[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]




                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION


                            FEBRUARY 2, 2012


                           Serial No. 112-123


        Printed for the use of the Committee on Foreign Affairs

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

72-653                    WASHINGTON : 2012
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                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
RENEE ELLMERS, North Carolina
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director

                            C O N T E N T S



Norman A. Bailey, Ph.D., president, Institute for Global Economic 
  Growth (former Mission Manager for Cuba and Venezuela, Office 
  of the Director of National Intelligence)......................    14
Mr. Michael A. Braun, managing partner, Spectre Group 
  International, LLC (former Chief of Operations, Drug 
  Enforcement Administration)....................................    24
Mr. Michael Shifter, president, Inter-American Dialogue..........    41
Jose Azel, Ph.D., senior scholar, Institute for Cuban and Cuban-
  American Studies, University of Miami..........................    47


Norman A. Bailey, Ph.D.: Prepared statement......................    17
Mr. Michael A. Braun: Prepared statement.........................    26
Mr. Michael Shifter: Prepared statement..........................    43
Jose Azel, Ph.D.: Prepared statement.............................    49


Hearing notice...................................................    70
Hearing minutes..................................................    71
The Honorable Gerald E. Connolly, a Representative in Congress 
  from the Commonwealth of Virginia: Prepared statement..........    73
The Honorable Connie Mack, a Representative in Congress from the 
  State of Florida, and chairman, Subcommittee on the Western 
  Hemisphere: Prepared statement.................................    75
The Honorable Allyson Schwartz, a Representative in Congress from 
  the Commonwealth of Pennsylvania: Prepared statement...........    76



