Emerging Threats and Security in the Western Hemisphere: Next Steps for U.S. Policy

Hearing before the
House Committee on Foreign Affairs

October 13, 2011

REPRESENTATIVE ILEANA ROS-LEHTINEN (R-FL): (Sounds gavel.) The committee will come to order. I'd like to recognize the visiting delegation from the Afghan National Assembly. We have 60 members of parliament from the Afghan National Assembly, mostly from the budget and economic committees. We have -- we have the secretary of the Budget Committee, the chairman of Budget Committee. We have many important folks here. And the delegation is here to observe how committee hearings operate in the House. Good luck with that.

(Laughter.)

REP. ROS-LEHTINEN: And if you could please stand, I know that you're over here and over here as well.

(Applause.)

REP. ROS-LEHTINEN: Thank you very much.

Thank you. Thank you ladies and gentlemen. It is an honor for us to have you visit our committee, learn from our mistakes and get a good democracy going there in Afghanistan. We so appreciate your efforts and your hard work. Thank you so much for honoring us with your presence.

After recognizing myself and my friend, the ranking member Mr. Berman, for seven minutes each for our opening statements, I will recognize the chair and the ranking member of the Subcommittee on Western Hemisphere for three minutes each -- and then one minute for any members who seek recognition. We will then hear from our witnesses. And without objection, the witness' prepared statements will be made part of the record. Members may have five days to insert statements and questions for the record subject to the length limitations in the rules.

The chair now recognizes herself for seven minutes.

In light of this week's foiled Iranian terrorist plot to be executed on American soil, this hearing could not be more timely. I want to commend the work of the DEA and the FBI and all of our outstanding agencies for their incredible work in uncovering this plot. I applaud the efforts of all law enforcement personnel and intelligence officers that continue to protect our homeland and keep us safe. Kudos also to the Mexican agencies who collaborated with us in making this a successful operation.

The issues to be covered by this hearing has been a priority -- have been a priority for many of us on this committee for some time as we sought to develop legislative policy and the responses to counter Iran's increasing activities in the Western Hemisphere, the threat of Islamic extremists in the region, and the threat posed by the narcotrafficking networks and related violence in themselves but also as ready-made networks to facilitate and support other terrorist activities throughout the hemisphere, including right here in the United States as we saw in that plot. We must stop looking at the drug cartels today solely from a law enforcement perspective and consider designating these narcotrafficking members as foreign terrorist organizations and their leaders as specially designated nationals if they are providing material support and assistance to other foreign terrorist organizations and especially designated nationals and their state sponsors.

The foiled Iranian plot also underscores the need to assess current U.S. strategy and examine what actions the United States must now undertake looking beyond existing initiatives to confront the evolving and the emerging threats and security challenges in the Western Hemisphere.

The U.S. provided nearly $2 billion in security-related assistance to the countries in Latin American and the Caribbean in the last fiscal year. Is this assistance advancing U.S. security objectives, and what have been the tangible returns on our investment? While violent crime in Central American continues to increase, our counternarcotics support for these countries remains limited. As Central America is ripped apart by drug violence, the State Department continues to dole out counternarcotics funding to regimes elsewhere in Latin America that are actively working against U.S. interests.

In Bolivia for example, State is providing $15 million for fiscal year 2011 to fight drug trafficking; and yet Bolivia is actively working against U.S. interests, has withdrawn from the Single Convention on Narcotic Drugs at the U.N. And the former Bolivian drug chief, General Rene Sanabria, was sentenced last month to 15 years in prison for drug smuggling charges.

In Peru, State has spent over $70 million in the past two fiscal years on counternarcotics programs, but according to the Office of National Drug Control Policy, overall coca cultivation increased in 2010 by 33 percent, which led to a 13 (sic) all-time high, no pun intended.

Further, the new Peruvian administration temporarily suspended U.S.-funded coca eradication programs earlier this year. There is no question that equipment and technology are necessary for protecting the integrity of this region from drug cartels, from extremist groups and from rogue regimes.

And I am pleased to see that -- many countries in the region, such as Colombia, assuming a more active role in taking on these threats. However, Venezuela and Brazil's increasing purchase of advanced lethal military equipment from Russia and China is very troubling and may lead to an arms race in the region. As we formulate and implement our security policy in the hemisphere, it is crucial that we understand the transnational nature of the illicit individuals and groups whom we are targeting.

Rogue regimes, extremist groups, they leverage the resources of their sympathizers to strengthen their capabilities in the regime and advance their hate-filled agendas. For years the State Department has reported on the fundraising activities of Hezbollah and Hamas in the region. This week's foiled plot contributes to the growing evidence of the potential links between these groups and the drug cartels. As we know, such a linkage was not made because those were our guys posing as members of the drug cartels. But it seems that our sworn enemy Iran sees a potential kindred spirit in the drug cartels in Mexico.

We report on the expansions of the FARC into West Africa, and its potential links with Hezbollah and al-Qaida in the lands of the Islamic Maghreb. In June, Iran and the rest of the Venezuela-aligned ALBA countries in Latin America inaugurated a military academy in Bolivia to educate and train their forces. And we know that Cuban intelligence officers are embedded throughout the Venezuelan government, as well as spread across the hemisphere working against U.S. national security interests.

This week we also learned that Venezuela and Cuban foreign ministers led a delegation which included representatives of Ecuador, Nicaragua and Bolivia to Syria to meet with al-Assad to show their support of his brutal attacks against his own people.

And finally a Department of Defense report from last year stated that Iran's Quds Force has, quote, "increased presence in Latin America, particularly Venezuela," end quote. Our national security interests, the stability of our hemisphere as a whole and this week's failed plot has reminded us that our homeland security is at stake. We must take immediate action to counter these threats and to not waste valuable resources on misplaced diplomacy with those who seek to do us harm.

So I thank all of our witnesses for being here today and I'm now so pleased to turn to my friend, the ranking member of our committee, Mr. Berman of California for his statement.

REPRESENTATIVE HOWARD BERMAN (D-CA): Well thank you very much, Madame Chairman, and I join you in welcoming our brothers and sisters from the Afghan National Assembly. I hope nothing you see this morning will cause you to lose faith in democracy, and we welcome you here. And what you'll probably see a little bit of is some disagreements but hopefully not being more disagreeable than usual. And we're glad to have you here.

This is our first full committee hearing that we've had this Congress that touches on our own hemisphere. And the title is revealing. While there are certainly security-related issues in the region that deserve our very close attention, like the foiled plot to murder the Saudi ambassador, I think it is a mistake to view our neighborhood as a constellation of threats rather than a series of opportunities.

This approach is not only out-of-date. It has a real cost for the United States. In his first term, the administration of President George W. Bush emphasized threats and confrontations in the Americas. But in his second term, his administration adopted a very different tone. Why? Because it became painfully clear that his initial approach did not serve U.S. interests, and in fact it did considerable damage.

The U.S. is still recovering from the colossal loss of influence in the region that resulted from those policies. And our constant post-9/11 lectures on terrorism to a region that has suffered from homegrown terrorism for 50 years left a bad taste.

Today, much of what -- Latin America perceives that we hold them at arm's lengths or worse -- as the title of this hearing implies -- that we see them as a problem rather than as partners. To its credit, the Obama administration signaled early on that it understood the need to chart a different course. In his speech to this region's leaders a few months after taking office, President Obama sought to defuse the threats and security legacy by emphasizing that trust has to be earned over time, and pledging that the U.S. seeks an equal partnership in the hemisphere.

"All of us," he said -- I quote -- "must now renew the common stake that we have in one another." This administration has made significant strides in regaining that damaged trust, as well as the influence that flows from it. The president's trip to the region this past March was understated, but it was self-assured and purposeful. Secretary Clinton's frequent presence and engagement in the region have also paid great dividends.

In his first State of the Union speech, President Obama said, "Our power grows through its prudent use; our security emanates from the justness of our cause" and "the force of our example." Nowhere is this notion more fitting than in our own hemisphere, and much more needs to be done.

To be sure, the U.S. must remain aware of all security concerns in this region, and the list is long. It ranges from the fight against barbaric drug cartels in neighboring Mexico, to the possibility of mass migrations to the U.S. from Cuba or Haiti.

These issues must be placed in a policy context and in a framework that permits the U.S. to understand and forcefully pursue its strategic interests and its values. The witnesses before us today represent bureaus which deal only with, as some call it, the drugs and thugs issues in the Western Hemisphere. This is no reflection on the panelists, whose work I hold in the highest esteem, but it paints an incomplete and skewed picture of our relationships with our neighbors.

Assistant Secretary Brownfield, because of your past work in the State Department bureau best positioned to frame these issues for us, the Bureau Of Western Hemisphere Affairs, I look to you to help us understand the complete picture.

Just last week, the Western Hemisphere Subcommittee held a second hearing intended to peddle the notion that in the fight against the drug cartels, Mexico is facing a full-scale insurgency from politically motivated terrorists.

Then you have a Republican candidate for president declared in cavalier fashion that we should send U.S. troops into Mexico. This is a clear slap in the face of our Mexican neighbors, and particularly to our ally President Calderon, on an issue that both of our governments have declared is a shared problem and that requires a true partnership to solve.

It is critical that our policy toward the region be based on solid facts, yet we sometimes seem to be chasing ghosts or creating caricatures of security threats. We should roundly condemn the horrific bombings of the Israeli embassy and the AMIA center in Argentina by Iran and Hezbollah back in the 1990s. And if the foiled Iran-backed plot to murder the Saudi ambassador on U.S. turns out to be true, and I assume it is, this would represent a significant escalation of Iranian government terror tactics reminiscent of those actions in Argentina decades ago.

At the same time, the persistent and bizarre statement that Iran has built its largest embassy in the world in Managua, or alternatively Caracas, is simply untrue, and a distraction from what should be a serious discussion of the true nature and dimension of the Iranian threat and what we should do to prepare for it. This is neither a semantic nor an academic exercise. The stakes are real and they are high.

This hemisphere is by far our biggest trading partner and our biggest energy supplier. We aspire to the same values. Overwhelmingly the constitutions of these countries are based on ours. If we don't keep relations with our neighbors on the right track, there is a real risk that the biggest regional threat facing the United State could become our own ability to take advantage of the irreplaceable ties we enjoy with the diverse and dynamic countries of our hemisphere. And I yield back.

REP. ROS-LEHTINEN: Thank you so much. And I'm pleased to yield three minutes to the Subcommittee on Western Hemisphere chairman, Mr. Mack of Florida, who doesn't pedal but puts forth thoughtful non- Pollyanna assessments of the threats that our Latin American allies face. Pleased to yield him three minutes.

REPRESENTATIVE CONNIE MACK (R-FL): Thank you, Madame Chair, and I also want to say that I want to associate myself with all of your opening statement, and thank you for your leadership. And I also would like to -- for those who are watching or paying attention to this, you could not have seen or heard more of a clear difference in direction than from the chair of the committee and the ranking member.

The idea that we are going to be safer in our hemisphere -- which is a shared desire by all of the countries in the Western hemisphere -- that this administration has somehow improved our security in the Western hemisphere I think is mistaken, short-sighted and unrealistic. Not wanting to address the real threats creates opportunity for those that wish to do harm on the United States and other countries in Latin America.

I have been suggesting and proposing for years now that Hugo Chavez be placed on the state sponsor of terrorism. There is no doubt that Hugo Chavez supports terrorist organizations, whether it's the FARC or Iran. We know that there are flights from Iran into Venezuela that go unchecked, and that has to stop and Chavez needs to be held accountable.

We also know that in Mexico the situation on the ground has changed and there's no denying it. And we've had two hearings in the Western Hemisphere focused on Mexico and the evolution of the threat of the drug cartels, and I think what we've seen over the last couple of days with this plot to assassinate -- this assassination plot highlights the work of our committee in defining what is happening in Mexico with the cartels as an insurgency that uses terrorist activities to further its cause. You cannot deny it.

Now you might have a disagreement about wanting to label it as an insurgency for political means, but I think if you're unwilling to identify the problem correctly then you are unable to properly put a policy forward to help combat it. I will say this. Our friends in Mexico, we share the same goal. We want freedom, security and prosperity for all of our people. Mexico doesn't want guns and cash moving south. We don't want drugs and terrorists moving north. We must do something about our border. We must secure our border.

