U.S. GOVERNMENT PUBLISHING OFFICE

30–176PDF WASHINGTON : 2018

COMBATTING TRANSNATIONAL CRIMINAL

THREATS IN THE WESTERN HEMISPHERE

HEARING

BEFORE THE

SUBCOMMITTEE ON 

THE WESTERN HEMISPHERE

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTEENTH CONGRESS

SECOND SESSION

MAY 23, 2018

Serial No. 115–154

Printed for the use of the Committee on Foreign Affairs

(

Available: http://www.foreignaffairs.house.gov/, http://docs.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 

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 

JOHN R. CURTIS, Utah 

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

PAUL COOK, CALIFORNIA, 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. Richard Glenn, Acting Deputy Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs, U.S. Department of State 8

Ms. Jennifer Fowler, Deputy Assistant Secretary, Office of Terrorist Financing and Financial Crimes, U.S. Department of Treasury ................................. 18

Rear Admiral Brian Hendrickson, USN, Director, Network Engagement 

Team, U.S. Southern Command ......................................................................... 30

Mr. Raymond Villanueva, Assistant Director for International Operations, 

Homeland Security Investigations, U.S. Department of Homeland Security . 64

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Paul Cook, a Representative in Congress from the State 

of California, and chairman, Subcommittee on the Western Hemisphere: 

Prepared statement .............................................................................................. 4

Mr. Richard Glenn: Prepared statement ............................................................... 11

Ms. Jennifer Fowler: Prepared statement ............................................................. 21

Rear Admiral Brian Hendrickson, USN: Statement of Admiral Kurt W. Tidd, 

Commander, United States Southern Command .............................................. 32

Mr. Raymond Villanueva: Prepared statement ..................................................... 66

APPENDIX 

Hearing notice .......................................................................................................... 90

Hearing minutes ...................................................................................................... 91

The Honorable Paul Cook: Statement of Zoe Reiter, Acting Representative 

to the U.S. and Senior Project Leader, Transparency International ............... 92

Questions submitted for the record ........................................................................ 104

(1)

COMBATTING TRANSNATIONAL CRIMINAL 

THREATS IN THE WESTERN HEMISPHERE 

WEDNESDAY, MAY 23, 2018

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE WESTERN HEMISPHERE,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:37 p.m., in room 

2172, Rayburn House Office Building, Hon. Paul Cook (chairman 

of the subcommittee) presiding. 

Mr. COOK. A quorum being present, the subcommittee will come 

to order. 

I would like to now recognize myself for an opening statement. 

First of all, I want to apologize to our guests and speakers here 

today. Everything has been a little bit backed up, and, you know, 

Congress is Congress. So I hope we get some more members here, 

but there are multiple committees going. But I am delighted that 

you’re here. 

Our country is facing the worst opioid epidemic in our history. 

According to the Centers for Disease Control and Prevention, over 

62,632 Americans died of drug overdoses last year, which is almost 

22 percent higher than in 2016. 

Transnational criminal organizations operating in the Western 

Hemisphere countries bear some responsibility for these deaths 

given their role in cultivating, producing, and transporting many of 

the drugs that kill Americans, such as heroin, cocaine, methamphetamine, marijuana, and fentanyl. 

According to the U.S. Council on Transnational Organized Crime, 

we have at least 96 gangs operating in the United States that are 

associated with transnational organized crime. Today’s criminal organizations are a new kind of threat. They operate like international corporations and use legitimate franchise structures that 

make combatting them more difficult. 

In many instances, they benefit from the protection of corrupt 

governments in countries where they operate. These criminal 

groups include drug cartels in Mexico; MS-13, 18th Street gangs in 

Central America; armed guerilla groups like the ELN and BACRIM 

in Colombia and Hezbollah in South America. 

While these groups engage in drug trafficking, their activities are 

not limited to drugs. They have also found ways to make substantial profits from human trafficking, the trafficking of weapons and 

wildlife, illegal logging, gold mining, oil taps, extortion and robbery, 

bulk cash smuggling, identity and benefit fraud, and money launVerDate 0ct 09 2002 14:48 Sep 07, 2018 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 Z:\WORK\_WH\052318\30176 SHIRL
2

dering. Significantly, in both Colombia and Peru, two of the top cocaine producing countries in the world, illegal gold mining brings 

in more revenue to criminal organizations than drugs. 

For the past 4 years, it has been the U.S. policy to curb the flow 

of illicit drugs from Latin America by dismantling the criminal 

groups that control these activities, yet I am not sure we are succeeding. Cocaine production is at an all-time high in Colombia, and 

these criminal groups have increased their profits from expanding 

into other illicit activities. 

The increasing numbers of these criminal groups operating in 

Latin America and the Caribbean and the havoc they produce for 

the United States and for our neighbors require that we take a 

critical look at our policies and tools to continue efforts that work 

and halt efforts that don’t show results. 

The United States has strong regional partnerships to address 

these issues, and we can further deepen our efforts. We support 

counter-narcotics and security efforts, share information, combat 

money laundering, and support anti-corruption efforts and stronger 

judicial systems. 

Mexico and the United States cooperate extensively throughout 

the Merida Initiative to counter the security threats from drug cartels. 

In Central America, the United States, Guatemala, El Salvador, 

and Honduras have worked together through the U.S. strategy for 

engagement with Central America in support of the country’s Alliance for Prosperity Plan, known as A4P, and through the Central 

America Regional Security Initiative in the Caribbean. 

We are partnered to address criminal threats through the Caribbean Basin Security Initiative. 

The United States also employs border security task forces to 

strengthen regional border security capacity, military and law enforcement tools to monitor and interdict contraband headed to the 

United States, and various sanctions regimes such as those targeting transnational criminal organizations, drug kingpins, and 

terrorists. 

Yet, with all these efforts, we have seen that the arrests of drug 

kingpins and the fragmentation of the large criminal organizations 

have led to the emergence of newer, smaller criminal groups in the 

region. Illicit activities have continued and even increased. 

And it’s not just gangs and criminal groups who are engaged in 

illicit activities in the region. Hezbollah, particularly entrenched in 

the tri-border area, nets approximately $20 million annually from 

drug trafficking, pirated goods, human smuggling, counterfeiting, 

and money laundering. 

This begs the question, just how effective are all these U.S. lines 

of effort in addressing transnational crime in the Americas? 

These criminal organizations terrorize local populations with violence where they operate. They use corrupt government officials, 

and they undermine democratic institutions to make a profit. And 

their illicit activities drive a parallel black market economy that 

impairs countries’ economic growth. 

In February 2017, President Trump issued Executive Order 

13773 to prioritize addressing transnational criminal activities. 

Subsequently, the United States Council on Transnational OrgaVerDate 0ct 09 2002 14:48 Sep 07, 2018 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 Z:\WORK\_WH\052318\30176 SHIRL
3

nized Crime found that over 60 Federal organizations are working 

on countering transnational crime but no U.S. agency coordinates 

all these efforts. 

With this setup, we run the risk of uncoordinated U.S. efforts 

and potential laws and policies that have not kept up with the 

ever-evolving criminal groups. Likewise, how can the U.S. coordinate with regional partners effectively if we, ourselves, lack a unified approach to the challenges? 

I believe all of your agencies are doing critically important work 

to advance U.S. national interests, but in this congressional oversight hearing, I want to examine if there are areas for improvement. Do your agencies possess the authorities and resources that 

you need to disrupt and dismantle transnational criminal organizations in the Western Hemisphere? Where are the gaps in our current approach? 

In conclusion, I want to ensure that the U.S. law, policies, and 

programs are keeping up with the changing technology, shifting regional dynamics, and ever-adapting criminal organizations so we 

are the most effective in our approach and in our cooperation with 

our regional partners. 

I look forward to hearing from our witnesses on these matters. 

And, with that, I want to turn to my good friend, the ranking 

member, for his opening remarks. 

[The prepared statement of Mr. Cook follows:]

4


30176e-1.eps

Chairman Paul Cook 

Opening Statement 

Page I ( L~o· Preparedjhr TJeli1·er·:v·J 

Foreign Affairs Committee's Subcommittee on the Western Hemisphere 

"Combatting Transnational Crimina/Threats in the Western Hemisphere" 

Wednesday, May 23,2018 in Raybum Room2172 

Our country is facing the worst opioid epidemic in our history. According to the Centers 

for Disease Control and Prevention, over 63,632 Americans died of drug overdoses last year, 

which is almost 22 percent higher than in 2016. Transnational criminal organizations operating in 

Western Hemisphere countries bear some responsibility for these deaths given their role in 

cultivating, producing, and transporting many of the drugs that kill Americans, such as heroin, 

cocaine, methamphetamine, marijuana, and fentanyl. According to the U.S. Council on 

Transnational Organized Crime, we have at least 96 gangs operating in the United States that are 

associated with transnational organized crime. Today's criminal organizations are a new kind of 

threat: they operate like international corporations and use legitimate franchise structures that 

make combatting them more difficult. In many instances, they benefit from the protection of 

corrupt governments in countries where they operate. These criminal groups include drug cartels 

in Mexico, MS-13 and IS'h Street gangs in Central America, armed guerrilla groups like the ELN 

and BACRIM in Colombia, and Hezbollah in South America. 

While these groups engage in drug trafficking, their activities are not limited to drugs. They 

have also found ways to make substantial profits from human trafficking; the trafficking of 

weapons and wildlife; illegal logging, gold mining, and oil taps; extortion and robbery; bulk cash 

smuggling; identity and benefit fraud; and money laundering. Significantly, in both Colombia and 

Peru- two of the top cocaine-producing countries in the world- illegal gold mining brings in more 

revenue to criminal organizations than drugs. For the past four decades, it has been U.S. policy to 
5


30176e-2.eps

Page 2 ( L~o· Preparedjhr TJeli1·er·:v·J 

curb the flow of illicit drugs from Latin America by dismantling the criminal groups that control 

those activities. Yet, I'm not sure we are succeeding. Cocaine production is at an all-time high in 

Colombia, and these criminal groups have increased their profits from expanding into other illicit 

activities. The increasing numbers of these criminal groups operating in Latin America and the 

Caribbean, and the havoc they produce for the United States and for our neighbors, require that we 

take a critical look at our policies and tools to continue efforts that work and halt efforts that don't 

show results. 

The United States has strong regional partnerships to address these issues and we can 

further deepen our etforts. We support counternarcotics and security etforts, share information, 

combat money-laundering, and support anti-corruption efforts and stronger judicial systems. 

Mexico and the United States cooperate extensively through the Merida Initiative to counter the 

security threats from drug cartels. In Central America, the United States, Guatemala, El Salvador, 

and Honduras have worked together through the U.S. Strategy for Engagement with Central 

America in support of the countries' Alliance for Prosperity Plan (A4P) and through the Central 

American Regional Security Initiative. In the Caribbean, we've partnered to address criminal 

threats through the Caribbean Basin Security Initiative. The United States also employs border 

security task forces to strent,>then regional border security capacity, military and law enforcement 

tools to monitor and interdict contraband headed to the United States, and various sanctions 

regimes, such as those targeting transnational criminal organizations, drug kingpins, and terrorists. 

Yet with all these etforts, we've seen that arrests of drug kingpins and the fragmentation 

of the large criminal organizations have led to the emergence of newer, smaller criminal groups in 

the region. Illicit activities have continued and even increased, and it's not just gangs and criminal 

groups who are engaged in illicit activities in the region. Hezbollah, particularly entrenched in the 
6


30176e-3.eps

Page 3 ( L~o· Preparedjhr TJeli1·er·:v·J 

Tri-Border Area, nets approximately $20 million annually from drug trafficking, pirated goods, 

human smuggling, counterfeiting, and money laundering. This begs the question: just how 

effective are all these U.S. lines of effort in addressing transnational crime in the Americas? These 

criminal organizations terrorize local populations with violence where they operate, they use 

corrupt government officials and undermine democratic institutions to make a profit, and their 

illicit activities drive a parallel black-market economy that impairs countries' economic growth. 

In February 2017, President Trump issued Executive Order 13773 to prioritize addressing 

transnational criminal organizations. Subsequently, the U.S. Council on Transnational Organized 

Crime found that over 60 U.S. federal organizations are working on countering transnational 

crime, but no U.S. agency coordinates all these etTorts. 

With this setup, we run the risk of uncoordinated and duplicative U.S etTorts and potential 

laws and policies that have not kept up with the ever-evolving criminal groups. Likewise, how can 

the US coordinate with regional partners etTectively if we ourselves lack a unified approach to 

the challenges? I believe all of your agencies are doing critically important work to advance US. 

national interests, but in this Congressional oversight hearing, I want to examine if there are areas 

for improvement. Do your agencies possess the authorities and resources that you need to disrupt 

and dismantle transnational criminal organizations in the Western Hemisphere? Where are the 

gaps in our current approach? In conclusion, I want to ensure that US. law, policies, and programs 

are keeping up with changing technology, shifting regional dynamics, and ever-adapting criminal 

organizations so that we are most etTective in our approach and in our cooperation with regional 

partners. I look forward to hearing from our witnesses on these matters. With that, I tum to Ranking 

Member Sires for his opening remarks. 

### 
7

Mr. SIRES. Good afternoon, everyone. 

And thank you to our witnesses for appearing here today. 

Thank you, Mr. Chairman, for hosting this important and timely 

hearing. 

We are here to discuss the threat of transnational criminal organizations in the hemisphere and hear from the administration on 

how they are assessing and combatting these criminal threats. 

Transnational criminal organizations are one of the largest challenges in bringing security, peace, and prosperity to the Western 

Hemisphere. They represent a real and ongoing threat to both domestic and regional security by engaging in a diverse range of nefarious activities, such as extortion, robbery, illegal mining, and the 

international trafficking of people, drugs, and other commodities. 

Furthermore, the continued success and profitability of these illicit ventures creates a flourishing prevalence of violent crimes in 

these areas as groups compete for control of territory and revenue 

streams. These criminal organizations present one of the greatest 

risks to stability in the Western Hemisphere and should undoubtedly be a top priority for U.S. foreign policy. 

Combatting these criminal organizations requires strong cooperation with our allies that focuses not just on security but also economic development and opportunity. We must counter the root 

causes of instability that leave young people vulnerable to joining 

transnational criminal organizations. These root causes create the 

conditions that allow illicit networks to flourish. 

Unfortunately, despite President Trump’s rhetoric on drug trafficking and being tough on crime, he continues to make missteps 

that embolden these organizations. By proposing draconian cuts to 

the foreign assistance in which we choke off our Embassies and 

civil society from doing necessary work on the ground to keep communities safe, the President makes it more challenging for the 

United States to foster alliances and build trust both with our 

neighboring governments and the people living in them needed to 

combat these threats. 

I am eager to hear from the administration on how the President’s actions impact the United States’ ability to combat 

transnational criminal threats and what more our agencies and allies need to help keep not just Americans but people living 

throughout the hemisphere safe. 

Thank you. I yield back. 

Mr. COOK. Thank you very much. 

Before I recognize you to provide your testimony, I am going to 

explain the lighting system in front of you. 

Oh, you snuck in on me. 

I will forgo the lighting instructions and recognize Mrs. Torres 

from California. 

Mrs. TORRES. Thank you, Chairman Cook and Ranking Member 

Sires, for holding this very important hearing. And thank you for 

allowing me the time for an opening statement. 

Thank you so much to our witnesses who have taken the time 

to be with us today. 

Transnational organized crime is a threat in stability, not only 

to our security here in the U.S. but also to our allies and throughout the hemisphere. It has taken a toll on the people all throughout 

8

the hemisphere, from the coca fields of Colombia to the streets in 

my hometown of Pomona, California. This is an issue that we can’t 

avoid, but it is not an easy issue to deal with either. 

The reality is that our lax gun laws are arming the cartels in 

Mexico. Criminals from across the region are using our financial 

system to launder their ill-gotten funds. In too many countries in 

this region, from Venezuela to Guatemala and Honduras, the bad 

guys aren’t just in the streets; too often, the bad guys are also in 

their legislatures, in their police forces, and even in their militaries. 

So I look forward to your testimony today and to discussing and 

finding ways that we can truly develop a comprehensive response 

to address this very urgent problem in our communities. 

And I yield back. 

Mr. COOK. Thank you, Mrs. Torres. 

Before I recognize you to provide your testimony, I am going to 

explain the lighting system in front of you. This is so I remember 

all these lights myself. 

You will each have 5 minutes to present your oral statement. 

When you begin, the light will turn green. When you have 1 

minute left, the light will turn yellow. When your time has expired, 

the light will turn red, unless the lights are out. I ask that you conclude your testimony once the red light comes on. You might hear, 

because I am such a nice guy, a gentle rap, rap, rap, like the raven 

on the window ledge. 

And after our witnesses testify, members will have 5 minutes to 

ask questions. We might have multiple rounds here and could extend that, because this is a great committee. I feel bad. I know we 

have other ones going on, but some of the things that we want to 

cover today are really, really important. 

So our first witness to testify will be Mr. Richard Glenn, the Acting Deputy Assistant Secretary in the Bureau of International Narcotics and Law Enforcement Affairs at the U.S. Department of 

State. He previously served as the office director for Western Hemisphere programs. Mr. Glenn has served as a Foreign Service officer 

in Ecuador, South Africa, Czech Republic, Argentina, and Mexico. 

So I am going to start off right now, and then I will introduce 

our second witness. And we are delighted to have you here. So, Mr. 

Glenn. 

STATEMENT OF MR. RICHARD GLENN, ACTING DEPUTY ASSISTANT SECRETARY, BUREAU OF INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS, U.S. DEPARTMENT OF STATE 

Mr. GLENN. Chairman Cook, Ranking Member Sires, Congresswoman Torres, members of the subcommittee, thank you for the 

opportunity to appear before you today to discuss transnational 

crime in the Western Hemisphere. 

Some of the greatest threats to U.S. national security today are 

ones that emanate from this hemisphere. And as you have already 

identified, the opioid and heroin crisis, gang violence, and the illegal smuggling of the drugs, people, and other illicit products across 

our borders threaten U.S. security and that of our neighbors 

throughout Latin America and the Caribbean. 

9

The Department of State’s Bureau of International Narcotics and 

Law Enforcement Affairs, INL, the bureau which I represent, leads 

our department’s efforts to combat crime overseas. And since INL 

got its start nearly 40 years ago, criminal activity today is more 

complex, more diversified, and more difficult to understand and attack than ever before. Criminal groups are nimble, and they thrive 

on weak institutions. This fluidity makes successfully attacking 

them difficult. 

From years of experience, we have learned that partnership and 

comprehensive solutions are key. Through bilateral and regional 

foreign assistance programs in Mexico, Central America, the Caribbean, and South America, INL provides targeted law enforcement 

and counter-narcotics assistance, supporting efforts to increase the 

capacity of criminal justice sectors to prosecute and convict criminals, and advocating for extensive anticorruption efforts. 

In support of the President’s executive order on transnational organized crime, we are working closely with our U.S. interagency 

partners to deliver assistance and apply tools such as financial 

sanctions and visa sanctions to not only bring criminals to justice 

but to also deter criminal behavior. 

Our efforts are demonstrating results. Through coordinated regional law enforcement operations in Central America, supported 

by INL and our DOJ partners, thousands of gang members have 

been taken off the streets. Our model police precincts and placebased strategy approach to develop strategically balanced and integrated criminal justice sector projects in high-crime communities 

throughout Central America has led to decreased homicide rates in 

all three countries. In Colombia and Mexico, our assistance has 

made possible targeted law enforcement operations against key, 

high-value-target traffickers. 

This is promising news, but we have a lot of work ahead of us. 

We are in this for the long game. 

Combatting transnational crime requires coordination that is 

often difficult enough to achieve among law enforcement entities 

within one country, let alone law enforcement entities among multiple countries. Trust is essential. 

And INL, together with the U.S. interagency, is working to establish and enhance relationships among counterparts in the region, 

including three regional trainings to be more effective and efficient 

at sharing information and best practices. 

In the Northern Triangle of Central America, INL supports the 

development of the regional criminal gang intelligence platform to 

enable real-time information-sharing for transnational anti-gang 

units to track gang-related activities, migration, human smuggling, 

and illicit trafficking. 

In Colombia, INL partners with the Colombia National Police to 

deploy its officers to key transit zone countries to build counternarcotics and law enforcement capacity as well as relationships and 

opportunities to share information. 

Advancing further coordination with and between our partners 

throughout the hemisphere is essential to successfully dismantling 

transnational crime, and INL is consistently looking for ways to leverage our partnerships. 

10

A secure hemisphere where citizens are protected under the rule 

of law and where criminal groups do not have the ability to operate 

depends upon having strong and willing partners who believe in 

the importance of institutions accountable to the people and stand 

ready to make difficult and often unpopular decisions that demonstrate a sustained commitment to fight impunity. 

We see this in Honduras, where the police have undergone an extensive and at times very unpopular purge that has led to the termination of over 3,000 law enforcement officers. This has been 

challenging. It has been time-consuming and messy, with a restructuring of the police, but they are moving forward and getting better. This example underscores the importance of political will in effecting change. Yet much more needs to be done. 

Chairman Cook, Ranking Member Sires, the threats posed by 

transnational crime in this hemisphere are immense. We have been 

engaged in the hemisphere for a very long time, and we are far 

from declaring success. A sustained commitment to our partners in 

the region is critical to protecting our homeland, and INL is committed to this effort. 

Again, thank you for the opportunity to appear before you today, 

and I look forward to your questions later on. 

[The prepared statement of Mr. Glenn follows:]

11


30176a-1.eps

Prepared Statement of: 

Richard H. Glenn 

Acting Deputy Assistant Secretary of State for 

Intemational Narcotics and Law Enforcement Affairs 

Hearing before the: 

House Foreign Affairs Subcommittee on the Western Hemisphere 

"Combatting Transnational Criminal Threats in the Western Hemisphere" 

May 23,2018 
12


30176a-2.eps

-1-

Chainnan Cook, Ranking Member Sires, distinguished Members of the 

Subcommittee; thank you for the opportunity to appear before you today to discuss 

the work of the Department of State's Bureau of International Narcotics and Law 

Enforcement Affairs (INL) to combat transnational crime in the Westem 

Hemisphere. The illicit profits made from moving dmgs, people, and money 

across borders pose significant threats to the security and prosperity ofthe United 

States and to our partners throughout Latin America. 

Transnational criminal organizations (TCOs) exploit our shared land border 

with Mexico and the porous borders of Central America and the Caribbean basin to 

traffic drugs, smuggle migrants and other illicit goods, and generate illicit revenue. 

TCOs operate with relative impunity in many countries, taking advantage of an 

absence of the nile oflaw and cormptible public officials who participate in large 

networks of international illicit tlnancing and smuggling. Today, rising poppy 

cultivation and heroin produced and trafficked by TCOs originating in Mexico and 

often laced with fentanyl fuels our domestic opioid crisis, contributing to over 

15,000 heroin overdose-related deaths in the United States in 2016 alone. Record 

levels of coca ctutivated and cocaine produced in Colombia and then trafficked 

into the United States is responsible for over 10,000 cocaine involved deaths in 

2016, the highest since 2006. In Central America, debilitating gang violence, 

staggering homicide rates, pervasive extortion, and weak state institutions, 

especially in the "Northem Triangle" ofEl Salvador, Guatemala, and Honduras, 

are key drivers of irregular migration to the United States. 

TCO networks are fluid, flexible and successfully dismantling them requires 

that we apply well-coordinated and comprehensive solutions at the local, national, 

and international levels. In support of Executive Order 13773, Fnfbrcing Federal 

raw with Re.1pect to Transnational Criminal Organi::ations and Preventing 

International Trafficking, INL leads the Department of State's efforts to combat 

transnational crime overseas by strengthening the capacity of partner nations to 

prevent and combat crime before it reaches U.S. borders. TNL works closely with 

interagency partners, including the Department of Treasury, to use sanctions and 

rewards programs to target and bring to justice individuals and entities engaged in 

narcotics trafficking, money latmdering, terrorist financing, and other financial 

crimes. We also see these as useftu tools to deter other criminal behavior in the 

region. INL programs are designed to dismpt and defeat TCOs by strengthening 

laws; enhancing investigative, law enforcement, and prosecutorial functions; 

supporting cross-border law enforcement cooperation; and equipping criminal 
13


30176a-3.eps

-2-

justice system actors to reduce impunity. Our programs complement and are 

closely coordinated with the efforts of our U.S. interagency colleagues, including 

the Departments of Justice, Homeland Security, Defense, Treasury and the U.S. 

Agency for International Development (USAID). INL collaborates with U.S. state 

and local partners, multilateral organizations, and non-govemmental organizations 

tor a comprehensive approach to regional and bilateral toreign assistance 

progrmru11ing to combat transnational crime throughout the henlisphere. 

Mexico 

The Merida Initiative continues to be the United States' primary vehicle to 

meet shared U.S.-Mexico security priorities and is m1 essential component of a 

whole-of-govemment response to curtail our domestic opioid crisis. Executive 

Order 13773 and two Cabinet-level U.S.-Mexico Strategic Dialogues in May and 

December 2017 elevated our bilateral response to this crisis m1d we have realigned 

Merida Initiative priority programming to sustain and advance critical cooperation 

against transnational crime. 

Today, our t\vo countries are making significant investments to improve our 

ability to disrupt the entire business model of TCOs. To reduce heroin production, 

INL is building Mexico's capacity to better analyze and target illicit poppy tlelds 

to more etiectively eradicate crops. INL trains and equips Mexican authorities to 

identify, seize, investigate, and dismantle clandestine laboratories that make 

heroin, fentanyl, methamphetamine, and other synthetic dmgs. To dismpt the 

supply chain of precursor chemicals diverted to make illicit drugs, TNL enhances 

Mexican capacity to electronically track chenlical imports and exports and builds 

the Mexican Navy's ability to interdict illicit goods m1d exercise port authority. 

These efforts, along with enhm1ced U.S.-Mexico law enforcement infommtion 

sharing and partnerships, are critical tools to deter the entry of illicit drugs into the 

United States. Under Mexico's new accusatorial crinlinal justice system, forensic 

scientists may, for the first time, be called upon to testity as expert witnesses 

during a criminal trial. As their testimony is key to successful prosecutions, it is 

critical forensic scientists and labs are trained and certified to successfully identify 

illicit chenlical substances. To date, INL, in partnership with the U.S. Department 

of.Tustice's Intemational Criminal Investigative Training Assistance Program 

(!CIT AP), has helped 34 federal and state-level forensic laboratories and the 

Mexican Attorney General's Office attain international (ISO) accreditation. The 

program is actively working to reach all six Mexican states bordering the United 

States. INL efforts enhance Mexico's capacity to screen migrants, secure land, air, 

and sea ports of entry, and conduct interagency operations against TCOs, including 
14


30176a-4.eps

-3-

through biometrics collection and sharing infommtion with U.S. law enforcement. 

Addressing U.S. demand for illicit drugs must go hand-in-hand with an effective 

criminal justice response in Mexico to deny criminals the ability to latmder and use 

illicit revenue from drug trafficking. Mexico remains a critically important and 

valued partner in this effort. 

Central America 

In support of the U.S. Strategy for Central America, INL 's Central America 

Regional Security Initiative programs address the drivers of irregular migration 

and illicit trafficking through a three-pronged approach: regional coordination and 

information sharing through vetted and specialized units; bottom-up community 

anti-gang efforts; and top-down institutional reform and capacity building. 

Working closely with our interagency colleagues, INL combats TCOs by training, 

advising, and equipping 56 partner nation vetted units and specialized task forces 

to investigate complex and high threat criminal cases, including gangs, and to 

serve as reliable, trusted partners of U.S. law enforcement. As a result, these tmits 

have significantly increased arrests for serious crimes in the region and, 

importantly, have led to arrests and convictions in the United States. For example, 

in 2017 INL worked with the Govermnent ofEl Salvador to directly confront 

illegal migration, deploying two Salvadoran intelligence analysts, one from the 

national police and one from the migration authority, to McAllen, Texas to share 

Salvadoran arrest and investigative records with a wide array of U.S. federal, state, 

and local law enforcement agencies. This effort cross-referenced U.S. and 

Salvadoran records on 12,509 subjects and led to 36 arrests in the United States to 

date. 

At the community level in Central America, INL programs strengthen the 

capacity of police, make neighborhoods more resilient to gang infiltration, and 

establish trust between the police and the people they serve. Through Model 

Police Precincts and Place-Based Strategy sites, we strengthen law enforcement's 

ability to prevent and respond to gang violence by identifying key high-crime areas 

and communities at risk, and develop strategically-balanced and integrated 

criminal justice sector projects. As a result of these strong partnerships, homicide 

rates declined between 40 to 73 percent since 2015 at INL-supported sites. 

Through training, technical assistance, and mentoring, INLand our 

interagency partners enhance the capacity of the Northem Triangle criminal justice 

sector institutions to improve laws and enhance intemal policies and processes to 

combat corruption and impunity. We work closely with the Attorneys General of 

the Northern Triangle cmmtries to introduce legal reforms, mitigate gang violence, 
15


30176a-5.eps

-4-

and combat corruption. Important advances, including Operation Regional Shield 

executed in September 2017, are coordinated by Northern Triangle Attorneys 

General with U.S. support. Through Operation Regional Shield, lNL-supported 

prosecutors and police in Guatemala, Honduras, and El Salvador, working with 

DOJ's Office of Overseas Prosecutorial Development Assistance and Training 

Program (OPDAT) and the FBI, conducted coordinated regional efforts against 

gang members in their respective countries, which led to the arrest of3,800 gang 

members in the United States and Central America, charges against 284 gang 

members in Guatemala, and the dismantling of eight MS-13 and Barrio 18 cliques 

in El Salvador. 

With U.S. support, our Northern Triangle partners are collaborating more 

effectively to combat transnational crime. Attorneys General and Ministers of 

Security meet regularly to discuss increased opportunities for collaboration. Under 

their "Regional Plan Against Transnational Organized Crime," the governments of 

El Salvador, Honduras, and Guatemala are sharing information on organized crime 

investigations and increasing joint patrols of border zones to curb arms and drug 

smuggling, as well as the movement of gang members. 

Caribbean 

INL works with partner nations in the Caribbean, our "third border," to 

substantially reduce illicit trafficking and increase public safety and security. 

Under the Caribbean Basin Security Initiative (CBSI), INL programs build partner 

nation capacity for law enforcement and rule oflaw institutions bilaterally, while 

also promoting regional cooperation to effectively detect and combat criminal 

threats affecting both the Caribbean and the United States. 

lNL technical assistance through CBSl increased the use of anti-money 

laundering measures in the Caribbean, including the passage of civil asset recovery 

legislation and the use of asset seizure orders to target TCOs. Cocaine seizures in 

all CBS! countries have risen substantially since CBSI's inception, increasing 

tourtold between 2010 and 2017. INL programs helped the Dominican Republic, 

the largest Caribbean transit point for cocaine in route to the United States, 

increase its cocaine seizures from approximately 4.5 metric tons (MT) in 201 0 to 

over 15.7 MT in2017. 

South America 

After years of progress in combating coca cultivation and cocaine 

production, Colombia is once again the world's largest producer of cocaine and is 
16


30176a-6.eps

-5-

the origin of approximately 90 percent of the cocaine seized in the United States, 

according to the DEA Cocaine Signature Program. Between 2013 and 2016, coca 

cultivation in Colombia increased by more than 130 percent and cocaine 

production by more than 200 percent. The explosion in Colombian cocaine is 

driving an increase in cocaine use and overdose deaths in the United States and 

threatening Colombia's intemal security and successful implementation of its 

peace accord. To tackle this challenge together, TNL programs directly support 

Colombia's whole-of-govemment approach to cOLmtemarcotics, which includes 

robust land and maritime interdiction, law enforcement operations against highvalue targets, and manual eradication components as well as host govemment and 

USAID altemative development initiatives. INL supports the expansion of the 

Colombian National Police to mral areas previously under the influence of the 

F ARC to deny TCOs the space to carry out illicit activities and bring sustainability 

to coca cultivation reduction efforts. 