                       THURSDAY, FEBRUARY 2, 2012

                  House of Representatives,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 o'clock a.m., 
in room 2172 Rayburn House Office Building, Hon. Ileana Ros-
Lehtinen (chairman of the committee) presiding.
    Chairman Ros-Lehtinen. The committee will come to order.
    After recognizing myself and my good friend the ranking 
member, Mr. Berman, for 7 minutes each for our opening 
statements, I will recognize for 3 minutes the vice chair and 
ranking member of the Subcommittee on the Western Hemisphere, 
and then the chair and ranking member of the Subcommittee on 
the Middle East and South Asia for their opening remarks.
    I will then recognize other members seeking recognition for 
1 minute. We will then hear from our witnesses. Thank you, 
gentlemen, for being here. And without objection, your entire 
testimony will be made a part of the record. Members may have 5 
legislative days to insert statements and questions for the 
record, subject to the length limitation in the rules.
    And before I recognize myself, I would like to say to Mr. 
Burton, who announced that he will not be running for 
reelection, that we have cherished his job in our committee. I 
have been a better person for having known him and have shared 
wonderful moments with him and a good friendship, and we will 
miss your wise guidance, Mr. Burton.
    Mr. Burton. Well, thank you very much. And I wish my----
    Mr. Burton. Thank you very much, and I only wish my wife 
were here to hear you say those nice things about me. 
    And I want to say I am going to miss all of my Democrat 
buddies over there. I know they will miss me.
    Chairman Ros-Lehtinen. Well, we hope that her health 
improves, and I know that she will do a lot better with you at 
her side.
    Mr. Burton. Thank you very much.
    Chairman Ros-Lehtinen. We will keep her in our prayers.
    Mr. Burton. Thank you.
    Chairman Ros-Lehtinen. The chair now recognizes herself for 
7 minutes. Through a series of hearings and classified 
briefings, this committee has exercised due diligence and 
oversight to examine the threat to U.S. national security posed 
by Iranian and Iranian-sponsored activities in our own Western 
    The Director of National Intelligence, James Clapper, 
stated this week, and I quote, ``Iranian officials, probably 
including supreme leader Ali Khamenei, have changed their 
calculus and are now willing to conduct an attack in the United 
    The Iranian regime has formed alliances with Chavez, as you 
see over there, with Ortega, with Castro, with Correa, that 
many believe can destabilize the hemisphere. These alliances 
can pose an immediate threat by giving Iran, directly through 
the IRGC, the Quds Force, or its proxies, like Hezbollah, a 
platform in the region to carry out attacks against the United 
States, our interests, and our allies.
    Some may question the congressional focus on the Iran-Latin 
America nexus, because they wrongly believe that Iran's 
influence in the region is exaggerated. But let us analyze what 
has occurred in Latin America due to the actions of the Iranian 
    Iran's Ahmadinejad recently returned from his tour of 
tyrants trip to visit Venezuela, Nicaragua, Cuba, and Ecuador. 
Media reports have indicated an increased presence of Iran's 
Quds Force in these countries and offices of Iran's 
intelligence services surfacing throughout the region.
    The fact that the military arm of a state sponsor of 
terrorism has its operatives within multiple countries in our 
hemisphere is certainly cause for alarm and merits 
congressional focus. In October of last year, we learned of the 
attempted plot by the Quds Force to assassinate the Saudi 
Ambassador on U.S. soil using individuals they thought were 
from the violent Mexican Zeta drug cartel.
    Two months later, the Spanish language network Univision 
aired a documentary that depicted a 2007 cyber attack scheme by 
the Iranian Ambassador in Mexico, diplomatic officials from the 
Embassies of Venezuela and Cuba, and undercover Mexican 
students who were posing as extremists.
    The principals involved in this plot wanted to infiltrate 
U.S. Government computer systems in the White House, FBI, CIA, 
and two nuclear facilities. A Venezuelan diplomat connected 
with the plot later became the Venezuelan Consul in my area in 
Miami, Florida.
    Shortly after the documentary aired, my congressional 
colleagues and I sent a letter to the Department of State 
requesting an investigation of these claims and asking that if 
the Venezuelan Council was found to be involved in this plot 
that she be designated persona non grata and be expelled from 
the United States. Last month we thanked the State Department, 
because it expelled the consul back to Venezuela.
    In May of last year, the Iranian Defense Minister was in 
Bolivia to inaugurate a military training school for ALBA 
countries financed by the Iranian regime. Meanwhile, Interpol 
has in place an arrest warrant for the Iranian Defense Minister 
in connection with the 1994 AMIA bombing in Argentina, the 
Jewish Community Center.
    Additionally, in order to further expand their influence 
and extremist propaganda, Iran just launched a Spanish language 
channel that airs in Latin America and Spain. Further 
compounding the problem is the increasingly diverse and 
extensive activities of Iran's proxy, Hezbollah. The synergy 
between Hezbollah and the drug cartels in Latin America makes 
for a very powerful enemy and one that is challenging to 
    Our law enforcement agencies focusing on narcoterrorism and 
terrorist financing have had success in penetrating these 
operations and gaining a better understanding of the nature, 
the extent, and the evolution of the links between Hezbollah 
and drug trafficking organizations.
    Recently, our DEA led an undercover investigation called 
Operation Titan, which exposed a vast criminal network 
operating a drug money laundering pipeline through West Africa 
to Europe, the Middle East, and Colombia. In addition, last 
year we learned of the investigations led by the U.S. into the 
Lebanese Canadian Bank that discovered a complicated web of 
high-ranking Hezbollah officials involved in a South American 
cocaine trafficking trade.
    Hezbollah has maintained a significant footprint in the 
Americas, including the tri-border region of Argentina, Brazil, 
and Paraguay, to help fund raise for their criminal activities. 
Media reports have indicated that Khalid Sheikh Mohammed, the 
master-mind of 9/11, spent some time in the tri-border area in 
the late '90s with Islamic extremists in the region helping to 
raise more funds for terrorist attacks.
    In Colombia, we have witnessed how another foreign 
terrorist organization, the FARC, is heavily involved in 
narcotics trafficking in South America. Therefore, it is not 
new to learn that terrorist organizations are actively using 
the drug trade and other existing criminal networks to raise 
funds and carry out their operations.
    Since the Western Hemisphere is a hub for drug trafficking, 
the possible combination of threats creates a clear and present 
danger. Last month at the State of the Union, President Obama 
ignored the security concerns stemming from the region and the 
importance that Latin America plays to our economic prosperity 
and our national security.
    The administration's policy of dialogue with Iran has 
failed, and a similar approach toward the ALBA countries in the 
region will fail as well. When asked about Iran's activities in 
the Western Hemisphere, Director Clapper, who I cited at the 
beginning, noted this week that ``there is more to unfold 
    This committee stands committed to unfolding the threats 
posed by Iran in the Western Hemisphere. We will continue to 
zero in on those concerns and engage all pertinent U.S. 
Government agencies to ensure proper resources are being 
dedicated to counter these threats against U.S. national 
security rather than wasted on unaccountable and corrupt 
    And with that, I am pleased to yield to my friend, the 
ranking member, Mr. Berman of California, for his opening 
    Mr. Berman. Well, thank you very much, Madam Chairman. And 
before I start, I want to join you in expressing both my 
sadness and my appreciation to Dan Burton, our colleague for 
the entire time I think that I have been on this committee, and 
that has been a few years. And behind that crusty exterior is 
really a very pleasant and likable guy, a sweet guy. And I have 
enjoyed working with him and talking with him over the years, 
and I am glad that we will be able to continue doing that for 
the next year, and wish him very well.
    Mr. Burton. Thank you.
    Mr. Berman. The behavior of the Iranian regime poses a 
significant danger to its own people, its neighbors, and the 
security of the United States. Tehran's pursuit of a nuclear 
weapons capability, its continued support for international 
terrorism, and its abuse of basic human rights, require the 
United States to maintain extreme vigilance in countering these 
    Though our goal has not yet been reached, thanks to the 
leadership of this Congress and the Obama administration, more 
pressure has been placed on the Iranian regime than ever 
before. The increasingly isolated Government of Iran has 
extended its tentacles far and wide in search of friends and 
resources. Today we will investigate Iran's dealings in the 
Western Hemisphere and what these actions signify for the 
national security of the United States.
    President Ahmadinejad just concluded his sixth trip to the 
region, which took him to Venezuela, Ecuador, Cuba, and 
Nicaragua, where he apparently accrues frequent visitor points. 
I can only assume that if any of the remaining 31 countries in 
the region would have had him, he would have visited there too. 
The Ahmadinejad trip has clearly succeeded in causing a great 
deal of agitation in this country regarding the Iranian threat 
in our hemisphere and suggests that our President is not--cause 
suggestions that our President is not doing enough to counter 
    From Ahmadinejad's perspective, that alone may have made 
his trip worthwhile. The political posture on this topic is not 
harmless. I believe it does us all a real disservice by 
obfuscating what is real and what is not. As I have said 
before, given that the stakes are so high, it is critical we 
get this analysis right.
    Iran is arguably the foremost threat to United States 
interests in the world. A nuclear Iran would be a significant 
threat not only regionally but globally. I know that if Iran is 
in our neighborhood, they are up to no good.
    Iran was complicit in the horrific bombings of the Israeli 
Embassy and the Jewish Community Center in Buenos Aires in the 
first half of the 1990s. The recent discovery of a twisted 
Iranian plot to assassinate the Saudi Ambassador here in 
Washington is, frankly, not a mind-bending surprise.
    Add to this our intelligence community's assessment of 
Iran's increasing willingness to conduct an attack on U.S. 
soil, as our chairman has pointed out. So my specific interest 
this morning is to sift through the facts, discuss with the 
experts before us, what about Iran's relationship with the 
nations of our hemisphere should be of serious concern to us, 
and how the Iranian President's recent trip plays into those 
    President Obama, in a recent interview with a Venezuelan 
newspaper, wondered aloud what the Venezuelan people hope to 
gain from a relationship with a country as isolated, 
repressive, and outright dangerous as Iran. I wonder, too. A 
cursory survey of what Iran actually brings to the table of the 
four countries he visited indicates it is littered with 
promises that go unfulfilled. Factories go unbuilt, ports go 
undredged, humanitarian aid goes undelivered.
    Importantly, this time Brazil closed the door to him after 
welcoming him for years. As for the charge that the 
administration is asleep at the switch, that is nonsense. 
President Obama has himself stated that his administration will 
continue to monitor Iran's activities in the Western Hemisphere 
closely, and I have no reason to doubt his word.
    My own interactions with high-ranking officials in several 
U.S. agencies, including the State Department, the Drug 
Enforcement Agency, FBI, Treasury, and the intelligence 
community, have reassured me that our Government is fully 
attentive to this matter. It is clear that our President and 
his administration understand what is at stake.
    I have heard a wide range of explanations regarding the 
purpose and timing of the recent Ahmadinejad trip. Some have 
painted it as a veritable invasion, some say it was a visit 
from an isolated and beleaguered leader to another isolated and 
beleaguered leader--Chavez--to distract from both of their 
troubles at home. Perhaps it was to shore up trade 
relationships, but Iran's trade with this part of the world is 
meager. For example, Brazil's trade with Iran, by far the 
biggest in the region, only amounts to \4/10\ of 1 percent of 
Iran's total trade.
    Even if our gut tells us that the Ahmadinejad-Chavez 
brotherhood is mostly political theater, it would be foolish to 
minimize Iran's interest in our hemisphere. But it is equally 
important to get it right.
    I strongly support efforts to solidify the rigorous 
sanctions regime against Iran in our hemisphere. But it seems 
to me that given the complexity of relationships with and among 
countries in our own hemisphere, a careless U.S. overreaction 
to the Ahmadinejad trip could harm that goal more than the trip 
    So what should we do? We should be alert to Iran's attempts 
to circumvent sanctions and its efforts to curry favor with 
regional countries to loosen those sanctions. We should pay 
particular attention to technology or, more likely, raw 
material transfers that might further Iran's nuclear ambitions.
    We should continue to monitor intelligence links, watch the 
Iranian Diplomatic Corps, given its historical involvement in 
nefarious acts. We should keep a close watch on financial 
transactions in this region that might involve Iran, both where 
they come from--say, for instance, drug proceeds--and where 
they go, such as funding the terrorist organization Hezbollah 
or the despotic, increasingly desperate Syrian regime.
    The chaotic nexus of drug money and terrorism in this 
region deserves a close look, as it is a fertile place for bad 
things to happen on a significant scale. The best way to 
prevent Iran from gaining influence in the Western Hemisphere 
is to continue to strengthen our relationship with the vast 
majority of countries in the region who, when push comes to 
shove, will prefer good relationships with the United States 
over those with Iran. That means we need to be both watchful 
and smart and only shout when we need to. I hope we are up to 
the task.
    And I yield back.
    Chairman Ros-Lehtinen. Thank you very much, Mr. Berman, for 
your statement.
    Mr. McCaul of Texas, the vice chair of the Subcommittee on 
the Western Hemisphere is recognized.
    Mr. McCaul. Thank you, Madam Chair, and I would like to 
take a point of personal privilege and also say, Danny-boy, 
what an honor it has been to serve with you, and you will be 
missed by all of us. Thank you.
    Madam Chair, I would like to commend you for holding this 
timely and necessary hearing. For years we have watched as Iran 
has stepped up its involvement in the Western Hemisphere. As 
vice chair to the Subcommittee on the Western Hemisphere, I 
assure you that the threats from Tehran in our part of the 
world have not gone unnoticed and will not be unanswered.
    Whether it is financing terrorism, the foiled plot to use 
Mexican drug cartels to kill the Saudi Ambassador, undisclosed 
direct flights between Caracas, Damascus, and Tehran, cyber 
plots against U.S. nuclear facilities, the launch of Iran's 
Spanish language TV channel, or Ahmadinejad's cozy relationship 
with Hugo Chavez in Venezuela and the Castro regime in Cuba, 
Iran has repeatedly demonstrated that its goals are to 
intimidate America in its own hemisphere. And we know from 
Operation Titan that Hezbollah is tied to transnational drug 
trafficking organizations--a very dangerous and lethal 
    Just last week Secretary of Defense Leon Panetta said that 
Iran is only a year away from producing a nuclear weapon. Our 
closest allies in the Middle East, the Israelis, have announced 
today that Iran could make four bombs by further enriching 
uranium that has already been stockpiled. And as a result, Iran 
is increasingly isolated in the world. The impacts of these 
sanctions on its banks and oil industry has backed Iran into a 
    But clearly Ahmadinejad sees Latin America as a new market 
for diplomatic and economic activity. Of course he also sees 
the region as fertile new grounds for plots against the United 
States and our allies. As the chair has recognized, the 
Director of National Intelligence, James Clapper, recently 
testified that Iran may now be willing to conduct an attack on 
the United States. That is unacceptable, that a wounded and 
desperate Iran would be as brazen to use the Western Hemisphere 
as a staging ground for attacks against American citizens on 
U.S. soil.
    What I hope to get out of today's hearing is a keener 
understanding of Iran's capabilities and objectives in the 
Western Hemisphere, and to hear from our witnesses about what 
they think the Congress and the administration can do to 
counteract Iran's growing influence in our region.
    One proposal that I have introduced is a bill to designate 
the Iranian Revolutionary Guard Corps as a terrorist--foreign 
terrorist organization, which would give the United States more 
authorities to go after them in this hemisphere.
    Madam Chair, with that, I would like to again thank you for 
your leadership on this issue. And with that, I yield back.
    Chairman Ros-Lehtinen. Thank you so much, Mr. McCaul, for 
your statement.
    And now we will hear from Congressman Engel of New York, 
the ranking member on the Subcommittee on the Western 
    Mr. Engel. Well, thank you very much, Madam Chair. I am 
glad our committee is holding this hearing. I, too, want to 
congratulate my good friend Dan Burton. Dan is a member's 
member, collegial, and I cherish our friendship through the 
years. Dan, we are going to miss you, but we are going to enjoy 
this next year with you.
    This is important, what we are doing today. It is important 
to take a look at Iranian President Ahmadinejad's trip through 
the Western Hemisphere. It is important to ask the questions: 
Why is he taking so much time to buzz through the region? What 
is Iran getting out of this? What are the four Western 
Hemisphere nations getting out of this?
    First, the bad news. Ahmadinejad has found like-minded 
souls in the leaders of Venezuela, Bolivia, Ecuador, and 
Nicaragua. In their dislike for the United States, the leaders 
of these countries are now willing to meet with one of the 
world's worst. You know the saying, ``The enemy of my enemy.''
    More concerning, Iran's ties with Venezuela are opaque at 
best. It is hard to know what the Iranians are doing stomping 
around this South American country. We do know there have been 
planes back and forth--Venezuela, Syria, and Iran. What a nexus 
of rogue states.
    And we must not forget what Iran has done in this 
hemisphere. Bombings in the 1990s of the AMIA Jewish Cultural 
Center and the Israeli Embassy in Argentina and the recent 
effort to murder the Saudi Ambassador only serve to remind us 
of the danger which Iran can bring. Still, not all of the signs 
are bad. In Brazil, President Dilma Rousseff has wisely chilled 
the warmth shown to the Iranian leader by former President Lula 
da Silva.
    Today Brazil votes for resolutions condemning Iran and the 
U.N. Human Rights Council. Ahmadinejad's media advisor 
complained recently that ``the Brazilian President has been 
striking against everything that Lula has accomplished''--that 
is a quote. Well, if she has done that, good for her.
    Further, the other successful major democracies in the 
region want nothing to do with the Iranian mischief. Chile, 
Colombia, and Mexico are shunning the Iranian despot. So why 
are the Iranians messing around in the region? What do they get 
out of it?
    I think the answer was best summed up by the Director of 
National Intelligence, James Clapper, when he testified 2 days 
ago in the Senate. He said, ``Ties with Tehran offer some 
regional governments a means of staking an independent position 
