the Russian and Chinese is about 17 times the 
level of U.S. visits to Latin America. I think that--well, I 
told them at the time--if Russia can find the time in the 
middle of a war to send its foreign minister around, we should 
be able to do a little better. We have a huge disadvantage with 
Russia in that they have a small cadre of highly experienced 
Ambassadors that rotate around the region and speak Spanish 
around all the time. We have major Ambassadors sitting without 
Ambassadors. In the case of Chile, almost 3 years. Now we're 
going into Colombia, we're going into the second year.
    So I think there are multiple relatively easy fixes that 
engagement. I think we also need to do a better job of helping 
to explain the threats to their own democracies and rule of law 
that the Russian and Chinese involvement bring because they're 
directly tied to massive corruption and massive destruction of 
their own institutions.
    Mr. Magaziner. Thank you. Mr. Blazakis, one final question. 
You notice that, see is a pattern that is developed at our 
hearings on the border where Members of both parties talk about 
the importance of cracking down on human smuggling, cracking 
down on drug trafficking. But when it comes to trafficking 
guns, there is a often deafening silence on the other side of 
the aisle. Can you talk about why this aspect of TCO activity 
is so important and something that we need to address?
    Mr. Blazakis. Just as you mentioned in your opening 
testimony, there is the illegal export of nearly 600,000 
weapons going into Mexico. That's not insignificant. In many 
ways, it could be perceived as fueling this insurgency that's 
happening in Mexico that's taken so many civilians' lives in 
Mexico that Ms. Maldonado, and also the lives of Americans when 
the drugs come back into the United States. So in this case, we 
have to improve our border security going outbound as just one 
example, and using be AI technology, especially could be one 
way to get at this challenge.
    Mr. Magaziner. My time has expired. Thank you, all.
    Mr. Pfluger. The gentleman's time has expired. The Chair 
now recognizes the gentleman from North Carolina, Mr. Bishop, 
for 5 minutes of questioning.
    Mr. Bishop. Thank you, Mr. Chairman. Mr. Blazakis, is that 
how you say it or Blazakis?
    Mr. Blazakis. Potato, potato. My grandmother will say 
Blazakis, I say Blazakis.
    Mr. Bishop. Blazakis. Thank you, sir. One point that you've 
made--you know, it is interesting, as I've listened to the 
witnesses, I think it sounds like a very tough--to crack. Now I 
understand this FTO designation thing has been out there for a 
while. I hope I come to that with you, Mr. Blazakis. But I want 
to first get at the last thing Mr. Magaziner was referring to 
and you have in your testimony, that the sentence says that you 
are to report information from Mexican authorities that--I 
don't know whether they are reliable or not--I can't tell from 
without further looking at it, but found that approximately 70 
to 90 percent of guns found in criminal investigations are 
linked to the United States. In your next sentence: This figure 
tells us that the availability and accessibility of guns within 
the United States renders their feasible illicit transfer.
    So I want to make sure I understand this. So are you saying 
just the fact that we have broad second amendment rights and 
Americans have, I have got a Glock 19, is that--I mean, we 
can't stop Mexican drug cartels because of that?
    Mr. Blazakis. That's certainly one component of it. There 
is no questioning that there are illegal weapons--weapons 
illegally being moved, and individuals may be purchasing these 
weapons legally in the United States. So there is a significant 
access to the weapons. There's no secret about that.
    Mr. Bishop. There certainly is access to guns in the United 
States. It's Constitutionally protected. The question now that 
I have for you. What are you saying then should be done about 
that? I mean, I didn't think it was a great idea when the Obama 
administration ran guns in the United States. I remember that 
big controversy. I wasn't here then. So that seems dumb. I 
think there are ways to stop trafficking guns across the 
border, southward, I'm for that. So what beyond that are you 
saying? Do you think we just need to repeal the Second 
Amendment? I just want to understand what you're proposing.
    Mr. Blazakis. No, no, not at all. Not repeal the Second 
Amendment. But I think careful consideration about who should 
have access to the guns is particularly important, and what 
kinds of weapons should be accessible to the American public. I 
mean, we've time and again, this is a separate issue, school 
shootings in this country, plaguing us just as the drug 
epidemic is plaguing us. Access to AR-15s, automatic weapons, 
you know, some of these things absolutely need to be explored 
and taken seriously. But in addition to that, as I mentioned 
before, the challenge of the border, these weapons going 
illegally, illegally across the border, there are things that 
you can do short of looking at arms control-related gun laws in 
America that would be helpful as I mentioned to responding to 
Mr. Magaziner of the use of AI technology, bolstering our 
border officials' capabilities to look at what's going 
outbound. A lot of that requires intelligence as well. Who are 
going across the border bringing these weapons? That's a thorny 
issue as well Constitutionally in terms of the investigation of 
Americans here. So these are quite a few issues I would 
explore.
