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53–136PDF 2009

IRAN IN THE WESTERN HEMISPHERE

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON 

THE WESTERN HEMISPHERE

AND THE

SUBCOMMITTEE ON 

THE MIDDLE EAST AND SOUTH ASIA

AND THE

SUBCOMMITTEE ON TERRORISM, 

NONPROLIFERATION AND TRADE

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED ELEVENTH CONGRESS

FIRST SESSION

OCTOBER 27, 2009

Serial No. 111–52

Printed for the use of the Committee on Foreign Affairs

(

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

(II)

COMMITTEE ON FOREIGN AFFAIRS 

HOWARD L. BERMAN, California, Chairman 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

BRAD SHERMAN, California 

ROBERT WEXLER, Florida 

ELIOT L. ENGEL, New York 

BILL DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

DIANE E. WATSON, California 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

MICHAEL E. MCMAHON, New York 

JOHN S. TANNER, Tennessee 

GENE GREEN, Texas 

LYNN WOOLSEY, California 

SHEILA JACKSON LEE, Texas 

BARBARA LEE, California 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

MIKE ROSS, Arkansas 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

JIM COSTA, California 

KEITH ELLISON, Minnesota 

GABRIELLE GIFFORDS, Arizona 

RON KLEIN, Florida 

ILEANA ROS-LEHTINEN, Florida 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

RON PAUL, Texas 

JEFF FLAKE, Arizona 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

BOB INGLIS, South Carolina 

GUS BILIRAKIS, Florida 

RICHARD J. KESSLER, Staff Director 

YLEEM POBLETE, Republican Staff Director 

SUBCOMMITTEE ON THE WESTERN HEMISPHERE

ELIOT L. ENGEL, New York, Chairman 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GENE GREEN, Texas 

GABRIELLE GIFFORDS, Arizona 

ENI F. H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

JOHN S. TANNER, Tennessee 

BARBARA LEE, California 

JOSEPH CROWLEY, New York 

RON KLEIN, Florida 

CONNIE MACK, Florida 

MICHAEL T. MCCAUL, Texas 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

RON PAUL, Texas 

JEFF FORTENBERRY, Nebraska 

GUS BILIRAKIS, Florida 

JASON STEINBAUM, Subcommittee Staff Director 

ERIC JACOBSTEIN, Subcommittee Professional Staff Member 

FRED RATLIFF, Republican Professional Staff Member 

JULIE SCHOENTHALER, Staff Associate 

(III)

SUBCOMMITTEE ON THE MIDDLE EAST AND SOUTH ASIA

GARY L. ACKERMAN, New York, Chairman 

RUSS CARNAHAN, Missouri 

MICHAEL E. MCMAHON, New York 

SHEILA JACKSON LEE, Texas 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

MIKE ROSS, Arkansas 

JIM COSTA, California 

KEITH ELLISON, Minnesota 

RON KLEIN, Florida 

BRAD SHERMAN, California 

ROBERT WEXLER, Florida 

ELIOT L. ENGEL, New York 

GERALD E. CONNOLLY, Virginia 

GENE GREEN, Texas 

DAN BURTON, Indiana 

JOE WILSON, South Carolina 

J. GRESHAM BARRETT, South Carolina 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

BOB INGLIS, South Carolina 

GUS BILIRAKIS, Florida 

DANA ROHRABACHER, California 

EDWARD R. ROYCE, California 

HOWARD DIAMOND, Subcommittee Staff Director 

MARK WALKER, Republican Professional Staff Member 

DALIS ADLER, Staff Associate

SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION AND TRADE

BRAD SHERMAN, California, Chairman 

GERALD E. CONNOLLY, Virginia 

DAVID SCOTT, Georgia 

DIANE E. WATSON, California 

MICHAEL E. MCMAHON, New York 

SHEILA JACKSON LEE, Texas 

RON KLEIN, Florida 

EDWARD R. ROYCE, California 

TED POE, Texas 

DONALD A. MANZULLO, Illinois 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

DON MACDONALD, Subcommittee Staff Director 

JOHN BRODTKE, Subcommittee Professional Staff Member 

TOM SHEEHY, Republican Professional Staff Member 

ISIDRO MARISCAL, Subcommittee Staff Associate 

(V)

C O N T E N T S 

Page

WITNESSES 

Mr. Eric Farnsworth, Vice President, Council of the Americas ........................... 19

Ms. Dina Siegel Vann, Director, Latino and Latin American Institute, American Jewish Committee ........................................................................................ 25

Mr. Douglas Farah, Senior Fellow, Financial Investigations and Transparency, International Assessment and Strategy Center ................................. 32

Mohsen M. Milani, Ph.D., Professor and Chair, Department of Government 

& International Affairs, University of South Florida ....................................... 51

Norman A. Bailey, Ph.D., Consulting Economist, The Potomac Foundation ..... 69

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Gary L. Ackerman, a Representative in Congress from the 

State of New York, and Chairman, Subcommittee on the Middle East 

and South Asia: Prepared statement ................................................................. 3

The Honorable Connie Mack, a Representative in Congress from the State 

of Florida: Prepared statement ........................................................................... 6

The Honorable Eliot L. Engel, a Representative in Congress from the State 

of New York, and Chairman, Subcommittee on the Western Hemisphere: 

Prepared statement .............................................................................................. 15

Mr. Eric Farnsworth: Prepared statement ............................................................ 21

Ms. Dina Siegel Vann: Prepared statement .......................................................... 28

Mr. Douglas Farah: Prepared statement ............................................................... 34

Mohsen M. Milani, Ph.D.: Prepared statement ..................................................... 53

Norman A. Bailey, Ph.D.: Prepared statement ..................................................... 71

APPENDIX 

Hearing notice .......................................................................................................... 106

Hearing minutes ...................................................................................................... 108

The Honorable Albio Sires, a Representative in Congress from the State 

of New Jersey: Prepared statement .................................................................... 109

The Honorable Dan Burton, a Representative in Congress from the State 

of Indiana: Prepared statement .......................................................................... 110

The Honorable Gerald E. Connolly, a Representative in Congress from the 

State of Virginia: Prepared statement ............................................................... 112

The Honorable Gene Green, a Representative in Congress from the State 

of Texas: Prepared statement ............................................................................. 114

(1)

IRAN IN THE WESTERN HEMISPHERE 

TUESDAY, OCTOBER 27, 2009, 

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE

WESTERN HEMISPHERE,

SUBCOMMITTEE ON THE MIDDLE EAST

AND SOUTH ASIA, AND

SUBCOMMITTEE ON TERRORISM,

NONPROLIFERATION AND TRADE,

COMMITTEE ON FOREIGN AFFAIRS, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:15 p.m. in room 

2172, Rayburn House Office Building, Hon. Eliot Engel (chairman 

of the Subcommittee on the Western Hemisphere) presiding. 

Mr. ACKERMAN [presiding]. The subcommittees will come to 

order. Today we have a meeting of the three subcommittees meeting jointly, the Subcommittee on Western Hemisphere, the Subcommittee on the Middle East and South Asia and the Subcommittee on Terrorism, Nonproliferation and Trade. First, I want 

to thank my friend, Mr. Engel, for organizing today’s trilateral 

hearing on Iran’s activities in the Western Hemisphere, and thank 

Chairman Sherman for also bringing his subcommittee to the table. 

Chairman Engel is on his way and I just wanted to get started so 

that we didn’t keep everybody waiting. 

I don’t think it takes a lot of convincing to make the case that 

Tehran’s goals in our part of the world are not benign. The Ayatollah’s foreign policy has always been simple, a good offense is the 

best defense. We see this vividly in the Middle East where Iran has 

built up Hezbollah and Hamas to create chaos and terror, and, 

most importantly, to drive events away from Iran and to create a 

deferent; likewise, in Iraq, where Iran has stroked the fires of sectarianism with arms, money and political support, all in the hopes 

of keeping Iraq far straight. 

Iran’s strategy in Afghanistan is much the same with Iranian 

military aid even going to the Shia hating Taliban, all in an effort 

to prevent the United States and our allies from bringing order and 

stability to Afghanistan. In each case, Iran seeks to maximize its 

gains by betting on insurgents, terrorists and militants hoping that 

their allies will either take over the body of politics, or by murder 

and intimidation seize an important or even dominant position in 

the political system over the long term. 

What should worry all of us is Iran’s intention to establish the 

same capability in this hemisphere. It is a heads, I win, tails, you 

lose, strategy and it has worked remarkably well for a remarkably 

2

low cost. Every year the State Department reports on sponsors of 

terrorism and describes in remarkable detail the extent of Iran’s 

activities to create chaos, turmoil and crisis around the world. Ever 

since 1979, Iran makes threats, supports diversion and dispenses 

military assistance to terrorists at war with their own or other governments, and every year, the international community does absolutely nothing whatsoever. 

As a major oil producer in a volatile region, the world has decided to minimize the significance of Iranian misbehavior. While 

Israel is routinely condemned in the United Nations for defending 

itself against aggression and terror, Iran, which is actively making 

trouble, or developing, or sustaining the ability to do so in Afghanistan, Iraq, Lebanon, Egypt, Kuwait, Bahrain, Yemen, Morocco, 

faces not a single word of censure. As a feat of diplomacy, it is really quite remarkable. When considered in the light of Iran’s steady 

march toward acquiring nuclear capabilities, which is in clear contravention of both Iran’s NPT obligations and three mandates from 

the U.N. Security Council, Iran’s success at avoiding punishment 

is altogether astonishing. 

Iran has gone untouched for two reasons. First, by supporting 

Hamas and Hezbollah, Tehran has effectively co-opted the Palestinian cause, which, due to the salience of the issue and the political weakness of the Arab states, effectively neuters the entire Arab 

league, and with the Arabs goes the organization of the Islamic 

conference. It is not that states with strong ties to the United 

States, like Saudi Arabia, Egypt, Indonesia or Pakistan think Iran 

is undeserving of censure. The governments of each of these countries are well aware that Iran is the greatest threat to both peace 

and stability in the Middle East and to the international nuclear 

nonproliferation regime. 

The problem is that the governments of every one of these countries are absolutely petrified of the price that they would pay in 

public opinion if they acknowledge these convictions publicly. Second, Iran has tapped effectively into the lingering hostility borne 

of the anticolonial struggles of the last century. Over time, appeals 

to fight against the United States in the west may have less resonance in a world where colonial dominance is more of an abstraction than a memory. In the present, anticolonialism still delivers 

the goods diplomatically for Iran and has given Iran entry into the 

Western Hemisphere. 

The fact that Iran is seeking hegemony over the Middle East and 

that in June it effectively went to war against its own people has 

apparently done nothing to diminish Iran’s credibility with some of 

the developing nations in this part of the world. We are not going 

to be able to constrain Iran until we understand the full scope of 

its ambitions and begin to work in a truly comprehensive manner 

to constrain, counter and defeat those ambitions. Today’s hearing 

on Iran and their activities in the Western Hemisphere is thus extremely important. We will turn next to the ranking member, Mr. 

Mack. 

[The prepared statement of Mr. Ackerman follows:]

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Mr. MACK. Thank you, Mr. Chairman. I also want to thank 

Chairman Engel for bringing this hearing together and thank all 

the members who are here today as well. One of the greatest 

threats the hemisphere faces is the rising influence of Iran. Together with Venezuela, Iran has slowly inserted itself into our 

hemisphere. Today’s hearing will address some of these concerns. 

