U.S. GOVERNMENT PUBLISHING OFFICE

31–416 PDF WASHINGTON : 2018

EXPLORING THE FINANCIAL NEXUS 

OF TERRORISM, DRUG TRAFFICKING, 

AND ORGANIZED CRIME 

HEARING 

BEFORE THE

SUBCOMMITTEE ON TERRORISM 

AND ILLICIT FINANCE 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

MARCH 20, 2018 

Printed for the use of the Committee on Financial Services 

Serial No. 115–82 

( 

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HOUSE COMMITTEE ON FINANCIAL SERVICES 

JEB HENSARLING, Texas, Chairman 

PATRICK T. MCHENRY, North Carolina, 

Vice Chairman 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

STEVE STIVERS, Ohio 

RANDY HULTGREN, Illinois 

DENNIS A. ROSS, Florida 

ROBERT PITTENGER, North Carolina 

ANN WAGNER, Missouri 

ANDY BARR, Kentucky 

KEITH J. ROTHFUS, Pennsylvania 

LUKE MESSER, Indiana 

SCOTT TIPTON, Colorado 

ROGER WILLIAMS, Texas 

BRUCE POLIQUIN, Maine 

MIA LOVE, Utah 

FRENCH HILL, Arkansas 

TOM EMMER, Minnesota 

LEE M. ZELDIN, New York 

DAVID A. TROTT, Michigan 

BARRY LOUDERMILK, Georgia 

ALEXANDER X. MOONEY, West Virginia 

THOMAS MACARTHUR, New Jersey 

WARREN DAVIDSON, Ohio 

TED BUDD, North Carolina 

DAVID KUSTOFF, Tennessee 

CLAUDIA TENNEY, New York 

TREY HOLLINGSWORTH, Indiana 

MAXINE WATERS, California, Ranking 

Member 

CAROLYN B. MALONEY, New York 

NYDIA M. VELA ́ ZQUEZ, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JAMES A. HIMES, Connecticut 

BILL FOSTER, Illinois 

DANIEL T. KILDEE, Michigan 

JOHN K. DELANEY, Maryland 

KYRSTEN SINEMA, Arizona 

JOYCE BEATTY, Ohio 

DENNY HECK, Washington 

JUAN VARGAS, California 

JOSH GOTTHEIMER, New Jersey 

VICENTE GONZALEZ, Texas 

CHARLIE CRIST, Florida 

RUBEN KIHUEN, Nevada 

SHANNON MCGAHN, Staff Director 

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SUBCOMMITTEE ON TERRORISM AND ILLICIT FINANCE

STEVAN PEARCE, New Mexico Chairman 

ROBERT PITTENGER, North Carolina, Vice 

Chairman 

KEITH J. ROTHFUS, Pennsylvania 

LUKE MESSER, Indiana 

SCOTT TIPTON, Colorado 

ROGER WILLIAMS, Texas 

BRUCE POLIQUIN, Maine 

MIA LOVE, Utah 

FRENCH HILL, Arkansas 

TOM EMMER, Minnesota 

LEE M. ZELDIN, New York 

WARREN DAVIDSON, Ohio 

TED BUDD, North Carolina 

DAVID KUSTOFF, Tennessee 

ED PERLMUTTER, Colorado, Ranking 

Member 

CAROLYN B. MALONEY, New York 

JAMES A. HIMES, Connecticut 

BILL FOSTER, Illinois 

DANIEL T. KILDEE, Michigan 

JOHN K. DELANEY, Maryland 

KYRSTEN SINEMA, Arizona 

JUAN VARGAS, California 

JOSH GOTTHEIMER, New Jersey 

RUBEN KIHUEN, Nevada 

STEPHEN F. LYNCH, Massachusetts 

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C O N T E N T S 

Page 

Hearing held on: 

March 20, 2018 ................................................................................................. 1 

Appendix: 

March 20, 2018 ................................................................................................. 23 

WITNESSES 

TUESDAY, MARCH 20, 2018 

Humire, Joseph, Executive Director, Center for a Secure Free Society .............. 5 

Maltz, Derek, Executive Director, Government Relations, Pen-Link, Ltd. ......... 7 

Realuyo, Celina B., Professor, Practice of National Security Affairs, William 

J. Perry Center for Hemispheric Defense Studies, National Defense University ......................................................................................................................... 9

Shelley, Louise, Professor, Schar School of Policy and Government, George 

Mason University ................................................................................................. 11 

APPENDIX 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Pittenger, Hon. Robert: 

Written responses to questions for the record submitted to Joseph 

Humire ........................................................................................................... 24 

Written responses to questions for the record submitted to Derek Maltz ... 29 

Written responses to questions for the record submitted to Louise 

Shelley ........................................................................................................... 32 

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EXPLORING THE FINANCIAL NEXUS 

OF TERRORISM, DRUG TRAFFICKING, 

AND ORGANIZED CRIME 

Tuesday, March 20, 2018 

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON TERRORISM

AND ILLICIT FINANCE, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

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

2128 Rayburn House Office Building, Hon. Stevan Pearce [chairman of the subcommittee] presiding. 

Members present: Representatives Pearce, Pittenger, Rothfus, 

Tipton, Hill, Emmer, Zeldin, Davidson, Budd, Perlmutter, Maloney, 

Himes, Foster, Kildee, Vargas, Gottheimer, and Kihuen. 

Chairman PEARCE. The subcommittee will come to order. 

Without objection, the Chair is authorized to declare a recess of 

the subcommittee at any time. 

Members of the full committee who are not members of the Subcommittee on Terrorism and Illicit Finance may participate in today’s hearing, and all members will have 5 legislative days within 

which to submit extraneous materials to the Chair for inclusion in 

the record. 

This hearing is entitled, ‘‘Exploring the Financial Nexus of Terrorism, Drug Trafficking, and Organized Crime.’’ I now recognize 

myself for 2–1/2 minutes to give an opening statement. 

I want to thank everyone for joining us today. Today’s hearing 

will examine the nexus of terrorism, drug trafficking, and organized crime to better understand how powerful criminal organizations exploit the U.S. financial system for their illicit gain. 

Transnational criminal organizations, or TCOs, operate on a 

global scale, crossing international boundaries to further their pursuit of power, influence, and profits. 

The United Nations Office on Drugs and Crime estimates that 

TCOs generate a total of $870 billion in revenue annually. 

This is done through accessing global supply chains across the 

land, sea, air, and cyber domains to move goods, people, services, 

money, and data. 

The massive profits also ensure that these criminal groups are 

powerful enough to influence the political, judicial, and law enforcement branches of the more vulnerable countries, providing them 

the protection to continue their illegal schemes and further expand 

their influence. 

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Terror groups and criminal organizations as well continue to 

merge as terrorists increasingly turn to transnational criminals to 

gain logistical and financial support for their activities. 

This is startling simply because it allows previously localized fanatics a platform to spread their radical propaganda on an international scale. 

We must remain vigilant in our ongoing efforts to dissuade these 

groups, and in that vein I want to thank Mr. Kustoff for his bill, 

the National Strategy for Combating the Financing of 

Transnational Criminal Organizations Act. 

This legislation would require the development of a national 

strategy to combat TCOs and their financial support networks. 

It passed out of the House earlier this month and I hope with 

continued support that it will be signed into law. Today’s hearing 

is an opportunity to dissect the connection of the transnational 

crime, terrorism, and corruption. 

I hope our members will take this opportunity to learn from our 

witnesses how organized crime and terrorist groups fund their operations as well as pose a significant risk to our national security 

through their illicit schemes. 