    Mr. Bishop. OK. I hope I have a chance to come back to you. 
Mr. Urben, I was interested in looking at your model that was 
on the diagram and your testimony, and I found myself sort-of 
surprised that with all the advances made, you know, the 
suspicious activity reports that financial institutions do, and 
they do them by the ton. That the success we've had in 
interdicting terrorists moving money, that this is really a 
model. They can money launder. Chinese money brokers can money 
launder proceeds from illicit drug transactions in huge 
quantities in order to supply Chinese who want to use money in 
the United States. Why are we not having success in breaking 
that up? It's classic money laundering, isn't it?
    Mr. Urben. I mean, the cash that's here that's bought by 
Chinese nationals after the Chinese broker receives the 
proceeds, it is disconnected from the financial system.
    Mr. Bishop. Oh, it does not go through the financial 
system?
    Mr. Urben. It does, but it's disconnected in a way where 
it's not linear, where the drug proceeds are smurfed into banks 
or smuggles or wire transferred. The cash stays in each country 
or location. So it is not traditionally like it's been required 
wired or moved or transfer. That's what you're talking about 
suspicious activity reports. This is the dollars stay in the 
United States, the pesos stay in Mexico, and RMB stays in 
China.
    Mr. Bishop. I would think the source of that money in those 
accounts would be suspicious to a financial institution 
handling it. So it may be something that acquires deeper than 
here. I want to get one more question in or one more comment. 
It does seem--you mentioned WeChat, though.
    Mr. Urben. Yes.
    Mr. Bishop. So you got that social media network. There's 
an article in the Wall Street Journal that comes out today. 
Instagram connects vast pedophile network. I didn't get a 
chance to read the entire article. It's really shocking.
    Ms. Ford Maldonado, you talked about, of course, child 
trafficking is a phenomenon that we see--sex trafficking in the 
United States facilitated by cartels is something we've seen 
that at higher levels as ever. Maybe I'll ask you, are social 
media networks contributing to that illegal conduct? I've been 
concerned about U.S. officials, agencies suppressing free 
speech on social media networks and have fought that. Speaking 
of agencies doing that, but we ought to be doing everything we 
can to stop illegal conduct on Instagram that's promoting 
pedophilia and so forth, shouldn't we?
    Mr. Pfluger. The gentleman's time has expired, but please, 
quickly.
    Ms. Ford Maldonado. Yes, 100 percent. I think there's a lot 
of social media platforms that are very responsible for what's 
going on. We've also done a lot of search on social media 
platforms being used to recruit people to take place in 
trafficking and smuggling and all of the illegal activities.
    Mr. Pfluger. The gentleman's time has expired. The Chair 
now recognizes the gentleman from New York, Mr. Goldman.
    Mr. Goldman. Thank you, Mr. Chairman. I thank our witnesses 
for being here today. I want to follow up on a line of 
questioning that my colleague, Mr. Bishop, was asking, because 
my experience as a prosecutor of Transnational Criminal 
Organizations makes it pretty clear to me that these 
organizations need some mechanism to maintain their power and 
their authority.
    Mr. Blazakis, when you were in your opening testimony, you 
talked a fair bit about that mechanism being assault weapons. I 
believe you say based on your research, which I've also seen, 
that approximately 70 to 90 percent of guns found during--by 
Mexican authorities during criminal investigations are linked 
back to the United States. Are you aware of how many legitimate 
gun stores there are in Mexico?
    Mr. Blazakis. I'm unaware, no.
    Mr. Goldman. One.
    Mr. Blazakis. Very little.
    Mr. Goldman. One. So there are nearly 500,000 guns that go 
across the border from the United States to Mexico illegally as 
you point out.
    Mr. Urben, I am grateful for your service in the DEA with 
whom I worked with many of your colleagues. What impact do you 
think that the cartels having access to assault weapons and 
other weapons of war has on their ability to control the 
border, to control human smuggling, to control the opioid and 
Fentanyl trade?
    Mr. Urben. Well, certainly, the access of weapons by the 
cartels is a paramilitary organization, many of them are former 
members of the Mexican military, enables them to impose 
themselves in violence throughout the country and to determine 
how they want to smuggle drugs across the border. So the 
weapons obviously facilitate that.
    Mr. Goldman. Right. Without those weapons of war to 
maintain that control at the border, is it your experience--or 
based on your experience, would you believe that the Mexican 
government with support from the United States and other 
countries would be able to curtail the authority and power of 
the cartels?
    Mr. Urben. Is it concerns just weapons or in general, a 
joint partnership or relationship?