INL support is keeping several hundred metric tons of illicit narcotics from 

reaching the United States each year by building the capacity of our partners to 

stem the flow of narcotics before they leave the continent. In 2017, our joint 

efforts eradicated more than 25,000 hectares of coca in Pem and more than 52,000 

hectares in Colombia. Peru interdicted 36.7 metric tons (MT) of cocaine in 2017, 

31 percent more than it seized in 2016. Colombian police and military forces 

seized 488 MT of cocaine, reaching a record for interdictions in a single year. 

lNL partnerships in the Southern Cone of South America are also critical to 

combatting transnational trafficking networks, cormpt govemment otllcials, and 

gang activity and violence. INL supports modest programs to strengthen law 

enforcement and criminal justice in Argentina, Paraguay, and Brazil, including key 

border areas with Bolivia, Colombia, and Venezuela. 

Addressing Justice Sector Challenges 

TCOs threaten the basic govemance and legitimacy of our allies in the 

Western Hemisphere, undem1ining the rule oflaw and allowing corruption to 

flourish. lNL supports holistic criminal justice sector progranlrning, leveraging 

U.S. interagency and state and local expertise to enhance the capacity of partner 

nations and improve international cooperation on complex criminal investigations. 

Our programs give foreign partners the skills to defeat TCOs by strengthening 

legislative frameworks, enhancing investigative functions, supporting cross border 

law enforcement cooperation, and developing capabilities to prosecute and 

adjudicate criminal cases. To complement our law enforcement initiatives, TNL 
17


30176a-7.eps

-6-

supports and advocates for extensive anti-corruption efforts in the region. 

Conclusion 

TCOs operating throughout the region are complex, diverse, and constantly 

evolving in approach and tactics to stay one step ahead oflaw enforcement in order 

to turn a pro tit. The crime, violence, and insecurity they perpetuate along the way 

threatens U.S. national security and the security of our partner nations. Criminal 

organizations impact every comer of the hemisphere and successfully combating 

them requires that we draw upon every diplomatic and foreign assistance tool at 

our disposal to stop crime at its source. These are long-tenn challenges. 

Hemispheric wide security, where citizens are protected under the rule oflaw and 

criminal groups do not have the ability to operate depends upon having strong and 

willing partners that believe in strong and accom1table institutions. A sustained 

commitment to our partners in the region is critical to protecting our homeland and 

the comprehensive approach lNL is advancing throughout the hemisphere is 

enabling the United States to invest strategically to disrupt and ultimately defeat 

TCOs. 
18

Mr. COOK. Thank you very much. 

Our second witness to testify is Ms. Jennifer Fowler, the Deputy 

Assistant Secretary in the Office of Terrorist Financing and Financial Crimes at the U.S. Department of Treasury. She also serves as 

the vice president of the Financial Action Task Force, FATF. 

Prior to this, Ms. Fowler served as the Treasury’s Chief of Staff 

and Senior Advisor to the Under Secretary for Terrorism and Financial Intelligence, as Assistant Director in the Office of Terrorist 

Financing and Financial Crimes, and in the Office of Foreign Assets Control. 

She was also a Peace Corps volunteer and journalist, and we are 

delighted to have her here. 

Ms. Fowler. 

STATEMENT OF MS. JENNIFER FOWLER, DEPUTY ASSISTANT 

SECRETARY, OFFICE OF TERRORIST FINANCING AND FINANCIAL CRIMES, U.S. DEPARTMENT OF TREASURY 

Ms. FOWLER. Chairman Cook, Ranking Member Sires, and distinguished members of the subcommittee, I am honored to discuss 

Treasury’s efforts to counter the illicit financial activities of 

transnational criminal organizations in the Western Hemisphere. 

It is the mission of Treasury’s Office of Terrorism and Financial Intelligence to disrupt these networks in coordination with other U.S. 

Government agencies and international partners. 

Transnational criminal organizations pose a threat to the prosperity and security of the United States and our regional allies. 

Our most recent National Money Laundering Risk Assessment, 

published in 2015, estimates that around $64 billion is generated 

annually from U.S. sale of drugs, with Mexico being the primary 

supplier for some drugs and a transit zone for others and Colombia 

the leading provider of cocaine in United States. 

Based on our engagement with law enforcement, we believe this 

figure has increased in recent years. Drug trafficking organizations 

launder and place drug proceeds into the United States and regional financial systems through the movement of bulk cash, the 

structuring of deposits, and trade-based money laundering 

schemes. 

Together with our Latin American partners, we are strengthening anti-money-laundering and countering the financing of terrorism regimes across the region. In Mexico, Treasury co-leads a 

working group to improve information-sharing between our governments and private sectors on illicit finance and contributes to operational matters by exchanging lead information on specific targets. 

In addition, Treasury chairs a dialogue with U.S. and Central 

American authorities and the private sector that is working to improve our understanding of the threat posed to regional financial 

systems by gangs, including MS-13. 

Colombia is also a key partner. For more than 15 years, we have 

worked with Colombian authorities against the assets of drug cartels and guerilla and paramilitary organizations, targeting more 

than 2,000 individuals and companies related to these organizations. 

Treasury’s engagement with regional financial authorities has 

been a cornerstone of the administration’s strategy on Venezuela. 

19

Secretary Mnuchin has hosted three meetings of finance ministers 

to discuss the crisis in Venezuela and to strengthen informationsharing on corrupt Venezuelan officials and their support networks. 

In response to the threat posed by terrorist financing in the triborder area, we are developing a regional illicit finance risk assessment with authorities in Argentina, Paraguay, and Brazil, which 

will improve our ability to develop appropriate measures to address 

those risks in coordination with those regional authorities. 

Our cooperation to tackle transnational criminal organizations 

outside of our borders helps to reduce the threat they pose to our 

own financial system. Nonetheless, the size and centrality of our financial system leaves us exposed to money laundering. Treasury 

works to ensure that the United States maintains a strong antimoney-laundering and countering-the-financing-of-terrorism regime. 

In 2016, the Financial Action Task Force reviewed our regime. 

FATF gave the United States the highest possible ratings for asset 

forfeiture and noted our effectiveness in prosecution and the implementation of targeted financial sanctions. 

Although we faired well, we are continually working to strengthen our anti-money-laundering and countering-the-financing-of-terrorism regime. At present, Treasury is preparing a national 

counter-illicit-finance strategy in response to the Countering America’s Adversaries Through Sanctions Act. This strategy updates our 

2015 National Money Laundering and Terrorist Financing Risk Assessment and will include our first-ever proliferation financing assessment. 

In our efforts to strengthen our own system, we will focus on the 

misuse of legal entities in real estate. Treasury’s Customer Due 

Diligence Rule took effect on May 11, requiring financial institutions to identify and verify the beneficial owners of companies 

opening new accounts and bolstering the ability of law enforcement 

to investigate the misuse of legal entities. 

We are also evaluating illicit finance typologies associated with 

property transactions. And Treasury’s Financial Crimes Enforcement Network, FinCEN, has released advisories on the abuse of 

the real estate sector. 

In addition to these efforts, Treasury uses its unique authorities, 

including sanctions authorities and authorities under the USA PATRIOT Act, to target individuals and support networks responsible 

for financial crimes. For example, OFAC uses the Kingpin Act and 

TCO authority to target dangerous criminal organizations. 

In 2012, OFAC sanctioned MS-13 as a significant TCO under Executive Order 13581. Since January 2017, OFAC’s Kingpin actions 

have designated a total of 174 individuals and entities. During that 

time, OFAC also designated more than 50 Venezuelan Government 

officials and their associates, including last Friday’s designation of 

Venezuelan politician Diosdado Cabello. As a result of these designations, hundreds of millions in assets have been blocked. 

Treasury has also issued targeted economic measures, including 

a new executive order signed by the President this week restricting 

the Maduro regime’s ability to liquidate state assets at fire sale 

prices at the expense of the Venezuelan people. 

20

TCOs represent a threat to U.S. interests at home and throughout the Western Hemisphere, and we will continue to work to protect the U.S. and global financial systems against TCO abuse. 

I look forward to your questions. Thank you for asking me to testify today. 

[The prepared statement of Ms. Fowler follows:]

21


30176b-1.eps

Testimony of Jennifer Fowler 

Deputy Assistant Secretary, Office of Terrorist Financing and Financial Crimes 

Honse Foreign Affairs Committee- Subcommittee on the Western Hemisphere 

May 23, 2018 at 2:00p.m. 

Introduction 

Subcommittee Chairman Cook and distinguished members of the subcommittee, as Deputy 

Assistant Secretary for the Department of the Treasury's Oft'ice of Terrorist Financing and 

Financial Crimes (TFFC), I am honored to appear before you to discuss Treasury's efforts to 

counter the illicit financial activities of transnational criminal organizations (TCOs) in the 

Western Hemisphere. Thank you for the invitation to speak with you today. 

TCOs threaten the security of the United States, our partners in the region, and the integrity of 

the U.S. and global financial systems. Drug traffickers, arms dealers, human smugglers, 

kleptocrats, terrorists and other illicit actors are persistently seeking to move and hide their illgotten proceeds in order to sustain their criminal enterprises. Tt is the mission of my office, 

along with colleagues across the Treasury Department's Office of Terrorism and Financial 

Intelligence, to disrupt these illicit networks by using the unique financial tools and authorities 

available to the Department of the Treasury in coordination with other agencies across the U.S. 

government and international partners. 

I would like to begin my remarks by highlighting the key threats we see in the Western 

Hemisphere. I will then turn to the etl'orts we have made to counter these threats in our work 

around the region. Lastly, I will discuss our efforts to strengthen our own financial system 

against abuse by TCOs and their aftlliates. 

Assessing the Threat 

Through crimes such as drug and human trafficking, extortion, weapons smuggling, and attacks 

on civil society and government institutions, TCOs operating in this hemisphere pose a threat to 

the prosperity, as well as the safety, of the United States and our allies in the region. This 

includes the direct physical threat posed by the violence ofTCO activity, as well as the threats to 

economic growth and prosperity as a result of the corruption of government and law 

enforcement, the intimidation oflocal populations, and increased costs for public security and 

health care services. 

Treasury is particularly focused on the threat TCOs pose to the U.S. and global financial 

systems. Our most recent National Money Laundering Risk Assessment, published in 2015, 

estimates that around $64 billion in revenue is generated annually from U.S. sales of drugs. 

Though, based on our recent engagement with U.S law enforcement, we believe this figure has 

increased in recent years. Mexico is the primary supplier for some drugs and a transit zone for 

others. We know that Mexican drug traft'icking organizations (DTOs) launder and place drug 

proceeds into both the U.S. and Mexican tinancial systems through the movement of bulk cash 

across our borders, through "smurfing" and funnel account activity, and through complex trade 

based money laundering schemes. Mexican DTO leaders and their associates have also invested 
22


30176b-2.eps

criminal proceeds into real estate in the United States, Mexico, and elsewhere. We invest 

significant time and energy into identifying and detecting the money laundering operations of 

Mexican DTOs, such as the Sinaloa Cartel, Jalisco New Generation Cartel, and the Zetas, which 

seek to integrate billions of dollars in drug and other crime-related proceeds into the U.S. and 

Mexican economies. As 1 will discuss in more detail later, Mexico is one of our closest partners 

in the fight against illicit financial activity, and in collaboration with Mexican authorities, we 

have taken concrete steps to strengthen our abilities to deter TCOs from placing criminal 

proceeds in our financial systems. 

Mexico, however, is certainly not the only country from which the drug tratlicking threat 

emanates. Colombia remains the leading provider of cocaine available in the United States and 

also is a source country for heroin and marijuana to a lesser degree. Since 2014, coca cultivation 

and cocaine production has risen partly as a result of the Colombian Government's decision to 

end coca aerial eradication programs. While Colombia is working to implement the peace 

accord with the hterzas Armadas Revu/ur.:iunarias de Columbia (F ARC), both Colombia and the 

United States remain concerned and vigilant to the possibility of factions composed of dissident 

F ARC members converting themselves into new organized crime groups. 

In addition to these drug traffickers, the U.S. and our allies face threats from Central American 

gangs, such as MS-13. The criminal activities of these TCOs, and their efforts to raise revenue 

primarily through extortion, kidnapping, and drug trafficking, have a significant negative effect 

on economic growth in the Northern Triangle countries ofEl Salvador, Honduras, and 

Guatemala. They also negatively impact individuals' quality of life as they seek work and, in 

many cases, aim to grow their businesses to sustain their families. This can lead to negative 

consequences, such as increased migration from the region and decreased foreign investment in 

Northern Triangle countries. 

Along with the threats we face from TCOs, we are also focused on the threat posed by the 

dictatorship ofNicolas Maduro, which is fueled by the Maduro regime's involvement in 

transnational organized crime (TOC), including drug smuggling, predatory economic policies, 

vast public corruption schemes, and brutal repression. Venezuelan Government otlicials at the 

highest level, to include Executive Vice President Tareck El-Aissami, and senior law 

enforcement and intelligence otlicials are guilty of participating in, and leading, nefarious 

activities of drug trafficking organizations, and conspiring to launder and hide funds they have 

stolen from the Venezuelan people. Treasury has taken action to target Venezuelan regime 

figures' criminal activities, including designating El-Aissami for playing a significant role in 

international narcotics trafficking, and designating former senior Venezuelan intelligence official 

Pedro Luis Martin Olivares for leading a drug trafficking and money laundering network. As a 

result of these designations, hundreds of millions in assets have been blocked. 

Maduro and his regime have destroyed what was once one of the hemisphere's richest 

economies. What is left is a developing humanitarian catastrophe, with consequences that 

extend beyond Venezuela's borders, threatening regional stability. The poverty rate in 

Venezuela has almost doubled over the last 20 years to 87 percent, with 60 percent of 

Venezuelans living in extreme poverty today. The Otlice of the United Nations High 

Commissioner for Refugees (UNHCR) estimates that 1.5 million Venezuelans are displaced in 

the region. The entire region is shouldering the costs of the humanitarian crisis and providing 

2 
23


30176b-3.eps

humanitarian assistance for Venezuelans who have fled their country, and the communities that 

are hosting them. 

In addition to the threats posed by TCOs and the Maduro regime, terrorist groups, namely 

Hizballah, have been active in the region. Hizballah sympathizers have taken advantage of free 

trade zones and a lax regulatory environment to build both legitimate and illegitimate importexport companies. As our designation of the Barakat organization demonstrates, some of these 

businesses have been used as front companies for Hizballah while others have siphoned a portion 

of their profits to provide support to Hizballah. We continue to investigate possible Hizballah 

terrorist financing and criminal activity in this area. 

Cooperation with Regional Partners 

Together with our partners in Latin America, and through the Financial Action Task Force-style 

regional bodies (FSRBs) in the region, we are working to strengthen the anti-money 

laundering/countering the financing of terrorism (AMLICFT) frameworks of countries across the 

region, as well as to improve their implementation of those frameworks, to prevent and protect 

against illicit financial activity. Our efTorts in the Western Hemisphere also include initiatives to 

improve infonnation sharing on illicit financial activities between governments as well as 

amongst financial institutions and supervisory authorities. In addition, we are working with our 

partners to implement more targeted efTorts to disrupt specific criminal activities and networks 

through the use of sanctions and operational information sharing. 

Mexico 

Our cooperation with Mexico on a wide range of AML/CFT issues is particularly strong. The 

economies and financial systems of the United States and Mexico are deeply linked. Mexico is 

our third largest trading partner in the world with over $500 billion in goods and services flowing 

between our economies each year. Yet we know that the conduits used for legitimate trade can 

also serve as channels for criminal activity, helping criminal elements operating on both sides of 

our border to raise, move, and hide their ill-gotten gains. 

In response to this challenge, Treasury co-leads the Bilateral Public-Private Banking Working 

Group (BPPBWG), a working group with representatives from the US and Mexican 

Governments and our private sectors to improve information sharing on illicit finance between 

governments and financial institutions. This initiative helped spur changes to Mexico's domestic 

legislation to allow Mexican banks to share information on specific suspicious transactions with 

their correspondent banks in the United States and elsewhere. 

Partnering with the Mexican government, we have also looked at the flow of U.S. dollar cash 

from Mexico to the United States. Drug purchases in the US. are generally made in cash, and 

we have worked to improve our understanding of how both licit and illicit dollars move across 

the southern US. border and how Mexican restrictions on dollar cash deposits into Mexican 

banking accounts afTect the border economy. 

In addition to working with our counterparts in the Mexican government, we also work directly 

with their private sector. Our engagement with the Mexican private sector helped to lead to a 

decision in 2016 by the Mexican Bankers Association to require banks in Mexico to impose 

financial sanctions on those listed on OFAC's Specially Designated Nationals (SDN) list, which 

3 
24


30176b-4.eps

includes significant narcotics traffickers and money launderers across the region, as well as 

terrorists and other illicit actors. This requirement improves banks' ability to identify and deter 

illicit financial activities by drug traffickers and other sanctioned individuals. 

Treasury also works closely with Mexican authorities on operational matters. This includes our 

etiorts to take enforcement actions against TCOs. For example, OFAC used its authority under 

the Foreign Narcotics Kingpin Designation Act ("Kingpin Act"), to designate the Raul Flores 

Hernandez drug tratlicking organization, comprised of 21 Mexican citizens, including prominent 

Mexican ti,,>ures in the sports and music industries, and a network of 42 entities, with assistance 

from Mexican authorities. In response, Mexican authorities also seized six companies linked to 

the Flores Hernandez network and opened their own investigations into several of his associates. 

Treasury also cooperates with Mexican authorities to share information about targets and to 

exchange financial intelligence infonnation through the Egmont Group process. Treasury coleads the Strategic Dialogue on Illicit Finance with Mexican authorities, which has resulted in 

the exchange oflead information on specific targets and suspicious activities by financial 

institutions and legal entities." 

Central America 

We have also enhanced our cooperation with Central American governments as we respond to 

ongoing illicit finance risks and vulnerabilities in Central America. Treasury leads a publicprivate sector dialogue with U.S. and Central American bank supervisors, regulators, financial 

intelligence authorities, and private sector representatives to improve understanding and 

information sharing on illicit finance matters. This group meets annually to discuss changes in 

correspondent banking relationships between U.S. and Central American banks, and efforts 

Central American public and private sector representatives can take to strengthen their 

AMLICFT frameworks as one way to prevent future correspondent banking losses. We have 

also conducted surveys in the region aimed to identify impediments to bank-to-bank information 

sharing, and more recently, discussed illicit finance typologies associated with Central American 

gangs. We are continuing to work with key countries to improve our understanding of how 

Central American gangs finance themselves and the threat this poses to regional financial 

systems. 

Furthennore, Treasury has taken significant enforcement actions against TCOs operating in 

Central America. In addition to designating MS-13, in 2015, OF AC sanctioned the Rosenthal 

money laundering organization in Honduras, a network of three members of the prominent 

Rosenthal family involved in laundering drug proceeds and seven key businesses, a Panamanian 

holding company and a Honduran bank. This action was the first time OFAC had designated a 

bank pursuant to the Kingpin Act. As part of the enforcement action, the Department of Justice 

also indicted the three Rosenthal family members, along with a fourth individual, and arrested 

one of the three family members in the United States. 

In May 2016, OF AC sanctioned the Waked money laundering organization, including its leaders, 

six of their associates and 68 companies involved in laundering drug proceeds, such as Balboa 

Bank and Trust and Grupo Wisa, which operates duty free stores across Latin America. Since 

then, Treasury has been actively engaged with Panamanian authorities to help them address 

weaknesses in their AML/CFT regime and steps they could take to strengthen it, improve 

4 
25


30176b-5.eps

compliance with international AML!CFT standards, and ultimately deter criminal elements who 

seek to abuse it. This includes our ongoing outreach by our financial intelligence units to share 

information on suspicious transactions that we see touching the U.S. and Panamanian financial 

systems. 

Colombia 

Colombia is also a key partner in combating TCO activities. For over 15 years, Treasury has 

worked closely with the Colombian Government to jointly act against the assets of major 

Colombian narcotics traffickers and their criminal organizations. Through Executive Order 

12978 and the "Kingpin Act," Treasury has targeted hundreds of individuals and companies 

including leaders and members of the Cali and North Valle drug cartels, FARC and the 

Autodefensas Unidas de Colombia (AUC). Colombian authorities have seized over two billion 

dollars in assets related to joint investigations with Treasury's Office of Foreign Assets Control 

(OF AC) and the Drug Enforcement Administration, which demonstrates the immense wealth of 

these powerful criminal organizations and the effectiveness of joint U.S.-Colombian efforts to 

target and seize their ill-gotten assets. We continue to work closely with the Colombian 

government to combat narcotics traffickers and criminal organizations, and we are working 

closely with Colombian partners to address the crisis in Venezuela, which is having direct 

humanitarian and economic impacts on Colombia. 

Venezuela 

Treasury's engagement with regional financial authorities has been a cornerstone of the 

Administration's strategy on Venezuela. Secretary Mnuchin has hosted three meetings of 

finance ministers from the Western Hemisphere, Europe, and Japan to discuss the crisis in 

Venezuela. The ministers have agreed that concrete actions are necessary to restrict the ability of 

corrupt Venezuelan officials and their support networks from abusing the international financial 

system. They also have agreed to strengthen international cooperation and continue to share 

information through appropriate channels on the assets of corrupt Venezuelan officials and their 

support networks. Treasury's May 18 designation of influential ruling vice president Diosdado 

Cabello and key figures in his network further illustrates our commitment to holding accountable 

those who violate the trust of the Venezuelan people. 

Terrorist Financing 

Tn addition to our focus on TOC, we also closely track risks posed by terrorist financing in the 

region. Last year, Treasury undertook a focused effort to better understand illicit finance risks in 

the Tri-Border Area between Argentina, Brazil, and Paraguay, an area often assessed as a center 

of illegitimate economic activity, in partnership with authorities in all three countries. At present 

we are working towards a money laundering and terrorist financing risk assessment for the 

region and developing enhanced mitigating measures to address those risks. With Argentina, we 

have also initiated a recurring bilateral dialogue on illicit finance, which we are using to promote 

better cooperation on risk assessment, terrorist financing and money laundering in the Tri-Border 

Area, corruption, and Venezuela sanctions. 

Technical Assistance EtTorts 

5 
26


30176b-6.eps

Finally, Treasury's Office of Technical Assistance (OTA) conducts capacity building programs 

aimed at strengthening AML!CFT frameworks and authorities responsible for identifying illicit 

proceeds while also taking enforcement actions against money launderers and terrorist financiers. 

OT A is very active in Latin America as well as the Caribbean, with eight programs focused on 

AMLICFT regime development in the region. 

Addressing Risks and Vulnerabilities in Our Own Financhtl System 

Our cooperation with Latin American countries to tackle the threat posed by TCOs outside of our 

borders helps to reduce the threat they pose to our own financial system. Nonetheless, the size 

and centrality of our financial system leave us with significant exposure to money laundering. 

Accordingly, Treasury works with other agencies across the U.S. government to ensure that the 

United States maintains a strong AML!CFT regime to protect our financial system from abuse by 

TOCs and other illicit actors. 

Our etTorts are yielding results. In 2016, the Financial Action TaskForce, the global standard 

setter for AML/CFT, reviewed our AML/CFT regime. The F ATF standards include 40 legal, 

ret,>ulatory, and operational measures that comprise an etTective AMLICFT regime and F ATF 

member countries receive periodic peer reviews to assess compliance with the standards and the 

etTectiveness of particular components. FATF gave the United States the highest possible ratings 

for our etTorts in pursuing civil and criminal asset forfeiture to deprive criminals of their illicit 

proceeds. The F ATF also noted our strong collaboration and information sharing between our 

intelligence community and law enforcement to combat illicit tinance; our etTectiveness in 

prosecuting and convicting money launderers; the strength of our implementation of terrorist 

financing investigation and prosecution, and tinancial sanctions for terrorist financing and 

proliferation tinancing. Although we fared well in FATF's assessment, we are continually 

working to improve and strengthen our AMLICFT regime. 

Preventative Measures to Protect Our Financial System 

Treasury's work to deter criminals and terrorists and protect our financial system starts with 

understanding the existing and emerging risks we face and putting in etJective preventative 

measures designed to counter those risks. To this end, we are taking a number of additional 

steps to improve our understanding of illicit actors' activities safeguard our financial system 

from them. 

First, Treasury is working with the interagency to prepare a national strategy to counter illicit 

finance, as directed by Congress in section 261 of the Countering America's Adversaries through 

Sanctions Act (CAATSA). The strategy includes an update to the 2015 National Money 

Laundering Risk Assessment, which acknowledged the money laundering threat posed by TOC 

groups in the United States. The 2018 money laundering risk assessment will identify current 

money laundering methods associated with TOC groups, and the strategy will present how the 

interagency is addressing them. This August, the updated money laundering risk assessment will 

be published simultaneously with an updated terrorist financing risk assessment as well as a firstever proliferation financing risk assessment. 

One of the methods highlighted in the money laundering risk assessments is the misuse oflegal 

entities, including shell and front companies. The collection of beneficial ownership information 

6 
27


30176b-7.eps

is critical both at the time of account opening and when a company is being incorporated. 

Treasury's Customer Due Diligence (COD) rule took effect on May 11, requiring over 29,000 

financial institutions to identify and verify the identity of the beneficial owners of companies 

opening new accounts. The rule will help financial institutions better address the risk posed by 

legal entities in the United States and bolster the ability of law enforcement to investigate 

criminals who use legal entities to launder money. At present neither the states nor the federal 

government require the identification of beneficial owners at the time of incorporation, which 

allows criminal actors to set up companies in the United States anonymously and establish banks 

accounts abroad. Collection of beneficial ownership information at the time of company 

formation would provide law enforcement access to valuable information in order to investigate 

and prosecute money launderers, terrorists, and other illicit actors. 

Another area we are working to address concerns real estate. Treasury is assessing the scale and 

severity of the vulnerability associated with real estate, especially the misuse of legal entities to 

purchase real estate anonymously, and whether additional policy responses are needed. For 

example, we have been looking at case data from federal law enforcement agencies on real estate 

seizures to further develop our understanding of the risks involved and common typologies of 

money laundering and illicit finance through property transactions. Although real estate 

professionals have no obligation to report suspicious activity to Treasury's Financial Crimes 

Enforcement Network (FinCEN), FinCEN has released advisories and is conducting ongoing 

industry outreach to encourage voluntary reporting. This outreach and data analysis will help 

Treasury determine what policy changes may be necessary. 

Treasury and the private sector benefit from a partnership in the process of collecting and 

analyzing financial intelligence to focus our efforts against TCOs. Tn recent years, FinCEN has 

produced a number of assessments and advisories for financial institutions and law enforcement 

on TOC organizations and the various methods they use to generate and launder illicit proceeds 

in the Western Hemisphere. By raising awareness of these methods, Treasury seeks to help 

financial institutions to detect this activity and report it, which support law enforcement 

investigations. These efforts are yielding important information Since January 2015, US 

financial institutions have filed approximately 2,400 suspicious activity reports (SARs) with very 

specific TOC indicators, of which at least 600 (25 percent) name specific TOC organizations in 

the SAR narratives, such as the Sinaloa Cartel or the FARC, a designated Foreign Terrorist 

Organization and Specially Designated Narcotics Trafficking Kingpin. 

Finally, at the international level, Treasury works within the FATF to protect the global financial 

system. Recently, Treasury contributed to FATF's work on the financial flows associated with 

human trafficking- a common source of TCO profit -and on professional money laundering 

networks, which TCOs often use to launder their illicit proceeds. Treasury also participates as an 

observer in the Latin America Financial Action Task Force (GAFILAT) and the Caribbean 

Financial Action Task Force (CFATF), both of which aim to improve compliance with F ATF 

standards throughout the Western Hemisphere. The FATF and these regional bodies hold 

countries to account for establishing the infrastructure to prevent, detect, investigate and 

prosecute money laundering and terrorist financing. To accomplish this, the FATF and its global 

network evaluate all countries' AML/CFT regimes and then leverage the possibility of public 

identification to pressure those falling behind to fulfil their commitments. 

Use of Targeted Financial Sanctions and Enforcement Tools 

7 
28


30176b-8.eps

In addition to these efforts to enhance our overall AML/CFT regime, Treasury does not hesitate 

to take measures to target individuals, entities, and support networks, responsible for narcotics 

trafficking, money laundering, terrorist financing, sanctions evasion, and other financial crimes. 

FinCEN has used its authority under section 311 of the USA PATRIOT Act to identify financial 

institutions that, among other things, facilitate TCO activity, including that of TCO facilitators 

(such as third party money launderers). As an example, in 2015 FinCEN issued a finding 

pursuant to Section 311 concerning Banca Privada d' Andorra (BPA), a bank headquartered in 

Andorra that TCOs, including a Venezuelan network, used to launder money via professional 

money launderers. As a result of changes we saw following FinCEN's action, BPA is no longer 

operating. 

OFAC uses the Kingpin Act to target destabilizing and dangerous criminal organizations 

operating in Mexico, Venezuela, Colombia, Panama, Peru, and the Northern Triangle. Since 

January 2017, OF AC has announced 13 separate Kingpin Act actions that designated a total of 

174 individuals and entities. Of those 13 actions, six targeted Mexican DTOs and designated a 

total of 103 individuals and entities. OF AC has also frozen hundreds of millions of dollars worth 

of assets using the Kingpin Act and TCO designation authority in just the past 16 

months. Treasury has taken the lead to detect the movement of Venezuelan corruption and drug 

proceeds, deter their placement in U.S. and regional financial systems, and expose criminal 

networks connected to senior Venezuelan Government otllcials. Since 2017, OF AC has 

designated more than 50 Venezuelan Government otllcials and their criminal associates and has 

prohibited U.S. persons from dealing in Venezuela's digital currency (the "petro"), new debt, 

and equity financing related to the Government of Venezuela 

Just last month, OFAC used its transnational criminal organizations authority, Executive Order 

13581, to designate a Syria-based transnational human smuggling organization involved in 

smuggling migrants through certain South and Central American countries to the U.S. Southwest 

border. This organization operates a global network of human smugglers that obtain fraudulent 

and/or counterfeit documents and engage in bribery to facilitate human smuggling, and money 

laundering. It also used its TCO authority in 2012 to impose sanctions on the MS-13 gang, 

naming it a significant TCO, and following up with derivative designations of its leadership in 

subsequent years. These are just a few examples of the novel ways that OF AC has deployed its 

robust sanctions authorities to combat organizations involved in drug trafficking, human 

smuggling, corruption, and organized crime throughout the Western Hemisphere. 

Our AML/CFT regime is also designed to assist law enforcement to track illicit tlnancial t1ows 

and take action, as well as for financial institutions to implement programs to detect, deter, and 

disrupt illicit tlnance. Where possible, FinCEN supports law enforcement investigations to learn 

about new or evolving TOC organizations and related illicit finance methods, and OFAC works 

joint cases with U.S. law enforcement counterparts. 

Conclusion 

As I close, I would like to thank the Subcommittee for the invitation to be here today. TCOs 

represent a threat to U.S. interests at home as well as throughout the Western Hemisphere. At 

Treasury, we are particularly focused on the abuse and exploitation of the U.S. and international 

financial system by TCOs and their facilitators. We continue to work bilaterally with our 

partners in the region to prevent TCOs from moving, investing, and profiting from the proceeds 

8 
29


30176b-9.eps

of crime in other jurisdictions. At the same time, we are also working domestically and 

internationally to protect the U.S. and international financial systems against TCO abuse. We 

look forward to working with the members of this Subcommittee on this critical issue, and 1 

welcome any questions you may have. 

Thank you. 

9 
30

Mr. COOK. Thank you very much. 

Next will be Rear Admiral Brian Hendrickson, Director of the 

Network Engagement Team at USSOUTHCOM, Southern Command. 