Mr. Chairman, where Ahmadinejad goes, so does trouble. Take 

Honduras, for example. When I was in Honduras and met with 

President Micheletti, he was clear. Honduras will no longer side 

with Ahmadinejad. Under Zelaya’s leadership and Chavez’ influence, Zelaya was moving Honduras close to Iran. 

Zelaya and Chavez, together with their friend Ahmadinejad, created conditions that had allowed anti-Semitism to foster. Mr. 

Chairman, the shocking comments of Zelaya supporters are unacceptable. Using the Jewish community as scapegoats is something 

we have seen in Venezuela. First, we have Chavez and Zelaya 

claiming that Israelis were behind Zelaya’s removal, and then 

Israelis were trying to kill Zelaya. Then we had Radio Globo, a 

staunch supporter of Zelaya. The anti-Semitism of Zelaya’s supporters is so egregious that I would rather not say it here and 


53136h-2.eps
5

today, Mr. Chairman. This wave of anti-Semitism cannot be tolerated. Of course in Venezuela this is nothing new. 

We all have heard the reports: Synagogues being attacked and 

state companies printing anti-Semitic propaganda. I actually want 

to commend some of our witnesses today for speaking out against 

anti-Semitism in Venezuela. The AGC showed true leadership 

when it spoke out against Chavez. Just as the AGC has done, we 

in Congress must make sure the world knows what is happening 

in the Jewish community in Venezuela. I urge my colleagues to join 

my resolution, H. Con. Res. 124, and express support for the Jewish community in Venezuela. Mr. Chairman, when it comes to Iran 

and the Western Hemisphere, Venezuela is where all the dots connect. 

Many of us already know how close Chavez is to Ahmadinejad. 

This close bond has created dangerous conditions in our hemisphere. Hezbollah operating in Latin America, flights from Tehran 

to Caracas and no checks whatsoever, Iranian banks operating 

with Venezuelan banks, a bank link that has one sole purpose, to 

avoid sanctions and fund terrorists. Now we have reports of a scientist selling nuclear information to Venezuela. Just a few weeks 

ago, Chavez and Ahmadinejad met to strengthen their relationship. 

At the top of the agenda was how to get uranium and how to help 

Iran of aid sanctions. 

Mr. Chairman, I was a vocal critic of the Bush administration 

and their hands off approach of Hugo Chavez. I believe that by failing to confront Chavez we have left a vacuum. The Obama administration must take the dangers of Hugo Chavez seriously. We 

must confront Chavez and Ahmadinejad and not wait until it is too 

late. Today, in a bipartisan manner, I introduced a resolution with 

my good friend, Congressman Klein, who just stepped out, that 

calls on the administration to designate Venezuela as a state sponsor of terrorism. Venezuela is a danger that cannot be overlooked, 

Mr. Chairman. 

I would like to conclude with Brazil. Reports tell us that 

Ahmadinejad and the President of Brazil are set to hold a summit 

this November in Brazil. Additionally, my understanding is that 

Lula intends to visit Iran next year. As may of us know, Brazil was 

the first country to recognize the most recent elections in Iran, 

elections which I believe were neither fair nor free. Brazil is clearly 

a leader in this hemisphere. That said, along with leadership comes 

responsibility. Brazil should not be following Venezuela. Instead, it 

should be leading. This meeting between Lula and Ahmadinejad is 

one that we will be paying close attention to. I call upon President 

Lula to put pressure on Ahmadinejad so that Iran understands 

that all responsible nations stand together. I urge President Lula 

not to take the same path as Chavez. Mr. Chairman, I look forward 

to the hearing today, and thank you for holding the hearing. 

[The prepared statement of Mr. Mack follows:]

6


53136i-1.eps
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53136i-2.eps
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53136i-3.eps
9

Mr. ACKERMAN. Thank you for your opening statement. We will 

tell Representative Klein about your shout out. Chairman Sherman? 

Mr. SHERMAN. Thank you, Mr. Chairman. Iran and Hezbollah 

have increased their influence in Latin America since the pernicious involvement that was shown by the bombings of the Israeli 

embassy in Buenos Aires in 1992, and then the bombing of the Argentine Israeli Mutual Association in 1994. Since Ahmadinejad 

came to power in 2005, Iran has opened six new Latin American 

embassies, specifically, Colombia, Nicaragua, Chile, Ecuador, Uruguay and Bolivia, adding to the embassies already in Cuba, Argentina, Brazil, Mexico and Venezuela. This hearing is an opportunity 

to examine our ongoing efforts to counter this influence and to isolate those who support terrorism. 

Iran has used its petrodollar windfall—or at least the illusion 

that it may be willing to actually spend its petrodollar windfall, to 

influence Latin American nations, including the Governments of 

Bolivia, Ecuador and Nicaragua. For example, Iran opened an embassy in La Paz in February 2008 and pledged more than $1 billion 

in assistance to Bolivia. In turn, President Morales announced his 

country’s intention to move its only Middle East embassy from 

Cairo to Tehran, and Bolivia lifted visa restrictions on Iranian citizens. 

In September, 2008, Iran and Ecuador signed an energy cooperation agreement. Meanwhile, President Correa, and this may or may 

not be linked, has refused to renew the U.S. military’s 10-year 

lease on the air base at Manta. In May, the Ecuadorian defense 

minister was quoted on Iranian television as saying that his country wants to work with countries, such as Iran, that are willing to 

help Ecuador develop its defense industry. 

In 2007, Iran promised, and I just want to emphasize this is a promise, to help fund a $350 million deep water port and to build 

10,000 houses in Nicaragua. Although Iran has yet to fulfill these 

promises, Nicaraguan officials removed Iran from the list of countries whose citizens must get visas in advance. I want to point out 

that there is no visible support among the Iranian people for any 

expenditure of the funds of a struggling country in foreign aid to 

a different hemisphere, namely the Western Hemisphere. 

Of greatest concern is the relationship between Iran and Venezuela which has been central to Iran’s rising influence in Latin 

America. Presidents Chavez and Ahmadinejad have collaborated on 

numerous cooperative ventures worth billions. 

In 2007, Presidents Chavez and Ahmadinejad announced a joint 

$1 billion investment fund would be set up by the two countries 

and would be used to finance projects in friendly developed countries. Chavez boasted it will permit us to underpin investments, 

above all, in countries whose governments are making efforts to 

liberate themselves from the so-called imperialist yoke. 

Later, in 2008, an article in the Italian periodical La Stampa reported that Iran has been using Venezuelan-owned commercial aircraft to transport computers and engine components to Syria for 

Syria’s missile program. In turn, the Iran Revolutionary Guard 

Corps, including its elite Al-Quds unit, has trained the Venezuelan 

police and secret service. Then, in April of this year, Iran and VenVerDate 0ct 09 2002 11:20 Dec 15, 2009 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\WORK\WH\102709\53136 HFA PsN: SHIRL
10

ezuela signed a memorandum of understanding on military cooperation comprised of training and mutual exchange of military 

experiences. 

The U.S. has responded to some degree. In October, 2008, the 

U.S. Treasury Office of Foreign Assets Control designated the export development bank of Iran and three affiliates, including Banco 

Internacional de Desarrollo, I am sorry for that mispronunciation, 

in Venezuela as proliferators of Iran’s WMD programs. OFAC 

freezes any U.S. assets of these entities and prohibits any U.S. person in the United States from doing business with them. 

Additionally, in February, 2008, Representative Ros-Lehtinen requested that Departments of State and Treasury investigate 

CITGO to determine whether a 2007 petro chemical sector agreement between the Governments of Venezuela and Iran benefits the 

American subsidiary, which would be a violation of the Iran Sanctions Act. I hope that we focus on the public diplomacy in Latin 

America. We need to remind our friends in Latin America that the 

United States has provided trillions in trade, billions in aid; whereas, Iran promises but, aside from making investments that are in 

its own interests, does almost nothing. We have to remind the people of Latin America that Iran may be involved in that continent 

region now, but may not be a year or two from now. 

In fact, as I pointed out, Iran’s involvement in Latin America has 

no visible support among the Iranian people. In contrast, America 

isn’t going anywhere. We will be involved in Latin America for centuries to come. I see that my time has expired. I will use other time 

to comment upon Hezbollah’s involvement, Hezbollah being virtually a wholly owned subsidiary of Iran. I look forward to hearing 

the witnesses’ statements, but I will point out that not only myself, 

but other members of this tripartite subcommittee, will also have 

to go to financial services where we are writing legislation of great 

economic importance, so if I am not here to hear your statement, 

I will be reading it. I know that you have provided a written copy. 

Thank you. 

Mr. ENGEL [presiding]. We are going to call on Mr. Royce. Before 

we do that, I want to thank Mr. Ackerman for filling in for me. 

After Mr. Royce gives his statement, I will give mine. Mr. Royce? 

Mr. ROYCE. Thank you, Mr. Chairman. Let me first say I appreciate very much the fact that we are holding this hearing. We had 

several hearings, Mr. Sherman and myself, a few years ago when 

I chaired the Terrorism Subcommittee on Hezbollah’s global reach, 

was one of the hearings that we held. That focused on the terrorism in our own hemisphere, the significant presence we have. 

Those of us from California know only too well about the case, for 

example, of Mahmoud Kourani, who was trained by Iranian intelligence, a Hezbollah terrorist who made his way over the California 

border in the trunk of a car and subsequently was detained and 

convicted here in the United States. 

During these hearings I think a great deal of information was focused on the Venezuelan connection to this. During the hearing on 

Venezuela, terrorism hub of South America, the subcommittee 

heard from the State Department that said at that time forgers 

alter Venezuelan passports with childlike ease. Most worrisome, 

they said, Venezuelan Government officials direct the issuance of 

11

documents to ineligible individuals to advance political and foreign 

policies agendas. Now, given growing Iran/Venezuela ties, I think 

that is a great concern. 

One witness who is with us today, Doug Farah, will characterize 

Iran’s relationship with governments and groups in our own hemisphere as direct and growing and it is a threat. My colleagues have 

mentioned specific concerns. Two Venezuelan companies sanctioned 

for connection to Iran’s proliferation activities. Large passenger 

planes conducting weekly flights between Caracas and the capitol 

of Iran, and yet, there is no tourism between these two countries. 

Hugo Chavez signing a number of energy agreements on a visit to 

Tehran. 

This year’s growing threat assessment by the Director of National Intelligence noted that Chavez’ growing ties to Iran, coupled 

with Venezuela’s lax financial laws and lax border controls and 

widespread corruption, have created a permissive environment for 

Hezbollah to exploit. With Iran being a Middle Eastern country, 

this connection, I think, may seem odd to some, but I think history 

is full of oddly twinned rogues conspiring together. During my 

years on this committee I have been surprised, certainly, to find 

some of this history. In the 1980s, North Korea went into 

Zimbabwe and trained the fifth brigade there, trained them to 

slaughter and terrorize people, and in Zimbabwe I saw the after effects of some of that where citizens had been thrown down wells. 

North Korea also worked more recently covertly to assist Syria 

in building a nuclear reactor. The IRA, of all organizations, developed connections with the PLO in the Middle East and with FARC 

in Latin America. So it is nothing new to have these types of connections from terrorist outfits, but we better keep our eyes on our 

hemisphere, and it might be harder and harder to do that because 

the Wall Street Journal reported last month that interviews with 

diplomatic officials suggest that western intelligence in this region 

is very, very limited. That must change. 

