U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

26–838PDF 2017

THE VENEZUELA CRISIS: THE MALICIOUS

INFLUENCE OF STATE AND CRIMINAL ACTORS

HEARING

BEFORE THE

SUBCOMMITTEE ON 

THE WESTERN HEMISPHERE

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTEENTH CONGRESS

FIRST SESSION

SEPTEMBER 13, 2017

Serial No. 115–65

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

MO BROOKS, Alabama 

PAUL COOK, California 

SCOTT PERRY, Pennsylvania 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

ADAM KINZINGER, Illinois 

LEE M. ZELDIN, New York 

DANIEL M. DONOVAN, JR., New York 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

ANN WAGNER, Missouri 

BRIAN J. MAST, Florida 

FRANCIS ROONEY, Florida 

BRIAN K. FITZPATRICK, Pennsylvania 

THOMAS A. GARRETT, JR., Virginia 

ELIOT L. ENGEL, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

KAREN BASS, California 

WILLIAM R. KEATING, Massachusetts 

DAVID N. CICILLINE, Rhode Island 

AMI BERA, California 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

BRENDAN F. BOYLE, Pennsylvania 

DINA TITUS, Nevada 

NORMA J. TORRES, California 

BRADLEY SCOTT SCHNEIDER, Illinois 

THOMAS R. SUOZZI, New York 

ADRIANO ESPAILLAT, New York 

TED LIEU, California

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

SUBCOMMITTEE ON THE WESTERN HEMISPHERE

JEFF DUNCAN, South Carolina, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

MICHAEL T. MCCAUL, Texas 

MO BROOKS, Alabama 

RON DESANTIS, Florida 

TED S. YOHO, Florida 

FRANCIS ROONEY, Florida 

ALBIO SIRES, New Jersey 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

NORMA J. TORRES, California 

ADRIANO ESPAILLAT, New York 

GREGORY W. MEEKS, New York 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Francisco Toro, executive editor, Caracas Chronicles ................................... 9

R. Evan Ellis, Ph.D., senior associate, Americas Program, Center for Strategic 

and International Studies ................................................................................... 15

Harold Trinkunas, Ph.D., senior research scholar and associate director for 

research, Center for International Security and Cooperation, Freeman 

Spogli Institute for International Studies, Stanford University ...................... 43

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Jeff Duncan, a Representative in Congress from the State 

of South Carolina, and chairman, Subcommittee on the Western Hemisphere: Prepared statement ................................................................................ 4

Mr. Francisco Toro: Prepared statement ............................................................... 11

R. Evan Ellis, Ph.D.: Prepared statement ............................................................. 17

Harold Trinkunas, Ph.D.: Prepared statement ..................................................... 46

APPENDIX 

Hearing notice .......................................................................................................... 72

Hearing minutes ...................................................................................................... 73

Questions submitted for the record by the Honorable Jeff Duncan and written 

responses from: 

Mr. Francisco Toro ............................................................................................... 74

R. Evan Ellis, Ph.D. ............................................................................................. 76

Harold Trinkunas, Ph.D. ..................................................................................... 80

(1)

THE VENEZUELA CRISIS: THE MALICIOUS 

INFLUENCE OF STATE AND CRIMINAL 

ACTORS 

WEDNESDAY, SEPTEMBER 13, 2017

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE WESTERN HEMISPHERE,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:08 p.m., in room 

2200, Rayburn House Office Building, Hon. Jeff Duncan (chairman 

of the subcommittee) presiding. 

Mr. DUNCAN. A quorum being present, the subcommittee will 

come to order. I now would like to recognize myself for an opening 

statement. 

Today in Venezuela there are over 600 political prisoners. The 

country is a failed state and a humanitarian disaster. Since April, 

more than 125 people have died, over 2,000 have been injured in 

protests at the hands of the Venezuelan Government. Food, medical supplies, and basic goods remain scarce. The legitimate democratically elected National Assembly has been silence in favor of a 

sham constituent assembly full of President Maduro’s supporters. 

The previous attorney general has fled the country after publicly 

opposing Maduro’s abuse of power. 

Today, Venezuela has entrenched itself as a dictatorship, 

unmoved by international condemnation and the pleas of its people. 

The political economic human rights crisis in the country is appalling for the 30 million citizens of Venezuela, and it threatens to destabilize the region. 

The United States has very clear interests in Venezuela. We 

want regional peace without masses of refugee flows or public 

health threats from rising cases of malaria, diptheria, or Zika. We 

want to see a democratic country that represents the rule of law 

and that is accountable to its people. We want to see a country that 

doesn’t use its power to beat up, imprison, torture, and kill its own 

citizens. 

We want to ensure that Venezuela does not become a narcostate 

that provides safe harbor to terrorists or transnational criminals. 

We want a stable energy market that promotes energy security. We 

also want to certify that Venezuela does not become a pawn for 

Russia, China, or Iran to exploit for their own geopolitical purposes. And bottom line, we care about the Venezuelan people, and 

2

we want to see them prosper. Let me repeat that. We care about 

the Venezuelan people, and we want to see them prosper. 

To those ends, the U.S. Congress has issued public statements in 

past legislation calling for the Maduro government to return to a 

democratic order. This subcommittee has held four hearings on 

Venezuela over the past 2 years. President Trump has affirmed 

that Venezuela remains a U.S. priority, and his many efforts, combined with Vice President Pence’s recent visit to the region, underscore U.S. solidarity with our partners in the region and with the 

Venezuelan people in our commitment to see the Venezuelan Government end this embrace of tyranny. 

I commend President Trumpand his administration for their efforts, and I want to underscore that we support further U.S. and 

international action to pressure the Maduro regime and to convince 

those who follow his leadership that they will not succeed in destroying the country. 

While the United States under President Trump’s leadership has 

been unwavering in our support for the Venezuelan people, many 

other countries in Latin America, Europe, and Asia have also demonstrated courage and conviction in jointly condemning the breakdown of democratic order in Venezuela and in offering full support 

and recognition for the democratically elected National Assembly. 

I believe it is critical that we continue to speak and act together 

in our support for the Venezuelan people. Dialogue alone is fruitless without a series of preconditions that level the playing field for 

democratic actors and without corresponding simultaneous multilateral pressure. Therefore, I strongly urge other countries to continue their efforts to step up said pressure. 

Recently, I, along with the ranking member Sires, led a congressional delegation visit, which included Ms. Kelly and Mrs. Torres 

and Mr. Espaillat of this subcommittee, to the Dominican Republic, 

Haiti, Colombia, and Peru. In our meetings, we emphasized U.S. 

congressional commitment to supporting democracy, rule of law, 

and human rights in Venezuela and urge greater regional cooperation to call out the Maduro government for its reprehensible behavior against its own people and to pressure the Venezuelan Government to restore the country’s democratic institutions. Decisions like 

Mercosur’s suspension of Venezuela and recent Lima Declaration, 

which was signed by 12 Latin American countries, are important 

steps in that direction. 

With that in mind, I strongly urge the European Union to enact 

sanctions on the Venezuelan dictatorship to cut off another important source of financing and ratchet up pressure on the Maduro regime. 

Yet regardless of any strong measure the U.S. or other countries 

in the Western Hemisphere and the European Union may take 

against the Maduro government, various state and criminal actors 

have undermined those measures’ effectiveness and blunted our objectives. Cuba, China, Russia, and Iran are the underlying supporters of the Maduro regime. 

Beginning with the rise to power of Hugo Chavez, the Cuban dictatorship has exported his system of oppression to Venezuela under 

the guise of medical doctors and teachers. For their part, Russia 

and China have funded the expansion of Venezuela’s military arseVerDate 0ct 09 2002 14:48 Oct 24, 2017 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\WORK\_WH\091317\26838 SHIRL
3

nal and invested heavily in Venezuela’s corrupt state-owned oil 

company, PDVSA. 

Iran has attempted to strengthen economic and diplomatic ties 

with Venezuela through visits in 2016 by Iranian President and 

Foreign Minister. Multiple reports exist of Hezbollah’s activities in 

the country. Just earlier this week, President Maduro met with 

President Rouhani to strengthen their cooperation. 