I would appreciate any comments from our witnesses on the biggest risk TCOs are posing to our country and how Congress can assist law enforcement in disrupting their operations. 

Again, I would like to thank our witnesses for being here today 

and look forward to their expert testimony on these very important 

issues. 

I would now recognize the gentleman from Colorado, Mr. 

Perlmutter, for 2–1/2 minutes. 

Mr. PERLMUTTER. I thank the Chair, and I want to thank him 

and the committee. We have had some interesting hearings on subjects similar to this as well as some briefings and I want to thank 

the panel for coming and visiting with us today. 

According to the United Nations Office on Drugs and Crime, trafficking in illegal drugs is the largest source of revenue for 

transnational organized crime groups accounting for approximately 

half of all revenue generated by the groups. 

This means traffickers and cartels are profiting while Americans 

suffer the consequences of illegal drug use. The opioid epidemic 

stretches from coast to coast and devastates the lives of individuals 

and families every day. 

In 2016, there were over 42,000 related deaths in the United 

States and in Colorado where I am from, 942 people died from 

opioid overdoses. 

We have also seen the devastation of other drugs in our communities like heroin, methamphetamine, fentanyl, and many, many 

more. 

As we address this public health crisis here at home, we must 

simultaneously be working to shut down the organizations and illicit trade activities responsible for the availability of these drugs. 

We need to make sure law enforcement has the tools they need 

to shine light on these activities and work with our international 

partners to stop the flow of drugs and cash into the country. 

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ficking efforts to evade detection, which creates complex challenges 

for law enforcement, and I look forward to the testimony we will 

hear from you today to help us answer some of these difficult questions. 

And with that, I yield back to the Chair. 

Chairman PEARCE. The gentleman yields back. 

The Chair now recognizes the gentleman from North Carolina, 

Mr. Pittenger, for 2–1/2 minutes. 

Mr. PITTENGER. Thank you, Mr. Chairman and Ranking Member 

Perlmutter, for holding the hearing today. 

I’d also like to thank our distinguished panelists for lending their 

expertise to our subcommittee this afternoon. 

The nexus between terrorist organizations and criminal enterprises poses a grave threat to U.S. national security. We know 

Hezbollah and other terrorist organizations are actively partnering 

with Latin American drug cartels in order to raise money to finance their terrorist activities around the globe. 

The tri-border region of Argentina, Brazil, and Paraguay in particular are a key focal point for drug trafficking, money laundering, 

and other cross-border criminal endeavors. 

To that end, the Western Hemisphere must be seen as a front 

line in the fight against terror. While this is often an under-theradar issue, it is critical that Congress better understand the dynamics of this threat and the methods by which terrorists and 

criminal organizations operate within this region. 

I visited South America numerous times and have hosted two 

parliamentary intelligence security forums in Buenos Aires, Argentina. 

The forums had brought together over 200 participants from 15 

countries across Latin America with a collaborative discussion on 

efforts to address terrorism financing, cybersecurity, intelligence, 

and other relevant issues. 

What I have found is very willing interested parties with those 

who are very much lacking on our technology capabilities as well 

as an infrastructure for judicial reform. 

Whether it’s through international organizations, bilateral partnerships, or other efforts within our Government and private sector, we need to carefully and thoroughly examine this threat and 

determine what additional tools and resources are needed to target 

and cut off this plentiful source of financing for terrorist organizations. 

Thank you, Mr. Chairman. I yield back the balance of my time. 

Chairman PEARCE. The gentleman yields back. 

Today, we welcome the testimony of our four witnesses. 

Ms. Celina Realuyo has been Professor of Practice at the William 

J. Perry Center for Hemispheric Defense Studies at the National 

Defense University since 2007. 

Professor Realuyo has over 2 decades of international experience 

in the public, private, and academic sectors. From 2002 to 2006, 

Professor Realuyo served as the State Department Director of 

Counterterrorism Finance Programs. She also Co-chaired the U.S. 

Interagency Terrorist Financing Working Group. 

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Previously, Ms. Realuyo was a private banker in London with 

Goldman Sachs, International. She also had a distinguished career 

as a U.S. Foreign Service officer. 

Professor Realuyo holds an MBA from Harvard Business School, 

an MA from Johns Hopkins University School of Advanced International Studies, and a BS from Georgetown University School of 

Foreign Affairs. 

Mr. Derek Maltz is currently the Executive Director of Governmental Relations at Pen-Link, Limited. Mr. Maltz previously 

served as Senior Executive in the Federal law enforcement as the 

Director of the Special Operations Division (SOD) of the Drug Enforcement Administration (DEA) in the U.S. Department of Justice 

(DOJ). 

Mr. Maltz was instrumental in expanding SOD and the DOJ’s 

Transnational Organized Crime Operational Center. He formally 

established the Counter Narco-terrorism Operations Center within 

SOD with a focus on global money laundering and terror financing. 

Most notably, as head of DEA’s special operations, Mr. Maltz 

oversaw Project Cassandra, a DEA-led effort launched in 2008 to 

undercut Hezbollah funding from illicit drug sources for 9 years, 

ending in July 2014. 

This Special Operations Division successfully coordinated several 

significant operations against drug cartels, including the capture of 

Chapo Guzman in Mexico and initiated a multi-agency money laundering project resulting in the identification of a Lebanese-Canadian bank as a facilitator involved with an international tradebased money laundering scheme supported by Hezbollah. 

Mr. Maltz holds a Bachelor of Science degree in accounting from 

Syracuse University. 

Mr. Humire is the Executive Director of the Center for a Secure 

Free Society where he specializes in transnational threats in the 

Western Hemisphere. 

Prior to this, Mr. Humire served in the U.S. Marine Corps with 

combat tours in Iraq and a multinational training exercise, 

UNITAS, in Latin America and the Caribbean. 

After leaving the military, Mr. Humira attended George Mason 

University where he studied global affairs and economics and 

began building the Center for a Secure Free Society’s global network of more than 100 security scholars in close to 30 countries as 

the Director of Institute Relations at the Atlas Economic Research 

Foundation. 

Mr. Humire’s first book is entitled, ‘‘Iran’s Strategic Penetration 

of Latin America.’’ More recently, he published a monograph titled, 

‘‘After Nisman: How the Death of a Prosecutor Revealed Iran’s 

Growing Influence in the Americas.’’ 

Dr. Louise Shelley is the Omer L. and Nancy Hirst Endowed 

Chair and a university Professor at George Mason University. She 

is at the Schar School of Policy and Government and directs the 

Terrorism, Transnational Crime, and Corruption Center, or 

TraCCC, that she founded. 

Dr. Shelley is the leading expert on the relationship among terrorism, organized crime, and corruption as well as human trafficking, transnational crime, and terrorism. Some of her recent 

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books include, ‘‘Dirty Entanglements: Corruption, Crime, and Terrorism’’ and ‘‘Human Trafficking: A Global Perspective.’’ 

From 1995 to 2014, Dr. Shelley ran programs in Russia, Ukraine, 

and Georgia—the leading specialist on the problems of organized 

crime and corruption. 

Dr. Shelley received an undergraduate degree cum laude from 

Cornell University in penology and Russian literature. She holds 

an MA in criminology from the University of Pennsylvania. 

She also studied at the Law Faculty of Moscow State University 

on IREX and Fulbright Fellowships and holds a Ph.D. in sociology 

from the University of Pennsylvania. 

Each of you is going to be recognized for 5 minutes to give an 

oral presentation of your testimony. Without objection, each of your 

written statements will be made part of the record. 

Mr. Humire, you’re recognized for 5 minutes. 