We have to do a better job of collecting this intelligence. We don’t 

want to find many more Mahmoud Kouranis after the fact, after 

they are in our country, and after they are arrested with a terrorist 

cell on our own soil. One strategy we could adopt to confront this 

threat would be to solidify our relationships with those who frankly 

are not that interested in Hugo Chavez’ and Ahmadinejad’s agenda, that frankly see an alternative to that kind of Chavez 

Ahmadinejad agenda. That means moving forward with free trade 

agreements for Colombia and Panama. They are languishing, and 

that is too bad. Thank you, Mr. Chairman. 

Mr. ENGEL. Thank you very much, Mr. Royce. I would like to 

make my opening statement now. First, I want to say that I am 

delighted that the three subcommittees are working together on 

Iran in the Western Hemisphere. The jurisdiction touches on all 

three subcommittees. It is obviously a very important subject. Obviously, looking at the turnout today, there are a lot of people here 

who are interested in doing this, so I am pleased to belatedly welcome everyone to today’s hearing on Iran in the Western Hemisphere. The question I seek to explore in this hearing is whether 

Iran’s expanding presence in the Western Hemisphere is a threat 

12

to our region or merely a nuisance. Is it only about expanded trade 

or is there something more nefarious going on? I believe it is both. 

Many poor countries in Latin America and the Caribbean actually seek financing from oil rich Iran for development projects. 

Every day, it seems, I hear about another country expanding diplomatic relations with Iran or seeking greater economic contacts. In 

fact, trade and investment deals between Iran and Latin America 

now total well over $20 billion. Is Iran’s expanded presence in the 

Western Hemisphere nothing more than an effort to earn some 

hard currency? I doubt it strongly. First and foremost, we must 

never forget the 1992 bombing of the Israeli embassy in Buenos 

Aires that killed 30 people, and the 1994 bombing of the AMIA 

building in Buenos Aires that killed 85 people. 

While the perpetrators have not yet been brought to justice, the 

state prosecutor of Argentina concluded that the bombings were executed by Hezbollah, which is supported by Syria and sponsored by 

Iran. In November 2006 an Argentine judge issued arrest warrants 

in the AMIA case for nine persons, including Ahmad Vahidi, who 

recently became Iran’s defense minister. Absolutely disgraceful. I 

would like to commend the Government of Argentina for condemning Iran’s selection of Vahidi as ‘‘an insult to Argentine justice.’’ I add my voice to President Cristina Fernandez de Kirchner 

of Argentina, who, in her recent speech to the U.N. General Assembly month, demanded justice on behalf of the victims of the bombings. 

So the Iranian role in the region is anything but well-meaning, 

and this brings me to Venezuela. When President Obama went to 

the Summit of the Americas he shook hands with Venezuelan 

President Chavez and our countries have now restored their ambassadors. Unfortunately, there are few other positive things to report. President Chavez recently traveled to Iran and Syria, leading 

sponsors of terror in the Middle East, and alleged from Damascus 

that Israel had committed genocide against the Palestinians. This 

was a vile attack on Israel, and I immediately issued a statement 

condemning these offensive and absurd remarks. 

I thought it was a bit strange that he would say this from Damascus, which is the headquarters of both Hezbollah and Hamas. 

It is just amazing. However, Venezuela’s relationship with Iran is 

more than just an outlet for Chavez’ excessive rhetoric. The Director of National Intelligence, Dennis Blair, recently said that Venezuela ‘‘is serving as a bridge to help Iran build relations with 

other Latin American countries.’’ The rationale underlying the Venezuelan/Iranian connection is apparent. Both leaders, Hugo Chavez 

and Ahmadinejad, are not friends of the United States and seek 

any opportunity to denounce this country. 

Concerns about the Iran/Venezuela axis run much deeper than 

harsh rhetoric and expanded diplomatic cover. A recent op ed in 

the Wall Street Journal by Manhattan’s district attorney, Robert 

Morgenthau, raised serious concerns about the expanded financial 

ties between the two countries. He said ‘‘failure to act will leave 

open a window susceptible to money laundering by the Iranian 

Government, the narcotics organizations with ties to corrupt elements in the Venezuelan Government, and the terrorist organizations that Iran supports openly.’’ In fact, in October, 2008, the U.S. 

13

Treasury Department imposed sanctions on Iranian owned banks 

in Caracas. 

Furthermore, a State Department report has expressed concern 

about weekly flights between Caracas and Tehran where passengers and cargo are not subject to proper security checks. In the 

wake of 9/11, for a country to have loose security procedures on 

international flights with Iran is simply reckless, if not downright 

dangerous. I am very troubled with agreements signed during 

President Hugo Chavez’ visit to Tehran last month. According to 

press reports, Venezuela would invest a 10-percent stake in Iran’s 

south parts gas projects valued at some $760 million and provide 

20,000 barrels per day of refined gasoline to Iran. 

While it is anyone’s guess as to whether these schemes will ever 

be implemented, they carry potentially serious repercussions. According to the Congressional Research Service, investment in Iran’s 

gas fields ‘‘could be sanctionable under the Iran Sanctions Act with 

potential ramifications for U.S.-based CITGO, a wholly owned unit 

of PDVSA.’’ If the bill being marked up in the Foreign Affairs Committee tomorrow becomes law, providing refined petroleum to Iran 

may also trigger sanctions. While some question whether Venezuela has the ability to provide gasoline to Iran since it imports 

gasoline to meet its own domestic demand, President Chavez is 

clearly approaching a perilous area. 

Iranian involvement with Latin America also has a transnational 

element. In 2007, while in Brazil, I visited a city called Falls de 

Iguazu, or Iguazu Falls. This city falls on the so-called tri-border 

region between Brazil, Argentina and Paraguay. It is known for 

lawlessness and reports of Islamic extremists and Hezbollah agents 

smuggling to finance their bases in Lebanon and elsewhere. The 

United States is working with the governments of the bordering 

countries in the three-plus-one arrangement where we are trying 

to halt the smuggling and the possibility of terror financing. I have 

no information about any active and operative terrorist cells in the 

region, but we must continue our vigilant monitoring. While I appreciate Brazilian cooperation in the tri-border region and on other 

issues, I am concerned about President Lula’s diplomatic outreach 

to Iranian President Ahmadinejad. 

Immediately after this summer’s flawed and stolen Iranian election, President Lula said he saw nothing wrong with the election 

and proceeded to invite Ahmadinejad to Brazil. It is my understanding that this visit will take place in November. When Venezuela expands its relations with Iran, I may not like it, but I chalk 

it up to President Chavez and his altered sense of the world. When 

Brazil expands its ties to Iran just as the world is trying to deal 

with the secretive Iranian nuclear program, I am frankly left bewildered. Brazil is a rapidly modernizing country which wants to join 

the U.N. Security Council and be a world leader. 

I truly hope Brazil reaches that point. Expanding ties to 

Ahmadinejad who denies the Holocaust and calls for the destruction of another nation’s state, Israel, is not the way to get there. 

In the future, I think we have to expand our dialogue with Brazil 

on the dangerous role of Iran and encourage our friends in Brasilia 

to reconsider their ties with Tehran. So, in the end I am left with 

two questions: 1. What do Latin American countries hope to get out 

14

of their relationships with Iran; and 2. What should we in the 

United States do about it? As to the first question, some seek 

money and investment, but we must remember with investment 

comes influence and I have serious concerns about expanded Iranian influence in the region. 

As for the second question, we must increase our diplomatic engagement to better explain our views. I have long been concerned 

that during the previous administration we did not pay enough attention to Latin America and the Caribbean and this was at our 

own peril. So who came to fill the gap? Iran. I think the Obama 

administration is today effectively reengaging in Latin America 

and hopefully will be able to describe our approach in a way that 

the region will more readily hear. In some ways, we have tarred 

our own hands. We still do not have an Assistant Secretary of 

State for the Western Hemisphere or an ambassador to Brazil because both names are facing a hold by Senator DeMint. 

Iran is making inroads into countries in the region and 

Ahmadinejad about to travel to Brazil, I hope that Senator DeMint 

rethinks his position and lifts these holds so we can more effectively engage our partners on the dangers of Iran and on the myriad of issues which confront the hemisphere. Thank you. With that, 

I would like to call on Mr. McCaul. 

[The prepared statement of Mr. Engel follows:]

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Mr. MCCAUL. Thank you, Mr. Chairman. I appreciate this joint 

hearing and the importance of it. In the interest of time, I will take 

a pass so we can move on and hear the testimony of the witnesses. 

Thank you. 

Mr. ENGEL. Okay. Ms. Watson? Pass. Mr. Fortenberry? 

Mr. FORTENBERRY. Thank you, Mr. Chairman. I am going to forego an opening statement as well. 

Mr. ENGEL. Mr. Scott? 

Mr. SCOTT Mr. Chairman, I will forego an opening statement. 

Thank you. 

Mr. ENGEL. Okay. Mr. Green? 

Mr. GREEN. Mr. Chairman, it seems like we are on a role. I will 

forego a statement and ask a statement be placed into the record. 

Mr. ENGEL. Okay. Finally, Mr. Klein. I don’t want you to be intimidated, Mr. Klein. 

Mr. KLEIN. I am not going to be intimidated. I come from south 

Florida. I am not going to be intimidated on something like this. 

Thank you, Mr. Chairman. I will be brief. I want to thank you 

again for holding the hearing. I thank my friend Mr. Mack. He and 

I have been working together on resolutions and dealing with some 

of the threats from Venezuela and the relationships that seem to 

be developing with President Ahmadinejad. Obviously, we are all 

very concerned about the issues that have been developing in this 

region, and particularly with President Ahmadinejad planning on 

being in the region visiting Brazil, Venezuela having pledged oil 

and refined petroleum to Iran, the district attorney of New York 

stating that there are certain banking relationships that obviously 

have to be examined. 

We need to obviously develop a comprehensive policy. At the 

same time, the United States continued to by significant amounts 

of oil from Venezuela. So I think there needs to be some reconciliation, but I think what our panel can do for us today is give us 

your perspective so we can understand how to best approach this. 

I thank the chairman. 

Mr. ENGEL. Well, thank you. Well put, Mr. Klein. I am now 

pleased to introduce our distinguished private witnesses. Eric 

Farnsworth is vice president of the Council of the Americas and is 

no stranger to my subcommittee having given excellent testimony 

many times previously. Dina Siegel Vann is director of the Latino 

and Latin American Institute of the American Jewish Committee. 

She does great work, and I rely on Dina a lot. Douglas Farah is 

senior fellow for financial investigations and transparency at the 

International Assessment and Strategy Center. Welcome. 

Mohsen Milani is a professor and chair of the Department of 

Government & International Affairs at the University of South 

Florida. Welcome. Last, but not least, Norman Bailey is a consulting economist at the Potomac Federation. Dr. Bailey previously 

testified at our Western Hemisphere Subcommittee hearing on 

Venezuela in July 2008. Welcome back. I thank all of you, and we 

will start with Mr. Farnsworth. Let me say, as I always do, that 

you have 5 minutes each. Could you please, it would be helpful if 

you could summarize your testimony and we could enter your actual statements into the record in addition to your testimony. Mr. 

Farnsworth? 