In addition, criminal organizations also operate in the country 

with unfettered access, fueling corruption, graft, and an increase in 

narcotrafficking and other illicit activities. A few years ago, U.S. 

Government drug trafficking maps showed virtually all suspected 

drug trafficking flights from South America originated in Venezuela. Today, we are seeing drugs from Venezuela entering neighboring countries as well as heading to the United States. 

Yesterday, the State Department affirmed that in Venezuela, 

drug trafficking organizations have completely penetrated virtually 

every security, law enforcement, and justice-related institution in 

the country. And any solution to the Venezuelan crisis requires a 

solution to the drug trafficking organization presence. 

In February 2017, the U.S. imposed sanctions on the Venezuelan 

Vice President, designating him as a drug kingpin, and revealed 

the Venezuelan Government’s complicity in drug trafficking. Questions remain regarding the Venezuelan Government’s ties to foreign terrorist groups and concerns about Russian and Chinese 

arms falling into the hands of these or other criminal actors. 

Today, we want to examine the role these actors play in sustaining the Venezuelan dictatorship and consider what might constitute an effective U.S. and international response. 

With that, I will turn to the ranking member for his opening remarks. And I look forward to hearing from our panelists today. I 

turn to the ranking member for his statement. 

[The prepared statement of Mr. Duncan follows:]

4


26838g-1.eps
5


26838g-2.eps
6


26838g-3.eps
7


26838g-4.eps
8

Mr. SIRES. Thank you, Chairman, and thank you for holding this 

timely hearing. Thank you to our witnesses for being here today. 

We have watched week after week Maduro continue to expand 

his authority at the expense of the Venezuelan people. Just last 

month, the National Constituent Assembly, the fraudulently elected puppet Congress orchestrated by Maduro, approved a Presidential decree giving itself authority to pass legislation, replacing 

the opposition dominated in legitimate elected National Assembly. 

Political prisoners continue to be kept under lock and key, while 

families are unable to access basic necessities such as food or lifesaving medicines. 

Despite all this, Venezuela continues to enjoy the support of 

some Latin American and Caribbean nations, in addition to others 

which help prop up the Maduro autocracy. 

When the Organization of the American States recently tried to 

press Maduro to take concrete steps to improve the human rights 

situation and restore democratic institutions, the resolution failed 

because a number of small countries abstained or voted against the 

measure. It is worth noting that 95 percent of the Western Hemisphere lives in countries that have voted to strongly condemn the 

Maduro regime’s actions. There is a consensus among the majority 

of the hemisphere, multilateral institutions such as the OAS, the 

United Nations and the European Union, that Maduro is destroying democracy and violating human rights. 

In order to reach a sustainable political situation, it is imperative 

that we work with our allies in the region and around the world 

to present a unified condemnation of Maduro’s autocratic regime 

and fight together for a restoration of democracy for the Venezuelan people. 

I am encouraged that regional leaders in Brazil, Colombia, Peru, 

Canada, and many others are criticizing Maduro for this gross 

abuse of human rights, and hope that more will join their neighbors in calling for a resolution to this crisis and productive engagement with the opposition. 

Maduro’s descent into authoritarianism has not only jeopardized 

the lives of innocent Venezuelans; it has also created an environment ripe for dangerous foreign influence from countries such as 

Iran, Russia, China, and Cuba. 

The State Department has already noted that Venezuela is home 

to several individuals linked to designated foreign terrorist organizations, including Hezbollah. As a continued sponsor of terrorism, 

Iran’s interest in Venezuela should be a concern to the Western 

Hemisphere. As Cuba continues to imbed itself deep within the 

Venezuela security network, Chinese and Russian presence in the 

country’s economic activities provide new opportunities for influence within the region. 

I believe that it will take a coordinated effort amongst the Western Hemisphere nations to present a viable solution to the ongoing 

crisis in Venezuela. I am hopeful that more regional partners will 

come forward in denouncing the Maduro regime. 

I am eager to hear how our panelists view the role that external 

actors play into the gang situation in Venezuela and look forward 

to their recommendations as we continue to grapple with this complex issue. Thank you. 

9

Mr. DUNCAN. Thank you, Ranking Member Sires. 

The Chair will now go to Mr. DeSantis for an opening statement. 

Mr. DESANTIS. Well, Mr. Chairman, thank you for having the 

hearing and your attention to this issue. It is very important. 

The more and more we have seen the Venezuela piece, the more 

and more we can say that the Obama administration deal with 

Cuba has been a total failure, because Cuba and the Cuban military are driving a lot of the bad things that are happening in Venezuela right now. And, of course, we have these reports of diplomats being harmed in Havana. We still don’t have all the facts 

on that, but I don’t know how you can spin that as anything other 

than an attack. The evidence is just too overwhelming. 

So we obviously need to hold Maduro accountable, but we need 

to hold the Cuban Government accountable too, because they are 

the root of a lot of these problems. I yield back. 

Mr. DUNCAN. I thank the gentleman. 

No other members have opening statements. 

So before I recognize the panelists, you will notice a lighting system in front of you. Five minutes is what you will be recognized 

for. When it starts to get down to a minute, the yellow light will 

come on. And when you run out of time, it will be red. If you could 

acknowledge that and start wrapping up your statement, it will 

help us stay on time. 

Members, all the bios for the witnesses are in your binders and 

provided earlier, so I am not going to read those. And once the witnesses offer testimony, all three, we will go into the question-andanswer portion of it, and each member will be recognized for 5 minutes. 

So I will start with Mr. Toro. You are recognized for 5 minutes. 

STATEMENT OF MR. FRANCISCO TORO, EXECUTIVE EDITOR, 

CARACAS CHRONICLES 

Mr. TORO. Okay. Thank you so much, Chairman Duncan. 

I wanted to focus today on the role of Cuba. I think when we talk 

about foreign influence in Venezuela, it is really Cuba and then everyone else. The influence of Cuba has been so overwhelming. 

On Sunday, October 14, in 2007, then President Chavez made a 

startling statement during his famous Alo Presidente show, which 

was broadcast from Santa Clara in Cuba then. He was addressing 

Fidel Castro directly across from him when he said, ‘‘Deep down, 

yes, we are just one single government. Venezuela has two Presidents, but we are one single government. We are advancing toward 

a confederation of republics.’’

Now, that is obviously a bit of overstatement. They are separate 

governments and separate juridical traditions, et cetera, but the 

ambition that Chavez and Fidel Castro had was something beyond 

the normal alliance, and we have seen it play out in over the last 

10 years in really nefarious ways. 

And it is important to understand that Venezuela always had 

four traditional service branches in the armed forces: The army, 

navy, air force, and the national guard, which is like a military police. But on Cuban advice, in 2005, a fifth service branch was 

added called the Milicia Bolivariana, the Bolivarian militia, which 

10

was an avowedly political arm of the ruling party organized, 

trained, and armed as a military force. Okay. 

The Bolivarian militia has been derided over the years as sort of 

a grannies army, that they don’t seem to be much of a fighting 

force, but there are hundreds of thousands of terrorista political activists under arms. And we have seen this, and in the last couple 

of years, the Bolivarian militia has become more powerful. President Maduro has made a calculated decision to strengthen the 

Bolivarian militia. 

And what is really concerning about this, and what I think the 

committee should really sink its teeth into here, is that there have 

already been a series of leakages of weapons from the Venezuelan 

military to nonstate actors. Okay? 

So we have seen criminal bans in Venezuela that are dedicated 

to extortion, drug trafficking, but local drug trafficking, buying 

weapons, buying assault rifles, buying C-4 plastic explosives from 

the military. And we see the Venezuelan military getting more and 

more powerful weapons under its control. 

Now, early last year, it was reported—Reuters reported that 

Venezuela had acquired over 5,000 surface-to-air shoulder-mounted 

MANPADS missiles, heat-seeking missiles that a single person 

could shoot. Those have been under the control of the Army for the 

last several years, since they were bought. 

We understand that as many as 1,000 of those MANPADS systems could be transferred to the Bolivarian militia in the coming 

weeks. And while the ARMY has leaky ways of keeping track of its 

stock of weapons, the militia has no system that we know of to log 

these weapons. 