STATEMENT OF MR. JOSEPH HUMIRE 

Mr. HUMIRE. Thank you, Chairman. 

Chairman Pearce, Vice Chairman Pittenger, Ranking Member 

Perlmutter, Congressman Rothfus, and distinguished members of 

the subcommittee, good afternoon and thank you for your leadership and for inviting me here before you today. 

I’d like to begin by repeating an old refrain often heard in the 

military, which is amateurs talk strategy but professionals talk logistics. 

What this means is that if you want to tackle the heart of the 

threat networks, you have to attack the logistics. Essentially, you 

have to go after the financial flows. 

The hearing today and all the work of the subcommittee is instrumental in emphasizing this point. After all, it’s the illicit financial networks that are sustaining a convergence of threats to the 

United States and our allies abroad. 

Not too long ago, conventional wisdom held that criminals and 

terrorists do not cooperate on a large scale because they have different goals and motivations. One is motivated by greed and the 

other by God. 

Today, after overwhelming empirical evidence, we know that’s 

not true. The crime-terror convergence is real, it’s growing, and it 

poses a significant threat to U.S. national security. 

Let me offer one statistic to reinforce this point. A 2014 report 

by the Combating Terrorism Center showed that in a sample of 

2,700 known criminals and terrorists in more than 122 countries, 

98 percent—let me repeat that—98 percent are connected through 

an all-channel network. 

This is very powerful evidence of the crime-terror convergence. 

But when we talk about the convergence, there is no other organization on our foreign terrorist organization list that embodies the 

nexus of terrorism and transnational organized crime than Lebanese Hezbollah. 

A bombshell article from Politico published last year renewed a 

policy debate on possibly designating Hezbollah as a transnational 

criminal organization. 

I fully support this designation and would like to emphasize at 

least two important benefits it could bring. First, it delegitimizes 

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Hezbollah in the hearts and minds of many Lebanese expats and 

the broader Shi’a community worldwide who see Hezbollah as a resistance movement with clear principles and ideology. 

By labeling Hezbollah a transnational criminal organization, we 

damage their reputation, which in turn hinders their ability to recruit members or raise funds. 

Number two, the second benefit is even more significant because 

a transnational criminal organization designation of Hezbollah 

shines a light on its criminal activity that could prompt our global 

partners to place Hezbollah under greater scrutiny in their own 

countries. 

This is the key to making our sanctions effective. If we are to leverage our sanctions against Hezbollah and maximize our effectiveness then we have to encourage our global partners to investigate 

and prosecute Hezbollah in their own countries using their own 

legal frameworks and their own designation list. 

The question of legal frameworks is vitally important in Latin 

America where Hezbollah has built a growing crime terror empire. 

Many of our partners in this region do not have proper legal 

frameworks to combat Islamic terrorism and none have recognized 

Hezbollah as a foreign terrorist organization. 

In my written testimony, I highlight one prominent counterterrorism case of an alleged Hezbollah operative in Peru. 

The reason I highlight this case is because it represents the glaring antiterrorism legal vacuum that Hezbollah has taken advantage of for decades in Latin America. 

In this particular case in Peru, had the accused Lebanese national confessed to being a member of the Shining Path, an old 

Marxist-Leninist domestic terror group, he would probably be sentenced to 25 years in prison. 

But because he confessed for working for Hezbollah, he was almost set free. This is exactly the kind of counterterrorism 

miscommunication that leads to future terrorist attacks. 

Designating Hezbollah as a TCO will encourage our regional 

partners in South America to place greater attention to the Lebanese terror group, to clamp down on its ever-growing business 

structure, particularly in the tri-border area, or TBA. 

The TBA is a historic crime terror hub in the southern part of 

South America where Argentina, Paraguay, and Brazil meet. 

In this area, OFAC has sanctioned 11 individual members or 

facilitators of Hezbollah dating back to 2004. As part of an upcoming SFS report, my researchers have identified at least 18 new 

companies opened by these same sanctioned individual Hezbollah 

members in recent years, irrespective of our sanctions. 

Local authorities have not stopped these sanctioned individuals 

from operating in their country, even though it’s widely known 

they work for or on behalf of Hezbollah. 

This underscores my central point, that whatever we do unilaterally here in the United States will be insufficient unless we can 

help our partners and allies in Latin America or elsewhere establish proper legal authorities and frameworks to deal with the crime 

terror convergence. 

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If not, then our financial authorities and sanctions are destined 

to a truncated strategy of whack-a-mole, constantly chasing front 

companies and cutouts. 

In closing, designating Hezbollah as a transnational criminal organization and helping the Latin American partners improve their 

anti-terrorism legal frameworks will end amateur hour and position the U.S. to lead the fight on dismantling the logistical networks of the crime terror convergence. 

Thank you, Mr. Chairman. 

Chairman PEARCE. Thank you, sir. 

Mr. Maltz, now you’re recognized for 5 minutes. 

STATEMENT OF MR. DEREK MALTZ 

Mr. MALTZ. Chairman Pearce and distinguished members of the 

committee, I would like to thank you for this opportunity to speak 

on these very important topics. 

I was fortunate to be the agent in charge of DEA’s Special Operations Division for almost 10 years before I retired, working with 

personnel from 30 agencies—law enforcement, intelligence community, Department of Defense. 

We had a daily battle trying to synchronize the efforts between 

the numerous agencies, especially as we lost capabilities to infiltrate the communications of the bad guys through encryption and 

advanced technology. 

I have always been a huge advocate of working in one unity of 

effort. Unfortunately, most of the time, when criminal cases connect through terror investigations, we lose cooperation right here 

in our back yards. 

They don’t always follow the money trail in these investigations 

to the terror groups because of the lack of cooperation. It’s unacceptable 16 years after 9/11, with all the inspector general reviews 

and the information-sharing failures, that this continues. 

The agencies need to cooperate and share. The leaders must be 

in the process of stopping this madness for all of us. 

I lost my brother Michael, U.S. para rescue, in the war and I am 

very passionate about national security and public safety issues. 

It’s nothing new. We need strong leadership here. We need—on 

this topic of crime and terror, we’ve been talking about this for too 

many years. 

We need some more action instead of Beltway meetings to debate 

who’s right, who’s wrong. We all know what the answer is. Terrorists are increasingly turning to crime and criminal networks for 

their funding. We all know that. This has been stated numerous 

times. 

The most public example is we speak about Project Cassandra 

and we see how Hezbollah is operating like a worldwide drug cartel, moving millions of dollars and tons of cocaine all over the 

world. 

I am thankful for Attorney General Jeff Sessions and his bold 

leadership in recognizing the serious gaps in our efforts here in the 

U.S., and he formed the Hezbollah Financing Narco-Terrorism 

Task Force headed by a great prosecutor from New York, John 

Cronan. 

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Forming a task force is great. We need complete sharing, though. 

Proactive investigations, high-level indictments, extraditions, with 

powerful U.S. Treasury actions is going to really do a lot to help 

us go after this problem. 

I remain optimistic because Mr. Cronan came from the Southern 

District of New York. It was that district in 2010 that broke down 

the walls of international terrorism and drug trafficking. 

It’s the only place—I think Eastern District of Virginia wound up 

doing it as well. We need to learn from that successful model. 

Break down the walls. 

This was bold leadership. I was recently testing—I was recently 

reading testimony on international terrorism and drug trafficking 

from a 1985 joint Senate hearing. 

It was surprising but very—it wasn’t very surprising but very 

disappointing that Honorable Strom Thurmond 33 years ago said 

terrorists need money to carry out their heinous activities and 

there is increasing evidence that these groups are involved with 

the illicit drug trade. 