19

STATEMENT OF MR. ERIC FARNSWORTH, VICE PRESIDENT, 

COUNCIL OF THE AMERICAS 

Mr. FARNSWORTH. Thank you, Mr. Chairman, and thank you for 

your generous comments. Good afternoon to you and to the members of the subcommittees. If I can, I would like to give you the bottom line first. Despite worrisome trends, we are dealing with imperfect information regarding the intentions of the Iranian regime 

in the Americas, and therefore, in my estimation, the ultimate implications for regional security, democracy and development priorities are not entirely clear. What is clear is this: Nations that disrespect democratic principles in the Americas tend also to be nations that offer aid and comfort to global actors who reject the 

norms of the international system, ungoverned regions within 

countries offer permissive environments for mischief making, and 

a weak inter-American system offers little in terms of the ability 

to counterbalance extralegal or threatening acts. 

As the ongoing crisis in Honduras shows, the first priority of the 

hemisphere must therefore be to strengthen democracy and the institutions of democratic governance. Although a flurry of think 

tank reports for the new administration ignored this central point, 

this is not a theoretical academic exercise. Democracy must be patiently nurtured and reinforced as a priority. It is a fundamental 

national security concern of the United States because healthy democracies in Latin America and the Caribbean make better partners to advance a common agenda consistent with broader U.S. national interests. 

On the other hand, countries where democracy is weak, where 

the institutions of the state are ineffective or where democratically 

elected leaders have in fact curtailed democratic institutions for 

their own purposes have proven time and again to be the most likely portals through which unhelpful influences, such as Iran, are introduced into the region. Of course, each nation of the Americas is 

a sovereign, independent state. Each nation has the right to maintain relations with whomever they wish, subject to prevailing international law and practice. It is truly unfortunate, however, that 

any nation of the Americas would go out of its way to intensify 

state to state relations with Iran, a regime that has been repeatedly identified as a state sponsor of terror, as has already been 

mentioned, which has been directly implicated in the only examples 

of extra regional terrorist acts in the Americas other than 9/11, and 

which is in violation of numerous U.N. resolutions. 

In this regard, Venezuela’s well-known efforts to midwife Iran’s 

entry into the Americas through reciprocal leaders’ visits, trade 

and commercial agreements, including air links, potential sanctions 

busting, and friendly votes in bodies such as the International 

Atomic Energy Agency, are at best polarizing and counterproductive in the hemispheric context. Most recently, in fact, Mr. 

Chairman, you referred to the Morgenthau report, and that also 

provided some important information in terms of the Iranian/Venezuelan links on the financial side. 

At the same time, when the list of hemispheric priorities includes 

economic recovery from deep global recession, job creation to eradicate poverty, reducing a comparative education deficit, among 

many other things, it makes little obvious sense for leaders like 

20

those in Bolivia, Ecuador and Nicaragua to take actions to undermine the very cooperation that they need, and claim to want, from 

the United States. For Iran, the benefits of closer relations in the 

Americas are not in doubt. Iran is able to build commercial relations with other parts of the world, especially in agriculture, the regime is able to exchange information and technology, particularly 

on energy, and gain access to raw materials, which may include 

uranium. 

By developing close regional ties, Iran also has the ability to leap 

frog its international isolation, potentially evading sanctions, as 

has been discussed. The regime is also able to build international 

coalitions in support of its domestic activities, including potential 

development of nuclear weapons. By expanding its diplomatic representation, Iran has enhanced its intelligence capabilities while 

outreaching, should it choose to do so, to nonstate actors and affinity organizations which may be working to raise funds through 

drug trafficking and other means in the Western Hemisphere for 

certain activities in the Middle East or which may be building their 

own extra legal capabilities in the Americas. 

With this in mind, the pending visit of Iran’s President to Brazil 

next month is of potential concern because Brazil’s engagement 

with Iran will give a political boost to the Ahmadinejad regime, 

even as the international community seeks in Vienna to find a solution to the nuclear nonproliferation dilemma. To the extent the 

visit does go ahead, one would hope that the Brazilians would use 

the opportunity to reaffirm that the Western Hemisphere is no 

place for Iranian meddling and would seek to use their access and 

emerging hemispheric leadership role for the purpose of vocally 

supporting international nonproliferation efforts. 

Mr. Chairman, I appreciated your comments about the pending 

nomination of Tom Shannon as well. I think it is important to have 

an active Ambassador in Brazil to make exactly this point. More 

broadly, these are issues that should be watched carefully. In other 

words, Iran’s engagement in the Americas. For the United States, 

several actions are appropriate. We should be wary, we should be 

watchful and we should be prepared to act in concert with the 

international community, particularly on the law enforcement side. 

We should not act on incomplete information unnecessarily, nor 

take steps precipitously. 

We must continue to understand better the true nature of the 

threat and pursue actions with others, as may be appropriate. Second, we should continue to emphasize the hemispheric growth 

agenda, including trade and investment expansion, which has already been mentioned, and the rule of law, which will help build 

strong and expanding middle classes and reinforce just, transparent societies that are less prone to authoritarian manipulations 

from elected leaders of any ideology or stripe. Finally, I would return to where I began. In testimony before the Western Hemisphere Subcommittee earlier this year I said that despite our efforts to build democracy elsewhere around the world the United 

States cannot be complacent about such matters closer to home. 

Honduras subsequently proved the point I was trying to make. 

Democracy offers no guarantees, but we stand a much better 

chance of achieving our strategic goals in the hemisphere, including 

21

a peaceful, growing, vibrant region that works in tandem with us 

to address issues of common concern and rejects outside meddling 

from Iran and others, if democratic institutions in the Americas are 

strong. Thank you again, Mr. Chairman. I appreciate the opportunity. 

[The prepared statement of Mr. Farnsworth follows:]


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Mr. ENGEL. Thank you very much, Mr. Farnsworth. Ms. Siegel 

Vann? 

STATEMENT OF MS. DINA SIEGEL VANN, DIRECTOR, LATINO 

AND LATIN AMERICAN INSTITUTE, AMERICAN JEWISH COMMITTEE 

Ms. SIEGEL VANN. Thank you, Mr. Chairman, for the opportunity 

to share with you and with the members of the three convening 

subcommittees a summarized version of our prepared statement on 

the many reasons our organization has been following with growing 

concern the increase of Iran’s presence and influence in the Western Hemisphere. In fact, AJC brought this issue to light in 2005 

when Venezuela and Iran made a strategic decision to expand their 

economic and political relations, which date back to the creation of 

OPEC in 1964. Since then, Venezuela has become the gateway to 

heightened cooperation between Iran and other countries within 

and outside the former’s sphere of influence. 

This seems to have had an impact on the level and intensity of 

anti-Semitic expressions, on bilateral relations with Israel and on 

the quality of the relationship between local Jewish and Arab communities. As we continue to travel throughout the region and raise 

the issue with Latin American government officials, leaders of Jewish communities and representatives of civil society as a whole, we 

have found that growing concern for this trend is shared by many. 

Some of Iran’s main goals and activities in the region became quite 

evident as early as the 1990s. As has been already pointed out, 

Iran and Hezbollah are thought to be complicit in the bombings of 

the Israeli embassy in Buenos Aires in 1992 and AMIA in 1994 

which resulted in 115 deaths and more than 500 injuries. 

Just last July 18 we commemorated the 15th anniversary of the 

1994 bombing, the worst anti-Semitic attack since the Second 

World War, and an atrocity labeled as a crime against humanity 

by the Argentine justice system. As Tehran attempts to expand its 

influence in our hemisphere, it is important to understand that 

today, as yesterday, the so-called moderates in Iran’s ruling circles 

have been directly involved in exporting terrorism and massacring 

innocents. Although diversification of bilateral and regional relations is the sine qua non for countries intent on being perceived as 

global players, the alliances struck in the last few years by many 

Latin American countries with Iran could be viewed as somewhat 

problematic. 

This derives from Iran’s confrontational attitude toward the 

United States and Israel and its apparent attempt to take advantage of democratic rule, competitiveness and a generalized climate 

of freedom to advance its agenda. All this comes as it is increasingly clear that a healthy hemisphere depends on nourishing a 

sense of partnership and connectedness among all its nations to ensure regional stability. At his June confirmation hearing, the head 

of the U.S. Southern Command, General Douglas Fraser, reaffirmed his predecessor’s concerns about ‘‘Iran’s meddling in Latin 

America.’’ General Fraser also underscored that ‘‘the real concern 

is not a nation to nation interaction,’’ but rather ‘‘the connection 

that Iran has with extremist organizations like Hamas and 

26

Hezbollah and the potential risk that that could bring to the region.’’

With the backing of Venezuela, Iran has pursued a proactive policy of outreach to other countries in Latin America, exploiting antiAmerican sentiment and offering sorely needed funding. Since the 

election of President Ahmadinejad in 2005, the first election, Iran 

has inaugurated, reestablished and increased its diplomatic representation in 10 nations. Against this backdrop, many of Latin 

America’s 450,000 Jews are feeling quite vulnerable. Of particular 

concern is the situation of communities in countries, such as Venezuela, that maintain intense bilateral contact with Iran. 

The use of anti-Semitism as a political tool and virulent antiJewish, anti-Zionist expressions in the official media, particularly 

during the 2006 Lebanon War and the 2008 Gaza operation, seem 

to have been the result of this alliance. Pronouncements from 

Presidents Chavez and Morales and other government officials denouncing Israel as genocidal and racist culminated in the severing 

of relations with the Jewish state after six decades of warm and 

constructive bilateral ties. This worrisome trend persisted during 

President Chavez’ recent trip to Libya, Syria and Iran. 

There have been several incidents of violence against community 

institutions, the most recent in February, 2009, against the Tiferet 

Israel Synagogue in Caracas. Strained relations, and even confrontation, between members of local Arab and Jewish communities 

are another disturbing development and contribute to the fracturing of society as a whole. This is the result of virulent anti-Zionist rhetoric and media campaigns that reflect a concerted attempt 

to import political conflicts alien to the region. Witness what just 

happened last month in Honduras. Anti-Semitism totally unrelated 

to the complex political impasse in the country was utilized in the 

same way it has been done lately in Venezuela, to scapegoat and 

to delegitimize. 

Although a direct cause/effect relationship cannot be proven, it is 

most probable that the development of close personal relationships 

and shared world views and agendas, including President 

Ahmadinejad’s stated desire to destroy the Jewish state, have had 

an impact on the state of affairs in the region. In this context, we 

are deeply concerned that despite President Lula’s best intentions, 

the programmed visit of the Iranian leader to Brazil on November 

23 will be perceived by many as a gesture of support for his extreme positions. Three years ago AGC first published a briefing recording a trend that had escaped most of the region’s observers. 

Today, although the topic is more commonly discussed, evident 

threats are being ignored or minimized. The mere establishment of 

relations between sovereign nations does not in itself constitute 

cause for concern. Nevertheless, the assault on AMIA is a tragic 

and compelling reminder of the potential dangers posed by Iran 

and its allies to the security and well-being of the Americas. Unfortunately, many countries have chosen to marginalize this event as 

they seek expanded commercial and diplomatic ties. Indeed, regional and international double talk has blocked the Argentine 

Government’s efforts to extradite and punish those who masterminded the attack, including members of Iran’s current ruling circle. 

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The generalized perception by some governments that the AMIA 

attack is far off in time and disconnected from their own reality 

has provided the necessary conditions for the expansion of Iranian 

influence and activities. Its growing presence could certainly have 

strong implications for democracy and security in the region. The 

growing strategic relationship established between countries in the 

Western Hemisphere and Iran deserves our attention and concern. 

Concerted and decisive action is needed to closely monitor the activity of Iran and the groups it subsidizes to correctly assess their 

potential for mischief and to establish mechanisms to prevent potentially dangerous scenarios. Thank you so much, Mr. Chairman. 