Rear Admiral Hendrickson has served in numerous naval special 

warfare assignments and has served as Assistant to the Vice Commander of U.S. Special Operations Command, Military Deputy at 

the Defense Innovation Unit Experimental, and Deputy Commander of the Naval Special Warfare Command. 

Admiral? Thank you. 

STATEMENT OF REAR ADMIRAL BRIAN HENDRICKSON, USN, 

DIRECTOR, NETWORK ENGAGEMENT TEAM, U.S. SOUTHERN 

COMMAND 

Admiral HENDRICKSON. Chairman Cook, Ranking Member Sires, 

members of the committee, thank you for the opportunity to appear 

before you today. 

For my written statement, I have submitted the SOUTHCOM 

Commander’s annual posture statement to the Senate Armed Services Committee, which covers a broad range of both challenges and 

opportunities in the Western Hemisphere. 

First, I will focus on the challenges. 

Every day, our southern approaches are under assault by criminal networks whose smuggling operations reach across Latin America and the Caribbean and deep into the United States. These 

groups exploit every land, sea, and air border to traffic drugs, people, weapons, and other illicit goods throughout the Western Hemisphere and beyond. 

Their corrosive activities pose a threat to the stability of our 

partners and to our national security. It is no coincidence that 

some of the most violent places on this planet are located right 

here in our hemisphere. They are home to the criminal networks 

like MS-13, the Sinaloa Cartel, and others. While our partners bear 

the brunt of this violence, these networks and many others have 

a significant footprint in the United States. 

The region is also home to networks that specialize in smuggling 

illegal immigrants from places like Afghanistan, Pakistan, Yemen, 

Syria, and Iraq—all places where terrorist organizations like Al 

Shabaab, ISIS, al-Qaeda, and their affiliates operate. 

Now, migrant smuggling is not uncommon. What makes these 

networks different is the type of people who enlist their services to 

attempt to enter the U.S. homeland undetected. Some of these people have ties to terrorism, and some have intentions to conduct attacks in the homeland. It is unclear if these attack plans are at the 

explicit direction of terrorist organizations or self-inspired, but that 

intent and the regional vulnerabilities these networks exploit is 

deeply concerning. 

Stopping these threat networks is truly a team network. It involves the FBI, HSI, the Departments of Defense and State, and 

partners like Panama, Costa Rica, Brazil, Colombia, and many others. 

In addition to our collective U.S. Governmental efforts to target 

criminal networks, U.S. Southern Command, INL, DHS, Treasury, 

and others also build the capacity of vetted police and military 

31

units throughout the region. We provide real-world training in 

countering illicit financial flows, the employment of biometrics, intelligence fusion, open-source analysis, border security, and maritime interdiction. The end result is capable partners who can do 

more with us and with each other in a layered defense to stop 

threats against our homeland and our shared home. 

I will close with this observation. You may be wondering why a 

guy in a military uniform is talking about something that seems 

to be primarily a law enforcement mission. My colleagues here at 

the table obviously all play a leading role in this effort, but DOD 

supports them by providing unique capabilities like intelligence fusion and training. 

Our effort is multiagency because the problem is multidimensional. In other words, it takes a network to defeat a network. This 

is a governance problem, a public health and safety problem, and, 

above all, a national security problem, because, as our awareness 

and understanding grows, we learn that more and more of these 

networks are being leveraged by those who seek to do us harm and 

those who seek to do our partners harm. 

I look forward to discussing these and other issues with you and 

my colleagues. Thank you. 

[The statement of Admiral Tidd, submitted by Admiral Hendrickson, follows:]

32


30176c-1.eps

POSTURE STATEMENT OF 

ADMIRAL KURT W. TIDD 

COMMANDER, UNITED STATES SOUTHERN COMMAND 

BEFORE THE usm CONGRESS 

SENATE ARMED SERVICES COMMITTEE 

15 FEBRUARY 2018 
33


30176c-2.eps

Table of Contents 

Introduction ............................................................................................................ .. 2 

Challenges and Opportunities ....... 3 

Security environment.. . ...... 3 

Threat networks . .. .. . ..... .4 

Extemal State Actors ....................................................................................... 5 

Cuba ... 

Venezuela 

Regional partnerships. 

Securing our southern approaches 

. ...... 7 

....... 8 

. ...... 9 

..... 10 

Countering threat networks .. . .... 11 

Addressing global challenges ........................................................................ 17 

Preparing and responding to crises ............................................................... 21 

Detention operations ..... 25 

Our requirements ..... 25 

Conclusion .... ..... 31 
34


30176c-3.eps

INTRODUCTION 

Chairman McCain, Ranking Member Reed, Members of the Committee: I appreciate the 

opportunity to discuss US. Southern Command (USSOUTHCOM) and our efforts in Central 

America, South America, and the Caribbean. Every day, our men and women work to secure our 

southern approaches and build a regional security network of principled, inclusive partnerships. 

As an economy afforce Combatant Command, we depend upon this network to help maintain 

our own security and defend our homeland in depth. It is the most important layer of our 

forward defense. 

Yet the combined impacts of defense spending caps, nine years of continuing resolutions, 

and insufficient spending in the diplomacy and development arenas make it increasingly difficult 

to sustain this regional network. Because our global security responsibilities outpace the 

resources available to meet them, we have had to make a series of tough choices, resulting in 

compounding second and third order e±Iects. The net result is the perception among our 

friends-and the palpable anticipation among our competitors-that we no longer stand by our 

commitments, that we are relinquishing our strategic position, and that we don't take the 

challenges in this region seriously. On the surface, these regional challenges may not seem 

directly related to the larger global challenges that dominate headlines and policymaking They 

don't always fit neatly in our strategic frameworks, as they blur the line between crime and war, 

competition and conflict, and simmering problems and crises. Left unchecked, however, their 

impacts compound over time, emboldening competitors in other theaters, draining capabilities 

needed in other high priority missions, and taxing our economic strength. 

Mr. Chairman, we must address evolving security challenges to help hold the line in this 

hemisphere, and ensure a crisis within it doesn't distract from our ability to address even higher 

2 
35


30176c-4.eps

priority global challenges elsewhere. We should not make assumptions that the future will be as 

generous to our interests in this region as the past, which means we need to decide how much 

security is acceptable in a part of the world so closely linked to the U.S. homeland. Unless we 

decide, we may open ourselves to exploitation by our adversaries, erode our competitive edge 

and, in the case of this theater, as well as expose our south em flank to a well understood range of 

vulnerabilities. We appreciate the support of the Congress in this matter, and T look forw·ard to 

providing a detailed overview of the challenges and opportunities in this region, and our 

missions within it. 

CHALLENGES AND OPPORTUNITIES 

Security environment. Latin America and the Caribbean is a region of contrasts, of both 

positive and concerning trends. It is not one homogenous place, but many disparate 

Eight of the ten countiies With the world-'s highest hqmicide rates 

are in the region. as Qre 43 of the world-'s 50 most violent cities. 

communities, home to modern, 

diverse, democratic societies, 

with a growing middle class and professional, capable militaries. Yet it faces governance 

challenges-including political corruption, unmet development goals, and shocking levels of 

violent crime-that create a permissive environment for illicit and other concerning activity. 

The global threat of violent extremism has gained a small foothold within Latin 

America's growing Muslim populations. Groups such as the Islamic State and others will likely 

continue recruiting tighters or inspiring others to carry out attacks in their home countries. 

Insecurity and economic hardship continue to drive migration; while overall trends are returning 

to historical norms, migration from the Northern Triangle across the US-Mexico border is once 

again on the rise. Natural disasters regularly impact vulnerable countries, exacerbating 

struggling economies, and Venezuela remains at risk for internal instability, which could have 
36


30176c-5.eps

significant regional ramifications. Within this context, the region contains a mix of challenges 

from both non-state and state actors. 

Threat networks-including drug traffickers, arms dealers, human smugglers, terrorist 

supporters and sympathizers, and money launderers-use common pathways and conduct 

operations that span the region and reach deep into our homeland. Criminal networks move 

drugs and engage in a wide array of illegal activity, including weapons traftlcking, chemical 

importation, poppy and coca cultivation, fentanyl smuggling, and illegal mining. Transnational 

gangs like MS-13 and the 181

h Street target and kill police oftlcers in Central America, and 

routinely communicate with counterparts in places like Massachusetts, Virginia, New York, New 

Jersey, and Maryland to direct operations on U.S. soil. Human smugglers enable the transit of 

thousands of illegal immigrants and Special futerest Aliens (SIAs) to our borders. 1 Lebanese 

Hezbollah supporters exploit free trade zones, working with criminal groups to raise funds. 

Collectively, these groups create pathways and vulnerabilities that can be exploited by terrorists 

or proliferators, and corrode confidence in the governance of partner nations we rely on to 

advance regi anal and global security interests. 

This challenge is constantly evolving. As this Committee knows, thirty years ago we 

focused on large cartels with designated leaders and relatively straightforward operations. 

Today, those cartels have diversified, decentralized, and franchised their operations. They are 

borderless, operating with the fluidity of a multinational corporation, but with impunity. They 

tra±lic in more illicit products, kill more Americans with illicit drugs, and earn ever-greater illicit 

prot1ts. Looking beyond the immediate, however, the larger challenge posed by threat networks 

is far more insidious: their potential to undermine democratic progress in all its forms. Mr. 

1 A Special Inlcrcsl Aliens (SIA) is a foreign IL'1lional originating from a counlry with potential or established 

terrorist links. 

4 
37


30176c-6.eps

Chairman, what these groups are really engaged in is an assault on the rule oflaw, and 

everything it stands for. 

This assault comes in many forms. We see it when illicit elements attack police, judges, 

and innocent by-standers, violating the most fundamental human right of all: the right to citizen 

security. We see it in the corruption of institutions and government officials. And we see it in 

the slowly expanding spaces of lawlessness, alternative order, and criminal control, which 

creates a breeding ground for other transnational threats. The cumulative effects of these groups 

eats away at core democratic values. Threat networks play a major role in fostering the 

corruption and insecurity that erodes citizens' faith in democracy, especially in countries with the 

highest levels of criminal violence. When we think about attacks on democracy, I would offer to 

this Committee that we must consider attacks that come from aft quarters-not just attacks from 

traditional, nation-states. 

The stark reality, however, is that we are likewise faced with traditional nation-state 

challenges. China, Russia, and Iran are courting some of our most strategically important Latin 

American and Caribbean partners and supporting authoritarian, anti-American regimes. With 

every inroad they make, they enlarge competitive space to interfere with our security 

relationships, cancel out our interoperability with the region, undermine our e±forts to reinforce 

international norms, and hold our interests at risk. 

China's commercial and diplomatic advances move it closer to its larger strategic goal of 

reshaping global economic and governance architectures. China has pledged $500 billion in 

trade with Latin American countries and $250 billion in Chinese direct investment over the next 

ten years. Increased economic cooperation-such as the extension of the 'One Belt, One Road' 

initiative to Latin America, one of the nodes to support China· s vision of a competing global 
38


30176c-7.eps

economic initiative-and the continued provision of financing and loans that appear to have 'no 

strings attached' provide ample opportunity for China to expand its influence over key regional 

(DOD Photo) Service members from partner nation air forces work 

together during PANAMAX Aug. 14, 2017. The week-long exercise 

focused on securitv of the Panama Canal. 

partners and promote unfair business and 

labor practices. Increased reach to key global 

access points like Panama create commercial 

and security vulnerabilities for the United 

States, as do Chinese telecommunications and 

space ventures with dual-use potential, 

which could facilitate intelligence 

collection, compromise communication networks, and ultimately constrain our ability to work 

with our partners. 

Russia's increased role in our hemisphere is particularly concerning, given its 

intelligence and cyber capabilities, intent to upend international stability and order, and discredit 

democratic institutions. Russia is a strategic competitor actively seeking to degrade U.S. 

partnerships and undermine U.S. interests in the region. Moscow attempts to falsely shape Latin 

America's information environment through its two dedicated Spanish-language news and multimedia services, and through its influence campaigns to sway public sentiment. Expanded port 

and logistics access in Cuba, Nicaragua, and Venezuela provide Russia with persistent, 

pernicious presence, including more frequent maritime intelligence collection and visible force 

projection in the Western Hemisphere. The sanctuary of robust relationships with these three 

countries provides Russia with a regional platform to target U.S. and partner nation facilities and 

assets, exert negative influence over undemocratic governments, and employ strategic options in 

6 
39


30176c-8.eps

the event of a global contingency. Left unchecked, Russian access and placement could 

eventually transition from a regional spoiler to a critical threat to the U.S. homeland. 

Additionally, North Korea may use its small presence in Latin America to do us harm 

while also looking to develop expanded economic and diplomatic partnerships. We remain 

concerned that Pyongyang could use its limited footprint in the region to collect or plot against 

us. Given the permissive environment in the region, North Korean efforts to generate revenue, 

and its history of working with supporters like Cuba to circumvent sanctions, North Korea is 

likely to engage in some form of illicit activity in Latin America. 

Post the Joint Comprehensive Plan of Action (JCPOA), Iran seeks to expand its 

diplomatic relationships and trade and investment opportunities. Having a footprint in the region 

also allows Iran to collect intelligence and conduct contingency planning for possible retaliatory 

attacks against U.S. or Western interests. Lebanese Hezbollah maintains an established 

logistical, facilitating, fundraising and operational presence in this region that can be quickly 

leveraged with little or no warning. 

Challenges to U.S. interests are not limited to extra-hemispheric actors. From a national 

security standpoint, Cuba has demonstrated clear intent to target U.S. interests through 

collection, surveillance, and counterintelligence activities in countries throughout the region. It 

has also demonstrably failed in its international obligation to protect diplomatic personnel. The 

planned political transition this spring is unlikely to change Cuba's approach, diminish the 

military's position of influence, or alter continued cooperation with Russia, China, and even 

North Korea on a range of security, political, and economic issues. Cuba's negative intluence in 

Venezuela-notably through its intelligence service and Armed Forces, which play key advisory 

roles shaping Venezuelan domestic policy-is evident in the Madura regime· s increasingly 

7 
40


30176c-9.eps

authoritarian tactics and human rights abuses. This relationship is symbiotic, as Cuba receives 

oil and financial support in exchange for keeping the Madura regime afloat. 

The future of that relationship, however, is unclear, as the political, economic, and 

humanitarian crisis in Venezuela worsens by the day. Its citizens (especially the most 

vulnerable) are suffering. The health care system has nearly collapsed. Child malnutrition rates 

are past the crisis threshold and infant mortality rates have risen sharply. Some reports suggest 

that 93% of Venezuelans claim they cannot afford the food they need. The government is on the 

brink of total default as a result of the Madura regime's mismanagement of the economy. Given 

these conditions, Venezuela's neighbors face a growing influx of migrants, straining local 

economies, health, and education sectors around the region. Over 500,000 Venezuelans have 

fled to Colombia, 40,000 to Brazil, 93,000 to Ecuador, and tens of thousands more to other 

countries in the region. Continued out migration of Venezuelans fleeing the dire economic and 

humanitarian situation at home is straining many neighboring economies to the breaking point, 

increasing the potential for regional tensions and border conflicts as countries attempt to protect 

scarce resources. 

Venezuela has long provided a permissive environment for narco-terrorist groups and 

Lebanese Hezbollah supporters, and is a transit country for the smuggling of illicit drugs and 

SIAs. The continued assault on democratic institutions provides increased space for illicit actors 

to operate with impunity, and for Russia, China, and Cuba to expand their influence over the 

corrupt Madura regime. The next few months will likely prove critical, with a presidential 

election, continued economic deterioration, and widespread shortages of medicine, food, 

electricity, and consumer goods. 

8 
41


30176c-10.eps

While these challenges are significant, they are not insurmountable. Across the regional 

security network, we continue to build capability, capacity, and interoperability, expand 

information sharing, and deepen linkages with the many committed and capable partners we 

have in the region. Below are but a few examples of the significant, positive trends and 

increasing contributions and leadership of our partners to help us address shared challenges in 

our hemisphere. 

El Salvador, Guatemala, and Honduras continue to make progress implementing their 

reform initiative, the Plan of the Alliance for Prosperity despite mounting challenges from gangs 

like MS-13. Their security services have played key roles in contributing to internal security 

gains. All three have plans in place to strengthen their law enforcement capabilities so they can 

eventually phase their militaries out of domestic security missions. Belize is demonstrating 

willingness to cooperate, sharing information with its neighbors and with us on drug smuggling 

and other illicit activity. Further south, Panama-a critical partner in both counter-terrorism 

(CT) and countering transnational organized crime (CTOC)-is taking important steps to address 

the increasing tlow of migrants and SIAs from the Middle East, Central Asia, and Atiica. 

A NATO partner, anchor for regional stability, and emerging contributor to global 

security challenges, Colombia remains a staunch friend whose leadership is critical to 

addressing threat networks, SIA smuggling, and the mutation ofF ARC dissidents into illegally 

armed groups. Peru is expanding its role in regional maritime security and continues to provide 

significant contributions to international peacekeeping efforts, while also contributing to the fight 

against coca cultivation. This year Chile will assume a major leadership role in the world's 

largest multinational maritime exercise, the Rim of the Pacific (RIMP AC), and is deepening 

maritime security cooperation throughout the Asia-Pacific region, while Brazil is working a 

9 
42


30176c-11.eps

South American security initiative to coordinate regional responses to criminal and extremist 

networks. Caribbean partners like Trinidad and Tobago and multinational organizations like 

the Caribbean Community (CARTCOM), the Regional Security System (RSS), and the 

Caribbean Disaster and Emergency Management Agency (CDEMA) are improving sub-regional 

coordination to shut down drug and weapon smuggling routes, prevent the spread of extremist 

networks, and cooperate on disaster response. 

In the year ahead, we see tremendous opportunity to deepen collaboration with these key 

partners and multilateral organizations, as well as reviving the mutually beneficial security 

partnerships with Argentina and Ecuador. Our regional partnerships are the cornerstone of our 

efforts to secure our southern approaches and the heart of everything we do in the region. 

SECURING OUR SOUTHERN APPROACHES 

Our mission and approach. USSOUTHCOM' s mission is to secure the southern 

approaches, protecting U.S. interests in Latin America and the Caribbean while reducing the 

threats extending from or through this region into the United States. We recognize that the 

region's primary challenges-criminal and extremist threat networks; vulnerabilities to natural 

and manmade disasters; and global competitors-are highly dependent on an integrated approach 

and leveraging authorities and capabilities across the joint, interagency, international, and nongovernmental communities. That's why our approach has always been less about what we need, 

and more about how we better employ what we have. We seek to mobilize and organize the 

unique strengths of each of our partners and Allies, to expand information sharing and 

collaboration, and to align security, development, and capacity building activities that allow us to 

translate short-tenn successes into long-tenn gains, sustained by an adaptive and inclusive 

regional security network. 

10 
43


30176c-12.eps

Countering threat networks-our main effort. We have internally reorganized our 

headquarters and refined command and control relationships across the USSOUTHCOM 

enterprise to improve the etTectiveness and efficiency of our counter threat network activities, 

and strengthen collaboration with interagency, regional, and non-governmental efforts. Working 

by, with, and through our network of partners, we confront the challenge of criminal and 

extremist networks at their source. 

F:nahling our network of partner nations. Building partner capacity (BPC) remains the 

primary way we improve interoperability and enable partner nations to take the lead in 

countering transregional threats. Our investments in places like the Northern Tier, Colombia, 

Panama, Trinidad and the Dominican Republic continue to pay significant dividends, as each of 

these nations have significantly improved their internal security, and increasingly execute 

successful maritime interdiction operations, many of which are in direct support of JIATF South. 

Naval Special Operations Forces in Guatemala, El Salvador, and Panama are now among the 

most competent and responsive counternarcotic (CN) units in Central America, integrating with 

air assets, effectively responding to JIATF South "cues," and executing numerous joint and 

individual interdiction operations. In Trinidad and Tobago, we initiated a 2282 Train and Equip 

program-which has helped better posture their CT units to illuminate and degrade violent 

extremist networks and their enablers throughout the region-and are developing legal capacity 

through a robust Judge Advocate corps to help reinforce rule of law, a critical element in the 

counter threat network fight. We also supported our partners in the Dominican Republic to 

improve maritime interdiction in the Caribbean through the establishment of a Joint Task Force 

that combined SOF-trained CN units with Dominican naval aircraft. 

11 
44


30176c-13.eps

Beyond enabling the immediate efforts of our partners, we also build operational and 

institutional capacities that in turn translate into more accountable, effective, and sustainable 

security organizations capable of mutually supporting each other while addressing our shared 

security challenges in the region. In the year ahead, we are developing engagement strategies 

that focus on episodic training engagements to maximize the effectiveness ofBPC activities, 

even with minimal forces. 

In South America, we are partnering with Brazil, Chile, Peru, and Colombia in support of 

multinational operations that confront the expansion of threat networks in South America. 

Colombia, in particular, remains our indispensable partner in the counter network fight. Since 

the signing of the peace accord, security levels have dramatically improved and conflict-related 

killings have plummeted. At the same time, the peace process has brought with it real challenges 

in extending state presence and economic opportunity, dismantling illicit networks, and reversing 

coca growth, all of which threaten to undermine a meaningful transition out of conflict Our 

partnership with Colombia remains critical at this difficult moment. Their progress is historic, 

but our work there is far from done. Just as we never considered walking away from our NATO 

allies upon the conclusion of the Cold War, it should be inconceivable that we permit any 

diminution in our ties with Colombia today. The Department's Section I 021 authority has been 

particularly valuable to our etiorts in Colombia, and we look forward to working with this 

Committee to ensure the authority remains relevant given the evolving security environment 

there. 

Mr. Chairman, in our view, a 

Colombia at peace can do even 

Since 2013, USCAP has trained 5,598 teahy-vetted security and 

defense personnel. A high-demand, /ow-cost program, requests 

for 'USCAP events have increased ei(;(ht-told since its creation. 

more, both regionally and globally Supporting Colombia's efforts to address its problems and 

12 
45


30176c-14.eps

deliver on the promises of the peace accord remains in our interests, as does facilitating 

Colombia's continued regional leadership and role as a net security exporter. Our Colombian 

partners continue to willingly and usefully share hard-won security lessons with Mexico, Central 

America, and the Caribbean through the U.S. Colombia Action Plan for Regional Security 

(USCAP). In the year ahead, we will remain engaged on Colombia's new riverine efforts, 

ongoing defense transformation, interest in pursuing trilateral cooperation with Mexico, and 

implementation of holistic plans to extend government presence, confront illegality, and 

encourage sustainable development. To further deepen linkages within the region security 

network, we are also offering key leadership and statl'billets to both Colombia and Chile during 

the Marine Corps' Special Purpose Marine Air Ground Task Force (SPMAGTF) 2018 

deployment, with the goal of complementing their respective contributions in Central America 

through USCAP and security cooperation training teams. 

Deepening integration ·with the interagency network At our headquarters, we continue to 

strengthen our successful partnership with the Department of Treasury, supporting the 

development of targeted financial measures and sanction designations against corrupt 

government officials in Venezuela, international narcotics traffickers, and money launderers. 

We are also expanding cooperation and integrating operations and intelligence professionals with 

the FBI, DEA, and DHS. Our premier exchange team at Joint Terrorism Task Force (JTTF) 

Miami provides intelligence fusion and collaborates on disrupting criminal and terrorist 

activities. Last year, this team helped the FBI disrupt an imminent threat to a U.S. Ambassador, 

supported an investigation into a major SIA smuggler, and provided analytic support to over two 

dozen law enforcement investigations. Beginning in April, we will again provide planning and 

analytic support to DHS' Operation CITADEL, a multinational, multiagency effort targeting 

13 
46


30176c-15.eps

illicit smuggling networks. We are also working closely with DHS to align DoD planning efforts 

with their Southern Border and Approaches Campaign Plan, and deepening coordination with 

DEA and other partners on the expansion of fentanyl smuggling networks. Earlier this month we 

hosted a high-level Opioid Summit, which brought together interagency and non-governmental 

stakeholders to further a holistic approach to counter this threat to American lives. 

We are also expanding linkages with interagency partners across Latin America and the 

Caribbean. Through the Central 

American Community of Interest 

(COl), JTF Bravo-our task force 

The small team from JIATF South's Cyber-Container tnitiative (CCI) has 

developed an innovative intelligence analysis methodqlogy knQwn as 

''technicql network analysis." By profiling on liM 'Cyber a<:tivity and 

detecting signs of ~efarious activities_, this grqup is able to deliver 

~ignificant operotionul support to DHS, FBI, and other DoD and law 

located at Soto Cano Air base in 

enforcement operations aimed at targeting and disrupting narcotics 

troffickl'ng, weapons smuggling, counter-proliferation, and other illicit 

activities undertaken, by criminal and state,-sponsored networks. 

Honduras charged with promoting security cooperation and disaster response in Central 

America-facilitates information sharing on criminal networks and violent gangs involved in 

drug trafficking and other illicit activity in the region. JTF-Bravo's efforts also complements 

efforts by the State Department and the US. Agency for International Development (USAID) to 

improve security and governance, prevent crime and violence, promote prosperity and extend 

state presence through its humanitarian and medical engagements. Soto Cano now hosts the 

Forensic Exploitation and Analysis Center (FEAC), the first of its kind in Central America. This 

center provides document and biometric exploitation capabilities that directly support US. and 

partner nation law enforcement efforts to dismantle transnational criminal organizations. 

In the air and maritime domains, our detection and monitoring (D&M) operations and 

support to interdiction enable US. and partner nation law enforcement to successfully prosecute 

and dismantle criminal networks. JIATF South set a record for interdictions in FY 17, 

supporting the disruption of283 metric tons of cocaine and the detention of nearly 900 suspected 

14 
47


30176c-16.eps

members of drug trafficking 

Potential Effects ofl MT Cocaine 

organizations. Given limited U.S. !1. n U5!10<a~otd<IO\ierd<>Se!leatil!t* 

government (USG) assets, we rely heavily 

ssg -1,0~5 U!i\SilcamrHl:<>~<I'ER vl;!ts {$1dl • Sl JIM!• 

6,140-11',4<19 NEW US C<l!;ljineUsers * 

on contributions by Canada, Central 

America, Colombia, Mexico, the 

Netherlands, the United Kingdom, and 

77 NEW. US l.ltlll!•Relafe<itmend"rl! ' 

$l!i31Mllll<>" Adl!iti<mal USll:l!sttiflnmatellllre •• 

France. Without the support of this Last year, we. were ullable to target "800 metric tans 

<>I cacafne.dve to lal:k of cssets. 

cooperative maritime network, an 

additional 77 metric tons of cocaine would 

have reached U.S. communities last year. 

Data compiled from a variety of sources: 

*The Office of National Drug Control Policy (ONDCP); Consolidated 

Counterdrug Data Base (CCDB) 

** DOJ [Bureau of Prisons and law enforcement agencies (LEAs)]; CCDB 

***The UN Office of Drugs and Crime (UNODC); World Bank; CCDB 

**** JIATFS; LEAs 

Persistent asset shortfalls continue to present challenges to the D&M mission, however. On any 

given day in the Eastern Pacific in FY 17, JTATF South had, on average, 2.9 force packages 

available to respond to illicit trafficking events, and was typically only able to seize or interdict 

only 1 in 31 of those events. The sheer volume of illicit tratlicking events far outmatches the 

force packages available to deal with them2 

Counter threat network operations, activities, and investments. We see great opportunity 

to build on the multinational cooperation that characterizes these international interdiction 

efforts, especially the successful inter-institutional coordination oflast year's Operation 

KRAKEN, in which the United States, Colombia, Panama, and Costa Rica targeted illicit 

maritime pathways in the Central American littorals. This year, we will align KRAKEN's 

"A force ptu.:kage consists ora medimn to long range slup (such as a non-ballistic missile capable US Nav~, DeslroyL-r or Littoral 

Combat Ship, or a US Cousi Guard Culler) hosting a Coasl Guard La\\' En10rcemL'nt Dd.adunmt, w1lh an inkreLvior boat, and 

one or more day/night capahk hclicopl(..:n; vvilh aL'Tial use of force capahility. A l(Jrcc package abo indudetl a man time patrol 

aireran equipped v.-iih \wle-areanwritime search radar and infrared detection sd (such as .ToLnt SurveillCl~lee TarJ!d Attack Radm 

System (JSl"ARS) or a P-S). lhemore lOrce packages Cl\'ailable for employment, U1e more illicit evenls can be mterrupted. 

15 
48


30176c-17.eps

maritime interdiction operations with land-based counter threat network activities, including 

ongoing and planned operations like HORNET and TOGETHER FORWARD. Operation 

HORNET, which illuminates threat network activity along the Guatemala-Mexico border, has 

led to the identification of 36 illicit organizations to date, many with linkages across Central 

America and Mexico. Under the umbrella of Operation TOGETHER FORWARD, U.S. soldiers 

work with counterparts in Guatemala, Honduras, and El Salvador to improve cross-border 

collaboration against threat networks. 

We are also expanding collaboration with U.S. Northern Command and U.S. Marine 

Corps Forces North to enable combined, multinational transregional operations by Mexican, 

Guatemalan, and Belizean security forces. By linking these operations with our capacity 

building programs; development efforts by USAID, the State Department, and non-governmental 

organizations (NGOs); and tailor-made training by teams from the Marine Corps' Special 

Purpose Marine Air Ground Task Force (SPMAGTF), we aim to employ a full range of threat 

network illumination, disruption, and prevention activities across Central America. 

In the Caribbean, we are expanding ties with multilateral organizations like the RSS and 

CARICOM to address the growing challenge of extremist networks. Transregionally, small 

teams of U.S Special Operations Forces (SOF) provide invaluable cross-functional supportincluding specialized capabilities, intelligence analysis, and targeted capacity and institution 

building-to deny anonymity to nefarious actors moving through the region and enable the 

disruption of criminal, ISIS, SIA, foreign fighter, and Lebanese Hezbollah support networks. 

Leveraging essential tools like Military Information Support Operations (MISO) and Civil 

Mfairs capabilities, these teams empower regional partners by promoting good governance, 

amplifying moderate voices in the region's small Islamic communities, and facilitating regional 

16 
49


30176c-18.eps

efforts to counter radicalization and recruitment by extremist organizations. We are very 

appreciative of the Theater Special Operations Command (TSOC), which provides a significant 

portion of our persistent presence, as well as unique capabilities, cultural awareness, and skill sets 

that are perfectly suited for the complex challenges in this region. 

Addressing global challenges. When it comes to addressing Russia, China, and Iran, we 

focus on two interrelated areas. We monitor their activities in support of the National Defense 

Strategy and broader USG efforts. We also work to enable greater regional contributions to 

international security, safeguard U.S. interoperability with our regional partners, support the 

continued professionalization of our hemisphere's defense forces, and deepen cooperation in 

defense innovation. 

Before I discuss that second area in greater detail, I'd like to share my views on 

"competition" with China and Russia in this region. Mr. Chairman, allow me to offer a candid 

observation. The larger strategic challenge posed by China in this region is not yet a military 

one. It is an economic one, and a new approach may be required to compete effectively against 

China's coordinated efforts in the Americas. Some of the most critical elements needed in this 

effort are not ones that USSOUTHCOM can bring to bear. In addition to the crucial role of 

whole-of-government efforts, lam referring to the strength and vibrancy of the U.S private 

sector, our multinational corporations, and NGOs. As for Russia, we are educating and 

informing our partners on the potentially detrimental and destabilizing effects of Russian 

activity, especially Moscow's use of active measures and disinformation. As noted in our new 

National Security Strategy, Russia has found operating space in this hemisphere. With the 

support of the Congress, I believe we can close this space, and prevent Russia from advancing an 

agenda opposed to the United States, our allies, and our partners in the region 

17 
50


30176c-19.eps

More often than not, the best way to compete is to be the best possible partner to our 

friends and Allies. That's why the majority of our efforts in the region are focused on 

strengthening the partnerships that are the backbone of the regional security network, and 

supporting the leadership and professionalization of partner nation security forces. 

