[Senate Hearing 115-]
[From the U.S. Government Publishing Office]
STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR
FISCAL YEAR 2018
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TUESDAY, MAY 23, 2017
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2:30 p.m. in room SD-124, Dirksen
Senate Office Building, Hon. Lindsey Graham (chairman)
presiding.
Present: Senators Graham, Shaheen, Lankford, Leahy, Daines,
Boozman, Merkley, and Van Hollen.
U.S. ASSISTANCE FOR THE NORTHERN TRIANGLE OF CENTRAL AMERICA
STATEMENTS OF:
HON. JOHN D. NEGROPONTE, VICE CHAIRMAN OF McLARTY ASSOCIATES,
U.S. CO-CHAIR, NORTHERN TRIANGLE SECURITY AND ECONOMIC
OPPORTUNITY TASK FORCE, ATLANTIC COUNCIL
ADRIANA BELTRAN, SENIOR ASSOCIATE FOR CITIZEN SECURITY,
WASHINGTON OFFICE ON LATIN AMERICA
ERIC FARNSWORTH, VICE PRESIDENT OF THE COUNCIL OF THE AMERICAS
JOHN WINGLE, COUNTRY DIRECTOR FOR HONDURAS AND GUATEMALA,
MILLENNIUM CHALLENGE CORPORATION
OPENING STATEMENT OF SENATOR LINDSEY GRAHAM
Senator Graham. The hearing will come to order. Senator
Leahy is on his way. We have Senator Shaheen and Senator
Lankford, along with myself.
We have a great panel here. John Negroponte, Vice Chairman
at McLarty Associates, who has had about every job you can have
from Director of National Intelligence to ambassadorships all
over the world, and has been involved in this part of the world
for a very long time. Thanks, John, for taking time out to
pariticipate. Eric Farnsworth, Vice President, Council of the
Americas. Thank you for coming. John Wingle, the Millennium
Challenge Corporation Country Director for Honduras and
Guatemala. Adriana Beltran, Senior Associate for Citizen
Security, Washington Office on Latin America, an NGO heavily
involved in rule of law issues.
The purposes of this hearing is that the American people,
through our budget process, are going to spend some money in
the Northern Triangle countries, and I want to make sure that
they understand why we are spending, what we hope to get for
it, and how important it is for us to stay involved in our own
backyard. If you are worried about illegal immigration, I think
this subcommittee hearing is very important because we are
going to try to address the root cause of why a lot of people
leave these countries, try to come to America for a better
life.
I worry about losing influence in our backyard. Russia and
China are all over the place. If people in the region think we
are indifferent, take their support for granted, we are making
a mistake. What we are going to ask for in terms of money given
is deliverables. I can go back to South Carolina or we can go
back to New Hampshire and Oklahoma and say, ``You are getting
better government in a part of the world that really matters.
It means less illegal immigration. It means better trading
partners. It means more stability in our own backyard.''
So that is the purpose of this hearing and the four people
on the panel have unique experiences and perspectives and we
appreciate you coming and sharing your thoughts with us so we
can make an informed decision.
Senator Lankford is the brainchild behind this hearing. He
has taken a unique interest in these three countries and I
appreciate that very much along with Senator Rubio and Senator
Durbin and Senator Shaheen and many others on the Democratic
side. We understand how important this region is to our
national security and economic wellbeing and dealing with the
problems like legal immigration.
So, with that, Senator Shaheen, would you like to make
opening comments?
STATEMENT OF SENATOR JEANNE SHAHEEN
Senator Shaheen. Just thank you all very much for being
here. I am sure Senator Leahy would say that as well and echo
the comments of Senator Graham about the importance of these
three countries to both Latin America, but also to the United
States.
Senator Graham. Senator Lankford, do you want to make a
statement?
STATEMENT OF SENATOR JAMES LANKFORD
Senator Lankford. I would just only make a brief comment,
and one is to thank the Chairman for holding this hearing. This
is a tremendous amount of money that needs some accountability
and oversight. This started with a dream and a purpose to say
what are we doing to be able to help encounter narcotics, what
are we doing to help stabilize a region of the world that is
incredibly important to us that we are geographically close to,
but also relationally close to with many people that are
Americans that have their heritage in Guatemala, Honduras, or
El Salvador, but also what are we doing with immigration?
We saw a flood of immigration starting in 2014 from this
particular region that came into our country illegally. The
countries in that area all raised their hand and said, ``We
want our citizens to stay home. We do not want them to run to
another country. We want to have a stable environment here.''
It is to our benefit to be able to have a stable Central
America. We want an ongoing trade partner in that area. We want
ongoing relationships. This is in our hemisphere and we should
take this to account. So these three nations have worked to be
able to cooperate together economically. They are democracies
that are passionate about serving their own people and about
staying connected to our country and I think it is right that
we pay attention.
But every tax dollar that has been in place, whether it is
a tax dollar they are spending locally, they should be able to
show people in their own nation how they are gaining value. We
should certainly be able to do that for American citizens as
well in saying, ``Is the money that we are being spent just
throwing money and saying we did something or what can we show
that we accomplished?'' So the metrics of it will be
exceptionally important in the days ahead to say, ``Millions of
dollars were spent. This is what the American taxpayer got from
it. And this is how it affected the families and the
communities there in Central America as well.''
So I look forward to this conversation and I would assume
within the hour we will solve all of those problems.
Senator Graham. Or at least try. Let us start with Mr.
Negroponte.
STATEMENT OF HON. JOHN D. NEGROPONTE, VICE CHAIRMAN OF
McLARTY ASSOCIATES, U.S. CO-CHAIR, NORTHERN
TRIANGLE SECURITY AND ECONOMIC OPPORTUNITY
TASK FORCE, ATLANTIC COUNCIL
Mr. Negroponte. Thank you very much, Mr. Chairman and
Members of the subcommittee. I am delighted to be here today.
As somebody who served as United States Ambassador to Honduras
from 1981, believe it or not, to 1985, I feel a little bit like
Rip Van Winkle here and sort of ask myself, you know, what am I
doing here and what has happened in all these intervening years
that we should still be having hearings on Central America. But
be that as it may, that is the situation we find ourselves in.
And have to deal with it.
I have an additional reason for being interested in Central
America and Honduras. I have a permanent recollection of that
country in that I have five adopted Honduran children that I
have raised in my household over these many years and very
proud indeed of those five children.
And lastly, by way of introduction, because General John
Kelly was asked by President Trump to be the Secretary of
Homeland Security and he had been chairing an Atlantic Council
Task Force on Central America, I was at the, kind of last
minute, invited to stand in for him as the American co-chair.
This was a four-way task force with co-chairs from the U.S.,
Guatemala, El Salvador, and Honduras. And we just published our
report about 2 weeks ago and we have made it available to
various Members of the subcommittee. And it is one task force's
opinion on what we should do about the situation down there,
but the general thrust of it is that we should continue to be
supportive.
So let me just say by way of a brief opening statement that
I believe that the problems of the Northern Triangle have a
direct bearing on the security and the economic wellbeing of
the people of the United States. Illicit drug flows,
trafficking in persons, and unauthorized migration can and do
have adverse impacts throughout our country. The root causes
for these activities are complex. There are the so-called pull
factors in our own country such as high drug demand and the
need for unskilled labor, among other factors. On the push
side, the Northern Triangle countries have been afflicted by
chronically poor governance, although that situation is
improving, and generally poor development of social and
economic institutions.
Intense population growth, especially in Guatemala and
Honduras, has also been a factor. Also, although the
ideological wars of the 1980s are over, the gang wars of this
century are very much in evidence. Indeed, the size of armed
groups in these three countries exceeds--I am talking about the
gangs now--exceeds the size of their armed forces.
Under the Alliance for Prosperity Plan, very useful
assistance has been provided to Guatemala, Honduras, and El
Salvador in the areas of security, institution building, and
economic development. I think we can see palpable progress, but
there is work that remains to be done and our continued
engagement will be an encouragement to those Central Americans
seeking to better the lives of their people and consolidate a
true partnership with the United States to deal with the
scourge of transnational crime and the other ills that I
mentioned previously.
The Atlantic Council Task Force report, which I co-chaired
along with representatives from Guatemala, Honduras, and El
Salvador, recommends continued support for the Alliance for
Prosperity Plan, if possible, on a multiyear basis. This is a
recommendation which I wholeheartedly support and believe to be
in the national security interest of the United States.
I thank you for your attention and I would be pleased to
try and answer any questions which you might have. Thank you
very much, Chairman.
[The statement follows:]
Prepared Statement of Hon. John D. Negroponte
Chairman Graham, Ranking Member Leahy, and members: thank you very
much for the invitation to testify this afternoon on U.S. assistance to
the Northern Triangle of Central America. This region--and the issues
it faces--are very dear to me. I was U.S. Ambassador to Honduras from
1981 to 1985. While in Honduras, my wife and I adopted two Honduran
children. In later years we adopted another three Honduran infants into
our household. So, this is not just an interesting subject study for
me, my connection to the region runs deeper than that. As I analyze
where the region stands today, I would be remiss not to reflect on how
the situation unfolded when I was Ambassador. Back then, 35 years ago,
the problems in the region involved Cold War tensions and ideological
violence. People were fleeing to Honduras from El Salvador and
Guatemala.
Today, the situation is different, but not any less concerning. The
region has seen 50,000 murders over the past 3 years, high-profile
corruption scandals have tested overburdened institutions and
exacerbated discontent, and nearly 10 percent of the region's 30
million residents have left in recent years. As you very well know, the
combination of these issues in the Northern Triangle have direct
implications for U.S. national security. These issues end up at our
doorstep and become our problem if we neglect to collaborate with the
three countries to address root causes. We saw it in 2014 with the
unaccompanied children and we will inevitably continue to see it happen
if we do not change the status quo.
However, we are usually more focused on conflicts in the Middle
East or tensions with North Korea instead of looking at our own
hemisphere. Realistically speaking, the issues of Northern Triangle
matter more to--and have a greater impact on --the American taxpayer
than conflicts on the other side of the world. It is justifiable to
spend U.S. taxpayer money on helping the Northern Triangle deal with
its problems. Simply put, what happens in San Salvador has direct
implications for the citizens of Charleston and Burlington. Combatting
drug trafficking and illicit flows--and working to curb unauthorized
migration to the U.S.--are naturally the most pressing issues from the
prism of national security. Moreover, the Northern Triangle represents
a key opportunity for the U.S. economy and U.S. businesses. There is an
enormous need for employment generation in the Northern Triangle in
order to achieve greater prosperity. U.S. businesses can help do
exactly that, through investments in infrastructure, agriculture, and
customs modernization, in a way that benefits the U.S. economy as well
as our national security.
factors driving migration
For the past 6 months, I have been the U.S. co-chair of the
Atlantic Council's Northern Triangle Security and Economic Opportunity
Task Force. As part of the Task Force, the Atlantic Council
commissioned a tri-country poll that gauged citizen's perception of
their situation and their leaders. Unsurprisingly, the results were a
scathing indictment of the situation in the Northern Triangle.
Poll respondents expressed virtually no trust in their
institutions. Whether it's judges, members of the police, tax
authorities, more than 75 percent of respondents said they had little
to no confidence in any of them. Even public trust in priests and
pastors barely reached 50 percent in Guatemala and Honduras, failing to
register 30 percent in El Salvador. The deep challenges faced by people
in the region must be solved with a holistic solution that focuses on
economic development, rule of law, and security.
successes and failures of us assistance
History has shown that any concerted effort cannot neglect key
development issues. For instance, the Central America Regional Security
Initiative (CARSI), which achieved some significant successes, was
nevertheless insufficient in improving economic development and
strengthening the rule of law.
That, of course, improved with the Plan of the Alliance for
Prosperity, which cut across three main interconnected themes: economic
development, institution building, and security. The plan underscored
that to reduce migration and remove stress from our Southwest border,
it was imperative to tackle the root causes of violence and
joblessness.
There has been one aspect that has been key to the success of this
plan: the commitment and collaboration of the Northern Triangle
governments. The fact is that 80 percent of Alliance for Prosperity
funding comes from the three countries themselves. These countries have
shown a real, tangible commitment to taking the necessary steps to
bolster economic development and curb migration. The reforms that have
been enacted and the admirable work of attorneys general in the region,
while supported by the U.S., are homegrown efforts.
a renewed call to action
It is thus crucial, in my view, to push for a renewed call to
action here in the U.S. that builds on the laudable efforts of this
honorable Congress and that of the three countries.
Earlier this month, I participated in the release of the report of
the Atlantic Council Task Force (Attachment 1) that focuses precisely
on the issue at hand today. Along with esteemed colleagues from El
Salvador, Honduras, and Guatemala--and under the direction of the
Atlantic Council--we devised what we consider to be a blueprint for
building a brighter future for the Northern Triangle countries in
Central America.
As we think about fiscal year 2018, we must build off the Plan of
the Alliance but go beyond what we are currently doing. First, we
should be thinking about a multi-year authorization rather than a
yearly package, providing a plan that goes beyond short-term measures.
Second, a new strategy for U.S. engagement in the Northern Triangle
should not be simply about providing more funds or creating new
projects. It is important to take stock of what is working and what is
not. Thus, any fiscal year 2018 strategy must have a large
accountability component. Our report suggests working with the Inter-
American Development Bank to track host country spending in areas that
complement U.S. support. That way, through open and transparent access
to data, we will be able to ensure that (a) the three countries
continue to complement U.S. funding with their own and (b) U.S. funding
is spent effectively and efficiently.
Before getting into other actions the U.S. should take, it is
crucial to discuss conditionality. The support provided through the
Alliance for Prosperity was heavily conditioned on enacting a series of
measures to strengthen institutions and curb migration. The recent
omnibus bill approved by Congress did the same.
While there is a discussion to be had about the swiftness of the
certification process to disburse funds, conditionality has proven
effective in spurring important reforms and will continue to be a key
tool to ensure that recent anti-corruption efforts are sustained.
specific recommendations
In terms of concrete actions, our Northern Triangle Task Force
report outlines recommendations directed at the administration as well
as Congress for building sustainable economic development,
strengthening the rule of law, and improving security.
On rule of law, we must continue supporting the work of CICIG,
MACCIH, and El Salvador's anti-impunity unit, while also pushing
heavily for more structural reforms to be enacted. This is the only way
to ensure sustained institution building and reduce dependency on
international commissions that depend on the sitting president for
renewal. One such reform would be improving transparency of secondary
public officials such as supreme court magistrates and attorneys
general to depoliticize the process.
On security, we must move beyond mere iron fist strategies.
Strengthening and promoting properly implemented community policing
initiatives such as the model police precincts (MPPs) is crucial.