I think the challenges in the Western hemisphere can be overcome. Things like the free trade agreements that passed the House yesterday are very good starts. Unfortunately it took a long time for those to come, and I've had meetings with the presidents of Panama and Colombia where they almost gave up. So I'm glad to see that we passed those.

Madame Chair, thank you for the time. I think there are a lot of challenges, and I appreciate this hearing today.

REP. ROS-LEHTINEN: Thank you so much, Mr. Mack, for your leadership on those issues. And another leader is my good friend from New York, Mr. Engel, who is the ranking member on that Subcommittee on Western Hemisphere, and he is recognized for three minutes.

REPRESENTATIVE ELIOT ENGEL (D-NY): Well, thank you very much, Madame Chairwoman. Thank you for holding this important hearing today. As the ranking member of the Western Hemisphere Subcommittee, I am well aware personally of your long-standing interest in the region and I believe it is good that under your leadership the committee is paying close attention to the issues which impact our friends south of the border.

Today's hearing focuses on security and emerging threats in Latin America and the Caribbean. These are important topics and this committee is right to focus on them. Only Tuesday we learned that the elements of the Iranian government tried to hire Mexico drug criminals to murder the Saudi ambassador. With the excellent work of the DEA and the FBI, along with the improved security cooperation with the Mexican government, we were able to apprehend the perpetrators before they could carry out this terrible plot.

We've spent much time and effort expanding security coordination with Mexico, Colombia and others in the region, interrupting drug and crime flows through the Caribbean and Central America, and keeping a close eye on the relationship between Venezuela and Iran.

As chair of the Western Hemisphere Subcommittee during the previous four years, I held hearings on all of these issues and I consider them serious and worthy of our attention, as I know our new chairman, Mr. Mack, does as well. However, we must recognize that the issues of the region extend beyond security. During my tenure in the chair the Western Hemisphere Subcommittee covered poverty and inequality, flows of remittances, relief in Haiti, press freedoms and other issues.

I share the concern of the chair of the full committee and the subcommittee and applaud this hearing, but I want to reiterate we also must not forget that the issues which affect the Western hemisphere go well beyond security, and the U.S. relationship with countries in the region extends significantly beyond the threats and dangers which this hearing will rightfully bring out.

Yesterday's passage of the Colombian and Panama FTAs -- and I was pleased to vote for both of them -- are only examples of the issues which connect us to this hemisphere. The U.S. also shares cultural, linguistic, social and other links with our southern neighbors. I've long said that one of our major problems involving security south of our border is the obscene number of American guns which flow down illegally south of the border, come into our country illegally, and then go south to Mexico illegally.

President Calderon has told me personally that he believes 90 percent of the crimes committed by the drug cartels are committed with weapons that come from the United States south into Mexico. So if we could stop that flow, imagine how much we could stop the cartels and the drug violence.

So as we move ahead with today's important hearing, let's remember that security is one component of the rich relationship the U.S. has with Latin America and the Caribbean but an important component, and I am very pleased, Madame Chairwoman that you have called this important hearing today. Thank you. I yield back.

REP. ROS-LEHTINEN: Thank you so much, Mr. Engel. I'm pleased to recognize members for one-minute statements. Mr. Johnson of Ohio is recognized.

REPRESENTATIVE BILL JOHNSON (R-OH): Thank you, Madame Chairman, and thank you to our witnesses for being here today. I find that too often we tend to envision serious threat to our national security coming from far across the ocean, one or the other. But what's happening in our own hemisphere is certainly just as important, if not more so. It's especially disconcerting when these emerging threats happen to reflect a joint venture with those who declared the destruction of the United States as one of their stated goals.

Of course at this hearing today I'd be remiss not to mention the uncovered terrorist plot of earlier this week in the alleged role that the Western hemisphere played in facilitating a planned attack on American soil.

Iran's continued interest in partnering with nations so close to home is a legitimate danger to our national security, one that should also draw our focus to Iran's interest in conducting mineral exploration in countries that just happen to have a large unexploited uranium deposit. And with that I look very much forward to the testimony from our witnesses. I yield back.

REP. ROS-LEHTINEN: Thank you, sir. Mr. Sires of New Jersey is recognized.

REPRESENTATIVE ALBIO SIRES (D-NJ): Thank you, Madame Chair, and welcome to our committee hearing. I'll be very brief and just say that I hope that what happened the last few days serves as a wake-up call to this country. The Iranians are not in Cuba or in any other place to go to the beach or anything else other than to try to destabilize and to cause as much destruction to this country as possible. I really believe that in my heart, and I hope that we wake up to that fact.

And I always believe that we should take a regional approach to the security of this country, especially when it comes to South America and Central America. The Merida effort is a great effort but I think more of a regional approach should be taken. So with that I yield back the balance of my time.

REP. ROS-LEHTINEN: Thank you very much, sir. Ms. Schmidt of Ohio.

REPRESENTATIVE JEAN SCHMIDT (R-OH): Thank you, Madame Chair. And I just want to dovetail on the announcement of the plot to assassinate the ambassador from Saudi Arabia in the United States by an Iranian operative living in Texas illustrates the dangers that we live in. I mean, this gentleman attempted to hire a presumed Zeta drug cartel member from Mexico to help carry out the deed, and it showcases what illegal drug activities can do to our national security.

Venezuela's close relationship with Iran and its tentacles in the Western hemisphere raises further concerns. More investigation to illegal activities occurring in the Western hemisphere are critically necessary and at least three questions need to be addressed.

First, exactly what are the threats to our national security in the Western hemisphere, how deep are they, how penetrating, and what kind of threats do they also pose to our allies; two, what are we currently doing to address these threats?; and three, what can be done to do -- what can we be doing better and what more needs to be done? And I'm looking forward to the testimony and I yield back.

REP. ROS-LEHTINEN: Thank you, ma'am. Mr. Chandler is recognized.

REPRESENTATIVE BEN CHANDLER (D-KY): Thank you, Madame Chair. I just am very interested. I want to thank the panel for being here. I'm very interested to hear exactly what it is we are not doing that we ought to be doing, particularly vis-a-vis Mexico, what solutions you all have. I think all of us have a sense generally what the threats are. What are the solutions? What can this country actually do to secure our country from threats to our south that we're not doing? And I hope you all will focus on that particular thing as much as you can. Thank you.

REP. ROS-LEHTINEN: Thank you, sir. Mr. Turner of New York is recognized.

REPRESENTATIVE BOB TURNER (R-NY): Thank you, Madame Chairman. I'm here to listen and learn today. Thank you.

REP. ROS-LEHTINEN: Thank you, sir. Mr. Connolly of Virginia.

REPRESENTATIVE GERALD CONNOLLY (D-VA): Thank you, Madame Chairman. For a country that is preoccupied with the great Satan, one has to conclude that no regime on earth is more familiar with the satanic than is the regime in Tehran. The outrage that was revealed this week about a plot to assassinate the representative of another sovereign nation, in this capital of this sovereign nation, is unacceptable. And it stretches credulity to believe that the highest levels of that government, both in the clerical circles and in Ahmadinejad's regime did not know, were not aware of this plot.

And it seems to me the policy of the United States government has to be, absent evidence to the contrary provided by that government, that we will hold them accountable as if they plotted this from the highest halls of government in Tehran itself. I look forward to the hearing, Madame Chairman.

REP. ROS-LEHTINEN: Thank you, sir. Ms. Bass is recognized.

REPRESENTATIVE KAREN BASS (D-CA): Thank you, Madame Chair. From the comments and opening statements by my colleagues today on both sides of the aisle, we all recognize that there are important challenges that must be addressed within the region. The United States and other Western hemisphere nations must increase cooperation and collaboration to successfully and effectively address emerging challenges.

While I know this hearing is focused on the challenges and the threats in the Western hemisphere, there are a couple of positive examples and I thought I would highlight those. The U.S. has played a critical role in recovery efforts in Haiti since the devastating 2010 earthquake. The U.S. in close collaboration with the Peru Mine Action Center have successfully located and destroyed more than 3,900 land mines left over from the 1995 conflict between Peru and Ecuador.

The Department of State continues to pursue pathways to prosperity which links Western hemisphere countries committed to democracy, and in this regard one question that I hope will be answered is why we don't have ambassadors to Ecuador and Bolivia. Maybe that will come up in the testimony of the witnesses.

REP. ROS-LEHTINEN: Thank you so much. Mr. Deutch of Florida.

REPRESENTATIVE TED DEUTCH (D-FL): Thank you, Madame Chairman, Ranking Member Berman. Thank you to our witnesses for being here today. And the events of this week leave no doubt that the Iranian regime is expanding its presence, dangerously so, in the Western hemisphere. While we've been aware of the Iranian presence in South America for some time, the possible link between the foiled terror plot and the dangerous Mexican drug cartels is particularly troubling.

There's no doubt that the Iranian regime is looking for additional opportunities to expand its sphere of influence, and the regime seems to have found a willing partner in Mr. Chavez. Over the past year the emergence of jointly owned Venezuelan and Iranian banks has allowed the Iranian regime to continue to move money throughout the international banking system, and in turn continue to fund its illicit activities, nuclear activities and be the leading state sponsor of terror.

Just how Venezuela benefits from these efforts and their effect on the rest of the region remains unclear. As I've said before, I've been concerned about the exploitation of the tri-border area by terrorist organizations through arms and drug trafficking, document and currency fraud and money laundering. It's widely known that Iran's proxy, Hezbollah, in particular has benefited financially from the manufacture and movement of pirated goods in the tri-border area. And I look forward to discussing these issues with our witnesses today.

REP. ROS-LEHTINEN: Thank you, Mr. Deutch. Mr. Poe of Texas, the vice chair of the Subcommittee on Oversight and Investigation.

REPRESENTATIVE TED POE (R-TX): The Western hemisphere has been ignored for a long time. I think we're starting to remember that what happens to our south is important to our national security. Everyone south of the border of the United States is our neighbor, after all. President Monroe back in 1823 announced a doctrine called the Monroe Doctrine. Many of us learned this in school.

I don't know if it's even taught in schools any more. But I'd like to see if that plays anything into what's taking place with our national policy or if that's been replaced by something else. Certainly if it is still the policy of the U.S., Iran violated the Monroe Doctrine and I'd just like to hear you all's input on that philosophy of the Monroe Doctrine.

Being a border state with Mexico, I think the border is a national security issue. Last year 663 individuals came from special interest countries that were caught by our law enforcement at the border and I'd like to hear more about that. And we need to, I think, label the drug cartels as foreign terrorist organizations and deal with them accordingly. Thank you, Madame Chair.

REP. ROS-LEHTINEN: Thank you so much, Mr. Poe, because that's just the way it is. And I thank all of our members for wonderful opening statements, and now we're so pleased to turn to our witnesses and welcome them. First, an old friend of our committee, William Brownfield, the assistant secretary for the Bureau of International Narcotics and Law Enforcement Affairs at the Department of State. Prior to his appointment Ambassador Brownfield served as U.S. ambassador to Colombia from 2007 to 2010, and ambassador to Venezuela from 2004 to 2007. Welcome. Great to see you.

Next I'd like to welcome Philip Goldberg. He is assistant secretary of the Bureau of Intelligence and Research at the Department of State. He previously served as the coordinator for implementation of the United Nations Security Council Resolution 1874 on North Korea, and as U.S. ambassador to Bolivia from 2006 to 2008. Welcome, Mr. Goldberg.

And I'd like to welcome also Daniel Glaser. He's the assistant secretary for terrorist financing in the Office of Terrorism and Financial Intelligence at the Department of Treasury. Prior to this position Mr. Glaser served as Treasury Department deputy assistant secretary for terrorist financing and financial crimes since November 2004. Welcome, Mr. Glaser.

And finally I'd like to welcome Paul Stockton. Thank you, sir. He is assistant secretary of Defense for homeland defense and America's security affairs. Paul is responsible on homeland defense activities, defense support for civil authorities and Western hemisphere security affairs for the Department of Defense.