Facilitating regional cotllributions 10 international security. As part of the State 

Department's Global Peace Operations fuitiative (GPOI) in our Latin American partners have 

demonstrated a willingness and ability to deploy effective peacekeeping capabilities-including 

critical enabling capabilities such as aviation, airfield support units, engineering companies, and 

medical units-which are persistent gaps in UN missions, especially in Africa. These partners 

deploy well-trained and equipped units with a reputation for strong performance in 

missions. Through capacity building programs such as GPOI, we help support the development 

and deployment of these critical mission assets, strengthening the effectiveness of the operations 

to which they deploy. 

Similarly, with over 57 years of building interoperability with the navies of Central and 

South America, the UNIT AS series of exercises has created a cadre of very capable maritime 

forces that can seamlessly incorporate themselves into not only U.S. led operations, but those of 

our NATO and Indo-Asia-Pacific partners as well. We are working to transition future iterations 

of UNIT AS from a traditional scripted exercise to an actual humanitarian assistance and disaster 

response (HA/DR) capable force that can exercise at sea against real world, unscripted missions. 

This multinational capability not only encourages burden sharing, it accelerates our naval and 

interagency interoperability by compelling planning and execution with real world political and 

operational implications. 

18 
51


30176c-20.eps

Building a network of accoumable, prqjessional security partners. We actively support 

the efforts of Argentina, Chile, Colombia, Guatemala, and Guyana to strengthen their 

institutions. DTB engagement helps increase the sustainability of our security cooperation 

programs, encourages our partners to take ownership of their security needs, and promotes 

universal values of transparent oversight of security forces and the rule of law. This program 

complements broader International Military Education and Training (TMET), which has 

facilitated the attendance of nearly 16,000 students from the region at military courses at the 

Western Hemisphere Institute for Security Cooperation (WHINSEC), the Inter American Air 

Forces Academy (IAAFA), the Inter American Defense College (IADC), and the William J. 

Perry Center at National Defense University (NDU), which provide invaluable opportunities to 

build relationships with future civilian and military leaders. Regional demand for IMET courses 

remains high, and China, in particular, is increasingly aggressive in courting students from the 

region to attend Chinese military schools, offering to cover all expenses and salaries in return for 

increased student enrollment. 

We also support the continued professionalization ofregional militaries through our 

Military Imperatives, which help build four core military competencies that strengthen the 

operational effectiveness, 

cohesion, and capabilities of 

In 2017_, we co-hosted the ]!!d annu_al Women in the Military Conference 

with Guatemala, bringing together regional force leaders to share 

perspective$ on improving gender jntegrfltion and talent management. 

our hemisphere's forces. These competencies- respect for human rights, the institutionalization 

ofjointness, development of professional non-commissioned officer (NCO) corps, and 

integration of effective gender perspectives-are interconnected and interdependent 

characteristics of capable, modern defense forces. 

19 
52


30176c-21.eps

2017 also marked the 201

h anniversary of the Human Rights Initiative, celebrating two 

decades of partnership in Latin America and the Caribbean to enshrine respect for human rights 

into the training, doctrine, and moral code of our hemisphere's security forces. As the only 

Combatant Command with a dedicated Human Rights Office, we work closely with our partner 

nations to emphasize human rights as a military imperative that cannot be an afterthought in 

military missions. We will continue to preserve this vital office even in the face of mandated 

headquarters manpower reductions. Without the consistent engagement on human rights by the 

U.S.-whether by the State Department, USAID, DoD, or another agency-the significant 

progress we have seen simply would not have happened. That engagement must and should 

continue. While our partners acknowledge their responsibility to respect and protect human 

rights, many lack the resources to build strong programs. 

We regularly promotejointness in annual 

multinational exercises. Last year we supported 

the Dominican Republic's creation of a 

professional NCO Corps, South America's firstever Senior Enlisted Conference, and continued 

regional leadership on effective gender integration 

in military and security forces and peacekeeping 

(DOD Photo) u.s. Army National Guardsman with Barbados 

Defence Force members during a USSOUTHCOM-sponsored 

Tradewinds Exercise June 8. 2017. 

operations. We continue to advance these imperatives within our organization as well, and we 

are learning from our partners as much as we are sharing our lessons learned. 

Collaboration on innovation. Collaboration on defense innovation otTers a unique 

platform to engage with our network of partners. Innovation also provides an opportunity to 

mitigate capability gaps and support defense capabilities and concepts, including those that 

20 
53


30176c-22.eps

ensure the U.S. military's continued advantage over potential adversaries. I am especially proud 

of our collaboration with the National Geospatial Intelligence Agency (NGA) to work with 

Akmg with u.s. Cyber command, we recently held an inaugural Cyb.er 

Conference., bringing together partner nations, academia, and the 

private sector to discuss issues related to cyber defense ~nd innovOtion. 

regional partners "in the 

open," combining 

commercially available imagery with online tools and publicly available data that we can easily 

share with our partners. We are currently working with Brazil, NASA, and others on a joint 

small-satellite project that stands to improve our operational effectiveness during disaster 

response, and conducting a Long Duration/Long Dwell ISR pilot program to investigate and 

deploy innovative, non-traditional ISR assets that have the potential to partially mitigate our 

D&M shortfalls in the Eastern Pacific. 

Preparing and responding to crises. In concert with our network of partners, we work 

tirelessly to improve our collective ability to respond to a range of crises. Through our capacitybuilding efforts and humanitarian assistance, we help build partner nation resiliency and reduce 

vulnerabilities at the community level. This not only reduces the need for a large-scale USG or 

DoD response, but also helps mitigate the kinds of poverty and extremism that can lead to larger 

contingencies. Nevertheless, we must be prepared to provide our unique capabilities if called 

upon. To improve our own preparedness, we are taking steps to increase our understanding of 

environmental change and predicative signals, which helps us better appreciate the e±Iects of 

natural and man-made disasters on political and social structures. We are also honing our 

internal capacity by training and exercising against a range of real-world contingencies. 

Prepare and prevent. Strong inter-Service relationships also help encourage greater 

regional response collaboration. The National Guard's State Partnership Program plays a role in 

the USG's efforts to enhance the region's ability to prepare and recover from natural disasters; 

21 
54


30176c-23.eps

regular engagements by the Florida National Guard help improve first responder tactics and 

civil-military cooperation in the Caribbean. Last year, the U.S. Army served as the Executive 

Secretariat of the Conference of the American Armies, which grew to 22 members with the 

addition of Jamaica and Barbados. Thanks to this persistent engagement by the Army, our 

region is one step closer to creating a partner-led, combined Joint Task Force for future 

humanitarian assistance and disaster response (HA/DR) operations. 

Through our humanitarian assistance program and the superb support provided by the US 

Army Corps of Engineers, we provide training to thousands of US. service members and support 

our State Department and 2017's NEW HORIZON exercise,. held in the Dominican RepubliC~ tri:tined 

402 US personnel who treated 11,686 patients. Utilizing nearly $500,000 

in donated NGO goods and servkes, the teaf!l built three medical clinics USAID partners by enabling 

ond a vocatictnal school for 1,20 students. 

intergovernmental and nongovernmental efforts to extend state presence; build infrastructure like schools, water wells, and 

fire stations; and deliver essential services like medical care and sanitation improvements. This 

type of resiliency building at the community level helps nations prepare for and recover quickly 

from natural disasters, while also reducing the influence of criminal networks and the main 

drivers of migration. Medical training (MEDCAPS) and annual medical engagements like NEW 

HORIZONS and CONTINUING PROMISE-which will soon deploy to Colombia, Panama, 

Honduras, and Guatemala-provide a vital platform to improve the interoperability of U.S. 

military personnel, partner nation forces, and NGOs. Public-private cooperation is a forcemultiplier for all of these efforts, improving collaborative planning on humanitarian aid delivery, 

and extending the long-term impacts of our humanitarian assistance. 

22 
55


30176c-24.eps

Multinational exercises also improve regional interoperability and the readiness of U.S. 

and coalition forces. Our 

annual PANAMAX exercise 

With Brazil, Chile, Colombia, and Peru playing major leadership roles, 

PANAMAX 2017 featured249 participants representing 16 partner nations. 

showcases the leadership of Colombia, Peru, Brazil, and Chile, who form the backbone of the 

multinational coalition to defend the Panama Canal. Held in Guatemala, this year's FUERZAS 

HUM A NIT ARIAS exercise will bring together 20 different regional partners and multinational 

organizations like the United Nations to strengthen disaster relief mechanisms and improve 

synchronization between regional military forces, NGOs, and international organizations. We 

also regularly exercise our countering weapons of mass destruction (WMD) capabilities, and 

work with the Defense Threat Reduction Agency (DTRA), the Department of State, and a 

diverse group of nations, including Argentina, the Dominican Republic, Guatemala, Panama, and 

Peru, to develop and enable WMD crisis response capabilities for their military and civilian tlrst 

responders. These partnerships demonstrate our commitment and enduring resolve to our 

partners in the face of the most devastating of potential disasters. 

We are also growing our partnership with USATD from operations-based coordination to 

one that builds strategic, enduring partnerships and better aligns our regional and strategic 

priorities. Together, we are exploring methods to strengthen interagency accountability, develop 

joint metrics to measure outcomes, and utilizing and coordinating monitoring and reporting of 

our integrated efforts. 

Rapid Response. Our ability to rapidly respond and provide unique capabilities also 

allows us to demonstrate our steadfast commitment to the region. Last year, joined by the UK, 

Chile, and others, we assisted Argentina in the search and recovery of the submarine ARA SAN 

JUAN, supporting our Argentine friends in a difficult time. This renewed relationship is 

23 
56


30176c-25.eps

providing new opportunities to work with Argentina for the upcoming G-20 Summit and in the 

areas of countering WMD, combating terrorism, strengthening interagency response, and 

expanding information sharing. 

Over the years, 

US SOUTH COM, 

USAID, and our regional 

partners have made 

significant investments in 

improving the response 

capacities of 

U.S. MHitary Assistance 

It D<!!!.!liii!Unation Unit:~~ !!Iilli Ml,.,., .... ., 

I!!Uli.O:Ull amt~l!!di'UI 

-of pot-obk """"'"'"' J;>~o®ce,J 

FwkfJ!U :P""""'d<td 

to i!'iffJoad .:.; rg~ 

u.s. military support to Caribbean disaster response operations in 2017 

multinational organizations. The return on this investment was evident in 2017, with CDEMA, 

CARICOM, and the RSS playing critical roles in the regional response effort to Hurricanes Irma 

and Maria, and multiple nations providing assistance to their Caribbean neighbors. For our part, 

by leveraging flexible, dual-purpose SPMAGTF forces already in the region, we were able to 

quickly evacuate thousands of American 

citizens, closely collaborate with French and 

Dutch Forces, and support simultaneous 

USAID/Otlice of Foreign Disaster Assistance 

(DOD Photo) The DOD distributes USAID relief supplies in 

Dominica Sept. 27, 2017. 

(OFDA) disaster response operations in St. 

Martin and Dominica. We continue to work 

closely with USAID/OFDA to ensure that 

future humanitarian response efforts are 

24 
57


30176c-26.eps

timely, effective, and well-coordinated. It's not enough that our assistance make news; it has to 

make a difference. 

OUR NO-FAIL MISSION: DETENTION OPERATIONS 

The team at Joint Task Force Guantanamo (JTF-GTMO) continues to conduct detention 

operations with the utmost professionalism and strict adherence to international standards. Our 

troops take very seriously their responsibility to provide safe, humane, transparent, and legal care 

and custody of detainees. I could not be prouder of these young men and women. On top of this 

demanding mission, they support ongoing military commissions, habeas corpus proceedings, 

periodic review boards, and visits by congressional and foreign government delegations and 

organizations like the International Committee of the Red Cross. We appreciate the support 

provided in the FY18 NDAA for barracks construction, and we are currently reviewing other key 

facilities that require replacement or upgrades to enable the JTF to sustain operations as we move 

forward. As relayed previously, I have concerns related to providing specialized, long-terrn 

medical care for the aging detainee population. We are working with the Department to resolve 

this issue and will keep this Committee inforrned on the way-ahead. 

OUR REQUIREMENTS 

As I alluded to earlier, while Latin America and the Caribbean is inextricably tied to the 

security and prosperity of the United States, this region fares poorly in the competition for tlnite 

national resources. The ability of our interagency partners to strengthen governance, rule of law, 

and economic opportunities directly impacts our ability to achieve our military objectives. 

Persistent gaps in TSR, cyber, and analytic capacities hinder our ability to anticipate crises or 

adequately mitigate challenges. The paucity of our own assigned forces presents another 

complication; our presence and persistent engagement not only builds trust and confidence with 

25 
58


30176c-27.eps

partners, but is especially important to counter threats or malign influence and contain crises in 

the Western Hemisphere. Mr. Chairman, to put it another way, you have to be on the field to 

compete, understand, confront, and degrade threats and adversaries. T look forward to working 

with the Congress in the year ahead to help ensure we maintain our competitive advantage in this 

vital part of the world. 

I'd like to close by providing a brief overview of our mission requirements and highlight 

the importance of continued support to our interagency teammates. 

Defense hudget. The Congress has provided great support to the USSOUTHCOM 

mission over the years. Just last year, the Congress recognized the dire need for housing for our 

troops at JTF-GTMO, authorizing and fully funding a barracks project that would provide that 

housing. We saw this need in even more stark terms with the recent passing of multiple 

hurricanes through the Caribbean Basin, necessitating the evacuation of personnel from the 

island because of inadequate housing facilities. Though this project was supported by both the 

House and Senate, we are unable to proceed with this much-needed project that will directly 

support our deployed personnel due to the lack of an FY18 Budget-a very real impact of the 

delay in appropriations. This is in addition to the emotional toll this takes on all our people in 

the way of the disruption and uncertainty they deal with every time we face a potential-or in 

this case actual-government shutdown, which has become an increasingly regular occurrence. 

Our men and women deserve better. 

Regional access. As the only U.S. forward-operating base in the Caribbean and the 

gateway to the Gulf of Mexico, Naval Station Guantimamo Bay plays a critical role for 

USSOUTHCOM, the State Department, Navy, Coast Guard, and DHS. The Naval Station is 

pivotal during mass migration events, counterdrug and search and rescue operations, 

26 
59


30176c-28.eps

humanitarian assistance, and disaster-relief operations in the Caribbean. Similarly, Comalapa, El 

Salvador (home to one of our two Cooperative Security Locations that directly support the D&M 

mission) and Soto Cano Airbase (which houses JTF-Bravo, Special Operations Forces, and the 

SPMAGTF headquarters) provides the bulk of our forward presence in Central America. This 

access allows us to advance security cooperation efforts, initiate regional disaster response, and 

support law enforcement operations to disrupt threat networks. These two locations are vital to 

USSOUTHCOM, and we thank the Congress for its support to their continued operations. 

Operalional support. We also appreciate congressional support to our ISR program and 

funding for an additional Maritime Patrol Aircraft and Special Mission Ship in the FY18 NDAA. 

Both will significantly enhance JIATF South's current and upcoming operations like 

MARTILLO and KRAKEN, as well as partially mitigate persistent capability gaps in the D&M 

mission. As referenced earlier, in FY 2017 JIATF South had precise geo-location on 1167 

targets carrying 815 metric tons of cocaine that we could not respond to due to lack of assets. 

Each additional force package deployment takes that number down by 31 metric tons. 

Resourcing for critical counter network capabilities-including information and intelligence 

sharing platforms, capacity-building efforts, and counter threat finance-are essential to our 

contributions to this fight. As we look to employ a more holistic approach in Central America, 

operations like TOGETHER FORWARD and HORNET would benefit from sustained 

engagement by Reserve and Guard forces and ISR platforms critical to illuminating threat 

network operations. 

Sustained forward presence at sea are also essential to stemming the flow of drugs 

towards our borders. I'd like to go on record to express my strong support for the U.S. Coast 

Guard's efforts to recapitalize its fleet, especially its medium endurance cutters, which directly 

27 
60


30176c-29.eps

support JIATF South-led interdiction operations. As I have stated repeatedly, without U.S Coast 

Guard cutters, USSOUTHCOM would have virtually no afloat maritime forces. I'd also like to 

express my unqualitled support for the Littoral Combat Ship (LCS), which we can leverage for 

multiple mission sets, including D&M, SOF support, partner nation capacity building, and 

potentially HA/DR response and medical engagements. LCS capabilities match our mission 

requirements pert'ectly, and we are working closely with the Navy to try and tleld them in our 

region. My view is that the sooner we can deploy these ships in theater, the greater the impact 

we can have on interdicting the flow of illicit drugs into our country. 

A broad suite of tools like information operations, MISO, and Civil Affairs teams is 

applicable to multiple mission sets, including CTOC, CT, and countering external state actors. 

These tools are especially critical to shaping the increasingly contested information domain and 

addressing the more fundamental challenges of the region. 

Like I reported last year, we continue to monitor the impact of wind farm construction on 

the U S. Navy's Relocatable Over-the-Horizon Radar (ROTHR) sites. All three construction 

sites have proposed projects that are under review in the Department's compatibility evaluation 

process. Although we continue to research new alternatives to ROTHR it remains our only 

persistent, long range aerial coverage for our southern approaches. lam particularly concerned 

about impending encroachment on the Texas site and our position remains that proposed wind 

farm developments should result in no degradation to ROTHR mission performance, and we will 

keep the Congress informed as this initiative moves forward. 

Continued resourcing of the Marine Corps' SPMAGTF provides USSOUTHCOM with 

increased capacity at relatively little cost and returns a more ready, more capable force back to 

the Marine Corps. Without the pre-mobilized reserve force resident in the SPMAGTF, we will 

28 
61


30176c-30.eps

be forced to rely on the Global Response Force for all major crisis response efforts, potentially 

draining resources from critical global missions. From a goodwill and engagement perspective, 

operational funding for the Navy's hospital ship COMFORT has been a proven game-changer 

for USSOUTHCOM. We ask for the COMFORT every other year, but the Navy has been 

unable to source its employment due to the ship's maintenance challenges. During disaster 

response, we continue to rely heavily on U.S. Transportation Command's (USTRANSCOM) 

Joint Enabling Capabilities Command (JECC), which provides unparalleled expertise in 

planning, public affairs, and communications. 

Closer to home, we are working to address housing issues that impact quality of life and 

security for our young service members and their families, and reduce force protection and cost 

of living concerns resulting from having most of our military work force spread across three 

counties in one of our nation's largest metropolitan areas. We will keep the Congress apprised 

as this effort progresses. 

Support to interagency partners and whole of government efforts. Parallel investments in 

our interagency partners operating in the Western Hemisphere are critical as we work to 

strengthen the capacities ofregional military and security forces. From State Department's 

!MET program and public diplomacy efforts, to DEA's vetted units, DHS's Operation 

CITADEL, and our Embassies and USAID missions throughout the region, our interagency 

partners are key to advancing the security of the Western Hemisphere. 

Given our limited resources, we rely heavily on the unique capabilities of key interagency 

partners to illuminate threat network operations and maintain ground truth on developments in 

the region. We directly benefit from analytic toolkits like the Joint Improvised Threat Defeat 

Organization's (JIDO) VOLTRON tool suite, and we strongly support continued investments to 

29 
62


30176c-31.eps

develop next generation of Artificial Intelligence and analytic capabilities, as well as expanded 

data mining of open source and publicly available information. Additionally, we support Office 

of the Director of National Intelligence (ODNI) and the Defense Intelligence Agency's (DIA) 

efforts to enhance Intelligence Community (lC) capabilities in the exploitation of lC data and 

information, with the goals of identifying global transnational crime and illicit networks and 

improving collaboration and strategic planning across the intelligence and defense communities. 

l know the situation in Venezuela weighs heavily on the minds of this Committee, as it 

could spark its own mass migration event, impacting economies and stability across the region 

and requiring a large-scale international humanitarian response. Crises of this magnitude can 

entail a significant, costly, and lengthy U.S. response, but are manageable with sufficient 

attention, prevention, and preparation. Continued support to the important work being done to 

plan and prepare to address humanitarian needs in Venezuela-especially by USAID's Offices 

of U.S. Foreign Disaster Assistance and Food For Peace and the State Department's Bureau of 

Population, Refugees, and Migration (PRM) -is essential. 

And finally, Mr. Chairman, we need to do everything we can to improve interagency 

integration and efficiency at home, and remove barriers to our partnerships abroad. Put simply, 

we need to make it easier for our partners to work with us. Conditions placed on security 

assistance sometimes limit our ability to fully engage on critical issues like human rights, which 

may ultimately fail to meet Congressional intent. When we engage, we make a real and lasting 

difference and advance our national interests. Engagement with our partners is the strongest tool 

we have to strengthen our partners' capabilities as well as our own competitive advantage. 

Anything that hinders engagement, hinders progress. I look forward to continuing this 

discussion with the Congress in the year ahead. 

30 
63


30176c-32.eps

Conclusion. Mr. Chairman, allow me to return to the theme I touched on in my 

introduction. Our ability to sustain the levels of engagement needed to deal with these 

challenges isn't for a lack of strategy or a lack of willing partners. We simply run out of 

resources before we run out of mission sets. Last year I told this Committee that success or 

failure in this region depends on us, what we stand for, and what we do. By addressing problems 

early through modest investment and sustained engagement, we can ultimately lower the costs 

associated with addressing them. 

Thank you again for your support to the men and women ofUSSOUTHCOM. 

31 
64

Mr. COOK. Thank you, Admiral. 

By the way, I was at the Army’s dive school, scuba school down 

there at Key West. They were saying it is better than the Navy’s. 

I just thought I would throw that out there. And they also made 

some comment about some football game last year. Being a Marine, 

I had to stay neutral on that. I didn’t get involved. But do you want 

to comment on that at all? 

Admiral HENDRICKSON. Not for the record, Chairman. 

Mr. COOK. Thank you very much. Sorry to stir things up here. 

Our last witness to testify will be Mr. Raymond Villanueva, 

the—did I get that right? 

Mr. VILLANUEVA. Yes, sir. 

Mr. COOK [continuing]. The Assistant Director for International 

Operations of Homeland Security Investigations at the U.S. Department of Homeland Security. 

Since joining HSI, he has served in numerous leadership positions. Prior to this, the gentleman served as a police officer in 

Puerto Rico. 

So you are now recognized, and thank you for being with us. 

STATEMENT OF MR. RAYMOND VILLANUEVA, ASSISTANT DIRECTOR FOR INTERNATIONAL OPERATIONS, HOMELAND SECURITY INVESTIGATIONS, U.S. DEPARTMENT OF HOMELAND 

SECURITY 

Mr. VILLANUEVA. Chairman Cook, Ranking Member Sires, and 

distinguished members, thank you for the opportunity to appear 

before you today to discuss U.S. Immigration and Customs Enforcement Homeland Security Investigations’ efforts to investigate, disrupt, and dismantle transnational criminal organizations, to include violent gangs, in the Western Hemisphere. 

During the last two decades, transnational organized crime has 

expanded dramatically, which poses a significant threat to national 

security. HSI takes this threat seriously and targets transnational 

criminal organizations at every critical location in the cycle by utilizing a layered approach—that is, internationally by pushing our 

borders out in cooperation with foreign counterparts; our Nation’s 

physical border, in coordination with U.S. Customs and Border Protection, where the transportation cells attempt to exploit America’s 

legitimate infrastructure; and in cities throughout the United 

States where criminal organizations earn substantial profits after 

illegal activities. 

As of May 2018, HSI maintains more than 130 open investigations targeting MS-13 members and their criminal organizations 

globally by working with our law enforcement partners, including 

those in Guatemala, Honduras, and El Salvador. Without information-sharing and partnering with our Federal, State, local, and foreign law enforcement partners, HSI would not be nearly as successful at battling MS-13 and other violent gangs. 

In fiscal year 2018, HSI, with the support of the Department of 

State’s International Narcotics and Law Enforcement, initiated Operation Gatehouse, which addresses the MS-13 threat in partnership with police officers from El Salvador’s civil national police embedded with our gang task forces in the United States. 

65

The Salvadoran officers work alongside HSI special agents in an 

advisory role, sharing their expertise on MS-13 and assisting in 

identifying gang membership and leadership in El Salvador that 

might be directing illegal activity in the United States. We hope to 

expand this program to additional task forces throughout the 

United States in fiscal year 2019. 

While combatting TCOs domestically, thus protecting Americans 

from harm, violence, and TCO exploitation, HSI continues to push 

the borders out by capitalizing on our international partnerships 

with foreign law enforcement officials. This is accomplished by our 

attache network located in 67 offices around the world. 

Our attaches leverage several key international partnerships, to 

include the Transnational Criminal Investigative Units and Operation Citadel, to identify potential bad actors along the illicit pathways, while exploiting available information, with the goal of identifying, disrupting, and dismantling unknown gang cliques posing 

a threat to the United States. 

HSI also leverages its information-sharing capabilities using several key initiatives, some of which I would like to highlight briefly: 

The Visa Security Program, in which HSI partners with CBP and 

the Department of State Consular Affairs by deploying trained special agents to high-risk visa activity posts to identify and investigate potential terrorists and criminal threats before they reach 

the United States. 

The Trade Transparency Units are designed to aggressively target criminal organizations and individuals involved in trade-based 

money laundering but also those preparing contraband smuggling 

and customs fraud. All TTU foreign partners recognize the value 

of information-sharing, which permits the comparison of international trade data to target illicit activity. 

And last but not least, the Biometric Identification Transnational 

Migration Alert Program, also known as BITMAP, which helps provide infrastructure and capability for host governments to collect 

biometric data on individuals they encounter. This information is 

shared with U.S. law enforcement and the intelligence community. 

We, including CBP National Targeting Center, share relevant law 

enforcement information with these countries. Through this process, HSI, CBP, and DOD are able to track movement toward the 

United States, take joint action with partner nations along the 

route, and deter human smuggling through South and Central 

America. BITMAP today is deployed to 15 countries. 

These operational endeavors could not have been successful without the cooperation of our Federal, State, local, and foreign government law enforcement partners. HSI will continue to give high priority and devote sufficient resources to disrupting and dismantling 

TCOs. 

Thank you again for the opportunity to appear before you today 

and for your continued support of ICE’s law enforcement mission, 

and I am looking forward to answering your questions. 

[The prepared statement of Mr. Villanueva follows:]

66


30176d-1.eps

STATE~!ENT 

OF' 

RAYMOND VILLANUEVA 

ASSISTANT DIRECTOR 

INTERNATIONAL OPERATIONS 

HOMELAND SECURITY INVESTIGATIONS 

REGARDING A HEARING ENTITLED 

"COMBATTING TRANSNATIONAL CRIMINAL THREATS m THE WESTERN 

HEMISPHERE" 

BEFORE THE 

U.S. HOUSE OF REPRESENTATIVES 

COMMITTEE ON FORF.IGN AFFAIRS 

SUBCOMMITTEE ON WESTERN HR\11SPHERE 

Wednc~day, May 23, 2018 

2:00p.m. 

21 72 Rayburn House Office Building 
67


30176d-2.eps

Chainnan Cook, Ranking Member Sires, and distinguished members: 

Thank you for the opporttmity to appear betore you today to discuss the mission of U.S. 

Immigration and Customs Enforcement (ICE), including: its efforts to identify, disrupt, and 

dismantle transnational criminal organizations (TCOs ), such as transnational gangs, drug cartels, 

and smugglers; and its information-sharing initiatives dedicated to combatting these threats. ICE 

enforces approximately 400 federal laws governing border control, customs, trade, and 

immigration to promote homeland security and public safety. With more than 20,000 employees 

and over 200 offices across the Uluted States and in 50 countries, the men and women of ICE 

execute our mission humanely, professionally, and always in accordance v.1th the law. ICE has 

three primary directorates: Homeland Security Investigations (HSI), Enforcement and Removal 

Operations (ERO), and the Oftlce of the Principal Legal Advisor. As a Senior Executive of 

ICEIHSI, I serve as the Assistant Director of ICE/HSI International Operations. 

As the largest investigative component in the U .8. Department of Homeland Security 

(DHS), ICE/HSJ protects U.S. borders by conducting multi-faceted, international law 

enforcement operations, and by partnering with foreign and domestic counterparts to combat 

criminal organizations and prevent terrorist activities. 

ICEIHST lntemational Operations has a network of over 400 personnel, including over 

180 special agents deployed to 67 attache offices in 50 countries, who conduct investigations 

against TCOs, terrorists, and other cri:mlnal organizations that threaten our national security. 

ICE/HSI leverages its intemational footprint and partnerships to disrupt and dismantle TCOs that 

seek to exploit America's legitimate trade, travel and financial .systems; and enforces U.S. 

customs and immigration laws at and beyond our Nation's borders to prevent threats from 

entering the United States. 

ICEIHSI manages several strategic/information-sharing initiatives, which include: 

fransnational Criminal Investigative Units (TCJU) 

• Biometric Identification Transnational Migration Alert Program (BITMAP) 

• Visa Security Progran1 (VSP) 

• Trade Transparency Units (ITUs) 

• Criminal History Inlimnation Sharing (CHIS) Program 

JCE/HSI, domestically and abroad, focuses on critical investigative areas, which include: 

• National Security 

• Counter-Proliferation of Arms and E-xpmt-Coi!trolled Technology 

• Human Smuggling and Trafficking 

• Financial Crimes 

• Child Exploitation 

• Conunercial Fraud and Intellectual Property Rights Violations 

2 
68


30176d-3.eps

o Criminal Gang Enforcement 

• Narcotics Smuggling 

• Identity and Benefit Fraud 

• Worksite Enforcement 

• Cybercrimes 

• Human Rights Violators and '"'ar Crimes 

ICE/ERO identifies, arrests, and removes aliens who present a danger to national security 

or are a risk to public safety, as well as those who enter the l'nited States illegally, or otherwise 

undennine the integrity of U.S. inunigration laws and border control efforts. ERO upholds 

America's immigration laws at, within, and beyond its borders through efficient enforcement and 

removal operations. ERO also develops investigative leads through the foreign fugitive program 

and provides support in locating and arresting foreign nationals wanted for crimes conJmitted 

abroad who are now at-large in the United States. 

ICTI/ERO removal operations require complex coordination, management, and 

facilitation efforts to successfully remove or return aliens from the United States to their country 

of origin. ERO has enforcement oftlcers strategically deployed.to 19locations around the world 

and leverages resources available through our foreign law enforcement partners. including 

INTERPOL, Europol and the ICE Attache corps. 

Combatting Trallsnational Criminal Organt.:ations 

TCR/HSlutilizes its broad legal authorities to investigate immigration and customs 

violations, including those related to expert control, human rights abuses, narcotics, weapons and 

contraband smuggling, financial crime, cybercrinte, human trafficking and smuggling, child 

exploit:ittion, intellectual property theft, transnational gangs, immigration document and benefit 

fraud, and worksite enforcement. ICE is grateful for continued congressional support that allow-s 

ICE to maintain ~ritical operations at home and abroad and increase our eftbrts to target and 

combat dangemus transnational gangs and other criminal organizations. 

During Fiscal Year (FY) 2017, lCEIHSI investig;1tions led to the disruption or 

dismantlement ofTCOs with more than 32,958 criminal arrests, including arrests of more than 

4,8!8 transnational gang members. ICE/HSI also seized 9&1,586 pounds of narcotics, made 

1 ,205 seizures for violations of U.S. export laws and regulations, and seized nearly $307 million 

in currency and monetary instruments. Additionally, ICEIHSI identified and assisted 51& human 

trafficking victims and more than 904 child exploitation victims. 

During the last two decades, transnational criminal organizations have expanded 

dramatica!ly in size, scope, and impact, which poses a significant threat to national security. 

ICE/HSJ takes this threat very seriously, and together in coordination with the Department of 

Justice including the Drug Enforcement Ailinlnistrat\on (DEA) and Federal Bureau of 

Investigation (FBI) targers TCOs at every critical location in the cyc!e: internationally, in 

cooperation with foreign counterparts, where transnational criminal organizations operate; and 

domestically, both at our nation's physical border and ports of entry, in coordination with U.S. 