So while weapons have been subtracted from the Venezuelan 

army for sale to criminal networks, the Venezuelan army, at least 

in the Venezuelan security forces know that and have a way of 

tracking it. Once hundreds or perhaps as many as 1,000 

MANPADS are transferred to the control of the militia, you can 

kiss them good-bye. There is no more tracking them. 

A few weeks ago, when there was some tension with the United 

States following President Trump’s declaration, it was very clear 

that the militia was given assault rifles to take home. There is a 

question, are we looking at a scenario here where Venezuelan military could be handing political activists surface-to-air missiles, 

heat-seeking missiles that can bring down an airliner at 20,000 feet 

to take home? 

You have to understand that many of the Bolivarian militia 

members are rank-and-file Chavista activists. These are people 

who are often hungry, penniless and hungry. So we would be looking, then, really at a buyers market for these extraordinarily dangerous weapons. And that is a debate that I don’t see happening 

anywhere, really, and that I think that should change. 

[The prepared statement of Mr. Toro follows:]

11


26838b-1.eps
12


26838b-2.eps
13


26838b-3.eps
14


26838b-4.eps
15

Mr. DUNCAN. Thank you for that. I am sure members will like 

to delve more into that. 

Now we will go to Dr. Ellis for 5 minutes. 

STATEMENT OF R. EVAN ELLIS, PH.D., SENIOR ASSOCIATE, 

AMERICAS PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES 

Mr. ELLIS. Thank you, Chairman Duncan. 

Chairman Duncan, Ranking Member Sires, distinguished committee members, thank you for the opportunity to share my analysis with you today. I will summarize what are my written remarks for the committee and would emphasize that these are 

strictly my own opinions and not those of my employer. 

I would like to emphasize how both Russia and China, in a pursuit of their commercial and strategic interests in Venezuela, have 

provided capital, goods, services, and political backing that has indirectly enabled the populist regime to ignore and ultimately destroy, as you alluded to, the mechanisms of democratic accountability. 

Between Russia and China, the PRC, in my judgement, holds the 

greatest leverage over the fate of Venezuela, with the control of financial instruments and loan-funded projects, as well as flows of 

goods important to the regime’s survival. 

First, the PRC has become Venezuela’s principal banker, with 

PDVSA moving current accounts from Portugal’s Banco Espirito 

Santo to China’s CITC Bank in August 2014. Venezuela has also 

stored a portion of its gold reserves in China. Both actions potentially protect Venezuela’s assets partially from international legal 

claims. However, they also give China influence over Venezuela in 

how it responds to such claims. 

Also, the PRC is Venezuela’s major source of credit, as is widely 

known, having extended an estimated $62.2 billion to the regime 

since 2005 in the form of revolving credit relationships repaid by 

shipments of Venezuelan oil. 

As the majority of international companies have withdrawn from 

Venezuela, the work performed by Chinese entities funded by such 

credit has become increasingly critical for building and maintaining 

the oil, electricity, and transportation infrastructure to get Venezuela’s oil to market. 

Indeed, just days ago, the China-Venezuela High-Level Mixed 

Commission met and authorized an additional $2.7 billion in such 

new projects, including the construction of the Jieyang refinery in 

China to process Venezuelan heavy oil. China has further provided 

Venezuela with billions of dollars of military goods on credit, displacing Russia as Venezuela’s principal arms supplier. Systems 

sold, just to name a few, include JYL-1 radars, K-8 fighter trainers, 

Y-8 and Y-12 transport aircraft, SM-4 self-propelled mortars, SP5 multiple rocket launchers, VN-1, VN-18, and CS/VP-4 armored 

combat vehicles, CS/LMG heavy machine guns, plus antisubmarine 

and antitank weapons, which are, frankly, concern for neighboring 

Colombia if war should ever break out between the two. 

In addition, Chinese arms also include VN-4 armored cars and 

VN-16 light tanks, which have been very publicly used by the VenVerDate 0ct 09 2002 14:48 Oct 24, 2017 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\WORK\_WH\091317\26838 SHIRL
16

ezuela national guard to suppress antiregime demonstrations in recent weeks. 

Russia. Russia’s activities in Venezuela have been more limited 

than those of the PRC, yet are still significant. Russia has sold over 

$11 billion of military hardware to Venezuela since 2006, including 

10 Mi-35 attack helicopters, 38 Mi-17 transports, 3 Mi-26 heavy 

transports, 24 Su-30 fighter aircraft, 100,000 Kalashnikov rifles, 92 

T-72 tanks, and approximately 200 BMP-3 and BTR-80 armored 

personnel carriers. 

Russia has also sold, as my colleague rightly alluded to, between 

2,000 and 5,000 Igla-S anti-aircraft missiles, which also I would 

agree with my colleague could gravely threaten civil aviation were 

they to fall into the hands of terrorists. 

Russia has also used its relationship with Venezuela to project 

a military force into the region. Examples include the deployment 

of two nuclear capable Tu-160 backfire bombers in 2008, later a flotilla of warships the same year into Venezuela, and another deployment of Tu-160s to Venezuela in October 2013, and farther, the 

second sending of warships to Venezuela in March 2015 to conduct 

exercises. 

With respect to commercial support, the Russian state-owned 

company, Rosneft, has been a key financier for the Venezuelan oil 

sector, providing an estimated $17 billion since 2008. Indeed, as 

the liquidity crisis in Venezuela has deepened, Rosneft has provided an additional $6 billion in loans to PDVSA for future delivery 

of oil, in addition to the $1.5 billion that it loaned in December 

2016 in exchange for the 49 percent interest in the PDVSA subsidiary, CITGO. 

In formulating the U.S. whole-of-government strategy to restore 

democratic governance to Venezuela, and I also would commend 

the administration’s efforts in that, I believe that the U.S. must 

structure its sanctions and other actions and strategic communication with an eye to convincing Russia and China that their continued support for Venezuela’s anti-U.S. authoritarian regime will not 

get those countries to a stable, internationally accepted successor, 

which would legalize and make sustainable the deals that they 

have struck with those who hijack the Venezuelan state and its resources. 

While sanctions should be imposed, in my judgment, broadly and 

not only against U.S. purchases of Venezuelan petroleum, but also 

at the regime’s access to the international financial system. In that, 

I concur with your remarks about Europe, Mr. Chairman. 

While this course of action is harsh, I believe that it is the best 

among imperfect options, short of military intervention, to bring 

about change that most rapidly ends the suffering of the Venezuelan people, and with that same rapidity, would deny Russia 

and China time to advance their position in the country through 

their own incremental deals which continue to prop up the regime. 

Thank you, Mr. Chairman. Thank you. 

[The prepared statement of Mr. Ellis follows:]

17


26838a-1.eps
18


26838a-2.eps
19


26838a-3.eps
20


26838a-4.eps
21


26838a-5.eps
22


26838a-6.eps
23


26838a-7.eps
24


26838a-8.eps
25


26838a-9.eps
26


26838a-10.eps
27


26838a-11.eps
28


26838a-12.eps
29


26838a-13.eps
30


26838a-14.eps
31


26838a-15.eps
32


26838a-16.eps
33


26838a-17.eps
34


26838a-18.eps
35


26838a-19.eps
36


26838a-20.eps
37


26838a-21.eps
38


26838a-22.eps
39


26838a-23.eps
40


26838a-24.eps
41


26838a-25.eps
42


26838a-26.eps
43

Mr. DUNCAN. Thank you for your testimony. 

The Chair will now go to Dr. Trinkunas. Did I pronounce that 

correct? 

STATEMENT OF HAROLD TRINKUNAS, PH.D., SENIOR RESEARCH SCHOLAR AND ASSOCIATE DIRECTOR FOR RESEARCH, CENTER FOR INTERNATIONAL SECURITY AND COOPERATION, FREEMAN SPOGLI INSTITUTE FOR INTERNATIONAL STUDIES, STANFORD UNIVERSITY 

Mr. TRINKUNAS. Yes. Yes, you did, Mr. Chairman. 