I thank all of our witnesses.

I kindly remind you that your prepared statements will be made a part of the record. And if you could limit your remarks to no more than five minutes -- and without objection your written statements will be inserted into the record.

We will begin with Ambassador Brownfield.

WILLIAM BROWNFIELD: I thank you, Madam Chairman, Ranking Member Berman, ladies and gentlemen of the committee. Thank you for the opportunity to appear before you today. Madam Chairman, I've been in the foreign service for 32 years. I mention this not just to make you feel sorry for me but to suggest that the answers to today's theme, emerging threats and security in the Western hemisphere, have evolved over time.

We are providing a snapshot of a moving train. In many ways the speed and direction of that train are determined by our own policies and programs. If you had asked me to assess major threats in 1980, I would have pointed to guerrilla insurgencies in Central America supported by governments both within and outside of the hemisphere. In 1990 I would have answered, huge vertically integrated Colombian drug cartels controlling all trafficking in the Andes.

In the year 2000 I would have said that the threat was the nexus between drug traffickers and guerrilla insurgencies in Colombia and Peru. In 2007 I would have argued that the most serious security threat to the United States had moved to Mexico, where criminal cartels produce, traffic and market their product into the United States. Today I believe our greatest threat has moved to Central America, where traffickers and criminal gangs now facilitate the flow of up to 95 percent of all cocaine reaching the U.S. and threaten the very governments themselves.

Madam Chairman, I suggest there is cause and effect here. We correctly focused on Central America in the 1980s and the Medellin and Cali cartels grew. As we broke the backs of the major cartels, smaller traffickers developed an unholy alliance with the Colombian FARC and ELN and the Peruvian Sendero Luminoso. As Plan Colombia squeezed Colombian traffickers, Mexican cartels filled the void. And as the Merida Initiative begins to bite against those cartels, we see them moving into Central America.

We still face security threats from drug cartels, guerrilla movements, organized crime and trafficking networks, but our job is to stay ahead of the emerging threats, and right now I believe that is Central America. The president made that clear last March when he announced his Central America Citizen Security Partnership. Our tactical challenge is to provide additional resources for Central America law enforcement and security programs, link the governments more closely together in regional efforts, engage other partners and support our essential Plan Colombia, Merida Initiative and Caribbean Basin programs. And we very much appreciate the committee's support in this effort.

The committee asked us to consider as well security threats from outside the hemisphere. They may not be as great as those from within, but they very definitely exist. I served three very long years as ambassador to Venezuela. When I arrived in 2004, the diplomatic list showed fewer than 10 diplomats assigned to the Iranian Embassy. When I left in 2007, the number was above 40. The Iranian ambassador never told me what his people were doing, but I assume they were doing something.

And if you had asked me when I left Argentina in 1989 the prospects for massive terror attacks within five years supported by the Iranian government that would kill more than a hundred innocent people in Buenos Aires, I would have said that probability was very remote. I would have been wrong, dead wrong.

Members of the committee, our mission is to assess the threats from the hemisphere to the American people and support the programs that solve them. I believe our highest priority right now is Central America, but we cannot lose sight of Mexico, Colombia, the Caribbean and the Andes. We must look ahead to tomorrow's priorities. I see an emerging trafficking threat from South America across the Atlantic to West Africa, and from there to Europe or back to North America, and we must not lose sight of the external players in our hemisphere. We did that in the early 1990s. We should never do that again.

Madam Chairman, I thank you for this opportunity and I look forward to your questions.

REP. ROS-LEHTINEN: Thank you, Mr. Ambassador.

Now we'd like to hear from Ambassador Goldberg.

PHILIP GOLDBERG: Thank you, Madam Chairman and Ranking Member Berman and members of the committee. Thank you for this opportunity to be with you today. Although much of the Western Hemisphere is experiencing strong economic growth, improving social conditions and increasingly consolidated democratic institutions, there continue to be some threats to U.S. interests in the region and indications of new threats from outside the region.

The drug threat to the United States continues to emanate primarily from the Western Hemisphere. The flow of drugs fuels violence in Mexico and contributes to the survival of terrorist groups in Colombia. Populist governments continue to work to undercut U.S. influence in the region. We are concerned about increasing Iranian activities in the hemisphere, and in particular by the charges that individuals directed by elements of the Iranian government were conspiring to assassinate the Saudi Arabian ambassador to the United States on U.S. soil.

President Calderon's ambitious efforts to combat Mexico's powerful drug cartels has achieved important successes, but faces enormous challenges. Mexico is pursuing a multifaceted strategy to eliminate the cartel's leadership, dismantle their networks and strengthen the rule of law.

Mexico faces escalated levels of brutal violence as drug cartels fight amongst themselves for dominance but also seek to intimidate the government and population. Mexican drug trafficking organizations are expanding into Central America, as Ambassador Brownfield said, which is experiencing a citizen security crisis that threatens the democratic gains made over the past two decades. Across the region we have witnessed surges in murder rates, inroads by transnational gangs and narcotics traffickers and rising crime.

Political instability challenge (sic) state institutions. Rampant corruption and impunity hamper efforts to combat increasing threats to citizen safety in the region. In Colombia in the 11 years since initiation of Plan Colombia, remarkable success has been achieved in the fight against narcotics trafficking and terrorist groups. The Colombian military attacks have weakened the FARC's leadership, and the group's membership has been cut nearly in half in the last decade. The Colombian government has expanded its presence throughout the country. These achievements have accompanied a successful counternarcotics strategy, with aerial and manual eradication eroding one of the FARC's primary revenue sources.

Despite these successes, Colombia still faces significant security challenges. The FARC remains the largest terrorist group in the hemisphere, with over 8,000 insurgents. It continues to traffic in drugs and inflict casualties on the military and police on a regular basis. In addition, criminal bands have emerged as a threat to public safety, having consolidated control over cocaine production and trafficking in some areas of the country.

In addition, I&R, the bureau I represent, continues to track connections between the Venezuelan government and the FARC and ELN. In July 2010, the Colombian government publicly exposed the presence of FARC in Venezuela. In the first half of 2011, the Venezuelans took stronger action against the FARC, arresting two of its members, likely in response to the diplomatic outreach initiated by Colombian President Santos.

I&R remains focused on the potential for instability in Cuba as a result of the changes Raul Castro has proposed to combat economic deterioration on the island. These plans are proceeding slowly, and the regime strictly limits and represses dissent. Although some changes are under way, others will take much longer, if they are instituted at all.

Despite the consolidation of democracy in much of the hemisphere, some countries continue to suffer a decline in the quality of their democratic institutions. In some countries we see a narrowing of freedoms of speech and dissent, a delegitimization of political opposition and a weakening of independent legislatures and judiciaries at the hands of populist presidents. Although elections are held regularly in these countries, electoral playing fields are skewed heavily in favor of incumbents.

I say that not just because the issue is one of democracy, which has been a long-standing policy goal and therefore the intelligence community has followed over decades, but also because it has an impact on our ability to work with governments in the critical areas of counterterrorism and counternarcotics.

There are continuing regional efforts to diminish U.S. diplomatic influence by creating organizations that some members hope will supplant the OAS and marginalize the U.S.

On the international level, Iran continues to reach out to Latin America as a way to diminish its international isolation. So far, Iran's relations with Latin America have developed significantly, only with leftist governments that share its goal of reducing U.S. influence.

Since Ahmadinejad took office in 2005, bilateral cooperation between Iran and Venezuela has deepened in the areas of diplomacy and defense and, to a more limited extent, on energy and trade. Most moderate governments -- and this is important to keep in mind -- have responded coolly to Tehran's outreach.

We remain concerned that Hezbollah is able to tap into the large Lebanese diaspora in Venezuela and elsewhere in Latin America for fundraising. And we continue to look very closely for any indications of other activities, particularly operational activity.

Thank you again for the opportunity to be before the committee, and I look forward to your questions.

REP. ROS-LEHTINEN: Thank you very much, sir.

Mr. Glaser is recognized.

DANIEL GLASER: Thank you, Madam Chairman, Ranking Member Berman and distinguished members of the committee. Thank you for the opportunity to appear before you today to discuss the emerging threats and security challenges in the Western Hemisphere.

The Western Hemisphere is a region of particular importance to the Treasury Department. Our economic and financial institutions are fundamentally intertwined with those of our neighbors. Illicit financial activity in one corner of the region will inevitably find its way across our borders and into our financial institutions.

Today I'd like to talk to you about how we are employing the Treasury Department's unique tools and capabilities to address this threat.

The threat emanating from narcotics trafficking has been and remains the preeminent illicit financial challenge in the region. Perhaps more than any other illicit activity, narcotics-related money laundering places our financial institutions at risk and undermines the integrity of financial systems throughout the region.

Historically, economic sanctions have been our primary weapon to target the financial networks of drug trafficking organizations. Over the past several years, the United States has sanctioned nearly 2,300 individuals and entities in Latin America involved in narcotics trafficking.

Even if sanctions remain a centerpiece of the Treasury Department's counternarcotics strategy, we recognize the importance of drawing upon additional tools to achieve a deeper and more lasting impact. This requires enhancing our understanding of the financial infrastructure of Mexican drug trafficking organizations to enable more effective disruption.

Along with our interagency partners, we have been working closely with Mexican counterparts to improve bilateral information sharing and coordination as part of a more comprehensive strategy to attack the financial resources of these drug trafficking organizations.

In addition to demonstrating a commitment to partnership with the United States on illicit counterfinancing, the government of Mexico has proposed or enacted a series of far-reaching domestic anti-money- laundering reforms of its own.

Further, Mexico has shown broad leadership in the region. Recently, for example, my counterparts at the Mexican finance ministry and banking commission joined me on a trip to Guatemala and Panama, where we together engaged host-country authorities on the importance of taking concerted action to undermine cartel financial networks.

Although the terrorist financing challenge in Latin America does not rise to the level of narcotics-related financing threat, we take terrorist fundraising and facilitation seriously wherever it occurs. While neither al-Qaida nor its affiliates derive a significant amount of support from the region, Hezbollah and the narcoterrorist Revolutionary Armed Forces of Colombia, or the FARC, remain active.

We have, therefore, focused our targeting efforts on FARC and Hezbollah fundraising and facilitation in Venezuela and Hezbollah activities in the tri-border area of Brazil, Paraguay and Argentina.

But given this hearing's focus on terrorist threats within the Western Hemisphere, I do think that it is important that I say a few words about this week's revelation that we disrupted an Iran Quds Force plot to assassinate the Saudi ambassador here in Washington.

This is a dramatic reminder that the urgent and serious threat we face from Iran is not limited to Iran's nuclear ambitions. Earlier this summer, the Treasury Department exposed an al-Qaida network operating in Iran under agreement with the Iranian government, and now we've seen new evidence of Iran's support for terrorism.

This is why we have been working for several years to address the full spectrum of Iranian illicit conduct. And while it is in the interest of an increasingly isolated Iran to seek expansion of its economic and financial ties to Latin America, the reality is that, to date, Iran has failed to establish a meaningful financial foothold in this region.

When Iran has managed to make inroads, we have been quick to act. Most notably, the U.S. designated, along with the European Union, Banco Internacional Desarrollo, a Venezuelan-based subsidiary of the Export Development Bank of Iran. We have also proactively engaged with government and private sector officials throughout the region to warn against the risk of doing business with Iran.

Treasury is also working to build a robust domestic and international anti-money-laundering counterterrorist financing framework to safeguard the entire region from these types of threats. Through the financial action task force, we have been working for many years to set anti-money-laundering and counterterrorist financing standards and best practices and hold countries in the region accountable for their implementation.

Every country in the region, with the notable exception of Cuba, has been or is scheduled to be assessed against the international anti-money-laundering counterterrorist financing standards. These assessments are published and highlight weaknesses in each jurisdiction, along with recommendations for remedying those deficiencies.

Madam Chairwoman, the Treasury Department is committed to prioritizing our counterillicit financing work in the Western Hemisphere. We will continue to seek ways to disrupt and dismantle illicit financial networks and to develop strong systemic safeguards across the region.

Thank you, and I look forward to answering your questions.

REP. ROS-LEHTINEN: Thank you very much, sir.

