United States General Accounting Office

GAO Testimony

Before the Committee on International Relations

House of Representatives

For Release on Delivery

Expected at

11:00 a.m. EDT

Thursday,

February 26, 1998

DRUG CONTROL

Counternarcotics Efforts in

Colombia Face Continuing

Challenges

Statement of Henry L. Hinton, Assistant Comptroller

General, National Security and International Affairs

Division

GAO/T-NSIAD-98-103

Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss the results of our review of

counternarcotics efforts in Colombia. At the request of the Committee, we

focused our review on (1) the nature of the drug-trafficking threat in and

from Colombia; (2) the political, economic, and operational implications

of the U.S. decisions to decertify Colombia in 1996 and 1997; and (3) U.S.

efforts to plan and manage counternarcotics activities in Colombia. Our

report on this review is being released today.1

 My statement will highlight

the principal findings and observations from the report as well as other

relevant issues from our previous reports.2

Summary The narcotics threat from Colombia continues and may be expanding, as

Colombia remains the world’s leading manufacturer and distributor of

cocaine. According to recent State Department and Drug Enforcement

Administration reports, the cultivation of coca leaf in Colombia increased

by 50 percent between 1994 and 1996, and the prevalence of Colombian

heroin on the streets of the United States has steadily increased.

Significant obstacles, including widespread corruption and extensive

violence, impede U.S. and Colombian counternarcotics efforts. Colombian

insurgent groups have further complicated the situation, as they are

increasingly involved in drug-trafficking activities, making it difficult for

Colombian police and military forces to reduce drug-trafficking activities

within their borders.

Since the initial decertification decision in March 1996, Colombia has

taken several actions to address U.S. concerns, including passing laws to

hinder drug-trafficking; eradicating illicit drug crops; interdicting drugs;

and combating drug-trafficking activities and organizations. U.S. officials

believe Colombia must now fully implement newly passed laws on asset

forfeiture, money laundering, and trafficker sentencing and show a

willingness to investigate and punish corrupt officials. Decertification had

little impact on Colombia’s economy because the President chose not to

apply discretionary sanctions against Colombia. However, mandatory

economic sanctions required by the decertification decisions led to the

1

Drug Control: U.S. Counternarcotics Efforts in Colombia Face Continuing Challenges

(GAO/NSIAD-98-60, Feb. 12, 1998).

2

Drug Control: U.S.-Supported Efforts in Colombia and Bolivia (GAO/NSIAD-89-24, Nov. 1, 1988); Drug

War: Observations on Counternarcotics Aid to Colombia (GAO/NSIAD-91-296, Sept. 30, 1991); The

Drug War: Colombia Is Undertaking Antidrug Programs, but Impact Is Uncertain (GAO/NSIAD-93-158,

Aug. 10, 1993); and Drug War: Observations on the U.S. International Drug Control Strategy

(GAO/T-NSIAD-95-182, June 27, 1995).

Page 1 GAO/T-NSIAD-98-103
termination of some U.S. economic aid and resulted in actions that may

have hurt some U.S. businesses.

When the initial decertification decision was made in March 1996, the

Department of State was not prepared to determine whether some

programmed assistance intended for the Colombian police and military

could continue to be provided. It took State, in conjunction with other

executive branch agencies, about 8 months to make this decision, and as a

result, about $35 million in programmed counternarcotics assistance was

canceled or delayed. The overall operational implications of the cutoff on

U.S. and Colombian counternarcotics programs are not clear. The

Colombian police and military were able to maintain or increase some

types of operations by purchasing parts and equipment on the commercial

market that were once available through the Department of Defense. Also,

the U.S. Embassy helped fund some of the activities with resources taken

from other projects. However, Colombian police officials told us that some

operations could not be conducted because certain types of assistance,

such as aviation spare parts and explosives, were not available.

The U.S. counternarcotics program in Colombia has continued to

experience management challenges. For example, State and the U.S.