Customs and Border Protection (CBP), where the transportation cells attempt to exploit 

3 
69


30176d-4.eps

America's legitimate trade, travel, and transportation &)"stems; and in our cities throughout the 

United States, where criminal organizations earn substantial profits off their illicit activities. 

As directed by the President's Executive Order 13773, E~forcing Federal Lavv with 

Respect lv Tt·ansnational Criminal Organizations and Preventing Intematio.nal Trqfficking, ICE 

will continue to give a high priority aud devote sufticicnt resources to disman!ling TCOs and 

subsidiary organizations. ICE will continue to focus on cooperative work with other federal 

agencies, as well as with foreign counterparts, by sharing intelligence and law enforcement 

in±onnation when appropriate and permitted by law. 

Joint Task Forces 

ln 2014, the Department announced its new Unity of Effort Initiative and directed our 

Department-wide Southern Border and Approaches Campaig11 (SBAC) Plan. The SBAC is part 

of a comprehensive security strategy designed to llllity efforts across DHS components to 

address threats specifically associated with terrorism, illicit market-driven flows, and illegal 

migration across our Southern Border and Approaches. In furtherance of the SBAC, the 

Department commissioned three Joint Task Forces (JTFs) in November 2014. The three Joint 

Task Forces, JTF-East (JTF-E), JTF-1,\"est (JTF-W), atld JTF-Investigations (JTP-I), are 

responsible for establishing operational priorities and synchr(mizing capabilities in order to 

achieve SBAC objectives. 

Two ofthe JTFs, JTF-E and JTF-W, are geographically focused task forces that 

concentrate on the southern land and maritime borders and approaches to the Gnited States all 

the way to Central and South America, JTF-1 is a ''functional," multi-component task force that 

employs National Case Management to identify and prioritize top TCOs affecting homeland 

security, manage investigations and operations to dismantle them, and identify weaknesses or 

gaps in our practices and technology. 

To address these gaps, JTF·I created and implemented HOMECORT (Homeland 

Criminal Organization Target), the DHS-wide process for identifYing and prioritizing the top 

criminal networks affecting homeland security. 

In order to manage and unify U.S. Government efforts against these HOMECORT 

crin1inal networks, JTF-I developed three complementary processes: 

1. National Case Management to manage, integrate and support all the investigations and 

operations related to the targeted criminal network; 

2. Comprehensive Criminal Network Analy.~ii! to provide knowledge of the criminal network; 

aud 

3. Integrdted Action Planning to establish the business rules for conducting National Case 

Management and producing ComprehenBive Criminal Network AnalysiB. 

Through the sharing and fusing of each other's infonnation, these JTF-I processes allow 

DHS components to: 

4 
70


30176d-5.eps

• Identify and prioritize the top criminal networks impacting homeland security; 

• Tie together and manage all the investigation~. operations, arrests, and seizures 

(covering multiple countries, jurisdictions, areas of responsibility and programs) 

related to all the activities (smuggling, money laundering, corruption, etc.) of a 

criminal network (see cnmplementary processes below); 

• Move towards a complex common goal through a formal integrated action 

planning process. 

Since ils inception, JTF-I's interagency delegates managed and supported the targeting of 

21 HOMECORT criminal networks, comprised of more than a. thousand criminal investigations. 

To date, 13 of those nettvorks have been dismantled to the point they no longer threaten 

homeland security. The networks included money launderers, human smugglers, sex traffickers, 

drug smugglers, bulk ca.sh smugglers, and weapons smugglers. The remaining HOMECORT 

designated criminal netwqrks continue to be the targets of active criminal investigations. 

Another exan1ple of a. successful joint ta.sk force model is the Border Enforcement 

Security Task Force (BEsn initiative. BEST teams are ICE/HSI-Ied, multiagency task forces 

that target illicit movement of people and contraband through border a.reas. Other DHS entitles, 

part1cularly Cl3P and the United States Coast Guard, also participate. There trre a total of 62 

BEST teams total, many of which focus on the U.S.-Canada border and U.S.-Mexico border. 

Cana.dian and Mexican (multiagcncy) law enforcement partners work directly with DHS and 

other U.S. counterpl!lts on investigative and inteniiction missions. Canadian officials are often 

cross-designated as U.S.law enforcement ot'ficets (under U.S. Code Title 19) to promote full 

sharing oflaw enforcement information. These units are housed on the U.S. side of the border. 

ln FY 2017, the BEST teams initiated 4,034 investigations and effected 4,967 criminal arrests. 

Additionally, HSI partners with the Department of Justice in its Extraten:itorial Criminal 

Travel Strike Force (ECt) to proactively target, disrupt and dismantle international criminal 

human smuggling networks that pose national security or organized crime concerns. ECT uses 

dedicated intelligence, investigative, and prosecutorial resources to focus on those who facilitate 

special interest alien travel, including document providers, corrupt offi.cials, tra.nsporters, 

harborers, and financiers. In this effort, HS!leverages its own Attache offices and foreign law 

enforcement partners. 

Also, as a result of close coordination with JTF-1, HSl's San Diego Field Office, the Sa.n 

Ysidro Human Smuggling BEST tean1, Dl:1S's Human Smuggling Cell, CBP's National 

Targeting Center, and the Deprutment of Justice's Human Rights and Special Prosecutions 

Section, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) on 

April 18, 2018 designated a. huma.n smuggling network, the Barakat Transnational Criminal 

Orga.nization (Barakat TCO), under Executive Order 13581 "Blocking Property of Transnational 

Criminal Organizations"- the first time that authority was used for that type of criminal 

organization. The Barakat TCO, hea.ded by Nasif Barakat, is a human smuggling organization 

ba.sed in Homs, Syria, that facilitates the smuggling of Syrian and Lebanese nationals to the 

Southwest border of the United States using a variety of travel routes. Barakat and members of 

his TCO operate a global network of human smugglers that coordinate the smuggling of foreign 

nationals to the United States for an average cost of approximately $20,000; this sum includes 

5 
71


30176d-6.eps

fees to obtain fraudulent and/or counterfeit documents. This is a meaningful example of 

dedicated professionals across the U.S, government building on an ICE/HSI initiative to take 

joint disruptive action against a network posing a direct threat to U.S. national security. 

National Gang Unit 

The National Gang Unit (NGlJ) is a critical part of ICE/HSI' s nrission to bring the fight 

to transnational criminal gangs. The NGU identifies and develops intelligence on gang 

membership, associations, activities, and internatioool movements. It also deters and disrupts 

gang operations by tracing and seizing cash, weapons, and other assets derived fium illicit 

activities. 

In2005, ICEiHSI initiated Operation Community Sl1ield, an international law 

enforcement initiative that combines fCE/HSI's expansive statutory and civil enforcement 

authorities to combat the gro.,.th and proliferation of transnational criminal street gangs, prison 

gangs and outlaw motorcycle gangs throughout the United States, With assistance from state, 

local, tribal, and foreign Iaiii' enforcement partners, the initiative helps ICEIHSI locate, 

investigate, prose<:ute, and where applicable, immediately ren1ove gang members from our 

neighborhoods and ultimately from the United States. 

Operation Community Shield has resulted in the criminal and administrative arrests of 

nearly 63,000 gang leaders, members, and associates since its inception. Among those arrests, 

Community Shield operath:ms have resulted in the criminal and administrative arrests of over 

8,500 leaders, members, and associates ofl'v1ara. Salvatrucha-13 (MS-13), the international 

criminal street gang. 

In 2012, lCE worked v.ith !he OFAC to designate MS-13 as a TCO, the first criminal 

street gang so designated. As a result of the designation, any property or property interests in the 

United States, or \n the.possession or control ofU.S. persons in which MS-13 has an interest, are 

blocked. In addition, U.S. persons are prohibited from engaging in transactions with MS-13. 

Violations are subject to civil monetary penalties or criminal penalties up to $250,000 and 

imprisonment up to 20 years. 

In 2016, ICEIHSI utilized the 2012 OFAC designation to develop and implement a new 

strategy targeting MS·l3. ICEIHSI recognizes that TCOs need funding to maintain and expand 

their criminal organizations, and has been successfully identifying, exploiting, and disrupting 

MS-l3's global financial networks. Part ofiCE!HS!'s new strategy is to address the threats 

posed by MS-13 in the United States by targeting their command and control structure iu El 

Salvador simultaneously "'ith our domestic investigations into the gang. Since January 2016, 

with support from tl1e Organized Crin1e Drug Enforcement Task Force (OCDETF), ICE/HST has 

been deploying special agents to El Salvador to work with out host country law enforcement 

partners to build fhcir financial investigative capacity ro combat MS-13 and identi:f}' MS-13 's 

financial networks within El Salvador. In addition, fhe deployment allows the free flow of 

actionable intelligence between ICEIHSI and our host country law enforcement partners. 

6 
72


30176d-7.eps

In 2017, ICE worked with our DHS partners to form a departmental MS-13 Working 

Group, including ICE, CBP, U.S. Citizenship and Immigration Services (USCIS), and the 

Department of Justice's Bureau of Prisons (BOP). The DHS MS-13 Working Group was formed 

to share intelligence, bridge intelligence gaps, eliminate redundancies, enhance collaboration, 

and provide visibility to all DHS entities involved in the fight against MS-!3. The ultimate goal 

ofthe DHS MS-13 Working Group is to develop and implement a DHS enterprise enforcement 

strategy to disrupt and dismantle MS-l3's global criminalnetwurks. Since July 2017, the DHS 

MS-13 Working Group has coordinated the arrest of 15 MS-13 and 18'h Street fugitives in the 

United States who were wanted for gang crimes in Ill Salvador, including homicide. 

In FY 2018, ICEIHSI initiated Operation Gatehouse which addresses the MS-13 threat 

through our partnership with pol.ice officers from El Salvador's Policia Civil Nacional (PNC) 

embedded with our gang tasktbrces in the United States. PNC advisors will work alongside HSI 

Special Agents and local police officers in an advisory role, sharing their expertise on MS-13 

culture and assisting in identifying gang membership in El Salvador that may be directing illicit 

activity in the Llnited States. In tum, HSI and local Jaw enforcement will educate and train the 

foreign advisors on U.S. gang inve~tigalive techniques and methodologies. We hope to e.xpand 

this program to additional gang tasktbrces in FY 2019. 

As of May 4, 2018, ICE/HSI maintains I 35 open investigations targeting MS-13 

members and their criminal organizations globally, including in Massachusetts, New York, New 

Jersey, Maryland, the District of Columbia, North Carolina, Texas, Tellllessee, Ohio, California, 

Washington, and the Northern Triangle countries of Guatemala, Honduras and El Salvador 

through Racketeer Influ;mced and Corrupt Organizations, Violent Crimes in Aid of 

Racketeering, and criminal-conspiracy prosecutions. The vast majority of these investigations 

have direct links to the targeting ofMS-13 leadership in E1 Salvador. Without information 

sharing and partnering with our federal, state, local, and foreign law enforcement pattners, 

ICEIHSI would not be nearly as successful at battling MS-13 and other·gangs. 

Illicit Finance and Proc(leds of Crime Unit 

'D1e Illicit Finance and Proceeds of Crime Unit (fFPCU) develops investigative 

techniques and typologies to identify and eliminate vulnerabilities in the U.S. financial systems 

and criminally pursue perpetrators of financial crimes. The IFPCU enhances cooperation and 

forges partnerships with domestic and ±ordgn law en:torcement, regulatory agencie,;, and nongovernmental bodies. The IFPCU then leverages these partnerships to enhance ICE/HS!'s 

financial investigations and various Anti-Money Laundering (AML) programs. The lFPCU also 

participates with the U.S. Department of Treasury, Financial Action Task Force and other 

government entities to provide AML assessments, training, best practices and lessons learned in 

the fight against global. money laundering. 

1CE/HSI through the lFPCU continues to expand its outreach work with the Money 

Service Business (MSB) industry. MSBs are widely used for international movement of money 

ood, and particularly by TCOs across ~ever<J.] different categories of criminal activity that 

ICE/H~l investigates, including oploid smuggling, narcotics smuggling, human smuggling & 

traffickmg, intellectual property theft .. transnational gangs and child exploitation. 

7 
73


30176d-8.eps

To finther their illicit activities, TCOs accept payments via the MSB industry. Employing 

various investigative methods and tools to disrupt and dismantle these criminal organizations, 

HSl is also actively identifYing individuals and entities \Vho receive payments on behalf of tbese 

illicit suppliers and subjects worldwide. Through bilateral relationships vvith MSBs, HSl is 

positioned to aggressively target criminal organizations and will continue all liaison efforts to 

provide HSI programmatic areas with invaluable access to infonnation that can be exploited Ia 

develop strategic intelligence based on trends and methodologies. 

In FY 2017, lCE/HSI initiated 4,061 new financial cases operating under the national 

programmatic scope of IFPCU which resulted in 2,942 criminal arrests, 2,007 indictments and 

1.329 convictions as well as the seizme of $306,782,043 in illicit currency and proceeds . 

. Already to date in FY 201 8, ICE/HSI financial investigations have initiated approximately 2,415 

new financial cases which haveresulted in approximately 1,409 criminal arrests, 873 indictments 

and 603 convictions. 

Law Knforcement Information Sharing Efforts 

In addition to levemging domestic assets, ICEIHSI uses its strategically deployed 

personnel around the globe to usc established relationships with host country law enforcement 

officials and mechanisms such as Customs Mutual Assistance Agreements (CMAAs) to share 

information and further its investigations. Mutnal Legal Assistance Treaties (MLATs) are also 

invaluable instruments in obtaining and receiving international legal assistance, including 

evidence, for criminal investigations and prosecutions. 

ICE!HSI International Operations also p<ll'lners with TCJUs and international task forces 

in 12 countries around the world. TC!Us are comprised of foreign law enforcement officials, 

customs officers, immigration of±lcers, and prosecutors who reoeive ICEIHSJ training and 

undergo a strict vetting process 10 ensure that shared information and operational activities are 

not compromised. Partnering with these TCHJs enables JCFJHSl to promote direct action via 

information sharing and investigative leads while respecting the sovereignty of the host country 

and cultivating international partnerships. 

In alignment with the President's Strategy to Combatting Transnational Organized 

Crime, TCIUs identifY targets, collect evidence, share intelligence, and facilitate the prosecution 

of TCOs both in-country and in the United States. These efforts, which often occur thousands of 

miles from the U.S. borders, essentially act as an outer layer of security for the United States. 

Another ICEIHSI program, BITMAP, helps provide infrastructure and capability for host 

governments to collect biometric and biographic data on persons of interest they encounter, This 

information is shared with U.S. law enfomcmcnl and intelligence agencies; HST in turu shares 

information, as appropriate, with host governments regarding these individuals. Through this 

process, ICE/HSI, in collaboration with CBP and Department of Defense, is able to track 

movement tov-<ards the United States, take joint action with partner nations along the route, and 

deter human smuggling through South and Central America. Comparisons ofhiometric data 

through BITMAP serve to identifY criminal persons, wanted subjects (including international 

8 
74


30176d-9.eps

fugitives); and known or suspected terrorists. BITMAP is currently deployed in mulliple 

countries, with near-term plans to expand to additional countries. 

ICEIHS! also leverages its information sharing capabilities through the use of tho Visa 

Security Program (VSP) and Trade Transparency Units (ITU). Through the VSP, ICE/HSI 

deploys trained HSI special agents abroad to high-risk visa issuing po~is to identify and 

investigate potential terrorist and criminal threats before they reach the United States. VSP 

contributes to both counter-flow and counter-network capabilities, as well as providing support 

for intelligence, interdiction and engagement. VSP special agents work alongside Department of 

State Consular Officers to provide real-time feedback on visa applicants and a unified DHS 

rec<)mmendation on visa eligibility prior to adjudication. Deployed VSP agents are supported by 

automated screening and vetting of visa applicants through tl1c Pre-Adjudicated Threat 

Recognition and hltelligcnce Operations Team (PA TR.TOT), an interagency endeavor with CBP. 

The core mission of the 'lTU is to aggressively target criminal organizations and 

individuals involved in trade-based money latmdering (TBML) and also those perpetrating 

contraband smuggling and customs fraud. In order to achieve this mission, ICE/HSI reached out 

to key foreign trading partners and successfully established (16) TI1Js abroad. TTU currently 

has partnerships with Argentina, Aust.ralia, Brazil, Chile, Colombia, Dominican Republic, 

Ecuador, Mexico, France, Guatemala, Panama, Paraguay, Peru, Philippines, United Kingdom, 

and Uruguay. TI1ese coumdes are highly dependent upon value added taxes (VAT) on 

commodities, which served as a motivating factor in the establishment of TTUs. These foreign 

partners recognize the value of information sharing, which permits the comparison of 

international trade and cross border movement of merchandise. 

The United States and its foreign TfU partners currently exchange trade data which 

allows HSI investigators and analysts to detect anomalies which may be indicative of criminal 

activity such as TBML contraband smuggling, and trade/customs fraud. This information 

sharing allows for the cross referencing of trade data with other pertinent information such as 

Bank Secrecy Act (BSA) reports. The ultimate goal of most criminal organizations is frnancial 

gain either to promote ongoing illicit activity or as the finality of this activity, hence trade-based 

money laoodering is often the primary means by which they launder proceeds for their criminal 

enterprises. 

ICE's Law Enforcernent Information Sharing Initiative (LEIS!) team serves as an active 

advocate in support of law enforcement information sharing both internal and external to DHS. 

This includes information sharing berween federal, state, local, tribal, territorial, and foreign 

partners. LEIS I coordinates throughout the law enforcement community to improve the 

understanding of intormation needs, provide. leadership in resolving policy issues that may 

inhibit law enforcement information sharing, and develop approaches to overcome traditional 

barriers to information sharing. 

LETS I provides program management support and overnight to include administration of 

the Law Enforcement Information Sharing Strategy. For FY 2018, additional focus is on 

international information for initiatives such as: Preventing and Combatting Serious Crimes 

9 
75


30176d-10.eps

(PCSC), the Five Country Ministerial (FCM), the Five Country Conference (FCC), and ERO's 

Criminal History lnformation Sharing (CHIS) program. 

CHIS is an ICE-led initiative between the United States and its international partners 

whose purpose is to provide participating nations with criminal history infonnation in advance of 

an alien's removaL In turn, foreign countries share their information with the United States. The 

information shared helps protect law enforcement personnel, regional security, and public safety 

officers all over the globe. The initiative supports etforts in immigration management, law 

enforcement and national security. Countries currently participating in the CHIS initiative are: 

Mexico, Dominican Republic, Jamaica, the Bahamas, El Salvador, Honduras and Guatemala, 

v;~th planned expansion to additional countries in FY 2018. 

CIIIS enables ICE to identify wanted felt)ns, including gang members, who fkd to the 

United States to avoid prosec.ution in their home countries. Without this initiative, dangerous 

criminals might be able to circumvent prosecution. In FY 2017, CHIS sent 84,067 outhonnd 

notices of removal and ICE's foreign partners returned 21 ,434 positive responses, including 

2,810 foreign criminal history records, 93 foreign criminal warrants and information related to 

199 transnational gang members. 

During FY 2017, ICE achieved significant successes in Latin America and the Caribbean 

through the developn1ent of programs that bolstered the law enforcement, customs, and 

immigration enforcement capabilities of international partners. These successes included the 

jointlnleragency execution ofOperationCITADEL, which focused efforts on building partner 

nation capaCity in identifying, disrupting and dismantling TCOs, including those designated as 

drug trafficking organizations and terrorist support networks. Interagency information sharing 

and collaboration from agencies within DHS, the Department of State, the Department of Justice 

(including the Federal Bureau oflnvesligation), and the Department of Defense, as well as 

participating partner nations, has been an essential piece of Operation CITADEL's efforts to 

build capacity and to address identified threats. Operation CITADEL provided resources to 

enhance foreign partners' investigative capabilities to counter transnational threats and otganized 

crime that, in turn, provided ICE the ability to expand domestic and international investigations 

well beyond the U.S. borders and to more effectively target the illicit pathways exploited by TCOs. . 

In FY 2017, Operation CITADEL trained 809 partner national personnel and support to 

partner nations contributed to the following results~ 231 criminal attests, 54 indictments, nine 

conviction~, 2,005 BITMAP enrollments, seizure of$252,235 in currency, 18,224 pounds of 

narcotics, seizure of27 firearms, and encountered 3,669 aliens of possible national security 

concern. 

In supportofOpemtion CITADEL 2018, ICE/HSI is deploying 12 agents to the 

following countries: Honduras; Guatemala; El Salvador; and Punama. The deployment began 

on April9, 2018 and is scheduled to conclude on July 15,2018. In addition, ICE/HSI is in the 

process of implementing phase two of Operation CITADEL 2018, deploying 20 additional 

agents to Brazil, Dominican Republic, Ecuador, Argentina and SOUTH COM. This second · 

phase of Operation CITADEL 2018 is scheduled to commence on or ahout the first week of July 

10 
76


30176d-11.eps

2018. To date, Operation CITADEL 2018 has resulted in 148 arrests, 51 search warrants, 41 

iireanns seizures, 75 rounds of ammunition. $452,030.00 U.S. currency, 8.600 lbs. of cocaine, 

collected biometric data on 1,131 subjects, initiated 7 foreign judiciary wire intercepts, and have 

trained 56 foreign nationals. 

CONCLUSION 

Thank you again for the opportunity to appear before you today and for your continued 

support of'DHS and ICE and their missinnR TCE is committed to continuing its successful 

practice of sharing information \\'ith domestic and foreign partners and leveraging its resources 

around the world to stem cross-border criminal organizations. I appreciate your interest in these 

important issues and the efforts I have discussed today. 

I would be pleased to answer any questions you may have. 

11 
77

Mr. COOK. Thank you, sir. 

Now I will yield myself 5 minutes to ask questions. 

And I want to make a comment. We had the Secretary of State 

here this morning. It was a long hearing, and there were a lot of 

issues that were covered. I, myself, just to let you know, I made 

the comment that I knew he had a lot on his plate with what was 

going on and everything. I said that I had been getting the feeling, 

talking to many of our colleagues and friends in the Western Hemisphere, in Latin America, that in many ways that region had been 

forgotten. And all these things have been on the news and everything else, and maybe they have been overshadowed, with the 

meeting in North Korea and ISIS and Afghanistan, the Ukraine. I 

can go on and on and on. 

The point I tried to make is that there are a lot of countries 

there—I think I said there were going to be 13 elections this year. 

There are a lot of things going on, and you have two countries that 

have been meddling big-time. One was China, which has thrown a 

lot of money around, and the other is Iran, as well as the drug cartels. 

And I think there is—at least when we were just down there for 

our conference, you remember the collective takeaway—and correct 

me if I am wrong when you speak—they were, ‘‘Hey, United States, 

you better wake up to what your friends there are talking about.’’ 

And it is like, yeah, we know things are going on, but we have our 

own problems here, and they are getting worse and worse and 

worse. 

So what you are saying about this collective effort, I couldn’t 

agree with you more. But right now I think they have a point, a 

lot of these countries. And a lot of it is that, whether it is true or 

not, they have the attitude that the United States has forgotten 

them to a certain extent, that something is more important. 

So basically my question to the panel is, can you comment on 

that and whether you have any assured solutions to say that and—

it is a very difficult problem. Maybe I am wrong. 

Yes, sir. 

Mr. GLENN. Excellent question. I think that there are a few examples of, I think, very important, high-level engagement that has 

given both signals within the administration and, I would hope, 

outward signals that there definitely is a focus on South America, 

Central America, and Mexico and the Caribbean as well. 

The Vice President, last year, in 2017, in June, led the U.S. delegation in Miami of a conference between the Central American 

countries, focused mostly on the Northern Triangle, with Colombia 

and Mexico present as well. I don’t know how there could be a 

clearer signal given than the Vice President being present and declaring a continued focus and emphasis on Latin America, specifically, in that instance, on the Northern Triangle of Central America. 

The funding levels have supported that emphasis. I think also 

the executive order that was issued early on in the administration 

also indicates, at least to us here at the table—gives us a clear signal of what we are supposed to be doing and what we are supposed 

to be focusing on. 

78

Mr. COOK. Well, part of it—and I will use the examples of countries like Panama, the Dominican Republic, that have changed 

their—you know, they used to recognize Taiwan, now they are recognizing Beijing. And the last day that we were there, we met with 

a large group of Caribbean countries, and they were very vocal 

about it. They were angry. And they made it very, very clear that 

is part of the reason that they have been taking to Venezuela. And 

I won’t go into the situation—I think you know it—about the stipend or how they are going to help them with their buying oil down 

there. 

And each one of those countries, even the small ones, have one 

vote in the OAS, same as the United States. And it was kind of 

like they were holding school on us, or at least me. And they were, 

at the end, polite about it because we were listening to them, but 

it is something that I heard loud and clear. 

Anyone else have any comments on that? Or am I way off base? 

Ms. Fowler? 

Ms. FOWLER. Well, I would add to what my colleague said, I 

mean, Secretary Mnuchin has been, I think, really leading an effort 

within the Lima Group with the finance ministers, hosting several 

meetings, working with finance ministers in that group to address 

the crisis in Venezuela. 

And I think that group has demonstrated a desire to really be 

unified. They have made very important commitments. And it is an 

opportunity for us to really deepen a lot of the coordination we do 

with those countries on TCO issues at that level, working really 

operationally to develop solutions and strategies. 

So I think that senior-level commitment from the Treasury Department is there. 

Mr. COOK. Well, thank you. 

By the way, I do want to mention, that was a weekend conference we went down. It was real short. I think it was 21 countries. And we had nine members, which I was delighted that we 

had such a large showing to go down there. And it was like boom, 

boom, boom, boom, boom, boom, boom. 

And I actually want to give kudos to my colleagues. I thought we 

kind of agreed. We split up what our agenda was with—and the 

staff did a fantastic job. And I thought it was great if we could do 

it. 

I am going to turn it over, and then I will come back. We have 

a lot of people. 

The only comment I am going to make—and it shows my age—

is that money is a big factor down there because of drugs, gold, logging, you name it, and everything else. And it always goes back to 

the old bank robber who was in jail before any of you were born, 

and they used to ask—his name was Willie Sutton. And they asked 

Willie Sutton, why do you rob banks? And his classic retort: That 

is where the money is. 

And there is a lot of money, as some of the testimony reflects, 

that is being made in a lot of different ways. And unless we get 

our act together collectively, it is going to get worse and worse before it gets better, I am afraid. 

So I am going to stop and turn it over to our ranking member. 

Mr. SIRES. Thank you, Chairman. 

79

And thank you again for being here. 

You know, I have been in this committee now for 12 years, and 

I have been saying all along that we just don’t focus enough on the 

Western Hemisphere. And, unfortunately, things have to come to 

a crisis before we really focus. 

I understand that there are a lot of issues throughout the world, 

that we have been sort of sidetracked. But we cannot—we cannot—

continue to overlook these countries that are right in our backyard. 

It has gotten to a crisis. You know, you have a situation in Venezuela where you have now people going all over South America, 

Central America from Venezuela because the situations are bad. 

Venezuela basically has become a satellite of the Cuban Government. There are 30,000

Cubans profiting off Maduro. You have in Nicaragua the situation in Nicaragua now. 

So I don’t think that it is helpful that we are going to be cutting 

the State Department’s budget. You know, we have a situation now 

where we are cutting 31 percent of the United States assistance to 

Colombia. You know, we have been working with Colombia for a 

long time. Cutting 31 percent I don’t think is helpful. 

The rhetoric coming out of the administration is not helpful at 

all. We have to work with these countries. And, unfortunately, calling people names and doing all these things is not going to endear 

these countries to work with us. 

I remember, when I first was on the committee, we were deporting people to some of these countries, and we weren’t even telling 

those countries who we were deporting—in other words, their 

records. Now it has changed. I understand now that when we deport some of these gang members there is a whole file that goes 

with them. But I remember talking to the Ambassador here when 

I was on this committee 10 years ago and he said that wasn’t done. 

Obviously, gangs are a real, real problem, not just in the Western Hemisphere but here also. I remember, when I was a mayor, 

having to deal with gangs, because they were recruiting in the high 

schools, and we had to do a strong effort. The MS-13 and the other 

gangs were recruiting right in the high school. We had a real effort 

that we made successfully through the prosecutor’s office. 

So all these things just keep coming up. And we need to focus 

our attention on what to do in those countries so we can help them 

deal with this issue. And, unfortunately, we just don’t seem to 

focus. 

You know, I asked the Secretary of State this morning something 

that I feel very concerned with. You have the Ayatollah promoting 

this revolution throughout the world. In the Western Hemisphere, 

you never had cultural centers. So the Ayatollah seems to be funding these cultural centers now throughout all these countries. 

There are over 100 of them. We have to focus on that, because they 

are not there to promote culture. I am sorry. I don’t agree with 

that. 

You have Nicaragua. Russia wants to build a base in Nicaragua, 

with all this buying tanks and so forth. 

I mean, when we overlook some of these areas that are in our 

backyard, somebody fills the gap. I know China is doling out money 

all over the place. 

80

I met with one of the presidents—I go to Colombia a lot because 

I work with some people there raising money for an orphanage. 

And I met with the president of one of the colleges. He told me that 

the second most studied language is Colombia today is Mandarin. 

Obviously, English is the first one, but, I mean, that is pretty high 

up there. You talk to the President of Peru, they tell you the same 

thing. 

So I don’t know how to stress to the administration how important it is that we refocus our attention on what is going on in the 

southern part of the hemisphere. 

I think last year we went—it was SOUTHCOM. They showed us 

how many flights are coming out of Venezuela that are heading for 

the European Union. It was incredible. They showed us the flights. 

Most of the drugs coming out of Venezuela goes to the European 

Union. But, still, I mean, this is what props this country. 

And then you have all these people leaving Venezuela and creating nothing but problems throughout the other countries. I was 

talking to the Brazilian Assistant Ambassador. He told me that in 

Brazil, on the border with Venezuela, there was a small town with 

about maybe 8,000 people. It swelled up to about 50,000. Colombia 

is dealing with it as best as they can, but, you know, the exodus 

out of Venezuela is creating nothing but problems. And we have to 

find a way to continue to put pressure and try to make some 

changes in Venezuela. 

So, I mean, I guess I don’t have a question, but I just have to 

vent. I apologize. 

And I want to thank the chairman for holding this hearing. 

Thank you. 

Mr. COOK. Thank you. Don’t apologize. I was venting too. 

We will probably have a second round of questions, but I wanted 

to get Mr. Brooks in from Alabama. 

Sir, you are recognized. 

Mr. BROOKS. Thank you, Mr. Chairman. 

My questions are directed at Mr. Glenn, but if anyone else has 

anything to add, please feel free to do so. 

How much are funds from illicit activities and ties to 

transnational criminal groups contributing to the survival of the 

Maduro regime in Venezuela? 

Mr. GLENN. I actually don’t have a number, but I would imagine 

that there is a significant portion of illicit activity that contributes 

to their survival. 

Mr. BROOKS. What can the United States do to increase our efforts with regional partners to cut off this illicit financing? 

Mr. GLENN. I think maybe that might be best answered by my 

colleague from Treasury. 

Ms. FOWLER. Congressman, what we are doing, as I mentioned 

earlier, is a very significant effort in the Lima Group, which includes all of the neighboring countries, really to make sure that we 

are pulling together all of the appropriate investigative authorities. 

Our goal, of course, is to make sure that members of the Maduro 

regime don’t have access to the financial system to place their corrupt proceeds, to move them throughout the international financial 

system. 

81

So I think those partnerships are strong. We have a very robust, 

ongoing dialogue at very senior levels but also at the technical level 

to really make sure that those countries are taking the right steps. 

And we have seen many of them do that. 

Mr. BROOKS. Anyone else want to add anything to those answers? 

I will go to my next one then. 