Mr. Stockton?

PAUL STOCKTON: Madam Chairman, Ranking Member Berman, distinguished members of the committee, the Western Hemisphere is in the midst of a transformation. There are two trends of fundamental importance to U.S. security. The first trend is that security challenges in this hemisphere are becoming increasingly severe. And I look forward to talking about specific threats in response to your questions.

But there's something else that's important that's going on, and that is, we have new opportunities to partner with the other nations in this region in order to work together to meet the emerging threats.

The foiled Iranian plot for assassinating the Saudi ambassador to the United States exemplifies how these two trends are coming together. On the one hand, we have a very severe threat in our hemisphere from Iran. At the same time, the government of Mexico was an absolutely indispensable partner in helping us meet this challenge. And I want to praise the government of Mexico for stepping up to the plate in a way that was absolutely essential.

So the two trends are coming together here -- threat and opportunities for partnership. But there's also a broader trend here for partnership opportunities that I wanted to address. All across the hemisphere, we have nations that are not only increasingly able to handle their own threats to their own countries, but to be what I would call security exporters; that is, to partner together with the United States to meet the shared challenges that we face.

Just a few examples -- I always start with Canada, our most special of partners in the Western Hemisphere. There's nothing like NORAD for us. Canada increasingly is helping out in the Caribbean, helping out in Central America, in ways that are very valuable from the U.S. perspective.

But it's not only Canada -- Chile, working in Central America to build police capacity; Brazil, invaluable leadership role with MINUSTAH; and in Colombia. Let's look at Colombia as the exemplar of this trend; Colombia not only making progress against the FARC, but today training helicopter pilots from Mexico to go after the narcotraficantes.

This is the broader trend. We're making progress in building these partnerships. But I would suggest, Madam Chairman, Ranking Member Berman, there's much more we can do. And I look forward to the opportunity to talk about this.

Before I close, I want to thank you, the ranking member, all the members of this committee, for helping make this progress possible. It's because of the assistance that the United States has provided to our partner nations to build their capacity that enables them now to become security providers across our hemisphere, so together we can meet the increasingly severe challenges that we face.

Thank you so much.

REP. ROS-LEHTINEN: Thank you very much.

And I thank all of the panelists.

I'm so glad that you brought up Colombia's being such a stable ally and a security exporter. You wouldn't know it from the debate that took place on the House floor. You should see that. It's like the Cambodia killing fields, you would think. But we thank Colombia for everything that it's done to transform their country by fighting against these extremists. And we hope that Mexico, their leadership is equally as successful before those drug cartels destroy that beautiful country.

I wanted to ask you about the ghost flights from Iran. There have been reports that they're no longer going from Iran to Venezuela, that they're shifting to Madrid. Is that so? If so, why the change? And what information do we have about who is being transported and what is being transported?

And my second question deals with Hezbollah operations in Latin America. Many of you discussed that. What changes have we seen in their involvement in Latin America? What are they targeting? You had mentioned money laundering in the tri-border area, et cetera.

And what do you think that, where do you think that they'll expand next and what is their goal?

Thank you.

MR. BROWNFIELD: On the flights issue, Madame Chairman, we understand that the commercial flight that existed between Iran and Venezuela has ceased. But we do keep and monitor other flights coming back and forth. I'm somewhat constrained --

REP. ROS-LEHTINEN: When you say flights that are going, so you say in addition to this commercial flight, there were other flights that may still be taking place?

MR. BROWNFIELD: No, I don't want to leave that impression. And any information that we gather from the intelligence would have to be discussed --

REP. ROS-LEHTINEN: In a classified setting.

MR. BROWNFIELD: -- in a classified setting.

As for Hezbollah, our interest in it and our understanding of their operations are largely in the fund-raising area. They tap the largely Lebanese Shia ex-patriot community in Latin America and Venezuela and other countries, the tri-border region, to raise funds. We do not know of operational activities, but we watch that very closely to see if we can get --

REP. ROS-LEHTINEN: And what can the U.S. do to put an end or to dampen this illicit activity of money laundering in the tri-border area? You mentioned these countries that are strong allies of the United States with whom we have very strong diplomatic and commercial ties. Are we without tools to use --

MR. BROWNFIELD: I'll defer to my colleague --

REP. ROS-LEHTINEN: -- against this operation?

MR. BROWNFIELD: -- from the Treasury Department.

MR. GLASER: Thank you, Madame. I think first of all just anytime we talk about Hezbollah fund raising I think the first thing that's important to flag is by far the most significant donor to Hezbollah is Iran. All other forms of Hezbollah fund raising pale in comparison to the funds that Hezbollah gets from Iran. That's not to say that we shouldn't tap all sources of Hezbollah fund raising, but I think it's important to put into context. Iran is the chief financial supporter of Hezbollah and Hezbollah survives on Iranian support.

That said as you point out, and as Phil pointed out, Hezbollah derives financial support from the Western Hemisphere as well, from fund raisers in Venezuela, from fund raisers in the tri-border area. And I think we need to take a broad approach to addressing that.

One of the most important things to do on a systemic level, as I noted in my testimony, is to ensure that all of these countries have effective anti-money laundering counter terrorist financing, regulatory regimes, law enforcement regimes. That's something that we're working closely with all the countries in the region on, primarily through the financial action task force and through regional affiliates of the financial action task force.

It's important that countries like Argentina for example enact money laundering laws that meet international --

REP. ROS-LEHTINEN: So do you believe that in these three countries, have they done enough to do away with the Hezbollah money laundering activities?

MR. GLASER: Well I think that there's more, I think that there's more to be done on that. I think, as I said, I think it's important to enact laws, but then in addition to enacting the laws, which for example in Argentina remain to be enacted, it's important to take targeted action with respect to Hezbollah fundraising.

We at the Treasury Department have designated 19 Hezbollah individuals in the Western Hemisphere over the years. I think an interesting act that we took earlier this year, separate from those 19 designations, is when we designated under Section 311 of the Patriot Act, Lebanese Canadian Bank, which is a bank in Beirut, which has ties into the Western Hemisphere, was a central node of a narcotics trafficking organization.

REP. ROS-LEHTINEN: So were you able to use the Patriot Act to get to some of these banks that have ties, if they have ties to the United States?

MR. GLASER: Oh, absolutely.

REP. ROS-LEHTINEN: Or if they've had some --

MR. GLASER: We used the Patriot Act to get at Lebanese Canadian Bank, and what Lebanese Canadian Bank also showed, the fact pattern that Lebanese Canadian Bank showed is that Hezbollah was deriving financial support from the criminal activities of this drug trafficking ring.

REP. ROS-LEHTINEN: How many of, and that was, that's one case. Do you have similar success stories where we've been able to use the Patriot Act to get to these illicit operations in Latin America?

MR. GLASER: We have lots of Section 311 success stories. That's the 311 success story in the Western Hemisphere though.

REP. ROS-LEHTINEN: Right. Thank you very much.

Any other comments from the panelists? When it comes to -- well I just have 15 seconds, so I'll leave it for another time. Thank you so much. I'd like to recognize my friend, the ranking member for his questions.

REP. BERMAN: Thank you very much, Madam Chairman, and I'd like to ask about two different areas.

So the first -- and I guess here a little bit I want to pick up on what Secretary Stockton raised at the end. The written testimony for Assistant Secretary Goldberg talks about the three top persistent threats: drugs, populous governments, most particularly Venezuela and Iran.

Assistant Secretary Brownfield, his written testimony and his oral testimony, did not mention Iran, did not mention populous governments, did not mention Venezuela. Obviously some of that comes from each function that you have.

But there's -- building on what Assistant Secretary Stockton said, could you take two minutes, Ambassador Brownfield, to give from your Western Hemisphere background a broader policy perspective in terms of our security and general relationship with the hemisphere? In two minutes.

MR. BROWNFIELD: Sure, Congressman. I will try. Obviously you have correctly noted that Ambassador Goldberg and I will attack the same issues from different perspectives, given what our responsibilities are. Not because we disagree, I have known the distinguished ambassador for some 25 years and we always agree, at least on fundamental issues. I will also -- that does not include the Boston Red Sox by the way -- (laughter) -- I will also try not to move into the terrain of the acting assistant secretary for western hemisphere who obviously has the responsibility for overall policy.

Congressman, I would suggest to you that Latin America to a very considerable extent, is an area that has been in transition for the past 10 or 15 years. That transition is evidenced by what both Phil and I have attempted to talk about in terms of an appeal in some countries of populous governments with fairly simplistic solutions to social and economic problems.

So we have that package of countries, call them what you will.

You have another group of countries that I would suggest are those that have committed themselves to a model, which in my opinion, has actually proven to work fairly well for the last 50, 60 or 200 years, and that is a model driven on market economies and governments that provide basic protections but that do not attempt to run the economy themselves.

And then you have a group of countries in between that swing, if you will, between one or the other. Our challenge for the last 10 years or so has been dealing with those three sets of countries, attacking the problems, the security problems, the law enforcement problems, the threats if you will that come from the region, taking into account or overlaying on that approach this fundamental issue of transition within the region.

Personally, I believe we've done a fairly good job at it. I would suggest to you that Latin America today in the year 2011 offers a better, more positive picture than 10 years ago, and certainly better than 15 or 20 years ago. I think we have some extraordinary good news stories to tell. Colombia foremost among them. I personally believe we are making progress in Mexico. And that progress will be increasingly evident in the years ahead.

REP. BERMAN: Well thank you. It's -- I'd love to hear you expand on this, but I got a minute.

MR. BROWNFIELD: You only gave me two minutes, Congressman.

REP. BERMAN: That's right. And you only took two-and-a-half. (Laughter.) Maybe this is for Secretary Glaser, although Ambassador Goldberg, I'd also be -- does the assassination, bombing, plot that was stopped, and I will take what Secretary Stockton said, that there's no disagreement among the panelists that Mexican government was a partner in helping us to apprehend the plotter and stop the plot. But does that change the way we understand the threat from the government of Iran? I'm asking you in your worldwide paths, not your --

MR. GLASER: Sure. I don't think it changes the way we view the threat from Iran. As I said in my oral testimony, just earlier this summer we exposed an al-Qaida facilitation network operating under an agreement with the Iranian government on Iranian territory.

So Iran's support for terrorism and participation in terrorism is not a new -- is not a new phenomenon. Now, certainly, this most recent plot makes it even more troubling than ever, but from what we do at the Treasury Department, this just reaffirms the importance of what we've been doing broadly, which is trying to put financial pressure on Iran broadly throughout the world, Western Hemisphere and everywhere else, trying to isolate Iran as much as possible from the international financial system.

And as has been said by numerous people over the -- over the course of the last couple of days, my hope and expectation is that this most recent plot is going to make it a lot easier to even take it to the next level internationally with respect to our friends and allies and partners throughout the world to demonstrate to them the importance of excluding Iran from the international financial system.

MR. BROWNFIELD: I would only add Iran has been on our list of state sponsors of terrorism for decades. We go back to the early '90s and the attacks that you mentioned, Mr. Berman, in Argentina, the attacks on U.S. troops in Iraq and support for those activities, a nuclear program that is not fully accounted for to say the least.

REP. ROS-LEHTINEN: Thank you, Mr. Ambassador. Thank you, Mr. Berman.

Chairman Mack of the Western Hemisphere Subcommittee?

REP. MACK: Thank you very much, Madam Chair. And I want to thank the opinion for your insight and for being here today.

Before I get into some of my questions, I just want to make a quick observation. My friend and I, Mr. Engel, we share a lot of same goals in the Western Hemisphere. We agree on a lot. We disagree in a few places. I would suggest that the idea that all of the guns are coming from the United States to Mexico -- there was a GAO report. As you drill down into the report, it's 90 percent of the guns that are traceable, and it's only the U.S. guns that are traceable. So I think that has to be put on the record for people to understand.

Also, if we're worried about the guns going into Mexico, that policy -- the Fast and Furious policy -- everyone in this room should be appalled by that policy.

Let me -- let me first start with -- in Venezuela. Is Hugo Chavez in control of his government, Ambassador Brownfield?