[The prepared statement of Ms. Siegel Vann follows:]

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Mr. ENGEL. Thank you, Ms. Siegel Vann. Mr. Farah? 

STATEMENT OF MR. DOUGLAS FARAH, SENIOR FELLOW, FINANCIAL INVESTIGATIONS AND TRANSPARENCY, INTERNATIONAL ASSESSMENT AND STRATEGY CENTER 

Mr. FARAH. Well, thank you very much for the opportunity to be 

here to discuss the issue of Iran in Latin America. I think that the 

growing influence of Iran is a significant threat to the United 

States and an underreported part of the equation that is driving 

instability and an uncertainty in Latin America from the crisis in 

Honduras to the rapidly closing space for democratic freedoms in 

Venezuela, Bolivia, Ecuador, Nicaragua and elsewhere where the 

Bolivarian revolution has gained a foothold. There is broad agreement that Iran is expanding ties with Venezuela forged by the personal friendships between Presidents Ahmadinejad and Chavez, respectively; anchor the relationship with Ecuador’s Rafael Correa 

and Bolivia’s Evo Morales. 

Iran’s relationship with Nicaragua is slightly different given 

President Daniel Ortega’s longstanding personal relationship with 

the Iranian revolutionary leaders dating back to his first term as 

President from 1979 to 1990. A second point of general agreement 

is that Iran, facing international sanctions because of its nontransparent nuclear program, is primarily seeking political support and 

leverage against the United States rather than true deep economic 

relationships in Latin America. The exceptions are ventures related 

to strategic minerals and hydrocarbon. 

A final and most important point of agreement is that the primary and sole real point of convergence between Ahmadinejad and 

Chavez in forging their relationship is their openly declared hostility toward the United States and its allies, particularly Israel. 

The leaders make a central point of publicly linking the Bolivarian 

and Iranian revolutions. This common desire to build an alternative power structure free of the perceived dominance of the empire, as these leaders call the United States, is the only real reason 

that a populist and self-described revolutionary, socially and 

staunchly secular government in Latin America would make common cause of a reactionary theocratic Islamist regime thousands of 

miles away. 

Trade relations between Latin America and Iran are still minimal, particularly when compared to Latin America’s commercial 

ties to the United States. There is no shared history or religious 

heritage, and virtually no cultural bonds or linguistic bonds. The 

only shared platform is the deep dislike for a common enemy, and 

that is the only thing that can explain this otherwise improbable 

alliance. Manhattan district attorney Robert Morgenthau, as has 

been mentioned, last week talked about the investigations ongoing 

in his office into Iranian front companies in banks in Latin America. I want to focus on a series of these types of relationships that 

highlight this murky and nontransparent web in Latin America. 

For some time it has been known that the Banco Internacional 

de Desarrollo, known as BID, established in Caracas in September, 

2007, under highly unusual circumstances is wholly owned by Iranian financial interests. The Toseyeh Saderat Iran Bank owns all 

the shares and all seven directors are Iranian citizens, yet, the BID 

33

is registered as a Venezuelan entity. The Saderat bank group was 

sanctioned by the U.S. Treasury, OFAC and the United Nations as 

a financial vehicle for the Government of Iran to fund Hezbollah, 

Hamas and other terrorist groups and evade international sanctions. The BID itself was sanctioned by OFAC in October, 2008, for 

its links to the Export Development Bank of Iran. 

The Export Development Bank was also sanctioned for providing 

financial support to Iran’s ministry of defense and armed forces logistics, yet, the Ecuadorian newspaper Loja last month revealed 

that in December, 2008, the Central Bank of Ecuador and the Export Development Bank of Iran signed a protocol of cooperation in 

which the Export Bank agreed to extend credit facilities of up to 

$120 million to help stimulate exports and imports between the 

two countries. The document commits the nations to find ways for 

the two countries to ‘‘expand their mutual banking relations.’’

Article VI of the protocol states that the Export Bank of Iran 

manifests its readiness to establish a branch of the Banco 

Internacional de Desarrollo, BID, in the Republic of Ecuador and 

the Central Bank of Ecuador will pave the way for this act. Two 

things stand out in this protocol. The first is the total amount of 

exports and imports between Ecuador and Iran over the past 2 

years has been less than $1 million. A credit line of $100 million 

is not proportionate to any actual commercial activity. The second 

thing is the Export Development Bank, as an Iranian bank, is offering to open a branch of the BID in Ecuador, confirming that the 

BID is in fact an Iranian bank rather than a Venezuelan institute. 

The concerns about these other unusual activities cloaked in official secrecy would be more easily dismissed if not for a longstanding and complex web of relationships between state and 

nonstate actors that carry across Iran’s relationships with its Latin 

American allies. Iran is the primary sponsor of Hezbollah, a terrorist organization that has carried out numerous attacks against 

American citizens, as well as in Argentina. Iran, in turn, has a cordial relationship with Chavez, who, in turn, has developed a deep 

relationship with the Revolutionary Armed Forces of Colombia, or 

the FARC, in neighboring Colombia. 

Another prominent regional player, Daniel Ortega in Nicaragua, 

has maintained a close relationship with both the FARC and 

Hezbollah for more than two decades. The common denominators 

among the state protagonists are a strongly anti-U.S. platform and 

a sponsorship of nonstate armed groups operating outside their national borders. It is therefore necessary to ask whether nonstate actors protected by their state sponsors will themselves form alliances and further threaten the stability of the region, as well as 

the security of the United States. 

Of primary concern is the possible Hezbollah/FARC alliance centered on the training of armed groups and drug trafficking. Given 

Iran’s ties to Hezbollah and Venezuela and Venezuela’s ties to Iran 

and the FARC, and the FARC’s history of building alliances with 

other armed groups, and the already existing presence of Hezbollah 

and Hamas and other Islamist groups on the ground in Latin 

America, it would be imprudent to dismiss this alignment as an annoyance. It is, instead, I believe, a direct and growing threat to the 

United States and Latin America. Thank you. 

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[The prepared statement of Mr. Farah follows:]


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Mr. ENGEL. Thank you, Mr. Farah. Dr. Milani? 

STATEMENT OF MOHSEN M. MILANI, PH.D., PROFESSOR AND 

CHAIR, DEPARTMENT OF GOVERNMENT & INTERNATIONAL 

AFFAIRS, UNIVERSITY OF SOUTH FLORIDA 

Mr. MILANI. Thank you, Mr. Chairman. I am honored to appear 

before you today. There are three key questions about Iran’s relationship with Venezuela. What is the nature of their relationship? 

Can their axis of unity blossom into a strategic alliance between 

the two? And does this unity pose a national security threat to the 

United States? 

The defining feature of this relationship is political cooperation, 

followed by cooperation in the oil and gas industries. Economic and 

military issues are peripheral to this relationship. 

The two countries each view the U.S. as a threat to their own 

survival and believe that they will be more able to defend themselves, expand their power through a united front and push the 

world toward a multipolar order. 

Isolated, the two countries support each other. Examples include 

Venezuela’s support for Iran’s nuclear program and Iran’s condemnation of the failed coup d’etat against President Chavez in 

2002. President Chavez was also one of the first leaders to congratulate Ahmadinejad after the disputed election in June 2009. 

Today, the legitimacy of both governments has been questioned 

by a significant portion of the population and they are rather isolated. For Ahmadinejad and Chavez, therefore, having an important ally might be as much about domestic politics as about international relations. 

Ultimately, oil is what unites these two countries. They seek to 

increase price by lowering production, intend to use Euros instead 

of dollars in their transaction, and have joined the Gas Exporting 

Countries Forum that Iran and Russia formed in 2001. They have 

recently agreed to invest some $700 million in others energy sector. 

Iran reportedly will import up to 20,000 barrels of gasoline daily 

from Venezuela in case of new sanctions against Iran. They also 

plan to build a refinery in Syria. 

The volume of trade and commerce is limited but growing. The 

two countries have established a joint production company to manufacture tractors. Iran is building 2,500 housing units, as well as 

a variety of other factories, in Venezuela. 

Iran, however, represents less than 1 percent of Venezuela’s total 

export to the world and is not even among the top 13 trading partners with Venezuela, and Venezuela is not even among the top 20 

countries that trade with Iran. 

In April, 2009, the two countries officially established a bank 

with an initial contribution of $100 million each. The bank could 

obviously become a convenient channel for Iran to bypass U.S. 

sanctions. 

The military cooperation between the two governments is growing. Venezuela seems to be anxious to learn from Iran’s advanced 

strategies of asymmetrical warfare. Asymmetrical warfare could become useful to Venezuela in case of its conflict with its neighbors. 

Regarding terrorism—an area beyond my expertise—although 

the Economist conclude that ‘‘there is no firm evidence of a conVerDate 0ct 09 2002 11:20 Dec 15, 2009 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 F:\WORK\WH\102709\53136 HFA PsN: SHIRL
52

tinuing and active Iranian inspired terrorist presence in the region,’’ there are experts who believe otherwise. Iran is unlikely to 

use Venezuelan soil to embark on any terrorist activities which 

would make its most important ally in the region vulnerable to allegations of sponsoring terrorism. There are other countries that 

Iran could use. 

Clearly, Iran has made a strategic decision to slowly find its way 

into Latin America. This is part of Iran’s policy to find ways to neutralize the United States policy of containing Iran, bypass U.S. 

sanctions, and, most importantly, develop retaliatory capabilities 

against the United States should Iran be attacked. Although there 

are no confirmed reports that Iran has developed any infrastructure in Venezuela to allow it to retaliate against the United States, 

still Washington must be concerned. 

Can this political unity blossom into a full strategic alliance? The 

probability is very low. The two countries seem to have recognized 

that the U.S. will not tolerate such an alliance and will react forcefully if needed. Venezuela is not among the top foreign policy priorities of Iran, and Iran does not seem to be Venezuela’s top priority. 

Finally, does this relationship pose national security threat to 

the U.S.? Thus far, I would argue the relationship between Iran 

and Venezuela has been more of an irritant and nuisance to the 

United States, but this nascent alliance has the real potential to 

become a low level threat, and therefore, it warrants close watching and diligent monitoring. Thank you. 

[The prepared statement of Mr. Milani follows:]

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Mr. ENGEL. Thank you, Dr. Milani. Dr. Bailey? Dr. Bailey, could 

you push your button? I don’t think it is on. 

STATEMENT OF NORMAN A. BAILEY, PH.D., CONSULTING 

ECONOMIST, THE POTOMAC FOUNDATION 

Mr. BAILEY. I wish to thank the chairmen of the three subcommittees and the members of the committees for this invitation. 

I have the advantage of coming last so that I will try not to repeat 

what has already been said by other witnesses, as well as by the 

members who gave their opening remarks. 

The activities of Iran in the Western Hemisphere have been 

made possible thanks to the essential collaboration of President 

Chavez of Venezuela providing Iran an operational base from 

which to expand its influence and operations throughout the continent. Many, if not most, of these activities and installations are 

designed to facilitate and provide cover for illegal and subversive 

endeavors that not only involve the Iranian Government, but also 

terrorist organizations such as Hamas, Hezbollah, Islamic Jihad, 

the Colombian FARC and ELN and drug cartels from Colombia, 

Mexico and elsewhere. 