    Mr. Goldman. Well, right, I'm trying to understand the 
impact of this influx of assault weapons from the United States 
to Mexico, especially to the cartels, how that impacts the 
Mexican government's ability to crack down on the cartels as 
well.
    Mr. Urben. Sure. Them being well-armed makes it difficult 
to control them.
    Mr. Goldman. Would you say--and I'll turn to Ms. Ford 
Maldonado--you know, the Executive Order signed by the 
President in 2021 lays out Executive Order 14060 in December 
2021 lays out objectives and mechanisms to fight these cartels 
and to fight the Fentanyl trafficking. What's your sense of how 
that has been implemented and whether that has had a material 
impact on the cartels across the border?
    Ms. Ford Maldonado. I think unfortunately the situation 
that we're seeing at the border is only getting worse and 
worse. So something new needs to happen, and we need to address 
the new problems that we're facing. I believe that every option 
should be on the table to fight these cartels. Because they're 
not a small threat anymore. I think they're the largest 
criminal threat to the United States right now, and I think we 
should have every option on the table. Right now, I mean, we 
have a very strong robust military. They're employed in 
different missions around the world, which is honestly 
necessary. But our governance is threatened because we are not 
using the full force and weight of the United States to protect 
our own border and fight those that are coming in and basically 
declaring war against Americans. So we should be----
    Mr. Goldman. Well, I do think that, you know, one of the 
things that we are talking about here--and I'm sorry to 
interrupt you, I'm about out of time--you know, to the extent 
that my colleagues on the other side talk a lot about the 
control that the cartels have over the Fentanyl trade, over 
human smuggling, we have to look at this outflow of American-
made guns to the Mexican cartels, which give them the control 
at the border and the power to oversee these trafficking 
networks. With that, I yield back.
    Mr. Pfluger. The gentleman's time has expired. The Chair 
now recognizes the gentleman from New York, Mr. D'Esposito.
    Mr. D'Esposito. Thank you, Mr. Chairman. Thank you to the 
panel for being here this afternoon sharing your time with us. 
Since the Biden administration's taken office, encounters at 
our Southwest Border have hit record numbers. The latest 
statistics of monthly border encounters on our Southwest Border 
show that the number of encounters is 10 times more than they 
were in 2020. To reach across our Southwest Border, illegal 
immigrants often rely on smugglers and cartels working for 
TCOs. The FAA recently signed off on plans to open a migrant 
shelter in a warehouse at JFK International Airport, just 
blocks from my Congressional district.
    Ms. Ford Maldonado, what sort of risks are associated with 
housing unvetted migrants at a major international airport?
    Ms. Ford Maldonado. I can tell you that the problem is no 
longer just people coming in and looking for a better life. I 
have a stat right here. In the last 26 months, we've seen 6 
million total encounters from 171 different countries, and 
we've had 1.7 million total gotaways. So we don't even know 
what threats they're posing to our country.
    But I can tell you that it's not a victimless crime, right? 
The immigration that's going on, it's coming in. It's taking 
away from our resources that should be used to defend our 
country from all of these threats coming in.
    In just the first 26 months of this administration, CBP has 
apprehended over 80,000 criminals at the border with the very 
few resources that are at the border right now. What's 
especially scary about that is 90 percent of our border 
resources aren't even on the front lines.
    So I think that, among the 80,000 criminals, if you think 
about it, there were murderers. There were rapists, pedophiles, 
gang members. There's even a term, ``angel families,'' for all 
the people that have lost their sons, their daughters, their 
family members to crime coming in from illegal immigration 
because we don't have control over our borders.
    So I think--I think it's a massive threat. I think we need 
to get it into control. I think we've handed complete 
operational control at the border to the cartels, and we have 
no idea what else is coming in.
    Mr. D'Esposito. I agree. You know, not only is it a failure 
of the administration; it's a failure of our Secretary of 
Homeland Security. It's a failure of the American people, but 
it's also a failure of those seeking the American dream.
    I've always said that I support people coming into this 
country but coming through the front door. Nobody comes to this 
country for a better way of life because they want to be stored 
in a vacant building at JFK Airport.
    TCOs are decentralized and depend on multiple illicit 
businesses' support from adversarial and lawless nation-states 
and work together with other TCOs. Human traffickers use new 
technology such as cryptocurrencies to hide and obscure 
payments while trafficking these humans coming across our 
Southern Border.
    The first question is, what techniques have law enforcement 
used to keep up with the evolving networks and techniques that 
are employed to traffic humans covertly? I'll leave that to 
anybody.
    Mr. Blazakis. I'll take that question.
    I think the Department of Justice Federal investigators 
have done an excellent job charting the cryptocurrency flows, 
whether it's Bitcoin, Ethereum, you name the crypto. The 
Government has worked with groups like Chainalysis in the 
private sector and Ciphertrace amongst others to be able to 
track cryptocurrency.