MR. BROWNFIELD: I would answer the question this way, Mr. Chairman. Virtually his entire government is unwilling to, in my opinion, make decisions without hearing what his view would be. To that extent, he clearly is in control.

If the question is is everything that's going on in his government known to and controlled by him, that's a more open question.

REP. MACK: But you would agree that government officials in Venezuela would not want to go against President Chavez?

MR. BROWNFIELD: I would agree with that statement, for sure.

REP. MACK: OK. So we know that Venezuela was selling gasoline in violation of the Iran Sanctions Act, supporting a terrorist organization. The Treasury Department, in early September, put sanctions on or designated four government officials in Venezuela on the drug kingpin, their quote was, "Today's actions expose four Venezuela government officials as key facilitators of arms, security, training and other assistance in support of the FARC operations in Venezuela."

So my question is if we have a list of state sponsor of terror and we have a country and a government in Venezuela that is supporting terrorists and terrorist organizations, whether it's Iran or the FARC, and we agree that Hugo Chavez is in charge with an iron fist of his government, and then we sanction four members of his government in support of the FARC, how can we not designate Venezuela as a state sponsor of terror?

MR. BROWNFIELD: Mr. Chairman, there is not a human being in this room who is less likely to defend the actions and decisions of the president of the Bolivarian Republic of Venezuela than your humble servant. That said, you've moved into an area that is beyond my area of responsibility. So I'm going to defer on answering your specific question.

REP. MACK: Somehow, I thought that would happen.

So let me go into another question. What is the difference between the FARC and the Mexican drug cartels?

MR. BROWNFIELD: You're looking at me, so I'll take a crack at that one, Mr. Chairman.

I mean, I could speak for days, but I suppose the fundamental differences that I would point to are that the FARC is an organization that claims to have a political, philosophical and ideological philosophy, if you will. And the Mexican drug trafficking organizations do not. That probably would be what I'd describe --

REP. MACK: OK. So going off that, if the cartels in Mexico are offering health care, if they're trying to displace the government, isn't that politically motivated? Offering health care, putting on -- you know, going into these communities and putting on barbeques or picnics and trying to win the support of the public so the public will listen to the cartels and not the government. Isn't that a political motivation?

MR. BROWNFIELD: You know what I'm going to respond, Mr. Chairman, because you've already gotten me to commit to this last week in this very self-same room. I do acknowledge that many of the facts on the ground, the things that are being done by those organizations are consistent with what we would call either terrorism or insurgency in other countries.

REP. MACK: Thank you very much.

Madam Chair, it is clear that an insurgency is happening in Mexico and that Venezuela must be placed on the state sponsor of terrorism list.

REP. ROS-LEHTINEN: Thank you, Mr. Mack.

Mr. Engel, the ranking member on the subcommittee, is recognized.

REP. ENGEL: Thank you, Madam Chair.

Let me first say to my friend, Mr. Mack, we agree on a great deal. I don't really think it matters whether -- I mentioned that President Calderon told me it was 90 percent and, in fact, in Jamaica, the prime minister of Jamaica told me it was more than 90 percent in his country.

But I don't think it matters whether it's 70 percent or 80 percent or 90 percent. I think what matters is that illegal guns are coming into this country and then going south of the border. We know that these people who set up gun shops on the Texas-Mexico border or gun shows or things like that to sell multiple guns, we know where these guns are going.

And to me, it goes way beyond Second Amendment rights. If we are truly going to identify terrorism in Mexico as a threat, Mr. Mack, as you say, if we are going to say that this is a real problem with the drug cartels, we've got to do something to curb the illegal flow the guns coming from the United States and south of the border.

And let me quote Secretary Clinton in March of 2009. She said, quote, "We know very well that the drug traffickers are motivated by the demand for illegal drugs in the United States and that they are armed by the transport of weapons from the United States."

So to me, this means, in effect, that the United States has played a role in creating the top persistent threat. Ambassador Goldberg, which you identify in your testimony, you put drugs at the top of the regional threats list.

So how is the U.S. government response to this threat taking account of our own responsibility for the threat? I'm disappointed that President Obama hasn't invoked U.S. law which was utilized by the first President Bush and then by President Clinton to be able to get at these things.

What are we doing in the government to acknowledge and try to stop the flow of illegal weapons south of the border?

MR. BROWNFIELD: Mr. Engel, I would -- we're probably -- I'm going to hide to a certain extent behind the fact that what we do is on the south side of the border, obviously. We do the foreign relations side of this -- of this effort.

I will say to you that we are supporting programs, organizations and institutions in Mexico that provide their side of trying to control the movement of illicit product, goods and people across that border.

And just as we have an obligation to control what moves across the border from the northern side. We are working with them to assure, one, they have the equipment; two, they have the skills, the training and the expertise necessary; and three, they have the coordination and jointness with U.S. institutions to control it. That I can tell you from where I sit. If you -- if you bring up the larger political and policy question you've moved beyond the area where I can offer you useful input.

REP. ENGEL: Thank you. Let me -- let me raise a couple of other things quickly. Mr. Goldberg, your testimony points out that U.S. regional muscle is under stress probably because the region's countries are forming competing organizations and is not inviting the United States to become a member. The only regional organization to which we are a member is the OAS. But, recently, we voted -- every majority member voted to defund the OAS. I think that's a mistake.

Can you talk about the importance of the OAS? Flawed that it is, I think we're there. We are an influence. We're important, and I think these competing organizations -- you know, if you take some of these other groups -- (inaudible) -- or whatever where we're not a part of it, we're much better off trying to strengthen the OAS, in my opinion, because we're there at the table.

MR. GOLDBERG: Mr. Engel, my point was strictly analytical and speaking about the trends in the region, and I'm not on the -- on the policy side so I'm not able to speak about the utility of OAS. As I say, it's an overarching point of what's happening in the region, but I take your point, obviously. But the WHA bureau would need to -- (off mic.)

REP. ENGEL: Let me ask you, Ambassador Goldberg -- you and I sat together in February of '08 in La Paz when you were ambassador to Bolivia. We currently do not have relations with Bolivia. Ambassador Brownfield, Venezuela -- you were ambassador there, and I think Ecuador as well. Should we be thinking about sending our ambassadors back? And also, in the four seconds I have left I'd like if some of the people who are answering questions of some of my other colleagues later on talk about Russia, China in the region -- should we be worried about their influence.

REP. ROS-LEHTINEN: Thank you so much, Mr. Engel. Mr. Rivera, my Florida colleague, is recognized now.

REPRESENTATIVE DAVID RIVERA (R-FL): Thank you, Madam Chair. With your permission, may I yield 30 seconds to Chairman Mack?

REP. ROS-LEHTINEN: Absolutely. Mr. Mack.

REP. MACK: Thank you very much. To answer the question from the gentleman from New York to Ambassador Brownfield, two things we can do to stop these guns and the flow -- one, we can secure the border, finish the double-layer fence, add more border patrol agents and use of technology; and two, we can stop the destructive policies like "Fast and Furious" that undermine our foreign policy initiatives in Latin America. Thank you, and I yield back.

REP. RIVERA: Thank you so much. Mr. Glaser, thank you -- or Secretary Glaser, thank you so much for being here today. I appreciate it. Are you in charge of OFAC? Does OFAC report to you?

MR. GLASER: OFAC doesn't report to me. My office and OFAC are both part of the Office of Terrorism and Financial Intelligence.

REP. RIVERA: So you all work together closely?

MR. GLASER: Absolutely.

REP. RIVERA: So perhaps you could help me because we had the OFAC director -- Mr. Szubin, I believe it is -- testify before another committee, and I was asking about one issue of terrorist financing which is financing the terrorist state of Cuba, which we all know is on the State Department's list of official sponsors of terror. We know they are holding an American hostage right now.

We know that they have murdered Americans over international air space. So they certainly have earned their label as a terrorist state. And one of the ways we finance terrorism from Cuba is by expanding the flights and travel and the money that goes to the Cuban dictatorship through these flights, which OFAC regulates. And I was trying to get some answers from Mr. Szubin as to how many flights are going to Cuba because the Obama administration has expanded those flights -- how many passengers -- what are the costs involved. I want to see how much money the United States is facilitating to finance the terrorist activities in Cuba and I couldn't get answers.

He had -- he was unaware of how many flights were going, how many passengers, and maybe if I could work with -- if my office could work with you or with your office you could help perhaps facilitate some of that information on how we're trying to regulate. If OFAC, indeed, is regulating that activity perhaps I could appeal to you -- (inaudible) -- to help me get some of that information.

MR. GLASER: As always, we're at your disposal and we'd be happy to answer any questions to the extent that we have the information.

REP. RIVERA: Thank you. I appreciate that because it does seem a little contradictory that we're trying to fight the financing of terrorist activities but we're facilitating that financing of terrorist activities by allowing more and more resources -- capital resources -- to go to a terrorist regime like Cuba, and let me go to a specific example that you could perhaps also help me with and that's Hezbollah's activities in Cuba. Information that you could provide what is -- we've seen many recent reports about increased activity of Hezbollah's terrorist activities and cooperation with Cuba. Can you tell us a little bit about that?

MR. GLASER: Well, I would defer to Ambassador Goldberg on the details of Hezbollah's relationship with Cuba. I could tell you from the financial angle, which is the angle that we approach it from, is there's very little financial connectivity between Hezbollah and Cuba. But with respect to operational issues or other issues --

REP. RIVERA: Please.

MR. GOLDBERG: I would add also on the operational activity that we haven't seen such -- we've seen allegations of such activity but have not been able to corroborate them or have not corroborated them.

REP. RIVERA: So have you not seen any of the media reports regarding Hezbollah's setting up a base of operations in Cuba regarding something called the Caribbean Case? Does that ring a bell at all to you?

MR. GOLDBERG: I've seen allegations. I've seen press reports. As I mentioned, we have not corroborated that. Perhaps we have actually -- we could go into more detail in a closed session if you'd like more detailed information.

REP. RIVERA: Absolutely, because I can understand perhaps you, to this point, haven't corroborated it but I would suspect it is of interest to you that Hezbollah would be setting up operations in Cuba.

MR. GOLDBERG: If that were the case, certainly.

REP. RIVERA: Thank you. Thank you, Madam Chair.

REP. ROS-LEHTINEN: Thank you so much, Mr. Rivera. Mr. Chandler is recognized.

REPRESENTATIVE BEN CHANDLER (D-KY): Thank you, Madam Chair. Welcome, gentlemen. Ambassador Brownfield, nice to see you again. I was particularly interested in your very brief history of our efforts in the last several decades in the region and what struck me about it was that it seems like your view is that we put needed pressure on particular areas that are causing problems at a particular time. We solve those problems at least up to a point.

At least, we make great inroads. But then the problem moves elsewhere. It moves from one country or one region to another, and now your most recent comment is you think it's worse in Central America than it is in Mexico or Colombia or elsewhere. Seems like it's -- it moved. It sounds like you believe we're playing an enormous game of whack-a-mole. Wherever we hit them we may tamp it down but it pops up elsewhere.

And I guess my question -- so much of it, of course, has to do with illegal drugs -- the whole drug trafficking problem. I guess my question -- one of my questions would be are we ever going to be able to truly solve this problem -- the problem of the supply of illicit drugs into this country -- or do we, as Mexican President Calderon is quick to suggest, do we need to solve the demand problem in this country -- will we ever be able to do it without solving that problem.

Also, I would like any of your all's thoughts, please, on the Chinese efforts here in this hemisphere. They are, obviously, making significant investments in different countries in the hemisphere. Do you all consider their efforts to be a serious emerging threat? Thank you.

MR. BROWNFIELD: Why don't I start, Congressman, and I'll try to address at least three of the issues you raised. One, are we playing whack-a-mole? I don't think so but I do acknowledge we have to deal with certain realities. One reality is we have a finite number of resources that we have available to dedicate to our efforts and programs in the Western hemisphere, and you pay us to get maximum value out of the resources that are made available to us.

Personally, I believe we have made progress. The fact that we are no longer talking about Colombia as a potential failed state or a narco state -- the fact that we are now actually seeing progress in our large neighbor to the immediate south, to my way of thinking, is progress over where we were 10 or 15 years ago.