The financial aspects of the penetration of Iran in Venezuela and 

elsewhere in the hemisphere have already been outlined and this 

gives, of course, Iran the ability to use the Venezuelan banking system to evade financial sanctions declared by the United States, the 

European Union and the United Nations. The Treasury Department has sanctioned the Iranian banks and various individuals but 

so far has not sanctioned any Venezuelan bank. This is odd because Iran makes extensive use of the Venezuelan banking system, 

especially Banesco, including Banesco Panama, Banco Occidental 

de Descuento, Banco Caroni and Banco Guyana. The availability of 

these financial institutions for Iranian use is advantageous to Iran 

for obvious reasons. 

In the industrial and mining area, the Iranians have acquired socalled industrial installations throughout Venezuelan territory, including a tractor factory in Bolivar State, a cement plant in 

Monagas, a car assembly plant in Aragua and a bicycle factory in 

Cojedes. Some of these installations in reality are used primarily 

as warehouses for the storage of illegal drugs, weapons and other 

items useful to them and their terrorist clients. In addition, the Islamic Republic bought a gold mine in Bolivar which indeed produces gold, but also produces uranium. Recently, Venezuela signed 

agreements with Iran and Russia for the transfer of nuclear technology. 

The weekly flights between Caracas, Damascus and Tehran have 

been mentioned several times. Additionally, however, Iran and 

Venezuela have formed a joint shipping line, the IRISL Group. On 

December 30, 2008, Turkish authorities intercepted 22 containers 

marked ‘‘tractor parts’’ in the Port of Mersin that in fact contained 

materials for making bombs and weapons bound from Iran to Venezuela. IRISL has now been blacklisted by the U.S. Government. 

Iranian technical assistance has been provided to Venezuela in 

the areas of defense, intelligence, energy, security and industry. 

Iran has agreed to build an explosives plant in Carabobo state and 

produces weapons in the so-called tractor plant in Bolivar. TechVerDate 0ct 09 2002 11:20 Dec 15, 2009 Jkt 000000 PO 00000 Frm 00075 Fmt 6633 Sfmt 6633 F:\WORK\WH\102709\53136 HFA PsN: SHIRL
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nical assistance, as we have seen, will now be granted to Venezuela 

by Iran in the area of nuclear power and for the purpose of finding 

and efficiently mining uranium deposits. I might add, recently a 

delegation of Iranians went to Bolivia for the same purpose. 

Iranian participation in drug trafficking through Venezuela to 

Central America, Mexico, the United States, Caribbean and West 

Africa and Europe is extensive and the proceeds are used to finance further penetration of Iranian interests in the region, as well 

as to fund the terrorist organizations mentioned above. 

Ocean-going tuna boats purchased in Ecuador and refitted in a 

shipyard in Panama which was bought by a private sector ally of 

Chavez are now used to transport cocaine across the Atlantic. This 

is perfect because it has tuna on top and cocaine below, and the 

smell of the tuna masks the cocaine. The so-called cement plant 

packages cocaine in bags marked cement and are taken by the tuna 

boats across the Atlantic to West Africa, and from there, transshipped to Europe. Other routes through Venezuela to Santo Domingo head to the Gulf Coast, and to the U.S. west coast and Florida. Cocaine is also flown or shipped in boats through Central 

America, particularly Honduras and Guatemala into Mexico, and 

from there, to the United States. Protection of the drug trade by 

the Venezuelan National Guard is notorious. In summary, Iran 

over the past several years has built up an extensive network of 

facilities throughout the region concentrated in Venezuela, Ecuador, Bolivia, Central America and Panama, and involved with the 

financing of terrorist organizations, drug trafficking, weapons 

smuggling, money laundering and the provision of chemical precursors to the Colombian drug cartels. It is becoming increasingly 

clear that one of the principal motivations of all this activity is to 

be able to retaliate against the United Stats if it is attacked, particularly through damaging the Venezuelan oil facilities and blocking the Panama Canal. 

In short, the Iranian penetration into the Western Hemisphere 

indeed is a security threat to the United States and the rest of the 

hemisphere. The United States and other governments should implement immediate action to confront this threat, including action 

against Venezuelan financial institutions, patrolling the mouth of 

the Orinoco River, actively monitoring Iranian activities in Panama 

and throughout the hemisphere while denouncing the activities 

outlined above in hemispheric and international fora. District attorney Morgenthau has it right. When will the rest of the government, other than the Treasury, come along, not to mention the rest 

of the hemisphere? Thank you very much, Mr. Chairman. 

[The prepared statement of Mr. Bailey follows:]

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Mr. ENGEL. Thank you very much. Let me start with the questioning. I know that prior to World War II, Hitler and Stalin had 

a pact and they both invaded Poland. We have found that in the 

past marriages of convenience have been made. The relationship 

between a conservative, theocratic government, like Iran, and a 

number of secular leftist governments in Latin America seems 

rather unnatural to me. Forced, unlikely to appeal to citizens of 

those countries. Can someone describe the public perception of Iran 

in countries where the ties are the closest, such as Venezuela, 

Nicaragua and Bolivia? To what extent has there been any discord 

between the idealogy of Iran’s conservative, theocratic government 

and that of secular Latin American governments, like Venezuela 

and Bolivia? How do moderate leftist leaning governments, like 

Chile and Brazil, view Iran’s overtures toward Latin America? Anyone want to take a stab at that? 

Mr. FARAH. I have just spent some time in Ecuador and in Bolivia and I think that most people are fairly oblivious to the Iranian presence there. The tractor factory that is supposed to be rolling out these tractors is actually rolling out about five or six a 

month that arrive there and sell for far more than other tractors 

that actually function, so it is not much of a boon for the people 

there. There is a cheese and milk factory on the Altiplano that is 

also largely nonproductive. So I don’t think that there is a great 

deal of connectivity with the people in the regions, but I do think 

there is a great deal of concern in the banking sectors of Bolivia, 

and Ecuador and elsewhere of what the Iranians are doing there 

and the constant Venezuelan accompanying of Iranian officials to 

meetings, and the recruiting of young people, as I outline in my 

written testimony, for training in Iran I think is one of the other 

things that has caused a great deal of concern, particularly in Bolivia, Venezuela, Ecuador and from the Communist party of the 

FMLN in El Salvador. 

They have been taking cadres of students and government workers over to Iran for training for 30–90 days in counterintelligence, 

crowd control, a whole series of things. So I think there is among 

the people who are in the political elites or in these political circles 

a great deal of concern. I think in the strata below that there is 

not much known about it and it is viewed as one of the other sort 

of ongoing multicircus things that President Chavez and others do 

to keep people distracted. I think in the people who actually work 

in the regions, in the areas where Iran is most active, there is a 

great deal of concern about that. 

Mr. ENGEL. Thank you. Dr. Milani? 

Mr. MILANI. To answer your excellent question, I can think of 

three major areas where the two countries have been ideologically 

pushed together. One is the incredible similarities between Christian liberation theology and radical Shiaism. A number of scholars 

have written about the commonalities between the two, and that 

is why the two countries can form a united front. Second, both Mr. 

Ahmadinejad and Mr. Chavez are populists and believe in the 

same kind of ‘‘model of resistance’’ against the U.S. In fact, if you 

study the writings by Chavez and others about the so-called U.S. 

imperialism, they have remarkable similarities to what Khomeini 

used to say, the ‘‘Great Satan.’’ I think, finally, the most important 

94

one is a practical reason: The enemy of my enemy is my friend. The 

two countries see in the United States a great threat, and therefore, they have formed a united front. 

Mr. ENGEL. Thank you. Let me ask one other question. We have 

heard a lot of mention of terrorist groups, like Hezbollah or Hamas. 

We have reports that Hezbollah conducts fundraising in Latin 

America, along with other activities. In March of this year in congressional testimony, Admiral Stavridis, then Commander of the 

U.S. Southern Command, or SOUTHCOM, noted that two U.S. 

antidrug operations in 2008 targeted Hezbollah connected drug 

trafficking in Colombia and the tri-border region of Argentina, 

Brazil and Paraguay. Separately, in April 2009, police in Curacao 

in the Netherlands, Antilles, arrested 17 people for alleged involvement in a drug trafficking wing with connections to Hezbollah. 

How would you characterize Hezbollah’s role in drug trafficking 

in the region in relation to its financing? What is the extent of 

Hezbollah’s financial network in Latin America? How important is 

such financing to Hezbollah? What types of infrastructure does 

Hezbollah have in Latin America and the Caribbean, and where is 

it? Is it the tri-border area of Argentina, Brazil and Paraguay? Is 

that the main nexus of Hezbollah activities? Or are there other 

areas of concern in the region? Want to try that? 

Mr. BAILEY. Well, yes, both Hamas, Hezbollah and other terrorist 

organizations such as Islamic Jihad raise money, and have been 

doing so, for many, many years in the tri-border area, and they 

continue to do so. Another major center for this activity is the island of Margarita off the coast of Venezuela where the Islamic Cultural Center which has 4-feet thick concrete walls and armed 

guards and is notoriously lacking in art exhibits and musical programs is a major center of these kinds of activities. It is not only 

drug trafficking, although that is a major source of financing, it is 

also extortion, and kidnapping and other activities of this kind. 

Mr. ENGEL. Thank you. Mr. Farnsworth, did you have your hand 

up? No? 

Mr. FARNSWORTH. Well, I would simply reaffirm what Dr. Bailey 

said and add that the tri-border area has traditionally been defined 

as a lawless region of the world, and so, frankly, a lot of bad things 

go on in there. Having said that, it clearly is an area where 

Hezbollah has been active in terms of financing some of their operations. I think the key question is, what is that money to be used 

for? I think that it goes to my oral testimony about the intentions 

of the Iranian regime and the affinity organizations that it supports. The question is, is that money channeled back to the Middle 

East to be utilized for activities in the Middle East region or is it 

designed to be used for activities in Latin America itself to expand 

perhaps the Iranian revolution into the Latin American framework? That is the question I think that remains undefined. 

To go the question that you asked, Mr. Chairman, about are 

these activities expanding, I think the answer to that is yes because we are seeing now Hezbollah engagement in drug trafficking, 

as Admiral Stavridis said, we are seeing engagement in other activities that frankly didn’t exist in the past, and so it is always a 

little bit dangerous to predict the future, but based on trends, one 

could anticipate that this behavior will increase. Even if that 

95

money is designed to return to the Middle East, if you will, nonetheless, the lawless activities that are going on to engage in that 

fundraising are disruptive, and, in fact, destructive to much of 

Latin America, and drug trafficking is a perfect example, as well 

as to the United States. 

Mr. ENGEL. Thank you. Well, let me ask my last question to Ms. 

Siegel Vann because this tracks some of your testimony, Ms. Siegel 

Vann. As you mentioned, there has been an uptick in the number 

of anti-Semitic acts in Venezuela. You mentioned the thrashing of 

a synagogue by hooligans, which I think was more than just hooligans. There have also been police raids on a Jewish center in Caracas in 2004 and 2007. The State Department’s annual human 

rights report indicates that incidents and attacks against Jewish 

institutions have become more frequent in Venezuela. So let me 

ask you, to what extent is the rise of anti-Semitism in Venezuela 

linked to the country’s strengthening its relationship with Iran 

under President Ahmadinejad? That would be Venezuela’s 

strengthening. 

Obviously, Ahmadinejad is known for his anti-Jewish and antiSemitic views. Do you see a pattern of increasing anti-Semitism in 

other countries in the region with increasing Iranian engagement, 

such as Nicaragua or Bolivia? Is the anti-Semitic messaging in 

Latin America similar to the anti-Semitic references in Iran? 