He went on to say how the terrorists are able to use the drug 

trade in two ways. Drugs erode our health, morals, and economy 

when the proceeds are used to finance the terrorists’ activities that 

are directed at this country and our citizens. 

That’s 33 years ago. Fifteen years ago after 9/11, FBI Assistant 

Director Steven McCraw told the Senate Judiciary Committee how 

terrorism and crime are inextricably linked. 

Terrorism and crime have no borders and labeled international 

drug trafficking and terrorism a dangerous mix. 

He also indicated that terrorist acts, crime, and foreign intelligence activities are no longer distinct activities but, rather, profound fluid enterprises that through their very existence have a reverberating impact on national security. 

I thank Mr. McCraw on his important words. But my question 

is why are we still talking about this. OK. This is ridiculous now. 

The agencies are loaded with all these dedicated experienced people. They have tools. They have capabilities. 

Now we need them to come together. In response to September 

11th, the DEA, along with the FBI and the attorney general formed 

a special coordination unit at the Special Operations Division right 

here in Chantilly. 

It’s known as the CNTOC today. The leaders recognize the dangerous nexus between drug trafficking and terrorism so they knew 

they needed a unit. 

However, as we approach the fifth anniversary of the Boston 

bombing, we realize that it failed once again because we are not 

cooperating. 

So what are we going to do? We can’t investigate terrorism in a 

cocoon, especially going after sophisticated transnational groups 

like Hezbollah, al-Qaida, and these other groups. 

We must shut down funding streams from a variety of crimes. 

It’s not just drug trafficking. You guys know. It’s cyber crime. It’s 

alien smuggling. It’s diamond smuggling. 

All right. So there must be true team effort between law enforcement and the intelligence community. Hezbollah is one of the worst 

terrorist organizations in the world and Project Cassandra outlines 

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some really disturbing trends—$200 million a month moving 

through a network where they’re selling used cars right from our 

back yard in America, right in our districts—all your districts. Even though we identified this scheme, we actually seized $150 million. We forfeited $102 million but the problem was we just 

touched the surface because we couldn’t get all the agencies together. 

So we’ve come a long way in information sharing but we need 

your help. We need the leadership’s help in this country. 

If the Government refuses to share with each other, they’ve got 

to be held accountable. If people are not sharing, they have to be 

held accountable. 

The Special Operations Division is a good platform to get this 

interagency task force going. It’s proven its reliability over the 

years. I would highly recommend some additional resources with 

the right expertise. 

The worst thing we need in this country right now is another 

center. Forget it. Don’t even think about it. Let’s get what we have 

and make it work. 

SOD should be working closely with the FBI’s JTTF (Joint Terrorism Task Force). We should provide them the resources so we 

can carry out President Trump’s Executive Order to go after 

transnational crime and violent crime. 

We don’t need any more centers. But we also need financial institutions to be held accountable. There has to be zero tolerance in 

this country for terror financing. 

I know I went a little bit long. I am very passionate about this. 

I could talk all day. 

So thank you very much. 

Chairman PEARCE. Thank you, Mr. Maltz. 

Ms. Realuyo, you’re recognized now for 5 minutes. 

STATEMENT OF MS. CELINA REALUYO 

Ms. REALUYO. Thank you, Chairman Pearce, Vice Chairman 

Pittenger, Ranking Member Perlmutter, and the distinguished 

members of the subcommittee for this opportunity to appear before 

you today to testify on U.S. efforts to counter convergence of terrorism and crime with the financial instrument of national power. 

We face threats from revisionist states, aspiring nuclear powers, 

global terrorism, transnational organized crime, and cyber instructions that have made national security more daunting than ever 

before. 

The complexity of these threats requires nimble, multi-disciplinary, and international approaches. Over the past year, the Trump 

Administration has issued strategies and policies to address terrorism and transnational organized crime that threaten U.S. interests at home and abroad. 

They recognized financing as one of the most critical of enablers 

for terrorism, crime, and corruption, and includes specific financial 

and economic measures that seek to better detect, dismantle, and 

deter these illicit networks. 

We see this dangerous crime convergence, which my colleagues 

have spoken about, where groups are sharing operating areas, intelligence tactics, and resources that threaten nation states. 

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ISIS perhaps best exemplifies a criminalized state engaged in extortion, oil smuggling, human trafficking, and antiquities looting 

that has made it the richest terrorist group in the world and in history as of 2015. 

ISIS has been largely defeated in Iraq and Syria by deliberately 

attacking its leadership and, moreover, its financing. 

However, last week’s arrest of a Cuban national in Colombia has 

actually seen—who’s plotted a terrorist attack in the name of ISIS 

against American diplomats at a restaurant in Bogota, Colombia 

reminds us that this threat of ISIS-inspired operations remains 

around the world. 

Besides ISIS, the best known cases of convergence involve the 

narco insurgencies in Afghanistan and Colombia that have lasted 

for decades. 

This past year, I am disappointed to say, that opium production 

in Afghanistan and coca production in Colombia have reached 

alarming record levels that affect the stability not just of the world 

but here in the United States. 

The Trump Administration has demonstrated a genuine commitment to get tough on crime and pursue illicit networks. 

In February of last year, one of the first Executive Orders issued 

by the White House was one enforcing Federal law with respect to 

transnational criminal organizations and preventing international 

trafficking, which reinforces the 2011 CTOC strategy. 

The new national security strategy includes the mission to defeat 

jihadist terrorists and dismantle transnational criminal organizations with all instruments of national power in order to promote 

our Nation’s security and prosperity. 

It underscores the use of financial measures such as following 

the money trail and sanctions to stem the flow of funding to terrorists, criminals, and rogue states. 

The Administration has aggressively sanctioned Iran, North 

Korea, Russia, and Venezuela in order to isolate these rogue states. 

Perhaps the best example of the effectiveness of sanctions is the 

recent case of North Korea. Increased diplomatic pressure, credible 

threat of military action, and severe economic sanctions imposed by 

us and our partner allies have radically changed the behavior of 

North Korea. 

Kim Jong-Un’s unexpected invitation to meet with President 

Trump face to face and his pledge to suspend nuclear testing while 

allowing for U.S.-South Korea militaries exercises continue to plan. 

It’s an interesting way in which economic sanctions actually complement our efforts on the diplomatic and the military fronts. 

We hope that stricter sanctions against the Venezuelan regime, 

led by President Maduro and his vice president, who have been 

sanctioned by the U.S., including yesterday’s very timely Executive 

Order against their virtual currency called the petro will similarly 

change the behavior of Venezuela and bring back democracy to that 

country. It is quite critical to the security of this hemisphere. 

Venezuelan officials are actively involved in international drug 

trafficking and money laundering and are known to collaborate 

with extra-regional actors like Iran and Hezbollah, incorporating 

them into their own criminal networks. 

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11 

U.S. policymakers should continue applying sanctions against 

key Venezuelan officials whose criminal activities help sustain this 

authoritarian regime and perpetuate the humanitarian crisis that 

we are now seeing devolve. 

As I’ve advocated in the past before this committee, we should 

continue to, first, employ the financial instrument of national 

power more deliberately into every one of our U.S. strategies. 

Second, bolster domestic and international financial intelligence 

and information sharing in order to counter threat financing. 

Third, dedicate more human, financial, and technological resources to those responsible for pursuing terrorist financing and financial crimes. 

I agree with Derek Maltz in that we have a proliferation of centers that actually just must be reinforced and collaborate in a more 

fulsome manner. 