Second, you do bring up the issue of demand reduction. You are absolutely correct as is anyone who says part of the solution must be demand reduction. But my response to those who believe it is the only solution is that just as it is wrong to put your entire focus on eliminating supply it is equally wrong to put your entire focus on eliminating demand.

You have to have a balanced approach. Surely that is one lesson we have learned the hard way over the last 40 years. I for one am open to figuring how to adjust the balance between those two, so long as no one tries to convince me we should do all on one side or all on the other.

Third and finally, while I am not an expert on China and Chinese involvement in the region, let me offer you the following very personal observation. I was U.S. ambassador to Chile for two and a half years, to Venezuela for three years, and to Colombia for three years, and my Chinese counterpart was a very important player in each of those three countries in this past decade. Thirty years ago I very much doubt that would have been the case.

If Dr. Goldberg wishes to offer more observations, I cede the floor to him.

MR. GOLDBERG: Just very quickly. China clearly has economic interests around the world. It looks for raw resources in much of Africa and Latin America, continues to do so. It seeks markets for its exports, so these are economic challenges, is how I would best describe it.

And in terms of political relationships, China has a growing relationship with Brazil because of the involvement in the BRICS group of countries -- Brazil, Russia, India, China and South Africa. And so there is some concert of diplomatic positions, but that's how I would describe it.

MR. GLASER: Just to add very quickly from an illicit finance perspective, which is what I focus on, I haven't seen any Chinese activity in the region which would raise an illicit financing concern. However, I do think it's worth pointing out that the black market peso exchange, which is the primary mechanism through which narcotics funds in this hemisphere are laundered, and it's been with us for decades, used to be a closed system within the Western Hemisphere.

Now it has branched throughout the world, including into East Asia, so it's important that we work with our Chinese counterparts to focus on narcotics money laundering. That's not to say that the Chinese are part of the problem but they definitely -- working with them will be part of the solution to that.

REP. ROS-LEHTINEN: Thank you so much. Mr. Duncan of South Carolina is recognized.

REPRESENTATIVE JEFF DUNCAN (R-SC): Thank you, Madame Chairman, and thanks to the panel for being here. Ambassador Brownfield, we were involved in a committee hearing last week I want to remind you about. You know, I don't think anyone was that surprised who had been following the issue of the growing Iranian threat in this hemisphere that Quds Force and Hezbollah, the arm of Iran, used the Mexican drug cartel as a proposed conduit for carrying out this assassination attempt, which was spoiled, thankfully, by the FBI this week.

The relationship between Hezbollah and the drug cartel already exists, and we have been trying to raise the awareness for months. It's not whack-a-mole of chasing this group or this group. We've known that there has been a relationship between the Mexican drug cartel and Hezbollah for a long time.

The evidence is clear, with the number of Hezbollah agents that have been incarcerated and captured along the border, the IED that exploded in July of 2010, the tunneling that resemble what has gone on in southern Lebanon. So I don't believe anyone that's been following this has been caught off guard. But I think America as a whole was caught off guard and it's time for us to wake up in this country that this is a real threat in the Western hemisphere.

So Madame Chairman, I want to bring to your attention House Resolution 429 that I filed on Tuesday night, which basically says that we will urge the administration to include the Western hemisphere in its 2012 national strategy for counterterrorism's area of focus, which was absent in the 2011 edition. That it will utilize an existing counterterrorism task force, to be led by the Department of Homeland Security in coordination with other members of the intelligence community to examine Iran's presence, activity and relationships in the Western hemisphere, including the United States of America.

REP. ROS-LEHTINEN: I look forward to reading it. Thank you, Mr. Duncan.

REP. DUNCAN: Thank you. And just for record, Mr. Higgins has co-sponsored that as well on the other side of the aisle, so it's a bipartisan issue.

I want to remind Ambassador Brownfield that we talked about this last week, and I was talking about the tri-border region, talking about the southern border and named a number of countries. And you reminded me, let's not forget Venezuela, one of your past posts. So I wanted to make that point as well.

So the question I have for the panel is -- and I'll address this to Ambassador Goldberg -- how do links between terrorism and drug and arms trafficking increase U.S. vulnerability to attack?

MR. GOLDBERG: The point, Congressman, that I was making earlier was that what's new here and what we have found in the last few days is a renewed interest by elements within the Iranian government to carry out an attack on U.S. soil, but in the hemisphere, because we had seen it in earlier times.

REP. DUNCAN: But it was also a backup plan possibly in Buenos Aires again, from some of the knowledge I've heard. And let me remind the folks that the last attack, and the largest attack prior to 9/11 in this hemisphere, happened in Buenos Aires with an attack on the Israeli embassy.

MR. GOLDBERG: That is true. In terms of what's happened, there is a case before a federal court at the moment and we need to allow that to play out. What I think this case shows more is Iran's interest in working in Mexico or doing something in Mexico than the other way around.

REP. DUNCAN: OK. If Hezbollah has a relationship with the cartels and can smuggle arms or people through our southern border, what would prevent them from bringing WMDs here?

MR. GOLDBERG: That's a kind of hypothetical question, and one that clearly we watch, we monitor. We try to prevent any kind of attack or use of the hemisphere for these kinds of activities. International terrorist groups of course are looking for opportunities everywhere, and we have to be vigilant against them in the intelligence community, in the law enforcement community. That's what we do.

REP. DUNCAN: In the remaining time, Ambassador Brownfield, can you enlighten me a little bit more on the relationship between Iran and Venezuela as we've seen it in the last few months?

MR. BROWNFIELD: Congressman, I've been out of Venezuela now for more than four years and as a consequence much of my personal data is going to be somewhat dated, but I would say very shortly -- very briefly and succinctly, first, there is a much greater presence, official presence of the Iranian government in Venezuela today than there was, say, 10 years ago.

Second, there is obviously a much stronger political relationship, visits between the two presidents and engagement at senior levels than there was 10 years ago. Third, there is greater mutual support in international organizations like the United Nations, the IAEA, atomic energy agency than there was 10 years ago. That is evident. It's public. It's in the media and neither side denies it.

REP. ROS-LEHTINEN: Thank you very much. Thank you, Mr. Duncan. Mr. Meeks is recognized. He's the ranking member on the Subcommittee on Europe and Eurasia.

REPRESENTATIVE GREGORY MEEKS (D-NY): First let me just say it's become clear, and I see a lot of my colleagues are concerned about terrorism, et cetera. One of the things that I think that everybody can agree, that President Barack Obama has been focused and he's been doing a very good job in fighting terrorism and terrorists coming in here, and getting rid of al-Qaida and a number of the others. I mean, I think his record speaks for itself.

And most Americans, even in the recent polls, is -- they may argue about one thing but one thing that they agree on is President Barack Obama's focus and the way that he's utilizing all of the intelligence to make sure that he keeps America safe.

Now I love this hemisphere. You know, I was sitting listening and I believe that we must indeed examine the topic of today's hearing, but we must do so without the polarizing rhetoric that is reminiscent of the U.S. policies of decades ago when our nation looked at the region through the Cold War prism and chose our allies and interventions on that basis alone.

We made some poor decisions when we were driven by fear and had a single and narrow focus in those days. This is not the time to be fearful of developments in Latin America and the Caribbean. I believe we'd be better served to look tactically and comprehensively at the developments in the hemisphere. I think we can reflect on some very positive and meaningful changes in recent years that show remarkable progress and promise.

I scolded some of my colleagues yesterday when they wanted to look at Colombia only through the past. All they were talking about Colombia, those who voted against Colombia, was about Colombia's past. Nobody looked at where Colombia is today and the improvements that it made and the direction that it was moving forward. We've got to stop just looking at the past.

Our hemisphere has never been this democratic. The social and economic reforms of the past decade have done much to shore up most of these nations.

Clearly democracy is always a work in progress and there are challenges that must be addressed and objectives to be pursued, poverty eradication, strengthening the rule of law, equal access to opportunity, security for all segments of society, eliminating corruption and protecting human rights.

And that is precisely why I have argued in this committee that cutting U.S. foreign aid is such a small but important item of our budget, and it is not in our interest to cut foreign aid. Emerging threats don't just stem from outside of our borders. A significant number of countries in the Western Hemisphere could very well hold a similar hearing on threats that stem from our own nation.

If we're going to talk about emerging threats, I hope we will include those issues that resonate so deeply south of the border. Mr. Engel talked about some. The U.S. demand for drugs, the flow of guns from America, migration, trade expansion, the embargo against Cuba to name a few. Let me take this opportunity to make a critical but often in this committee unacknowledged point about regional progress.

We are seeing for the first time significant participation in democratic life on the part of disadvantaged communities who finally feel free and feel that they have a voice in a region where black and indigenous communities historically suffered without recourse. I speak in this instance about the United States as well. Democracy is more inclusive than it has ever been.

For the first time, many countries have elected presidents that were born in poverty and do not come from their white elite. Take Bolivia, for example. The majority and historically marginalized indigenous population is more politically involved and takes pride in the fact that President Morales is the first indigenous person to lead that country.

The biggest threats to our hemisphere are not the personalities that some of my colleagues will label today as demagogues and ideologues. I would argue that from the perspective of the people in our hemisphere who have chosen these leaders, the biggest threats are criminality and poverty. Recent research indicates that our regional neighbors have lived more in the center politically than we are often willing to acknowledge.

Some of my colleagues are quick to see ideologues. But if we look more closely we often find pragmatists with whom we might build constructive relationships and may ultimately dispel some of our assumptions about the simple clinging -- without simply clinging to ideology. I remember a decade ago when there was a new leader on the scene and on the horizon in Brazil. Many worried about him and saying that he was going to be a bad guy.

But we see years later after the economy was expected to tank and social chaos was to ensue, instead what we saw with the movement of Brazil as a rising star among emerging nations with President Lula at the helm. And of course we must not be Pollyannaish. There are evildoers out there and the Western Hemisphere does need to confront real security threats head on.

To this end, our alliances with our neighbors are essential. So is continued engagement and continued cooperation and intelligence sharing, continued assistance to build the capacity of our neighbors, intelligence and security institutions and continue joint operations in training. I think that the glass is more than half empty. It's half full.

I think that we should salute our friends. I love the progress that the people in the Western Hemisphere. We always talk down to them. We always say bad things. There's a lot of good things going on in the Western Hemisphere and I think that that's good for all of us.

REP. ROS-LEHTINEN: Thank you very much, Mr. Meeks. Mr. Deutch of Florida is recognized.

REP. DEUTCH: Thank you, Madame Chairman. Ambassador Brownfield, you spoke in your testimony about the difficult that you would have had in imagining the bombing in Argentina at the time that you were there. The recent foil of the Iranian terror plot highlights Iran's growing ties in the Western Hemisphere.

But what's in many ways most troublesome is that at the same time Iranian officials like Defense Minister Ahmed Vahidi travel freely in places like Latin America. Just this summer he spent time in Bolivia. The reason I refer back to your comments is because Mr. Vahidi has been implicated in the AMIA Jewish Center bombing in Argentina.

He is subject to an Interpol red notice. What are we doing to prevent sanctioned officials like Vahidi from traveling not just to areas of concern but skirting international sanctions by traveling under the guise of official business? How are we addressing that and how can we prevent it?

MR. BROWNFIELD: Congressman, you raise a very valid question. I would remind you that it's a question in the case that you're talking about that involved the countries of Iran, Argentina and Bolivia. The gentleman is actually currently under the equivalent of an indictment in the Republic of Argentina for homicide-related charges.

At the end of the day, we are members of Interpol. We support Interpol. To the extent that an Interpol warning or notice is out there that would give us and U.S. law enforcement the authority to act against an individual, we would exercise that authority.

If your question is asking more what are we doing or able to do in Bolivia to get that government to take certain steps, while I am not responsible for Bolivia, obviously we have perhaps less ability to influence the direction that that government goes than certain other governments in the region.

REP. DEUTCH: The question -- thank you, Ambassador. The question really is more the former. It is individuals like Vahidi and others that -- Ahmadinejad and the regime understands that the sanctions law, the ban on travel can be skirted simply by appointing these individuals to official positions which give them the ability to travel freely. I'd throw it open to the other witnesses.