Promoting an increase in the number of women in the police force could
reduce rates of sexual assault, rape, and violence. We've done this in
Afghanistan and Iraq and could replicate it in the Northern Triangle.
On sustainable economic development, the Inter-American Development
Bank has been behind setting up an infrastructure fund in the region.
U.S. support of such efforts is essential in order to spur and provide
reassurance to private investment, as well as incentivize American
businesses to participate. We already have the capacity to expand in
this area via OPIC and USTDA. Any new strategy must balance investment
in migrant-sending communities with investment in intermediary cities
that have the highest employment-generating potential. It is simple: if
jobs are not created in the region, people will continue to migrate
north.
Regarding human capital, I am reminded of the time when I was
Ambassador to Honduras and the National Bipartisan Commission on
Central America, chaired by Dr. Henry Kissinger, analyzed the problems
of the region then. The Commission concluded that reforming the
region's schools and funding scholarships for study in the U.S. were
critical steps toward stability and prosperity. We should provide more
funding for scholarships that bring Central American students to the
United States, targeting low-income applicants and requiring them to
return to their home countries after completing their education.
On immigration, we need to expand information sharing on deported
gang members and criminals. Otherwise, we will continue to feed into
this vicious cycle in which we deport criminals to ameliorate violence
in our own streets but simultaneously contribute to heightened
insecurity in the Northern Triangle, which eventually boils over into
our borders once again.
multi-year authorization
Before concluding, I would like to emphasize the following. We see
this happen every time: the issues in the Northern Triangle boil over
and it becomes news in the United States. Once they are back on our
radar and that of the media, only then are we compelled to act. Once
the frenzy dies down, we put the region on the backburner again and
shift to focusing on other parts of the world. We must be more
consistent in the attention we give to this critical region.
It is essential that assistance to the region is not only holistic,
but most importantly, sustained. A multi-year authorization for the
region would help build lasting change in Guatemala, El Salvador, and
Honduras.
Thank you, once again. I look forward to answering your questions.
ATTACHMENT 1
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STATEMENT OF ADRIANA BELTRAN, SENIOR ASSOCIATE FOR
CITIZEN SECURITY, WASHINGTON OFFICE ON
LATIN AMERICA
Ms. Beltran. Good afternoon, Mr. Chairman and Members of
the subcommittee. It is a real pleasure to be here with you
today on behalf of the Washington Office on Latin America, or
WOLA.
As you are aware, Central America faces many challenges.
Today I will focus on why strengthening the rule of law and
tackling corruption is critical to breaking the cycle of
violence and impunity and how the United States can best
support the region in doing so. In Honduras, Guatemala, and El
Salvador, violence, corruption, and justice are inextricably
linked. Corruption and neglect have resulted in weak and
ineffective justice institutions incapable of adequately
responding to the high levels of violence. On average, 19 out
of 20 murders in the region remain unsolved.
The fact that perpetrators rarely face justice means people
feel they have nowhere to turn for security. They will not stop
fleeing their homes and communities until they know that they
are going to be protected rather than ignored or even
victimized by their own police and judicial system. But the
situation is not hopeless and the U.S. assistance can help.
The Alliance for Prosperity was developed by the three
countries of the Northern Triangle as a new opportunity to
tackle the region's problems. The United States has
appropriated $700 million in fiscal year 2016 and $655 million
in 2017 to help with these efforts. I hope Congress will
approve a comparable assistance package for fiscal year 2018.
However, the success of U.S. efforts will be limited without
the commitment from the region's governments. The conditions on
aid enacted by Congress are critical. They require recipient
governments to strengthen the rule of law, address corruption,
and create independent justice systems and functioning law
enforcement institutions.
There are important actors in the region, some in key
government positions, some in innovative internationally backed
organizations, and some in civil society who are leading reform
efforts. The U.S. should continue to support the Attorney
Generals of all three countries as well as the International
Commission Against Impunity in Guatemala, known as CICIG, and
the mechanism to support the fight against corruption and
impunity in Honduras, or MACCIH. These institutions are on the
front lines of combating corruption and have achieved important
results.
However, they have faced substantial pushback from certain
elements within and outside of government who want to undermine
their efforts. In Guatemala, efforts to curb corruption have
experienced legal obstructions, threats, and smear campaigns.
MACCHI and the Attorneys General have faced similar problems.
It is imperative that the Central American governments fully
cooperate with these institutions. The U.S. must continue to
politically and to financially back them.
Equally important is supporting independent courts. Too
often judges can be bought, influenced, or manipulated. And
this allows criminal networks to operate unencumbered.
Government should establish a transparent process to select and
promote judges based on merit while offering protection to
justice officials who have had the courage to uphold the rule
of law.
And finally, professional, accountable civilian police
forces are crucial to lowering violence. In all three
countries, police are involved in a range of illicit
activities, abuse, and extrajudicial executions, but there have
been some positives steps to a reform in Honduras and
Guatemala, but much more needs to be done.
Improvement will require ongoing professionalization, the
creation of strong internal controls, increasing investigative
capacities, and cooperation with community policing
initiatives. An effective U.S. strategy to reduce violence and
corruption requires clearly defined goals, tangible metrics to
measure improvement, and ongoing monitoring and evaluation.
This is why WOLA, working with local civil society partners,
developed the Central America Monitor. This is a tool that
tracks U.S. assistance and uses a set of objective indicators
to assess progress on the ground. The goal of the monitor is to
move the discussion beyond abstract calls for reform to
specific measures of change.
The process of change may be slow, but with a willingness
to be smart and strategic about our investment, we can see real
results.
Thank you and I look forward to your questions.
[The statement follows:]
Prepared Statement of Adriana Beltran
Good afternoon. Mr. Chairman, Ranking Member Leahy, and members of
the subcommittee. I appreciate the opportunity to appear before the
subcommittee today on behalf of the Washington Office on Latin America,
or WOLA, to discuss U.S. assistance to Central America.
As you are aware, Central America faces many challenges--deep
social inequality, endemic levels of violence, and a lack of economic
opportunities--some of which my counterparts on the panel will address.
While U.S. assistance should support a comprehensive strategy to
address all of these concerns, I will focus on why strengthening the
rule of law and tackling corruption is critical to breaking the cycle
of violence and impunity, and how the United States can best support
Central America to strengthen police and judicial institutions and
promote accountability.
Corruption permeates nearly all government institutions throughout
the region. According to Transparency International's 2016 Corruption
Perception Index, El Salvador, Guatemala and Honduras ranked 95, 136,
and 123 respectively, out of 166 countries.\1\ This corruption has
allowed criminal networks to co-opt state institutions while corroding
access to, and the quality of, public services such education, health,
and public security. Not only has this corruption depleted public trust
in institutions, it has exacted tremendous economic costs. For
instance, a 2015 study carried out by Oxfam and the Central American
Institute of Fiscal Studies estimated corruption could cost Guatemala
at least 6 percent of its GDP just that year.\2\
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\1\ Transparency International, ``Corruption Perceptions Index
2016,'' January 25, 2017, https://www.transparency.org/news/feature/
corruption_perceptions_index_2016.
\2\ Instituto Centroamericano de Estudios Fiscales and Oxfam
Guatemala, ``La corrupcion: Sus caminos, su impacto en la sociedad y
una agenda para su eliminacion,'' August 12, 2015, https://
www.oxfam.org/es/informes/la-corrupcion.
---------------------------------------------------------------------------
In Central America violence, corruption, and justice are
inextricably linked. Corruption and neglect have resulted in woefully
weak and ineffective criminal justice institutions incapable of
responding to the violence impacting many marginalized communities.
Throughout the Northern Triangle, impunity rates for homicides average
95 percent at best. This means that 19 out of every 20 murders remain
unsolved, and the chances of being caught, prosecuted, and convicted
for committing a murder are practically zero. The low prospect that
perpetrators will ever face justice means that many crimes go
unreported. In many communities in the region, people feel they have
nowhere to turn for security. They will not stop fleeing until they
know that they are going to be protected, rather than ignored or even
victimized, by their own police and judicial system. But in Honduras,
Guatemala, and El Salvador, that is not currently the case.
Despite these harsh realities, the situation is not hopeless. U.S.
assistance can make a difference. Actors in the region--some in civil
society, some in key government positions such as the attorneys
general, and some in innovative internationally-backed organizations,
such as the International Commission against Impunity in Guatemala
(Comision Internacional contra la Impunidad en Guatemala, CICIG) and
the Mechanism to Support the Fight against Corruption and Impunity in
Honduras (Mecanismo de Apoyo contra la Corrupcion y la Impunidad en
Honduras, MACCIH)--are paving the path toward reform. But without
independent justice systems, functioning law enforcement institutions,
and adherence to the rule of law, the success of these efforts will be
limited in both scope and duration. The United States needs to be
clear-eyed and principled in targeting assistance in a way that will
support comprehensive and lasting changes.
The Alliance for Prosperity, which U.S. assistance supports, was
initiated as a new opportunity developed by the three countries of the
Northern Triangle to tackle the shared problems of violence, drug
trafficking, irregular migration, and unemployment or underemployment.
However, this is not the first time we have been down this road. From
fiscal year 2008 to fiscal year 2015, the United States provided $1.2
billion in assistance through the Central America Regional Security
Initiative (CARSI), the main vehicle of U.S. assistance to the region
during this time. But conditions on the ground have not improved to the
degree that we would have hoped. Past assistance lacked a clear
strategy to guide the series of programs and initiatives, emphasized
training over concrete institutional reform, and did not give enough
attention to ensuring adequate coordination among U.S. agencies and
between donors.
moving into fiscal year 2018
Now is the time to ask ourselves: how do we avoid repeating the
mistakes of the past? How do we ensure that U.S. investments are paying
off and making a difference?
The U.S. Government has demonstrated its willingness to be a
partner by appropriating $750 million in fiscal year 2016 and $655
million in fiscal year 2017. We support a comparable assistance package
for fiscal year 2018. However, our assistance can only go so far if the
recipient countries are not serious about tackling corruption,
supporting transparency, and sending the message that no one is above
the law. Conditioning aid is an important tool to ensure our partners
are making these changes and that U.S. investments are being used
wisely. WOLA strongly supports the conditions that Congress placed on
50 percent of aid to El Salvador, Guatemala, and Honduras in both
fiscal year 2016 and fiscal year 2017, and we recommend that Congress
include these conditions in fiscal year 2018. These conditions require
recipient governments to demonstrate a firm commitment to strengthening
the rule of law and addressing corruption, poverty, and inequality. In
providing assistance we should not ignore or excuse conduct that
undermines reform. Our support is critical, but ultimately there is no
substitute for the commitment of the governments in the region to take
decisive actions to enact necessary reforms.
There are four key areas I recommend we pay particular attention to
in order to help build strong institutions, strengthen the rule of law,
and ultimately improve security in Central America:
(1) International anti-impunity commissions in Central America
Independent, internationally-backed institutions such as the CICIG
and the MACCIH are important and innovative tools to build capacity in
domestic justice systems. These bodies, set up at the request of the
host governments by the United Nations and Organization of the American
States, respectively, have both enjoyed strong U.S. bipartisan support.
The CICIG, created in 2006, has revealed the depth of corruption in
Guatemala and unearthed criminal networks that have leveraged their
links to government to embezzle public funds. Its investigations have
resulted in the indictment of the former president and vice president
for corruption, as well as the prosecution of several ministers and
high-level public officials, legislators, retired generals, police
officers, and members of the private sector. The Commission has also
boosted the investigative capacity of the Guatemalan Attorney General's
Office by promoting the adoption of legal reforms and use of modern
investigative techniques and tools. The MACCIH, established in Honduras
just last year, has started investigating a multi-million dollar
embezzlement scandal within the Honduran social security system and
other high-profile cases. It has also championed the adoption of a
much-needed campaign finance law and been instrumental in creating
anti-corruption tribunals with national jurisdiction.
Both entities have faced substantial pushback from certain elements
within the government and private sector who want to undermine their
efforts. In the case of Guatemala, reforms have stalled in Congress,
cases have been delayed through the abuse of legal motions and
remedies, and the Commission and its leadership have been the target of
smear campaigns. For progress to continue, the Honduran and Guatemalan
governments must fully cooperate with these entities. For its part, the
United States must continue to make clear it will politically and
financially support them.
(2) Independent, professional, and well-resourced attorneys general
Currently, all three countries have attorneys general who have
shown some political will to advance high-level corruption cases and
improve the investigative capabilities of their institutions. El
Salvador's attorney general has created an anti-impunity unit, arrested
a well-known criminal leader with deep political ties, and indicted
three former presidents and the former attorney general on corruption-
related charges. In Honduras, the attorney general has investigated
several top criminal leaders and created a special investigative unit
trained in scientific and technical techniques to increase prosecution
of high-impact crimes. The Guatemalan Attorney General's Office has led
the charge on anti-corruption efforts and taken on several organized
crime and corruption cases without the assistance of the CICIG.
Still, these offices remain understaffed, susceptible to outside
pressures, and absent in many areas of the countries. In Guatemala, for
example, only 10 percent of municipalities have prosecutor's
offices.\3\ This lack of personnel has contributed to a huge backlog of
cases, adding to high impunity rates. Recent death threats and an
assassination attempt against Guatemalan Attorney General Thelma Aldana
highlight the danger justice officials in all three countries face when
taking on cases targeting high-level corruption.
---------------------------------------------------------------------------
\3\ Presentation by the Guatemalan Attorney General's Office
(Ministerio Publico de Guatemala), February 2016.
---------------------------------------------------------------------------
In fiscal year 2017, Congress appropriated significant direct
funding for Attorneys General Offices in the Northern Triangle, and
this support should continue. Attention should be given to creating or
strengthening specialized investigative units, implementing special
investigative methods, improving prosecutorial capabilities,
strengthening internal control bodies to help root out corruption, and
improving regional witness protection mechanisms.
(3) Independent courts
A functioning judiciary is critical to ensuring all other areas of
a country's government act in the public interest. But in Central
America, justice systems are rife with corruption and lack
transparency. Their fairness and effectiveness is determined in large
part by the judges trying the cases, how transparent the proceedings
are, and the scope and quality of convictions.
Too often in Central America, judges can be bought, influenced, or
manipulated by political figures, business elites, and others who stand
to lose or gain profit or power from their decisions. This makes
uncovering the truth a near-impossible task and allows criminal
networks to operate unencumbered. Judges who have been compromised not
only sway decisions in favor of those pulling the strings, but will
stall cases, sometimes indefinitely. This has decimated public trust in
the system--the Supreme Court in El Salvador for instance is trusted by
just 8 percent of the population, according to a survey from the
Institute of Public Opinion at the Jose Simeon Canas Central American
University in San Salvador.\4\ Independent, functioning courts are the
key to ensuring the environment shifts from one that rewards corruption
and violence to one in which the system works for all.