    Cryptocurrency is not anonymous. It's pseudonymous. There 
is a great capability that exists within the Government to 
track crypto as a general matter. We have seen billions of 
assets frozen of transnational groups who have thought that 
they were able to have secure transactions via crypto, and 
they've lost those forfeited funds to the United States.
    So we are doing some good work in the crypto space. Great 
technology being leveraged by Department of Justice in 
conjunction with the law enforcement community and the private 
sector in this space.
    Mr. D'Esposito. Thank you.
    Mr. Chairman, I yield back.
    Mr. Pfluger. The gentleman yields.
    The Chair now recognizes the gentleman from Arizona, Mr. 
Crane, for 5 minutes of questioning.
    Mr. Crane. Thank you, Mr. Chairman. Thank you guys for 
coming. I appreciate you all being here.
    I am going to start with Mr. Urben. Sir, why do you think--
why do you think the cartels purchase chemicals necessary for 
the production of Fentanyl from China?
    Mr. Urben. There's obviously a budding relationship there, 
and there's an ease to get them, as well as there's a 
tremendous amount of chemical companies in China that produce 
the precursors that they need.
    Mr. Crane. That's a pretty long trip from China to Mexico, 
isn't it, sir? Doesn't that increase costs, shipment costs?
    Mr. Urben. Sure. It certainly would increase shipping 
costs. But, again, it's obvious that they are successful in 
acquiring the precursors from China, so they continue to do it.
    Mr. Crane. Thank you.
    In a Communist-run country like China, you would think that 
they would be able to crack down if they wanted to on the 
supply that's coming over and killing so many Americans. Would 
you agree with that? Or maybe do a better job of cracking down?
    Mr. Urben. I believe they can, yes.
    Mr. Crane. Sir, have you ever read the book ``Unrestricted 
Warfare''?
    Mr. Urben. I have.
    Mr. Crane. What about anybody else on the panel?
    Mr. Farah, have you read ``Unrestricted Warfare''?
    Ms. Maldonado.
    Ms. Ford Maldonado. No.
    Mr. Crane. Sir on the end?
    It was written and published in 1999, authored by two PLA 
senior colonels, and it talks about China's plan to, you know, 
dominate and take out the United States of America using 
economic warfare, cyber warfare, elite capture, corporate 
espionage, intellectual property theft, asymmetric warfare on 
almost every aspect of our social, economic, and political 
life. Basically, take out the United States of America without 
firing a shot, if possible.
    Does that sound--does that sound familiar to anybody on the 
panel?
    Does that sound like something you're seeing in the 
headlines, Mr. Urben?
    Mr. Urben. I mean, certainly, they are finding ways to 
undermine various aspects of our country. In terms of my 
investigative efforts when I was with DEA, those investigative 
efforts took place outside of mainland China.
    Mr. Crane. Now, obviously this is a Homeland Security 
Committee, and we're talking about border security.
    Reading that list and just knowing a little bit about the 
Chinese Communist Party, do you think it's feasible that they 
might use Fentanyl and the ingredients for deadly drugs to kill 
our own citizens?
    Mr. Urben. Again, in terms of my investigative efforts, I 
did not tie it back to mainland China and the CCP.
    In terms of the question itself, is it feasible?
    Mr. Crane. Yes.
    Mr. Urben. I guess it is feasible.
    Mr. Crane. But you would acknowledge that ingredients are 
coming from China, right?
    Mr. Urben. Oh, I certainly--they are coming--precursor 
chemicals are coming from China to Mexico.
    Mr. Crane. OK. Thank you.
    Ms. Maldonado, you were talking about the cartels--how 
effective they are, how powerful they've become. I think we can 
all acknowledge that. But I want to ask you a question.
    Do you think that that's what initiated this surge that 
we're seeing on the Southern Border? What do you think the 
cause of what we're seeing on the Southern Border--what do you 
think initiated that surge that we're seeing right now?
    Ms. Ford Maldonado. The surge of immigrants?
    Mr. Crane. Yes.
    Ms. Ford Maldonado. I think it's a lot of reasons. 
Actually, I was just in Juarez about 3 weeks ago on the Mexican 
side of the border, and I was able to talk to a lot of the 
migrants that were there. I think a big part of it is they're 
hearing that the border is open, right?
    So people are traveling--I mean, there was people there 
that traveled 8,000 miles with no water, no medical care 
because they're hearing that the border is open. They're 
hearing that their family members, their friends got in. That's 
what's taking them straight into the hands of the cartels. So I 
think a lot of it is word of mouth.
    Mr. Crane. Yep.
    Ms. Ford Maldonado. They're hearing that there's an open 
invitation to come into the United States. Unfortunately, 
they're having to make it through incredibly difficult and 
horrendous circumstances to try and get here.