I mean, I have suggested -- and I think there are others who have looked at this -- that existing sanctions law gives us the opportunity to sanction perhaps not those individuals who should not be traveling but can because of our treaty obligations and the like.

But to sanction those fuel suppliers who provide the fuel for the airlines, for example. What else can we do to crack down on those who would otherwise be subject to a travel ban but get around it by their official capacity, the official title that they may hold?

MR. GLASER: Well Congressman, it's tangentially related to your question but I think part of -- you have part of this in mind because you mentioned the whole issue of transportation. I mean, that is something that we take quite seriously and it is part of our overall efforts with respect to Iran.

As you know, earlier this week the Treasury Department designated Mahan Air. Earlier this summer we designated Iran Air. We've been focusing our efforts with respect to IRISL, the Islamic Republic of Iran Shipping Lines, for some time. So I think -- I think you're thinking about this the right way.

Part of our efforts to squeeze Iran, part of our efforts to apply pressure on Iran isn't just related to the financial side but it's related to isolating Iran on an even broader basis than that. And that's -- from the Treasury Department, that's what we're trying to do when we target entities like Iran Air, when we target entities like Mahan Air.

REP. DEUTCH: Mr. Glaser, let me just follow up, then. As we go forward and look forward to the debate on further Iran sanctions, given the work that you do, what's the most important -- the important missing piece? What is it that would help you most that you don't currently have?

MR. GLASER: Well, I think when we look at our ongoing efforts to continue to squeeze Iran, it's -- you know, it's about -- you know, it's about finding where are they finding points of access to the international financial system and closing those off.

You know, some of the things that we look at -- there are numerous branches of designated Iranian banks around the world, branches of, like, Bank Saderat, branches of Bank Melli operating in various countries. Those are -- those are banks that we want to focus on and isolate as much as possible.

You know, we continue our efforts to engage in countries and to engage with banks around the world with respect to CISADA enforcement. That's something we take seriously. So I think that we're -- I think that we're on the right track. I think it's just a question of finding where are these -- where are these points of entry into the international financial system and trying to close those off.

REP. DEUTCH: Thank you. Thank you, Madame Chair.

REP. ROS-LEHTINEN: Thank you so much, Mr. Deutch. Mr. McCall, who is the vice chair of the subcommittee on western Hemisphere.

REPRESENTATIVE MICHAEL MCCAUL (R-TX): Thank you, Madame Chair, and welcome to the panelists. Ambassador, it's great to have your presence twice in about a week. (Chuckles.) It's an extreme pleasure for me as well. And the events -- and I'm sure this has been discussed. I had a markup on homeland security but the events of this week clearly call into question I think the relationship between terrorists and the drug cartels.

And it's something that we've -- I think we've been talking about for quite some time. Certainly the Hezbollah influence is nothing new. We've known that has existed in Latin America, particularly with Venezuela. Hua Crani (ph), the operative who was brought across the border by a coyote and prosecuted in Detroit several years ago.

But what happened this week is, again, I think, hard evidence that these groups are now trying -- attempting, at least, from their point of view, to reach out to members of the drug cartels, in this case the Zetas, to carry out their plots, in this case an assassination of a high-level official, Saudi ambassador, in the nation's capital; a pretty bold, brazen act on the part of Iran.

And it makes me wonder if they haven't attempted to make those sort of contacts with drug cartels in the past. If anyone's at liberty to discuss that issue -- I know we're not in a classified setting. But Ambassador, are you aware of any other attempts to contact or contacts between any terrorist organizations and the drug cartels?

MR. BROWNFIELD: Mr. Chairman, so as to avoid being hit over the head by Ambassador Goldberg seated to my immediate side, I'll say I am unaware of any hard evidence in that regard. I've seen reports, rumors, to the same extent you have. I cannot tell you of a specific case where I am comfortable that this has occurred.

MR. GOLDBERG: I'd prefer to discuss it in a classified setting.

REP. MCCAUL: Sure. And I'd like to do that. It's hard for me to believe that something this high profile -- that this would be the first time they've reached out to the Mexican drug cartels.

Let me ask a couple of other questions. Ambassador, do you believe that the Mexican drug cartels intimidate the civilian population in Mexico?

MR. BROWNFIELD: I believe you know my answer to this question, Mr. Chairman, since I believe I gave it to you last week. In certain communities, in certain places, at certain times, yes, I do.

REP. MCCAUL: And do you believe that they also intimidate or coerce the government in Mexico?

MR. BROWNFIELD: And to that I gave you the same answer. It depends on location and time, but the answer is, in those cases, yes.

REP. MCCAUL: And do you agree that they carry these acts out by extortion, kidnappings and political assassinations?

MR. BROWNFIELD: I believe that those are among the tools that they use in their efforts.

REP. MCCAUL: That is the definition of terrorism under federal law, which is why I introduced my bill, which has been a little -- it's been provocative -- to designate them as foreign terrorist organizations; not to label, but rather to give us additional authorities to go after them, far beyond the kingpin statute. This would be jurisdictionally. It wouldn't be limited to just in the United States.

And I think the 15-year penalty enhancement, the freezing of assets in the United States and the ability to deport them would be a valuable tool. And I think, in light of what happened this week, I think we've really got to start taking this pretty seriously. If they're attempting to reach out and get in bed, so to speak, with the Mexican drug cartels, that's a serious issue.

My judgment is this is not some rogue operation on the part of Iran. My judgment is this goes to higher levels within the Iranian government and was sanctioned by -- at higher levels by Iran. And that leads me to my next question, to anybody on the panel. What should be our response?

I mean, I think the secretary has come out -- and I think she's a very smart lady -- talked about harsher sanctions. I think we will certainly all support that. But what else can we do? For instance, should we be expelling suspected Iranian intelligence officers that we know may be in the United States and help Mexico expel the ones in Mexico? Because the Mexicans will tell you we don't have a handle on who's down here; we don't know if there are -- you know, we know that they're here. But they're having a hard time identifying them. And it seems to me we need to help Mexico in that effort.

And I'll throw that out to the panel in general. What should be our response?

MR. GOLDBERG: I think you might have the wrong panel for that.

REP. MCCAUL: And that's true. This is Western Hemisphere. However, given the influence they have in the hemisphere, what do you believe?

MR. BROWNFIELD: Well, I'll -- I'm -- I think I'm qualified to talk about our sanctions policy with respect to Iran. It's what I spend a considerable part of my job doing. And I think that our overall efforts to date have been, from the financial sanctions perspective, again, to isolate Iran from the international financial system, to isolate Iran economically, to apply broad pressure on Iran. And I think that that is the right approach. I think that's an approach that this government has taken for years.

REP. ROS-LEHTINEN: Thank you. Thank you so much.

REP. MCCAUL: Can I (give ?) just one last question. Given the level --

REP. ROS-LEHTINEN: Mr. McCaul --

REP. MCCAUL: -- of this --

REP. ROS-LEHTINEN: -- I like you a lot and appreciate and respect you, but I have to be brutal with the time.

REP. MCCAUL: OK.

REP. ROS-LEHTINEN: Thank you.

REP. MCCAUL: Well, I appreciate that.

REP. ROS-LEHTINEN: I apologize.

REP. MCCAUL: All right.

REP. ROS-LEHTINEN: Mr. Connolly is recognized for five minutes.

REPRESENTATIVE GERALD CONNOLLY (D-VA): Thank you, Madam Chairman. And if my friend, Mr. McCaul, were to formulate a question, I would yield to him.

REP. MCCAUL: Thank you for your generosity. I really appreciate that. And I will return the favor in the future.

REP. CONNOLLY: I know you will.

REP. MCCAUL: Just real quickly, if this was enacted at the highest levels in the Iranian government, a political assassination -- after all, a political assassination started World War I. It started the First World War. Would you view this attempt to assassinate the Saudi ambassador, if it was indeed sanctioned at the highest levels, as an act of warfare?

Nobody wants to answer that?

MR. BROWNFIELD: Mr. Chairman, as Ambassador Goldberg said, you've got the wrong panel for this one. I could offer you Bill Brownfield's personal opinion, but that's not why we are here.

I think it is safe for all of us to say -- and I bet I do speak for all of us on this one -- that we share the same personal view of what has been revealed to us this week than you do. Where we go from there obviously does require other people with other responsibilities to give a useful response to your question.

And let me just reiterate. This does represent something that is very disturbing, and the use of Mexico, the proposed attempt on the life of an ambassador here in Washington on American soil. So all of those things, the premises are correct.

REP. MCCAUL: In fairness to the gentleman from Virginia, I'm going to yield back.

And thank you so much for --

REP. CONNOLLY: I thank my colleague.

Well, if I may follow up a little bit on that, Mr. Ambassador, it's disturbing. It's actually a lot more than that, presumably. And what bothers one is that, with impunity, these agents provocateurs went to Mexico knowing that's where they would find a willing partner.

And so I guess part of my question is, you know, I went to Mexico and met with Mexican officials over a year and a half ago and with a rather high-level delegation here from the House, and we expressed great concern about violence, especially in the northern part of Mexico. And we even raised the question, frankly, of a failed state. The situation in northern Mexico seems to have actually gotten worse, not better.

And so I guess I would ask, in light of the recent revelations this week, how concerned do we need to be about stability in our southern neighbor?

MR. BROWNFIELD: Why don't I start with a response to that, Congressman?

And first, I'd like to remind everyone on the committee that at the end of the day, what we have is a positive outcome. Let us not forget that a plot was foiled. It was foiled in no small measure due to the cooperation between the governments of the United States and Mexico, which in turn is a product perhaps of four years of unprecedented historic cooperation between our two governments, our two countries and our two peoples in addressing common threats from a perspective of shared responsibility. So I do want to remind you that that is our starting point.

Where do we go from here? My -- the part of this project that I am responsible for, which is the Merida Initiative, obviously we want to ensure that the support, the equipment, the assistance, the cooperation that we are providing to and with the government of Mexico will also address this sort of threat.

Failing to do that would make us guilty of stupidity. And while I'm willing to be many things, I'd prefer not to be stupid. What we obviously have to do and what we are doing is assessing the nature of our programs, the organizations that we are working with, the institutions that we are working with, to ensure that they are better able to address this sort of threat in the future.

In my opinion, what we have done over the last four years has contributed to foiling this plot. And I think, for that, we all should owe ourselves a debt of gratitude.

REP. CONNOLLY: I think you make a very good point, Mr. Ambassador.

But part two of my inquiry had to do with concern about stability in northern Mexico because it looks like, frankly, the situation has gotten worse. How concerned should we be about a de facto failed state in the northern part of Mexico?

MR. BROWNFIELD: Yeah. My own view is that the Merida Initiative is in transition, and part of the transition directly addresses that issue, and that is the transition from support for federal institutions and organizations to support for state and local organizations and institutions; police, prosecutors, courts, municipal governments.

The extent to which we are able to make that pivot, that transition to strengthen the states of northern Mexico, particularly the five states that border on the United States of America, will address that specific issue.

REP. CONNOLLY: I thank you, Mr. Ambassador and Mr. Chairman. My time is up.

REPRESENTATIVE ELTON GALLEGLY (R-CA): Just let me say now that I have the chair I'll be a little more generous. (Laughter.)

REP. CONNOLLY: If you would allow me just a point of personal privilege, I want to welcome Paul Stockton to the committee. Paul and I worked together in the Senate Foreign Relations Committee many years ago, and it's good to see at least one of us did well. (Laughter.)

MR. STOCKTON: Well, Congressman, I can see who did well and, again, thank you and all the members of the committee for your contributions and leadership.

REP. GALLEGLY: Well, thank you for that.

And the chair now recognizes the gentleman from New York, Mr. Higgins.

REP. HIGGINS: Thank you, Mr. Chairman.

The theme of this hearing is emerging threats, and as important as knowing where terrorist activity exists, it's as important to know where it will exist in the future. And with a lot of these terrorist organizations, including Hezbollah, it's a new generation. They're younger. They're more aggressive. They're more technologically sophisticated.