on Iran, thereby mitigating its isolation while also attempting 
to extract Iranian financial aid and investment for economic 
and social projects.''
    I think he is right. Given Iran's history and the pressure 
they are facing due to their dangerous nuclear weapons program 
and the sanctions, we need to be extra-vigilant in monitoring 
Tehran's presence in our region. However, we also need to 
carefully weigh all of the intelligence, the good with the bad, 
and reach a sober and balanced conclusion.
    The good news is this region is much more than Iran and 
drugs. Let us not forget that we just passed free trade 
agreements with Colombia and Panama, and that we have deep 
cultural, political, social, and economic ties with many of the 
    So, Madam Chair, thank you for this hearing. It is very, 
very important to focus on this. Thank you for focusing on 
Iran, and we will continue to focus on them and keep an eye on 
the big picture in our region.
    I yield back.
    Chairman Ros-Lehtinen. Thank you so much, Mr. Engel.
    And now we would like to hear from Congressman Chabot, the 
Subcommittee on the Middle East and South Asia chairman.
    Mr. Chabot. Thank you, Madam Chair. And before making my 
comments, I would also like to include my best wishes to our 
colleague Dan Burton. I followed in his footsteps on this 
committee, because he was the ranking Republican on the 
committee, and now I chair it.
    But thank you and best wishes to you, Dan. And you are an 
Indianian, a Hoosier, and I am a Buckeye, and if we are not 
brothers, we are at least close cousins. So, you know, I wish 
you the best. Thank you.
    And thank you, Madam Chair, for holding this hearing. As 
chairman of the Middle East and South Asia Subcommittee, I 
frequently hear about the threats posed by Iran and the global 
terrorist networks that it supports. The possibility, however, 
of an Iranian threat emanating from Latin America is 
particularly troubling.
    The threat posed by the Iranian regime take on new and more 
dire geostrategic significance when coupled with the potential 
for alliances with oppressive anti-American regimes in our own 
hemisphere. These regimes could in turn provide Tehran with 
additional bases of operations from which to assault American 
    This possibility is especially threatening in light of the 
recent Iranian terror plot here in Washington, DC, which our 
intelligence community believes is evidence that the leadership 
in Tehran feels increasingly emboldened in its plans to 
undermine American interests and those of our allies.
    Director of National Intelligence James Clapper recently 
testified before the Senate Intelligence Committee that the 
Iranian leadership is now ``more willing to conduct an attack 
in the United States in response to real or perceived U.S. 
actions that threaten the regime.''
    We are having enough trouble combatting Iranian meddling on 
the other side of the globe. The last thing we need is for 
Tehran to be able to more easily threaten the American homeland 
and pose an even greater threat to the American people. This 
prospect harkens back to the days of the Cold War when all of a 
sudden we were no longer separated from our enemies by oceans 
but face threats in our own backyard.
    I hope our witnesses here today will be able to shed light 
on the threats Iran poses in the Western Hemisphere, as well as 
what steps the United States should take to mitigate these 
    Thank you, and I yield back, Madam Chair.
    Chairman Ros-Lehtinen. Thank you so much, Mr. Chabot. And 
Mr. Burton was reminding me he is--we are all on different 
committees, and he is going to have the Fast and Furious 
hearing going on, and I know that the Transportation Committee 
is marking up their big bill today. So we will see a lot of our 
members not here today, but it does not mean that we don't care 
deeply about the topic.
    Thanks for that reminder, Mr. Burton.
    Mr. Ackerman is recognized. He is the ranking member of the 
Subcommittee on the Middle East and South Asia.
    Mr. Ackerman. Thank you. But first, Madam Chair, I, too, 
would like to join in and pay my respects to Dan Burton with 
whom I have slugged through the last three decades. Unlike 
Howard, I think under that exterior of a crusty, cantankerous 
old man is really a crusty, cantankerous old man. [Laughter.]
    Dan, you have been an absolute challenge to us, but truly a 
delight and a treasure on this committee, and we are truly 
going to miss you.
    Tehran, it scarcely needs to be said, is up to no good. 
Iran's partnership with Venezuela, as well as its ties to Cuba, 
Nicaragua, and Ecuador, are rightfully of concern, and we 
should be closely monitoring developing in these relationships 
to counter their efforts at sanctions-busting, money 
laundering, regional subversion, and further development of the 
narcoterrorist infrastructure in the hemisphere.
    Iran's presence in the Western Hemisphere is totally 
lacking in legitimate economic or political interest. Unlike 
the nations in Levant and the Arabian Gulf, which have for 
decades sought a security partnership with the United States to 
balance against the threat of Iranian radicalism, hegemonism, 
and subversion, the nations of the Western Hemisphere have no 
natural ties to Iran and do not fear us.
    The fact is, for almost all of them, the United States has 
been their partner in efforts to stabilize the region against 
the threats of subversion, terrorism, and external domination.
    So Tehran's outreach to the nations of the Western 
Hemisphere is justifiably met with suspicion and grave doubts 
about Iran's intentions. A nation that is the world's principal 
state sponsor of terrorism, that is responsible for the 
subversion throughout the Middle East, that has spent billions 
to avert Arab-Israeli peace through the most disgusting acts of 
terrorism, that every day for years has defied the clearly 
expressed will of the entire international community to meet 
its nuclear non-proliferation treaty obligations and come clean 
about their illicit military aspects of its military program, 
can't be accepted as a legitimate participant in this 
hemisphere's affairs.
    Iran is up to no good, because that is what Iran is always 
up to. Iran is controlled by a radical, theocratic dictatorship 
with grand ambitions and appetites, and these tyrants 
rightfully see the United States as the principal impediment 
for their success. And they should; we are proudly the enemy of 
all the Ayatollah seek to achieve.
    We are opposed to their dreams of hegemony in the Arabian 
Gulf and throughout the Middle East. We bitterly condemn their 
massive and ongoing violations of the rights of the people of 
Iran, and we will not allow them to destroy Israel or even 
attempt it. We will not allow them to control the region's 
natural resources, and, by extension, the world's economy. And, 
most importantly, we will prevail. We will win, and they will 
    Together with our allies and partners, we will ensure the 
peace and contain and ultimately see the Iranian threat crumble 
and dissolve. The tyranny will end, and their system will join 
the Soviet communism on the ash heap of history. And in the 
meantime, we will be vigilant about these threats in our own 
    Ahmadinejad can rack up all of the frequent flyer miles he 
wants, and he can figure out how to convince the people that 
tyranny would be better and that the waste of war is superior 
to the fruits of peace. He will continue to find welcome only 
in the most marginal and radical of states, and who can only 
join him in a little nasty mischief along the way to his 
regime's ultimate collapse.
    Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you very much, Mr. Ackerman.
    And now we will hear from members who wish to make 1-minute 
opening statements, starting with the chairman on the 
Subcommittee on Europe and Eurasia, Mr. Burton of Indiana.
    Mr. Burton. Thank you, Madam Chairman. Thanks for all of 
the nice comments. I really appreciate that.
    Let me just say real quickly, we have had problems in 
Central and South America for a long, long time. We had the 
Reagan Doctrine under Ronald Reagan. And because of what he 
did, we changed almost all of those countries into democratic 
institutions, their leaders and their countries.
    The problem we have right now is we have, in Venezuela, 
Chavez working with Castro and Ortega and others down there to 
destabilize this entire hemisphere. This is our front yard, and 
I really appreciate you gentleman being here today, because we 
really need to focus on that.
    We have had Che Guevara down there in the past trying to 
destabilize the area, and today it is even more dangerous 
because Tehran, and working with Venezuela and Chavez and 
Ortega, they really are a danger. We have a 1,980-mile border 
between us and Mexico, and we had better pay attention to our 
front yard and do it real quickly.
    And with that, thank you very much, Madam Chair.
    Chairman Ros-Lehtinen. Thank you, sir.
    Mr. Sherman, the ranking member on the Subcommittee on 
Terrorism, Nonproliferation, and Trade.
    Mr. Sherman. We all wish the best to Dan. Some join this 
committee with a strong interest in the Americas; some join 
with a focus on the Middle East. We have to thank President 
Ahmadinejad for showing us that this is one struggle, that 
those who strengthen Castro and Chavez also strengthen 
Ahmadinejad, and vice versa.
    We are asked sometimes, ``Why is Iran's nuclear program 
more dangerous than that of North Korea?'' The answer is that 
Iran has worldwide ambitions, expressed in Buenos Aires in the 
early 1990s, expressed recently in an attempt to commit murder 
and assassination here on our own soil. We can only imagine 
what a nuclear weapon would do. We would see terrorism with 
impunity on a massive scale.
    Recently, when we saw this attempt at attack on our own 
soil, I fear the administration would want to limit our 
reaction to a robust rhetorical response. Congress stepped in 
and passed Menendez-Kirk, and now it is time for the 
administration to fully enforce not only that amendment, but 
the entire Iran Sanctions Act as amended by CISADA.
    It is time for us to realize we have run out of time. And 
as long as we only enforce those sanctions that don't cause any 
heartburn in our allies, then we will avoid heartburn in our 
allies, but we will not avoid a nuclear Iran.
    And I yield back.
    Chairman Ros-Lehtinen. Thank you so much, Mr. Sherman.
    Mr. Duncan of South Carolina.
    Mr. Duncan. Thank you, Madam Chairman. And I just want to 
add my voice to those thanking the gentleman from California 
for his service. As a freshman member of this committee, his 
leadership has been a tremendous help to me, and especially on 
issues such as what we are addressing today. So thank you for 
    I also want to thank you for taking the opportunity to 
delve into the Iranian threat in the Western Hemisphere. I 
think it is very important, and I appreciate your leadership as 
    And I want to thank the gentlemen for coming. I look 
forward to learning more about what I think is a real threat in 
our own neighborhood.
    And I want to sum up with a quote from a New York Times 
article of 25 January by Ronen Bergman that says this, ``It is 
not for nothing that it--Iran--is establishing bases for itself 
in Latin America and creating links with drug dealers on the 
U.S.-Mexican border.'' He goes on to talk about the specific 
threats, but he ends with this. ``This is not a far-fetched 
scenario.'' So I am glad we are delving into that, and I look 
forward to your testimony.
    Thank you. I yield back.
    Chairman Ros-Lehtinen. Thank you, sir.
    Mr. Higgins of New York.
    Mr. Higgins. Thank you, Madam Chair. I am just also 
concerned about the Iranian presence in the Western Hemisphere, 
but in particular in North America. Hezbollah, the Party of 
God, is a Shia Muslim group committed to violent jihad. They 
act as a proxy for Syria, for Venezuela, and for Iran. They 
have a pervasive and growing presence in the 20-country region 
of Latin America, including a presence in 15 cities in the 
United States and four Canadian cities.
    When we inquire about the level of threat by this presence 
of Hezbollah in North America, we are told that we are not to 
worry because their activities are limited to fund raising. 
Well, that doesn't comfort me. And my sense is when you look at 
Hezbollah and their commitment to the destruction of the state 
of Israel, that is the near enemy. But the far enemy in their 
minds, in the Iranian--Ahmadinejad's mind, is the United 
    So I look forward to the testimony here and hope that we 
can drill down a little bit deeper and assess this threat, 
because of the presence in North America.
    Thank you.
    Chairman Ros-Lehtinen. Thank you, sir.
    Mr. Turner of New York is recognized.
    Mr. Turner. Thank you, Madam Chair. It is interesting when 
you look at what these people have in common--Ahmadinejad, 
narcoterrorists, and Hugo Chavez, an old-line Communist. Their 
commonality of interest is their hatred for the United States, 
their hatred for truth, democracy, and freedom.
    So knowing that, we can proceed. Thank you.
    Chairman Ros-Lehtinen. Thank you very much.
    Mr. Connolly of Virginia.
    Mr. Connolly. Thank you, Madam Chairman. President 
Ahmadinejad's charm offensive here in the Western Hemisphere 
ought to be of concern to the United States. He repeatedly 
extolled the virtues of authoritarian regimes. You know, he 
talked about his dear brother Hugo Chavez when he first landed 
in Venezuela. He called Daniel Ortega of Nicaragua his 
``brother President.'' He said to the Nicaraguan audience, 
``Among all of you, we are at home, like brothers.'' He went on 
to say, ``I feel like I am with Iranians.''
    In Cuba, he was enormously happy to see the Commandant 
healthy and fit, and, of course, was very cordial to Rafael 
Correa in Ecuador, talking about the fact that Iran was 
presenting a message of love, affection, friendship, and 
solidarity with that great nation.
    Coupled with these flowery statements is an economic 
investment being promised by Iran that may yet produce results. 
It so far has had mixed results, but it needs to be of concern 
to the United States. This is our backyard, and the Iranian 
charm offensive is not just a superficial endeavor. It may very 
well represent something far more sinister and worthy of U.S. 
foreign policy consideration.
    With that, I yield back. Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you, Mr. Connolly.
    Mr. Rivera of Florida.
    Mr. Rivera. Thank you so much, Madam Chair, and I want to 
add my words of commendation to a great American patriot, 
Congressman Dan Burton, for his great service promoting freedom 
and democracy for many, many years.
    And I want to thank the witnesses for being here today. I 
look forward to their testimony. Throughout the last 3 years, 
we have continued to watch Iran expand its cooperation with 
state sponsors of terrorism and criminal organizations in our 
own backyard, while I believe the Obama administration has 
stood by idly as a spectator.
    Chairman Ros-Lehtinen so eloquently stated that 
Ahmadinejad's tour of tyrants to Cuba was his fifth visit to 
the region since 2007, which I believe shows Iran's intentions 
in working with anti-American regimes to continue undermining 
the interest of the United States, which demonstrates how 
important it is for the Obama administration to work with 
Congress to develop a range of policy options to contain and 
prevent Iran's continued expansion into the region. This should 
include sanctions and law enforcement indictments against 
anyone seeking out economic and other arrangements with Iran.
    And with that, I will yield back, Madam Chair.
    Chairman Ros-Lehtinen. Thank you, sir.
    Mr. Cicilline? Gone. Mr. Murphy?
    Mr. Murphy. Thank you very much, Madam Chair. Thank you for 
convening this hearing. As Mr. Connolly said, this is a great 
threat to the United States to have the President in our 
backyard. And the question is: What can we do about it?
    Clearly, their ability to play in Latin America is 
constrained by the potential generosity of their government. 
Our ability to crack down on Iran with sanctions, as supported 
by this President and this Congress, constrains their ability 
to be generous in their support to Latin America countries. Our 
ability to encourage dissent within Iran promotes many people 
in that country who have very bad feelings about the amount of 
money that goes abroad from Iran.
    Our ability as a country both to crack down on sanctions 
and to promote dissent clearly is at the top of the list of the 
tools at our disposal, and I look forward to the panel to give 
us additional tools.
    Thank you very much, Madam Chair.
    Chairman Ros-Lehtinen. Thank you.
    And our cleanup batter, Mr. Deutch of Florida, is 
    Mr. Deutch. Thank you, Madam Chairman, Ranking Member 
Berman, for your continued focus on the Iranian regime's 
attempt to exert influence around the world. And thank you to 
our witnesses for appearing today.
    Madam Chairman, the latest visit by Ahmadinejad to Latin 
America leaves little doubt the regime is continuing to pursue 
allies in the region that will assist in its efforts to 
circumvent international sanctions and avoid isolation. And 
while we know Ahmadinejad has found a willing partner in 
Chavez, his warming relations with Ecuador and Bolivia are 
evermore troubling, given Iran's history in South America.
    It is no surprise that the mastermind behind the AMIA 
bombing in Argentina, and current subject of an Interpol red 
notice, Ahmad Vidhi, now serves as Iran's Defense Minister.
    And increasingly troubling is the long-standing and growing 
presence of Iran's proxy, Hezbollah, in the tri-border area. We 
must continue to make it clear, not only to the Iranian regime 
but to all nations, that the U.S. will not tolerate efforts to 
aid Iran's illegal nuclear program or support its state-
sponsored terrorism.
    I appreciate the opportunity, Madam Chairman, and I look 
forward to hearing from the witnesses.
    Chairman Ros-Lehtinen. Thank you.
    And the cleanup batter on our side, Mr. Poe of Texas.
    Mr. Poe. Thank you, Madam Chairman. We have suspected for a 
long time that the tiny tyrant of the desert, Ahmadinejad, was 
doing more than holding powwows with his comrade Chavez. Now we 
have proof. His terrorist group, Hezbollah, has been money 
laundering for Colombian and Mexican drug cartels since 2006.
    Hezbollah took drug cartel money, bought goods from Asia, 
and then shipped those goods back to Latin America to be sold 
by the drug cartels. Hezbollah made $200 million a year off the 
scheme until our DEA got involved. Undercover agents met a 
Hezbollah drug trafficker in Bogota, and before long it led to 
a major Hezbollah money launderer.
    Last month Federal prosecutors in Virginia announced the 
indictment of Hezbollah operative Ayman Joumaa, who is now an 
outlaw on the run. The question is: How many more Joumaas are 
out there? Was this just the tip of the iceberg? And, of 
course, what are we doing about it?
    I yield back.
    Chairman Ros-Lehtinen. Thank you so much.
    And now the chair is pleased to welcome our witnesses. 
First, we will hear from Dr. Norman Bailey, who is the 
president of the Institute for Global Economic Growth. Dr. 
Bailey previously served at the National Security Council and 
was the former mission manager for Cuba and Venezuela at the 
Office of the Director of National Intelligence.
    Next, we welcome Michael Braun, a managing partner at 
Spectre Group International. Prior to this position, Mr. Braun 
served at the Drug Enforcement Administration as the chief of 
    And I would like to welcome Michael Shifter, the president 
of the Inter-American Dialogue. Previously, Mr. Shifter 
directed the Latin American and Caribbean Program at the 
National Endowment for Democracy. Thank you.
    And, finally, I would like to welcome one of our hometown 
heroes, Dr. Jose Azel. He is a senior scholar at the Institute 
for Cuban and Cuban-American Studies at the University of 
Miami--go Canes, my alma mater--and has written extensively 
about the relationship of Iran, Cuba, and Venezuela.
    I would like to remind our witnesses that your entire 
statements have been made a part of the record, and I kindly 
suggest that you summarize your remarks to no longer than 5 
minutes each.
    And we will begin our expert testimony with Dr. Bailey.