---------------------------------------------------------------------------
\4\ Instituto Universitario de Opinion Publica-Universidad
Centroamericana Jose Simeon Canas, ``Los salvadorenos evaluan la
situacion del pais a finales de 2016,'' Boletin de prensa ano XXXI,
no.1, http://www.uca.edu.sv/iudop/wp-content/uploads/Bolet%C3%ADn-
Evaluaci%C3%B3n-A%C3%B1o-2016-10-01-2017.pdf.
---------------------------------------------------------------------------
To this end, judges and other justice officials must be selected
and promoted through a transparent process based on merit. But
addressing corruption is just one crucial piece of strengthening a
justice system. U.S. assistance should also support efforts to improve
judicial independence, help ensure that laws and norms meet
international standards, and support mechanisms that offer protection
to judges who have the courage to uphold the rule of law.
(4) Professional and accountable police forces, trusted by the public
In all three countries, citizens do not feel that the police will
protect them or enforce law and order. Accused of everything from
bribery to drug trafficking to extrajudicial executions, officers are
often seen as a threat. In Honduras, 83 percent of the population
believes the police are corrupt, according to a 2016 survey carried out
by the Violence Observatory at the National Autonomous University of
Honduras.\5\ Similarly, in El Salvador, 36 percent of people said
violence carried out by the state was most harmful to the country, the
Latinobarometro Corporation's 2016 study found.\6\ More often than not,
neither internal nor external mechanisms effectively hold security
forces to account for corruption or abuses against the population.
Compounding this corruption and impunity, police capacity is limited.
Officers are often underpaid, lack the training and resources necessary
to carry out investigations, and are not trusted by the justice system
to cooperate in, or properly conduct, investigations.
---------------------------------------------------------------------------
\5\ Instituto Universitario en Democracia, Paz y Seguridad-
Universidad Nacional Autonoma de Honduras, ``Percepcion Ciudadana sobre
Inseguridad y Victimizacion en Honduras,'' May 2016, http://
www.iudpas.org/pdf/Estu_InvestNacionales/
2016_percepcion_ciudadana_inseguridad_
victimizacion.pdf.
\6\ Corporacion Latinobarometro, ``Informe Latinobarometro 2016,''
September 2016, http://www.latinobarometro.org/latNewsShow.jsp.
---------------------------------------------------------------------------
In lieu of functioning civilian police, all three Northern Triangle
presidents have deployed their militaries to provide internal security.
Not only has this diverted much-needed resources away from civilian law
enforcement, it has changed the nature of violence in each country,
given the armed forces' undue political influence over civilian
agencies, and escalated human rights concerns. The military is trained
to overcome an enemy with as much force as necessary, not to maintain
public order and investigate crimes. When soldiers get sent to the
streets, the line between citizen and enemy becomes blurred and abuses
happen. Further, no state in the region has sustainably brought crime
rates down by relying on troops to act as de facto police for an
extended period of time.
The answer, then, is to focus on strengthening civilian police
forces. There have been some positive steps. The Honduran Government
established a special commission to clean up the civilian police force
following media reports of high-level police involvement and cover-up
in the assassination of the anti-drug czar in 2009 and his advisor in
2011. To date, out of 9,234 police officers evaluated, nearly 4,000
have been removed for reasons of restructuring, voluntary withdrawal,
and for alleged involvement in corruption or criminal acts.\7\ Yet the
state has been slow to investigate and prosecute officers involved in
abuses and criminal activities, and there have been no convictions to
date. But to create a reliable civilian police force will require more
than a cleanup. It will take ongoing measures to professionalize
officers, strong internal controls to hold all ranks to account, and
cooperation with community policing initiatives.
---------------------------------------------------------------------------
\7\ ``Comision depuradora en un ano ha realizado una agresiva
limpieza de la Policia,'' La Tribuna, April 12, 2017, accessed May 22,
2017. http://www.latribuna.hn/2017/04/12/estos-los-logros-la-comision-
especial-la-depuracion-transformacion-la-policia-nacional-ano-
funciones/.
---------------------------------------------------------------------------
In Guatemala, improvements in police investigative capacity and
collaboration with justice officials has led to a declining homicide
rate since 2010. Although Guatemala's homicide rate still remains above
the Latin America and the Caribbean regional average of 22.5 homicides
per 100,000 inhabitants, sustained reforms in justice and security
policies have made a difference, and further professionalization is
essential to seeing continued improvement.\8\
---------------------------------------------------------------------------
\8\ World Bank, ``Intentional homicides (per 100,000 people),''
accessed May 22, 2017, http://datos.bancomundial.org/indicador/
VC.IHR.PSRC.P5?locations=ZJ.
---------------------------------------------------------------------------
In El Salvador, there have been significant improvements in police
recruiting, vetting, and training at the police academy. But police
investigation units remain understaffed and overworked, and the ability
to conduct scientific and forensic investigations remains limited.
Perhaps most troubling, aggressive police anti-gang tactics have led to
a rise in allegations of police abuse, including extrajudicial
executions of suspected gang members. The internal affairs units that
ought to investigate and deter this kind of police abuse have been
ineffective, and there do not appear to be sufficient controls over
police misconduct.
Without a police force they can trust, and without a justice system
that has the ability to convict criminals and hold state actors
accountable, Central Americans are left without a lifeline. U.S.
assistance can help by improving internal and external control bodies
to address corruption and wrongdoing, bolstering criminal investigative
capacity, and working to change the culture of police forces by
focusing aid on how officers are recruited, selected, promoted, and
trained.
evaluating u.s. assistance
An effective U.S. strategy in Central America requires clearly
defined goals in each of these areas, tangible metrics to measure
improvement, and ongoing monitoring and evaluation.
This is why WOLA, working with local civil society organizations
committed to promoting reforms, developed the Central America Monitor,
a tool that tracks U.S. assistance and uses a set of objective
quantitative and qualitative indicators to assess progress on the
ground. Its goal is to move the discussion beyond abstract calls for
reform to specific measures of change. These indicators look at many of
the issues I have highlighted, including each country's degree of
judicial independence, selection and promotion processes for justice
officials, resources allocated for law enforcement, and conviction
rates, among many others. WOLA's Central America Monitor and other
monitoring and evaluation efforts are essential to ensuring U.S.
assistance is properly implemented.
In conclusion, it is possible for conditions in the Northern
Triangle to improve, but the situation is far beyond the capacity of
the governments to tackle on their own. The problems there are not
isolated: they are rooted in decades of shared history with the United
States, and their consequences now extend up to the U.S. border.
Working together to support and monitor specific and substantial
reforms, we can achieve results that will reduce violence and create
conditions for greater prosperity in Central America. The process may
be slow. But, with a willingness to be smart and strategic about our
investment in fighting corruption, improving transparency, and
bolstering respect for the rule of law, we can see real results.
Thank you. I look forward to your questions.
Senator Graham. We will hear from Senator Leahy. He just
arrived. A brief statement and then we will continue with our
witnesses.
STATEMENT OF SENATOR PATRICK J. LEAHY
Senator Leahy. Thank you, Mr. Chairman, and it is good to
see all of the witnesses here.
I know that Secretary Negroponte referred to a Rip Van
Winkle feeling and maybe several of us feel that way in being
here.
For most of the twentieth century, there was a concern that
our policy towards Central America consisted primarily of
propping up corrupt and abusive regimes led by families of
oligarchs that benefitted from the exploitative practices of
U.S. corporations. During the Cold War, the armies of those
regimes trained and equipped by the United States committed
atrocities in the name of anti-Communism. Democratic movements
were crushed and their leaders assassinated. Very few people
have been punished for heinous crimes in Guatemala, Honduras,
and El Salvador to date.
So what did the people in those countries get from it? They
got poverty and violence, impunity, inequality, political
polarization. The situation is worse because of the influx of
gangs and illegal drugs and all that brings. Since 1980 alone,
the United States has provided billions and billions of dollars
in military and economic aid to the Northern Triangle
countries. Much of that aid, in my opinion, was either wasted
or contributed to the problems there.
We made excuses for those governments whose leaders were
interested only in enriching themselves. But last year we
embarked on what has been portrayed as a new approach. And, Mr.
Chairman, I applaud you in working with all of us to do that,
to address the underlying causes of the flood of undocumented
migrants fleeing violence and poverty in Central America.
In fiscal year 2016, we provided $750 million to support
the Alliance for Prosperity. A few weeks ago, we approved
another $655 million. Now the President has proposed to cut
that to $460 million. I strongly support this aid, but we need
to see real sustainable results. I think Republicans and
Democrats agree about that. We cannot want equitable economic
development and human rights in these countries more than their
own governments want it.
So thank you for holding this hearing. Central America gets
too little attention here. These countries are our neighbors.
The struggles and hardships of their people deeply concern us.
So I thank you and I want to be supportive.
Senator Graham. Thank you, Senator Leahy. I know you have a
long-held interest in this region.
Mr. Farnsworth.
STATEMENT OF ERIC FARNSWORTH, VICE PRESIDENT OF THE
COUNCIL OF THE AMERICAS
Mr. Farnsworth. Well, Mr. Chairman, good afternoon. Thank
you for the invitation to be here. Mr. Ranking Member and
Members of the subcommittee, it is a real privilege to be
before you this afternoon.
In 3 weeks [June 15, 16, 2017], the U.S. Secretaries of
State and Homeland Security, together with their Mexican
counterparts, plan to host a meeting in Miami of leaders from
the Northern Triangle countries and ministerial level
representatives from others in the region. This continues, as
we have already been talking about, an accumulating body of
work on a bipartisan basis going back to the conclusion of the
vicious civil wars just over 20 years ago and continuing with
significant U.S. assistance and support since that time.
And yet, the situation on the ground remains fluid and
difficult. Some 50 percent of Central Americans live in
poverty, many without access to clean water, electricity,
healthcare, and quality education. Malnutrition is widespread
in some areas. High unemployment plagues the region and with
just over 60 percent of the population under the age of 30
years old, the high percentage of youth without jobs or going
to school full time is a significant concern. Periodic natural
disasters including hurricanes, volcanic eruptions, and
earthquakes rock the region.
Meanwhile, security in the Northern Triangle is fraught,
with homicide rates well above global averages. Located between
the world's largest illegal drug consuming nation and one of
the world's largest drug producing regions, as well as a
Venezuelan regime that allegedly facilitates the narcotics
trade, Central America is a prime transit route for illegal
activities that both overwhelm and also undermine the capacity
of governments to address them.
Gang activity and the easy availability of high caliber and
other weapons contribute significantly to insecurity. The
attractiveness of gang membership is exacerbated by the lack of
economic opportunity and also the lack of effective policing
and judicial processes. Impunity is rife, as is corruption, and
deep social divisions within countries and deep political
divisions between and among countries hamper governance and
cross-border cooperation. It is a potent mix, and it is no
wonder why so many Central Americans have sought to migrate
from the region.
While the primary responsibility for addressing these
issues clearly resides with the nations themselves, the United
States is in a position to assist our neighbors and friends in
need and I believe it is in our interest to do so.
In my view, one of the best ways we can support development
effectively is by promoting investment and job creation in the
formal economy. Generating good, legal, sustainable jobs
offering the prospect for a better life and stability at the
local and community levels is critical in migrant sending
nations. A more focused effort by the United States to help the
Northern Triangle nations develop and improve their business
climates would therefore be appropriate and meaningful.
Job creation is not a panacea, but it would provide options
for those who might otherwise migrate or get wrapped up with
criminal gangs. Without an attractive business climate that
includes enhanced personal security, an educated workforce, the
improved regulatory transparency, and the rule of law,
investors both foreign and domestic will look elsewhere. And
that means foregone access to global supply chains, tax
receipts, and labor protections for workers, among other
things.
The key is for U.S. assistance to leverage real results.
One way to do this might be to allow Northern Triangle
countries to claim a greater share of the overall aid package
over time. In other words, rather than dividing assistance co-
equally among the three recipients upfront, we could leverage
improved outcomes by encouraging each nation, either alone or
in cooperation with the others, to compete for a larger share
of the overall assistance package by committing to concrete
action plans and measurable results consistent with their own
realities that can be tracked and rewarded after successful
implementation.
On the security side, which is fundamental to improving
conditions for economic growth, metrics employed during Plan
Colombia with strong bipartisan support could prove beneficial,
such as reduction in homicides, meaningful reductions in
criminal impunity, and the reestablishment of a state presence
in all communities. Metrics in drug trafficking, corruption,
and judicial effectiveness can also be employed, and greater
regional law enforcement cooperation could be pursued.
The same approach should be considered for development
activities that will help create conditions to draw investment
that creates jobs and grows the economy. Taking another page
from what has worked in Colombia, the three nations of the
Northern Triangle should give priority attention to improving
their ease of doing business rankings with the World Bank and
also their respective competitiveness rankings with the World
Economic Forum to build economic capacity and a framework for
competitiveness.
Importantly, regional growth has often been consumption-
led, fueled by remittances from Central Americans living in the
United States and elsewhere. But remittances do not generally
build capacity. There must be a new commitment to improving
business conditions to drive investment led, sustainable
growth.
There must also be a more genuine commitment among the
three nations to linking their economies more closely together,
to increase economies of scale, and to reduce production costs.
Freer trade with the United States through the CAFTA Dominican
Republic Trade Agreement was a beginning. Nonetheless, from
trade facilitation and customs procedures to infrastructure
development including an intensive focus on border
infrastructure, to common, best standards regulatory
permitting, tax, and commercial frameworks, the simple reality
is that until the three nations begin to operate more as a
regional more unified economy, they will continue to lack
investment attractiveness.
Currently, it is said that it is easier to export products
to the United States from nations in Central America than it is
to export products to each other. This is crazy. It raises
costs and dramatically reduces the attractiveness of Northern
Triangle countries for participation in the cross-border market
expanding supply chains that increasingly drive global
production.
Of course, job creation also depends on human capital,
which requires concrete actions by governments to improve
education and workforce development and training. The cost of
labor is relatively attractive, but productivity lags.
The mismatch in labor skills with currently and potentially
available jobs is profound, requiring sustained attention.
Migrants returning to the region, many with English language
skills, are one pool of workers that could benefit from
additional training as they seek to transition back to local
communities.
Still, the bottom line is this: without job creation in the
formal economy, prospects for Northern Triangle nations to
address effectively the twin security and migration crises that
confront them will be next to impossible. And without adequate
attention to the factors described above, the domestic and
direct foreign investment that creates jobs and builds
economies will materialize only unevenly. U.S. assistance can
and should be used to prime the pump. But even with U.S.
support, the primary commitments and achievements, including
enhanced security, reduced corruption, and increasing job
creation in the formal economy, must emanate purposefully from
the region itself.