    Mr. Crane. Yes, ma'am. Do you think something that might 
contribute to that is when the future President of the United 
States says in a 2019 Democratic primary debate, ``The United 
States is a country that tells people struggling under 
oppression or poor conditions,'' quote, ``you should come''? 
``They deserve to be heard. That's who we are. We are a Nation 
that says you want to flee and you're fleeing oppression, you 
should come''?
    Do you think that that's something that might initiate some 
of the surge that we're seeing?
    Ms. Ford Maldonado. I think absolutely. I think that that's 
what we're seeing happen. It hasn't always been the same 
problem that it is now. It's a problem that's continuously 
increasing, and it's being orchestrated by the cartels because 
they're making more money than ever.
    But I think that a different policy would have different 
results, and that's why we need to look at new avenues that 
haven't been thought of before.
    Mr. Crane. I agree. I also think we should go back to some 
of the policies that were working in the past.
    My time is up. I yield back. Thank you, Mr. Chairman.
    Mr. Pfluger. Thank you. The gentleman's time has expired.
    We will now enter a second round of questioning and do the 
same process between Republicans and Democrats for 5 minutes.
    I'd like to highlight the fact that I think I finally agree 
with one of my colleagues on the control of the border. When my 
colleague from New York mentioned that the cartels do in fact 
have control of the border, I do agree with that statement. 
They do have control of the border.
    I'd also like to remind my colleagues on the other side of 
the aisle that Operation Fast and Furious under the Obama-Biden 
administration put hundreds of thousands of weapons into 
Mexico. One of those--two of those weapons actually were found 
at the crime scene where U.S. Border Patrol Agent Brian Terry 
was murdered.
    So maybe this narrative that we need to turn our Border 
Patrol northward to protect Mexico from U.S. weapons--maybe we 
should just take a deep breath and protect the United States 
from the illegal and illicit activities that are entering our 
country.
    I'd like to focus your attention on this chart. On the 
bottom rung is the year 2020, and then it goes 2021, 2022, and 
2023. These are in pounds of drugs--illicit drug seizure by 
weight every single year from 2020 in red, to 2021 in gray, 
2022 in blue.
    Mr. Urben, with your 25-plus years in DEA, why do we see a 
doubling, tripling of the amount of drug seizures here in the 
United States that are coming from Mexico? I mean, is it--are 
these--is this success here, or is this actually an indicator 
of failed policies?
    Mr. Urben. Well, I mean, I'm not going to comment on the 
policy aspect in terms of--it's obviously an indication of more 
drugs coming across the border and more seizures. That's the 
way I look at it. So, to some degree, there is some success 
there if you're seizing the drugs.
    With the amount of drugs coming over and the amount of 
deaths associated with overdoses or murder for taking, you 
know, pills that are laced with Fentanyl, that's not success.
    Mr. Pfluger. That's not success. I agree.
    So what are the policies that need to be implemented to 
prevent the hundreds of thousands of deaths?
    Mr. Urben. It's obviously a broad question. I think the 
first component to that is there needs to be a joint 
cooperative relationship with Mexico in some way where you can 
action law enforcement or the military down there against the 
cartels. For us to disrupt the Mexican cartels, we have to 
start down there. That's, again, a broad issue. It's a State 
Department issue. It's a negotiated issue. But that's something 
that would have to happen to disrupt their capabilities.
    In terms of the homeland, I think--again, what I talked 
about earlier was data, right? We need data analytics to 
leverage data for insight for law enforcement against the 
Mexican cartels and Chinese money launderers.
    Mr. Pfluger. You know, you have all mentioned working with 
the Mexican Government.
    Mr. Farah, do you see this administration doing anything to 
have accountability or relationships with the Mexican 
Government to push back?
    Mr. Farah. I think the relationship with Mexico as well as 
Colombia and many other countries is much more fraught than it 
was previously. I think we have fewer and fewer interlocutors 
that can be trusted that we can deal with.
    I think--as I talked about the criminalized state structure 
emerging as different governments--and I think the AMLO 
government in Mexico is certainly moving this direction--they 
become more aligned on a strategic level with cartels than with 
United States and other groups, as I think Colombia will do 
under President Petro and as we've seen in Venezuela and as 
we've seen in Nicaragua.
    You're facing an outlook where you have fewer levers 
because we have, over time, allowed those relationships--and 
I'm not saying--I think it goes back a decade at least--those 
relationships to deteriorate, and we have not been successful 
in engaging in on-going training because those--the units we 
train and work with are consistently dismantled. When different 
governments come in, they are more aligned with the criminal 
groups.
    So you have well-trained, well-meaning people that are then 
dispersed to the wind. I think that that has made it more and 
more difficult over time to engage people who want to talk with 
us because they're not going to last in their own structures 
and for us to have people we can talk to down there.