    Mr. Bailey. Thank you very much, Madam Chair, and members 
of the committee.
    Chairman Ros-Lehtinen. Put the microphone--direct it a 
little bit closer to your mouth. Thank you.
    Mr. Bailey. My testimony today is based upon a paper that 
was published actually yesterday by the American Foreign Policy 
Council. And even though it was completed less than a month 
ago, several events have taken place which have signaled--and 
they have all been mentioned by members of the committee, so I 
am not going to go over them again, except to emphasize the 
appointment of General Henry Rangel, a notorious drug 
facilitator, as minister of defense of Venezuela.
    But all of the other things that were mentioned have 
happened since then, so that both Iran and Venezuela have been 
signaling to the United States that they are a threat. We are a 
threat--they are saying, ``We are a threat.'' And, finally, 
some important figures in the intelligence and security 
agencies of the United States have recognized the fact that we 
are vulnerable here in the Western Hemisphere.
    It has only taken several years for that to penetrate to 
the U.S. Government, with the honorable exception of the 
Department of the Treasury, which has taken many steps over the 
past few years because of this threat to the United States.
    For years, the media and the U.S. Government have repeated 
a familiar refrain, that the regime of now-ailing Venezuelan 
strongman Hugo Chavez, however annoying, poses no serious 
threat to the national security of the United States. 
Compelling evidence, however, suggests otherwise, and the most 
dangerous threat to the U.S. from Venezuela results from its 
facilitation and encouragement of the penetration of the 
Western Hemisphere by the Islamic Republic of Iran.
    For the last several years, with Venezuela's assistance, 
Iran has created an extensive regional network of economic, 
diplomatic, industrial, and commercial activities, with 
significant effect.
    This economic activism serves several clear strategic 
purposes for the Iranian regime. First, it allows Tehran to 
circumvent financial sanctions imposed by the United States, 
the European Union, and the United Nations, through the use of 
the Venezuelan and Ecuadorian financial systems.
    Second purpose is to facilitate the funding of radical 
organizations and guerrilla movements in the hemisphere, such 
as Hezbollah, Hamas, Islamic Jihad, and the FARC and ELN in 
Colombia. Iranian sponsorship is not limited to Hezbollah, 
however, but to many of these organizations which are raising 
funds in the Western Hemisphere and plotting against the United 
States and other countries in the Western Hemisphere, as we 
have heard.
    The Iranian regime has acquired various ``industrial 
installations'' throughout Venezuelan territory and elsewhere 
in Bolivia and Ecuador and Nicaragua. Many of these so-called 
factories actually produce something, but others are used for 
purposes of drug trafficking and storage of weapons.
    The weekly flights between Caracas, Damascus, and Tehran 
are significant. There are no controls at either end, and even 
though these are supposedly commercial flights you cannot buy a 
seat on these flights.
    The illicit shipping of armaments and other prohibited 
goods and energy cooperation. I specifically want to mention 
the important Iranian involvement in drug trafficking through 
Venezuela to Central America, Mexico, the U.S., the Caribbean, 
and to Europe, through West Africa, is both extensive and well 
documented. And I am sure we will hear more about that from 
other witnesses.
    Activities of Iran in the Western Hemisphere have gone 
beyond Venezuela, as we have heard, into Ecuador, particularly 
in the financial area; the opening of Iranian Embassies in 
Nicaragua, Ecuador, and Bolivia; and the threat to Panama from 
the Iranian Embassy in Nicaragua; activities throughout Central 
America and in Panama, most specifically.
    The construction of numerous warehouses for drugs amassed 
is a legitimate construction business throughout Central 
America. Trade and investment missions, likewise, have been 
exchanged with Uruguay, Paraguay, and Brazil, and Argentina has 
recently tried to improve its relationship with Iran.
    What should we be doing? In testimony time and again, 
particularly to the Subcommittee on the Western Hemisphere, 
then chaired by Congressman Engel, who has been a pillar of 
strength on this and similar issues--and thank you very much, 
Mr. Engel, for your activities. My recommendations are the same 
as they have been for the last 4 years, because none of them 
has been put into effect.
    One is that attention be paid--and that is one of the few 
that very recently, within the last few weeks, has begun to 
take place in the intelligence and security communities. 
Secondly, sanctioning Venezuelan and Ecuadorian banks for 
facilitating Iranian evasion of the financial sanctions.
    Thirdly, patrols outside the mouth of the Orinoco River, 
which have not taken place, and much of the drug trafficking 
into the Western Hemisphere and into Europe goes out of the 
Orinoco. And, finally, the declaration of Venezuela as a state 
sponsor of terrorism, which has been proven over and over and 
over again, and which would permit the United States and other 
countries to take other measures against Venezuela.
    Thank you very much, Madam Chair, and members of the 
    [The prepared statement of Mr. Bailey follows:]