Embassy were unprepared for the financial consequences of State’s 1996

decision to expand aerial crop eradication. Due to unplanned expenditures

to support the eradication effort, other Embassy counternarcotics

activities, including interdiction efforts, demand reduction within

Colombia, and efforts to strengthen Colombian law enforcement

institutions, were scaled back or lost support. Moreover, State did not take

adequate steps to ensure that equipment included in a 1996 $40-million

assistance package from Defense Department inventories could be

integrated into the Embassy’s plans and strategies to support the

Colombian police and military counternarcotics forces. As a result, the

package included items that had limited immediate usefulness to the

Colombian police and military and will require substantial additional

funding to become operational. Examples include five C-26 aircraft, six

river patrol boats, and 12 UH-1H helicopters. Moreover, the assistance was

also delayed for 10 months because State and the Embassy could not

reach an agreement with the government of Colombia over acceptable

end-use provisions to ensure that the assistance was not being provided to

units suspected of human rights violations.

To address the problems in planning and coordinating assistance packages

drawn from Defense Department inventories, we recommended that State

Page 2 GAO/T-NSIAD-98-103
Department, in close consultation with the Defense Department and the

National Security Council, ensure that future assistance is compatible with

the priority needs of the Colombian government and that adequate support

resources are available to maximize the benefits of the assistance. Defense

and State agreed with our recommendation.

The Drug Threat From

Colombia Continues

and May Be

Expanding

Colombia provides almost three-quarters of the cocaine consumed in the

United States. While Colombia accounts for 1.5 percent of the world’s

illicit opium production, recent data shows that 62 percent of all heroin

seizures in the United States that were tested by the Drug Enforcement

Administration during 1995 were of Colombian origin. The Department of

State reported in March 1997 that the amount of coca under cultivation in

Colombia increased from 44,700 hectares to 67,200 hectares, or about

50 percent, between 1994 and 1996. U.S. officials attribute this increase

partially to successes in shutting down drug-trafficking activities in Peru.

According to the Drug Enforcement Administration, new cartels and

drug-trafficking groups have emerged as major drug-trafficking

organizations in Colombia. Furthermore, insurgent groups have

increasingly funded their activities through drug trafficking. The two

groups posing the most serious threats to internal security are the

Colombian Revolutionary Armed Forces (FARC) and the National

Liberation Army (ELN), with a combined strength of 10,000 to 15,000

personnel. According to a 1997 U.S. interagency report, FARC units are

involved in growing coca, protecting coca fields from eradication, and

providing security for drug-processing facilities of various drug-trafficking

organizations. Recent reports also indicate that the two insurgent groups

are enhancing their capabilities and are gaining strength throughout the

country.

Page 3 GAO/T-NSIAD-98-103
The Political,

Economic, and

Operational

Implications of the

U.S. Decertification of

Colombia

Colombia Has Taken Some

Actions to Address U.S.

Concerns

Since the initial presidential decertification decision in March 1996,

Colombia has addressed some U.S. concerns by (1) enacting a new law

allowing for the seizure of drug traffickers’ assets, (2) approving

legislation increasing sentences for those convicted of drug-trafficking and

money-laundering activities, (3) signing a maritime agreement allowing the

United States to pursue suspected drug traffickers, and (4) passing a new

extradition law. However, State Department and U.S. law enforcement

officials believe that Colombia must demonstrate greater political will by

• addressing the pervasive public corruption that continues to weaken the

government and undermine law enforcement activities;

• improving prison security to prevent convicted traffickers from directing

drug-trafficking activities from prison; and

• fully implementing the newly passed laws on asset forfeiture, money

laundering, and trafficker sentencing.

According to State officials, these factors will be considered as part of the

1998 certification process.

Economic Sanctions May

Have Hurt U.S.