So thank you again for the opportunity to testify and I
look forward with anticipation to your questions.
[The statement follows:]
Prepared Statement of Eric Farnsworth
Good afternoon, Chairman Graham, Ranking Member Leahy, and members
of the subcommittee. It is a privilege to appear before you today to
discuss United States assistance for the Northern Triangle of Central
America; namely El Salvador, Guatemala, and Honduras. Thank you for the
attention that you are bringing to these issues, and for your
leadership in addressing them over the years. We very much appreciate
your long-term, bipartisan interest in building U.S. policy priorities
in Central America.
In three weeks the U.S. Secretaries of State and Homeland Security,
together with their Mexican counterparts, plan to host a meeting in
Miami of leaders from the Northern Triangle countries and ministerial
level representatives from others in the region. This is a serious,
well-intentioned effort designed to advance discussions on building
prosperity and improving security as a means to address most
effectively the national interests of the United States. It is an
accumulating body of work, on a bipartisan basis, going back to the
conclusion of the vicious civil wars just over 20 years ago, and
continuing with significant assistance and support since that time.
central america requires long-term development attention
And yet, as evidenced by the crisis of unaccompanied minors and
others crossing the Southwest border of the United States over the past
several years, the situation on the ground remains fluid and difficult.
Some 50 percent of Central Americans live in poverty, many without
access to clean water, electricity, healthcare, and quality education.
Malnutrition is widespread in some areas. High unemployment plagues the
region, and, with over 60 percent of the population under the age of
30, the high percentage of youth without jobs or going to school full
time is a significant concern. To complicate matters further, periodic
natural disasters including hurricanes, volcanic eruptions, and
earthquakes rock the region, knocking precious percentage points off
GDP in those nations least-equipped to cover losses.
Meanwhile, security in the Northern Triangle is fraught, with
murder rates well above global averages. Located between the world's
largest illegal drug consuming nation and one of the world's largest
drug producing regions as well as a Venezuelan regime that allegedly
facilitates the narcotics trade, Central America is a prime transit
route for illegal activities that both overwhelm and also undermine the
capacity of governments to address them. Gang activity and the easy
availability of high-caliber and other weapons contribute significantly
to insecurity, at times even giving criminals the ability to outgun
state actors. The attractiveness of gang membership is exacerbated by
the lack of economic opportunity and also the lack of effective
policing and judicial process. Impunity is rife, as is corruption. Deep
social divisions within countries and deep political divisions between
and among countries hamper governance and cross-border cooperation.
It is a potent mix. While the primary responsibility for addressing
these issues clearly resides with the nations themselves, the United
States is in a position to continue assisting our neighbors and friends
in need. Doing so is in our interests, given our history and
connectivity with the Northern Triangle and the opportunity to address
core U.S. interests at their source.
working to create jobs in the formal economy
To be most effective, U.S. commitment must be sustained, and might
benefit from another Kissinger-style commission to recommend a high-
level, bipartisan, fully-resourced path forward. In the meantime, one
of the best ways we can support development effectively is by promoting
investment and job creation in the formal economy as a pillar of
longer-term development. Generating good, legal, sustainable jobs
offering the prospect for a better life and stability at the local and
community level in migrant-sending nations is critical.
Regional job creation is not a panacea, but it would provide
options for those who might otherwise migrate or get wrapped up with
criminal gangs. Freer trade with the United States through the CAFTA-DR
agreement was a beginning, but the agreement only establishes a
baseline; it does not guarantee results. Without an attractive business
climate that includes enhanced personal security, an educated
workforce, improved regulatory transparency and the rule of law,
investors both foreign and domestic will look elsewhere. And that means
foregone access to global supply chains, tax receipts, and job
creation, among other deficiencies, providing, along with deep security
concerns, a continued push for intending migrants.
As a result, a more focused effort by the United States to help the
Northern Triangle nations develop and improve their business climates
would be appropriate and meaningful. The good news, at least from the
Central American perspective, is that U.S. participation the Trans-
Pacific Partnership has been shelved for now, offering temporary relief
from enhanced global competition with their most competitive products
and markets. Although important from a strategic U.S. perspective in
Asia and Latin America, TPP threatened to divert U.S. trade and
investment activities away from the Northern Triangle and others in
Central America in favor of nations such as Vietnam and Malaysia. But
this is only a reprieve, and nations including the United States should
be encouraged to redouble their efforts to focus on improved regional
economic competitiveness.
security and job creation go hand-in-hand
U.S. assistance can be used primarily to leverage results. On the
security side, which is fundamental to improving conditions for
economic growth, metrics employed during Plan Colombia with strong
bipartisan support proved beneficial, such as a reduction in murders
and the re-establishment of a state presence in all communities.
Appropriate metrics on drug trafficking, corruption, and judicial
effectiveness can also be employed, and greater regional security
cooperation should be actively considered. More importantly, Northern
Triangle countries should be incentivized to produce real results by
allowing them to claim a greater share of the overall assistance
package over time. In other words, rather than dividing assistance co-
equally among the three recipients up front, we can be more creative,
leveraging improved outcomes by encouraging each nation, either alone
or in cooperation with the others, to compete for a larger share of the
overall assistance package by committing to concrete actions plans and
measurable results that can be tracked and rewarded for successful
implementation.
The same approach should be considered for economic development
activities that will help create conditions to draw the investment that
creates jobs and grows the economy. Taking another page from what has
worked in Colombia, the three nations of the Northern Triangle should
give priority attention to improving their ease of doing business
rankings with the World Bank and also their respective competitiveness
rankings with the World Economic Forum. Much like the Millennium
Challenge Corporation approach, these efforts would be designed to
build economic capacity and a framework for competitiveness.
And, there must also be a more genuine commitment among the three
nations to linking their economies more closely together, to increase
economies of scale and to reduce production costs. From trade
facilitation and customs procedures, to infrastructure development, to
common, best standards regulatory, permitting, tax, and commercial
frameworks, the simple reality is that until the three nations begin to
operate as a regional, more unified economy, they will continue to lack
in attractiveness for global investors. Currently, it is said that it
is easier to export products to the United States from nations in
Central America than it is to export products to each other. This
raises costs and dramatically reduces the attractiveness of Northern
Triangle countries of participation in the cross-border, market
expanding supply chains that increasingly drive global production.
Regional growth has often been consumption-led, fueled by
remittances from Central Americans living in the United States and
elsewhere. But remittances do not generally build capacity; absent a
new commitment to improving business conditions, there will be limited
opportunity for investment-led, sustainable growth.
increasing human capital and improving peoples' lives
Of course, job creation also depends on human capital, which
requires a new commitment by governments to education and workforce
development and training. The cost of labor is relatively attractive in
the Northern Triangle but productivity lags. Regional production costs
are already high, due to enhanced security requirements, high energy
prices, lack of transparency and predictability, judicial and contract
issues, and other aggravations. Potential investors report that these
issues are significantly compounded by difficulties in finding
adequately trained workers with appropriate abilities including math
and language skills. The mismatch in labor skills with currently and
potentially available jobs is profound and will require sustained
attention over time. Migrants returning to the region, many with
English language skills, are one pool of workers that could benefit
from additional training as they seek to transition back to local
communities.
But the bottom line is this: without job creation in the formal
economy, prospects for Northern Triangle nations to address effectively
the twin security and migration crises that confront them will be next
to impossible. And without adequate attention to the factors described
about, the domestic and direct foreign investment that creates jobs and
builds economies, providing alternatives for men and women alike to
build better lives in their own communities, will materialize only
unevenly. U.S. assistance can and should be used to prime the pump. But
even with U.S. support, the primary commitments and achievements,
including enhanced security, reduced corruption, and increasingly job
creation in the formal economy, must emanate purposefully from the
region itself.
STATEMENT OF JOHN WINGLE, COUNTRY DIRECTOR FOR HONDURAS
AND GUATEMALA, MILLENNIUM CHALLENGE
CORPORATION
Mr. Wingle. Thank you, Chairman Graham, Ranking Member
Leahy, and Members of the subcommittee. I am delighted to be
here today and I look forward to discussing MCC's work in
Central America.
MCC is working in the Northern Triangle countries of El
Salvador, Honduras, and Guatemala to promote prosperity and
strengthen governance in the region, supporting the objectives
of the U.S. strategy for engagement in Central America, as well
as the Northern Triangle Government's Alliance for Prosperity.
The subcommittee is already familiar with how MCC uses an
evidence-based model to drive economic growth and in turn
create opportunities to escape poverty in three interrelated
ways: first, in being selective on our partner countries;
second, in how we design programs with those partner countries;
and finally, the way we build capacity for our partner
countries to implement the programs. Underlying this is the
principle that we cannot solve the problems of our partner
countries for them. We provide diagnostic tools such as
constraints to growth analysis, as well as the right incentives
and support for our partners to make the reforms needed for
them to address their own problems.
While we are an important part of the solution, our partner
countries are ultimately responsible to implement the projects
funded my MCC, to follow through on the policy reforms, and
perhaps most importantly, to transfer this knowledge to manage
their own resources with the same transparency and
accountability that MCC demands in the projects that we fund.
In our Constraints to Growth Analysis, we found the
political economy of Northern Triangle democracies has been
characterized by patronage-based politics, weak rule of law,
low effective tax rates, and a lack of accountability. These
factors have led to governments with small budgets that are
poorly executed due to corruption and inefficiency, and as a
result, they have been unable to adequately provide
infrastructure, health, education, and security services to
their people. This poor and highly unequal service provision
has left Northern Triangle countries with low educational
attainment, high transportation costs, and entrenched crime
that constrains private investment and job creation and drives
migration.
These problems affect both the rich and poor in Central
America. However, the wealthy can pay for private schools,
private healthcare, and private security, but the majority of
the people struggle to provide a decent life for their
families.
Annual government expenditures by the Northern Triangle
countries are more than ten times the amount of official
development assistance they receive from international donors.
The efficient and effective use of their own government funds
therefore is critical to provide the security, health,
education, and infrastructure needed to achieve sustainable
economic development and reduce poverty.
Ultimately, by helping strengthen the policies and
government institutions, we advance the sustainability of MCC
and other governments funding and reduce dependency on foreign
aid. This has been MCC's goal with the Northern Triangle
programs.
In 2010, MCC and Honduras successfully completed a compact
that provided 7,400 farmers with technical training and better
crop management, irrigation techniques, business, and
marketing. The compact also improved farm-to-market roads,
secondary roads, and 110 kilometers of the main highway linking
the capital with the main Atlantic port.
Currently, MCC is supporting the government's efforts to
improve public financial management. MCC's threshold program is
helping the government of Honduras improve budget practices,
save money on procurement, improve delivery of public services,
increase accountability through both their Supreme Audit
Institution and civil society organizations, and reduce
opportunities for corruption, ultimately improving the
efficiency and effectiveness of how the Hondurans use their own
government resources.
Turning to El Salvador, in 2012 MCC and El Salvador
successfully completed a $461 million compact to strengthen the
transportation and agricultural sectors and improve the
educational system in the country's Northern Zone. According to
independent evaluators, more than 600,000 people benefitted
from the construction of the Northern Transnational Highway and
households with access to potable water and electricity
increased significantly with MCC's investments.
After the success of this compact, MCC and El Salvador
signed a new compact in 2014 to invest up to $277 million to
improve education, logistical infrastructure, regulatory
environment, and institutional capacity. El Salvador will
contribute $88.2 million to support this compact's investments.
Finally, in Guatemala MCC and the government are currently
partnering to implement a $28 million threshold program to
increase revenues and reduce opportunities for corruption in
tax and customs administration, attract more private funding
for infrastructure, and provide Guatemalan youth with the
skills they need in the job market.
While the challenge in Central America is great, there has
undoubtedly been progress. With the support of the United
States and other development partners, the people of Guatemala,
Honduras, and El Salvador had made significant efforts recently
to improve governance. Some examples are the courageous local
prosecutors that have taken on political corruption and
organized crime, governments have increased transparency and
expose themselves to social accountability. There have been
payroll audits to purge government payrolls of dead, absent,
and non-working recipients. Progress has been made in making
teacher appointments based on merit rather than political
affiliation. Progress has been made on police reform.
These are deeply entrenched and mutually reinforcing
problems and progress has not been universal, but there has
undoubtedly been progress. MCC is committed to continuing our
work with partner agencies to create the conditions for greater
economic growth by improving the climate for private
investment, strengthening human capital, and improving public
financial management and social accountability to advance good
governance and reduce corruption.
Thank you very much for your time and attention and I look
forward to your questions.
[The statement follows:]
Prepared Statement of John Wingle
Thank you, Chairman Graham, Ranking Member Leahy and members of the
subcommittee. I am delighted to be here today and I look forward to
discussing MCC's work in Central America.
MCC helps relatively well-governed poor countries reduce poverty
through economic growth and the agency's work, along with our sister
agencies in the U.S. Government, advances American security, values and
prosperity. When people have stability and opportunity, they are more
likely to stay in their home communities and are better able to address
health and security challenges that have international implications.
mcc model
MCC is an important tool in U.S. foreign policy. We work to
catalyze economic growth in the best-governed poor countries, and we
support and coordinate with other U.S. Government agencies to achieve
our shared goals. MCC's investments with partner countries drive
economic growth and create opportunities to escape poverty in three
interrelated ways.
--First, by consistently applying stringent eligibility criteria to
select our partners, MCC is able to leverage and incentivize
policy, regulatory and institutional reforms. MCC uses third-
party data to assess a country's policy performance in three
categories: ruling justly, investing in people, and encouraging
economic freedom. Without good policies in each of these areas,
countries cannot achieve sustainable economic growth and, as
such, our assistance would not be as effective. In addition to
providing a roadmap to determine which partners are more likely
to provide better development outcomes, this selection process
also drives countries to reform policies to qualify for MCC's
assistance. Once a country is selected, MCC is often able to
successfully push for major policy and sectoral reforms that
complement and sustain project investments. Together, these
reforms and investments help draw in private sector investment
and create opportunities for sustainable growth long after our
5-year partnership.
--Second, MCC uses an evidence-based, business-like approach to
choosing investments that will yield the best return in terms
of economic growth and poverty reduction. After selection, MCC
immediately begins working with partner governments to identify
the most binding constraints to economic growth. This is a
data-driven process to understand what is holding countries
back and limiting private investment and job creation. The
choice of what sector to focus on, therefore, is demand driven
and based on the needs of each individual partner country.
We invest in projects that lead to economic growth and help
people lift themselves out of poverty, like power, clean water, land
rights and roads. We also leverage these large investments to ensure
partners undertake policy reforms that promote the sustainability of
our investments and benefit the most vulnerable populations. After
agreeing on the outlines of a project, MCC's economists carefully
estimate the anticipated costs and benefits of the projects to ensure
that we design an efficient solution that generates a return on
investment and fosters self-sufficiency.