Chairman Duncan, Ranking Member Sires, members of the subcommittee, it really is an honor to be here today to discuss the negative influence of external actors in the crisis in Venezuela. I am 

providing this testimony in my private capacity as an expert on 

Venezuela, its politics, and its foreign policy. 

Mr. Chairman, Ranking Member Sires, I concur with your assessment of both the situation in Venezuela and U.S. interests at 

stake here, so I will not dwell on those further. 

In my written testimony, which I am summarizing here today, I 

focus on the role of China, Cuba, Russia, Iran, and illicit nonstate 

actors in Venezuela. I am happy to go into further detail on those 

in the Q&A, but I would like to make some broad remarks here before we go into specifics. 

The first thing I will say is that each of these actors in Venezuela plays a slightly different role, of course, as I detail in my 

testimony. But the important thing to note is they are all in Venezuela at the invitation of Hugo Chavez as part of his governing 

strategy back in the day before he was deceased. Chavez’s plan was 

to use these actors to increase Venezuela’s capabilities and to resist 

U.S. influence. 

The thing to keep in mind is when oil was at $120 a barrel, Chavez had the upper hand. Now that oil is at a third to half of that, 

it is Maduro’s aspiration that really makes Venezuela vulnerable. 

I would like to make four main points at this time about the negative role of external actors in Venezuela. I concur with you that 

these actors are principally enablers. They basically provide capabilities to the Venezuelan regime that allow them to pursue catastrophic policies for longer and at less cost to the regime than 

would otherwise be possible. 

The second thing is that the Castro-Chavez policies we now observe in place in Venezuela are primarily designed to benefit President Maduro and his allies. We should not assume that they are 

the result the ignorance or external influence. They are very much 

designed to support the regime’s coalition, transfer public resources 

into private pockets, and, in fact, this is involvement in corruption, 

some officials are linked to drug trafficking, some now are linked 

to human rights abuses, that these actors cannot afford a transition back to democracy. They fear being held accountable. 

That said, I do think that at this point in time, and here I am 

focused principally on how these actors can keep the present regime in power. Their primary motivation for working with the 

Maduro government is economic. They want to secure the biggest 

possible return on their investments for interacting with the Venezuelan regime. Of course, geopolitical interests, ideological interVerDate 0ct 09 2002 14:48 Oct 24, 2017 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 F:\WORK\_WH\091317\26838 SHIRL
44

ests, may derive welcome benefits from that participation of Venezuela, but that is relatively secondary to their economic motivation. 

With that said, I concur with Dr. Ellis that there may be some 

opportunities there in the sense that they may fear that these 

deals that they are making now may be invalidated in the future. 

Finally, I would say that not all of these external actors have an 

equally negative role. I think that if you look at China’s involvement over time, they have become more skeptical of the Venezuelan regime. They are more concerned about its ability to pay 

back the existing loans. They are somewhat disenchanted, as opposed to let’s say the case of Russia, which I really do think is playing a very opportunistic role these days, picking up Venezuela’s oil 

assets for pennies on the dollar. There may be an opportunity there 

that the United States should be exploring. 

The final thing I would say is that I concur with you and with 

the ranking member that we are seeing the most positive external 

environment for international collaboration to address the crisis in 

Venezuela since President Maduro took office, a decided shift 

against the Maduro regime, not just in Latin America, but also increasingly in Europe, and that is something the United States, I 

agree with you, should capitalize on. 

That said, I am skeptical that there are solutions in the short 

and medium term to the crisis in Venezuela, and that guides a set 

of recommendations that I would like to make now. 

The first is, I do think it is time to begin serious contingency 

planning to address a full-scale humanitarian crisis in Venezuela. 

This means collaborating with efforts already underway in Colombia and Brazil to deal with Venezuelan economic and political refugees. It means shoring up the efforts of small island states in the 

Caribbean, which have already been badly affected by the recent 

hurricanes. It means increasing monetary assistance to credible 

civil society organizations that can actually get food and medicines 

to Venezuelans, maybe initially just on the border, but there may 

be other opportunities. 

And finally, I would say that we should talk to the states, including the ones that have a negative influence, who have significant 

personnel present in Venezuela, the Chinese, the Cubans to understand exactly what the limits of their support are. Are they willing 

to support at all costs, no matter what, or is there some room short 

of that that could be explored? 

Second, deepen, accelerate strategic engagement programs in the 

Caribbean. I commend the subcommittee’s work on that. I know 

you have been doing important work in that area. The time after 

these hurricanes is, I think, an important time to capitalize on that 

forward-leaning effort that this subcommittee has supported. 

I concur with you on the need to build on the international consensus. Any U.S. diplomacy is magnified if we work with our partners in the region. 

And finally, I would consider targeted sanctions against individuals and businesses that are enabling the Maduro regime. The 

Maduro regime is enabling external actors that have not paid much 

cost for supporting Venezuela so far, and individual sanctions and 

45

sanctions against businesses might produce less of a diplomatic 

blowback than general sanctions. 

I conclude my remarks there. 

[The prepared statement of Mr. Trinkunas follows:]

46


26838c-1.eps
47


26838c-2.eps
48


26838c-3.eps
49


26838c-4.eps
50


26838c-5.eps
51


26838c-6.eps
52


26838c-7.eps
53


26838c-8.eps
54


26838c-9.eps
55


26838c-10.eps
56


26838c-11.eps
57


26838c-12.eps
58

Mr. DUNCAN. I thank all of our panelists, and great testimony. 

Dr. Ellis, the deteriorating economic situation in Venezuela 

makes investment in the country increasingly risky for anybody, 

especially as Venezuelan oil production continues to decline. In 

your opinion, why is Russia willing to take these risks? 

Mr. ELLIS. Thank you, Chairman Duncan. I believe that Russia 

itself is not the one taking the risk, but rather, specific Russian 

companies, Igor Sechin with Rosneft, presumably with the backing 

of Vladimir Putin. 

I believe, frankly, that in addition to the economic interest, both 

Russia and China have a long-term strategic interest in having a 

relatively anti-U.S. actor close to U.S. shores that grants them 

privilege access, not only to the arms market and the oil market, 

but other markets as well. And so to the extent that it is in both 

of those countries’ interest to sustain that, you know, the small 

amount of capital, relatively, that is being invested is a minor price 

to pay, in my judgment. 

Mr. DUNCAN. One thing I have always thought about is, I mean, 

Russia is a gas station masquerading as a country. They don’t need 

the oil. It is not about that geopolitical dynamic of a natural resource. 

So with their investment in PDVSA, if Venezuela defaults on the 

loans, then, basically, Rosneft will have controlling interest, or 49 

percent interest in CITGO. What does that mean? 

Mr. ELLIS. That is an excellent question, Mr. Chairman. I believe 

this illustrates an opportunity in part of the Russian strategy. I 

think in many ways, Russia became somewhat careless as it advanced the last $6 billion in advance loan payment. And I think at 

the point in which they put in the money for CITGO, what they 

failed to understand was that, you know, the degree to which, for 

example, with CFIUS review, that their ability to actually take 

control over CITGO holdings in the U.S. could actually be denied. 

So I think Russia finds itself in a difficult position, and indeed, 

public information indicates they are currently negotiating actually 

to swap the access to CITGO for potentially other assets, which 

might include Petropiar, which might include expanded access to 

Petromonagas and others, which really goes to Russia’s farther 

strategy, in my judgment, which is to use Venezuela’s time of need, 

not only to sustain the regime, but to broaden the holdings that 

they have to Venezuela’s 300 billion barrels of oil. 

And I think their calculations really come down to whether they 

think, at the end of the day, I believe that Russia and China as 

much as everyone else wants to transition away from the Maduro 

regime. But what they want to transition to is very different. I believe that they are hoping that they can get a transition to an 

equally anti-U.S. authoritarian regime that will let them legally legitimize their holdings. And so to the extent that they believe that 

they can get that and not be forced to cooperate with the United 

States toward a more democratic regime, I think they will still continue to play this game to fund the regime as they have. 