Fourth, better understand the actual drivers of the illicit economy. Anticipate how new financial innovations such as crypto currencies could be used by future terrorist financiers and money 

laundering. 

And last, we must call upon the private sector and the civic sectors to be a part of this fight against illicit financing. 

And with that, I think that we’ve seen now how we can actually 

use economic sanctions in a way to complement many of our other 

much more kinetic and more aggressive approaches, whether it’s 

against rogue states, criminal networks such as the Mexican cartels, or transnational terrorist groups including al-Qaida and its affiliates as well as ISIS. 

Thank you, Mr. Chairman and committee members, for your 

time and attention. 

Chairman PEARCE. Thank you, Ms. Realuyo. 

Dr. Shelley, you are recognized now for 5 minutes. 

STATEMENT OF DR. LOUISE SHELLEY 

Dr. SHELLEY. Thank you. It’s a great honor to address Chairman 

Pearce, Vice Chair Pittenger, Minority Committee Member 

Perlmutter, and the rest of the committee. 

My statement is a little different from my fellow panelists in that 

I am trying to provide a little bit more global perspective. I seek 

to balance the drugs that you mentioned in your opening remarks 

as 50 percent of the financing with the other 50 percent that we 

also need to be looking at. These sources are becoming of increasing importance. 

In late 2014, the Security Council of the United Nations adopted 

Resolution 2195 that identified the crimes that support terrorism. 

Of these, they indicate that trafficking of arms, persons, drugs, 

artifacts, illicit trade in natural resources including gold and other 

precious metals and stones, minerals, wildlife, charcoal, and oil 

support terrorism. 

Most of these have been mentioned at least peripherally by the 

witnesses that have preceded me. 

While much transnational crime exists today apart from terrorism, there’s almost no terrorism that exists today without funding from transnational crime and we need to think of these 

transnational terrorists as diversified businessmen. 

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12 

They function with a logic that is often used by legitimate business so that when the risk increases in the drug trade or the profits can be greater in some other area, they diversify. That is why 

we need to look at the diversified portfolio of terrorists. 

What the U.N. Security Council did not mention was the role of 

counterfeits. Counterfeits are now probably the most lucrative form 

of transnational crime. Profits from them exceed that from drugs. 

And if we go back to the original bombing of the World Trade 

Center in 1993, it’s believed that counterfeit t-shirts were part of 

the funding source for that initial attack on the United States. 

So we have the role of counterfeits and the role of cigarettes that 

are major funding sources that are not recognized in the Security 

Council but that deserve much more attention. 

And terrorists also choose to fund many of their activities 

through least policed forms of criminal activity. So while we are 

chasing them on drugs—and I think that there can be more done 

on drugs—50 percent of their revenues are now coming from other 

areas of activity such as antiquities trade, petty fraud, low-level intellectual property crime because those are areas that are not commanding much law enforcement attention. 

Terrorists also use crime as a weapon and I call that dual-use 

crime in that they’re deriving profits from it but they also degrade 

political stability in communities through this activity. 

So that by trading in drugs they keep people subservient or incapacitate communities. When they kidnap women and girls, as has 

been done with the Yazidis or Boko Haram, they’re devastating 

communities and making them less resistant to their activities. 

This criminal activity can also help destroy communities. 

I think we need to be looking at the problems of drug trafficking 

not only out of Colombia, where it remains a significant problem, 

but looking at it out of Afghanistan where there is less territorial 

control by the central government and the Taliban is reasserting 

itself. We need to look at the northern route from Afghanistan 

through Russia and the southern route that goes through Iran into 

Turkey. 

And we also see Boko Haram and AQIM in Africa being involved 

in this drug trade as well as D-Company, which is a hybrid crime 

terror organization operating out of Pakistan. 

And we need to think also about how fentanyl, which is so potent 

that it can kill people who are transporting it, may be used as a 

weapon of terrorists in the future and not just as a form of deriving 

revenue. 

Antiquities trade remains a recurring problem, but as ISIS is losing territory it’s a possibility that al-Nusra is also gaining profits 

from it. 

We need to think about the illicit cigarette trade not just here 

but in North Africa, in the tri-border area where Hezbollah is involved, and in other areas. 

Terrorists are also involved in energy markets. We’ve seen this 

with ISIS but also we’ve seen this in Nigeria and we’ve seen this 

also in the carbon credit markets of Europe in which there were 

Pakistani-involved groups that were operating out of Afghanistan 

that were involved in hijacking this market. 

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13 

And last, we need to look at their role in environmental crime, 

which is an enormous profit source for terrorists, in deforestation, 

in fishing, and in many other areas in which profits can be turned. 

So we need to be looking at this in the financial streams and 

focus in on public-private partnerships and a whole of society approach, not just one of a whole of Government. 

Thank you. 

Chairman PEARCE. Thank you, Dr. Shelley. 

We’ll now go into a round of questions. The Chair would now recognize himself for 5 minutes. 

Dr. Shelley, can you flesh out just a little bit when you said that 

terrorists are now moving into the clean energy using the carbon 

credits or whatever? Can you flesh that out just a bit? 

Dr. SHELLEY. Certainly. A few years ago, the Europeans established a carbon market without proper oversight and at that point 

there were both criminals and terrorists who hacked into markets 

and stole credits and then proceeded to trade them with using the 

VAT (value-added tax) sales and selling them with VAT and then 

getting VAT refunds. 

Chairman PEARCE. OK. 

Dr. SHELLEY. When our troops were operating in Pakistan—I 

mean, in Afghanistan—they found evidence of some of the terrorists profiting from this enormous carbon credit fraud, especially 

that linked with Italy, and the costs of this were approximately— 

for that part of it alone about a billion euros. 

This crime cost the European community $5 billion. But the terrorist part of it is only about a billion. 

Chairman PEARCE. OK. Thank you. 

Dr. Realuyo, you have—according to briefings that we’ve recently 

received that ISIS is not getting nearly as much money through the 

sale of oil, at one point that was probably the largest source of revenue. What is your independent assessment of that source of revenue? 

Ms. REALUYO. It’s actually quite similar, and perhaps the most 

interesting part of our campaign against ISIS was the deliberate 

use of financial targeting, which we had not used in previous campaigns by really going after the entire supply chain minus the wells 

in terms of attacking the refinery and the income-generating piece 

for ISIS. 

We had taken a look and, more importantly, other independent 

analysts had taken a look at a decline in ISIS finances by 80 percent from January 2015 until last summer, and we do believe that 

this dramatically contributed to bringing ISIS to its knees and its 

inability to pay its foreign fighters, which actually then led to tremendous gains on the military campaign— 

Chairman PEARCE. And you would believe that the gains in the 

campaign are because they can’t—that ISIS can’t sustain the payments to the people—they were buying their loyalty, paying them 

to do jobs and— 

Ms. REALUYO. That’s correct. 

Chairman PEARCE. —they don’t have that flexibility now? 

Ms. REALUYO. And the other thing is that in terms of how much 

they made money, about a third came from oil and then a third 

came from extortion, and as the Iraqis and the Syrians got— 

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14 

Chairman PEARCE. As they lose the territory they lose access to 

extortion, too. 

Ms. REALUYO. —they lose the territory, they can’t— 

Chairman PEARCE. OK. That sounds reasonable. 

Mr. Maltz, you were a head of Project Cassandra and you described thoroughly the breakdown in cooperation between agencies. 

Is that what caused Cassandra to sort of fall on its face is the lack 

of cooperation or was there more involved in that? 

Mr. MALTZ. Sir, there was a lot more involved. Certainly, there 

was a breakdown in cooperation and coordination. 