--Finally, MCC's focus is not only on building infrastructure or
completing a specific project, but also on building expertise
and know-how in our partner governments to transparently and
effectively implement other projects after MCC's investment
comes to a close. Through MCC's country-led approach, countries
learn effective project implementation, accountable fiscal
stewardship, and transparent procurement processes that outlast
the program. MCC is guided by the principle that we cannot
solve the problems of our partner countries for them; we
provide diagnostic tools, incentives and support for our
partners to make the policy and institutional changes needed
for them to address their own problems. We are an important
part of the solution, but our partners are ultimately
responsible to implement the projects funded by MCC, to follow
through on the policy reforms, and, perhaps most important, to
transfer this knowledge to manage their own resources with the
same transparency and accountability that MCC demands in the
projects that we fund.
Maintaining the maximum level of country ownership over the
process of implementing MCC-funded projects, which encourages the level
of responsibility and knowledge sharing we expect, while at the same
time ensuring the proper oversight of U.S. taxpayer dollars is of
utmost importance and always a delicate balance. MCC requires that
partner governments establish an entity to implement the projects,
usually known as an ``MCA.'' Like MCC, the MCAs are government bodies,
with governing boards that include public and private sector
representation and they are accountable for overseeing the day-to-day
implementation of the projects. In Honduras, where MCC had a compact
from 2005 to 2010, the government has been using the unit established
during the compact to implement over $1 billion in other development
programs. While this country ownership model is unique, MCC uses our
experience and lessons-learned to support the efforts of our
interagency partners and the governments of the Northern Triangle
countries. Moreover, these entities have developed solid reputations
for transparency and capacity in their countries. They set an important
example of a government entity delivering effectively, transparently,
and without regard for political bent. Such examples are scarce and are
valuable in setting a higher bar for government performance.
progress in central america
MCC is working in the Northern Triangle countries of El Salvador,
Honduras and Guatemala to promote prosperity and strengthen governance
in the region, supporting the objectives of the U.S. Strategy for
Engagement in Central America as well as the Northern Triangle
governments' Alliance for Prosperity.
Annual government expenditures by the Northern Triangle countries
are more than 10 times the amount of official development assistance
they receive from international donors. The efficient and effective use
of their own government funds, therefore, is critical to provide the
security, health, education, and infrastructure needed to achieve
sustainable economic development and reduce poverty. To promote
effective, transparent use of government resources, MCC not only
invests in needed infrastructure and promotes policy and institutional
reforms, but we also seek to strengthen partner governments'
implementation capacity to deliver services to their people. MCC is at
the forefront of this critical but still often elusive effort. Our
approach involves assessments, training, oversight, and hands-on
support for human resource management, financial management,
procurement, and auditing which, along with the vital reforms, are
leveraged through the large grant funds, or the prospect of grant
funds. Ultimately, by helping to strengthen policies and government
institutions, we advance the sustainability of our investments and
reduce dependency on foreign aid.
MCC is already part of the solution in Central America with over
$320 million currently committed through our compact and threshold
programs. MCC has invested more than $1.1 billion in the region since
2005 seeking to foster the enabling environment for faster economic
growth by improving the climate for private sector investment,
strengthening human capital to create jobs and opportunities in the
region, and reforming public financial management and increasing
transparency and accountability to promote good governance and reduce
corruption.
After successful completion of its first 5 year compact with El
Salvador, which invested $461 million to strengthen the transportation,
power and agricultural sectors, El Salvador and MCC signed a new $277
million compact in September 2014 to improve the country's regulatory
environment, enhance the role of public-private partnerships in
delivering key services, improve the quality of education, and improve
a key highway and border crossing infrastructure to reduce
transportation costs.
MCC also has threshold programs with Guatemala and Honduras.
Threshold programs are significantly smaller grants for countries that
are close, but do not yet meet our criteria for a compact. In 2013, we
launched a $15.6 million threshold program with Honduras to improve the
country's public financial management and the efficiency and
transparency of public-private partnerships. In April 2015, we signed a
$28 million threshold program with Guatemala to support reforms to the
country's secondary education system that match skills to labor market
demands, and to improve tax and customs administration so that the
government can generate greater resources to invest in the Guatemalan
people.
constraints to growth in central america
The political economy of Northern Triangle democracies has been
characterized by patronage based politics, weak rule of law resulting
in gang and drug related criminal activity, low effective tax rates,
and a lack of accountability. These factors have led to governments
with small budgets that are poorly executed due to corruption and
inefficiency, and as a result, they have been unable to adequately
provide infrastructure, health, education, and security services to
their people.
A lack of critical services over the years has yielded low
educational attainment, high transportation costs, and entrenched crime
that constrains private investment and job creation and drives
migration. These problems affect both the rich and poor in Central
America. The wealthy can pay for private schools, healthcare, and
security, but the majority of the people struggle to provide a decent
life for their families.
Over the last 10 years, we have seen many members of the political
and economic elite call for more transparent government, adequate tax
revenue, better infrastructure and improved healthcare, education, and
security services. We have also seen citizens take to the streets and
social media to hold their leaders accountable for providing
transparent, efficient and effective government.
In response to the desire to tackle these problems and with the
support of the U.S. and other development partners, there have been
significant efforts recently to improve governance:
--Courageous local prosecutors have taken on political corruption and
organized crime with the help of the International Commission
Against Impunity in Guatemala, the Mission to Support the Fight
Against Corruption and Impunity in Honduras and El Salvador's
Anit-impunity Unit within the AG's office.
--Governments have increased transparency and exposed themselves to
social accountability.
--There have been payroll audits to purge government payrolls of
dead, absent and non-working recipients.
--Progress has been made in making teacher appointments based on
merit.
--Honduras reduced its fiscal deficit from above 7 percent to below 2
percent.
--Progress has been made on police reform and neighborhood policing
and community outreach has been re-established.
These are deeply entrenched and mutually reinforcing problems, and
progress has not been universal, but there has undoubtedly been
progress.
mcc's 2006 and 2014 compacts with el salvador
In 2012, MCC and El Salvador successfully completed a $461 million
compact to strengthen the transportation and agricultural sectors and
improve the education system in the country's Northern Zone. The
program brought people in the Northern Zone training, education, rural
electrification, community infrastructure and 125 miles of road.
According to evaluations by independent consultants:
--146,000 rural residents received access to electrification.
--More than 600,000 people benefited from the construction of the
Northern Transnational Highway.
--Approximately 26,000 received access to potable water.
--Approximately 17,000 people were beneficiaries of the Productive
Development project, which transitioned producers to higher-
profit activities, generated new investment, expanded markets
and sales, and created new jobs.
--Approximately 12,000 youths were trained in various technical
trades.
--Approximately 5,000 people, including students and teachers,
obtained scholarships for study and training.
Households with access to potable water in the Northern Zone
increased from 79 percent in 2007 to 86 percent in 2011. Electricity
coverage increased from 78 percent in 2007 to 90 percent in 2011.
After the success of the compact signed in 2006, and with continued
strong policy performance as reflected by the MCC policy indicators,
MCC and the Government of El Salvador signed a new compact on September
30, 2014 to invest up to $277 million on improving education,
logistical infrastructure, regulatory environment and institutional
capacity, with the goal of promoting economic growth and private
investment in the country.
El Salvador has committed to increase the country's productivity
and competitiveness in international markets by partnering with the
private sector to generate economic growth and addressing
institutional, human, and logistical constraints to international trade
in goods and services. The Government of El Salvador has committed to
contribute $88.2 million to support MCC's investment, double the 15
percent host country contribution required by MCC, reflecting the
government's solid commitment to the compact.
The current compact has three primary projects:
--The Human Capital Project focuses on preparing the people of El
Salvador to better meet the demands of a global economy by
improving the quality of education and better matching the
supply of skills to the labor market. The project is composed
of two activities:
--The Education Quality Activity supports complementary
interventions in competency-based education, increased
classroom time, teachers training, and improvements to the
institutional environment that are conducive to learning.
It also includes investments in approximately 344 schools
in the coastal zone of El Salvador where dropout rates are
the highest, with a focus on grades 7-12.
--The TVET System Reform Activity seeks to strengthen ties between
the skills demanded by the labor market and those supplied
by private and public vocational education and training
providers. The intended result of the activity is that,
students in these TVET programs will graduate with skills
that better match the job market.
--The Investment Climate Project is composed of two activities:
--The Regulatory Improvement Activity is designed to prioritize and
promote business regulation reforms resulting in more
efficient and profitable operations for firms doing
business in El Salvador. MCC funding supports the
development of an institutional framework and system, which
includes the establishment of an institution that will
focus exclusively on regulatory improvement, and the
prioritization and implementation of a select set of key
reforms. The first reforms package, submitted in December
of 2016, contained 36 recommendations in public
administration, international trade, and development of
public private infrastructure. These reforms will result in
more efficient and profitable business operations for the
private sector.
--The Partnership Development Activity seeks to improve the
capacity of the Government of El Salvador to partner with
the private sector to provide key public goods and services
through the use of: (i) public-private partnerships to
enable the government to tap private capital to finance,
develop, and manage key infrastructure needed to increase
productivity, and (ii) the El Salvador Investment Challenge
to identify important private investment potential and
efficiently allocate limited government resources to public
goods and services needed to support this investment.
--The Logistical Infrastructure Project will address two
transportation bottlenecks that have led to high transportation
and logistics costs for regional trade.
--The Coastal Highway Expansion Activity will serve to relieve
congestion at the most trafficked segment of El Salvador's
key coastal corridor.
--The Border Crossing Infrastructure Activity will make significant
infrastructure and systems improvements at a major border
crossing with Honduras, reducing wait times at the border
and relieving freight and passenger traffic congestion.
mcc's threshold program in honduras
Prior to MCC's current partnership, MCC completed a compact with
Honduras in September 2010. The $205 million compact invested in a
broad range of constraints to economic growth in the agriculture
sector, including assisting farmers with technical training, providing
farmers with access to credit, and building farm-to-market roads. The
compact also invested in rehabilitating the primary national highway
that connects Honduras with international markets.
After completing the compact in 2010, Honduras experienced
political instability. Because of this, MCC's Board of Directors did
not select the country for a second compact. Honduras was, however,
selected as eligible for threshold program assistance to catalyze
needed reforms.The Honduran Government is subsequently working on
substantial reforms to fiscal transparency in order to improve
accountability and limit opportunities for corruption, in hopes of
qualifying for a compact once again.
MCC's $15.6 million Honduras Threshold Program is designed to
improve public financial management and create more effective and
transparent public-private partnerships. The program is helping the
Government of Honduras save money in procurement, improve delivery of
public services, and reduce opportunities for corruption--ultimately
improving the efficiency and effectiveness of how the Government of
Honduras uses its own resources. Honduras passed 10 of 20 scorecard
indicators in fiscal year 2017.
The Honduras Threshold Program includes two primary projects:
--The Public Financial Management Project is working to make the
management of government finances more efficient and
transparent. The project has four activities:
--The Budget and Treasury Management Activity is strengthening
budget formulation and execution in the government's
executive and legislative branches. Through the U.S.
Department of Treasury's Office of Technical Assistance
(OTA), MCC and Honduras are working to strengthen the
Ministry of Finance's budgeting capabilities and increase
legislative oversight of the budget process. In addition,
MCC is supporting an audit of government payment arrears
and promoting institutional reforms so that vendors are
paid consistently and on time, resulting in increased
competition and reduced opportunities for corruption.
--The Procurement Activity is increasing the transparency,
accountability and quality of public procurement. MCC
funding is supporting: an e-catalogue that allows bulk
purchases, saving time and money; the creation of a
procurement evaluation unit to assess the quality of
procurement throughout the government; and a procurement
training and certification program that includes a legal
change to phase-in a requirement for a procurement
certified government official to manage procurement
processes.
--The Supreme Audit Authority Activity is strengthening the ability
of this governance institution to conduct performance
audits.
--The Grant Facility for Social Accountability Activity is designed
to increase demand for greater accountability and
responsiveness from Honduran public officials and service
providers, with the ultimate objective of improving
national and municipal government efficiency and
effectiveness. The largest grant is $1.2 million to the
local chapter of Transparency International (the
Association for a More Just Society) to implement their
agreement with the Honduran Government to review the
performance in procurement and human resource management in
the Ministries of Health, Education, Infrastructure, and
Security as well as the tax authority.
--The Public-Private Partnerships (PPP) Project aims to improve the
efficiency and transparency of PPPs in Honduras by supporting
activities designed to increase the government's capacity to
develop, negotiate, implement and oversee PPPs. The activities
under this project include:
--The Core PPP Capacity Activity is designed to improve the
capacity of, and procedures utilized by, Honduran
Government agencies with key PPP responsibilities to
develop and implement PPPs in accordance with best
practices, including by supporting the Ministry of Finance
in properly identifying and managing fiscal risks in its
PPP portfolio; and
--The Design and Implementation of PPPs Activity provides
specialized technical assistance to improve the development
and implementation of PPPs.
mcc's threshold program in guatemala
MCC and the Government of Guatemala are currently partnering to
implement a $28 million threshold program to increase revenues and
reduce opportunities for corruption in tax and customs administration,
attract more private funding for infrastructure, and provide Guatemalan
youth with the skills they need in the job market.
Guatemala did not pass MCC's fiscal year 2017 scorecard although
they did improve and now pass 9 out of 20 indicators--one more than
fiscal year 2016. While Guatemala does pass the democratic rights
scorecard indicators--a prerequisite for passing the scorecard
overall--it fails the control of corruption indicator at the 22nd
percentile. MCC recognizes that work remains to improve Guatemala's
scorecard performance and its control of corruption score, but believes
progress can be made through our partnership to benefit the Guatemalan
people.
The Guatemala Threshold Program includes two primary components:
--Education Project:
--This $19.3 million project supports the Government of Guatemala
in improving the quality and relevance of secondary
education to prepare its youth to succeed in the labor
market. The threshold program is supporting efforts by the
Ministry of Education to develop programs that improve
teacher skills, the quality of teaching, and the
effectiveness of technical and vocational education and
training.
--The project promotes high-quality teaching in lower-secondary
schools by supporting the Ministry of Education to develop,
implement, and refine a continuous professional development
system for teachers, as well as establish school networks
to improve learning and accountability. The project also
helps the Ministry of Education in its efforts to offer
technical and vocational education to students and design
and implement new curricula that better meets labor market
demand.
--Resource Mobilization Project:
--This $5.8 million project increases the availability of revenues
by improving the efficiency of tax and customs
administration. It also supports the efforts of the
Government of Guatemala to design and implement public-
private partnerships to attract private funding for
important infrastructure projects and free up public
resources for citizens.