Mr. DUNCAN. So you mentioned a lot of the weapons. Is there 

any possibility those weapons could fall in the hands of the criminal element or the narcoterrorists at all? 

59

Mr. ELLIS. They already have, Mr. Chairman. Especially with respect to small arms. I mean, everything from——

Mr. DUNCAN. Beyond small arms. I am talking about some of the 

larger, more capable weapons that you mentioned. 

Mr. ELLIS. Indeed, as my colleague Mr. Toro also mentioned, one 

of the particular concerns are the Igla-S anti-aircraft munitions, 

which, especially to the extent that they are transferred away from 

the regular Army, there is the opportunity for those to begin to be 

sold to other people. 

So it is certainly that, especially as there is a deterioration in 

order. And what is particularly concerning not only is the black 

market sales, but if there is a collapse of order, a split in the military as part of a succession crisis, that becomes one of the moments 

in which those type of arms could begin to even more rapidly disappear into other hands. 

Mr. DUNCAN. My time has expired. I will turn to the ranking 

member. 

Mr. SIRES. Thank you, Chairman. 

You know, as I look at Venezuela, I see the same game plan that 

was implemented in Cuba. First of all, in Cuba, they started out 

with the Communist assembly. In Venezuela, it is called the National Constituent Assembly. Basically, that is to take away power 

from any kind of democratic effort to put it in the hands of these 

groups. 

The second step is, basically, to eliminate the opposition. They 

eliminated the opposition in Cuba. They eliminated the opposition, 

putting them in jail in Venezuela. 

And the third thing is this whole structure of committees that 

they are setting up throughout the country, where the committees 

basically tell on the activity of the public, you know, what the people are doing, and then they can go and put them in jail. 

So I see the same formula, actually, being implemented in Venezuela. Now, what can we do about it? I think we pretty much have 

to depend on all the other countries around Venezuela to continue 

to put the pressure and prohibit them from using the World Bank 

and so forth. But I think other than that, we are kind of limited 

on what we can do, you know, in the country. So would you agree 

with that? 

Mr. ELLIS. First of all, Mr. Chairman, I would thoroughly agree. 

Clearly, not only Hugo Chavez, as my colleagues alluded to, but 

continuing with Nicolas Maduro, who have continued not only to 

follow the Cuban playbook, but indeed, have received the benefit of 

their consultation as well as the active presence of the Cuban DGI, 

the Avispas Negras, and various other organizations to include 

those introduced through the doctors. And so if it looks like Cuba, 

that is not entirely by coincidence. 

But beyond that, I actually believe that we are at a unique moment where, although oftentimes sanctions are not effective, sanctions may have a particular opportunity to be effective in this case, 

specifically because PDVSA is at the brink of a cascading liquidity 

crisis. 

You have a series of events, whereby which, for example, certain 

bond payments, the $3 billion that are due in October, that if 

PDVSA goes into technical default, you have a situation where the 

60

creditors, including of course, Rosneft that you alluded to, and the 

other PDVSA creditors from the bond from last year, as well as 

other international claimants such as Crystallex and others, all 

begin to jump on international assets, which effectively shuts down 

the regime. 

I fundamentally believe that there is some point at which, if the 

money flow that accounts for 96 percent of Venezuela’s ability to 

import the food and medicine it needs for its people is effectively 

shut down through that international legal battle, you do force a 

situation in which you may have regime change. And the way that 

we structure sanctions may impact how that comes about. 

Mr. SIRES. Mr. Toro? 

Mr. TORO. I think it is important to understand that the U.S. has 

a lot of leverage. The United States buys 720,000 barrels a day 

from Venezuela. I read in the Washington Post last month that 

there is scope for creativity here if people are willing to explore it. 

It is nowhere written that the United States has to buy this oil. 

And if it does buy it, you could think creatively about conditioning 

payments to some kind of mechanism where the National Assembly, the duly-elected National Assembly in Caracas approves the 

use of those payments. You could think of escrow systems. You 

could think of different ways of leveraging the fact that, yes, the 

United States needs this oil. Yes, Venezuela needs to sell this oil, 

but not under just any old conditions. 

Mr. TRINKUNAS. Thank you, Ranking Member Sires. I concur 

with you that collaboration from the countries in the region is important. We know from sanctions that they are more effective the 

more that the key parties are present. I also think there is an opportunity to put pressure on individuals and businesses that facilitate and serve as fronts for the officials in the Venezuelan Government that have engaged in corruption or benefit from drug trafficking. Cooperation with regional financial centers, especially in 

places like Panama would be important. So I do think there is 

room for creativity both in the kinds of sanctions and then how the 

earnings of Venezuela——

Mr. SIRES. In terms of the game plan that I described at the beginning of my comments, do you agree with that? Do you see similarities? 

Mr. TRINKUNAS. To——

Mr. SIRES. To the Cuban game plan. 

Mr. TRINKUNAS. I do think that there is a similar level of effort 

to achieve authoritarian control. I do see a lot of similarities also 

to what Hugo Chavez did in 1999. It is just when Hugo Chavez 

shut down the Congress and the Supreme Court in 1999, it was 

popular, and now it is not popular. So I don’t let the Venezuelans 

off the hook, sir. 

Mr. SIRES. Mr. Toro, do you agree with that game plan that they 

are implementing? 

Mr. TORO. Absolutely. The difference is that in Cuba in the late 

1950s and 1960s, they had firing squads, and so things went much 

more quickly. If you are trying to do the same thing, but you are 

not going to have firing squads, it is going to take you 17 years or 

18 years instead of 6 months or a couple of years. But you see the 

procession. 

61

And Venezuela now is at a very peculiar point in its history in 

that it still has an organized independent political opposition hanging on just barely in the Mesa de la Unidad Democratica, in MUD. 

They are trying to figure out ways to stay relevant and to stay 

united and to stay cohesive and to stay effective under a lot of pressure. 

It is not a given that Venezuela will always have that kind of opposition. Venezuela could end up just like Cuba with only dissidents and not an organized——

Mr. SIRES. My time just ran out, but I do think that Venezuela 

is going to move on private property in the next year. 

Thank you, Chairman. 

Mr. DUNCAN. I thank the ranking member. 

Now we will go to Mr. DeSantis from Florida. 

Mr. DESANTIS. I thank the witnesses. 

And just following up on the Cuba stuff. How do the Cuban military officers and soldiers exert power and influence over the Venezuelan military government? Doctor? 

Mr. TRINKUNAS. So Venezuela invited in 40,000 Cuban personnel 

during the Chavez regime. Most of those were doctors, but a significant number were intelligence officers and military advisers. 

The most important role that they play is really as spies on the activities of the Venezuelan officer corps. It makes it very difficult for 

anybody in the Venezuelan officer corps to remain independent or 

nonideological or nonsupportive of the regime. So they have also 

taught the Venezuelans themselves how to conduct surveillance of 

their own officers. So it is really in support of maintaining regime 

control that they play a role. 

Mr. DESANTIS. You want to——

Mr. TORO. I think it is important to understand also that I think 

if we go back 5 years, that was very much the case. You had Cuban 

military personnel, spies, pretty much in every Venezuelan army 

unit. And in the last 3 years, that has changed a little bit, because 

that was generating a lot of resentment inside the Venezuelan military. It is humiliating to be spied on openly by foreigners. 

So in the last 3 years, what we have seen there is a move away 

from this unit-by-unit surveillance. And the way I put it in my 

written statement is the Cubans used to be everywhere, now they 

are just at the top. So you have, in Miraflores in the Presidential 

palace in Caracas, you have the situation room where intelligence 

gathered mostly by Venezuela, it is a little bit by Cubans, is funneled and analyzed and fed to the top leadership, really by Cubans. 

So they have become a kind of mechanism for dictatorship, if you 

want to put it that way. They are playing a consultancy role, but 

a very high-level consultancy role. High-level decisions are never 

made without asking the Cubans for advice first, and Venezuelan 

high regime officials are traveling back and forth to Havana all the 

time. 

Mr. DESANTIS. So the Cuban military officials and intelligence officials, are they shaping the oppression of the Venezuela people and 

the opposition? 

Mr. TORO. Very clearly. 