But, obviously, there were other things that were going on at the 

time. There were other initiatives, other priorities for other agencies. 

And so I am not privy to all of those other details, but there were 

things like, for an example, a terrorist like Ali Fayed, who’s sitting 

in prison in the Czech Republic who gets to walk out and go home 

to Lebanon instead of being brought back here to face justice, pursuant to the rule of law. 

So there’s things that happened during Project Cassandra. But 

it’s a very complicated question for me to answer in this short period of time. 

Chairman PEARCE. So you said that you need our help to cause 

the walls to break down. Describe a little bit more from an agent’s 

point of view what the walls look like. In other words— 

Mr. MALTZ. OK. A real example would be, right off the bat, since 

we are coming up to the fifth anniversary of the Boston bombing, 

when the Russians provided information to our FBI on this terrorist, why wouldn’t they tap into my center for information? 

What’s the answer to that? Not because they didn’t want to 

share, because the system doesn’t call for that. But we have all this 

criminal intelligence sitting at the Special Operations Division that 

could have helped our JTTF investigate this guy Tamerlan for his 

criminal activities. 

Chairman PEARCE. But we shouldn’t have to pass a law to get 

the—can’t the agency simply say— 

Mr. MALTZ. Of course. Exactly. That’s why when people say we 

need more authorities, we need more tools, a lot of this has to do 

with we just need some basic cooperation and start holding people 

accountable, and that’s where we have failed. 

Chairman PEARCE. Thank you, sir. Appreciate that. My time has 

expired. 

The Chair would now recognize the gentleman from Colorado, 

Mr. Perlmutter, for 5 minutes. 

Mr. PERLMUTTER. Thanks, Mr. Chair, and Mr. Hill has interest 

in the counterfeiting, which I thought was an interesting comment 

from you, Dr. Shelley, and I will let him focus on that. 

But I want to talk about something—we mentioned Venezuela 

and ISIS and al-Qaida and Hezbollah and North Korea, and Ms. 

Realuyo, you mentioned sort of rogue states and I want to turn 

everybody’s attention to Russia for a second. 

We have sanctions against them for a variety of things. But really, there wasn’t much testimony—I haven’t heard yet—from the 

panel about the Russian Mafia, the role that they play, the role 

that the country may play. 

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15 

So Dr. Shelley, I will start with you and just, if you could, you 

have some testimony in your—in your written remarks about Russia. If you would talk to us a little bit about what role you think 

the Russian Mafia is playing in all of this. 

Dr. SHELLEY. Thank you for the question. 

When I mentioned the northern route that’s coming out of Afghanistan, that is a route that is very much controlled by Russian 

organized crime. 

In the beginning, in the early 1990’s, Russian organized crime 

was focused primarily on the privatization of state resources. But 

as all the drugs began to come out of Afghanistan, they got very, 

very heavily involved in the drug trade and they are prominent 

international actors in this. 

In fact, Celina and I, before the hearing, were talking about how 

she was seeing Russians in Colombia. So they’re working on their 

international networks into Latin America. 

Also, there was a major political leader in central Russia, from 

Kalmykia, Mr. Ilyumzhinov, who was sanctioned by the U.S. Government for his support of Syria and of ISIS. He was a 

criminalized political leader, a supporter of terrorism, and 

kleptocrat who ran the international chess confederation. 

And so you have this unusual confederation of political leaders 

and terrorist groups as with Mr. Ilyumzhinov. I talked about how 

we need to use sanctions not just on the national level but on 

local—regional leaders, like former Kalmykia leader, and we need 

to be focusing not just on drug trafficking in Latin America but 

what is going on in Afghanistan and the expanding northern route. 

Mr. PERLMUTTER. OK. Ms. Realuyo, you want to add to that? 

Ms. REALUYO. Well, last week it was pretty interesting to see 

how, in pursuant to the Countering America’s Adversaries Through 

Sanctions Act, we had a series of sanctions imposed relating, like, 

to election meddling as well as this threat to the electricity and energy grid and I am hopeful that we are going to see more sanctions 

as the investigation as to who is behind the election meddling and 

other types of pieces. That’s the political part. 

I think Louise and I have been working quite—for several years 

taking a look at the tentacles of the Russian Mafia, which we believe are now working hand in hand with the Mexican cartels in 

order to get cocaine, which we anticipate is five to six times the 

price in Moscow versus Miami. 

So what we’ve seen is the globalization that’s given us as international citizens access to cheaper goods and services and information. Unfortunately, it’s also benefiting what I call the dark side of 

globalization. 

And we’ve also seen—I’ve just come back from Colombia on Sunday night and I am very disturbed by the news that we’ve seen 

from the Colombians that they’re starting to arrest many dozens of 

Mexicans related to the cartels and we are—part of my study now 

is to understand better how the Mexican cartels are actually buying up and trying to control the back end of the supply chain as 

the FARC (Revolutionary Armed Forces of Colombia) transition 

and, more importantly, leave vacant spaces. 

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16 

Someone’s got to be moving and producing, refining, and, more 

importantly, moving that cocaine. And sadly, as you know, some of 

that cocaine is actually landing on the streets of the United States. 

Mr. PERLMUTTER. Thank you. 

Mr. Maltz, in your position with the DEA, again, just my focus 

is more on sort of the Russian connection to all of this drug trafficking and just illicit finance around the world, any experience 

that you had or any comments you’d like to make? 

Mr. MALTZ. My experience was limited when it dealt with Russia. I know, though, from Afghanistan we had a lot of heroin going 

into that region and, obviously, the Russian organized crime networks, like, globally and the cyber crime that’s out there, but that’s 

not my area of expertise, sir. 

Mr. PERLMUTTER. OK. Sir? 

Mr. HUMIRE. The Russian Mafia is rampant in Latin America. 

They’re pretty much present in just about every country. 

They’re involved in every aspect of organized crime. They’ve been 

growing. But there’s an increasing convergence taking place not 

just with criminals and terrorists—and I will speak specifically in 

Latin America—there’s also a convergence between criminal networks, terrorist networks, and rogue state actors. 

The Department of Defense has a framework that they use called 

the four-plus-one where they talk about the biggest threats— 

transnational threats facing our country. 

The four biggest state actors—Russia, China, Iran, and North 

Korea—and the plus-one is violent—transnational violent extremism. 

You can apply that framework to Latin America, a four-plus-one 

framework where you have four anti-American actor states that are 

working against our interests, which would be Venezuela, Bolivia, 

Nicaragua, and Cuba, and then the plus-one would be 

transnational organized crime. 

These two frameworks are unifying themselves and increasingly 

working together. Russia, China, Iran are working through these 

networks. 

Mr. PERLMUTTER. And my time has expired. I appreciate 

everybody’s answer. Thank you. 

Chairman PEARCE. The gentleman’s time has expired. 

The Chair now recognizes the gentleman from North Carolina, 

Mr. Pittenger, for 5 minutes. 

Mr. PITTENGER. Thank you, Mr. Chairman. Thanks, each of you, 

again. 

As it relates to our successful efforts in South America, how dependent are we upon our collaboration with foreign governments 

and how capable are they? Another part of that question was OTA. 

Has OTA been effective and helpful to these countries to assess 

their financial capabilities, their collaboration with us, and the— 

with FIUs as well? 

So Mr. Humire, if we could start with you. 

Mr. HUMIRE. Thank you, Congressman, for the question. 

We are absolutely critically dependent on our host nation partners in Latin America or elsewhere, anywhere in the world, to be 

able to enforce a lot of the things that are happening in terms of 

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17 

sanctions and other designations that happen here in the United 

States. 