Commercial Interests

The mandatory sanctions from decertification required the termination of

official U.S. export and investment support of certain transactions and

may have resulted in business losses. The Foreign Assistance Act of 1961

and the Narcotics Control Trade Act of 1974 contain both mandatory and

discretionary sanctions that the President can invoke when denying

certification to a drug-producing or drug-transiting nation. Mandatory

sanctions include the termination of most forms of foreign assistance and

bilateral loans and a U.S. vote against multilateral development bank loans

to the decertified country. Counternarcotics assistance provided through

State’s International Narcotics Control Program and disaster and

humanitarian aid are not subject to the sanctions. Discretionary sanctions

Page 4 GAO/T-NSIAD-98-103
include the loss of trade preferences, the suspension of sugar quotas, tariff

penalties, and the curtailment of transportation arrangements. According

to State and U.S. Embassy officials, there was no intention to use

discretionary economic sanctions to harm Colombia’s economy because

the Colombian private sector is viewed as a positive influence in

strengthening the government of Colombia’s resolve to combat

drug-trafficking activities.

Some U.S. businesses operating in Colombia believe that the mandatory

sanctions required by decertification have harmed their business activities

there. The State Department reported that the 1996 decision required the

Overseas Private Investment Corporation and the Export-Import Bank to

freeze about $1.5 billion in investment credits and loans for U.S.

companies investing in Colombia. Also, a 1996 survey by the Council of

American Enterprises—an American business consortium in

Colombia—indicated that its member companies lost $875 million in sales

because of the sanctions. State officials indicated they have not conducted

an in-depth assessment of the economic consequences of decertification

and could not validate the information in the survey by the Council.

Overall Operational Impact

of Delays of Assistance Is

Unclear

The initial decertification decision resulted in the delay or cancellation of

approximately $35 million in U.S. counternarcotics assistance to

Colombia. The overall impact of the delays and cancellations on

Colombian counternarcotics operations is unclear. We do know that the

State Department, in conjunction with other executive branch agencies,

took about 8 months to decide what aid could be provided under

decertification. During this period, the United States did not provide

Colombia with, among other things,

• almost $30 million in counternarcotics Foreign Military Financing grant

assistance (helicopter spare parts, ammunition, and explosives),

• about $1.4 million in planned U.S. International Military Education and

Training assistance for Colombian police and military units involved in

counternarcotics operations, and

• about $3.6 million in counternarcotics assistance to the Colombian police

and military units to be provided under the U.S. Foreign Military Sales

Program and the State Department International Narcotics Control

Program.

The Foreign Military Sales and State assistance was released in October

1996, but the Foreign Military Financing grant aid and some military

Page 5 GAO/T-NSIAD-98-103
training was frozen until August 1997, when the President released it as

part of a national security waiver.

According to U.S. Embassy and Colombian officials, the assistance delays

prevented Colombian police and military units from receiving some

U.S.-funded military training and from conducting some planned

counternarcotics activities. However, data from the Colombian National

Police shows that they were able to operate their interdiction and

eradication helicopters at higher levels from March 1996 to June 1997,

compared to the 2 months before decertification. U.S. military reports

indicated that each of the services conducted more counternarcotics

operations and seized more narcotics during 1996 than in 1995.

The impacts from assistance delays were minimized because the

Departments of State and Defense and the Colombian police and military

used other funding and procurement sources to obtain critical support

necessary to continue operations. Both the Colombian police and military

purchased spare parts directly from various commercial sources and used

their existing inventories to maintain operational readiness rates for their

aircraft. These spare parts, however, were substantially more expensive

than they would have been had the Colombians had access to U.S. military

assistance and spare parts. For example, the Colombian police reported

that certain helicopter parts bought commercially cost 150 percent more

than parts obtained through U.S. military sources. In addition, the U.S.

Embassy used some State and Defense funds to support Colombian police

and military eradication and interdiction efforts.

U.S. Embassy officials said that while the use of commercial and other

sources had enabled the Colombian police and military to continue

counternarcotics operations after the suspension of U.S. assistance, the

higher expenditures for items and effectiveness of operations could not be

sustained over a long period.

Page 6 GAO/T-NSIAD-98-103
Planning and

Management

Problems Hamper

U.S. Counternarcotics

Efforts in Colombia

State and the U.S. Embassy

Were Not Prepared to

Manage Increases in Aerial

Eradication

In October 1996, the Department of State, through its Bureau of

International Narcotics and Law Enforcement Affairs, decided to

significantly increase the level of U.S. support for and participation in

Colombia’s aerial eradication of coca and opium poppy, primarily to

improve upon the eradication results of 1995 and 1996. However, the

Narcotics Affairs Section at the U.S. Embassy was unprepared for the

escalation in costs to support this effort and was unable to fully support

other planned counternarcotics programs meant to achieve all of the

Embassy’s counternarcotics objectives.