Mr. DESANTIS. And what specifically do they do to do that? 

62

Mr. TORO. Well, it is just day-to-day management of the political 

crisis. It has taken a lot to break the Venezuelan opposition to set 

it against the various groups against one another. It has taken a 

lot to identify the fracture points inside the Venezuelan opposition 

and play on those. 

If you read Venezuelan news over the last couple of days, we 

have one part of the opposition now at semi-open warfare with another part. That is not casual. That is the result of a Cuban strategy to sow divisions in a very canny kind of way. Because we know 

that to the degree that the Venezuelan opposition splits, it becomes 

harder for people like you to put pressure—for the United States 

to put pressure, because, you know, if half the Venezuelan opposition is accepting the National Constituent Assembly, how exactly 

does the Lima group or the United States or anyone else get off 

saying, no, this is an illegitimate assembly? 

So I think the Cubans are very good at this kind of work, understand it very well, and have in Nicolas Maduro a real hardliner, 

I mean, a man whose entire political vision was built in Cuba. 

Mr. DESANTIS. So if you did not have any of this Cuban influence 

and Cuban support, what would that mean for the viability of the 

Maduro regime? 

Mr. TORO. I think to some extent, because Maduro and the inner 

clique around Maduro, they came up through the Liga Socialista, 

this Cuban satellite party in Venezuela in the 1970s, but they 

thought like Cubans. They have been trained to think like—

Maduro never went to university, but he did go to the school of 

international cadres in Havana for a year between 1996 and 1997. 

That was his university. So he thinks like a Cuban Communist. 

The inner clique around him thinks like Cuban Communists. And 

in a way, you know, the Cuban vice has been embedded in the way 

that the Venezuelan security services do their work and certainly 

in the way that the leadership clique thinks. 

Mr. TRINKUNAS. I would just add that, basically, the Cubans enable President Maduroand his supporters to do what they want to 

do sort of faster or better or more effectively. But, basically, I agree 

with Mr. Toro, that this is their preferred course of action. It is not 

being forced upon them. 

Mr. DESANTIS. But it makes their course of action more viable 

against opposition because of the Cuban support. 

Mr. TRINKUNAS. Correct. And, in fact, right now, they are engaged in the strategy of shaping the opposition. It is an opposition 

that they can easily manage by pruning off the parts they don’t 

want to deal with. 

Mr. DESANTIS. Great. Well, I thank you, thank the witnesses. 

And I yield back. 

Mr. DUNCAN. Dr. Ellis, do you want to chime in on that? 

Mr. ELLIS. Yes. I just want to say very briefly that, in my judgment, that the Cubans are only able to imperfectly compensate for 

the bad management of Maduro team. But at the tactical level 

what becomes critical as the crisis deepens is the DGI and others 

who are monitoring whether or not there is a fracture in the military. Because I think with that, that element of the support, basically, a collapse can occur more readily with respect to the military 

split, it is a vehicle for ending the regime. 

63

Mr. DUNCAN. Thank you. 

The Chair now will go to Ms. Kelly from Illinois. 

Ms. KELLY. Thank you, Mr. Chairman. 

While the U.S. has taken action to sanction individuals profiting 

from the Maduro regime, other nations like China and Russia have 

enabled Venezuelans actions. Venezuela is accounted for 44 percent 

of total lending by Chinese banks in the region. For Russia, Venezuela has been a major market for Russian sales, armed sales 

with over $11 billion in sales since 2001. 

Mr. Trinkunas, you stated that most outside actors that trade 

with Venezuela do so to secure the biggest possible return. As the 

economic outlook deteriorates in Venezuela, do you expect outside 

countries to have more interests to exploit a weak state or fear of 

possible default? And are there any indications that China would 

inject capital into Venezuela to keep the Communist (ph) government informed? 

Mr. TRINKUNAS. That is a very good question, Congresswoman 

Kelly. And I believe there is a difference between China and Russian on this. I think China has become more reticent in recent 

years. They are still providing some level of support. They are not 

willing to totally completely cut and run, because they are concerned about how that would be viewed by other potential and existing partners around the world. They think of themselves as a 

rising global power, and they know what they do in Venezuela will 

affect their relations with other countries. So they are reluctant to 

invest more money, but they don’t want to completely leave. 

On the other hand, Russia, and specifically Rosneft, have been 

behaving very opportunistically this year in terms of acquiring 

stakes in joint ventures in Venezuela, as Dr. Ellis and Mr. Toro explained. The one thing to understand about the Constituent National Assembly, in addition to supporting the completion of 

authoritarianism in Venezuela, it is a vehicle by which the Maduro 

regime can try to provide some legal cover for what the Russians, 

for example, are doing in Venezuela. 

Mr. ELLIS. If I could jump in, ma’am. I also believe that China 

is now continuing to inject capital. The idea that although China 

has become more cautious and has not extended new loan vehicles; 

however, it is interesting the current $2.7 billion in new projects 

that was just authorized last week actually is basically money that 

was paid down out of one of the existing tranches of one of the 

heavy investment fund. And so China is proceeding cautiously. 

But I also believe that because the majority of those $62.2 billion 

that were lent was actually lent on generally 3-year repayment 

terms and largely on a—you know, repaid out of China—out of 

Venezuelan oil deliveries, that China is not as worried about losing 

money as many think. As a matter of fact, the amount that could 

be still owed to Venezuela may be—or to China may be as low as 

$15 billion. And when you consider the China investment corporation itself has a $900 billion loan portfolio. For China, you know, 

taking a loss on $15 billion, which is actually only half of the loans 

that Russia took as a write-down when it wanted to reestablish its 

own relationships with Cuba. 

64

So my suspicion is that China is continuing to support the regime; it is just doing so in a less overt way than people like Igor 

Sechin are on the Russian side. 

Mr. TORO. We should note that as far as we know, Simon Zerpa, 

the PDVSA vice president for finance who was named as part of 

the latest round of OPEC sanctions, is in Beijing now and has been 

for a couple of weeks negotiating a—trying to negotiate some kind 

of support deal. The—Beijing is—obviously, it is difficult to get information out. It is hard to know if it is going well or not. We will 

have much better answers to the question when Mr. Zerpa comes 

back. 

But it should be noted that sanctions, individual sanctions 

against Simon Zerpa and against the national treasurer, Erick 

Malpica Flores, the first lady’s nephew also, have been very effective in limiting their capacity to look for financing in traditional 

ways. And so we have Simon Zerpa camping out in Beijing for 2 

weeks trying to solve that problem. 

Ms. KELLY. I have used up all my time. 

Mr. SIRES. You have——

Ms. KELLY. I yield back the balance of my time. 

Mr. DUNCAN. She yields back. 

So the Chair will go to Mr. Yoho from Florida. 

Mr. YOHO. Thank you, Mr. Chairman. Thank you, gentlemen, for 

being here. 

I hail from Florida, so we are very, very concerned with this. We 

have got—in my past life as a veterinarian—I will always be a veterinarian—and I had several clients from Venezuela, and we have 

been following this, and it has only deteriorated in this first half 

of the century. 

And it is very disturbing to see what is going on there, from the 

breakdown of the rule of law, the Communist state that is developing, the dictatorship. The liberties that they had are gone. They 

are already usurping the property and taking the personal property. And I agree with Mr. Sires that this is the prelude of what 

Cuba did with the Castro regime. 

There are so many different avenues that I am concerned with. 

You know, the terrorist networks that are developing there from 

the Middle East, the Chinese influence, the national security—

these all tie into national security, but what I see with the CITGO 

deal that was made with the loan—and I want to touch on that just 

briefly—if Venezuela defaults, CITGO has three oil refineries here, 

nine pipelines, and 50 petroleum platforms. Are we to believe that 

if they were to default, Russia takes that over in this area? Is that 

something that we would anticipate? Or China, if China were to—

if they were to default to China? 

Dr. Ellis? 

Mr. ELLIS. Yes. Well, first of all, my understanding is there is a 

pending CFIUS review. 

Mr. YOHO. Right. 

Mr. ELLIS. And I think, you know, heavy attention to that would 

be merited to potentially blocking that, and I think there are 

strong grounds for blocking the takeover by Rosneft of those assets. 