I mentioned in my testimony there’s been 11 individuals that 

we’ve sanctioned that are related or affiliated to Hezbollah in the 

tri-border area—a historic fundraising hub for that terrorist group. 

These 11 individuals—most of them are still on the streets today. 

They’ve opened a slew of companies. We’ve identified at least 18 

companies that they’ve opened since 2004 and the Brazilian, Paraguayan, and Argentinian authorities are aware of this. 

And it’s not that they don’t want to do anything about that, but 

they don’t always have the proper legal frameworks to go after 

them. 

In Latin America, there is no designation or legal authority to go 

after foreign terrorist organizations. They have a lot to go with domestic terror organizations and most of the anti-terror laws that 

were created were designed for that. 

But if you’re a Hezbollah, al-Qaida, ISIS, you’re not considered 

a terrorist until you get involved in a criminal act, and until they 

catch you in a criminal act they let you kind of work—operate freely in that country. 

Until that’s fixed, the terrorists are going to continue to use 

those vacuums to be able to move throughout the region. 

So it’s very—it’s very important—I think one of our biggest challenges, and to that end, I think there’s a critical opportunity in this 

part of the world to increase partnerships. 

I know, Congressman, you have been there plenty of times in 

your work at building this network. Argentina, Peru, Guatemala, 

Brazil, Ecuador, Panama are all countries critical to this fight and 

these are countries that I would say maybe half a decade ago 

wouldn’t be considered U.S. partners, at least some of these. 

But the political winds have changed and that creates a tremendous opportunity for us here in the United States. 

Mr. PITTENGER. Mr. Maltz. 

Mr. MALTZ. So to answer your question, I could say that when 

I was at SOD for about 10 years, Colombia, as an example, was one 

of our greatest partners. 

And so with Project Cassandra, just to make it clear, when that 

case first started it was because of the money launderers in the 

United States that were sending money back to—around the world 

but it was Colombia that opened up the investigation for us and 

identified the Middle Eastern presence. 

So we had all these Lebanese guys that were inside of Colombia 

and they were moving millions and millions of dollars and tons of 

cocaine but it was the Colombian national police investigation that 

led to us identifying this global network. So we can’t downplay the 

level of significance with the cooperation in Colombia alone. 

You know, as far as the extraditions out of Colombia, we know 

the power of extraditions. That’s what we are trying to do in Mexico. 

You know, like, if we judicialize our efforts and we collect evidence and we prosecute people and we extradite them, that’s going 

to be a home run for the communities all over Latin America. 

So we use Colombia as a success model. You know, we try to actually go out and educate other countries. But they’re very limited. 

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18 

So as one quick story, just to give you an idea, when we were 

doing our trade-based money laundering case, all the calls were in 

Arabic. The Colombians didn’t even have translators to actually listen to the calls that they were intercepting. 

So the U.S. had to work with them and kind of help. But so yes, 

they have some limited capabilities but they’re advancing and are 

working very closely with us. 

Mr. PITTENGER. Thank you. 

Ms. REALUYO. Just to complement—not just extraditions. Our export of the concept of asset forfeiture has now been adopted by 

many of our Latin American partners including Mexico and Colombia. 

I was just in Colombia last week and met with the Bank of the 

Republica, which is their version of Central Bank, and they’re 

using asset forfeiture now to recuperate the assets of the FARC, 

which will be actually used to pay the distribution for the victimizations fund. 

Mr. PITTENGER. Do you believe the FARC agreement is— 

Ms. REALUYO. Yes. 

Mr. PITTENGER. —a valid agreement and is workable? 

Ms. REALUYO. It is, but it has to still be implemented, and then 

a bigger question is as the groups there start to morph, someone 

is going to take the place of the FARC. 

Mr. PITTENGER. Sure. 

Ms. REALUYO. As you will remember, the FARC actually took the 

place of the Medellin and Cali cartels. So we are trying to figure 

out what that evolution of mafias are going to be, coming forward, 

because someone’s going to be—have to be moving those amazing 

amounts of cocaine that are being produced. 

The other one that’s— 

Mr. PITTENGER. They’re not spraying it anymore? 

Ms. REALUYO. No. That’s right. That’s why. 

And then the other piece is—and we are seeing there’s going to 

be a change in government. August 7th there will be a new president of Colombia and hopefully they’ll be revisiting that issue, and 

President Trump will be going to Colombia on April 15th and both 

issues, cocaine trafficking and Venezuela, will be, we anticipate, 

the top topics. 

Mr. PITTENGER. My time has expired. Sorry, Ms. Shelley. 

Chairman PEARCE. All right. The gentleman’s time has expired. 

The Chair now recognizes the gentleman from Michigan, Mr. Kildee, for 5 minutes. 

Mr. KILDEE. Thank you, Mr. Chairman. Thanks for holding this 

hearing, the Ranking Member as well for his leadership on his 

question. 

And so I will try to be brief because I know we’ve got votes. As 

everyone on this committee is aware, this opioid epidemic is killing 

us. Rural communities, urban communities, 800 people a week 

dying from opioid-related overdoses. 

No sign that it’s curtailing at all, and this epidemic is perpetuated by lots of things, particularly synthetic opioids like fentanyl, 

often supplied by foreign-based cartels. 

And so I was curious—Dr. Shelley in particular but others could 

answer if they would like after you—you state that due to the 

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19 

strong potency of fentanyl and thinking about carfentanyl in particular, used as a terrorist tool. 

Number one, is that just frightening speculation or is there some 

evidence that that’s a possibility? And second, can you paint a picture as to what that might look like for this country? 

Dr. SHELLEY. It’s not just speculation. To do my research I talk 

to people who actually work in the system, and some of them have 

talked about the problems of how people who are just handling 

fentanyl that’s coming through the mail are sometimes harmed. 

The lessons of what this product can do are evident to people who 

are as innovative as the terrorists and their criminal facilitators. 

What is really distinctive about our drug problem in the U.S. is 

that, despite all of the trafficking of heroin into Europe, we are 

having so many dying in the U.S. as opposed to in western Europe. 

The cause of American deaths is that the fentanyl being mixed 

with the heroin, and that’s our particular drug problem that’s killing so many people. 

And I think we need to be much more flexible in approaching 

this problem. We haven’t talked enough probably in our hearing 

today about the online marketplaces that are facilitating the sale 

of drugs and that is part of the American problem with fentanyl. 

Mr. KILDEE. In those cases, if I may interrupt, these substances 

are coming in through our legal ports of entry. They’re not being 

tossed over a wall, right? 

We are talking about the 52 legal ports of entry which not only 

might be the source for fentanyl but for the vast majority of the 

illicit drugs that come into this country. 

I only say that because there’s so much debate right now about 

the impact that a wall on the southern border might have on drug 

trafficking. The truth of the matter is much of this is coming in 

through the United States mail, for goodness sakes. 

Dr. SHELLEY. Exactly. It’s coming through mail services, mail— 

the U.S. Postal Service, and we had a conference. 

If you’re interested, I am happy to share with you a conference 

we had in mid-October at George Mason on the opioid crisis and 

had people from the Postal Service and others looking at this issue 

and how much it is not a border issue but something that needs 

much more data analytics and much more ability to identify packages and flows that could help stop some of this trade. 

Mr. KILDEE. Would the panel generally agree even if we were 

able to somehow affect what the President has essentially referred 

to as sealing the southern border that that would not eliminate the 

problem of illicit drug trafficking coming into the United States 

and in fact they would just find another pathway? 

Is that generally accepted logic? Any members of the panel. 