--MCC and the Government of Guatemala together are undertaking
reforms to improve tax and customs revenue by reducing the
rate of rejected audit cases; using risk management to
facilitate clearance of low-risk cargo and compliant
traders at ports of entry, focusing on high-risk cargo and
traders; implementing a post-clearance audit program for
customs; and improving control of the physical movement of
people and cargo.
conclusion
While the challenge in Central America is great, there has
undoubtedly been progress in El Salvador, Guatemala, and Honduras and
opportunities are at hand to continue that progress. MCC is committed
to continuing our work with partner agencies to create the conditions
for greater economic growth by improving the climate for private
investment, strengthening human capital to create jobs and
opportunities in the region, and improving public financial management
and social accountability to advance good governance and reduce
corruption.
Thank you very much for your time and attention.
U.S. STRATEGY FOR ENGAGEMENT IN CENTRAL AMERICA
Senator Graham. I thank you all.
Mr. Negroponte, you have been involved in this region, as
you said, for a very long time. You have some personal
attachment to Honduras, but the region in general. Do you think
we are on the right track with the U.S. Strategy for Engagement
in Central America?
Mr. Negroponte. Yes, sir, I do. And I do think it is
important that we have good metrics. I do think it is important
that we support these accountability initiatives and keep a
close watch over how this assistance is disposed of, but yes, I
think we are pushing on a more open door than we were before. I
think the political convergence at the moment is quite good in
terms of the governments of those countries wanting to work
with us, which has not always been the case.
So I think--and I think the amount of money they are
willing to put up in support of these programs I think is an
indication of that. So, yes, in brief, I do think we are on the
right track, sir.
METRICS
Senator Graham. So Plan Colombia metrics may be something
we want to look at in terms of how we go forward here?
Mr. Negroponte. Well, I am not sure I know enough about the
Plan Colombia metrics, but, yes, metrics, we need to know how
the money is being spent and we need to satisfy ourselves that
it is basically doing some good.
HUMAN RIGHTS AND THE RULE OF LAW
Senator Graham. Ms. Beltran, I think you said 19 out of 20
murders go unsolved.
Ms. Beltran. Regionally, that is correct. Among the three
countries, I would estimate that about 95 percent of murders,
homicides alone, are not adequately resolved.
Senator Graham. Is there just an outcry from the people for
better justice?
Ms. Beltran. Yes. And that is, you know, one of the reasons
why you see outflows of migration. It is not just the high
levels of violence, but the fact that people have nowhere to
turn for protection. In many of these marginalized communities,
they are often victims of police abuse or they do not have, you
know, adequate access to justice.
Senator Graham. Do you think that the political leaders of
these countries, particularly on the rule of law front, are
beginning to get it?
Ms. Beltran. I think there are many factors. I think when
you talk about the rule of law there has clearly been progress
on the issue of combating corruption, of strengthening the
investigative capacity of the Public Prosecutor's Office,
particularly I would say in the case of Guatemala. However,
they have faced many issues. One of them is the issue of
resources.
In the case of Guatemala, for instance, 90 percent of the
country, of the municipalities, do not have the presence of
public prosecutors. And this, you know, it has created a huge
backlog of cases, but also access to justice for many victims
of crime. That also hampers the ability to actually invest in
these institutions.
Senator Graham. Can you give me an example of a good news
story, if there is one?
Ms. Beltran. Yes. There is a good news. I would take the
case of Guatemala. You know, back in 2007, the Guatemalan
Government requested the creation of an entity called the
International Commission Against Impunity in Guatemala, or
CICIG. This is an innovative model. It is an international
independent entity that is able to carry out investigations,
but has to work hand-in-hand with the local public prosecutor's
office to be able to bring cases of corruption and organized
crime embedded in the institutions to trial.
This has been an initiative that has been supported by the
U.S. Congress, and if you look since then, there has been
tremendous progress, not only in the cases of high level
corruption that have been unearthed and have been prosecuted.
In 2015, the then president and vice president were indicted on
issues of corruption. But what they have been able to do within
the Public Prosecutor's Office and equipping it with the tools
that they need to go after high level organized crime and
corruption.
Senator Graham. Well, would you consider this to be one of
the metrics we look at improvement in this area?
Ms. Beltran. Yes, definitely.
ENERGY ISSUES
Senator Graham. Mr. Farnsworth, from the economic
development point of view, energy costs in this area are pretty
high, is that correct?
Mr. Farnsworth. Yes, sir, that is correct.
Senator Graham. Is there a gas pipeline we are looking at
building that may help these folks?
Mr. Farnsworth. Well, there has been a lot of work done
with the Inter-American Development Bank and with the U.S.
Government that has been looking at ways to lower power
generation costs, electricity primarily. In terms of specific
issues along those lines, we would have to take a look in terms
of what U.S. Government support may have been for pipelines and
what have you. But the general point, I think, is critically
important.
High energy costs across the region in Central America are
a limiting factor in terms of people's willingness to invest,
particularly in sectors like manufacturing or mining or what
have you that require a lot of the use of electricity. So
anything that raises the cost of production--and that is just
one factor--but it is an important factor, is going to make the
economic attractiveness of those particular countries less
impactful. So, yes, that is something that really needs to be
taken a look at.
Senator Graham. Mr. Wingle, is it Wingle?
Mr. Wingle. Yes, Senator.
MILLENIUM CHALLENGE CORPORATION SUCCESSES
Senator Graham. The MCC is kind of a novel approach of
where you basically do a contract with a country. You focus on
one or two areas. From your point of view, has this been a good
investment for the MCC in these three countries?
Mr. Wingle. Yes. I think we have had several good
investments in these three countries with MCC and I think part
of that has been the commitment of these countries, but part of
it is also the model in which we require a detailed diagnostic
study jointly with the partners.
Senator Graham. Are you doing anything in the energy area?
Mr. Wingle. We are not currently working in energy in these
particular countries.
Senator Graham. Is that something you could put on the
table?
Mr. Wingle. With a small exception. The small exception to
that is we are supporting their Supreme Audit Institution to do
more performance auditing. One of the pilot audits was in the
energy parastatal and a particular problem they have is high
non-technical losses like 30 percent of power does not actually
get paid for. That, of course, piles on an increasing--so
increasing that environment of accountability is one way.
But to answer your subsequent question about whether we
could become more involved, if the countries were able to pass
the control of corruption indicator in the case of Honduras and
Guatemala, we would look at the constraints to growth. As Eric
pointed out, this would be one potential avenue. And if that
were to occur, then we could assist in that.
Senator Graham. Thank you. Senator Leahy.
Senator Leahy. Thank you. You said two or three of the
programs have been successful. Which ones?
Mr. Wingle. I would say each of our programs had success in
each of the three countries. In all fairness, I would say not
every activity is always successful. And one of the things MCC
tries to do is to have independent evaluations to look at where
we are successful and where we are not.
Senator Leahy. What would you deem as the three most
successful?
Mr. Wingle. I would say the three most successful things,
and I might be a bit biased towards the two countries that I am
responsible for, so I apologize for that in advance. Within
Honduras, I would say in the first compact I would only point
at the kilometers of roads constructor to the farmers trained.
I would point the highest success was the program
management unit that we established and trained and built up
that has now managed over a billion dollars in total
development assistance from other donors and from the
Government of Guatemala. That gives them an alternative that
provides them a transparent effective mechanism. Not only for
donor projects, but now they are also looking at this
institution to support other parts of government.
Senator Leahy. What are some of the projects that worked
out well?
Mr. Wingle. I think the projects that worked out well were,
first of all, the highway I think is very important for linking
the country----
Senator Leahy. How many miles?
Mr. Wingle. This is 110 kilometers of the main highway.
Then there was a total of 500 kilometers of other farm to
market roads.
COMBATING CORRUPTION
Senator Leahy. Thank you. For fiscal year 2017, we
appropriated $655 million for the Northern Triangle countries.
Fifty percent of the funds as conditioned on efforts like
reducing corruption and impunity, building a professional
police force, protecting freedom of expression. Now if a
government is not fully committed to fighting corruption and
impunity, how do we respond?
Mr. Wingle. Okay. So while MCC is not directly in the U.S.
engagement for Central America, I agree with all of the
conditions that have been put in there, and particularly in
control of corruption. So what our----
Senator Leahy. If they do not do it, let me ask Ambassador
Negroponte, what should we do?
Mr. Negroponte. Well, of course, I am no longer running
these kinds of programs, chairman. I am no longer directly
involved in the operational side of these things, but I would
point out that the members of our Atlantic Council Task Force,
the Guatemalan member who is a former Vice President of
Guatemala, the Salvadoran member who is a former foreign
minister, and so forth, and the Honduran member all spoke
emphatically about the importance and the utility of
conditionality in the execution of these programs.
So they, themselves, even though as you know sometimes the
conditionality can create resentments in recipient countries,
they themselves felt----
Senator Leahy. I have been told.
Mr. Negroponte. I imagine. They, themselves, have expressed
strong support for that concept in the context of these
programs.
Senator Leahy. But do we cut the aid if they do not come
through?
Mr. Negroponte. Well, you know, I hate to--I hate for it to
get to that point because we do not want to lose the
interaction and the engagement that these programs imply, so if
I were involved in implementation I would just try to make as
sure as I could that they are working.
SUPPORT FOR ATTORNEYS GENERAL
Senator Leahy. Ms. Beltran, you said in your testimony that
in each of the countries involved there are competent,
courageous Attorneys General. That makes us all very happy, but
they face threats and intimidation sometimes from within their
own government. We have seen the same with the Commissions
Against Impunity in Guatemala and Honduras, and the UN High
Commissioner for Human Rights. Is there anything we can do
about that?
Ms. Beltran. Thank you, Senator, for your question. Yes,
you know, we see the courageous efforts of the Attorney
Generals, other prosecutors, members of the courts, but yes,
both the Commission and the attorney generals have had serious
setbacks. In Guatemala right now, there is a massive campaign
to discredit the work of the attorney general and the
International Commission Against Impunity, or CICIG.
I think very direct statements of support from the U.S.
Congress to these efforts must continue. I think direct
messages that the Government of Guatemala needs to fully
cooperate with the Commission, with the attorney generals, is
vital to the success of their efforts.
Senator Leahy. I remember going to one country in Central
America and the President telling me proudly that he was not
put there by the bullet or the ballot, but directly by the hand
of God. That was the first time I had met somebody so
designated. I have not seen him since he went to prison, but I
was just thinking of that.
Senator Lankford. He was also put there by the hand of God.
RESOLUTION OF COMMERCIAL DISPUTES
Senator Leahy. We said in the omnibus that a portion of the
aid to the Central American governments be withheld pending the
Secretary of State's certification that they are taking
effective steps in resolving commercial disputes. There is one
with the Government of Honduras and CEMAR. That is a company
owned by a U.S. citizen that has been languishing for a decade
or so. Is this ever going to be resolved if we do not apply
some pressure, either by withholding money or otherwise? I will
ask that of each of you.
Mr. Negroponte. It gets their attention, Senator.
Senator Leahy. Well, it is one thing to get their
attention. We can give a speech, it will get their attention. I
want to get some results. The case has been sitting there for a
decade. How do we get it resolved? Anybody want to respond?
Mr. Farnsworth. Mr. Senator, if I could use an example from
a country that is not in Central America, but it is in South
America, Peru. Before the U.S. confirmed a Free Trade Agreement
with Peru there were a number of outstanding investment
disputes that had languished in that particular country for a
long time. And it was made clear--in fact, I testified before
Congress a couple of times in that--under those circumstances
that the leverage of a trade agreement was a real action
forcing event in the context of Peru.
Senator Leahy. Are you saying we should hold back our aid?
Mr. Farnsworth. I am saying that leverage matters and money
matters and people--like Ambassador Negroponte said, it does
get their attention and once you have their attention the
political will tends to follow.
Senator Leahy. Thank you. Thank you, Mr. Chairman.
Senator Graham. Senator Lankford.
Senator Lankford. Thank you.
CLARIFYING U.S. FOREIGN POLICY TOWARD CENTRAL AMERICA
Mr. Chairman, thank you again for holding this hearing.
Can anyone tell me America's long-term foreign policy
objective that is achieved or even short-term foreign policy
objective that is achieved by investing more in the Northern
Triangle? When we explain to the American taxpayer, ``We should
invest in Central America,'' we should say, ``We should invest
in these three countries because this is the outcome for
Americans.'' What would you say that is? And anyone can jump in
there.
Mr. Negroponte. Well, I think----
Senator Lankford. Ambassador.
Mr. Negroponte. I think, and actually, some of this reason
pertains to our internal debate 30--almost 30 years ago when we
talked about NAFTA and what interest we had in negotiating an
economic integration arrangement with Mexico, that it would
help improve local economic conditions so that the incentives
to migrate in an undocumented and an illicit fashion would be
diminished. I think it could also help some of the other
measures in the area of rule of law and so forth in reducing
transnational crime.
Senator Lankford. Okay.
Mr. Negroponte. I think it is a question of the geographic
proximity of Central America gives us an immediate interest in
what is happening in those countries.
Senator Lankford. Okay. Anyone want to take a stab at that?
Ms. Beltran. I would say, you know, particularly after 2014
there was tremendous attention, you know, here in Washington
and in the country with regards to the unaccompanied minors
humanitarian crisis. I think the best way for the United States
to support the region is to focus on figuring out how do we
address the conditions that led many people to flee their homes
and their communities in the first place.
Senator Lankford. So both of you say illegal immigration,
we benefit what is happening here, by engaging there. That
helps us with immigration issues. It helps us with economic
activity--I have heard that several times--and narcotics or
human trafficking, those three things in specific. Anyone else
add to something on that?
Mr. Farnsworth. If I can briefly add, I think it supports
our values as Americans as well. And the United States has had
a long history in Central America. And the idea of us coming
alongside of Central Americans themselves to try to improve
their own conditions, their own democracy, their own markets I
think is an important use of the United States political will.
Senator Lankford. Right. So then the challenge is how do we
actually keep the projects narrow enough that we are focused in
on things and things that have enough metrics that we can
achieve them. I spoke to General Kelly this week. He was very
involved in the origination of the Alliance for Prosperity at
the earliest stages when he was at SOUTHCOM and with what
happened with State Department at that point. Obviously, he is
at DHS at this point.
Mr. Farnsworth, I believe you had mentioned the conference
that is happening in about 3 weeks in Miami with all these
nations together with Mexico and with us, how to be able to
communicate, what can we do on that. Those are all very
important things, but what was interesting is speaking to
General Kelly, the concern at the very beginning for this focus
in Central America was trying to make sure there are achievable
things that Americans do well. And he gave a quick for
instance.