    Mr. Pfluger. Thank you.
    I look at one of the agreements that we had from 2016--or 
really 2017 to 2020--and that was migrant protection protocols, 
MPP, otherwise known as Remain in Mexico. I can't help but draw 
a distinction between the numbers that we're seeing here in 
2020 in a policy like that that does limit the amount of malign 
activity that a cartel can do, that they can use people.
    I have been to the border a dozen times. I've seen the 
destruction. I've seen what Ms. Ford Maldonado has described. 
The assaults, the sexual assaults, the amount of money that 
they're charging.
    Ms. Ford Maldonado, what do you think about reinstatement 
and an actual implementation from this administration of MPP, 
Remain in Mexico? Would that have an effect on the amount of 
drugs that we're seeing come into this country?
    Ms. Ford Maldonado. I think it's possible. I think it would 
definitely have an effect on what's happening at the border. I 
think we also need to explore new avenues as to how we can 
secure the border and how we can stop the inhumane things that 
are happening.
    You were just saying, we've also heard stories from Border 
Patrol who have interviewed little girls who were raped 
multiple times on their journey to Mexico. Little girls that 
came across with the morning-after pill because their parents 
sent them across expecting them to be assaulted on their 
journey.
    So I think something needs to be done, not just because of 
what's happening at the border but what's happening beyond the 
border. I mean, Fentanyl is affecting absolutely everyone. I 
think that the most recent numbers we've seen is 107,000 people 
that were killed in the year ending in January 2022. That's 
9,000 people every 30 days. That is the equivalent of a fully 
loaded 747 crashing into a mountain every single day of people 
that are dying because of this.
    Mr. Pfluger. It's tragic. Thank you for your testimony. My 
time has expired.
    I recognize the gentleman from Rhode Island, Mr. Magaziner.
    Mr. Magaziner. Thank you, Chairman. I have to--I wish that 
some of our colleagues were still here.
    On this discussion about guns illegally trafficked across 
the Southern Border to the cartels, there are solutions here. 
They don't need to be partisan solutions. I wish our colleagues 
were here for this conversation.
    But, you know, listen. I know that our colleagues across 
the aisle are not going to support an assault weapons ban. 
They're not going to support a high-capacity magazine ban. I 
support those things. They don't. Fine. Leave that conversation 
for another day.
    As Mr. Blazakis said, the issue here is firearms often 
being purchased legally and then trafficked to the cartels 
illegally. There are things that we can do to crack down on 
that, like universal background checks; closing the gun show 
loophole so that when a gun is sold to an individual, wherever 
they are in whatever setting, there is a criminal background 
check to make sure that that firearm is not being sold to 
somebody with a record that suggests that they can't be trusted 
with it.
    I have introduced a bill--or I'm introducing a bill soon to 
stiffen penalties for dealers that fail to conduct background 
checks that they are legally required to conduct. Because, 
unfortunately, right now, under our current laws--and this is 
not the vast majority of gun shop owners, most of whom follow 
the law and do the right thing--but those that don't, when they 
knowingly fail to perform a background check, get a slap on the 
wrist over and over again.
    So there are things that are common sense that ought to be 
bipartisan that we ought to do, and we cannot minimize the fact 
that the source of the power of these TCOs, of these cartels, 
is their ability to inflict acts of violence on people because 
they are heavily armed, and that is part of the equation.
    I also want to build off of something that Ms. Ford said 
correctly when she was asked--correctly, I believe. Why are 
people coming here? The obvious answer is, well, because they 
think they'll have an easy time getting across. One of the 
reasons that they think they have an easy time getting across 
is because the cartels and the traffickers are lying to them 
and telling them that U.S. asylum laws will let anybody come 
across; you'll have an easy time getting asylum, getting a 
green card, whatever the case may be.
    So, again, one of the remedies to this is, let people apply 
for asylum at U.S. consulates or from their home countries so 
that they can see whether they are eligible or not. When people 
see themselves that they're not eligible, they'll be less 
likely to believe the lies that the cartels are telling them 
and make that dangerous, often deadly journey.
    So, again, there are things here that ought to be common-
sense, bipartisan solutions, and I do hope that----
    Mr. Pfluger. Will the gentleman yield? I'll give you 
additional time.
    Mr. Magaziner. Sure.
    Mr. Pfluger. Is that not currently happening where you can 
apply for asylum at U.S. consulates? Is that not the standard 
protocol?
    Mr. Magaziner. My understanding is that the legislation 
that the House just passed restricts the ability of people to 
use the CBP One app to get applications to have their asylum 
claims considered, that the number of places in other countries 
where people can apply for asylum in person is limited.