    Chairman Ros-Lehtinen. Thank you so much. We will tease Mr. 
Engel at great length with that ``pillar of strength'' comment.
    Mr. Braun.


    Mr. Braun. Thank you, Madam Chairman, Ranking Member 
Berman, and other distinguished members of the committee. Let 
me tell you right up front, Madam Chairman, I am not an expert 
on Iran, and I am not an academic. I am a practitioner. I spent 
35 years in law enforcement, 24 with the DEA, and was fortunate 
enough to assent through the ranks and help lead the agency as 
its chief of operation for 4 years and chief of intelligence 
for about--acting chief of intelligence for about a year before 
    So I am speaking to you from that perspective, and a lot of 
that time, over that 35 years, was spent in some very tough 
locations and environments around the globe. And by the way, in 
fact, in this town as well.
    So what I do know a great deal about, though, is how 
organized crime, terrorist, and insurgent groups operate, and 
how they collaborate around the world. So how does that relate 
to this hearing focused on Iran and their agenda here in the 
Western Hemisphere?
    As you have said, Madam Chairman, and others on the 
committee, just 2 days ago the Director of National 
Intelligence, James Clapper, testified before the Senate 
Intelligence Committee on Iran's appeared to at least to be 
poised to strike the United States and our interests abroad.
    How could Iran ever pull off attacks on the United States 
right here at home? Well, I can assure you that if that day 
comes, two of Iran's proxies will be leading the charge. It 
will be Quds Force and it will be Hezbollah. And the reason for 
that is because both organizations are now heavily involved in 
both the global cocaine and global heroin trade.
    And because of that growing activity in this post-9/11 
environment that we are all still living in, because of that 
growing--because of their growing involvement in that activity, 
far more of their terrorist fighters are now in our 
neighborhood and more and more on our doorstep. It has brought 
them into this part of the world in a large way.
    You can rest assured that these organizations are 
developing, are working hard. They are masters at this. They 
have done it successfully in many places around the world. But 
you can rest assured that they are developing close 
relationships with organized crime cartels, the most powerful 
organized crime cartels that have ever operated anywhere in the 
world. And those are the Colombian and Mexican cartels, and 
that, by the way, would include the FARC, the Revolutionary 
Armed Forces of Colombia, also a designated terrorist 
    When you take into consideration--and this has been 
mentioned by a couple of you--that the Mexican cartels now 
dominate drug trafficking throughout the world, as far as 
cocaine is concerned, but they also dominate the drug trade in 
the United States. The best estimates are is that they are well 
entrenched in over 250 cities around our country.
    If anyone thinks for a moment that the Hezbollah and the 
Quds Force has not recognized the strategic importance of that, 
of those cartels being in our communities in 250 cities, and 
all of the infrastructure that has been built over many, many 
years to support that activity, then quite frankly--and I don't 
want to be too crude here--but if folks aren't thinking about 
that, then they are stupid or at least they are naive, because 
I guarantee you the Quds Force and Hezbollah have recognized 
the strategic importance of all of that.
    Interestingly enough, the DNI used an Iranian plot to 
assassinate the Saudi Arabian Ambassador here in Washington as 
a key example to support his position that Iran may well be 
poised to attack here in the homeland.
    The Quds Force operative--or a Quds Force operative and an 
Iranian-American attempted to recruit one or more members of 
the ultraviolet Mexican Los Zetas drug trafficking 
organization, to carry out that attack with all things--for 
God's sakes, with all things, of a car bomb right here in 
Washington, DC. If that attack had taken place, that car bomb 
most assuredly would have taken out more than just the Saudi 
Arabian Ambassador.
    And I don't want to do your jobs for your, and I certainly 
don't want to speak for you, but I would suggest strongly, the 
way I see it, that is nothing short of an act of war, 
especially in this 9/11 era that--you know, that we are 
continuing to live through and work through.
    Thankfully, by the way, you know, the DEA and the FBI 
foiled that plot, and I believe saved ultimately--potentially 
saved a lot of lives.
    I cannot think of a better example that the director could 
have used as a byproduct of a byproduct that comes about from 
the growing confluence of drugs and terror, something that I 
have talked about for the past 10 years and, quite frankly, not 
a lot of folks were willing to listen in this town.
    Obviously, you are willing to listen, and I want to thank 
you for that. And thank you for your leadership, for calling 
this committee hearing together today.
    Chairman Ros-Lehtinen. Thank you very much, sir.
    Mr. Braun. No, I----
    Chairman Ros-Lehtinen. I didn't know if that was a pause, a 
dramatic pause.
    Mr. Braun. No, no, it was just a pause to collect my 
thoughts. But, you know, thanks to that unwillingness and the 
growing drug's terror nexus, we now have far greater numbers of 
Quds Force and Hezbollah terrorists in our neighborhood and on 
our doorstep, as I have said.
    Finally, that same Quds Force that I have been talking 
about that is obviously prepared to commit acts of war against 
us right here in our homeland is also the same Quds Force that 
is holding the keys to Iran's strategic missile program, so 
many experts believe. So I think we need to be asking ourselves 
another very tough, important question, as a result of that. 
Who is going to be holding the keys to Iran's nuclear arms 
program when that albatross hatches in the not-too-distant 
    Thank you, ma'am.
    [The prepared statement of Mr. Braun follows:]

    Chairman Ros-Lehtinen. Thank you, sir.
    Mr. Shifter, welcome.


    Mr. Shifter. Thank you very much, Madam Chair, and thanks 
to Ranking Member Berman and all members of the committee. I am 
very grateful for this opportunity.
    This is an issue that needs to be taken seriously. No one 
doubts the nature of the Iranian regime. All of its actions 
that have been cited this morning have justifiably made it an 
international outcast, but these features are antithetical to 
today's Latin America, which is living through a good moment of 
self-confidence and democratic politics.
    The region may want more independence from the United 
States, but it also wants to work more closely with the U.S. It 
has no interest at all in aligning itself strategically with 
Iran. That would be completely counterproductive.
    Iran is trying to expand its support in the region. 
Ahmadinejad did visit four countries on his recent visit to 
reinforce the few ties he still has in the world. But his 
efforts have not been successful, and the four countries he 
visited--Venezuela, Nicaragua, Cuba, and Ecuador--are less and 
less relevant to regional politics. It is telling that 
Ahmadinejad did not go to Brazil where he traveled in 2009. 
Iranian-Brazilian relations have weakened. Moderation and 
pragmatism are increasing in Brazil and throughout the region.
    Iran's window and point of entry in Latin America has been 
Venezuela's Hugo Chavez. They have forged a strategic 
geopolitical alliance. Their aim is to curtail the influence of 
the United States. They have used oil revenues and diplomatic 
resources to advance their objectives. But Chavez has serious 
problems at home, and Ahmadinejad is reportedly also beset by 
very severe difficulties.
    Iran's trade with the region has increased, especially with 
Brazil, but it remains insignificant. Many of the economic 
projects that were promised never materialized. On more serious 
matters, skepticism is warranted and understandable. In the 
early 1990s, the Iranian regime was involved in terrorist 
actions in Buenos Aires, the Israeli Embassy, and AMIA Jewish 
Community Center.
    I happened to be in Buenos Aires the day of the attack of 
the Israeli Embassy, a few blocks from the Israeli Embassy, 
having lunch. And so I have a strong sense of the impact of 
that terrorist action that day in 1992.
    In October, the U.S. accused Iranian authorities working 
with Mexican drug cartels of directing a plot to assassinate 
the Saudi Ambassador in Washington. There have been more recent 
allegations about Iran and the region that should be pursued. 
There has been a lot of conjecture and speculation. The nature 
of Iran's involvement in Latin America is tentative. The 
highest standards of evidence should apply.
    There have been accusations, for example, about training 
camps for terrorists and support for prospecting uranium in 
Venezuela and Ecuador. These charges have not been 
substantiated. I am sure and confident that our intelligence 
agencies are pursuing energetically these leads and are doing 
the best to gather any relevant intelligence. If they are not, 
they certainly should be doing so.
    There have also been accusations about money laundering 
through the region's banks to help finance Hezbollah's 
activities. This is no doubt a serious problem throughout the 
Western Hemisphere. There needs to be a coordinated effort 
among law enforcement agencies to address it seriously.
    What should the U.S. do? Well, the Obama administration has 
taken a few steps, including imposing financial sanctions on 
Venezuela's state-owned PDVSA oil company for violating U.S. 
law by doing business with Iran. It has rightly been keeping a 
close and careful watch on Iran's role in the hemisphere.
    There have also been calls for a tougher U.S. stance in the 
region, but it is important to assess carefully the likely 
consequences of any alternative approach. It is crucial that 
the U.S. consult closely with the major players in Latin 
America about Iran's role and the best way to respond.
    Ask our friends and allies what they think is going on. 
They surely would not want to risk their hard-earned peace and 
democracy by allowing the spread of terrorist forces in the 
region. This approach would fit with seeing Latin America not 
as a threat but as a series of opportunities.
    The governments that Ahmadinejad recently visited are not 
representative of the region. They are marginal and do not pose 
a threat to the United States. The best way to deal with this 
issue and advance U.S. national interest is by working more 
closely with major Latin American players and by keeping a very 
careful watch.
    Thank you very much.
    [The prepared statement of Mr. Shifter follows:]

    Chairman Ros-Lehtinen. Thank you, sir.
    Dr. Azel.