We know on immunizations, for instance, if we engage on
immunizations in certain regions of the world, we know we watch
disease drop. We do that well. We do distribution well. We can
engage and we can achieve that. The focus on this seems to be
so broad so quickly. There is so many areas of need. It does
not look like we are engaged. It looks like--I am sorry. It
looks like we are engaging in everything rather than in narrow
things to be able to achieve things that we know: (1) we do
well; and (2) that we can measure and track and know that they
are staying on focus.
And I do not want this conversation to be about this topic,
but I just bring this up as an example. Of the $750 million
that we did last year, $57 million of that was on climate
change work in Central America. Now, again, there are many
people that see a high value in investing in that, but when we
are talking about the desperate need in Central America at that
point, 10,000 homes--finding ways to have alternative energy in
10,000 homes in Central America may not rise to the highest
level of what we have got to do first to help stabilize a
community and help engage.
Now, I am not again arguing it is not something that is
important, but I am asking is it first priority. Last year it
was. It was $57 million of the $750 million that was done. I
want to ask the question how do we get us on focus so that 2
years from now we look back on it and go, ``These are the
things we achieved?'' So my general question is, and I would
love to be able to do a second round if that is possible. My
general question is what are the things that Americans do well
that we should partner well with them that has specific metrics
that we can look back on in the years ahead and go, ``We
invested this dollar here. We partnered in this way, and here
is how we achieved it.'' Any quick ideas on that?
Mr. Wingle. Yes, Senator. I agree completely with your
emphasis on a narrow focus. We cannot try to do everything. I
also agree on the importance of stronger metrics and a results-
based framework. I would push just a touch on the part of what
America does well in the implication that, you know, for
instance, in vaccines and vaccine delivery, I think we want to
go a little bit beyond just----
Senator Lankford. I agree.
Mr. Wingle [continuing]. Delivering vaccines and I think we
want to go beyond. What we need to do is make sure that these
countries are capable of doing that for themselves, which is a
bigger challenge, frankly.
Senator Lankford. Right. And I agree completely. I am just
saying that is one that is a very clear metric to be able to
look----
Mr. Wingle. Yes.
Senator Lankford [continuing]. And go, ``We did this. This
is what happened in disease in that particular.'' Now, it is
not even a Central America issue.
Mr. Wingle. Right.
Senator Lankford. That is typically an Africa issue for
that.
Mr. Wingle. Okay. And so I think, you know, using the
constraints analysis that we have done at MCC and the analysis
that the Atlantic Council has done, there is a lot of
diagnostic out there and I think there is a fairly narrow list
of problems in terms of security, essentially prosperity that
is underlined by education, and particularly secondary
education leads into both problems in security and prosperity.
Senator Lankford. Right.
Mr. Wingle. I think that is an important area to focus on.
And then the underlying governance, which is not just
controlling corruption. It is also building the capacity in
these aligned ministries to better deliver these services for
these countries. And that is an area where we, as the U.S.
Government, I think need to be a little bit more forward
leaning.
SECURITY ISSUES
Senator Lankford. So what does that look like when you talk
about security? I just want to press on that one issue.
Mr. Wingle. Okay.
Senator Lankford. What can we do to actually help security
that we can measure and track and we know we are investing in?
Mr. Wingle. Okay. So in security, which is an area outside
of MCC, in which USAID and State Department through INL are
more engaged. They are engaged on things such as community
policing. They are working with the prosecutors to improve
their ability to both investigate and prosecute cases. But that
is an area that I would turn more towards other members of the
panel that are more familiar with security because MCC, due to
our mandate, is focused----
Senator Lankford. Right.
Mr. Wingle [continuing]. More on the prosperity aspects and
the things that underlie that as well as governance.
Senator Lankford. Okay.
Mr. Negroponte. So in our report we talk about prison
reform, targeting high risk neighborhoods for increased social
and educational programs. We have several specific things--
improving police accountability. I think security and rule of
law, if I was going to say what are the real priorities for
this program, our program, this national program towards
Central America. I think that is where it ought to be.
Senator Lankford. Mr. Chairman, I know--if there is going
to be a second round, can----
Senator Graham. Yes. We will go.
Senator Lankford. I can hold this back and----
Senator Graham. Sure.
Senator Lankford [continuing]. We can move on and get a
chance and I will come back to that.
Senator Graham. Just hold that thought and then we will
take it up.
Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman, and thank you all
for being here. And I guess I would follow up a little bit on
your comment, Senator Lankford, because when I was here and
voted for the investments in the Northern Triangle in 2014, it
was in response to the unaccompanied minors crisis because
there was a convincing argument that people were fleeing the
Northern Triangle because of conditions at home. And that if
circumstances were different, if there were rule of law, if
there were jobs available, if people felt comfortable keeping
their kids at home, they would not be trying to send them to
the United States where they could have a better future. So I
think this is a good investment that is good for us as well.
IMPACT OF PROPOSED CUTS ON U.S. ASSISTANCE AND PROGRAMS IN CENTRAL
AMERICA
And I guess that is my question for the panelists, my first
question anyway. And that is as we look at the proposed budget
that we received today from the White House. And I think we are
still going through that. I am sure others are. But it would
certainly propose--it proposes dramatic cuts to the State
Department, to USAID, to economic development efforts that we
have made around the world. And what impact do you think these
kinds of cuts would have on those underlying conditions that
drive regional migration northward in the United States, that
the very efforts that you all are talking about on this panel
to try and address the conditions in the Northern Triangle?
Anyone.
Ms. Beltran. Thank you for the question, Senator, and I
want to also address the previous question. I think the cuts
would have a tremendous impact in these countries. You clearly
see many windows of opportunity in all three. And I would, you
know, rather than try to support efforts to move reforms
forward, I think it would have serious setbacks.
In the case of Guatemala, as I mentioned, there is a
tremendous effort being driven by the Attorney General's
office, the CICIG, and others to really improve justice and
security conditions. I think they are at a key moment. They are
facing many setbacks, many death threats, and it would be
tremendously detrimental for the U.S. to not continue that
support.
I think, you know, metrics are key, strong metrics. And
that is the reason why WOLA and our partners developed this
monitor which establishes very clear indicators of progress. I
think the investment on security and rule of law is key. The
U.S. has supported many efforts in Guatemala with the CICIG,
but also the work that has been done in the public prosecutor's
office where you can see real success. Also, with the work that
has been done with the Ministry of Security where you have
seen, in the case of Guatemala, a steady decline in homicides.
And much of that work has been supported by the United States.
Senator Shaheen. Thank you. Yes, Mr. Farnsworth.
Mr. Farnsworth. If I could add briefly, and I agree with
what Adriana said. One of the things that I think was really
important in the context of Colombia--and I understand Central
America and Colombia, totally different, I understand all
that--but one of the things that really seemed to help was the
Colombians understanding that the United States was there for
the long term, that they could rely on us, that when we
launched projects with the Colombians, that they could depend
on us to deliver the training, the equipment, the intelligence,
et cetera, and that freed them to concentrate on what they
could do best.
And one of the things that significant budget cuts could
potentially do in Central America is question the commitment of
the United States that will then undermine in some ways some of
the reformers in Central America who are trying to make those
steps on their own. So I think that is point number one.
I think point number two is the idea that more broadly--and
I know it is not the focus of this hearing--but people outside
of the United States look at things like U.S. foreign
assistance budgets in terms of global commitment and these
sorts of things. There is a huge symbolic issue here that I
think we need to be aware of as we go forward.
Senator Shaheen. Thank you very much.
COMBATING ILLICIT NARCOTICS
In the United States and in my State of New Hampshire, in
particular, we have a raging heroin and opioid epidemic. And
one of the things we watch very closely is the amount of
illegal drugs that come across our southern border and come up
to Northern New England, go to other states in the country. How
much is happening in the Northern Triangle governments in terms
of trying to address this kind of drug trafficking and is there
more that we should be doing to support them? If you are not--I
am going to have to call on somebody. Mr. Farnsworth, you want
to?
Mr. Farnsworth. There could be more that is done, no
question about it. And it is not just transiting, but also now
production in Central America. But I think one of the things we
have to recognize is that Central America is a victim of
geography.
Senator Shaheen. Right.
Mr. Farnsworth. And that is not their fault. And the drug
trade has also undermined some of the institutions that are
required to actually address these very issues. And one of the
things that is not a country in Central America that would help
a great deal is if democracy returned to Venezuela because much
of what we see in terms of the unclassified tracks of drug
transit go from the Andean region through Venezuela and then to
Central America or Hispaniola.
That is a real factor because those drug flights or ships
tend to then land in parts of Central America where there is no
real government presence--for example, the north coast of
Honduras. And because of that then the trade flourishes
throughout the region.
Yes, these countries in the Northern Triangle could do
more, but I think that is a real area where the United States
can be helpful. It is also an area that is fraught with
complications--human rights issues, the need to vet police
forces, police training, not just police themselves, but also
the whole rule of law system so that there are prosecutors in
place, so that there are courts that are able to actually
render justice, so that impunity goes down from 98 percent or
whatever it is to much lower than that.
This is a huge problem. I think additional attention would
be appropriate.
GENDER ISSUES
Senator Shaheen. Thank you. Ms. Beltran, I am going to ask
you this question, though I think it is a question for each of
you. And as I am sure you are aware, the Northern Triangle is
some of the most dangerous places, one of the most dangerous
places in the world for women. Women are more likely to be
victims of domestic violence there, to be murdered. It has a
very high murder rate for women. Many other challenges that
women, even more than men, in these countries face. And I
wonder if you could talk about why it is in our interests to
invest in women in these countries and to empower women.
Ms. Beltran. I think--thank you, Senator, for the question.
There has been--you know, violence against women is a huge
problem in these countries. The three of them have extremely
high rates of femicides. And in some areas they do not have
access to justice. Many of the unaccompanied minors were in
fact women that suffered great violence through the trek.
I think greater efforts are needed to address the issue of
violence. From access to justice to how the government has
responded, oftentimes they are victimized by their own
governments. There have been some efforts in the case of
Guatemala to try to improve that access. It also deals with
education and providing greater opportunity.
There have been some efforts by civil society and
organizations to try to empower women and get them to be more
active participants in their communities.
Senator Shaheen. And do you think it is important for us to
have an office in the State Department that is focused on women
so that we can make sure that that is a priority?
Ms. Beltran. Yes. And I would hope that, you know, there is
a continued focus on the issue of violence against women
because of the rates of violence.
Senator Shaheen. Thank you. Thank you, Mr. Chairman.
Senator Graham. Thank you.
Senator Lankford. Mr. Chairman, could I make a quick
comment?
Senator Graham. Sure.
COMBATING ILLICIT NARCOTICS
Senator Lankford. Just a quick comment, Senator Shaheen as
well. I went through last year's dollars for this money and
what was targeted towards the narcotics trafficking itself. And
I do agree with Mr. Farnsworth. Central America is a victim of
geography in that there was a tiny fraction that was committed
to interdiction in that area. And I think that is an area that
we could make a significant difference and it is not a large
amount of money. And a relatively small amount of money could
make an enormous difference on government corruption and
impunity in those countries and then make a huge difference in
our communities that are facing an epidemic in those areas.
Senator Shaheen. And, Mr. Chairman, if I could follow up.
We certainly have heard from General Kelly when he was head of
SOUTHCOM that that was an area where a little bit of money
would have helped tremendously to deal with interdiction
efforts.
Senator Graham. Senator Daines.
Senator Daines. Thank you, Mr. Chairman. And I want to
thank you all for coming forward to this committee. Illicit
drugs ranging from meth to heroin as well as other opioids are
having a significant impact in places like Montana as well as
across the country. We hear, I know, a lot from Senator Shaheen
and what is going on in the northeast, from Senator Portman in
Ohio, and of course this scourge continues to move west.
For example, over 90 percent of the drug offenses in
Montana are meth related. And drug testing for heroin related
criminal offenses by 475 percent from 2013 to 2016. This is an
issue I am engaged as we speak with our Attorney General, Tim
Fox, in Montana as we are not able to keep up right now with
what is going on with this drug epidemic.
It is having a dramatic impact in our communities. It is
imperative we work to address both the supply and the demand
side of illicit drugs, whether it is in the U.S., the Northern
Triangle, or elsewhere.
Mr. Negroponte, earlier this month Secretary of Homeland
Security John Kelly stated that U.S. demand for illicit drugs
including meth is a key contributor to violence in Central
America. And I can tell you, I think I speak for many of the
U.S. Senators, that we are so grateful that we have Secretary
Kelly in that position bringing in experience from SOUTHCOM to
this job.
DECREASE U.S. DEMAND FOR ILLICIT DRUGS
What suggestions might you have to decrease U.S. demand for
such drugs in a way that might also help decrease violence in
that region?
Mr. Negroponte. Well, I am really not the expert on demand
reduction, Senator, although perhaps--and I have not looked at
the resources that we dedicate domestically to that. That used
to be a debate in the days when I worked more actively on this
subject as to what is the division of resources between
interdiction and enforcement on the one hand and demand
reduction on the other. So it seems to me a hard look at that
might be in order.
The other point I would make on the question of violence
and dealing with this problem in Central America and as it
comes up through Mexico, and we have not mentioned it yet in
this hearing is that there is an opportunity, I think, for
greater cooperation between ourselves, Central America, and
Mexico on these issues. I think we need to promote more active
role on the part of Mexico in helping confront these problems.
They have worked with us very hard dealing with the norther
border and I think there have been some improvements over the
last, say, generation, if you will.
Well, we are going to have this meeting that Secretary
Kelly and others have organized now in Miami in the middle of
next month, it seems to me that is one of the issues that ought
to be on the table. How do we get Mexico more involved in
helping us on these questions? And I think they can.
INTEGRATION OF CRIMINAL DEPORTED FROM THE UNITED STATES
Senator Daines. You know, to follow up on this thought
about cooperation and violence, in your testimony you
highlighted this vicious cycle where deported criminals
exacerbate instability and violence in the communities that
they return to. What programs are Northern Triangle countries
implementing to help better integrate, reintegrate, these
deportees back into society?
Mr. Negroponte. Well, I think some of the programs of this
assistance program are devoted to try to help integrate these
people better. Possibly other panelists have a better insight
into that than I do, but I thought that was one of the intents
of the program.
And the other point I would make in that regard is there
have been complaints, and I have heard them directly from our
Central American friends, that sometimes we deport people, but
we do not give them enough of a heads up or enough information
on the backgrounds of the people that we are sending back. And
so they are not necessarily fully equipped or adequately
equipped to deal with these people when they are trying to
reintegrate them into their own societies. And I think that
over time is something that can be adequately worked on.
Senator Daines. That, just on the surface, looks like a
very solvable problem.