    Again, I think, under the current administration, some of 
those policies are changing. I think that's a positive thing. 
But I do think that needs to be part of the conversation. We 
need to make it harder for the cartels to lie to people about 
their eligibility.
    Mr. Pfluger. Yes. I just think we need to check that--you 
know, the specificity of that particular asylum--when you're 
seeking asylum and doing it in another country, I think it is 
pretty much standard protocol that that happens, and I'm not 
sure that the law has been changed to reflect any difference.
    You still have 2 minutes left. So I yield back.
    Mr. Magaziner. Thank you. All right. Switching gears here.
    We've focused most of our attention today on Mexican, 
Central American, and South American TCOs, and rightfully so 
because I think we are all in agreement that those are the TCOs 
that pose the most immediate risks to the homeland and to our 
citizens.
    But there are other groups out there, some of which are 
operating in the United States that are dangerous, and I 
believe Mr. Farah and others have mentioned them. ISIS, the 
Iranian transnational network.
    Can we just--and I'll open it up to any of you with my last 
couple minutes here. Would anyone like to spend a little bit 
more time highlighting the risks posed by some of those 
organizations and what we, as policy makers, should do to crack 
down on them?
    Mr. Farah. I think one of the real issues that we're seeing 
across the region is not just the traditional like Hezbollah 
threat network, Iranian threat network. It's--the Albanian 
mafia is now there. There are multiple parts of the Italian 
mafia structure now plugged in.
    Because the market is--the cocaine market is shifting while 
our synthetic market here is rising. So the cocaine market in 
Europe and Russia and the former Soviet republics is much more 
lucrative than it is in the United States. Our cocaine 
consumption has been down while our synthetic consumption has 
been way up.
    So I think that there are numerous new types of violence 
being introduced, numerous new types of money laundering being 
introduced. Numerous new types of trafficking structures are 
being introduced. It introduced these groups that have been in 
this hemisphere to a whole new set of African, European, Asian, 
and former Soviet republic structures that allow everyone to 
make a lot more money and make it much more difficult for us to 
crack down.
    There's one case I'm sure Mr. Urben is familiar with. The 
case of the Gayane, which is a ship that ended up being busted 
in Philadelphia with 17 tons. That was--those are Eastern 
European crews, loading off the coast of Chile, passing through 
with a different group that switched--that loaded the cocaine 
in the Panama Canal and moved to Philadelphia. It was all 
external actors in a 17-ton cocaine shipment, which was busted 
almost by luck in Philadelphia. So I think that's the issue.
    Mr. Magaziner. Would anyone else like to weigh in on any 
other TCOs that we should be focused on as well as a committee? 
Again, ISIS, Iran.
    Mr. Blazakis.
    Mr. Blazakis. I'll just say, on the ISIS front, I think 
it's particularly important that we keep our eye on 
Afghanistan. We've had multiple senior officials within the 
Biden administration speak with great alarm regarding a 
possible resurgence of the so-called ISIS Khorasan Province in 
Afghanistan, so much to the point where the administration said 
that they worry about that group having the external operations 
capability within 6 months. That statement was from a senior 
Department of Defense official about 3 months ago.
    I think it's particularly important that we continue to 
invest some level of resources as it relates to tracking ISIS 
Khorasan in Afghanistan, especially.
    Mr. Magaziner. Thank you all.
    Mr. Pfluger. The gentleman's time has expired.
    The Chair now recognizes the gentlelady from Nevada, Ms. 
Titus, for her questioning.
    Ms. Titus. Thank you very much.
    I'd like to talk about an issue that maybe many people 
don't think of as connected to homeland security, but it's 
becoming more and more entwined with some of the issues that we 
have internationally. It's affecting major metropolitan areas, 
especially in a district like mine, which is Las Vegas. That's 
organized retail crime.
    We've seen that it involves targeted, large-scale organized 
theft. It's run through international criminal networks. I 
think the Department of Homeland Security Investigations Unit 
issued a report saying the average American family will pay 
more than $500 annually in additional cost due to the impact of 
organized retail crime, which has been used to finance on-going 
illicit operations like human trafficking and drug trafficking.
    There was another DHS report that noted organized retail 
crime is leading to more brazen, more violent attacks in retail 
stores throughout the country, and many of the criminal rings 
orchestrating these thefts are also involved in other serious 
activities.
    So I wonder--it's an incredibly complex issue, but should--
can you make some suggestions of how we can better address it 
with more interaction among--across Government agencies or with 
different levels of government? Anybody?
    Mr. Urben. I mean, the first thing you'd want to do is 
prioritize it and put funding into that and have a local, 
State, and Federal response set up a task force to do--whether 
it be undercover operations to engage--you know, they're going 
to sell these products after they steal them.
    Ms. Titus. Right.