    Mr. Azel. Thank you, Madam Chairman, Ranking Member Mr. 
Berman, distinguished members of the committee. I am honored to 
have this opportunity to share my views on the growing Iranian 
influence in Latin America, and I commend you for calling this 
hearing on what is often an underestimated and misunderstood 
threat to our national interest.
    Iran is an increasingly important political economic player 
in Latin America. Its influence transcends geography, language, 
culture, and religion. At the heart of this growing Iranian 
influence is a peculiar trilateral configuration with Cuba and 
Venezuela. The basis of this rather eccentric alignment is not 
east-west political philosophy or a coalition based on 
congruent economic models or north-south ideological affinity.
    Even more perplexing, it is a strategic alliance that 
transcends profound theological differences. What, then, brings 
together Fidel Castro, Marxist-Leninist-atheist; Hugo Chavez, a 
putative socialist Christian; and Mahmoud Ahmadinejad, a 
product of Islamic fundamentalism? What allows the Iranian 
theocracy, so removed from Latin America by ethnicity, by 
customs and values, to play an increasingly influential role in 
our hemisphere?
    If we answer these questions in terms of the growing 
economic ties among these countries--and there are many, both 
licit as well as illicit and covert--we would be basing our 
analysis on a straight Western economic rationality. We would 
be mistakenly extrapolating our logical model to the likes of 
Castro, Chavez, and Ahmadinejad.
    A second analytical mistake is to scrutinize Iran's 
influence in discrete country-by-country terms rather than in 
terms of the synergies and the symbiosis of the Tehran-Havana-
Caracas alliance.
    We will further compound our error if we formulate U.S. 
foreign policy in similarly disconnected terms. As world events 
have repeatedly demonstrated, we eventually gained the socratic 
insight that we know very little of the logical reasoning 
models of autocratic leaders. Although it may seem that way to 
us, these countries do not follow an irrational foreign policy.
    The analytical challenge for the United States is to 
understand, in our cultural milieu, actions arising in another. 
In the case of Iran, Cuba, and Venezuela, the unifying point 
seems to be a virulent hostility toward the United States, 
liberal democracy, and Israel. In other words, the Ahmadinejad-
Castro-Chavez nexus is fundamentally an anti-American 
alignment, and as such--and I think this is critical--it 
follows its own logic and its own rules of engagement.
    The growing Iranian influence in Latin America, together 
with its Cuban and Venezuelan connection, should be understood 
in this context of an anti-American alliance determined, above 
all other considerations, to undermine U.S. national interest. 
Cuba and Venezuela have become the most strident defenders of 
Iran's nuclear ambitions, and the three countries have formed a 
strategic partnership to evade U.N. and U.S. economic 
    Moreover, Cuba's sophisticated intelligence and 
counterintelligence capabilities are reportedly shared with 
Iran and Venezuela. The Tehran-Havana-Caracas bloc speaks with 
a unified anti-American voice at the U.N. and other 
international forums, in a concerted effort to undermine U.S. 
influence by any means at their disposal.
    In addition to these diplomatic maneuvers, the bloc seeks 
to increase U.S. economic costs in a variety of ways, from 
impacting the price of commodities to providing support for 
anti-American and terrorist groups, to collaborating with 
Russia and China in opposing U.S. initiatives, and of course by 
Iran seeking to become a nuclear power.
    It is within the realm of the possible that should Iran 
succeed in deploying and developing its nuclear capabilities, 
Venezuela may seek deployment on its own territory. This 
geopolitical alignment, if it can be described as ideological 
at all, is based on an ideology of hate toward the United 
States, Israel, and democratic governing principles.
    Distinguished members, the formulation of U.S. foreign 
policy is often imbued with inherent tensions between policies 
anchored on our democratic values and policies based on our 
national interest. In this case, a rare congruence exists for 
clarity of purpose in a coordinated U.S. foreign policy that 
blends our support for democratic values with our national 
security concerns.
    First, our foreign policy should pay far more sustained 
attention to Latin America; and, second, unambiguously we 
should take advantage of this congruence of purpose to be 
unabashed and not timid in supporting opposition to the tyrants 
that threaten our national interest.
    Thank you.
    [The prepared statement of Mr. Azel follows:]