And in the 12-country region of Latin America, estimates are that there are about 138 Hezbollah operatives. This concerns me because Hezbollah is a proxy for -- acts as a proxy for Venezuela, Syria and Iran. It's also estimated that Hezbollah has a presence in the United States in 15 major cities and, also, in four major cities in Canada.

My concern is that they have a presence there, and some will say, well, they're not really a threat because they have a presence. Well, again, it's an organization that's committed to violent jihad. It's an organization that we identify as a major threat.

So I would ask each of you to assess the concern of the Hezbollah presence not only generally in the Western Hemisphere but more specifically in the United States and in Canada because those four cities in which Hezbollah has a presence, the sense is that they're there so as to have access to major areas of the United States.

So I would ask you to assess that for us.

MR. GOLDBERG: Our view of Hezbollah and what it has been doing in the hemisphere and particularly in South America has been in the area of fundraising for its activities. We talked some about that earlier.

We have not -- we follow very closely. We track attempts to do operational activity of these groups around the world. And I'm -- I don't have information to corroborate some of the allegations that I've heard over time, but it is something you can be assured that we watch very closely.

MR. GLASER: Well, again, I would defer to the FBI and to the Justice Department to speak to the threat that Hezbollah plays within the United States. With respect to Hezbollah's broad activities with the region, I think Ambassador Goldberg is correct. They engage in a lot of fundraising activities within this region.

Again, I think it's important to always emphasize when you talk about Hezbollah fundraising, that the vast majority of Hezbollah's funds come from Iran. And Iran is the primary donor to Hezbollah. But their fundraising activities in the Western Hemisphere of are of concern, and that's something that we are monitoring and that's something that we target at every opportunity.

Again, recently, the Treasury Department, when targeting a particular bank in Beirut, had the opportunity to point out that Hezbollah does derive financial support from criminal activities of criminal networks that span into the Western Hemisphere.

MR. BROWNFIELD: Congressman, I'd like to broaden the aperture a little bit and talk about an emerging threats and opportunity for collaboration, and that is cybersecurity. Both state and nonstate actors increasingly pose a challenge to not only the United States but partner nations throughout the Western Hemisphere. And we've seen recently denial-of-service attacks against our partner nations in the Western Hemisphere. This is a prime example of both increasing and transforming threats but also new partnership opportunities so that we can share our expertise with our partner nations so they can then help us in providing security for the Western Hemisphere.

REP. HIGGINS: Got it.

Mr. Chairman, yielding back my time. I would just say that, you know, it's cold comfort when you hear the assessment that Hezbollah's activities in North America are limited to fundraising activity. It seems when there is a physical presence in 15 major cities in the United States and four major cities in Canada, that the potential of their nefarious activity is certainly there and present and we should have -- we should be diligent about monitoring that activity moving forward.

I represent an area, Buffalo, New York, which is 90 miles south of Toronto. And a Hezbollah presence in Toronto concerns me very much beyond the fundraising activity. And I understand clearly that fundraising is a big part of this. So that would be my concern.

I thank you and I yield back. Thank you.

REP. GALLEGLY: Thank you. And I certainly share your concerns as well.

The chair now recognizes the ranking member on Africa Global Health and Human Rights, Mr. Payne.

REP. PAYNE: Thank you very much, Mr. Chairman.

Let me just ask a general question. In your opinions, is the relationship with the United States to our Central and South American countries in general -- taken the region in general, in your opinion, is it better today than it was in the immediate past decade, say, the same or worse?

MR. BROWNFIELD: Let me offer you a first cut at that, Congressman, Mr. Chairman.

Congressman, this is not our area because we're not responsible for the regional relationship. However, I said earlier before you were in the room that, in my opinion, we have made progress in this relationship and, in fact, our relationship with the region is better today than it was 10 years ago or 15 years ago; that there is, to a certain extent, a competition for ideas in terms of what best represents the future -- the vision for the future of the hemisphere and that I would suggest the vision that is more associated with open markets and governments that protect their communities but do not run the economies appear to be showing greater success than those with an alternative vision.

REP. PAYNE: The -- thank you very much. You know, we found that, you know, countries -- poorer countries, as we do find in Central and South America -- I know that's not your expertise, but I'm going to just throw it out anyway.

In many instances, you do get sort of a populous movement. You get people who feel that there should be kind of a safety net for peasants or the poor. In many instances, our government reacts because we feel that this is a new socialist threat or it may be getting some influence from some of the -- I guess if there's any communists left -- I don't know if -- I look at China and wonder what China is, you know.

But what do you think about our positions that in cases change because of the election of someone that we may not agree with their political ideology? And what our relationship should be because, in a number of instances, we simply change our relationship and may be less engaged with them if it's a government or a political ideology that we don't -- that we don't like.

MR. GOLDBERG: I mentioned, Mr. Payne, in my statement that one of the areas that we look at in the I&R bureau is the activities of some of the populist governments in the region. And it's not for ideology that we look at it. The way we may view what's going on in the region is in part a result of where we sit -- the intelligence community or someone who deals with sanctions -- and it's a different view.

But the reason I raised it was, and as a concern in a threat sense, is that we have seen some of the same governments that -- where we see a decline or a narrowing of democratic space, of ability of oppositions to exist and rule of law especially, that it becomes harder to work together and we see the same countries on issues like counter-narcotics or counterterrorism. So that's what we look at from an analysis point of view.

REP. PAYNE: Just finally before my time expires, on the Merida initiative is there any way that -- can you measure the human impact positively that this has had on the people of Mexico?

MR. BROWNFIELD: Congressman, it's -- you're going to find it hard to believe this, but I would argue that it's still early to give you a definitive answer to that question. Our experience over the last 40 years in places such as Bolivia and Peru in the 1980s, Colombia in the course of the last 10 years, the past decade, is that it takes about five years for a major program to actually begin to show an impact. And then often your statistics are a couple of years behind the reality on the ground.

What we can measure right now quite clearly is the input, what have we delivered to Mexico under the Merida initiative, how many trucks, how much equipment, how many helicopters and so forth. What you have a right to hold us to in the years ahead is the impact that that will have. How many senior members of cartels have been arrested or otherwise removed from their activities. How has the crime rate, the homicide rate, the violence rate gone down. Has the successful prosecution rate improved. These are the sorts of statistics which you have every right in the world to hold us to.

My only suggestion to you is, give it about five years before you grill us on those statistics. And that doesn't mean you have to wait much more than about one more year before you can haul me up here and rake me over the coals.

REP. PAYNE: (Chuckles.) Thank you very much.

REP. GALLEGLY: I appreciate that. I appreciate -- we would never dream of raking you over the coals up here. The chair now recognizes the gentleman from California, Mr. Sherman.

REPRESENTATIVE BRAD SHERMAN (D-CA): I would never rake anyone over the coals. As the last questioner, perhaps almost all the interesting questions have been asked. Mr. Glaser, we're focusing here on raising money for Hamas in the Western Hemisphere. There are several instances at least that have been reported where money has been raised for Hamas here in the United States and the Justice Department refuses to do anything about it. Do you find that frustrating?

MR. GLASER: I'm sorry -- we're talking about Hamas now, not Hezbollah?

REP. SHERMAN: Hamas, yes. Another terrorist organization.

MR. GLASER: OK. I think that the Justice Department has been pretty active in targeting Hamas fund-raising, so I would find it frustrating if we in the government weren't taking it seriously.

REP. SHERMAN: Well, wasn't there a widely publicized delivery of valuable assets to Hamas in Gaza by ship, spearheaded in part by American citizens and -- is it not terrorist financing if you deliver trucks as opposed to cash?

MR. GLASER: I would consider it terrorist financing to deliver --

(Cross talk.)

REP. SHERMAN: Has a single person involved in delivering trucks to Hamas been even the subject of a criminal inquiry? Or do you want to re-evaluate your answer that the Justice Department is focusing on Hamas financing in the United States?

MR. GLASER: I'm sorry, Mr. Sherman, I have to defer to the Justice Department on who they're investigating and what the status of those investigations are.

REP. SHERMAN: We both know that the Justice Department will do nothing to those who deliver trucks to Hamas, but we'll send you around the world trying to make sure that we -- that Hezbollah financing is interrupted. And let's shift to another issue. China. To what extent should we be concerned about Chinese relationships in Latin America? Ambassador Goldberg?

MR. GOLDBERG: I would reiterate that we view China's activities in the region as part of an economic challenge. They have a booming economy. They seek markets for their exports. Some of the countries, interestingly, in the region have the same issues about currency and Chinese currency valuation as we do in the United States.

REP. SHERMAN: There's a chance they'll actually do something about it, but that's another subject.

MR. GOLDBERG: But in political terms China's interests have been largely on the economic side and in gaining raw materials for its economic boom, and on the political side largely based in the BRICS group of countries, coordinating with Brazil on international issues. But as I said, it's part of a global issue.

REP. SHERMAN: We know that Russia is supplying weapons to Venezuela. Is China doing the same, and what concerns should we have about Russia providing arms to Venezuela?

MR. GOLDBERG: Well, Russia's position in the region is different and has a more political kind of tint. Russia has, for example, inked deals worth about $11 billion with Venezuela since 2007, so there's clearly an interest in selling military goods in the region. There is also Russian political goals, traditional ones of trying to promote multi-polarity and -- of world centers of power. And so I do think that you would, both in a commercial sense when they're selling military goods, but also in a political sense you would look at it differently than perhaps some of the Chinese activities.

REP. SHERMAN: I yield back.

REP. GALLEGLY: Thank you for your questions. I just want to close out with just an observation. I mean, Hezbollah is a terrorist organization. They're very prevalent in Latin America. In 1980 they issued a fatwa that stated its rationale for engaging in drug production and trafficking, and it said that it was making these drugs for Satan, America and the Jews. If we cannot kill them with guns, we kill them with drugs.

Then it was reported that the Mexican Sinaloa drug cartel was sending elite assassins to train on weapons and explosives with Islamic radicals in Iran. I don't know if that's true or not, but if it is, it seems to me they're aiding and abetting a known terrorist organization. And then finally, three Pakistani citizens pled guilty to conspiracy to provide material support to the TTP, and Pakistan -- it's part of a human smuggling operation, bringing these Pakistanis into South America.

We don't have all the answers as to how complicit the drug cartels are with these organizations, and I think that's something that we are going to continue to investigate. But the more evidence that comes out that they are, the more I'm led to the conclusion that we need to treat them as terrorist organizations. And I'm talking about the drug cartels themselves.

So with that, let me just say thank you to the witnesses for your very interesting testimony. Ambassador, we hope to have you back again soon.

One final -- when we met with President Calderon -- I do want to ask you this. He said, you know, we're hitting a turning point. He said, you may not see it right now with all the killings, but he said I really believe we're hitting a turning point. We have trained 200,000 national federal police officers. And he was generally, I think, optimistic about what a lot of people view as a very pessimistic situation. Do you have any observations on that?

MR. BROWNFIELD: Actually I'm delighted to close on this point, Mr. Chairman, because I agree with that sentiment completely. And I suggest to you it's one of the lessons that we've learned from our Colombia experience. That is, one, that it takes a certain amount of time before your efforts begin to bear fruit. We've been at this Merida initiative now for about four years. Second, your data, since drug trafficking organizations rarely report their data to government offices and institutions, your data is usually one or two years behind the reality on the ground.

That said, look at Mexico; look at what the Mexican federal police and law enforcement institutions have done. They have taken down, I believe, 34 senior cartel members since the year 2009. That compares with one in the preceding six years. They have beefed up their national police from a force of somewhere less than 10,000 to a force of about 35,000 to 40,000 within the last three years. They are better equipped, they are better trained, and I personally agree that we are seeing results from that, and we'll see them increasingly in the years ahead. If I'm wrong, you have every right to bring me up here and berate me.

REP. GALLEGLY: I think that's a positive note to end on, Ambassador. And thanks to all the witnesses for being here. This committee stands adjourned.

Wisconsin Project on Nuclear Arms Control - Iraq Watch

About Us | Contact Us | Subscribe

Copyright © 2003- 2012
Wisconsin Project on Nuclear Arms Control
1701 K Street NW, Suite 805
Washington, DC 20006 USA
Tel: 202-223-8299, Fax: 202-223-8298