    Mr. Urben. There's a process associated with this, and 
they're doing it continually again and again and again.
    The other component is if you could intercept their 
electronic communications. Obviously, if it's an international 
or a sophisticated organized crime group, they're communicating 
amongst other members. So I think that's the first thing.
    I also think a deterrent--however you want to work with the 
private sector--to have a deterrent at that store, at that 
location, so it's not as easy to steal the goods.
    Ms. Titus. That was going to be my question.
    Do you think a Federal task force would be something that 
would be useful in the Department of Homeland Security?
    Mr. Urben. On this specific topic? Yes. I do think the more 
sophisticated actors that are operating beyond State--from 
State to State doing--multiple States--I think a Federal task 
force would be the answer. Again, encompassing State and local 
resources and expertise.
    Ms. Titus. I've got a bill that's bicameral and bipartisan 
called Combating Organized Retail Crime to give more resources 
to Homeland Security to go after this. So we should look at 
having a task force as part of those resources.
    Mr. Urben. I've had task forces that I've supervised, and 
if you have proper leadership and resources, they can do 
amazing things. So I think the threat that you're discussing 
and you're talking about--that would be a solution with 
properly--properly resourced up.
    Ms. Titus. Thank you.
    We could look at that, Mr. Chairman, Mr. Ranking Member.
    Anybody else want to comment on that? I mean, they're 
stealing everything from eyelashes to power saws, you know, and 
reselling it, and then that money goes into other nefarious 
operations.
    Well, let me ask you another question. This goes back to 
Mr. Goldman's talk about guns and--U.S. guns go to Mexico, and 
that's where they are used in the involvement of a lot of 
crime.
    Mr. Blazakis, could you address how we could work better 
with Mexico to address this issue?
    Mr. Blazakis. So one of the most important things that we 
need to do with the government in Mexico is engage with them as 
it relates to implementing the bicentennial framework that was 
put in place by the Biden administration in agreement with the 
Mexican government.
    On this front, it's still early days. But, in particular, 
there are three pillars where I think it's particularly 
important to spend our time. That is in the area of jointly 
working on a challenge of public health-related issues, which 
obviously is an impact that comes from the cartel work.
    Doing more in the area of shoring up the border, particular 
in the context of using technology. I'm not a believer of 
building walls and moats. I think that's--you know, from times 
in the past, it didn't help the Chinese particularly when it 
comes to the creation of the Great Wall of China. It's 
certainly not going to work in the contemporaneous time that we 
live in today.
    There's a cyber component to this that we have to explore 
to pursue these criminal networks as well, and I think the 
bicentennial framework is an important place to do this work.
    But we can't alienate the Mexican government. I do think we 
run the risk of doing so if we consider certain other kinds of 
policy options, whether it's the FTO designation of the 
cartels, whether it's the use of authorized military force 
against cartel members across the border.
    I think these things will push AMLO into the arms of our 
economic adversaries like China, our ideological enemies like 
Iran, and our military foes like the Russian Federation.
    Ms. Titus. Thank you.
    Thank you, Mr. Chairman.
    Mr. Pfluger. The gentlelady's time has expired.
    I'd like to thank the witnesses for your valuable testimony 
and for Members on this committee for your questions.
    Just to close with a couple of thoughts, I mean, I think 
you heard Members on both sides of the aisle asking very 
similar questions. We may disagree on a couple of tactical 
points, but on the strategic problem that we have right now, 
the fact that Fentanyl--the trafficking of the opioids, the 
problem that we see in the United States is massive, and it's 
tragic.
    I hope that, as a result of this hearing, what we will see 
is a push--not just in a bipartisan way but more in a whole-of-
Government way, that we take your testimony, that we take your 
answers and your experience professionally, and that we're able 
to push this into action.
    Because--on a point of personal privilege, my 12-year-old 
daughter was here listening to this. I have a classmate from 
the Air Force Academy here with his daughter. I see many young 
people in the audience here today. The reason that we're having 
this hearing is to preserve the next generation from being 
inundated with--whether it's Fentanyl or other opioids crime or 
whatever else it may be.
    I hope that the work on this subcommittee will really get 
at the heart of this, that our country can come together in a 
way that we can lower those numbers. Whatever the cause may be, 
this is not and should not be a partisan solution. It should be 
a bipartisan, bicameral--as Ms. Titus mentioned in her bill--
solution to get after this and to see our communities safe.
    The Members of the subcommittee may have additional 
questions for the witnesses, and we would appreciate and ask 
the witnesses to respond to these in writing. Pursuant to the 
committee rule VII(D), the hearing record will be open for the 
next 10 days.
    Without objection, this subcommittee stands adjourned.
    [Whereupon, at 3:33 p.m., the subcommittee was adjourned.]

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