    Chairman Ros-Lehtinen. Thank you very much. Thank you to 
all of our witnesses for excellent testimony.
    I have a question for Dr. Bailey and for Dr. Azel. Dr. 
Bailey, your former employer, the Office of the Director of 
National Intelligence, stated that Iran's leaders now appear 
willing to conduct an attack within the United States, and that 
it is ``trying as well to penetrate and engage in this 
hemisphere.'' Do you agree with Director Clapper's assertions? 
And does Iran have the capabilities and the interest to use 
countries in Latin America as a platform to launch attacks 
against us here in the U.S.?
    And, Dr. Azel, for you, in your prepared testimony you say 
that the foundation of the Iran-Cuba-Venezuela relationship is 
an anti-American alignment. Because these nations actively work 
to undermine U.S. interest, what do you think we can expect in 
the future to be their chosen mode of aggression from this 
alliance against us in the United States? Would it be Iran's 
nuclear aspirations, Cuba's oil drilling program that just 
recently started, the upcoming Venezuelan elections, et cetera?
    So, Dr. Bailey, we will start with you.
    Mr. Bailey. Thank you very much for the question, Madam 
Chair. Yes, Iran certainly has the desire and it increasingly 
has the capability of threatening the United States and the 
Western Hemisphere. Several of these possibilities have been 
    I would also add the threat to the Panama Canal to close 
the canal. They have been talking, of course, about closing the 
Straits of Hormuz for some time. But they have the capability 
to close the Panama Canal. That is clearly a threat to the 
United States.
    The recent discovery of a plot to mount a cyber-attack 
against the United States, which resulted in the expulsion of 
the Venezuelan Consul in Miami, and simply the fact that the 
Venezuelan Government now issues passports and Venezuelan 
identity documents freely to Iranian agents in the Western 
Hemisphere, permits them to travel whenever they want within 
the hemisphere, and including across the border into the United 
States, as has been very extensively documented.
    Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you.
    Dr. Azel.
    Mr. Azel. Madam Chair, the most threatening scenario, of 
course, is a nuclear Iran with a complicit Venezuela that may 
be willing to offer its territory for deployment of Iran's 
nuclear weapons. In such a case, we would find ourselves in 
1962 all over again.
    But in addition to that scenario, these countries are 
continuously using their influence in all of the international 
forums to undermine U.S. influence everywhere and to increase 
our operating costs, whether it be by impacting the price of 
commodities or anything else.
    I am also particularly concerned with the sharing of 
intelligence. As we do know, Cuban intelligence and 
counterintelligence capabilities are exceptional, and they are 
reportedly sharing all of that information with Iran. That is a 
very threatening scenario.
    Chairman Ros-Lehtinen. Thank you. Mr. Braun, the attempted 
ploy by the Iranian regime to use agents in the Mexican cartels 
to assassinate the Saudi Arabian Ambassador in the U.S. was 
quite alarming. With your experience at DEA, do you believe 
that Iran's attempt to carry out a terrorist attack on U.S. 
soil was an isolated incident? Do you think that Hezbollah has 
a strategic interest in Central America and the southwest 
    Mr. Braun. Madam Chairman, I would say that the Quds Force 
and Hezbollah, as I said earlier, are absolute masters at 
developing very close relations with existing criminal 
organizations throughout the world, whether they be powerful 
drug trafficking cartels, smuggling groups, money launderers, 
those that develop and provide forged documents, passports, and 
so forth, and they work very, very hard to conduct or develop 
those relations.
    And by developing those relations, it provides them with 
the ability to operate far from home in our neighborhood, and, 
as I said earlier, on our doorstep. There is no doubt in my 
mind that they have developed close relations or relations with 
groups like the FARC and some other Colombian cartels in 
    It is important to understand that, you know, one of many 
threats posed by that is, you know, the FARC's ability to 
routinely construct fully submersible submarines now that are 
capable of moving eight to ten tons of cocaine all the way up 
into northern Mexico. What else could be on those ships?
    They have obviously established or are at least attempting 
hard to establish relations with the Mexican cartels right on 
our southwest border. For what reason? Because they--you know, 
they or any other terrorist organization are not going to 
attempt to construct their own smuggling infrastructure into 
the United States.
    To answer your question, ``Do they have designs on 
attacking us?'' I believe that they do have. As one of the 
Congressmen said earlier, they are up to no good. And they have 
got the ability to do it, thanks to their relations----
    Chairman Ros-Lehtinen. Thank you.
    Mr. Braun [continuing]. With cartels.
    Chairman Ros-Lehtinen. Thank you very much.
    Mr. Berman is recognized.
    Mr. Berman. Thank you very much, Madam Chairman.
    At least initially for Mr. Shifter and Mr. Braun, a couple 
of questions. I clearly understand Iran's interest in its 
network with cartels, criminal groups, putting Quds Forces 
closer to the United States and in sensitive areas.
    What are the governments that are playing with Iran? What 
is their interest, other than sort of a larger band of brothers 
with--joined together by hatred or a dislike for the United 
States? What are they getting? Why is Castro and Ortega and 
Ecuador, why are they--why are the governments here playing 
with Iran?
    And I will throw out a suggestion, but then I would like 
you to comment. Is this Chavez's clout, not Iran's clout, that 
is getting them to go along with this agenda?
    Mr. Shifter. Thank you. There is no question that the 
principal alliance in this hemisphere is between Ahmadinejad 
and Chavez. And Venezuela has been the window for Ahmadinejad 
in the hemisphere. And Chavez has money from oil, and he 
supports the subsidy to Cuba. For example, for a year, I have 
heard figures of--really quite striking--$3 billion to $5 
billion a year, 100,000 barrels of oil a day.
    Mr. Berman. He is filling the role Russia used to play.
    Mr. Shifter. Exactly. He provides that role while he gets 
something in return, and he gets other things in return, but I 
think this is part of the package. And I think it is the same 
with Ortega, who relies on Chavez as well. So this is----
    Mr. Berman. But these countries are not getting economic 
benefits from Iran, as I understand it.
    Mr. Shifter. No.
    Mr. Berman. Nicaragua has a huge debt to Iran for oil 
purchases, and Iran hasn't canceled it or reduced it or 
    Mr. Shifter. Right. No, nothing. They are not getting 
benefits at all. As a matter of fact, Ahmadinejad went to 
Rafael Correa's inauguration in 2007, so that was exactly 5 
years ago in January 2007. There has been no cooperation from 
Iran to Ecuador. And I have consulted with Ecuadorian 
colleagues who were very--who were in the opposition to Correa; 
they don't like Correa. But they said there is just--you know, 
it hasn't come through. There has been nothing that has been 
delivered despite lots of promises.
    This recent visit was just, you know, there is no sign that 
populations respond positively to him at all. There is a 
rejection by Ahmadinejad. The governments are doing it, because 
it is a favor to Chavez, and that is the deal that they have. 
But there is really no sense of really any in-roads in the 
societies of these countries.
    Mr. Berman. Mr. Braun, I would like your reaction. But 
also, is there something more you would like to see this 
administration doing to deal with the issues you have raised?
    Mr. Braun. Well, I mean, one of the things that I would say 
to that, Ranking Member Berman, is that I really believe 
strongly that post-9/11, not shortly thereafter, we took the 
ball off--or we took our eye off the ball of the global drug 
trade and drug trafficking and how it impacts our nation.
    And, consequently, the confluence of--or, you know, the 
confluence of drugs and terror began to grow, and it is growing 
now at speeds far faster than most in this town want to admit. 
I am not saying that that is the case with this committee. 
Obviously, it is not. But it is moving at speeds far faster 
than anyone wants to admit.
    What we have got to do is we have got absolutely separate 
and distinct strategies, plans, and funding streams for 
counterterrorism and counternarcotics. The two have come 
together. We are already behind the power curve. We need to put 
our strategies together, which would include obviously, you 
know, the funding that goes along with all of that.
    We have got stovepiped directorates within the CIA, the 
FBI, and other parts within Department of Justice and 
Department of Treasury and our intel community. And they need 
to be communicating far more closely with one another and 
working more closely together.
    To answer the first question, though, or to make a comment, 
what is amazing--and I think it was you that said that when 
Ahmadinejad shows up in Venezuela there are countless numbers 
of promises made for human aid and that like kind of activity, 
and it is never delivered. But what is delivered, what I see, 
is the building of organized criminal capacity in Venezuela, 
Bolivia, along our southwest border. That appears to me to be 
one of the things, one of the most important things that come 
out of those meetings.
    If you look at the number of flights that are leaving 
Venezuela loaded with cocaine, headed for the west coast of 
Africa, ultimately making its way into the soft underbelly of 
Europe through Spain, it is mind-boggling. It looks like a mass 
of red with each one of those flights being a single red line.
    If you look at the collaboration between Venezuela and 
Bolivia on the drug trade, this is a multi-billion dollar 
industry, and I for one believe that what it is doing is 
generating a great deal of contraband revenue that each one of 
these countries and organized crime throughout the region can 
tap into to move their agendas forward.
    Mr. Berman. My time is----
    Chairman Ros-Lehtinen. Thank you so much, Mr. Berman. Thank 
you, sir.
    Mr. McCaul, vice chairman of the Subcommittee on the 
Western Hemisphere.
    Mr. McCaul. Thank you, Madam Chairman. You know, when I 
worked in the Justice Department on counterterrorism cases, 
Hezbollah--we were--obviously, al-Qaeda was the number one 
priority, but Hezbollah in many respects has a greater 
sophistication by far. We were always concerned about the 
presence of Hezbollah, much heavier presence in the Western 
Hemisphere, more so than al-Qaeda.
    But we always viewed them as more of a sort of terrorist 
financing support mechanism rather than an operational cell, 
for instance. Then, the Saudi Ambassador plot unfolds, and that 
is a bit of a game-changer. Univision does this report on a 
cyber plot to attack the United States involving the Iranian 
Ambassador. That became an eye-opener.
    I think, Mr. Braun, as you stated, counterterrorism and 
counternarcotics have now--the two have come together. And when 
you look at this quote from Hugo Chavez over here, 
``Ahmadinejad and I are going into the basement now to set our 
sights on Washington and launch cannons and missiles.'' Now, he 
said that was a joke, but I fail to see that humor in that 
statement. In fact, there may be some truth to that statement.
    So my question is: Have they made the transition from 
merely support to operational? I guess, Mr. Braun, you would be 
the best person to start out on that.
    Mr. Braun. Well, I think they have--I believe, Congressman, 
they have made the transition, and I would say, again, that it 
has--their ability, you know, to execute is strengthened by the 
close relations that they are working hard to develop with very 
powerful organized criminal organizations in our neighborhood 
and throughout Latin America, as well as with, you know, 
designated terrorist organizations like the FARC.
    These groups allow them to operate freely in our 
neighborhood, and they are getting closer to our doorstep. And 
if we don't do something about it, and really get serious about 
it, then, you know, I--again, I don't want to sound too crude, 
but I think there is--you know, there is going to be hell to 
pay, you know, at some date in the not--probably in the not-
too-distant future.
    Mr. McCaul. Well, you know, the conventional wisdom, when 
we get these briefings, I always ask the question, and they 
say, ``Well, you know, the drug cartels would never associate 
themselves with any sort of terrorist organization, because 
they don't want the blowback that would be associated with 
that.'' And yet Operation Titan I think pretty well revealed 
and underscored the fact that there is a relationship between 
the two.
    Mr. Braun. Well, there is an unequivocal relationship, and 
that is exactly why I believe General Clapper used the 
attempted plot--or the plot to kill or assassinate the Saudi 
Arabian Ambassador to the United States. The reason he used 
that is because he knew he could rely on it. It is not just 
some piece of intelligence or pieces of intelligence.
    It is intelligence and information that has been converted 
into evidence that would pass a judicial test in any Federal 
courthouse in the United States. And we have the greatest 
system of justice in the world, in our Federal courts system, 
and it is not an easy thing to get evidence admitted--as you 
well know based on your past experience, admitted into a court 
of law. So, you know, there is an unequivocal connection.
    Let me just mention one thing about Operation Titan, 
anecdotally, that will paint an absolutely clear picture on the 
amounts of money that are generated in the Hezbollah, supported 
and facilitated by Quds Force activity in the growing cocaine 
trade throughout Latin America.
    One small piece of that Op Titan initiative resulted in the 
delivery of a close--a very close associate and affiliate of 
the Hezbollah, the guy that apparently was in Latin America 
responsible for putting a lot of these multi-ton loads 
together, moving them into West Africa, and ultimately 
responsible for collecting massive amounts of bulk cash.
    Part of that operation involved the delivery on the part of 
that money launderer to a DEA undercover operative, an agent 
that spoke fluent Arabic, of $36 million in cash. So they were 
having a tough time moving it out of the Western Hemisphere and 
into Africa and beyond. That agent actually took delivery of 
$20 million in cash as part of that investigation.
    Mr. McCaul. I want to make one more point, because my time 
is running out. That is, the Revolutionary Guard, Quds Forces, 
and Iranian intelligence officers, they are here in the United 
States. In my judgment, they are in Mexico. CISEN has told me 
they can't even quantify. They don't know how many officers are 
in their own country, and that is probably true throughout 
Latin America. I think expelling these officers would be a very 
smart idea.
    I think designating the Revolutionary Guard as a foreign 
terrorist organization, which we were surprised they hadn't 
been, would be a helpful tool I think from a law enforcement 
standpoint. Would you agree with that?
    Mr. Braun. I would absolutely agree with it.
    Mr. McCaul. I see my time has expired. Thank you.
    Chairman Ros-Lehtinen. Thank you so much, Mr. McCaul.
    Mr. Engel, the ranking member on the Subcommittee on the 
Western Hemisphere.
    Mr. Engel. Thank you, Madam Chair, and thank you, 
gentlemen, for wonderful testimony. And thank you, Dr. Bailey, 
for that nice compliment. I very much appreciate it.
    I want to focus on two things. Number one, the sanctions 
that we have imposed on Iran. How have these sanctions against 
Iran affected Iran's ability to engage with Latin America 
economically? To what extent do you agree with the 
administration that Iran has been unable to establish a 
financial foothold in the region, largely because of U.S. 
sanctions? And are additional sanctions needed to make it 
harder for Iran to establish a foothold in the region? That is 
one thing.
    And the second thing is I would like to focus on Hezbollah. 
We have looked at Hezbollah fund raising activities in the 
region, particularly in the tri-border region of Argentina-
Brazil-Paraguay, and in Venezuela. I am wondering if anyone can 
enlighten us a little bit more about Hezbollah's current 
activities in the hemisphere. And, Dr. Bailey, why don't we 
start with you.
    Mr. Bailey. Thank you very much for the question, Mr. 
Engel. In the first place, as far as a financial foothold of 
Iran in the Western Hemisphere is concerned, it is primarily 
centered in Venezuela and Ecuador at this point. The Iranians 
established Iranian-controlled banks in both Venezuela and 
Ecuador. Those banks have in fact been sanctioned by the 
Treasury Department.
    What the Treasury Department has not done is to apply 
sanctions to Venezuelan and Ecuadorian banks, which are used by 
the Iranians to evade U.S., European Union, and U.N. financial 
sanctions on Iran. In my opinion, as I mentioned in my 
recommendations, that is something that I would very strongly 
recommend that the U.S. Government do.
    As far as the financing of Hezbollah is concerned, as you 
rightly point out, a lot of that comes from the tri-border 
area, although less than before, primarily because of fairly 
successful Brazilian efforts to counter smuggling and money 
laundering in the tri-border area.
    However, they have, as a result, established other centers 
sometimes with the cooperation of the government in the country 
involved, particularly in the case of Bolivia and more strongly 
in the case of Venezuela. The center of these activities in 
Venezuela at this point is in the island of Margarita, where 
the Islamic Cultural Center, which never has ballet 
performances or art exhibits, but does have 4-foot-thick 
concrete walls and armed guards, is the center of these 
activities in the northern part of South America.
    They extort funds from--and some of them are not extorted, 
some of them are voluntary, from the Arabic communities in 
these countries, which is quite large. But the main funding of 
Hezbollah and other terrorist organizations, such as Hamas and 
Islamic Jihad, at this point comes from what Mr. Braun is 
talking about, namely the alliance between the drug traffickers 
and the terrorist organizations.
    The drug traffickers make enormous profits, and the 
terrorist organizations provide security for them. And as a 
result, there is a symbiotic relationship between the two, 
which goes--partially goes toward funding of the activities of 
Hezbollah and other terrorist organizations.
    Mr. Engel. Thank you.
    Mr. Shifter, I wanted to hear your comments on it.
    Mr. Shifter. Thank you. I think that the sanctions regime 
has been effective in preventing the financial foothold, and 
there have been sanctions, as Norm Bailey mentioned. I think 
the enforcement could be maybe a little bit stronger, a little 
more coordinated, a little more sustained.
    It could do a little bit--and I think, like all 
governments, like our Government, there are different agencies 
that are more active on enforcing the sanctions than others. So 
I think it has had some positive impact, but I think there 
could be more enforcement.
    On Hezbollah, my sense is that they have been involved in 
drug--smuggling arms, smuggling drugs, and the like, in the 
region. I think that in terms of their control over sales in 
Latin America, it is an educated guess the extent of it, but I 
think there is really not a lot of very reliable, credible 
information about how much we know. I think we should try to 
find out more.
    Mr. Engel. Mr. Braun, could you comment on what Dr. Bailey 
had said with the drug trafficking?
    Mr. Braun. Congressman, the one thing that I would add to 
the doctor's comments, you know, I would go back to his comment 
of a symbiotic relationship that develops between very powerful 
drug trafficking cartels and terrorist organizations. That is 
an extremely important point, because you can take it a step 
    With respect to destabilizing already weak governments in 
many places around the world, when you have these two very 
powerful threats occupying the same place at the same time, 
like the tri-border area of South America, perhaps even some 
limited regions or areas of Mexico, in West Africa and 
elsewhere, what you have is a--what results is a symbiotic 
destabilization of already weak government, because when the--
you know, the cartels are working hard with their corruption 
campaigns to undermine the rule of law. That further weakens 
good governance.
    Oftentimes they resort to attacks, physical attacks on 
security forces, further undermining already weak governance. 
But the terrorist organizations and insurgents are doing the 
same thing. So when either attacks government, it just weakens 
it that much more, and the other benefits just as much as, you 
know, the attacking force. And that--you know, we saw it in 
Colombia. We are seeing it all over West Africa and North 
    We are seeing it in the Afghan-Pakistan region and 
elsewhere around the world. We have got to be doing more to 
keep these very powerful threats from building long-term 
relations. We have got to be getting them apart rather than 
allowing them to come together.
    Mr. Engel. Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you so much, Mr. Engel.
    Mr. Chabot, the chairman of the Subcommittee on the Middle 
East and South Asia.
    Mr. Chabot. Thank you, Madam Chair. At the end of last 
year, Iran introduced a new Spanish language television 
network, Hispan TV, to markets across Latin America. Are you 
familiar with that? Could you talk about potential sizes of the 
audiences and what type of reception that this might be 
receiving now in the region or potentially in the future? And 
do you anticipate that it might have a significant effect on 
public opinion? Just anything that you could tell us about 
that, whoever wants to take that up. Anybody familiar with 
    Mr. Azel. No, not familiar with the specifics of the 
programming or anything like that. I think we have to wait and 
see. But I did want to take a second, if I could, to address 
part of Mr. Berman's question earlier having to do with the----
    Mr. Chabot. Well, I don't know if I want to do that. 
    But let me--if I have time, I will come back to that. Does 
anybody know about the Hispan TV? Mr. Shifter?
    Mr. Shifter. I have heard about it, and I am, just frankly, 
very skeptical that it is going to get much reception in Latin 
America. I mean, it is just starting. That is clearly what--the 
Iranians have that intention, but I don't think there is going 
to be a lot of response in the region.
    Mr. Chabot. Okay. All right. If you want to make it real 
quick, Mr. Azel.
    Mr. Azel. Absolutely.
    Mr. Chabot. Go ahead, Mr. Braun.
    Mr. Azel. It is only the point that I try to develop that 
if we look for logic in these regimes, we are not going to find 
logic as we understand logic. This is about odium. This is 
about hate for the United States and democratic governing 
    Let us recall, for example, that in 1979 with the victory 
of the Islamic Revolution, Fidel Castro abandoned his long-term 
support for the Communist Party in Iran and embraced the 
Ayatollah Khomeini at that time. In his mind, the anti-
Americanism of the Ayatollah trumped his anti-Communist 
philosophy, so my point is simply that we should not look for 
the kind of logic that we employ in our analysis.
    Mr. Chabot. Okay. Mr. Braun?
    Mr. Braun. Well, I would just say that I would agree with 
my co-panelists here to my left that in many places in Latin 
America it probably won't take hold, but we have to remember 
that there are some locations in South America where you have a 
rather large Middle Eastern population, folks that have 
migrated from various locations in the Middle East, the tri-
border area being one of those. Cumulatively, you have got 
several million folks with that kind of background, if you 
will, that are in Latin America.
    So I would be concerned that--and many of those folks, 
especially in the tri-border area, are young men between the 
ages of 16 to 25. They are disenfranchised. They have virtually 
nothing to their name, and that area for one has been a 
recruiting mecca for the likes of al-Qaeda, Hezbollah, and 
Hamas for many years.
    So, you know, I would be a little bit concerned about that, 
    Mr. Chabot. All right. Thank you. Let me move on to 
something else. This potential, you know, axis of evil--Iran, 
Cuba, and Venezuela--one of you had mentioned their cooperation 
with China and Russia insomuch as the thing that brings them 
all together is undermining U.S. interest there or around the 
world. What evidence or anything you could comment relative to 
Russia and China and their coordination or alliance or 
involvement here? Dr. Bailey?
    Mr. Bailey. Yes, thank you for the question. As far as 
Russia is concerned, it is primarily interested in selling 
arms, and has been selling massive quantities of arms to 
Venezuela particularly. As far as the Chinese are concerned, 
their involvement in the Western Hemisphere has been largely 
economic--in other words, trying to tie up sources of natural 
resources--minerals, oil and gas, and so on and so forth.
    And it is part of their effort throughout the world 
centered in Southeast Asia, in Africa, and in Latin America, to 
tie up sources of natural resources. They have also made 
investments in various areas. I have not seen credible evidence 
that the Chinese are trying to undermine the interests of the 
United States in the Western Hemisphere. I would be much more 
concerned about their military and naval buildup, and so on, in 
the Far East and in South Asia, than I would be about anything 
they are doing in the Western Hemisphere.
    In the case of the Russians, of course, they are always 
happy to do anything that makes the United States look bad, and 
they sent ships to Venezuela, because we sent ships into the 
Black Sea when Russia attacked Georgia, sort of tit for tat 
sort of thing. But primarily, again, as I say, their principal 
interest is in selling weapons.
    Mr. Chabot. Thank you very much. I see my time has expired, 
Madam Chair. I will yield back.
    Chairman Ros-Lehtinen. Thank so much, Chairman Chabot.
    Mr. Deutch, my colleague from Florida is recognized.
    Mr. Deutch. Thank you, Madam Chair.
    MR. Braun, I want to stay on the tri-border area. Iran's 
proxy Hezbollah has been benefitting financially from the tri-
border area since the 1980s, mainly from rampant intellectual 
property theft and piracy. Last Congress this committee held a 
hearing on protecting intellectual property rights overseas, 
and we looked at efforts to train security personnel in the 
tri-border area to reduce intellectual property theft and 
transfers of pirated goods.
    First, can you assess the current state of Hezbollah's 
efforts in the tri-border area? You talked some about the 
recruitment for terrorist groups. Could you speak specifically 
about Hezbollah and U.S. efforts to combat that? And, secondly, 
in your opinion, are Hezbollah's activities in the region still 
mainly confined to fund raising and generating revenue, or is 
there a significant operational presence?
    Mr. Braun. Well, I think there has been a monumental shift, 
and much of this has to do with--quite frankly, with our 
success in prosecuting the global war on terror. Two things 
have happened--state sponsorship for terrorism has declined 
    Even the amounts of money that Iran are pushing to the 
Hezbollah, it is not dried up, but it is not what it used to 
be. State sponsorship continues to decline, and we have done 