And I think—my understanding is that out of concern for that poVerDate 0ct 09 2002 14:48 Oct 24, 2017 Jkt 000000 PO 00000 Frm 00068 Fmt 6633 Sfmt 6633 F:\WORK\_WH\091317\26838 SHIRL
65

tential blockage, Rosneft is actually working right now to switch 

out those assets for broader assets in Venezuela. 

Mr. YOHO. Okay. You know, and we have had personal contacts 

with people that used to work for the Venezuelan generals that 

were working with our Government through different agencies, I 

won’t mention them, that have firsthand information that the Vice 

President Asami, when he was a Foreign Minister, was printing 

Venezuelan official passports for ISIS and Hezbollah members that 

were entering our country. 

And to me, this is just a very severe national security risk. And 

I look back at the words of John Kerry when he said the Monroe 

Doctrine was outdated and not needed. I think we need to bolster 

it and really put an influence and, you know, make sure we secure 

the Caribbean base in South America with our policies. 

And let’s see. The corruption scandals. I mean, they are widespread down there. And you brought up, there are over—Mr. Toro, 

over 1,000 MANPADS that have gone missing. Is that—did I hear 

that correctly? 

Mr. TORO. No, no. Let me restate. There are 5,900 Russian 

MANPADS, is the latest information I have, they are under the 

control of the Venezuelan army. The question is what happens—

there is a plan now to shift about 1,000 of them to the Bolivarian 

militia where they will not be as well safeguarded. And we know 

that there are contacts between illicit groups, drug trafficking 

groups, Colombian groups, groups that have expertise shipping 

drugs from the northern coast of South America to the United 

States. If you want to hide a MANPADS system, they want to send 

it to the United States, just hide it under a sack of cocaine. You 

can do that. So this hasn’t happened——

Mr. YOHO. Yes. That is not comforting. 

Mr. TORO. It is not comforting. It is deeply concerning, because 

it is—it is not just that there are these external actors that are 

very worrying, it is a way they can overlap and interact. If you 

have the drug trafficking route, because you set it up for illicit narcotics, what else can you put on that? 

Mr. YOHO. Mr. Chairman, I have got one more question. Do I 

have time? I don’t have a timer in front of me. 

What we have heard is that the Maduro regime, and even Chavez, had the Cuban soldiers around him because he felt they were 

more loyal to them, because they are a student of Castro’s. Do we 

still find that today? Is the Cuban militia that is around him and 

the military around him, are they more loyal and protective of 

Maduro than the Venezuelan generals? What are your opinions on 

that? 

Mr. ELLIS. I have heard similar things. And, you know, to some 

degree, that may be the case, and it depends on which specific loyalists. One of the difficult issues with many of those, especially the 

Venezuelan national guard generals, is they have become so deeply 

entwined in narcotrafficking and other profiteering from the regime’s economic, you know, policies that, you know, their fate in 

many ways is actually tied to Maduro’s, although they are looking 

for transition to a more rational management. 

There is also some speculation, though, whether some, for example, the Avispas Negras, the elite Cuban guard, are they actually 

66

guarding Maduro, or are they actually guarding their own, you 

know, Cuban personnel from the Venezuelans? So that is a little 

bit of concern. 

Mr. YOHO. All right. I yield back. 

Thank you, sir. 

Mr. DUNCAN. I thank the gentleman. 

The Chair will now go to Mr. Espaillat from New York. 

Mr. ESPAILLAT. Thank you, Mr. Chairman. 

I guess, how many Cubans are there? How many Cuban 

operatives are there right now in Venezuela? Do you have an approximate number? 

Mr. TRINKUNAS. Congressman Espaillat, that is a very good question. The assessment was in 2012 there was about 40,000. However, at that time, Cuba-Venezuela trade was about $7.5 billion, 

more or less. Trade has dropped to about $2.2 billion. And a lot of 

those personnel were being paid for by Venezuela through subsidized oil. So those personnel, some likely have been withdrawn 

just because Venezuela is not paying anymore. In fact, there was 

a 8-month oil moratorium last year and early this year, that is—

Venezuela started shipping oil at a reduced rate. But if those personnel are not in Venezuela, they have likely been redeployed to 

the Middle East or Africa or elsewhere in Latin America, because 

that is how—one of the ways that Cuba earns money is through 

providing those personnel. 

Mr. ESPAILLAT. And during the—is there a sign that there is a 

crack in the wall, if you may, in the military, are there any solid 

noncorrupt military professionals that are showing signs of potentially objecting to Maduroand his ways? 

Mr. TRINKUNAS. Let me just briefly say that there is—the senior 

leadership is selected for ideological loyalty, and also as Dr. Ellis 

and I am sure Mr. Toro agree, there is the issue of connections to 

drug trafficking among the Guardia Nacional. The junior officers 

are heavily ideologized at the national Bolivarian Military University. It is those middle ranks that have not been completely captured by the revolution, and that is where you see this occasional 

small uprising, the helicopter, the raid on the base. It is that set 

of officers that, I think, are sort of most open to all these, but they 

are being watched. 

Mr. TORO. I think it—well, about 4 months ago, there was a 

video—or 6 months ago, there was a video that, with little notice 

outside the Venezuelan military, that showed a couple of soldiers 

outside the main army base in Maracay rummaging through sacks 

of garbage looking for food. Okay? 

The video was not very much noticed outside the military, but inside the military where everyone has WhatsApp, because they are 

South Americans, it went viral. Everybody inside the military saw 

it. And there was a moment when people in different units inside 

the military realized, wow, it is not just in this unit where we don’t 

have quite enough to eat. 

For middle-ranking officers, keeping morale and preparedness 

and just basic discipline in a situation where you can’t always feed 

your troops is very difficult. And for the army, again, trying to secure weapon systems when the troops are hungry is, again, very 

difficult. So some of the people, I don’t doubt—I don’t know if you 

67

can find very many people who are not at all corrupt inside the 

Venezuelan military, but what you can find is many officers who 

find that the current government setup is unsustainable and find 

it difficult to understand why they should try to continue to sustain 

it. 

Mr. ESPAILLAT. My last question is, I am kind of losing a little 

hope on the sanctions positions, because as just stated here, China 

has been substantially present there and may look to bail them 

out. And, in fact, if we sanction them, that provide them—provides 

them with a platform to then go out there and demonize the U.S., 

and then here comes China and bails them out. So is there any 

way that we can—what is the objection to not buying their oil, for 

example? That is a significant part of their economy. 

And second, the second question is, what can we do about the 

international—the smaller countries that have benefited from petro 

[off mic] that seems to be bailing them out in the international 

community both at the Organization of American States as well as 

the United Nations? 

Mr. ELLIS. Congressman Espaillat, that is a great question. I 

strongly believe that we are in a moment where sanctions can 

make a difference, but only if done right and coordinated with an 

effective strategic communications, not only to Venezuela, but also 

to Russia and China. 

First of all, I believe that it is actually important that we do 

sanctions in a relatively quick fashion. I believe that what you said 

is absolutely on track, that we need to move forward with sanctions 

that cut off Venezuela’s oil flow. Although that will damage U.S. 

industrial interests, I believe that in some ways that not only doing 

so shows that we do not have a, you know, moral ambiguity in the 

game, but it also accelerates the rate at which you force a crisis 

to the regime. 

And, frankly, we also need to signal strongly to China, because 

China watches this with one eye in the relationship with the 

United States. And if they believe that we see this as a strategic 

play on their part, they may or may not be willing to put in that 

cash. They have been very cautious about that. 

I believe also that we do need, as you pointed out—and, of 

course, Dominican Republic, as you know that—and I was just actually in Santo Domingo just a couple of weeks ago right after your 

visit, sir, the committee’s visit, and was struck by the number of 

Venezuelans that you see. And so you have this ironic situation in 

which friendly governments continue to go along with the Venezuelan regime, while at the same time they are suffering from the 

crisis that is created by the Maduro regime. I think we need to 

manage that diplomacy carefully through a bit of—you know, 

through a bit of tough love, if you will. 