During fiscal year 1997, State increased the number of aircraft and U.S.

contractor personnel involved in the aerial eradication program. The role

of the contractor also changed from being primarily responsible for

training Colombian pilots and mechanics to directly maintaining aircraft

and actively participating in planning and conducting eradication

operations.

Throughout fiscal year 1997, the Narcotics Affairs Section continually

adjusted its estimates for the amount of funding needed to support its

program efforts from about $19 million in the beginning of the fiscal year

to $34 million by July 1997. According to various U.S. Embassy reports,

these changes were caused by unforeseen costs that the Embassy incurred

as the result of the State Department’s decision to increase support for

aerial eradication. For example, the Narcotics Affairs Section identified

$3 million to $4 million needed to upgrade security for contractor

personnel that was not included in the Embassy’s original budget.

In July 1997, the Embassy’s Narcotics Affairs Section informed the State

Department that because of the expanded aerial eradication effort, it had

to reallocate $11 million from other planned counternarcotics programs.

The Section also reported that it could not continue to support programs

for Colombian police interdiction units, demand reduction, and efforts to

strengthen Colombian law enforcement institutions. Each of these

Page 7 GAO/T-NSIAD-98-103
programs supports the Embassy’s program plan to fulfill U.S.

counternarcotics objectives in Colombia.

Assistance Package Was

Poorly Planned

On September 30, 1996, the President, in accordance with section

506(a)(2) of the Foreign Assistance Act, notified Congress that Colombia

would be provided about $40 million in assistance from Defense

Department inventories. However, the package was hastily developed and

did not include sufficient information on specific Colombian requirements,

the ability of the host country to operate and maintain the equipment, or

the funding necessary from the United States or Colombia to support it.

For example, Defense Department and Embassy officials said they were

given little time by the National Security Council to determine what

equipment was best suited to meet the needs of the Colombian police and

military counternarcotics forces. The package contained several items

(C-26 aircraft, patrol boats, and utility landing craft) that did not meet the

priority needs of the Colombian police and military. In addition, because

much of the equipment was not operationally ready for use, substantial

unbudgeted funding would be required for the equipment to be of value to

the Colombians. For example:

• Five C-26 aircraft included in the package could cost at least $3 million

each to modify to perform the surveillance mission desired by the

Colombian police and another $1 million to operate and maintain annually.

• Twelve UH-1H helicopters, delivered to the Colombian National Police in

May 1997, had an average of only 10 hours of available flying time left

before substantial maintenance was required. By July 1997, the Colombian

police reported that only 2 of the 12 helicopters were operational.

• Six patrol boats required $600,000 to make them operational, and two of

the boats were missing key parts and operational panels.

In addition to these shortcomings, the assistance package was delayed for

10 months while the State Department and the Embassy negotiated

end-use monitoring agreements with the government of Colombia to

ensure that the aid was not being provided to units suspected of human

rights violations. According to Embassy officials, State took 4-1/2 months

to provide guidance to the Embassy on the terms to be presented to the

Colombian government. The delay was partially due to the Colombian

government’s unwillingness to finalize an acceptable end-use agreement.

To address the problems in planning and coordinating assistance

authorized under section 506(a)(2) of the Foreign Assistance Act of 1961,

Page 8 GAO/T-NSIAD-98-103
we recommended that the Secretary of State, in close consultation with

the Secretary of Defense and the National Security Council, take steps to

ensure that future assistance is, to the maximum extent possible,

compatible with the priority requirements identified in U.S.

counternarcotics programs and that adequate support resources are

available to maximize the benefits of the assistance. Defense and State

agreed with our recommendation.

This concludes my prepared remarks. I would be happy to respond to any

questions.

(711328) Page 9 GAO/T-NSIAD-98-103
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