yeoman's work--collectively, our Government security forces--in 
identifying and significantly disrupting the funding streams 
from very powerful private donors.
    So for those two reasons, many groups like Hezbollah and 
many other designated terrorist organizations, well over half 
on our FTO list now, are involved in one or more aspects of the 
global drug trade.
    In the tri-border area, really, it is where Hezbollah got 
its start. After 9/11, in a significant way, from that area 
they were acquiring relatively small quantities or loads of 
cocaine. But what we were seeing, or what DEA was seeing, just 
8-10 years ago, was them acquiring 14, 15 kilograms of cocaine 
for a $75,000 investment. It goes into a couple of suitcases 
with a passenger. Checked luggage ultimately makes its way into 
Europe or some other location, where that $75,000 investment 
becomes $1 million in profit very quickly.
    And that has since grown at light speed into their 
wholesale involvement now of moving multi-tons of cocaine out 
of Latin America. Thank you, Hugo Chavez, and thank you, Evo 
Morales, for assisting them, but helping them move it into West 
Africa and then onward into Europe and other markets.
    I can't speak about their involvement in the other kinds of 
activities, Congressman, that you are focused on, but could 
certainly give you some names of some folks that could help 
    Mr. Deutch. I appreciate that. Thanks.
    Mr. Shifter, I would like to go back to a point you made 
earlier. You noted that Brazil is not on the itinerary of 
Ahmadinejad, and though maintaining overall positive relations 
the U.S. and Brazil had some differences of opinion under 
President Lula, particularly Iran.
    Brazil's failed attempt to stave off last-minute sanctions 
at the U.N. through the fuel swap deal put them at odds with 
other Western powers. Because they were missing from the 
agenda, from the itinerary, do you see Brazil's policy now 
taking a new direction? And what influence--most importantly, 
what influence does Brazil, as the economic powerhouse of the 
region and a U.S. ally, have on countries like Bolivia and 
Ecuador that have chosen to strengthen their ties with Iran?
    Mr. Shifter. Thank you. Well, Brazil is the regional power 
in Latin America, and it does have strong influence. It is on 
the border with Bolivia. It has investments that have grown 
throughout South America especially, so it has--it is the 
political and economic powerhouse in the region.
    On Brazil's change, I think there has been some change. I 
don't want to overstate the change. There is still an economic 
relationship. Brazil is pragmatic. Brazil sells a great deal to 
Iran. That hasn't stopped. They sell a lot of food and other 
products to Iran. But there seems to be a distancing with the 
new government of Dilma Rousseff since she came in on January 1 
from, you know, a year ago with the Iranian--there is a 
different approach, there is a different style.
    She is doing things that the previous government wouldn't 
do. There was a backlash in Brazil politically to what Lula 
did. It went too far, so she is pulling back. So there is a 
difference there, but I wouldn't expect Brazil to sort of have 
sort of a very confrontational posture toward Iran. So I don't 
want to overstate the change either.
    Mr. Deutch. Thank you. Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you, sir.
    Mr. Duncan of South Carolina.
    Mr. Duncan. Thank you, Madam Chairman, and thank the 
witnesses for being here. Just a brief section of statement 
here. America is a friend and ally to many of our Latin 
American neighbors. We were the first to recognize and welcome 
Argentina, Peru, Chile, Colombia, and Mexico, in the Community 
of Nations in 1822. We have had an excellent military support 
from our Latin American friends, both in World War II and 
Korea, and most recently in Operation Iraqi Freedom.
    The U.S. possesses vital national security and economic 
interest in Latin America, and we strongly resent hostile 
foreign influence in our neighborhood that threatens the peace, 
security, and tranquility of our own interest and those of our 
    I think Dr. Bailey's written testimony states the issue 
succulently when he says, ``Iran's penetration into the region, 
and Venezuelan's facilitation of it, represents a real and 
growing security threat to the United States as well as to the 
rest of the hemisphere.'' There are some who believe we should 
abandon the Monroe Doctrine. I could not disagree more, which 
is why I recently introduced H.R. 3783, the Countering Iran in 
the Western Hemisphere Act.
    This legislation requires the administration to detail the 
presence and activity of Iran, the IRGC, and Quds Force, 
Hezbollah and Hamas in the Western Hemisphere, and to craft a 
strategy in response to those threats that these entities face.
    Now, I want to be clear. This bill does not advocate 
imperialism, and we are not trying to build an empire. We are 
trying to protect American interests and those of our friends 
and allies here in our neighborhood, so to speak. Consider what 
we know and recap much of what is being said today, we know 
Iran has been building a diplomatic, economic, and security 
relationship within Latin America.
    We know Iran uses the IRGC directly and indirectly, its 
Quds Force and terrorist organizations such as Hezbollah and 
Hamas, as tools of foreign policy. We know that Iran is a 
master chess player, and recently expanded its public diplomacy 
outreach to Latin America with Hispan TV. We know that the 
recent DEA success of effectively shutting down the Lebanese 
central bank resulted in the indictment of a man at the center 
of the case who was charged with trafficking cocaine and 
laundering money for the Los Zetas Mexican drug cartel.
    Since our country has trouble securing our southwest 
border, this poses a serious concern. We know that the U.S. has 
sanctioned 23 Iranian financial institutions, and the EU has 
instituted a ban on Iranian oil. We also know that, as we 
tighten the noose around Iran, we also have assets in Latin 
America that make for easy targets for Iran--Embassies, 
consulates, businesses, energy pipelines, cultural 
organizations, and the like.
    We know from Director of National Intelligence Clapper's 
recent testimony just this week on 31 January that some Iranian 
officials, probably including Supreme Leader Ali Khamenei, have 
changed their calculus and are now more willing to conduct an 
attack in the United States in response to real or perceived 
U.S. actions that threaten the regime.
    So knowing this, and failing to take action to protect 
American interest, is irrational and foolish. We had the 
opportunity to counter Iran's strategy and alliances in Latin 
America, and I exhort my colleagues to recognize the threat and 
seek to work together, united in our desire to protect American 
security interests. This includes working with our Latin 
American neighbors and our closest allies in the region.
    The question I have today is for both Dr. Bailey and Mr. 
Brown--Braun, excuse me. Would you elaborate on what type of 
concrete response needs to occur for our Government to 
effectively counter the extensive web of illicit activity, the 
nexus between narcotrafficking and terrorism, and the strategic 
connections that Iran has made in Venezuela and throughout the 
Latin American area? Dr. Bailey.
    Mr. Bailey. Thank you very much for that question. I mean, 
one comment I would make to add to what Mr. Braun was talking 
about is that Iran has greatly reduced its contributions to 
Hezbollah and Hamas because of its own financial and economic 
problems. That makes those organizations even more dependent on 
drug trafficking revenues to keep up their activities.
    As far as the activities of Hezbollah particularly, as well 
as the other terrorist organizations in the Western Hemisphere, 
they have become, as Mr. Braun pointed out, very, very much 
operational, and that is being demonstrated almost on a daily 
basis. As I mentioned at the very beginning, it is almost as if 
both Iran and Venezuela and some of the other--and Cuba, and so 
forth, are saying to the United States, ``We are a threat. We 
are a threat.'' And people in the United States, for some 
reason, in many cases don't want to admit that, or don't want 
to receive that message.
    The fact that Iranian agents are throughout Central America 
and Panama at this point is extremely significant. From the 
Embassy in Managua, the Embassy now has 25 ``diplomats'' 
because of their enormous joint operations between the two 
countries. That is sarcasm. They are all--almost all--agents 
who are penetrating Central America and Panama through 
    As far as financial support is concerned to evade financial 
sanctions through particularly Venezuela, and to some extent 
the Ecuadorian financial system, this is something that the 
United States needs to--and the Western world needs to be 
extremely concerned about.
    As I pointed out in my list of recommendations, I think it 
is very important to declare Venezuela a state sponsor of 
terrorism, at which point we could stop Venezuelan oil exports 
to the United States, and then they will throw up their hands 
and say, ``Oh, my God, then the price of oil will go through 
the stratosphere.''
    At the same time we do that, we could release the same 
quantity of oil from the Strategic Petroleum Reserve, which is 
actually better quality oil than what we get from Venezuela. It 
would damage the Venezuelan Government tremendously. It would 
do no damage to the oil market in the United States. The United 
States does not depend on Middle Eastern oil. It does depend, 
to some extent, on Venezuelan oil, but that can be offset with 
releases from the Strategic Petroleum Reserve, which after all 
was created for some purpose, although it has never been 
extensively used for any purpose whatsoever.
    Mr. Braun. Congressman, if I could just quickly say three 
things that I believe strongly we need to get focus on with 
respect to shoring up security on our front and on our flanks. 
And those three things come in this order: As I said early on, 
we need to develop interlocking strategies that bring 
counternarcotics and counterterrorism together.
    Much of that is driven by funding. That falls into your 
ball park. I think you can do a lot to drive these--our, you 
know, myriad security forces within our country together and 
get them focused on the growing confluence of drugs and terror.
    The second thing we need to do is, you know, we are 
obsessed with developing--or, excuse me, we are obsessed with 
developing strategies to defend the one yard line, our 
southwest border. What we need is a defense-in-depth. After 9/
11, many of our Government's resources didn't dry up, but many 
of them went to other parts of the world, and that is 
    But in many ways, those resources have never been 
backfilled, and we need a lot more DEA agents, we need a lot 
more FBI and IS agents downrange working with their 
counterparts shoulder to shoulder on bilateral investigations, 
which comes into the third point, and this is the most--
probably the most important thing I can say is----
    Chairman Ros-Lehtinen. I was about to cut you off, but I 
can't do it now, on the most important point. [Laughter.]
    Mr. Braun. Thank you, Madam Chairman. We need to refocus 
our efforts on the traditional forms of illicit markets that 
are driven by organized crime. We have taken our eyes off of 
drug trafficking. In many ways, we have taken our eyes off the 
smuggling of arms in our hemisphere, human trafficking, and 
those kinds of things. If we are focused on those--and we have 
got the resources focused on those threats--we are naturally 
going to come up against the terrorists and the terrorist 
groups that we should be fearing most.
    Thank you.
    Chairman Ros-Lehtinen. Thank you very much.
    Mr. Duncan. Thank you, Madam Chairman.
    Chairman Ros-Lehtinen. Thank you. Mr. Sherman, the ranking 
member on the Subcommittee on Terrorism, Nonproliferation, and 
    Mr. Sherman. I want to comment on the previous questioner's 
idea of us not buying oil from Venezuela. I think it would have 
much less of an effect, in that I think they could sell it 
elsewhere. And I see one person shaking your head. Are you 
saying, Mr. Bailey, that China would not be a customer, at a 
good price, for Venezuelan oil?
    Mr. Bailey. China is a customer for Venezuelan oil. They 
could not sell it elsewhere for the simple reason that it is 
extra heavy, sulfurous crude, and can only be processed in 
certain refineries. Certain of those refineries exist in 
Venezuela and in Curacao, but mostly the refineries are in the 
United States. And those, of course, would be deprived of----
    Mr. Sherman. And China could not retrofit its refineries to 
be able to handle this.
    Mr. Bailey. China takes as much oil already from Venezuela 
as it can process.
    Mr. Sherman. But the question I asked was: How much work 
would it be for China to change its existing refineries to be 
able to accept more Venezuelan oil?
    Mr. Bailey. That is the kind of thing that cannot be done 
overnight. I mean, it----
    Mr. Sherman. Yes.
    Mr. Bailey [continuing]. For that kind of refinery to be 
built takes a long time.
    Mr. Sherman. Gotcha. And of course an easier thing for us 
to do against Venezuela, if we have them red-handed in 
terrorism, is to take the assets of the oil company they own in 
our country.
    I don't know if anybody on the panel can answer this, but 
it is easy to see all the press releases of promised Iranian 
aid to Latin American countries. How much in the last decade 
has Iran actually provided? Not in trade. I mean, buying 
soybeans that would be sold elsewhere hardly accomplishes much. 
But in terms of free money, how much can be documented to have 
actually been disbursed? Does anybody have an answer? Or can we 
say it is a very de minimis amount? Mr. Bailey. Dr. Bailey.
    Mr. Bailey. The estimates vary. Iran, as pointed out by Mr. 
Shifter and others, has been promising things to all of--you 
know, to Bolivia, to Nicaragua, to Ecuador, and so on and so 
forth. Most of the actual investments that they have made have 
taken place--that they have actually made rather than promised 
have taken place in Venezuela, and that is----
    Mr. Sherman. And these are investments. This isn't a 
    Mr. Bailey. These are investments, yes.
    Mr. Sherman. Okay.
    Mr. Bailey. And the best estimate that I----
    Mr. Sherman. My question was: Donation, free money.
    Mr. Bailey. Ah, I am sorry. I misunderstood.
    Mr. Sherman. Can anybody here say with confidence that 
there is a particular instance when even $1 million has gone 
from Tehran to any Latin American country, gratis, donation, 
free? Whether it be in kind or in currency.
    Mr. Braun. I can't say that, but I can't restrain myself 
from saying this, Congressman, I know an informational campaign 
when I see one, an informational campaign for the masses on a 
visit like Ahmadinejad's recent visit to Venezuela. What I am 
more concerned about, and what we should all be more concerned 
about, is what is happening in the basement, you know, after 
    Mr. Sherman. I know, but I am--so you are saying that the 
United States has allowed it to be thought throughout Latin 
America that Iran is generous, when in fact as far as we know 
not $1 million, or even $100,000, of generosity has yet been 
    I would hope the CIA could answer the question I have asked 
you. Looking here, you folks can't tell me one instance when 
Iran distributed any money gratis. I would hope the CIA could 
more definitively answer that question. And then, we are of 
course remiss in not informing our Latin American friends that 
we are talking lots of sizzle and absolutely no steak.
    Dr. Bailey, you have a comment?
    Mr. Bailey. Yes, with reference to what the CIA is able to 
do and not able to do. One of the things I discovered very 
quickly when I was mission manager for Cuba and Venezuela in 
the Office of the Director of National Intelligence is that 
with two exceptions--Mexico and Colombia--our intelligence 
assets in Latin America can only be described as pathetic.
    Mr. Sherman. That may be the case, but if we simply had an 
all-out campaign to say not one penny of aid is going from Iran 
to Latin America, and let them prove it, as far as you four 
gentlemen know they could not point to a single thing that they 
have done to help poor people or economic development in Latin 
    Mr. Bailey. That is correct.
    Mr. Sherman. And if you can't point to anything, we would 
sure like to be able to say that nobody can point to anything. 
And if they surprise us and point to anything, it will be so 
small that none of the four of you have been able to find it 
and the CIA couldn't find it either.
    Mr. Bailey. I think your statement is absolutely correct.
    Mr. Sherman. Okay. I believe my time has expired.
    Chairman Ros-Lehtinen. Thank you so much.
    Mr. Rivera of Florida.
    Mr. Rivera. Thank you very much, Madam Chair. I have a 
question for Mr. Shifter, and then a couple of questions for 
Dr. Bailey and Dr. Azel. We will start with Mr. Shifter.
    During several of the statements that have been made 
throughout the morning by many of my colleagues, they have laid 
out in detail recent actions by the Iranian regime and by 
Hezbollah in our hemisphere, both in their opening statements 
as well as in the question and answer period. Some of those 
that were cited included the Saudi Ambassador plot; the Mexico 
plot uncovered by Univision which resulted in, as you well 
know, the expulsion of the Venezuelan Consul; the Lebanese 
Canadian Bank case.
    However, as I have noticed in the responses to those 
questions, or to those comments by many of my colleagues, and 
even in your testimony, you have stated that the charges of 
Iran's influence in the hemisphere have not been substantiated 
or perhaps exaggerated. Is there any further proof, or what 
further proof would we need to substantiate the fact that Iran 
is attempting in Latin America to run counter, or at least to 
stabilize or hurt U.S. interests?
    Mr. Shifter. Thank you, Congressman. There are clearly some 
things that are cited in the testimony, including the attempted 
assassination of the Saudi Ambassador, which are real and which 
there is evidence and should be of enormous concern.
    I think what the challenge is is to separate what is 
substantiated with what is speculation and conjecture. And 
there has been a lot of conjecture that I cited in my testimony 
about training of terrorists and other things.
    Mr. Rivera. Well, let us just talk about conjecture and 
citing of evidence. Let us stick to the U.S. intelligence 
community and the law enforcement community.
    Mr. Shifter. Right.
    Mr. Rivera. Is there anything on their part that they have 
brought forward that you believe is conjecture----
    Mr. Shifter. No.
    Mr. Rivera [continuing]. Or unsubstantiated?
    Mr. Shifter. No. On the U.S. intelligence and law 
enforcement, no. But I think there have been things that have 
been accused that haven't been supported by the law enforcement 
community that are out there, and that I think that are open to 
question. But in terms of what the U.S. law enforcement 
community has said, I think that is----
    Mr. Rivera. And what would you say are the more egregious 
examples coming from U.S. intelligence and U.S. law 
    Mr. Shifter. What would be egregious examples? Do you 
    Mr. Rivera. Where it would not be conjecture, where it 
would be substantiated.
    Mr. Shifter. Well, no, everything that has come from U.S. 
law enforcement I think has been substantiated.
    Mr. Rivera. Such as?
    Mr. Shifter. Well, in terms of the role of, you know, the 
Saudi--the Iranian bank in Venezuela, the attempt on the Saudi 
Ambassador here in Washington. I mean, those things are clear 
evidence. What I was referring to was other things that are 
part of the debate that haven't been substantiated, and I would 
be careful about that.
    Mr. Rivera. Let me ask Dr. Bailey and Dr. Azel--I have seen 
media reports that indicate Hezbollah has possibly set up a 
base in Cuba. What is the nature of this--of these reports and 
any potential nexus between Havana, Tehran, and Caracas, and 
the impact it could have on U.S. national interest? I will 
start with Dr. Azel.
    Mr. Azel. Well, there are of course numerous reports of 
training bases in Cuba that have aided the terrorist networks. 
There are also substantiated reports of Cuban scientists 
helping with chemical plants, in Tehran for example. So there 
is really a network of things that we can point at with 
    My concern is when we look at these things is, do we have 
the right analytical framework? And whatever the evidence may 
or may not be, what I am trying to emphasize is that we need to 
understand the threat, not from Iran in discrete terms in each 
country, but these countries acting in unison.
    When I mentioned earlier that my worst nightmare would be a 
nuclear Iran and a Venezuela willing to accept deployment of 
those weapons in Venezuelan territory, for example, it is 
within the realm of possibility.
    Mr. Rivera. Well, let me do this before you--I only have a 
few seconds left. Dr. Bailey, this issue of the bases, 
Hezbollah, and involvement in Cuba?
    Mr. Bailey. It depends on what you mean by ``base.'' I 
mean, when I talk about a base, I am talking about substantial 
physical infrastructure, and so on. I don't believe that 
Hezbollah has established a base in that sense in Cuba.
    The presence of Hezbollah agents in Cuba is well 
documented, and it would be very odd if they didn't have them 
there. Has that been greatly increased? I don't know. Quite 
frankly, I don't know the answer to that, but I----
    Mr. Rivera. My time has expired. I will yield back, Madam 
    Chairman Ros-Lehtinen. Thank you so much, Mr. Rivera.
    And, Mr. Royce, it is so great to end with your questions. 
Mr. Royce from California is the chair of the Subcommittee on 
Terrorism, Nonproliferation, and Trade.
    Mr. Royce. Thank you, Madam Chair. And actually this 
hearing builds a little bit on a hearing we held last year, and 
the findings of our subcommittee, on the use of Section 311 
sanctions to target bad banks. This is the tool that was used 
on the Lebanese Canadian Bank, which was at the center of 
Hezbollah's massive money laundering effort.
    But Mike Braun was actually at the center of some of DEA's 
most effective operations, including taking down Viktor Bout. 
Thank you for that. One of the things I wanted to ask you, Mr. 
Braun, was when you think about the use of PATRIOT Act 311 
sanctions, combined with the money laundering investigations, 
it is awfully similar to the methodologies that were used with 
the Banco Delta Asia in order to move against North Korea with 
respect to their illicit activities.
    And there was a little lesson I think in terms of that 
operation, because it was enormously successful in getting the 
attention of the North Koreans and cutting off the supply of 
hard currency that went into that regime. Things got to the 
point where he couldn't pay his generals, and yet what happened 
was that the diplomats really pulled the plug on that 
    There was a situation where we had them dead to rights, and 
they were sweating out the consequences of that freeze, and it 
was the diplomatic effort that got them out from underneath the 
    I would argue that now is the time, before there is any 
backsliding on the part of Iran or any attempts, you know, 
diplomatic efforts to try to move it in the opposite direction, 
now is the time to take down as much of Hezbollah's criminal 
structure as you can. And I was just going to ask you for your 
view on the similarities of this and the lessons learned.
    Mr. Braun. Well, with the earlier piece to that--your 
comments, I mean, it certainly wouldn't be the first time that 
Federal law enforcement and diplomacy bumped heads, but those 
things sometimes happen.
    With respect to 311, I believe 311, in the case of the 
Lebanese Canadian Bank that was the first time that that had 
been used, and it needs to be used more often.
    Mr. Royce. And I wonder if it could have been used more 
extensively, because of course what happened was the head of 
the central bank in Lebanon simply allowed them to move those 
accounts to other banks. Now, there was some success in terms 
of grabbing some of the 200 accounts that were used in money 
laundering, most of it by Hezbollah. But on the other hand, we 
allowed a public official there to get away with lax oversight, 
and just move it to other Lebanese banks.
    I think we should have expanded it, just like in North 
Korea. The expansion was used beyond Banco Delta Asia to any 
other accounts that were being used by the North Korean regime 
when we caught them counterfeiting our money, and with their 
other illicit activities. Should that have been done here? 
Should we have doubled down in order to make sure that we got 
all of the perpetrators?
    Mr. Braun. Well, I think we--you know, I think we should 
have doubled down, as you say. But, you know, even more 
importantly, I think it is a weak spot with respect to Federal 
law enforcement in general, you know, and even our greater 
security apparatus. We need to get better at using sanctions 
like 311 to drive very nefarious organizations and bad guys 
into the areas where we can hit them the most, and we are not 
doing that.
    Mr. Royce. I am glad you said that, because it took us 
literally years to get Treasury to use 311 on North Korea 
despite--we put out a position paper in my office on this. We 
have been trying to drive the use of this, and it was the 
central bank governor, Mr. Solana, who decided to allow those 
same accounts to morph and transfer into the banking system in 
other banks under his purview. We should have expanded this 
operation while we had them.
    Mr. Braun. Well, Congressman, you know, we have talked 
about this before, and I know we are on the same page. But for 
the benefit of everyone on the committee, you know, when you 
hit the bad guys in the pocketbook, you cause them to change 
their tactics, techniques, and procedures. Any time you cause 
them to change their TTPs, they become more vulnerable. They 
become more vulnerable; we become more successful. It is 
something that should be used far more often than it is.
    Mr. Royce. One last point. Congressman Duncan of South 
Carolina and I have written legislation that essentially says, 
``Wipe the board clean. Set aside your pre-conceived ideas on 
this. Get everyone in a room, all of the agencies in a room, 
and come up with a strategy to deal with Iran's role in our 
    And I was just going to ask you in closing, putting DEA and 
other law enforcement on this case, mandating that everybody be 
a part of it and coming up with a plan to deal with it, what 
would you think of that strategy?
    Mr. Braun. I think it would be a great strategy, and it 
is--you know, it is not Congress' job, but somebody needs to 
herd the cats. We need to get the right folks into the same 
room and develop, again, robust, interlocking strategies and 
plans to effect the kind of impact that you are talking about. 
That is what we have got to do.
    Mr. Royce. Get the agency and DEA together on this. Well, 
thank you very much, all of you, for your testimony today.
    Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you, Mr. Royce. Those are 
excellent suggestions. I think we have some good action items 
about what we could do to help coordinate. Before it is too 
late, let us wake up.
    Thank you so much, gentlemen. Thank you for expert 
testimony. Thank you to our audience as well for helping us 
    And with that, our committee is now adjourned.
    [Whereupon, at 12:13 p.m., the committee was adjourned.]


                            A P P E N D I X


     Material Submitted for the Hearing RecordNotice deg.



          \\a statt\


Prepared statement of the Honorable Allyson Schwartz, a Representative 
           in Congress from the Commonwealth of Pennsylvania