Mr. DUNCAN. We have time for another round if members would 

like. 

I would like to just raise a point. So under Chavez we saw the 

Air Caracas flights, Caracas to Tehran, stopping in Beirut. And 

Beirut is the lead country for Hezbollah. I mean, Party of God, Iranian proxy. 

How much activity is Hezbollah conducting in Venezuela? Is 

there still as much Iranian influence as there was under Chavez 

68

with Maduro? And are we aware whether the Air Caracas Tehran 

flights are still going on? 

Dr. Ellis. 

Mr. ELLIS. Chairman, that is a wonderful question. And I believe 

there are two dimensions to this, the Iranian and the Islamic extremists. And they are overlapping but somewhat separate. Certainly, with the shift from——

Mr. DUNCAN. Some of us think they are one in the same. 

Mr. ELLIS. Yes. They are certainly reinforcing. And certainly 

with the change in style in Iran from President Ahmadinejad to 

President Rouhani, what you see is at least a low profile. 

But I believe that Iran’s strategy in the region is fundamentally 

the same. They are continuing to recruit personnel for the Iranian 

madrassas from places like Venezuela. They are continuing to introduce Quds Forces into the region, although at a somewhat lower 

level. They are continuing to work, many of us believe, on missile 

proliferation. 

And one of the concerns is—and I think you have already seen 

it—with President Rouhani’s reelection in Iran, and the freeing up 

of $150 billion in resources, and indeed the meeting with Maduro 

just a short time ago, I think you are beginning to see a renewed 

willingness of Iran to drop a little bit of the caution that it had previously adopted when it was negotiating the end of the sanctions 

regime. 

Related to that, clearly, I am very concerned not only about 

Hezbollah, but other Islamic radicals. As you rightfully pointed out, 

Tareck El Aissami, the Vice President, is one of the key people not 

only in terms of the religious activity, but also with the criminal 

radicalization. 

Hezbollah, both in Syria and Lebanon, but also in Latin America, 

is a major drug-dealing and money-laundering organization with 

ties in Colombia, Venezuela, elsewhere, that is reinforced and plays 

with Iran, but also has their own criminal agenda, which really 

leads to the growth of illicit networks which fundamentally undermine and threaten the United States. 

So I am glad that you brought that up, sir, because that emphasis has received probably less attention than it should recently, the 

role that is being played. 

Mr. DUNCAN. That has been an issue with me, the Iranians’ activity in the Western Hemisphere, not just Venezuela. We are not 

going to take our eye off the ball with the things you mention and 

what Iran, Quds’ Force, their proxy, Hezbollah, are doing here closer to home. 

Last question. India, they are buying a lot of oil, I understand. 

Are they propping up the Maduro government? Is it anything we 

ought to be looking into? 

Mr. Trinkunas, that is fine. Yeah. 

Mr. TRINKUNAS. I was just going to make a brief point, that I 

think India is an interesting signal of the change that you are seeing, I think, in the Iranian relationship. When Iran reentered global oil markets after sanctions were lifted under JCPOA, a competitive dimension was introduced into the Iran-Venezuela relationship 

because they are competing for markets. And, in fact, India was 

69

traditionally an Iranian market that would later on become a Venezuelan market. 

So we shouldn’t ignore the fact that there is a new dimension to 

the Iran-Venezuela relationship where Iran is competing for markets after being locked out for so long. 

Mr. ELLIS. Sir, India is a wonderful point. Thank you for bringing it up. And it is interesting because even though India’s orientation toward the region, including under Prime Minister Modi, has 

been relatively apolitical, it is interesting that until the Jieyang refinery comes on in Guangdong, in China, really it is the Reliance 

Refinery in India that has one of the few capabilities in the world 

to bring on and process Iranian heavy oil coming out of the Orinoco 

Tar Belt. 

It is also of interest that actually Rosneft has a play, the Russian 

company, to actually buy a stake in that. And some of us believe 

that part of Igor Sechin’s play is to actually refine Venezuelan oil 

in India. 

But India, to the extent of which—there is probably as much of 

an impact on Indian potential sanctions and cooperation as there 

is from U.S. sanction. And so to the degree to which India is willing 

to cooperate with us toward the Venezuelan regime, that would 

bring a big deal of help in bringing pressure on the Venezuelan regime. 

Mr. DUNCAN. Thank you, gentlemen. 

I said earlier Iran and Islamic extremism were one and the 

same. Maybe not one and the same, but not mutually exclusive, I 

guess is what I meant by that. 

Any other members have any followup questions? 

Mr. Yoho. 

Mr. YOHO. Thank you again. 

What is your recommendation with Goldman Sachs, who bought 

$2.8 billion in bonds? Is that something that we should discourage 

from American financial institutions, bailing out a country that 

suspends or gets rid of their Constitution? Thoughts? 

Mr. TORO. I think the latest—well, the first round of financial 

sanctions is narrowly constructed to prevent that from happening 

again. It is unfortunate that it happened once. But as I understand 

it, sanctions will not allow that to happen again. 

Mr. YOHO. Okay. 

Mr. TRINKUNAS. Congressman Yoho, I think that is a very interesting point, because I think you highlight a mechanism by which 

you discourage financial institutions in the future of taking the risk 

of dealing with the Venezuelan Government. You don’t have to prevent very many of these actions to discourage many of them. 

Mr. YOHO. Make an example out of them. I am a firm believer 

in that. 

One last thing, and I don’t know if you touched on this. Again, 

with the Citgo operations in the United States, and with the Venezuelan Government suspending or changing their Constitution, 

which I feel is through an illegitimate election and process, would 

you sanction those companies, the Citgo companies here, and prevent them from processing Venezuelan crude and replacing it with 

U.S.? And I know you said it would disrupt our system, but I think 

we could probably fill that fairly quickly. 

70

Mr. TORO. I am a Venezuelan national. I have family and employees and friends there. I cannot support any such move. 

And I think it is important to understand clearly the mechanism 

through which stopping Venezuela from selling oil to the United 

States is supposed to create pressure. I mean, this is a hunger 

strategy. This is let us starve out the Venezuelan population, let 

us put a hard stop to food and medicine imports into Venezuela, 

and then they will overthrow the government. I don’t think that is 

a viable or defensible strategy. 

Mr. YOHO. Dr. Ellis. 

Mr. ELLIS. Frankly, I wrestled with a lot of this in my own testimony, because, obviously, we don’t want to do anything that hurts 

either U.S. companies or the Venezuelan people, because at the end 

of the day our interests are in the well-being of the Venezuelan 

people. 

My two concerns is that a go-slow strategy of individual sanctions, while certainly sending messages, prolong the rate at which 

you have the suffering of the Venezuelan people while giving Russia and China the opportunity to incrementally bail out and advance their position more and more and more. 

Whereas, the faster that we do sanctions, although immediately 

painful, it creates a situation in which Russia and China do not 

have the time nor the scope for being able to bail it out. And, 

frankly, it sends a very strong message not only to companies like 

Goldman Sachs, but companies such as Citgo as well. 

Mr. YOHO. Thank you. 

Mr. DUNCAN. I thank the gentleman. 

Before we end up, hurricanes have affected a lot of our members 

on this subcommittee and their districts. So our prayers are out to 

the State of Florida and Texas. And also to the Caribbean, which 

we have jurisdiction over, has experienced a lot of damage from the 

hurricanes. So our prayers are with them, as well. 

Pursuant to Committee Rule 7, the members of the subcommittee 

will be permitted to submit written statements to be included in 

the official record. 

Without objection, the hearing record will remain open for 5 days 

to allow statements, questions, extraneous materials for the record, 

subject to the length limitation in the rules. 

There being no further business, the subcommittee will stand adjourned. 

[Whereupon, at 3:17 p.m., the subcommittee was adjourned.] 

(71)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE RECORD

72

f


26838n.eps
73

f


26838m.eps
74


26838d-1.eps
75

f


26838d-2.eps
76


26838e-1.eps
77


26838e-2.eps
78


26838e-3.eps
79

f


26838e-4.eps
80


26838f-1.eps
81

Æ


26838f-2.eps