Ms. REALUYO. Except that the Mexican cartels have their 

hands—they’re knee deep in both the heroin and— 

Mr. KILDEE. They don’t have the ability to use any of the other 

delivery systems that would—that have typically been used as 

well? I guess that’s the point. 

Ms. REALUYO. We do, but we understand that the fentanyl is also 

coming into the Mexican ports and in May—on May 15th at National Defense University, my organization is partnering with 

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20 

ONDCP to take a look at the entire chain, first, raising awareness 

to reduce the actual consumption here in the U.S. 

And we are actually inviting our Mexican counterparts who are 

now starting to see consumption on their side of the border to actually address all of the different components of the supply chain, 

and then raise awareness, including some Members of Congress, 

because it’s such a burning issue in every one of our districts. 

And the bigger question that we have is how the distributors 

here in the U.S. are actually mixing fentanyl with heroin and with 

cocaine, and the complaints—it’s kind of interesting that the cartel 

leaders are complaining that the local distributors here—the objective is to make them addicts, not to actually kill the consumer. 

It’s kind of in a weird way kind of interesting is their perception, 

because they’re—as referring to what Louise is saying, these are 

entrepreneurs and businessmen and women who are all about the 

profit, and a dead user is not of interest to the Mexican cartels. 

Mr. KILDEE. Well, I thank the panel. My time has expired and 

I thank the Chairman and Ranking Member for holding this hearing. Thank you. 

I yield back. 

Chairman PEARCE. Gentleman’s time has expired. The members 

are advised that we have a vote going on and we’ve got 8 minutes 

and 43 seconds left. 

I could take one more of the questioners. I guess my question to 

members is do you want to come back afterwards to ask questions. 

OK. So we’ll just take Mr. Rothfus and we’ll let you ask questions. Then we’ll adjourn the hearing after that. 

Mr. ROTHFUS. Thank you, Mr. Chairman. 

Mr. Maltz, the 2017 political article on how the previous Administration wilfully ignored Hezbollah’s massive global drug trafficking operation was shocking, especially given Hezbollah’s antiU.S. conduct, even in the Western Hemisphere. 

Can you describe the extent of Hezbollah’s involvement with the 

Colombian drug trade? 

Mr. MALTZ. Well, in that case, we saw multi tons of cocaine leaving South America, going to Africa, drugs being distributed worldwide, moneys being collected, put on Middle Eastern flights, carried 

into Beirut, guarded by Hezbollah, moneys coming back through 

the exchange houses into banks in Lebanon, back to America to 

buy used cars. 

Cars are sold—sent on Hezbollah shipping lines back to west Africa to resell. In that case, the one thing that is still shocking to 

me as a taxpayer is that we collectively in the interagency identified about 300 businesses in our neighborhoods. We only attached 

30 to our action because we could not get the cooperation across 

the Government agencies. 

So there’s hundreds of businesses still operating in our country 

because we were never able to shut them down. So $200 million a 

month going through this scheme just by one kingpin, Ayman 

Joumaa, is pretty significant. 

Mr. ROTHFUS. Besides Colombia, are there other Central and 

South American nations that you can identify that are facilitating 

or tolerating Hezbollah’s presence in their countries? 

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21 

Mr. MALTZ. Well, of course, all over the tri-border. But Venezuela 

was the control—command and control hub for all the multi-ton 

shipments. 

The problem was that the government was so corrupt that the 

highest levels of the government where we had guys indicted but 

they walked out of jail and they went back to their countries. 

Mr. ROTHFUS. So are they tolerating them more because of the 

kickbacks, the money, or— 

Mr. MALTZ. It’s all about the money. 

Mr. ROTHFUS. So no ideological thing—this is all just money driven? 

Mr. MALTZ. In my opinion, it was about the money. General 

Carvajal was in charge of their security at the airport. So when 

multi-ton quantities of cocaine were leaving to go worldwide it was 

all about the money and— 

Mr. ROTHFUS. What do we—what do we know about any links 

between Hezbollah and any of the Mexican cartels? There was reference to Los Zetas in the Politico piece. 

Mr. MALTZ. Well, in that particular case, the Eastern District of 

Virginia did an indictment on Ayman Joumaa and they alleged in 

the indictment that the cocaine proceeds that were being laundered 

by Ayman Joumaa were from the Los Zetas cartel. 

What I will tell you is a DEA undercover agent went to Guatemala and picked up $20 million in suitcases in cash from the cartel 

because they were sitting on $100 million and they needed money 

to be laundered. 

So real—$20 million in three deliveries in Guatemala. So yes, 

there’s a lot of money involved. 

Mr. ROTHFUS. Do you think we’ve lost anything over the last 

year and a half as a result of the actions of the prior Administration with respect to Cassandra? 

Mr. MALTZ. I am sorry. That question— 

Mr. ROTHFUS. Have we lost anything? Have we lost ground? 

Have we— 

Mr. MALTZ. Well, anytime— 

Mr. ROTHFUS. —by not aggressively pursuing this at the time. 

Mr. MALTZ. OK. So I am going to answer this really directly. Ali 

Fayed wanted the head of an American back in Czech Republic and 

we let him walk out and go back to Lebanon. So yes, we’ve lost a 

lot of intelligence for our U.S. Government agencies. 

It would have been nice to debrief Walid Makled or General 

Carvajal to see what’s going on in these different countries. But 

they walked out. They’re gone. 

Mr. ROTHFUS. Mr. Humire, you noted in your testimony the convergence of criminals, terrorists, and organized crime can be traced 

back to the 1990’s. 

But those interactions were mostly transactional back then. Now 

it appears that those interactions have metastasized into a very 

dangerous global network. 

What are the largest transnational criminal threats facing the 

United States today? 

Mr. HUMIRE. Congressman, what I mentioned earlier was the 

convergence that extends just beyond the illicit actors or the nonstate actors. 

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I believe there’s now a convergence with rogue state actors, and 

the state actors provide cover, concealment, and state support. 

In the case of Venezuela, we’ve seen the Venezuelan government 

providing documentation—passports, birth certificates, national 

IDs—to members of terrorist groups, the Lebanese Hezbollah probably the most prominent. 

But I want to touch on your earlier point, Congressman, about 

the collaboration between Hezbollah and Colombia. It’s very historic and it’s very extensive. 

The AMIA bombing, which we all are familiar with—1994 attack 

in Buenos Aires that killed 84 people—that attack—the explosives 

for that attack were trans shipped from the Middle East to Colombia to Argentina and were trans shipped by the FARC. 

The Hezbollah operative that was—is a Colombian Lebanese national that operated in the tri-border area in Colombia that was the 

logistical man that carried about that attack, Samuel Salman elReda, is one of the chief operators in the top hierarchy of the command today in the IJO—International Jihad Organization—of 

Hezbollah. 

So there’s a long, extensive collaboration between Latin American cartels, transnational criminal organizations and Hezbollah 

particularly but other terrorist groups. 

Mr. ROTHFUS. My time has about expired. I just want to thank 

each of the panelists for being here and for your work in this area 

that is so critical to our national security and to the drug issue that 

all of our communities are facing. 

So thank you. 

Chairman PEARCE. Gentleman’s time has expired. 

I would like to thank our witnesses for their testimony today. 

The Chair notes that some Members may have additional questions for this panel, which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 5 legislative days for Members to submit written questions to these witnesses and to place their responses in the record. Also, without objection, Members will have 5 legislative days to submit extraneous 

materials to the Chair for inclusion in the record. 

This hearing is adjourned. 

[Whereupon, at 3:26 p.m., the committee was adjourned.] 

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