How have transnational criminal organizations used the Venezuelan humanitarian crisis and subsequent migration throughout 

the region to their advantage? 

Mr. GLENN. I think in any situation where you have a large 

number of people moving across borders and very porous borders, 

there is a large susceptibility to trafficking of many sorts, whether 

it be human, wildlife, and, of course, narcotics. So there is an increased risk because of that movement. 

Mr. BROOKS. And the followup question: How can the United 

States help other countries in the region prevent the crisis from 

benefiting international criminal organizations? 

Mr. GLENN. I think our continued assistance to Colombia, especially Colombia, since it neighbors Venezuela, is crucial. 

The assistance that we specifically give to Colombia focuses 

mostly on coca cultivation and cocaine production and giving the 

ability, and greater ability, to the Colombian National Police and 

the Colombian military to eradicate coca and to interdict those 

drugs that are moving across borders and coming out of Colombia, 

whether it be to Europe or, more importantly, to the United States. 

Mr. BROOKS. Mr. Glenn, I am going right back to you with some 

more. 

Have you seen any evidence of the Maduro regime in Venezuela 

supporting Colombia’s criminal groups—FARC dissidents, ELN, 

BACRIM, or others? 

Mr. GLENN. I think it is well-known that drug trafficking organizations and radical groups like the ELN do take refuge in Venezuela. Whether or not that is this state-sponsored or -encouraged, 

I wouldn’t be able to comment on that. 

Mr. BROOKS. Anyone else want to try any of those questions? If 

not, I can go to another one. 

All right. 

This week, the Trump administration announced new sanctions 

on Venezuela, which follow the sanction of over 70 Venezuelan-related persons. 

What is the process by which the Treasury Department coordinates with other agencies, specifically the State Department, in 

designating individuals or entities under sanctions programs? 

Ms. Fowler? 

Ms. FOWLER. Sure, Congressman. I mean, we have a very robust 

coordination process, really, with the interagency, led by the National Security Council. And we have a very active group that is 

considering, sort of, all of our potential authorities and tools and 

how best to bring them to bear on the Venezuela crisis. 

So the designations, the discussion about how best to use those 

kinds of authorities, including the types of authorities that you see 

in the most recent executive order, are all, I think, very robustly 

coordinated with the rest of the interagency. 

82

Mr. BROOKS. Admiral Hendrickson? 

Admiral HENDRICKSON. We also have—you know, one of ways we 

do this is by, at Southern Command, we have an LNO from OFAC 

that is embedded into our intelligence side of the house. So we 

work quite robustly with the Treasury folks in terms of the intelligence we have and sharing that with them, particularly as those 

packages are developed. 

Mr. BROOKS. All right. 

Thank you, Mr. Chairman. I yield back. 

Mr. COOK. LNO? The acronym, I——

Ms. FOWLER. It is a liaison officer. 

Mr. COOK. Oh. Okay. 

Mrs. Torres? 

Mrs. TORRES. Thank you, Mr. Chairman. 

I want to start by associating myself with some of the comments 

that have already been stated by my colleagues. 

I am from California, and, as a California native, you would understand—also, as a former mayor—this is, like, the worst of the 

worst combinations that you can get here—a former mayor, former 

State legislator, I did a lot of work around our prison system in 

California. In my district, I have a State prison, men’s prison, women’s prison, and a juvenile that has now been closed. 

The Mexican mafia controls—or has great control of our prison 

system. They are very active in my home city of Pomona. They are 

the cause of a lot of the murders and the increase in the murder 

rate. 

I want to make sure that we are helping small communities like 

this to coordinate efforts to ensure that folks like the L.A. County 

Sheriff’s Department, the San Bernardino Sheriff’s Department, 

that are doing a lot of work around human trafficking have the resources that they need. 

And thank you for helping, all of you, for helping to boost that 

allocation of funding. But it is not enough. The Mexican mafia has 

moved on from simply trafficking weapons and drugs to now trafficking people. 

I wonder if any of you have a comment on that. 

Oh, come on, you are Homeland Security now. You are burning 

my time. 

Mr. VILLANUEVA. Yeah. So, ma’am, we work very close with our 

State and local partners. Going back to my early days, as the chairman mentioned, I was a State trooper, and I worked with a former 

U.S. Customs Service task force. And we have that program all 

over the Nation to work with our State and local partners doing 

the Border Enforcement Security Task Forces. 

And those joint interagency teams are deployed all across the 

southwest border, southern border, as well as the Canada border. 

And it is through those mechanisms that we can support the small 

communities to deal with situations like that. We would be more 

than happy to follow up through our special agent in charge in the 

region to make sure that we are providing adequate support. 

Mrs. TORRES. As we speak, there is a press conference on some 

FBI activity that occurred very close to where I am, where my 

home police department was involved also in this investigation. So 

I want to encourage that type of work and involvement from our 

83

Federal agencies to ensure that resources are given to our communities to deal with these issues. 

Ms. Fowler, the first round of the Global Magnitsky sanctions included several individuals from the Western Hemisphere. What 

was the impact of those sanctions? And, going forward, how will 

you use Global Magnitsky authority to combat transnational organized crime within our hemisphere? 

Ms. FOWLER. Well, Global Magnitsky has been, of course, a top 

priority for the Treasury Department and for our Under Secretary, 

and we have a robust plan in place to continue to use that authority to the fullest extent possible. 

I can’t comment on, you know, potential future actions, but I can 

assure you that we have a very active evaluation of information 

that we have access to to try to determine how best to use it, how 

to use it strategically, how to have the greatest impact, including 

in this hemisphere. 

Mrs. TORRES. As you may know, I have an amendment—and, 

hopefully, we will be voting on it later today and pass it—that 

would help with a report identifying folks, specifically targeting 

elected officials in the Northern Triangle. 

Mr. Glenn, the head of the national police in Honduras was accused of being involved in narcotrafficking. What can you say about 

that? 

Mr. GLENN. I read the same report, and in our——

Mrs. TORRES. This was after cleaning up the police force. 

Mr. GLENN. Right. So I read that report. We, through the Embassy and other groups within the government, have been unable 

to corroborate that story. So we continue to work with him. 

Mrs. TORRES. So is he currently on duty, or——

Mr. GLENN. I believe so. 

Mrs. TORRES. Okay. 

I yield back, Mr. Chairman. 

Mr. COOK. Thank you very much. 

I just want to—I know I was kind of venting, myself, earlier. And 

what I am trying to get at—and I am not sure how to do it—is, 

we are looking for solutions here. And I will be very honest with 

you. There are so many different organizations involved, it seems 

that sometimes we might have one organization working at crosspurposes. 

Do you have—and I don’t know—do you have command post exercises, to use a military term, where you have a scenario—and we 

have a number of real diverse scenarios that you could use, with 

lessons learned from this, where you go through it, and you need 

this, this, this, and this, or you take away—because, right now, to 

an outsider, I have this cynicism that says, because you have so 

many different countries and so many different agencies, how are 

we going to coordinate that? 

Do you do these exercises, working together, where you have a 

post-exercise report and it is recommended that Congress wake up 

and pass this or Congress pay attention to this? And I am showing 

my ignorance here, but I am turning to the experts to see if you 

could share some of your wisdom with me on that. 

The admiral is looking at me like, here is the dumb Marine question, right? 

84

Admiral HENDRICKSON. No, I would never say that, Chairman. 

So I think that one of the things that we have been doing for the 

last couple of years, his has been sponsoring——

Mr. COOK. His? 

Admiral HENDRICKSON. Homeland Security Investigations. 

Mr. COOK. Okay. 

Admiral HENDRICKSON [continuing]. Has been sponsoring a surge 

operation in Latin America—and it was mentioned in the opening 

remarks—Operation Citadel. It is the best case that we have right 

now, where we, in partnership with his, have been supporting them 

with military capabilities as they surge, mostly intelligence but 

also some biometrics, which has yielded pretty substantial results. 

We go through this every year. It is anywhere from a 3- to 6-

month surge, depending on the funding available. And, thus far, we 

have seen very impressive results. 

We do a planning process leading up to that operation. We do a 

hot wash and an after-action upon completion. And then we start 

planning the next evolution. And we take those lessons learned and 

incorporate them in. 

You know, thus far, I think, trying to get after the meat of your 

question there, that is kind of one of those examples I can use that 

has really taken on a pretty substantial traction over the last several years. 

Mr. COOK. Is this classified, your after-action report, or could 

that be shared with Congress? 

In other words, if we are going to make decisions that are going 

to improve the efficiency of the problem we are talking about, some 

of these things that you might have learned might prove beneficial 

to us. 

Admiral HENDRICKSON. Yes, Chairman, I think we can certainly 

share that with you. 

And I think the other thing that we—actually, just 2 weeks ago, 

we were discussing, you know, how we transition what has up to 

this point been a sporadic surge operation, how we transition that 

into something that is a steady-state operation. 

Mr. COOK. Thank you. 

Anyone else? 

Yes, sir. 

Mr. GLENN. I would just mention the effort that has been born 

out of the executive order on transnational crime. One of the tasks 

out of that executive order and now given to the U.S. CTOC, the 

Council on Transnational Organized Crime, is to develop what we 

hope will be something similar to the National Counterterrorism 

Center, where strategic intelligence is matched with mission management across the interagency. That does not exist for 

transnational organized crime right now. 

So, in terms of what the future could look like, I think that is 

a very encouraging development. It is by no means finished. It is 

very much in its early stages of development. But it is a very positive development. And I would look forward to, at some point in the 

future when that is better established, to be able to share that with 

you. 

Mr. COOK. Mr. Sires? 

85

Mr. SIRES. How significant is Hezbollah fundraising in Latin 

America from both licit and illicit activities? Can anybody talk a 

little bit about that? 

Ms. FOWLER. It is an excellent question. It is something that we 

have been quite concerned about, obviously, for many years. What 

we are concerned about is Hezbollah taking advantage of some of 

the areas that have more lax regulatory supervision, sort of, constraints there. 

So it is something that we continue to assess. I don’t think I can 

frame it for you in terms of how much—what proportion of overall 

funding. We know what Hezbollah’s largest source of funding is. 

But we continue to look at this. 

And, notably, we are working really closely with the countries in 

the region that are most affected, very much in a very close manner, to try to assess what the risk is and really work with them 

to build some capacity to address it and potentially to take action 

together. 

So that is our approach currently to the issue. 

Mr. SIRES. Mr. Glenn? 

Mr. GLENN. I was just down in the tri-border region a couple 

months ago, and we have been able to identify past funds to—now 

that Argentina is in a more cooperative posture, we have been able 

to give them some assistance in setting up a border task force 

around the tri-border area. 

I also visited check Paraguay. They are also more willing to focus 

some of their efforts to match with our assistance. And Brazil as 

well. 

So I think we are not there, in terms of a positive story, but we 

are getting there, as the three countries, with our assistance, reengage in the region. 

Mr. SIRES. I was just going to bring that up, because I was there 

last year, and they have a toll booth between the three-countries 

border. And I have to tell you, it is easier getting through there 

than getting through the Lincoln Tunnel where I am in New Jersey. I mean, there is nothing to stop them. There is no checkpoint. 

People go back and forth. 

We talked to the authorities. It is a—I mean, I try to make light 

of it, but it is very serious, the fact that we have these people just 

going from one to another without any kind of a check or anything. 

I yield. 

Mrs. TORRES. Thank you once again for doing a second round. 

There is never enough time to ask all of our questions. 

I can’t remember if it was Mr. Glenn or who mentioned the Vice 

President’s involvement, personal involvement, last year at the conference in Miami. I think he has done that twice. Ambassador 

Nikki Haley also visited the Northern Triangle, Guatemala specifically, recently. 

Today, Secretary Pompeo was here, and I once again asked about 

our continued support for CICIG and to ensure that we continue 

to be focused on the region. We have spent $2 billion there. These 

are hardworking American taxpayers’ dollars. We need to make 

sure that the trolls and the very corrupt elected officials that continue to work to undermine the work of CICIG, the work that we 

are doing in the region, by hiring lobbying groups here in the U.S. 

86

to lobby against the efforts of bringing about change and some 

transparency within the Northern Triangle—that, you know, we 

don’t lose focus and that we don’t fall to the—and give credit to 

these folks, specifically from the Treasury Department, that we 

continue to look toward people that ought to be identified publicly 

for their effort in continuing to push narcotics north. 

Last year, when we were in South America, I was alarmed at 

what we saw, the narcotics coming north from still Colombia 

through the Pacific Ocean. And I know that we have been proactive 

on the Atlantic side. We have good partners with Costa Rica there, 

with Haiti. But what is the status of Mexico’s involvement in helping to intercept in the Pacific side? 

Admiral HENDRICKSON. Yes, ma’am. Mexico is actually quite involved. We hosted at Southern Command, earlier this year, a meeting that had the head of the Mexican Navy, the head of the Colombian Navy, our own Commandant of the Coast Guard, the Northern Command Commander, and the Southern Command Commander. And all of that discussion was about the Eastern Pacific 

and how we better utilize everyone’s assets. We all recognize that 

none of us alone has what is sufficient. 

And the reality is—and we just finished up an exercise, actually 

an operation, that, frankly, was led by the Colombians and the 

Mexicans. And what we recognize is the better we can get at improving the efficiency and trust in our communications, the more 

opportunity we have to leverage each other’s strengths. And we all 

recognize that that is something necessary. 

So I will tell you that that has been—you know, that was the 

first time we have had this kind of meeting with those partners, 

but everyone is actively engaged. And they understand, collectively, 

how big a problem that is. 

Mrs. TORRES. Thank you. 

Mr. Glenn, in Central America, specifically in dealing with asset 

forfeiture issues, I know the Salvadoran Government just passed a 

law exempting themselves or exempting Members of Congress from 

having their assets forfeited. Can you speak to that? And what are 

some of our efforts to combat those laws that they are passing? 

In Guatemala, they are trying to exempt themselves from ever 

being tried of a crime involving corruption. Honduras’ President is 

doing the same thing. 

Mr. GLENN. Sure. It is troublesome, but at the same time I think 

it is an indication of some of the success that we have had. The 

fact that these legislatures are attempting to pass or, in some 

cases, passing laws to exempt themselves from laws is an indication that the assistance that we have been providing—I think 

CICIG is a very good example of an effective entity. 

CICIG has been roundly criticized, and I think that that is actually—the criticism runs the full gamut from the socialist, progressive party criticizing it as an imperialist American tool, all the way 

to the other end of kleptocratic, entrenched families who claim it 

to be a U.N. conspiracy to establish a new world order. 

To me, as a neutral foreign assistance giver trying to fight corruption in Central America, I think we are hitting the spot when 

we are able to make everybody upset. And threatening that mode 

of government, of using corruption and coercion as a way of governVerDate 0ct 09 2002 14:48 Sep 07, 2018 Jkt 000000 PO 00000 Frm 00090 Fmt 6633 Sfmt 6633 Z:\WORK\_WH\052318\30176 SHIRL
87

ment, that is where we want to be. That is what we want to be 

doing. Because it ensures fairness for American companies who try 

to compete in these countries and ensures that governments are responsible and responsive to their people, which should ensure a 

more secure and more safe Central America so that people don’t 

feel the necessity to flee to other countries, to the United States. 

Mrs. TORRES. Thank you. 

And I am way beyond my time, but final words I want to say is 

that it also has empowered the young people to come forward and 

see themselves as the leaders of those countries, and that is exactly 

where we want to see them. 

Mr. COOK. Thank you. 

They are going to call votes, I believe, very shortly. Let’s see—

final remarks. Pursuant to committee rule 7, the members of the 

subcommittee will be permitted to submit written statements to be 

included in the official hearing record. 

Without objection, the hearing record will remain open for 5 business days to allow statements, questions, extraneous materials for 

the record, subject to the length limitation in the rules. 

I just want to thank everybody. 

By the way, I have gone to NATO when they had exercises over 

there. I learned a lot. One of them was going from country to country, Stryker vehicles that came all the way down from Poland to 

Georgia. And they did a great job, everything, from a military 

standpoint, but the EU would not let them—you know, they held 

them up at the border, because the EU was under different rules 

than NATO. And some of those lessons learned, you know, we 

brought that up at the NATO Parliament, and you can kind of 

make corrections. 

So anytime you have suggestion for hearings, what we can perhaps ask questions about—I think a lot of the members were—obviously, they had a long day, with trying to catch up and everything. So I am very, very appreciative of your patience and for 

being with us today. 

And if you got something going on, if you could let our committee 

know. Just what you want to have is a bunch of Congressmen and 

Congresswomen looking over your shoulder. But, really, we are 

here to learn and maybe make a difference. So, please, if you have 

anything, don’t be shy about that. And I think you will see some 

people that will be down there trying to learn to make it better. 

So thank you very much. There being no further business, the 

subcommittee is adjourned. 

[Whereupon, at 3:56 p.m., the subcommittee was adjourned.] 

(89)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE RECORD

90

f


30176n.eps

SUBCOMMITTEE HEARING NOTICE 

COMMITTEE ON FOREIGN AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

WASHINGTON, DC 20515-6128 

Subcommittee on the Western Hemisphere 

Paul Cook (CA-08), Chairman 

TO: MEMBERS OF THE COMMITTEE ON FOREIGN AFFAIRS 

You are respectfully requested to attend an OPEN hearing of the Committee on Foreign Affairs 

to be held in Room 2172 of the Rayburn House Office Building (and available live on the Committee 

website at b11Q.:LLyvw::_:v.For~gD.diJ~1lrs.hou:t.~): 

DATE: 

TIME: 

SUBJECT: 

WITNESSES: 

Wednesday, May 23, 2018 

2 00 p.m. 

Combatting Transnational Criminal Threats in the Western Hemisphere 

Mr. Richard Glenn 

Acting Deputy Assistant Secretary 

Bureau ofTntemational Narcotics and Law Enforcement Affairs 

U.S. Department of State 

Ms. Jennifer Fowler 

Deputy Assistant Secretary 

Office of Terrorist Financing and Financial Crimes 

U.S. Department of Treasury 

Rear Admiral Brian Hendrickson, USN 

Director 

Network Engagement Team 

U.S. Southern Command 

Mr. Raymond Villanueva 

Assistant Director for International Operations 

Homeland Security Investigations 

U.S. Department of Homeland Security 

By Direction of the Chairman 
91

f


30176m.eps

COMMITTEE ON FOREIGN AFFAIRS 

MINUTES OF SUI3COMMITTDE ON ________ 11_'"_1e_r_n_n_"_"'_,'·'lc_'"-"-'e _______ liEARJNG 

Day Wednesday Date. ___ M._<"'Iy_1_3_1_0_1_8 ___ .Room 1171RHOB 

Starting Time _ _.l"':O.,O"p"''"n __ Ending Time _ _.3"':"'5._6~p,.m.__ 

Recesses [ 11/a I L___to ___j ( __ to __ ) ( __ to __ ) L___to __ ) L___to __ )( __ to __ ) 

Presiding Member(s) 

Chnimwfl Cook 

C/ret;.k u!l of the following ilml upp(J': 

Open Session Cl1 Rxecuth'e ~sed) Sc.~sion D Televised [l] 

TITLE OF HEARING: 

Rlcctmnicnlly Rccnnl~tupcd) 0 

Stenogrnphic Record W 

"Combatting Tnms1U1tional Cl'imilwl Threats in tlte Westernllemisphere" 

SUBCOMMI'J'l'EE MEMBERS PRESENT: 

Cltaimmn Cook, Ran !ring Member Sires, Rep. BJ'Ooks, Rep. Torres 

NON-SUBCOMMITTEE MEMBERS PRESENT: (Mark ll'ilh an • i(lhey are not members offull committee) 

N/A 

HJ<:ARING WITNESSES: Same as meeting notice attached'/ Yes[;] NoD 

(lj "no", please li.H he!mt' and include Iitle, agency, department, or organization) 

STATEI\JIENTS FOR THE RECORD: (Dstanystatf'ments submffledfor the record) 

C/winmm Coolr SFR 

Chalrmau Cook QFRs 

Rep. Smith QFRs 

Rep. McCaul QFRs 

TIME SCHEDIJI,F.O TO RRCONVRNE ___ _ 

nr 

TIMF AOJOURNE0 __ 3_:_5_:6p'-l-ll __ 
92

MATERIAL SUBMITTED FOR THE RECORD BY THE HONORABLE PAUL COOK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA, AND CHAIRMAN, SUBCOMMITTEE ON THE WESTERN HEMISPHERE


30176f-1.eps
93


30176f-2.eps

adopt a comprehensive Integrity Policy. 1-lovvevcr. although there have been impro;cments in some 

legal frameworks, implementation of those laws in practice remains a challenge in the region. 

Progress has continued across the region with the investigations of several high-profile cases of 

corruption. For example, the case of the Odebrecht construction company resulted in sanctions for 

businessmen and political figures at the highest levels in Brazil, Ecuador and Peru because of their 

involvement with bribery and illegal funding in exchange for public contracts. In Guatemala. the 

country's Office of the Prosecutor and the Intemational Conunission against Impunity (CICIG) arc 

currently investigating politicians and businessmen for cases of corruption, including illegal funding 

involving current President Jimmy Morales, although such investigations have faced a number of 

obstacles. In addition, investigations into the fom1er president of Panama, Ricardo Martinelli, also 

have advanced considerably. 

However, perceptions of corruption in the region remain unchanged. According to the Corruption 

PcrcqJtions Index 2017, the region continues to score poorly for perception of corruption. The index, 

vvhich ranks 180 countries and territories by their perceived levels of public sector corruption 

according to experts and businesspeople, uses a scale of zero to I 00, where zero is highly com1pt 

and 100 is very clean. T11e index found that of the 32 countries assessed in the Americas region, 21 

countries scored below 50. 

In Latin America and the Caribbean, Transparency h1temational's latest Global Corruption 

Barometer (GCB) shows that corruption is a scourge that hurts ordinary people on a daily basis. The 

survey, which covered more tl1m1 22,000 people in 20 countries, found tl1at nearly one in three 

people who had used a public service in the last 12 months said they had to pay a bribe (29 per cent). 

Based on the estimated population size of these countries, this means that around 90 million people 

paid bribes. Most worrisome, the GCB found that almost two thirds of people surveyed said that 

corruption had risen in the 12 months prior to when they were questioned (62 per cent). 

Few bribe payers reported cormption to the authorities (9 per cent) m1d of those who did, almost one 

third said they suffered negative retaliation as a result (28 per cent). Police and politicim1s are 

perceived to be the most cormpt in the region_ with almost half of citizens saying that most or all 

people in these institutions are cormpt. This demonstrates a worrying lack oftmst in these vital 

public sector groups. 

Our research further suggests that in spite of the progress seen in some countries, there are still no 

overarching policies to address the key stmctural refom1s needed to e±1ectively fight com1ption in 

the region. The recent Shadow .B£QQrt on the Implementation ofSustain::~j:>le Development Goall6 

in the Americas released by our Chilean chapter, Chile Transparente, in collaboration with seven of 

our chapters in the region, exmnined the state of the key stmctural m1d institutional components to 

tight against cormption that are contained in Goal 16- Peace_ Justice and Strong Institutions- of the 

United Nations· Sustainable Development Goals. The assessment covered seven countriesArgentina, BraziL Chile, Costa Rica, El Salvador, Honduras and Peru. The stmctural components 

assessed were: (1) Access to Information: (2) Public Procurement (3) Open Gover11ll1ent and Open 

Data: (4) Integrity in Public Administration: (5) Transparency in Electoral Campaigns and Political 

Parties: (6) Fiscal Transparency: (7) Final Beneficiary Transparency (also referred to as Beneficial 

Ownership Transparency): and (8) Asset Recovery. The report concludes that the countries must 

focus their actions on measures that aim to attack the essence of cormption and that allow for early 

2 
94


30176f-3.eps

detection. The measures must not only be laid out in policies but must be implemented in practice 

through well-thought-out mechanisms and procedures. These measures include: 

effective mechanisms to allow public access to infonnation, including the publication of 

govennnent data 

the publication of beneficial 0\\1lership inforn1ation 

the adoption of asset recovery mechanisms 

the adoption of enforceable integrity and accountability policies for public ot1icials 

the adoption of measures that regulate the movement of persons from the public to the 

private sector and vice-versa (i.e., revolving door) 

transparency in electoral processes, campaign contributions and the financing and expenses 

of political parties 

the adoption of data-driven, accessible, transparent and user-friendly procurement systems. 

How corruption affects the investment landscape for U.S. businesses 

There is a large amount ofliterature and research on the impact of cormption on businesses. trade 

and investment. A 2016 rev~":' of recent literature and data sets conducted by Transparency 

lnternational's Anti-Cormption Helpdesk reveals that corruption has a complex and significant 

relationship with investment patterns and trade flows. The findings of this review are summarized as 

follows: 

There is now a clear consensus that corruption is detrimental to international trade and 

reduces business opportunities, regardless of the business firm's profile. 

High levels of corruption in host countries lead not onlv to reduced investment, but also to 

poorer quality investments in tern1s of teclmological sophistication, management expertise, 

and sustainability. 

Uncertainty about the size and frequency of facilitation payments has been shown to reduce 

inward investment and the rate of market entry by foreign finns. Particularly in transition 

countries, corruption has been identified by some studies as the single most important 

determinant of investment growth, ahead of finn size, ownership, trade orientation, industry, 

GDP growth, inflation and the host country's openness to trade. 

Several studies identified medimn-sized business finns as the most vulnerable to coercive 

corruption- i.e., when the fim1s arc compelled to pay bribes. It is speculated that smaller 

firn1s are less conspicuous, while larger firn1s are better placed to rebuff attempts to solicit 

bribes from com1pt officials or intern1ediaries. 

Business surveys consistently demonstrate that firms are deeply concerned by corruption in 

their international supply chains, vvith foreign partners and in foreign markets. 

3 
95


30176f-4.eps

Surveys also suggest that finns from countries with tough anti -bribery lav,;s and enforcement 

mechanisms arc increasingly willing to make bold investment decisions as they now feel 

confident in the compliance programs they have been required to develop in the last few 

years. 

Recent studies suggest that, given the long gennination period of most foreign investments, 

firn1s are becoming more interested in long-tenn prognosis of a potential market's 

governance profile than in snapshots assessments of corruption levels. 

A 2014 review carried out by Transparency International's Anti-Corruption Helpdesk on the Impact 

of Com1ption on Grovvth and h1equality concluded that corruption is likely to affect long-tenn 

economic growth through its negative impact on investment tm<ation, public expenditures and 

human development. More specifically, it found that existing literature and empirical research show 

that: 

Cormption is a significant factor in lowering Foreign Direct Investment (FDI) in a host 

country. 

Cormption lowers capital productivity and constitutes an important element of investors· 

decision-making processes. 

Cormption acts as an inefficient tax on business, ultimately raising production costs and 

reducing the profitability of investments. 

Cormption distorts the decision-making process associated with public investment and 

affects the composition of government expenditure. 

Cormption in host countries results in less FDI from cmmtries that criminalize cormption 

abroad- which are the largest source ofFDI- and more FDI from countries with higher 

levels of corruption. 

Cormption undem1ines a country· s tax structure and its revenue-collection capacity. 

Cormption is also likely to undennine an effective regulatory enviro1m1ent and the 

efficiency of state institutions as rent seeking distorts incentives and decision-making 

processes. 

Cormption acts as a non -tariff barrier to trade by raising transaction costs and obstmcting 

foreign investment. 

Cormption leads to income inequality and is detrimental to human development. 

With respect to specific countries, corruption is a major challenge for investment in most countries 

in the region. Some examples are as follovvs: 

h1 Argentina, our research has found that there are regulations that deal with diverse areas 

of transparency, access to public infommtion and the fight against corruption but they do not 

constitute an effective integrity system that fights corruption. Even when regulations have 

been adopted, a significant gap often remains between policy and implementation. The 

inability to create an effective anti-corruption system is associated with, among other things, 

4 
96


30176f-5.eps

the lack of capacity to enforce existing regulations as wc11 as the inability to put in place real 

processes for the implementation ofthe public policies of integrity. There arc also marked 

fluctuations in the level of political wi11 to implement such anti-corruption measures. 

Furthennore. the govcrm11ent bodies in charge of prevention, oversight and sanctions either 

do not have the necessary institutional independence to guarantee their objectivity, or they 

are denied the resources and/or authority to do their job. [Source:'"-'"""-""-'-"=""-'""'-"-"'"" 

The State Department's ?OJ7lnvestmcnt Climate Statement on Argentina stated: 

''Allegations of corruption in provincial as \Vell as federal courts remained frequent. Lack of 

transparency, autonomy, and clear rules in the selection of judges as well as inefficiencies 

and pervasive delays compromise the judicial system and create the potential for political 

influence. Few Argentine companies have implemented anti-foreign bribery measures 

beyond limited codes of ethics." In a step forward, however, the Corporate Liability Bill was 

passed in March 2018. This la\v subjects legal entities to liability for (i) national and 

transnational bribery and influence peddling: (ii) improper and unlawful transactions of 

public o±licials: (iii) illegal exaction committed by a public o±licial: (iv) illicit enrichment of 

public o±licials and employees: and (v) forgery of balance sheets and reports to conceal a 

corruption offense. 

h1 20 16, the govennnent of Mexico enacted a broad anti-corruption system that was 

enshrined in the Constitution, \vhich, in spite of the fact that the provisions \Vere not perfect, 

constituted a watershed moment for the country. The effort started in 2015, when advocates, 

including Transparencia Mexico (Transparency International's chapter) presented the 

govenlll1ent with hundreds of thousands of signatures backing a nation-wide campaign to 

combat corruption. However, the promises ofthe ne\v program have thus far faced 

continued g;ovenm1ent inaction and obstacles. 

The State Department's 2017 lnYestment Climate Statement on Mexico stated. "cormption 

exists in many forms in Mexican government and society, including cormption in the public 

sector (e.g., demand for bribes or kickbacks by goyernment onicials) and priYate sector 

(e.g., fraud. falsifying claims. etc.), as well as conflict of interest issues, which are not well 

defined in the Mexican legal framework. A significant concern is the complicity of 

goyernment and law enforcement onicials with criminal elements in certain cases. While 

public and private sector cormption is fOlmd in many countries, the collaboration of 

gowrnment actors (often due to intimidation and threats) with criminal organizations poses 

serious challenges for the mle oflaw in the affected areas in Mexico. The response of the 

current administration to recent scandals has been criticized as slow and ineffective. Some of 

the most common forms of official cormption involve government officials stealing from 

public cotTers or demanding bribes in exchange for doing their work.., 

Corruption remains one of the main challenges faced by Brazil, affecting the quality of 

services provided, infrastmcture and owrall investment in the country. The recent grand 

corruption scheme involving high-level politicians, executives from the Brazilian stateowned oil company Petro bras and the largest constmction companies like Odebrecht drew 

attention to the country's systemic failures that open opportunities to mismanagement and 

corruption. Such opportunities come from the political finance environment the 

politicization of key government positions and weak oversight mechanisms wi:tich, 

combined with a rather ineffective judiciary, contribute to fueling the culture of impunity 

that pem1eates the country. Brazil needs to refom1 its political system and ensure that 

5 
97


30176f-6.eps

existing laws, including the 2014 Clean Companies Act, arc implemented and enforced. 

[Source: Transparency Intcmational, Countlv Profile. Brazil.] 

According to the >Q 17 Investment Climate Statement, Brazil ''has laws, regulations and 

penalties to combat corruption, but their effectiveness is inconsistent. Several bills to revise 

the country's regulation ofthe lobbying/govemment relations industry are pending before 

Congress. Bribery is illegal, and a bribe by a local company to a foreign official can result in 

criminal penalties for individuals and administrative penalties, including fines and potential 

disqualification from govenrment contracts, for companies. A company cannot deduct a 

bribe to a foreign official from its taxes. While federal govemment authorities generally 

investigate allegations of corruption, there arc inconsistencies in the level of enforcement 

among individual states. Corruption is reported to be problematic in business dealings with 

some authorities, particularly at the municipal level." 