Ms. SIEGEL VANN. Mr. Chairman, we haven’t detected an uptik 

in anti-Semitism in other countries other than Venezuela. We have 

seen isolated cases, but we cannot refer it directly to Iran’s involvement in the hemisphere. What we have seen is that in crisis situations, like the Lebanon war or the crisis in Gaza at the beginning 

of this year, we did see that there was an increase in radical extremist rhetoric in the media, anti-Semitic/anti-Zionist rhetoric, 

and we can say that that has to do very much with the permissive 

atmosphere that President Chavez has created for this type of discourse. 

So even though we cannot see a cause/effect relationship exactly, 

we can say that a new type of discourse is now present in the 

hemisphere where we didn’t have it before. Anti-Semitism in general terms has become politically incorrect very much in most of 

Latin America, and as Latin American societies become more 

democratic, more inclusive, Jewish communities have really enjoyed an atmosphere of tolerance and inclusiveness. We have seen 

that since President Chavez increased its strategic cooperation 

with President Ahmadinejad this type of atmosphere has changed. 

Mr. ENGEL. Thank you. Mr. Mack? 

Mr. MACK. Thank you, Mr. Chairman. I want to follow-up on the 

chairman’s question. Clearly, I think we agree that there is a 

threat to the Jewish community in Venezuela. Do you think now 

is the time for the United States Congress to speak out against 

anti-Semitism in Venezuela? 

Ms. SIEGEL VANN. I believe at this point we have been in very 

close contact with our partners from the Jewish community in Venezuela and with other political representatives and members of 

civil society who continually give us an overview of what is going 

on there. The Jewish community now is really living in a situation 

where they don’t know what is going to happen tomorrow. It is a 

96

fact that since the attack against the Tiferet Israel Synagogue the 

atmosphere in Venezuela has improved for the community. Attacks 

in the official media have decreased about 70 percent, there is increasing security in Jewish institutions, and there are open channels of communication with the government, so there has really not 

been any overt attack against the community. 

Having said that, because of the atmosphere that has been created, we don’t know when this can change. I don’t know if this is 

the moment really for the U.S. Congress to intervene. I know that 

the U.S. Congress has been very much involved and very much 

concerned about this situation and it is something that the community appreciates tremendously, such as we do, but I do believe that 

at this point it is a wait and see situation, but we have to monitor 

and keep our eyes open and have the channels of communication 

open at this point. I really don’t know if this is the moment to 

interfere in a stronger way. 

Mr. MACK. Okay. So the answer was no, you don’t think we 

should do that now. So let me ask you this. What has to happen 

that then would make it the right time? I mean, you know, in these 

issues the question always is what do you wait for? Let me just finish by saying, you know, we don’t want to look back and say, wow, 

you know, we should have moved in Congress and with one voice 

and spoke out against anti-Semitism in Venezuela. So the question 

is, what has to happen? What is it that has to happen? We have 

already seen such an attack on the Jewish community in Venezuela. What further has to happen for us to do something? 

Ms. SIEGEL VANN. Well, I think that the message was delivered 

loud and clear during the attack against the synagogue. I think 

that President Chavez understood very well that their type of behavior was not correct, and I think that he, or the people who followed him, understand that this shouldn’t be their modus operandi. 

I do believe that it is very important to have the cooperation of governments in the region which we did have during those times as 

well. 

Mr. ENGEL. If I can just interrupt for a minute. 

Ms. SIEGEL VANN. Yes. 

Mr. ENGEL. I just want to point out that this committee, the Foreign Affairs Committee, sent a very strongly worded letter to President Chavez signed by 11 Democrats and nine Republicans. It was 

truly a bipartisan letter with strong words in it. I think Mr. Mack’s 

question is a very excellent question, but I do think at times when 

the United States Government speaks out it does have a positive 

effect. I agree with you that the timing has to be right. I am sorry. 

Just wanted to add that. 

Ms. SIEGEL VANN. So basically I do think that having partnerships with different countries in the region has helped a great deal. 

There were many countries that saw the attack against the synagogue in very negative ways and approached the Chavez government letting him know that this was a no, no. So I do believe that 

our partnerships with different governments in the region are a 

very good dissuasive for this——

Mr. MACK. Thank you. Let me just point out that there is a pattern with Hugo Chavez. He pushes and he pushes until he gets in 

trouble, and then he says he is sorry or he won’t do it again, and 

97

then when no one is looking, he does it again. I don’t want to wait 

for the opportunity when he is going to do it again. The chairman 

is right, there was a letter that went from this committee, but 

there is also a resolution in the House that I believe is very important that we move forward. Maybe tomorrow there will be an opportunity for that. I don’t know. I think now is the time. It is always the right time to speak out against anti-Semitism. So, with 

that, Mr. Chairman, my time is up. Thank you. 

Mr. ENGEL. Thank you. Mr. Ackerman? 

Mr. ACKERMAN. Thank you, Mr. Chairman. Iran seems to be 

reaching out to various places in the world, different countries. 

Today, I think we have the Western Hemisphere under the microscope. Is what they are doing based on a counter reaction to what 

some of us are trying to do? Notably, to try to place the toughest, 

strongest sanctions upon Iran because of their nuclear weapons 

program in order to prevent eventually having to possibly go to 

war? Are they reaching out to other countries so as to undermine 

the possibility of sanctions so that other countries, whether it be 

Venezuela or some other countries in Latin America or all of Latin 

America, not voting in the United Nations for sanctions, are they 

trying to make themselves sanction proof? Mr. Farnsworth? 

Mr. FARNSWORTH. Well, yes. Thank you for the question. I think 

that that is what the situation has evolved into. I don’t think that 

is how it began. This relationship has been budding for several 

years and it really, in my view, is at the behest of President Chavez of Venezuela. If you look at what happened initially, the Iranian response was not overly receptive, it was a little bit skeptical. 

I believe it was the chairman who said well, what is the relationship between these two countries? They are dramatically different 

character nations. I think over time the Iranians have realized the 

value not just of a relationship with Venezuela, but frankly being 

introduced into the neighborhood with Bolivia, Nicaragua, Ecuador, 

and that is what is involved in the sanctions issue. 

Mr. ACKERMAN. Got to get through everybody. 

Mr. FARNSWORTH. Absolutely. 

Mr. ACKERMAN. Thank you. 

Mr. FARNSWORTH. Sure. 

Mr. ACKERMAN. Ms. Vann? 

Ms. SIEGEL VANN. Definitely we think that Iran is seeking support in the hemisphere in order to sidestep isolation and sanctions 

against them in the Middle East and around the world. 

Mr. ACKERMAN. Thank you. Mr. Farah? 

Mr. FARAH. Well, I think it is clear, particularly given the financial institutions that they are working through, that that is one of 

their primary goals because if their banks are sanctions to the New 

York u-turn and they can’t go there but Venezuelan banks, Ecuadorian banks can, and as long as they have access to that, they are 

not going to be very hurt by the sanctions. 

Mr. ACKERMAN. Dr. Milani? 

Mr. MILANI. Yes. I think it is both a reaction to the U.S., but 

also, it is part of the emergence of Iran as a regional player with 

ambitions to play on global stage. It is very important to remember 

that the foundation of the relationship with Hugo Chavez was not 

98

laid during Ahmadinejad’s presidency, but was laid during the tenure of the more moderate Mohammad Khatami. 

Mr. ACKERMAN. Dr. Bailey? 

Mr. BAILEY. Yes, definitely, the involvement of Iran in the Western Hemisphere is intended to find ways to circumvent sanctions 

and also to prepare itself to retaliate against the United States in 

case it is attacked. 

Mr. ACKERMAN. Different question. Are any of you aware of or 

tracking the upsurge in the planning or actual construction anywhere in Latin America of mosques? Anybody? Something I think 

we have to take a close look at. 

Mr. FARAH. The one place where you see a notable increase in 

the presence is in Panama. I am not aware in any other country 

where it is noticeable but Panama is seeing a significant upsurge 

in the presence of Pakistanis and Pakistani mosques. 

Mr. ACKERMAN. Dr. Milani, you seem to have taken a very studied but moderate attitude toward the threat of the Iran/Venezuela 

axis and implied that maybe it wasn’t the strongest of axis’ that 

we should be looking at. I would like to go just down the line. If 

you could pick the biggest, fill in the blank, Iran-some Western 

Hemisphere country axis that we should be the most concerned 

about. Why don’t we start with Dr. Milani? 

Mr. MILANI. Well, I think at this time it would be Venezuela, but 

Brazil would be the key to watch. 

Mr. ACKERMAN. Dr. Bailey? 

Mr. BAILEY. Well, Venezuela obviously, and tremendous activity 

in Panama. 

Mr. ACKERMAN. Mr. Farah? 

Mr. FARAH. I would say the one country with largely ignored 

scrutiny is Nicaragua, and it has the longest and most longstanding radical ties to the Iranian revolution, Daniel Ortega. 

Mr. ACKERMAN. Ms. Vann? 

Ms. SIEGEL VANN. I would say Venezuela, but Chile, even though 

it has the largest Palestinian community in the hemisphere, generally very moderate. We have heard that in the last few months 

there has been some presence from foreign actors that have been 

stirring things up among——

Mr. ACKERMAN. Thank you. Mr. Farnsworth? 

Mr. FARNSWORTH. My view is without Venezuela you wouldn’t 

have Iran in the region in the way it is, so Venezuela, clearly. 

Mr. ACKERMAN. So we have at least four countries to be—it is 

quite a mix, and I think that fills up our plate. Mr. Chairman, back 

to you. 

Mr. ENGEL. Thank you, Mr. Ackerman. As you can hear, we have 

three votes and I am told those will be the last votes of the day, 

so I am going to try to see if we can get people to ask questions 

before we have to go to vote. Mr. Royce? 

Mr. ROYCE. Thank you, Mr. Chairman. Mr. Farah, I mentioned 

in my opening statement some of the observations about our intelligence collection there in this hemisphere and a press report I saw 

had an official complaining that we don’t even have fly overs, another official says we don’t even know what we don’t know, and 

yet, you pick up the Wall Street Journal and there is a story about 

an intrepid report who shows up at a factory that is a jointly 

99

owned Iranian and Venezuelan factory, so you have done that kind 

of aggressive reporting throughout your career. What is your assessment of intelligence collection capabilities here? Then maybe 

also you could tell us a little bit more about your observation on 

Nicaragua, which is something that is off our radar and it would 

be interesting to know. Go ahead. 

Mr. FARAH. Thank you, Congressman Royce. I think that partly 

because of the antipathy of Venezuela, Bolivia, Ecuador, they have 

reduced our embassy staffs so much there, especially in Bolivia 

where they have PNG’ed out most of the embassy in Venezuela, 

that we have limited capability and we have not concentrated on 

nonofficial covert type folks in Latin America I think for some time, 

so I think that the intelligence gathering is not great there, and I 

think that the embassies have confined so many of their people to 

such limited access across the countries. I was just down in the 

Lago Agrio region on the Colombia/Ecuador border where American 

embassy personnel are simply not allowed to go, and it is this relatively safe place and you can actually walk across to Colombia, 

but there is all kinds of interesting stuff going on that you wouldn’t 

know about unless you were able to get on the ground there. 