Chile has been able to successfully adopt and implement a policy of transparency and access 

to infommtion that stands out in the region. Chile has focused on issues such as fiscal policy, 

public procurement and measures to publish public officials· swom declarations of interests 

and assets. Chile's integrity system is a leader in the prevention of conflicts of interest and 

creating access to infonnation but continues to face challenges in sensitive areas such as the 

movement of civil servants from the public sector to the private sector and vice versa (i.e., 

revolving door). 

Prevention measures against corruption by private sector entities arc not a priority in the 

public agenda in Chile. However. there has been progress in registries regarding the 

beneficial owners of legal entities. Recent reforms introduced to the Chilean political system 

have lowered risks of corruption with respect to political activities and campaign financing 

but there is still more to be done with respect to the individualized disclosure of donors to 

political parties and granting greater resources to oversight bodies. [Source: Shadow Report 

on the Implementation of Sustainable Development Goal 16 in the Americas, p. 39J 

The State Department's 2017 hncstmcnt Climate Statcmcllt stated that in Chile, "corruption 

exists but on a much smaller scale than is the case with most Latin American countries. [ ... ] 

A presidential committee against comtption and conflicts of interest created in 2015 issued a 

report recommending an anticorruption agenda of 236 new measures, laws and regulations, 

nearly half of which have already been implemented." 

The impact of high magnitude corruption cases on the region 

h1 recent years, the economic health of a number of Latin American countries has been negatively 

impacted by corruption cases of unprecedented size and scope. Corruption probes involving 

''Operation Carwash" (Lava Jato) in Brazil, uncovered a complex web of public sector corruption, 

contract fraud, money laundering, and tax evasion stemming from bribes paid in exchange for 

lucrative govemment contracts involving the state-owned oil company Petrobras. 

T11e investigation revealed the involvement of more than a dozen corporations, including Brazil's 

construction giant Odcbrecht. T11e overlapping investigation against the construction company 

unveiled one of the largest corruption schemes in history. In April 2017, Odebrccht was ordered to 

pay fines totaling $2.6 billion to authorities in Brazil, Switzerland and the United States after 

admitting to paying officials in twelve countries approximately $788 million in bribes. T11e ongoing 

investigation led to nearly 180 convictions for crimes including corruption, abuse of the intemational 

6 
98


30176f-7.eps

financial system, drug trafficking, and money laundering. Executives from Petro bras and Odebrecht 

were sentenced to jail time. Other individuals implicated include oil industry suppliers, money 

launderers, fanner politicians, and political party operatives. Petrobras and Odebrecht have laid off 

more than one hundred thousand people. Petrobras was estimated to have lost at least $88 billion by 

mid-2015. [Source: Claire Felter and Rocio Cara Labrador, Brazil's Corruption Fallout, Council on 

Foreign Relations, April 24, 20 18]. 

As would be expected, the investigations. convictions, financial penalties. and lav-offs delivered a 

direct and hannful blow to the oil and construction sectors and negative consequences for other 

economic sectors in Brazil. Estimates for the impact of the fallout on Brazil's GDP in 2015 and 2016 

range from between a decrease of 1 and 2.5 percentage points. The scandals have complicated 

efforts to revive the economy in Brazil amid a large economic downtum that started in 2014. 

[Source: Claire Felter and Rocio Cara Labrador, Brazil's (oJTuption Fallout, Council on Foreign 

Relations, April24, 20 18]. 

Moreover. the effects of these scandals have been highly detrimental to other countries in the region. 

According to a recent article in Argentina's l,a NacjQ.rr, the Pemvian investigations triggered by the 

rava Jato scandals caused an economic freeze in Pem in 2017. In Panama, the scandals caused an 

estimated 0.5 percentage point decrease in GDP in 2017. It is feared that the economy in Argentina 

will face hanns similar to those in Brazil, Panama and Peru, as a result ofthe allegations of collusion 

between Odebrecht and Argentinian companies. 

ll1e systemic corruption involved in the rava Jato scandals has also caused political instability that 

may further hamper the adoption of much needed reforms. Multiple political leaders from different 

countries have been implicated including Brazil's former President Lui ada Silva and other highlevel Brazilian officials, Colombian President Juan Manuel Santos. Ecuadoran Vice-President Jorge 

Glas, Venezuelan President Nicolas Madura and Pemvian President Pedro Pablo Kuczynski. The 

continued political turmoil caused by the corruption scandals has led to lower investment levels and 

consumer confidence. 

The systemic nature and breadth of the corruption schemes involved in these scandals make it 

evident that reforms need to focus on embedding permanent key stmctural changes to the regulatory 

framework and institutions. in particular in public contracting and political and electoral financing. 

As nations try to address their deteriorating infrastructure or derive profit from their extractives 

sector. large high-value public contracts in those sectors will continue to present high risks of 

corruption where the stakes are the highest. U.S. businesses bidding for such contracts will face 

potentially rigged bidding systems t!11less transparency and accountability mechanisms are put in 

place. In addition, the increased use of Public-Private-Partnerships adds a new dimension where 

accountability and integrity systems need to be adapted to that type of delivery method in 

government contracting. With respect to public contracting. Transparency International has 

partnered with other international civil society organizations to work on a new initiative to increase 

transparency and accountability. The new initiative calls for: 

the adoption of open contracting data standards and monitoring systems 

independent civil society monitoring of specific projects using tools, such as Integrity Pacts 

7 
99


30176f-8.eps

effective and meaningful participation by affected commnnities in all phases of the public 

procurement process, including the pre-tender phase 

a strong, professional and engaged civil society sector 

a strong and credible sanctions regime 

Proposals on how the U.S. congress can support these types of refonn are listed belovv as 

recom1nendations. 

How corruption harms U.S. businesses 

At the company level, cormption has a corrosive impact on business activity. performance and 

grovv1h. The 20 l4 review carried out by Transparency Intemational' s Anti -Corruption Helpdesk on 

the Impact of Corruption on Growth and Inequality found that corruption raises costs, introduces 

uncertainties_ reputational and legal liability risks and vulnerability to extortion. It depresses a 

company-s valuation, makes access to capital more expensive and undennines fair competition. 

Companies also lose significant business opportunities because of comrption risks as shmvn by a 

survey of company ot1icers conducted by PricewaterhouseCoopers (PwC) in 2008. The survey found 

that almost 45 per cent of respondents had not entered a specific market or pursued a particular 

opportw1ity because of corruption risks, while close to 40 per cent reported having lost a bid because 

of corrupt officials. In a 20 !6 PwC survcv, 55 per cent of 1,400 CEOs questioned, identified bribery 

and corruption as a threat to their business grovvth prospects. 

T11e 2014 review also found that bribery is not an effective strategy to alleviate red tape if 

bureaucrats can increase the regulatory burden and the red tape delay to extract bribes. As explained 

in the review, empirical evidence indicates that (I) comrption is likely to negatively atiect a tim1-s 

growth: (2) comrption can significantly affect a firm's investment pattems: (3) comrption may also 

have a negative impact on a firm's et1iciency: (4) corruption may also have an impact on companylevel resource allocation and diminish the level of new product introduction: and (5) corruption is 

also likely to increase exit rates. 

A 20 IS -"''\P.SCf.lfllillvsi s produced by the U 4 Helpdesk operated by Transparency International on the 

relationship between business integrity and commercial success found that aggregate growth and 

finn perfom1ance is lower in highly comrpt settings. while markets perfom1 poorly when corporate 

corruption becomes commonplace compared to markets in which firms typically refrain from corrupt 

behavior. The body of evidence demonstrates that, while there may occasionally be some short-term 

gains, the costs of paying bribes outweigh the benefits in the long-tenn. Moreover, although some of 

the more indirect costs may not be captured on a company-s account books, they can have severe 

implications on a firm-s performance. To give one example, corporate corruption- whether detected 

or undetected- has a deleterious effect on staff morale, which in tum often leads to marked slumps 

in productivity. 

According to a survey conducted by Control Risks in 2015, companies with anti-i:orruption 

programs and strong ethical guidelines arc found to suffer up to 50 per cent fewer incidents of 

corruption than those without such programs, indicating integrity and anti-corruption compliance 

programs are an effective means of minimizing losses which can be incurred as a result of 

corruption, especially where it is detected. Finns from countries with stringent anti-corruption 

provisions are reporting fewer losses to corrupt competitors compared with a decade ago. [Source: 

U4 Anti-Corruption Resource Center, Ho" Could Anti-Corruption Tnterventrons Tackling Global 

_Corru.Q):ion bcl!£ilt.llic LT.KL August 24, 20161 

8 
100


30176f-9.eps

Business leaders increasingly recognize the benefits of anti -corruption laws that require companies 

to have strong compliance programs. The majority of business people surveyed by Control Risks in 

2015 believed anti-corruption laws improve the business environment (81 percent), deter corrupt 

competitors (64 per cent) and make it easier for good companies to operate in high-risk markets (55 

per cent). The same survey found that companies from countries vvith the toughest laws and 

enforcement, such as the U.S. and the UK, arc increasingly willing to take bold investment 

decisions. 

Transparency Intemational advocates for the adoption and enforcement of such anti -corruption laws 

in the region to help these markets become more open and competitive. In addition, the promotion of 

anti -corruption refonns that offer real and pennanent structural and institutional changes in the 

region would incentivize investment, lower costs, and promote growth and nevv opportunities for 

U.S. businesses. 

Tackling corruption in markets in the Americas would lower U.S. businesses· risks and transaction 

costs caused by cormption. In addition, promoting anti -com1ption refonns in the region would place 

U.S. companies on the same footing in obtaining business opportunities as companies from countries 

with higher level of corruption and no foreign bribery lmvs. As risks are reduced, trade opportunities 

open up for smaller companies. which cannot afford the same level of intemal controls as larger 

finns. 

Benefits for the U.S. of promoting anti-corruption interventions and measures in the Americas 

h1 addition to the research that shows that corruption adversely affects foreign direct investment in 

foreign markets and the firm-level studies that demonstrate corruption's detrimental effect on firms' 

growth and productivity, research demonstrates how corruption undennines security. facilitates 

transnational orga11ized crime and has a detrimental effect on migration pattems, all of\vhich 

negatively affect the security and economic growth in the U.S. 

Ties to organized crime and security 

Cormption enables organized crime to thrive and undennines security in the region. First, com1ption 

is both a product and a driver of instability and contlict as it undermines the mle of law and faith in 

public institutions. Second. cormption is a cmcial enabling mechanism for organized criminality and 

terroris1n. \Vhere regulatory and govenumce structures are styn1ied, cri1ninals are able to cleanse and 

launder profits from illicit markets in human beings, dmgs, poached ivory. illegally harvested timber 

and oil trom terrorist-controlled territories. The criminal underworld and authoritarian regimes alike 

rely on corruption to siphon ofl'their ill-gotten gains, fimd their illegal activities and finance terrorist 

organizations. Third, cormption can prevent effective responses trom the security services, 

prosecutors. and the courts, allowing criminals to escape detection, prosecution and punishment. 

Lower security and increased crime pose high risks for U.S. businesses operating in the region. 

lSource: U4 Anti-Cormption Resource Center. How CouJg_,:\nti-(Q_r_mption ll\terve_mions T;~ckling 

Qj_obal_Cormption benefit the UK? August 24, 2016. For a review of studies on the relationship 

9 
101


30176f-10.eps

Anti -Corruption Hclpdcsk, Literature RcviciV on 

-"-"~-"'"''""-~""'~'-""'-'L2~"""-.c'-'.!"-~"--~""-"' June 13, 20 14] 

Tics to illicit financial flows and transfer of wealth 

Corruption is closely linked to many practices that facilitate illicit financial flows, vvhich are 

resources generated by methods, practices and crimes aiming to transfer financial capital out of a 

country in contravention of national and intcmationallaws, including criminal and tax laws. 

According to Global Financial Integrity, every percentile increase on the corruption control indicator 

showed a decrease in global fmancial flows. Developing and emerging economies with high 

incidences of corruption arc therefore particularly at risk: one estimate states that between 2003 and 

2013. these countries lost $6.6 trillion to illicit financial flows. This transfer of wealth from lowincome countries to developed countries leads to reduced public income, cripples long-tem1 growth, 

and leads to high inequality and larger fiscal deficits in developing countries. h1 tum, these 

consequences drastically lower the demand for industrial goods and services provided by advanced 

economies. [Source: Source: U4 Anti-Corruption Resource Center, How Could Anti-Conup!ion 

h1terventions Taclding Global Comrption benefit the UK? August 24, 2016J 

Transparency Intemational and numerous anti-corruption NGOs working to stop money laundering 

and the flows of illicit funds have been advocating the adoption ofbcncficial ownership registries 

that would infom1 the public and enforcement agencies about who the actual beneficiaries arc of 

transactions carried out by legal entities. Argentina, Costa Rica, Honduras and Peru have made 

concrete efforts to legislate in this area but must still strengthen the implementation processes of 

these policies and ensure access to the infonnation included in the registries so that civil society can 

take on an active oversight role. Brazil and El Salvador, on the other hand, arc still in the stage of 

regulation although certain infom1ation is accessible regarding the actual beneficiaries thanks to 

other legal instruments. h1 the case of Chile, efforts have been made to adopt regulations in this area, 

without the binding force of the lavv, that vvould allow for the registration of the effective controllers 

of businesses but the availability of this information to the public is still not assured. [Source: 

Shadow Rcpmi on the Implementation of Sustainable Dewlopmcnl Goal J 6 in the A.:mericas, p. 22 J 

Ties to migration 

T11crc is evidence of a clear but nuanced correlation between higher levels of corruption and 

increased motivation for migration. The literature surrounding migration and its causes identifies a 

lack of economic opportunities and a lack of security as two key drivers of legal and illegal 

migration. As described above, there is ample evidence that corruption has a negative impact on 

economic opportunities and security, and thus operates as an indirect driver of migration. Studies 

also have found that corruption can become a more direct incentive for migration out of corrupt 

countries and toward countries with lower levels of corruption. Corruption negatively affects the 

flows of migration in different ways: it is a factor contributing to brain drain, to illegal migration of 

people fleeing poverty and violence, and it enables human trafficking. [Source: U4 Anti-Corruption 

Resource Center, Hovv Could Anli-ComJR]jon Interventions Tackling Global Com1ption bendil the 

UK? August 24, 2016] 

11ms anti-corruption measures are in the U.S.'s benefit by ( 1) improving the business environment 

and establishing fairer markets for U.S. businesses: (2) expanding intcmational trade opportunities in 

the region and job-creation in the U.S. in export-led businesses: (3) countering security threats and 

transnational organized crime: ( 4) improving economic and security conditions in the region: and (5) 

helping reduce the flows of migration of people fleeing violence and poverty. 

Recommendations 

10 
102


30176f-11.eps

Aid-based reconm1endations 

Development aid from countries like the United States contributes powerfully to economic growth, 

trading relations and human development in developing countries. Development aid programs 

targeting improvements in healtb, education and poverty reduction outcomes have the potential to 

spur greater market participation and generate demands for goods and services, especially in 

emerging economics. Anti-corruption policies play a central role in both improving the outcomes of 

development aid interventions and ensuring value for money in development assistance programs. 

h1 countries in receipt of U.S. development aid, targeted assistance can help improve institutions and 

tbe regulatory environment, helping to build more prosperous, secure and resilient partners. T11e 

position of development agencies as contact points between developing and developed countries 

make them perfect partners to provide support to anti-corruption \Vork. Progranm1atic anti-corruption 

interventions by aid agencies can target tbe demand side (related to improving tbe quality of public 

institutions), the supply side (working with civil society and the private sector to improve 

accountability and encourage them to participate in anti-corruption initiatives), or a combination of 

both. USAlD, for exmnple, has carried out anti-com1ption initiatives in Honduras, ParaguaY, 

Jan'@ig, f:l Sa.[yjl_ijQI, and Mexico. Such interventions should be supported and expanded. 

Programmatic initiatives should focus on capacity building in public institutions to: 

strengthen institutions involved in the detection, investigation, prosecution and adjudication 

of com1ption-related crimes 

strengthen investigative capacity, reinforce internal disciplinary measures and establish 

permanent and effective accountability mechanisms 

establish or strengthen accessible, anonymous. reporting channels for whistlcblowers which 

meaningfully protect them from all fom1s of retaliation 

strengthen access to infom1ation systems 

establish transparent. accessible, a11d data-driven procurement systems 

strengthen integrity rules a11d accountability mechm1isms that reduce public officials' 

arbitrary discretion and opportunities to solicit bribes and that enable detection and 

sanctioning of wrongdoing 

improve systems to publish infonnation about electoral funding a11d the funding of political 

activities 

increase the participation by local civil society organizations in the monitoring and oversight 

of public administration processes 

Donor agencies also need to have mechanisms in place to investigate allegations of cormption 

involving the provision of aid for development. Anti-cormption integrity measures within 

development programs are cmcial to ensure that ta'<:payers' money is being spent e±Iectively and not 

11 
103

f


30176f-12.eps

contributing to the underlying corruption in the country of operation. Investigations such as those 

carried-out by the Office of the Inspector General (OIG) with oversight over aid programs from 

USAID, the Millenium Challenge Corporation, and other donor and lending agencies are crucial to 

ensure that funds aimed toward development assistance arc not diverted through fraud. abuse and 

corruption, or wasted through mismanagement. The endeavors of the OIG should continue to be 

supported and expanded. 

Finallv, there should also be more support for regional lending institutions· work on transparency 

and accountability such as the Inter-American Development Banks's Action Plan for Supporting 

Countlies · Efforts to Combat Corruption and Fostertransparen~ (PAACT) and Transj;1arencv Fund. 

Non-aid-based recommendations 

Beyond foreign aid, U.S. policymakers can strengthen anti-corruption policy and practice in the 

Americas through various other vehicles and mechanisms. including: 

Initiate. participate in and support multilateral and regional initiatives on beneficial 

ownership transparency and open contracting. 

Promote the inclusion of strong transparency and anti-corruption provisions in trade and 

investment treaties. 

Support active enforcement of the Foreign Corrupt Practices Act. 

Support the adoption oflaws in the U.S. that increase beneficial ownership transparency. 

such as the passage of bills for a Corporate Transparency Act of 2017 (H.R. 3089). 

Strongly support the lntemational Commission Against Impunity in Guatemala and the 

Mission to Support the Fight against Com1ption and Impunity in Honduras. 

Push for anti-com1ption goals at global or regional fonuus and conferences. 

Welcome the participation of civil society organizations in such global or regional forums 

and conferences. 

Promote. at the regional level, the adoption of transparency and anti-bribery measures. 

Incentivize alliances and inter-governmental cooperation in order to improve the 

effectiveness of asset-recovery efforts. 

Support inter-governmental cooperation in the investigation of transnational criminal 

activities. 

Promote. at the regional level, the lifting of immunity for corruption-related cases. 

Promote. at the regional level, the adoption ofwhistleblower protection laws. 

12 
104


30176g-1.eps

Questions for the Record 

WHJiM Subcommittee Hearing: "Combatting ll'(lnsnationa/ Criminal Threats in the Western 

Hemisphere" 

May 23, 2018 at 2 00 p.m. in Rayburn Room 2172 

Chairman Paul Cook 

TO: All Witnesses 

L U.S. lntcragcncv Coordination: There arc reportedly 60 U.S. federal organizations that arc working 

on countering transnational crime. 

Who is the lead agency in the U.S. government for countering transnational crime for the region 

and how are U.S. agencies working to advance a tmified strategic intelligence_ planning, and 

coordination of U.S. efforts on transnational crime in the region? 

Glenn: In February 2017, President Trump issued Executive Order 13773 on Enforcing Federal Law 

with Respect to Transnational Criminal Organizations (TCOs) and Preventing International 

Trafficking. This E.O. directs the State Department, along with the Attorney General, Secretary of 

Homeland Security_ and Director of National Intelligence to strengthen federal law enforcement to 

thwart criminal organizations that undem1ine U.S. interests and global security. There is not one 

agency in charge of coordination on countering transnational organized crime (TOC). Instead, the 

aforementioned agencies co-chair the c±lort. They assess the U.S. government" s practices_ resources, 

authorities, and coordination related to dismantling TCOs and recommend improvements. As part of 

this wholc-o±~governrncnt e±lort, the Department of State has seven offices engaged in countering 

TOC e±lorts, apart from the regional bureaus. Programs managed by the Bureau of lntcmational 

Narcotics and Law Enforcement Affairs (TNL) give foreign partners the capacity to dismpt and defeat 

TCOs by strengthening laws; enhancing investigative, law enforcement and prosecutorial functions: 

supporting cross-border law enforcement cooperation: and equipping criminaljusticc system actors. 

Fowler: Although there currently is no lead agency in the U.S. government ±or countering 

transnational crime_ the National Security Council has initiated a number of e±lorts focused on this 

issue in the Westem Hemisphere. The Department of the Treasury participates in multiple 

interagency fomms and groups to ensure our work is synchronized with that of other agencies 

working against the regional transnational organized crime threat Two of the most important arc the 

National Security Council Policy Coordination Committee (PCC) on Transnational Organized Crime 

(TOC) and the Threat Mitigation Working Group (TMWG). We have been looking actively in the 

PCC and the TMWG at how to improve our collaboration on countering transnational crime. For 

example, the TM\VG and USCTOC arc fomms for Treasury to engage in ongoing dialogue and 

coordination \Vith a range of interagency partners. including the Departments of Justice. Defense. 

State, and Homeland Security, as well as the intelligence community, on tlris issue. l11c named 

Departments_ to include Treasury, arc all Co-Chairs of tl1c TMWG, pursuant to Executive Order 

13773 ("'Enforcing Federal Law With Respect to Transnational Criminal Organizations and 

Preventing li1tcmational Trafficking"). Currently_ we arc developing a wholc-<>±~govcmment TOC 

Mission Management solntion for strategic planning and strategic intelligence. Separately_ Treasury 

has collaborated across the U.S. interagency on the development of: our 2015 National Money 

Laundering Risk Assessment and National Terrorist Financing Risk Assessment; our updated 2018 

money laundering and terrorist financing risk assessments, and first-ever proliferation fulancing risk 

assessment which will be published later this year, as part of the National Strategy for Combatting 

Terrorist and Other Illicit Financing. 
105


30176g-2.eps

Hendrickson: The February 2017 Executive Order (Enforcing Federal Law with Respect to 

Transnational Criminal Organizations and Preventing International Trafficking) outlines coordination 

mcchm1isms among agencies - such as the Threat Mitigation Working Group. the Organized Crime 

Dmg Enforcement Task Forces (OCDETF)_ DEA's Special Operations Division_ the OCDETF 

Fusion Center, and the International Organized Crime Intelligence and Operations Center - to 

counter trm1snational organized crime (CTOC). Coordination for u_s_ CTOC activities overseas is 

the responsibility of the Department of State_ Bureau for Intemational Narcotics and Law 

Enforcement Affairs, working closely with U.S. law enforcement agencies. Though not the lead for 

CTOC. the Department of Defense (DoD) is the lead federal agency for the detection and monitoring 

of aerial and maritime transit of illegal drugs into the United States. In complim1ce with this statutory 

requirement. U.S. Southern Command (USSOUTHCOM) is committed to supporting the CTOC 

wholc-o±:govcmment approach by bringing DoD-unique authorities_ capabilities_ and capacity (i.e. 

detection and monitoring in intemationalmaritime and air spaces~ collection and analytlcal support to 

US m1d partner nation law enforcement operations, etc.) to defend the southern approaches to the 

United States. ln working with our partner nations in the region, we prioritize security cooperation 

activities aimed at improving maritime, air_ and land domain awareness capabi1ities in the Northen1 

Tier countries of Central America where the threat posed by transnational criminal organizations is 

greatest. In the Caribbean, we continue to support the development of a regional maritime 

interdiction strategy. USSOUTHCOM also provides equipment and training to improve regional 

maritime and air domain awareness. 

2. 2018 Elections: What effect could the outcomes of upcoming elections in Colombia_ Mexico, m1d 

Brazil, have on our efforts to combat transnational crime in the Western Hemisphere? 

Glenn: Our efforts to address transnational crime in the W cstcm Hemisphere arc based on 

longstanding, shared interests. The United States maintains close partnerships with Colombia, 

Mexico, m1d Brazil on a wide range of issues, including on the rule of law and the security sector. 

\Vc closely track criminal groups operating in all three countries m1d work with partner govennnents 

to address trm1snational crime and the threat it poses in the region. We look forward to continuing 

our close partnerships with the new govcmments in Colombia. Mexico, m1d Brazil. 

Fowler: The Department of the Treasury is following developments related to the 2018 elections in 

Colombia, Mexico, and Brazil closely and is committed to engaging with the administrations in each 

country to cooperate cftcctively against illicit finance Treasury also looks forward to maintaining its 

institutional relationships in these countries regardless of electoral outcomes. 

Hendrickson: The United States alone carmot stop trm1snational crime in the \Vestem Hemisphere: 

we must work closely ·with partner nations throughout the region to counter these complex threat 

networks. Having willing and capable partners is critical to the success of this strategy. Currently, 

Colombia, Mexico m1d Brazil are all willing and capable partners in the CTOC effort_ While 

elections could result in changes in particular national policies_ we would expect our collaboration to 

address these shared challenges to continue. 

3. Multilateral Organizations: Multilateral organization, such as the OAS and CARTCOM, have internal 

bodies, progrmns, and activities to target criminal threats in the region. 

How do each of your agencies coordinate with these organizations on these issues? 

Glenn: T11e Department of State works closely with the OAS's li1tcr-Americml Drug Abuse Control 

Commission (CICAD) m1d the Department against Trm1snational Orgm1ized Crime (DTOC) to 

combat transnational crime m1d dmg trafficking in the Western Hemisphere. Through the Bureau of 

li1temational Narcotics m1d Law Enforcement A±Iairs (INL), the Department supports OAS 
106


30176g-3.eps

programming to improve understanding of drug trafficking routes and dismantle illicit supply chains 

throughout the region. INL also coordinates interagency delegations to CICAD Regular Sessions, 

where expert discussions facilitate the exchange of best practices and lessons leamed among Member 

States. U.S. participation in the CICAD Regular Sessions promotes U.S. policy and programmatic 

priorities in the region, including encouraging fellow OAS member states to recognize and respond to 

emerging threats. such as the trafficking of synthetic drugs and precursor chemicals. The United 

States also participates in CICAD·s five standing experts' groups, which provide a mechanism for 

experts from OAS member states to investigate trends: outline training needs; develop curricula: 

identify best practices: and draft model legislation and regulatory standards on technical drug control 

subject m<Itter <Ire<!S, such <IS drug dem<Ind reduction <Ind <Inti-money laundering. The United States 

currently chairs the Group of Experts on Maritime Narcotrafficking, and the Department of State is 

coordinating with the U.S. Coast Guard to plan a meeting of the expert group this year. INL also 

supports the OAS by providing funding to the Mission Against Corruption and Impunity in Honduras 

(MACCTH), which is instmmental in advising the Government of Hondur<!S on how to effectively 

combat corruption and impunity in order to dismantle corruption in Honduras. Through the Caribbean 

Basin Security Initiative (CBSI) the United States works with the Dominican Republic and the 

Caribbean Community (CARTCOM) to promote regional cooperation to substantially reduce illicit 

trafticking: incre<!Se public safety and security: and mitigate the underlying causes of crime. The 

Department coordinates an annual Caribbean-United States Security Cooperation Dialogue with 

Caribbean and CARTCOM leaders and interagency delegations to address issues of citizen security 

and regional law enforcement collaboration on countering criminal threats in the region. INL 

collaborates with CARTCOM and rl1e interagency to arrange targeted teclmical working groups on 

specific criminal threats in the Caribbean, as discussed at the annual Dialogue. 

Fowler: Treasury coordinates with the State Department on their engagement with the OAS and 

CARICOM, including through the State Department's Mission to the OAS, on transnational criminal 

threats in the region. Treasury and State have worked with the OAS to emphasize the need for 

member states to have proper legal foLLLldation and processes to ensure law enforcement, regulatory. 

and intelligence professionals - as well "' the private sector and international partners - have the 

tools they need to fight money laundering and terrorist financing. 

Hendrickson: USSOUTHCOM h<!S worked with sub-org<Iniz<Itions within the OAS on a v<Iriety of 

issues related to the transnational threats in tllis region. We have met with the lnter-America.tl Drug 

Abuse Control Commission (CICAD) to discuss counterdrug efforts. We have also met with the 

Secretariat for Access to Rights and Equity. Department of Social Inclusion, regarding migration a.tld 

refugee issues in the region. We have collaborated with the Pan-American Development Foundation 

over the years on exercises that build partner nation capacity and contribute to govenunent presence 

in areas that have been pennissive to these threat net\vorks. \Ve are also supporting the US Element 

of the Inter-American Defense College, an element of the Inter-American Defense Board. However, 

most of our meetings with the OAS have been infonnational in nature and have not led to a great 

level of detailed collaboration. We are exploring opportnnities for continued engagement with 

CICAD and the Secretariat for Multidimensional Security [to include the Inter-American Committee 

Against Terrorism, tl1e Department of Public Security (Violence Prevention a.tld Security a.tld Justice 

Sections) and the Department to Combat Transnational Organized Crime)]. We are also in the 

preliminary stages of discussing potential collaboration with OAS on Threat Finance. 

USSOUTHCOM works with CARJCOM member states to share intormation through the Joint 

Regional Communications Center a.tld the Regional Intelligence Fusion Center. These two centers, 

sub components of CARICOM's Implementation Agency for Crime and Security, serve as key 

infom1ation sharing conduits tor the Caribbea.tl. USSOUTHCOM has also assisted CART COM with 

the refinement of regional strategic efforts through the review of key strategic documents (i.e. the 
107


30176g-4.eps

CARl COM Crime and Security Strategy and Caribbean Counter Terrorism Strategy) which serve as 

foundational cornerstones for the organization's efforts in countering a wide-range of threats. 

How effective have the efforts of these multilateral organizations_ such as OAS and CARl COM 

been in combatting the transnational criminal threat in the Western Hemisphere? 

Glenn: Multilateral efforts by the OAS and CARICOM have been effective at reducing the 

transnational criminal threat in our hemisphere. U.S. support for and engagement in these fora are 

advancing U.S. policy priorities and bolstering c±forts by these organizations. At the United States' 

request, the OAS' Inter-American Drug Abuse Control Commission (CICAD), at its 63rd Regular 

Session in April 2018, convened experts to identify regional responses to the challenges posed by 

synthetic drugs and identified options to respond to new trafticking modalities in the hemisphere_ 

CICAD fi.1rther highlighted TNL-funded programming that provides technical assistance by its Supply 

Reduction Unit that aim to strengthen Member State capacity to detect and interdict dangerous 

substances. including synthetic opioids. Research conducted by the OAS' INL-funded InterAmerican Observatory on Drugs (OlD) enabled OAS member states to have a better awareness and 

understanding of the opioid problem as a challenge across the hemisphere. For example, 10 years 

ago, there was no m1derstanding of heroin use in the region. but OlD studies demonstrated that it is a 

cha11enge in the Southem cone, bolstering attention to these issues by other member states. The 

Multilateral Evaluation Mechanism (MEM), a peer review mechanism that evaluates OAS member 

state efforts to comply with obligations within the UN drug control conventions and the OAS' 

Hemispheric Drug Strategy and Plan of Action 2016-2020, enables CICAD to support member states 

in implementing and upholding these intemational commitments. TNL uses the information in the 

MEMs to infonn its regional programming_ An INL-funded anti-money laundering program within 

the OAS- Department against Transnational Organized Crime (DTOC) enabled expert cooperation 

that led to the seizure and return to U.S. custody of a I 00 foot luxury yacht (valued at $6-8million) in 

the Caribbean. T11e yacht was originally purchased with profits from an illegal scheme to swap 

Venezuelan currency for U.S. dollars in the black market. 

CARICOM's Implementation Agency for Crime and Security (IMPACS) is the Department's 

primary multilateral security partner in the Caribbean and helps advance our mutual security interests 

in the region by promoting lmv enforcement capacity-building, collaboration and infonnation sharing. 

Fowler: Treasury coordinates closely with State in detennining the eftcctiveness of the noted 

multilateral organizations. The OAS has successfully advanced regional approaches to combatting 

transnational criminal threats. encouraged infonnation-sharing among member states, provided 

specialized training and capacity building to law enforcement, and established asset recovery 

net\Yorks that facilitate cross-border coordination bet\veen lmY enforcement agents to combat money 

laundering. 

Hendrickson: USSOUTHCOM does not have the capability or infonnation required to evaluate the 

effectiveness of these organizations to combat transnational crime. However, we do believe that 

greater information sharing and collaboration is a necessary component to thwarting this threat. 

Are there areas where the OAS and CARICOM could strengthen their efforts to target criminal 

threats in the region'' 

Glenn: As OAS' Department against Transnational Organized Crime (DTOC) was established in 

2016, the OAS should continue to strengthen the DTOCs capacity to offer a variety of high quality 

technical assistance programs in the region. DTOC and CICAD should enhance their coordination to 

ensure that the OAS advances efficient and effective holistic responses to cross-cutting threats in the 

region. CARJCOM should continue to encourage member states to meet commitments made in the 
108


30176g-5.eps

Joint Action Statement from the 2017 Caribbean-United States Security Cooperation Dialogue. 

These commitments include increasing capacity to dismantle transnational criminal and terrorist 

organizations by curbing the trafficking and smuggling of illicit goods and people, strengthening the 

rule oflaw_ improving citizen security, and countering vulnerability to terrorist threats. 

Fowler: We continue to work closely with State to devise strategies that strengthen efforts to target 

criminal threats in the Westem Hemisphere. T11c OAS could strengthen its work by further 

promoting the use of international platforms that facilitate information sharing between law 

enforcement agencies and encouraging member states to strengthen legal processes to criminalize and 

prosecute transnational criminal organizations and their illicit activities. 

Hendrickson: All efforts toward increasing information sharing across all govcmmcnt and 

multilateral organizations stre"b>lhen the friendly network. Ultimately_ as I stated in my testimony- it 

takes a network to defeat a network. 

TO: Mr. Richard Glenn 

1. State/ DHS Role in Illegal Mining and Logging: Reports have shown that illegal gold mining, 

especially in Colombia and Pem, has become more profitable for criminal groups than dmg 

trafficking in recent years. These groups also make a substantial profit from illegal logging of timber. 

What is the interaction between the State Department and Department of Homeland Security on 

addressing the challenges of transnational criminal organizations operating like businesses that 

try to move illegal gold or illegal timber through U.S. customs to make a profit0 

Glenn: The Department of State coordinates closely with the Department of Homeland Security 

(DHS) and other U.S. gmemment agencies to address transnational organized crime. As the 

Department of Justice-s (DOJ) case against gold buyers from North Texas Refinery (also known as 

NTR Metals) demonstrates, billions of dollars in illegal gold have been brought into the United 

States, where it harms our legitimate businesses and exploits our financial system for illicit gain. In 

Peru_ an epicenter for illegal gold mining, ten U.S. govemment agencies_ including the Department of 

State and the Department of Homeland Security. collaborate through Embassy Lima's Illegal Mining 

Working Group. In Washington, the Department of State coordinates an interagency working group 

on artisanal and small-scale gold mining_ including its connection to transnational criminal networks. 

DHS is part of this interagency working group. 

To strcngtllcn Pcm's environmental enforcement capacity_ the Department of State's International 

Narcotics and Law Enforcement Affairs (INL) Section in Lima has sponsored numerous U.S. 

government experts to train Peruvian administrative, law enforcement, and justice sector officials on 

investigating and prosecuting illegal mining and illegal timber crimes. U.S. Customs and Border 

Protection (CBP) advisors, embedded in the INL team, mentor Peruvian customs officials, resulting 

in the seizure of millions of dollars of illegal gold within Peru. Homeland Security Investigations 

(HSI) officers have worked to identifY weaknesses in the supply chain potentially exploited by 

criminals. The U.S. interagency also collaborates to address the trade in illegal timber and encourage 

improvements to Peru's regulatory oversight of its timber supply chain. DHS and DOJ have trained 

Peruvian authorities to develop outbound risk mitigation processes and plans for identifying and 

disrupting illegal timber shipments from Peru to the United States. 

U.S. Embassy Bogota coordinates anti-illegal gold mining activities through a Department of Stateled interagency working group that includes DHS and other law enforcement agencies. To reduce the 

possibilities of illegal gold or timber entering the United States. INL Bogota helps Colombia build 

institutional capabilities in the police. arn1ed forces. attorney general's oftice, and judicial institutions 
109


30176g-6.eps

to detect, investigate, and prosecute enYironment.:'ll crimes_ as well as money laundering, narcotics 

trafficking, and other organized crime. INL Bogota collaborates with DHS to provide Colombian law 

enforcement entities with training and field equipment to detect and secure evidence of environmental 

crimes. INL Bogota has built equipped. and staffed forensic laboratories to improve the use of 

evidence of environmental crimes in judicial proceedings and provided traiuing and technical 

assistance to prosecutors and judges to increase conviction mtes and sentences. 

Are there sufficient safeguards in place to ensure that we don ·t let gold or timber illegally 

obtained into the U.S., inadvertently lining the pockets of criminal groups? 

Glenn: l11c State Department cannot respond to questions on safeguards against illegal timber or gold 

as this is the domestic jurisdiction by several other U.S. agencies. including the Department of 

Homeland Security and the Treasury Department. 

2. Private Sector Role in Illegal Mining and Logging: What role docs the logging industry and private 

sector have in addressing this issue? 

Arc there suftlcient safeguards in place to ensure that companies exporting mining machinery for 

projects in Pem or elsewhere in ilie region can certifY iliat they are not selling their equipment to 

criminal groups to use in illegal activities? 

Glenn: In Peru and other countries. the U.S.-based Intemational Wood Products Association (IWPA) 

funds and delivers training for private sector companies on transparency and supplier accountability 

to improve due diligence in supply chains. The U.S. Agency for International Development provided 

fLmding for IWPA to develop tl1c curriculum. In addition, the State Department supports specific 

activities in producer and transit countries to engage the private sector to combat illegal logging and 

associated trade (!LA n. restrict global markets for illegal timber, and avoid illegal imports to the 

United States. U.S. agencies consult regularly with tl1c private sector on ILAT issues- more recently 

on the Asia-Pacific region and Korea. as well as Pem - through the Industry Trade Ad,isory 

Committee (Department of Connncrcc) and the Trade and Enviromncnt Policy Advisory Committee 

(U.S. Trade Representative). In the area of illegal mining activity, separate from ilic inappropriate 

use of mining equipment, the United States has Memoranda of Understanding with both the Peruvian 

and Colombian governments to address illicit mining of gold. including environmental concerns, 

deforestation. mercury usc, and illicit activities. With respect to the usc of equipment in illegal 

mining, private sector companies have limited capacity to address the misappropriation of mining 

assets for illegal activity. U.S. manufactnrers, such as Caterpillar, compete for market share in selling 

mining equipment in Peru and otl1cr countries. It is the responsibility of the importing country to 

enforce lmvs relating to mining and other activities. Law enforcement authorities in Colombia and 

Pem have conducted interventions to destroy the large machinery, including excavators, used by 

illegal miners in order to disrupt their activities. l11ese officials acknowledge, however. tl1at 

offenders quickly replace equipment and resume illegal activity. l11e legal uses for this equipment. 

such as construction and agriculture, may serve to obfuscate the equipment's final use. Mining 

equipment exported for usc in large-scale mines is Lmlikely to be used by illegal miners. which arc 

predominantly small-scale. 

3. Venezuela: How much would you say arc fm1ds from illicit activities and tics to transnational 

criminal groups contributing to the survival of the Madura regime in Venezuela? 

How can ilie U.S. increase our e±Torts with regional partners to cut-offthis illicit financing? 

Glenn: We arc conccmcd by any profit the Venezuelan govcmmcnt may be making from illicit 

activity at the expense of the Venezuclm1 people. The United States continues to deploy targeted 

sanctions on current or former Venezuelan government oftlcials who are complicit in the regime· s 
110


30176g-7.eps

cormption_ undem1ining of democratic processes and institutions_ and human rights abuses. The 

2017 designations of Vice President Tareck El Aissami and his front-man Samark Lopez Bello 

pursuant to the Kingpin Act highlight our c±Iorts to target those in the Venezuelan govemment with 

ties to narco-tra±licking. Vice President Pence called upon members of the Organization of American 

States on May 7 to '·cut off Venezuela's cormpt leaders from laundering money through your 

financial systems." The continued sanctions against the Madura regime and future coordination with 

members of the Lima Group_ the EU, and the broader intemational connnunity will be critical in 

helping the Venezuelan people restore stability, prosperity, and democracy to their country. The 

Department's extensive programs in the \Vesten1 Hemisphere \viii continue to strent,rthen the 

institutional capacity of our a11ies throughout the region to combat transnational criminal networks 

including dismm1tling illicit financing that supports public corruption_ 

4. Venezuelan Humanitarian I Migration Crisis: Ho\v have transnational criminal organizations used the 

Venczuclm1 humm1itarim1 crisis and subsequent migration throughout the region to their advm1tage? 

How can the U.S. help other countries in the region prevent the crisis from benefiting 

transnational criminal organizations? 

Glenn: We are closely tracking ho\v the humanitarian crisis in Venezuela can increase security risks 

in the region. We will work with partners across the U.S. government to coordinate with partner 

countries to combat the activities of transnational criminal organizations throughout the region. Close 

cooperation between law enforcement agencies will be imperative in managing the situation and 

ensuring the crisis in Venezuela does not benefit transnational criminal organizations. 

5. Colombia I Venezuela: Have you seen any evidence of the Madura regime in Venezuela supporting 

Colombia" s criminal groups (FARC dissidcnts/ELN/BACRlM)? 

Glenn: We closely track criminal groups operating in Colombia and take seriously any security threat 

they may pose in the region. We are \Vorking ·with our regional partners to address the gro\ving 

criminal elements operating in Colombia and Venezuela and commit to broadening and promoting 

intcmational cooperation cftorts to combat criminal groups_ 

TO: Ms. Jennifer Fowler 

I. Monev Laundering: In your testimony you mention that Treasury conducted a National Money 

Laundering Risk Assessment in 2015 that estimated $64 billion in revenue from U.S. drug sales. 

Further, you stated that you believe this figure has increased in recent years. 

When will the next assessment take place? 

If the reyenue number does indeed increase_ what would be the cause? And what does this say 

about the effectiveness, or ineffectiveness, of our security and counten1arcotics cooperation in the 

region? 

Fowler: l11e 2015 National Money Laundering Risk Assessment is being updated this year in 

compliance with Sections 261 and 262 of Public Law No. 115-44 (Countering America's Adversaries 

Through Sanctions Act), which directs the Secretary of the Treasury, in consultation with other 

relevant ±cderal agencies, to develop a national strategy tor combating the finm1cing of terrorism m1d 

related fonllS of illicit finance. Based on the Dmg Enforcement Administration's (DEA) 2017 

National Drug Threat Assessment, estimates ±or U.S. illicit drug sales revenue in 2018 arc assessed to 

be $100 billion_ DEA reports there has been a substm1tial increase in heroin availability in the United 

States in recent years as well as increased availability of fentanyl, fentanyl-related substances, and 
111


30176g-8.eps

cocaine. In addition, DEA reports overproduction of methamphetamine has led dmg trafficking 

organizations to attempt to expand the U.S. methamphetamine market to new users. Marijuana 

continues to be smuggled into the United States from Mexico in large volumes_ but domestic 

production is also increasing. The DEA and the Department of Justice are best positioned to 

comment on U.S. counter narcotics efforts. 

2_ Venezuela Sanctions: The U.S. has sanctioned hundreds of individuals under OFAC sanctions 

programs resulting in millions of dollars- worth of seized assets. However, in cases like Venezuela, 

where more than 50 high-level govenunent ofticials have been sanctioned through OFAC, 

infonnation about the seized assets is scarcely released and hinders the ability of the U.S. to 

communicate the extent of these officials' criminality to the Venezuelan population. 

Can you explain why this infom1ation is not released? Is there a better way ±or Treasury_ in 

cooperation with the State Department, to better explain the reasoning and results of OF AC 

sanctions to targeted populations? 

Fowler: When possible, the Department of the Treasury's Office of Foreign Assets Control (OFAC) 

endeavors to release general information about assets blocked as a result of OFAC designations. For 

exan1ple, we have publicly shared that hundreds of millions in assets have been blocked related to our 

Kingpin Act designations of Venezuelan VP El-Aissami and his front man Lopez Bello. However, 

legal and other considerations generally caution against proactively publicizing specific information 

related to blocked assets_ It is also important to understand that the amount of assets blocked is only 

one measure of a sanction's efficacy. There are a number of other important metrics - including 

operational dismptions and transactions avoided -that are equally if not more important. Indeed, not 

every designation results in blocked assets. Nonetheless, Treasury-s sanctions actions have 

significant effects. For instance. many financial institutions across the vvorld implement and screen 

against OFAC's Specially Designated Nationals and Blocked Persons List (SDN List). The Treasury 

Department working in close coordination with the State Department, releases as much infonnation 

as possible about the reasoning behind and results of sanctions designations. while always striving to 

protect confidential sources, classified information, investigative techniques, and methods. Treasury 

publishes a detailed press release when announcing a designation and works closely with the State 

Department and U.S. Embassies around the world to explain our rationale for designating an 

individual or entity. In addition, Treasury engages directly ·with international counterparts to explain 

our measures and ask them to investigate designated individuals and entities. Secretary Mnuchin, ±or 

example, has engaged with Finance Ministers from the Westem Hemisphere, Europe, and Japan 

several times and urged partners to investigate designated indiYiduals and entities and strent,rthen 

international cooperation on Venezuela. Other senior Treasury officials also regularly engage with 

government counterparts and in private sector roundt:1bles to explain in detail the rationale behind our 

actions and the importance of abiding by U.S. sanctions. 

3_ Treasurv-State Sanctions Coordination: l11is vveek, the Trump Administration mmom1ced new 

sanctions on Venezuela, which follow the sanctioning of over 70 Venezuela-related persons. 

What is the process by which the Treasury Department coordinates with other agencies, 

specifically the State Department, in designating individuals or entities under sanctions 

programs? 

Fowler: The Department of the Treasury maintains a robust sanctions coordination process with the 

State Department, as well as with other national security partners, including the Department of 

Justice_ Department of Homelm1d Security, and Department of Defense_ l11e Treasury Department 

actively participates in the National Security Council's Policy Coordination Committee process. 

which provides a forum for interagency coordination and revie\v of sanctions designations before 

mmouncement. Additionally_ in accordance with the requirements of the relcvm11 Venezuela-related 
112


30176g-9.eps

Executive Orders, the Treasury Department consults with the State Department prior to any 

designation action. 

TO: Rear Admiral Hendrickson 

l. The Coast Guard reports its interdiction of over 223 metric tons of cocaine and detention of 708 

suspected smugglers in 2017 is directly related to disrupting tnmsnational criminal organizations. 

However, the Coast Guard also states that it is only interdicting approximately 30% of the known 

±low. Is this making a dent or do we need to do more? lfmore, what else needs to be done? 

Hendrickson: Mr. Chainnan. I would refer you to the U.S. Coast Guard for their specific operation 

requirements. Our combined effort on the high seas prevents hundreds of metric tons of dangerous 

drugs from reaching our shores each year. Additionally, every detained smuggler is a potential source 

ofinfom1ation that contributes to our collective understanding of these threat networks. I also cannot 

speak to what more the Coast Guard could do, but I can tell you that additional resources translate 

into additional seizures. To stop dmgs from entering the country. USSOUTHCOM. working with the 

Coast Guard via the Joint Interagency Task Force - South (JIATF-S), requires force packages that 

include Maritime Patrol Aircraft (MPA) and medium to high endurance vessels with embarked 

aircraft (and the authorized to use force) and over-the-horizon RHIBs. For every force package 

provided, we have historically been able to stop approximately 31 metric tons (or 36 illicit events) 

annually. MPA are the top priority within the force package as they provide precision geolocation 

tl1at greatly increases the likelihood of a successful interdictions of illicit conveyances. 

Would it be helpful if the Defense Department via U.S. Southern Command provided supply 

ships in order to keep the Coast Guard in the transit zones longer to limit their time 'off-target' for 

logistics? 

Hendrickson: USSOUTHCOM is planning to execute a 90-day pilot program in FY 19 to do just this. 

We are in the process of leasing a Multi-Mission Support Vessel (MMSV) that will be able to accept 

detainees from the Coast Guard vessels and transport them to shore so that the Coast Guard assets can 

stay on station longer. \Ve estimate that the employment of the MMSV in this fashion will result in a 

15% increase the Coast Guard's ship-<iay presence. USSOUTHCOM is appreciative of Congress' 

support in enabling tl1is mitigation measure and we arc confident that it will contribute significantly to 

the great work being conducted by ITA TF -S and the Coast Guard. It is however, only a temporary 

mitigation. We \viii continue to \Vork \Vith Congress and the military senrices to pursue those 

resources which will best enable increased effectiveness and cfticiency of our limited interdiction 

capabilities. 

Arc there biometric technologies that our interdiction forces can employ which will help you 

target transnational crin1inal organizations? 

Hendrickson: DoD already employs biometric enrollment kits in support of DHS and partner nation 

operations against numerous transnational criminal organizations, such as MS-13 and Ml8, along 

with Special Interest Aliens (SIA). Biometric means have been successful in providing early 

detection of numerous STAs with known or suspected terrorist (KST) linkages. USSOUTHCOM. our 

USG partners, and partner nations are using biometric equipment emplaced along kno\\11 and 

suspected migrant routes to monitor the movement of illegal immigrants through the region. The 

purpose of these activities is to resolve tmknown identities across multiple encounters and potentially 

halt the transit of threat actors. In order to accomplish identity resolution, interdiction forces require 

access to collection devices and, as importantly, data architecture solutions that support the retention 

of identity data and matches identities across multiple encounters. A March 2017 example 
113


30176g-10.eps

demonstrates the utility of biometric teclmologies to interdicting KST movement. Costa Rican 

authorities detained a 25-year-old Somali identified as Ibrahim Qoordheen, a KST, within one hour 

after receiving an immediate arrest request from U.S. immigration officials. 

What is being done to improve our partner nation's capacity to hinder transnational criminal 

organizations? I understand the Coast Guard has a program that specifically focuses on training 

our foreign partners. Would additional capacity for this program help0 

Hendrickson: USSOUTHCOM is fortunate to have very willing partners in this region and we work 

very closely with them to help build their capacity to address our common security challenges, 

including the threat posed by transnational criminal orgm1izations. Regional m1d bilateral 

engagements. exercises, training and exchanges \\-ith our partner nations that emphasize counter 

threat network goals, objectives and effects greatly improve their ability to deter trm1snational 

criminal orgm1izations. Any additional capacity to train m1d equip our partners would benefit the 

region as a whole. 

Do we need to establish a forward operating logistical base in Central America0 

Hendrickson: USSOUTHCOM already has a forward operating site at Soto Cano Air Base in 

Honduras that supports Joint Task Force-Bravo. a Special Purpose Marine Air Ground Task Force, 

and other tenant tmits. We also operate air assets out of a cooperative security location in Comalapa, 

El Salvador. Both locations focus on the mission to counter threat networks operating in this theater. 

Rep. Michael McCaul 

TO: Mr. Richard Glenn & Mr. Raymond Villanueva 

I. In general, a Special Interest Alien (SlA) is a migrm1t from a country outside the Western Hemisphere 

with terrorist or security concems who travels through the Hemisphere to the U.S. 

What is your official definition for the term "Special Interest Alien?'' Do your components and 

the interagency share a uniform definition of the term? 

Does your Department maintain m1 official list of countries considered "special interest" m1d the 

reason for such a designation o 

How does the definition m1d com1try list or lack thereof, impact the interagency effort to combat 

this threat? 

How many SIAs cross the U.S. borders each year-both at ports of entry· m1d between ports of 

entry? 

Glenn: There is no interagency, or Department of State, agreed -upon definition for a ''Special Interest 

Alien,'' and the Department of State does not maintain an official list of countries considered '·special 

interest" for the purpose of identifying "Special Interest Aliens." The Department of State is working 

with partner govcmments to improve their capacity to control their borders_ airports, and seaports to 

better position themselves to screen all travelers and migrants entering their countries. Our goal is to 

better prepare our partners to keep all fonns of suspected nefarious travelers and migrants from 

transiting the region and reaching the U.S. border. With this approach. the lack of specific definition 

for "Special Interest Aliens" is not a significant obstacle. I refer you to the Department of Homeland 

Security for details on numbers and types of migrants encountered at our borders. 
114


30176g-11.eps

2. There are numerous security and cost saving benefits to third-countr:v repatriation ofn1igrants. ·where 

for example, Panama or Colombia is able to repatriate migrants back to their home countries before 

they even reach the U.S. 

What is the current status of third-country repatriation? 

Does your Department have the authority to fund repatriation assistance to our Central and South 

American partners? 

What is DHS · s role in repatriation assistance and training? Should DHS have the authority to 

directly fund repatriation assistance to partner nations since DHS would be conducting the 

training and operational support? 

What can the U.S. do to improve and expand third-country repatriation? 

What arc the proper roles of DHS and the State Department in this effort'' Is there sufficient 

coordination between the two? 

Glenn: TI1e Department of State, in collaboration with the Department of Homeland Security and 

other U.S. interagency partners, is pursuing multiple avenues to address irregular migration 

challenges in the Western Hemisphere. We arc coupling diplomatic engagement to encourage our 

regional partners to better manage migration \Vith targeted capacity-building programs to help 

strengthen their law enforcement and border control capabilities. In addition, we are working with 

the U.S. Agency for International Development to build the capacity of foreign governments to 

address economic. security, and governance challenges that drive illegal immigration to the United 

States. While foreign assistance is generally not used to support foreign government operations, 

foreign assistance funds may be available for that purpose in some cases, subject to certain 

limitations. DHS does not currently have the authority to use its appropriated ftmds for repatriation 

operations. Therefore, the Department of State supports a narrowly tailored legislative authority that 

would allow DHS, with Secretary of State concurrence, to usc its own appropriated funds to directly 

support foreign govcmmcnts' operations to address irregular migration flows that impact the United 

States. Under the proposal, the Chiefs of Mission at U.S. Embassies would retain oversight of the 

DHS program and sta±T in country. In addition to general oversight. the relevant Embassy would 

work with recipient govcnnncnts to gamer support for such assistance and to ensure !hat there arc 

safeguards in place to ensure that removals are conducted in accordance \\-ith the country's domestic 

and intemational legal obligations. including with respect to ar1y claims for refugee status or other 

protection. 

TO: Rear Admiral Hendrickson 

I. In general, a Special Interest Alien (SIA) is a migrant from a country outside the Westem Hemisphere 

with terrorist or security concerns who travels through the Hemisphere to the U.S. 

What is your official definition for the tenn "Special interest Alien?'' 

Hendrickson: In line with DHS (the lead federal agency for addressing this threat), we define a SIAs 

as foreign nationals originating from a com1try with potential or established terrorist links. 

What is DOD currently doing to combat the flow m1d threat of S!As reaching the U.S. border? 

How does DOD work with the State Department and DHS in this regard0 

Hendrickson: We arc working closely with DHS m1d partner nations to stop the flow as far from the 

homeland as possible. This includes our support to Homeland Security Investigations' (HSI) 

Operation CITADEL and numerous specific investigations being conducted by HSI and the FBI. Our 

support primarily involves the provision of intelligence and collections support and when appropriate 

we are prepared to assist in other operational support activities authorized in 10 U.S.C. § 284. Of 
115


30176g-12.eps

particular importance is our ability to assist law enforcement with biometrics exploitation_ equipment 

and training. 

What else can DOD do to stop and/or track SIAs in South and Central America? 

Hendrickson: Early identification is critical to addressing the flow of SIAs. To that end_ additional 

Intelligence, Surveillance and Reconnaissance (ISR) collection and analysis resourcing are key 

enablers needed to address this problem set. We will continue to work closely with partner nations to 

help them identify, track, and interdict the ±low of STAs through their borders and before it reaches 

the U.S. Improved mvareness requires improved dissemination ofinfon11ation. We \viii continue to 

pursue increased intelligence sharing m11ong DoD, the USG interagency and foreign partners through 

technicaL process m1d policy chm1ges m1d improvements_ We also continue to work trm1sregionally 

and collaboratively by. with <Ind through the interagency in "whole-of-govemment <Ipprmch. We <Ire 

currently working with DHS (HSI/CBP), DOS. FBI, USNORTHCOM, USAFRlCOM, 

USCYBERCOM m1d USSOCOM on m1 initiative designed to employ a collaborative approach 

towards enabling a transregional HSI investigation into a priority illicit facilitation pathway. 

Rep. Chris Smith 

TO: Mr. Richard Glenn 

I. In response to a question Rep. Nom1a Torres raised regarding the Tntemational Commission against 

hnpunity in Guatemala (CICIO, by its acronym in Spm1ish). you stated ''I think CICIO is a very good 

example of an effective entity. CICTG has been roundly criticized and I think- the criticism nms the 

full gmnut from the socialist progressive party criticizing it as an imperialist American tool all the 

way to the other end of kleptocratic entrenched fmnilies who claim it to be a U.N. conspiracy to 

establish a new world order. but to me. as a neutral foreign assistance giver trying to fight com1ption 

in Central America, I think we-re hitting the spot when we're able to make everybody upset and 

threatening that mode of government of using corruption and coercion as a way of government, that's 

where we vvant to be. Thafs \Yhat \Ve \Vant to be doing_ because it ensures fairness for American 

companies who try to compete in these countries and it ensures that governments are responsible and 

responsive to their people .. " 

This response ignores the substance of criticism while categorically stating that the existence of such 

criticismmem1s ·'we're hitting the spot." 

Beyond vour broad characterizations of the criticisms of CICIO by the extremes_ what is the 

specific substance of the criticism you are referring to when you state ''CICTG has been roundly 

criticized?" 

Does the criticism of CTCIG include (i) politicization ofthe judicial process: (ii) advocacy of pretrial detention; (iii) 11//ra vires acts exceeding the CICIO mm1date: (iv) involvement in heavyhm1dcd police raids involving SWAT teams to arrest essentially white collar criminals; or (v) 

failure to prosecute narcotrafficking. human trafficking and other serious crimes involving 

criminal networks while focusing on political crimes which may involve small mnounts of 

money? 

\Vho has made such criticisms? 

What due diligence have you conducted to dctem1ine whether the criticisms referenced above arc 

warranted or not? 

What do you mean by the phrase "'hitting the spot'?'' 
116


30176g-13.eps

At a briefing with Congressional staff held on May 24, 2018, CICIG Commissioner Ivan Velazquez 

stated that he considers the use of exiended pre-trial detention in the Guatemalan legal system to be a 

"human rights abuse;'' indeed, the 2017 State Department human rights report for Guatemala notes 

that over half of prisoners in Guatemala during the period surveyed were under pre-trial detention. 

However, when pressed as to whether CICIG had advocated the use of pre-trial detention in cases it 

had investigated and assisted the Attomey General in bringing. Commissioner Velazquez conceded 

that CICIG had advocated for pre-trail detention on multiple occasions. 

Do you agree with Commissioner Velazquez that use of extended pretrial detention in Guatemala 

constitutes a "hllll1an rights abuse?'" 

Are you aware of any criticism of CTCTG that accuses CTCTG of advocating for e"iended pre-trial 

detention? 

If so. do you think such criticism to be warranted? 

What due diligence have you conducted to with respect to any such criticism of C1ClG and its 

advocacy of pre-trial detention" 

At a hearing of the Helsinki Commission held on April 27, 2018, testimony established that C1CJG 

cooperated with Russia·s VTB Bank in pursuing claims against a Russian family living in Guatemala 

which had been persecuted by Russian interests linked to the Kremlin. 

Cb1.tl2?.0~0.2JY'.Y.cs~t,_\SQ.::diDt.@_atjotml:hmmtl~~!t~lj~lJ131L~~) Among other instances, 

CICIG attomey Claudia Orellana argued that VTB Bank should be allowed to intervene in the case 

against the Bitkovs on Jammry 22. 2015. 

Given that VTB Bank and its principal, Andrey Kostin, have been sanctioned by the US 

Govemment. and Kostin has been identified the Treasury De:oartt11ertt 

Government of the Russian Federation'" tlliWG'!lN!Jl£Jl:\~!:!.D:Jl!~l\Qn:5iill~::.U;glli~cm!!J;lli), 

"effective entity'" in fighting corruption'/ 

What due diligence have you conducted with respect to the relationship with VTB Bank and 

ClClG. especially in light of the fact that VTB Bank is a sanctioned entity and Kostin is a 

sanctioned Russian official'~ 

2. At the Helsinki Commission hearing. allegations were made that Mayra V cliz. who served until 

recently as General Secretary in the Attorney General's office during the tenure of TI1elma Aldana. 

was culpable in the underlying passport ±raud/falsc document case that ensnared the Bi±kovs, given 

that she was in charge of RENAP during the relevant period. Similar allegations of culpability were 

made with respect to the Cutino law finn. 

Arc you aware of any investigation CIClG has conducted with regard to Mayra V cliz' role in the 

underlying fraudulent docllll1ents case, as well as that oftl1e Cutino law finn 'I 

What due diligence have you conducted with regards to allegations conceming (i) Ma,Ta Veliz 

and (ii) the Cutino ±irm? 

3. CICIG Commissioner Ivan Velasquez has become a polarizing figure in Guatemala and is perceived 

by some to be a political protagonist. 

Do you agree with this assessment" If not, why not? 

Do you believe that this involvement in Guatemalan politics has undercut Velasquez· s 

impartiality to the point where his effectiveness in leading CICIG is compromised'/ 

If not, at what point does his mission become compromised'~ 

4. "\Vhen one creates a '"Commission against Impunity,)' one is making a statement about human nature 

and the tendency of power to corm pt. to which no one is immune. The underlying accord between the 

United Nations and Guatemala which set up CICIG lacks any accountability or oversight 
117

Æ


30176g-14.eps

mechanisms, beyond requiring periodic reports to the Secretary General. Indeed, in conversations 

with U.N. Secretary-General Antonio Guterres, the Secretary-General has said that he has no 

oversight role with regard to CICIG, nor docs the U.N. Office of Intcmal Oversight Services. 

Further, at his briefmg with Congressional staff Commissioner Velazquez stated that he favors 

reform of CICIG. 

Do you agree that the absence of accmmtability and oversight mechanisms ;vith regard to CICIG 

is problematic as a matter ofprinciple 0 

Have you, or to your knowledge, anyone else at the State Department, raised this lack of 

accmmtability and oversight with Commissioner Ivan Velasquez? 

Tfso, what was his response? If not, why not0 

Do you think accountability and oversight mechanisms would be helpful? If so_ what 

specifically? Would an ombudsman be helpful? 

5. Congress has placed a hold on $6 million in funding for CTCTG from the TNCL account in order to 

leverage reforms, which upon information and belief is consistent with the position of the U.S. 

Mission to the U.N. and the Bureau of lntemational Organizations within the State Department. 

Does the Bureau of International Narcotics and Law Enforcement Affairs support these refom1 

efforts and the use of a congressional hold to leverage these reforms'' If not, why not'' 

If Ivan V clasquez has become compromised in his position, do you believe that he should step 

do\\11 as CTCTG Commissioner" If not_ why not? 

If substantive reform of CICIG and the resignation of Ivan Velazquez are sine qua non 

prerequisites for the release of funding_ does your ansvver change? 

LNote: No responses were received from Mr. Raymond Villanueva prior to printing.J