So I think the assessment of our ability to move in the hemisphere and our resources allocated to that are minimal, and I think 

it is somewhat concerning. I think that journalists or people doing 

other types of research, such as myself, are unconfined by what the 

embassy rules are and it lets us do a lot more than sometimes they 

are able to. Nicaragua, I would say that Daniel Ortega, if you will 

recall, during the Sandinista time Iran had the largest embassy in 

Nicaragua aside from, and they were constantly complaining about 

the size of the U.S. Embassy. There is a history of Ortega where, 

as you recall, the last thing he did in 1990 as he was leaving office 

was grant citizenship to almost 900 foreigners living in Nicaragua. 

Many of them were Red Brigade, and Iranians and other folks. 

Violeta Chamorro tried very hard to undo some of that, but most 

of that stayed. So he has a history that goes back. He always said, 

Ortega has always said that the Sandinista and Iranian revolutions were twin revolutions, they were same year, same anti-imperialists, et cetera, and so I think that as sort of a gateway to Central America and given Ortega’s longstanding history of ties to subversive groups, particularly the FARC and the Tumpac Amarus in 

Peru and elsewhere, that that relationship is extremely dangerous. 

I think what Ortega brings to the table is an ability to run clandestine networks that are very useful to Iran that other governments 

simply don’t have, including Venezuela, don’t have near the sense 

of development of those type of networks as Ortega brings to the 

table. 

Mr. ROYCE. And what is Ahmadinejad looking for in Brazil on his 

trip there? What do you think his objective is? 

Mr. FARAH. Well, I think, you know, Brazil does have nuclear 

technology and is, I think, the emerging leader in the hemisphere 

that is garnering a lot of international attention. Lula, I think, 

until very recently had been very studied in his relationship with 

Iran. If you will look back, he refused to meet with Ahmadinejad 

for several years. When Venezuela insisted initially that Iran be 

brought into this nuclear program and asked Brazil to help, Brazil 

100

said no because of Iran’s involvement. I think Lula has changed. 

I think in the last few months he seems to have changed his mind 

on a lot of those issues. I think they are a serious power, their economic entry of the world. Chavez is viewed, I think, largely as a 

clown. Lula is not. If he gets legitimized by Lula it is something 

much more important than Chavez could ever give him. 

Mr. ROYCE. On the other hand, Lula has the opportunity basically to send the message after the meeting that Latin America is 

no place for Iran to be meddling, so we will have to wait and see 

how that plays out. 

Mr. FARAH. If he were to do that, or to stand up to Chavez more 

publicly, it would have a tremendous impact in the region. No 

question. 

Mr. ROYCE. The last, I have no reason to believe there is a connection, but you read the cases of the myriad, this endemic kidnapping that occurs across Venezuela of businesspeople, and especially 

in the province in which the President’s brother happens to be governor. Who is doing that kidnapping? Is there any indication? Is 

that just local? 

Mr. FARAH. I think some of it is spillover from the FARC and 

some of it is people—I think, you know, if you look at the homicide 

in Caracas, it is higher than Medellin was during the drug wars 

of Medellin. 

Mr. ROYCE. Yes. 

Mr. FARAH. So I think the lack of rule of law is endemic there, 

and I think that the Chavez government has proved singularly 

inept at providing that. 

Mr. ROYCE. Thank you very much, Chairman. 

Mr. ENGEL. Thank you, Mr. Royce. I would like to try to finish 

this before we go to vote, so I would just see if we can restrict the 

questions maybe to a quick question or two so we can give everybody a chance. Mr. Klein? 

Mr. KLEIN. Thank you, Mr. Chairman. One of the things that we 

have been watching is the transportation issues between Caracas 

and Tehran, air flights. There has also been a report by the United 

States State Department, Country Reports on Terrorism, that was 

published in April of this year that stated that Venezuelan citizenship, identity and travel documents remain easy to obtain and 

making the country a potential attractive weigh station for terrorist threats. They have also assessed from our transportation system that there is a gaping hole in aviation security. We have direct 

flights between the United States and Miami, I mean, Miami and 

Venezuela, obviously. Frequent flights. Can you help us assess the 

threat of what is coming in, what is not coming in? Should we be 

developing a policy that deals differently? I mean, I think there is 

some concern about this. 

Ms. SIEGEL VANN. I think that one of the problems is that really 

we don’t have a clear assessment or real understanding of the 

scope of the problem. There is a lot of hearsay and we have read 

a lot of reports regarding people who are in the airport, reports 

through open sources that talk about this. The truth is that there 

is nothing really concrete about it that we can point out to. I think 

it is very important to start assessing and start collecting the data 

that will lead us to an assessment of how dangerous this is and if 

101

we have to really establish some sort of policy with respect to that. 

The flights, I just read last week another report about them, but 

again, the information is really very dubious, even the sources. It 

is not really clear what is going on there. They talk about some 

phantom planes. People really don’t know. 

Mr. BAILEY. The question, and Dina’s response to it, goes back 

to the previous question of how good is our intelligence in Latin 

America? We have, and I know this as from my own experience, 

decent intelligence operations in Mexico and Colombia, period. Our 

intelligence apparatus in the rest of Latin America is very, very 

thin. In order to get the kind of information that we need with reference to some of these activities, quite frankly, we are not 

equipped for. Often, open source and private organizations do a 

better job than the U.S. intelligence community. 

Mr. KLEIN. So are we just closing our eyes to the fact that this 

is a place where we have no real good information, and cargo and 

individuals can be coming in from this point to the United States 

without any—I mean, obviously on our receiving end there is some 

level of verification, but is there a concern that we should be taking 

a deeper look at this? 

Mr. BAILEY. Well, it is certainly a concern in my mind. It is a 

matter that has to do with the fact that dealing in Latin America 

for the people in the intelligence community is no longer a good career path because that is not the way to get promoted. You want 

to deal with the Middle East, and the Far East and China, and, 

you know, et cetera, et cetera. 

Mr. FARAH. I would just add that every country in the Bolivarian 

revolution has lifted all visa restrictions on Iranians coming and 

going. Bolivia, Ecuador, Venezuela and Nicaragua have all lifted 

restrictions, so you have no idea how many people are coming and 

going there. Ecuador lifted restrictions on everybody and now they 

are inundated with Russian organized crime, Chinese organized 

crime, and every major bust of foreigners or illegal immigrants into 

the United States that aren’t Mexican, Guatemalan, pass through 

Ecuador. I think it is one of the serious issues. 

Mr. ENGEL. Thank you. We have about 4 minutes left. I am going 

to divide it between Mr. Fortenberry and Mr. McCaul. Mr. 

Fortenberry? 

Mr. FORTENBERRY. Thank you, Mr. Chairman. Let me do this 

quickly. First of all, thank you for holding the hearing. Dr. Milani 

and Dr. Bailey, you hold similar sentiments but your conclusions 

are quite different. Dr. Milani, you drew a loose parallel between 

the Iranian revolution, liberation of theology, and you concluded by 

suggesting that the Iranian presence in the hemisphere is a nuisance. Dr. Bailey, you suggested prior to this later surge of interest 

in the hemisphere by Iran there was no cultural or political historic 

tie so that, in your view, this rises to a very serious level of national security concern. These panels are helpful in that you get a 

spectrum of perspectives, but clearly, there is some incompatibility 

here in the conclusions, so I would like you to further unpack your 

conclusions, please. 

Mr. MILANI. Well, I think you need to put the relationship in a 

sort of comparative perspective. When you talk about grave national security, what can Iran actually do to the United States by 

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its relationship in Venezuela? You have to look at the actual numbers economically speaking, in terms of military exchanges, and 

other areas. The only area that I do not know, and I am not going 

to make any judgment about, is of course the case of terrorism. If 

you look at all of the interactions and activities between Iran and 

Venezuela, they are not very different from what Iran is doing with 

many other countries. 

Now, that does not mean Iran is not a threat to the United 

States just because it has the same kind of relationship with others, but compare what Iran, for example, is doing in Lebanon, what 

Iran is doing in Afghanistan and Iraq with what Iran is actually 

doing in Venezuela and ask yourself: What is the national interest 

of Iran in Venezuela? There really aren’t much. I think there is 

great deal of sensationalization about this whole business. That is 

why I said you need to watch it carefully. It has the potential to 

become a serious one, but not yet. 

Mr. FORTENBERRY. Thank you. Dr. Bailey, you care to respond? 

Mr. BAILEY. The fact that, as Doug said, terrorists can come and 

go, Iranians and others, freely in these countries, the financing of 

terrorist organizations, the involvement in drug trafficking, the capacity, for retaliation, if the United States were to attack Iran or, 

for that matter, if Israel were to attack Iran, of damaging the oil 

facilities in Venezuela and blocking the Panama Canal to my mind 

represents an important national security threat to the United 

States. 

Mr. ENGEL. Let me call quickly on Mr. McCaul. 

Mr. MCCAUL. Thank you, Mr. Chairman. I will be brief because 

I have to. I want to follow-up on this potential terrorist threat. The 

alliance between Iran and Venezuela has been highlighted very 

well. I am concerned about also the alliance between Hezbollah and 

the drug cartels in Mexico, the movement of human trafficking. We 

know Kourani was captured. He actually got in to the United 

States. You don’t need a visa to enter Mexico from Venezuela? 

Then, when the former Ambassador Shapiro is asked about Venezuelan passports, he basically said that anybody in this room except for me could probably obtain a Venezuelan passport because 

it can be forged so easily. 

So I think that is of grave concern. I am also concerned that if 

we pass this legislation, the Iran Sanctions Act, that Venezuela is 

going to be one of the first violators of that act in terms of sending 

refined petroleum to Iran. Then what would the response be to 

that? So, with the 30 seconds I have left, I am going to throw it 

to perhaps Dr. Bailey and Dr. Milani. 

Mr. BAILEY. Well, there is no question about it that Venezuela 

is in violation of sanctions imposed not only by the United States, 

but by the European Union and the United Nations in many different areas, and nothing is happening to them as a result of that, 

with the exception of certain measures taken by the Treasury Department. All praise to the Treasury Department. It is the only 

branch of the U.S. Government that is doing anything effective 

about the situation. So, again, I say that as far as I am concerned, 

you don’t have to forge Venezuelan passports, I will happily give 

you one, and identity documents and so on and so forth. So if you 

run into somebody in Latin America that says his name is GuilVerDate 0ct 09 2002 11:20 Dec 15, 2009 Jkt 000000 PO 00000 Frm 00108 Fmt 6633 Sfmt 6633 F:\WORK\WH\102709\53136 HFA PsN: SHIRL
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lermo Rodriguez but he speaks Farsi, you can be pretty sure that 

he is not really a Venezuelan. 

Mr. ENGEL. Dr. Milani, if you could do it quickly, you will have 

the last word. 

Mr. MILANI. Thank you. I think any time you try to pressure 

Iran or Venezuela, what you do at the end is make them closer. 

Rather than make them closer, I think you need to have subtle 

ways of creating distance between them, subtle political ways, rather than putting them in a corner so that they would need one another and therefore they would solidify their relationship. 

Mr. ENGEL. We will let those be the last words. As I can see on 

my screen, we are down to zero minutes remaining in the vote. I 

want to thank all of our excellent witnesses. I want to thank Mr. 

Mack, as always, and I want to thank the chairs and the ranking 

members of the other subcommittees, Mr. Ackerman, Mr. Sherman 

and Mr. Royce, for cooperating. I thank you all very, very much. 

It has been very enlightening to me, and I know to the other members of the subcommittees. The hearing is now adjourned. 

[Whereupon, at 3:56 p.m., the subcommittees were adjourned.] 

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