Mr. Negroponte. Yes, I think so.
CONDITIONS ON U.S. ASSISTANCE AS LEVERAGE
Senator Daines. Yes. Mr. Wingle, to what extent have
conditions on U.S. assistance to the governments, El Salvador,
Guatemala, Honduras, whether it be through Millennium Challenge
Corporation or otherwise, help spur policy changes within those
countries?
Mr. Wingle. Thank you, Senator. I agree completely with I
think what the premise of the question is is the importance of
conditionality both before we provide the assistance and while
we are providing the assistance in a whole range of areas, both
for the specific projects and for broader governance.
So starting with the control of corruption indicator that
we have that sets up a requirement for countries to improve
governance before we even engage in them, and then within
specific programs that we have there are programs or there are
conditionality that have to do with everything from within if
we are building a road we want to see increased road
maintenance funding. We want to see better governance and
better uses of that funding.
If we are working in governance programs in public
financial management such as we are in Honduras, we are focused
on them taking on greater responsibility for doing performance
auditing by the Supreme Audit Institution, having open access
to Transparency International and we are supporting
Transparency International to do auditing and procurement in
human resources across major ministries. And then within
Guatemala, we are looking at how do we not only support
education, but make sure that the government systems for hiring
and recruiting teachers are better done. Within customs, there
is conditions within making sure that they are both doing risk-
based selection of which containers get inspected, making sure
that there is better vetting of customs officials.
So there is both big picture conditionality, I think, which
is important, but I think it is also important that we have
these small, more specific things----
Senator Daines. Yes.
Mr. Wingle [continuing]. That we do in each of those
programs.
COMBATING CORRUPTION IN LAW ENFORCEMENT
Senator Daines. You know, you--bringing up this issue of
auditing and transparency, accountability, have we seen
progress in some of the reform efforts related to, let us say,
the police and judicial systems?
Mr. Wingle. So, MCC does not work directly in security due
to our organization and mandate. In terms of broader progress,
I think within accountability and auditing, I would point to
two different directions. One is I think supporting the Supreme
Audit Institutions in those countries, particularly what we are
doing in Honduras, to make sure that they are looking at
performance and they are looking at big issues and not going
after small civil servant violations on their travel filings,
which is a problem that we see in all three countries at the
Supreme Audit Institution to occupy their time are focusing on
these unimportant issues.
The other part that I think is very important is increased
access by institutions like Transparency International through
their local affiliates to be able to go in and have access to
human resources in the Ministry of Security, in the Ministry of
Education, Ministry of Health, other large ministries so that
you bring that light and that transparency to these that keeps
not just the short-term improvements that have happened in the
cleansing that De Puracion of the police, but you have that
permanent presence and social accountability to ensure that
this is more sustainable.
Senator Daines. Thank you, Mr. Wingle. Thank you, Mr.
Chairman.
Senator Graham. Senator Lankford.
ENGAGEMENT WITH LOCAL LEADERS
Senator Lankford. Thank you, Mr. Chairman. So how are we
interacting with this point and what role would you place on
local leaders? Obviously, there are elected officials in each
of these countries that are great partners for us. They are
passionate about their country and care for their country. What
balance should there be between American tax dollars coming to
be able to invest in key areas and ways that we can partner
together in those local leaders, elected officials there,
saying, ``This is where you can help us the most.'' How do we
marry those two together so that we are not doing projects and
they are saying, ``That is fine, but that is not our greatest
area of need?''
So what do you see already? Where have you seen the success
in that, in discovering the issues from the local leaders?
Mr. Farnsworth. Mr. Senator, if I could start with a couple
of comments. The first is that if we are serious about Central
America taking the lead in its own development and solving its
own problems, we have to allow them to do that.
Senator Lankford. Right.
Mr. Farnsworth. And so part of that is allowing them to
actually develop the plan that we can then come alongside and
choose what part or parts to fund and underwrite based on our
own interests. So I think----
Senator Lankford. Do you feel like that is happening now or
do you feel like once we voted there was a rapid pursuit to be
able to get dollars out the door to be able to do something or
was there a strategic working with individual leaders there?
Mr. Farnsworth. I think that there is a combination of all
of the above, to be honest.
Senator Lankford. Okay.
Mr. Farnsworth. And there was also, in the context of
Central Americans creating this plan, there was always an eye
to Washington in terms of what the anticipation might be that
we would fund anyway. So as that plan was being put together it
was not done in a vacuum. So I think that is the first part.
But the second part pertains to our delivery of assistance.
It is--I think we can use some creativity here. So, for
example, as I mentioned in my oral testimony, instead of just
dividing a package by three and saying, ``This is the amount
that we will provide for you; come up with a way to spend it.
This is the amount for you, et cetera.'' Why don't we think
more creatively and say, ``Okay, this is the plan that you are
committed to. It is not the same plan. It is your national
plan. That is great. We will fund a certain percentage.''
And then once you have completed that plan, if you are the
first mover on this, why not have the ability to compete for a
greater amount of the overall----
Senator Lankford. Right. A bonus.
Mr. Farnsworth. Absolutely.
Senator Lankford. Right.
Mr. Farnsworth. And I do not know if it is politically
correct to use this phrase, but it is really a race to the top.
Senator Lankford. Right.
Mr. Farnsworth. In the context of getting the three
countries, again, with their own national commitment. So we are
not imposing anything, but we are saying, ``You know, if you
meet your commitments first, if it is verifiable, if it is
audited, if it is consistent with what we thought we agreed to
do, you can get 50 percent of the overall budget or you can get
40 or whatever it is.'' I am not suggesting that I have the
wisdom here.
Senator Lankford. Right.
Mr. Farnsworth. But that would change the dynamic because
it would then cause the leaders of those countries to take
these commitments seriously and to say, ``You know, we have a
chance to compete for double our funding or whatever it is.'' I
think that would have an important incentivizing effect.
Senator Lankford. Ms. Beltran, were you wanting to add to
that? You look like you were leaning towards the microphone
there.
Ms. Beltran. Yes. No. Thanks, Senator. Just to add, I think
the importance of having a very clear strategy and outcomes is
key. I think one of the issues, you know, of why past
assistance has not been as effective as, you know, how are we
defining outcomes.
Senator Lankford. Right.
Ms. Beltran. In the area where I work is how are we
defining institutional strengthening and what do we mean by
having an effective justice system and work backwards and
establish very clear metrics. I think there are opportunities,
spaces of opportunities, in each of the three countries
regarding rule of law and it is how we can better support the
efforts of those that are really seeking lasting reforms in
these countries.
Senator Lankford. Yes. I saw some of the outcomes and the
specific things that you all had articulated and I think those
are very beneficial.
Ambassador.
Mr. Negroponte. Yes. And one point I would like to add just
because I have served in so many different parts of the world,
Senator, is that relationships in Latin America between the--
for the United States are very close. These are people whose
languages we understand. We can speak them. It is not like
being in Iraq or Vietnam, both of which countries I have served
in, where the relationship--I am not saying it was not friendly
or close, but it was a little more arm's length than it would
be in a situation like Latin America.
So when you are doing a community policing initiative or
one of these model precinct programs or you are doing something
that Ambassador Brownfield is conducting carrying out under his
International Narcotics and Law Enforcement, these are close
relationships. We are not just writing a check and walking
away. We are not just writing a check and walking away.
Senator Lankford. Right. And I would----
Mr. Negroponte. I think we have good, close up observation
of what is going on.
Senator Lankford. I would agree and it is something you and
I have spoken about before. I would suggest that as a gain for
us some of the partner cities that we have had before and
partner police departments in the United States partnering with
some of the local law enforcement in each of these countries to
develop lasting relationships to where when there is an issue
there and they feel like they cannot call someone locally, they
do have someone outside the country they can call and say, ``I
am seeing this. I am experiencing this. What would you
suggest?'' That only happens with relationships and with
engaging, and those are things that we can bring to bear.
We have excellent law enforcement border to border across
the country. We have a lot of departments that would be a
tremendous asset. Our FBI, those in the FBI Academy, there is a
tremendous amount of gain that we could share from insight and
the things we have tested for a long time that I think would be
an asset in local law enforcement. So it is not just a matter
of sending a contractor down to train, but that is--we actually
send people back and forth and develop those relationships.
ECONOMIC COOPERATION AND INTEGRATION
Mr. Farnsworth, you had mentioned before as well about
CAFTA and about some of the relationships there, that it is
still easier for many of those countries to do business with
the United States or with Mexico than it is with one of the
countries that literally they border to. How does that ever get
resolved to create an economic zone there?
Mr. Farnsworth. It is a really important question and one
of the missed opportunities of Central America over the past 15
years has been precisely that point where the countries which
are parties to CAFTA saw this in some ways as guaranteed access
to the United States rather than the opportunity to really
develop their own trade relationships with their neighbors.
The World Bank, for example, has done some really
interesting work recently about the gains from trade and what
that means for national incomes if you do more to trade with
your neighbors. First of all, it starts with an attitude of
desire to do that. There is still history there. There is still
politics there between countries. And they are not always the
best of political allies necessarily. So that is number one. It
requires a mind shift just to do it.
Number two, there are some pragmatic realities on the
ground in Central America. For example, borders. Borders do not
work in Central America. They are incredibly difficult to
cross, whether you are a pedestrian, whether you are a trucker,
whether you are whatever you are. That impedes commerce. It
also enables corruption. And it makes these countries simply
less productive. That is not simply a matter of law
enforcement. It is also a matter of infrastructure, which is a
really big issue.
But one of the areas, for example, that the United States
can contribute to in terms of improving the scenario and would
be beneficial to address the issue you have raised, Mr.
Senator, is the idea of trade facilitation in terms of customs
procedures and in terms of allowing and helping trade actually
to be done better in the Central American countries.
What you do not have is the idea yet that is developed
everywhere else globally, or many other places globally, is the
idea of supply chains. And that is the next logical area of
production and it makes a lot of sense, linking to Mexico,
linking to the United States. So now instead of the hub and
spoke method, where you produce something in Central America
and you export it to the United States, now you see each other
as more integrated economic space and you produce things
together.
That breaks down some of these barriers we have been
talking about, but it requires a political commitment at the
top to really go in this direction. I think the United States
can help facilitate that, but ultimately the region has to
decide that is the direction it wants to go.
Senator Lankford. All right. Mr. Chairman, I do appreciate
your indulgence very much in this and to be able to go through
it and for holding this hearing. I think our relationship with
these three countries really is very strategic to us. There are
so many Americans that trace their lineage back to these three
countries. There is so much commerce that could go back and
forth between us.
There is a clear connection in illegal immigration to these
three countries and what happens there both economically,
crime, corruption within governments, lack of access to courts
and such that is very significant in the narcotics trafficking
that they are caught in the middle of that starts in South
America and they are only the midpoint. And a lot of that
government corruption is based on narcotics trafficking through
them that Americans are the buyers and they are merely the
waypoint in it and they are affected by what is happening here.
So there are some significant relationships where I think
they expect us to step up and to say, ``You are helping create
this problem in Central America based on the drug purchasing
happening in the United States,'' and their trafficking point
that they want to engage. Quite frankly, all three of these
countries are friends. They are allies of ours that we have a
lot of common relationships with. And what I have seen, and we
have just mentioned it several times. Ms. Beltran has mentioned
it with Guatemala.
And specifically, what President Morales has done and what
Thelma Aldana, their Attorney General has done, has been
remarkable to be able to see their aggressive focus on trying
to deal with corruption that has been historic there and to be
able to turn that around. I think we should reward that and I
think we should lean in and engage in a way that continues to
support them.
What I would hope in this is that how we do oversight and
metrics on these three countries and what we do with our
foreign aid becomes a model with how we handle foreign aid all
over the world, that because of our partnership and our
relationship we start asking the hard questions. What are the
metrics? What are we good at? Are we putting money towards
something because there is a problem or are we helping solve
something so that both countries at the end of it see a
success? And I think it can be done with this kind of focus on
it. And so I very much appreciate your engagement in this.
Senator Graham. Well, thank you. We will wrap it up.
Senator Lankford has really been all over this issue, as you
can tell, very informed. The thing I like most about this
subcommittee is you have some very smart, dedicated people
trying to get better value for the American dollar realizing
that we do lead and we are the envy of the world in many ways.
So what have I learned? We better talk to Mexico. That is a
good idea. I want to make sure that when we collaborate on the
Alliance for Progress we have a Mexican representative seeing
how they can help make it happen, that trying to get better
trading relationships between the three nations themselves
would probably strengthen their economy as a whole. Rule of law
seems to be the center of gravity here and if they do not have
a plan to improve the rule of law, they need to give us one
that we can resource based on what we think we do best and make
sure they buy in. And basically tell people back home, ``Here
is what you got for your money.''
I think the governments would welcome some accountability
and conditionality because they can go to their constituents
and say, ``We have got a more reliable partner in the United
States, but they are asking us to change things and it is in
our interest to change things not only here at home, but to
have a better relationship with the United States.''
So this could be a model. I want it to be. The MCC, to me,
is a great concept. It focuses on a few things with a different
attitude. So I am very dedicated to the idea that we are going
to take this money and have more metrics-based spending, that
we are going to get Mexico more involved, and that we should
probably try to have somebody ride herd over the idea of
economic integration. Somebody at the State Department can help
us do that.
Thank you, Senator Lankford, and all those who are
interested in the topic. I have a letter here from the Global
Leadership Council, 225 businesses who have signed a letter to
Secretary of State Tillerson urging the Secretary not to have
draconian cuts to the State Department's budget.
[The information follows:]
May 22, 2017.
Secretary Rex Tillerson,
U.S. Department of State,
Washington, DC.
Dear Secretary Tillerson,
As business leaders, we are writing to voice our strong belief in
the return on investment from the U.S. International Affairs Budget in
advancing America's economic interests overseas and supporting jobs at
home.
With 95 percent of the world's consumers outside the United States
and many of the fastest growing economies in the developing world, now
is the time to double down on America's global economic leadership.
America's diplomats and development experts help build and open new
markets for U.S. exports by doing what only government can do: fight
corruption, strengthen the rule of law, and promote host country
leadership to create the enabling environment for private investment.
Our country's investments have generated impressive results: 11 of
America's top 15 export markets are in countries that have been
recipients of U.S. foreign assistance.
Strategic investments in diplomacy and development make America
safer and more prosperous. American companies depend on robust U.S.
engagement overseas, especially in the fast growing markets in the
developing world. Our embassies and consulates around the world are
essential partners for American businesses to ensure we can compete on
a level playing field. Trade promotion programs have helped drive
American exports, which today make up almost 13 percent of America's
$18 trillion economy and support about one in five American jobs.
The State Department and USAID are increasingly partnering with
American businesses to catalyze and leverage private sector expertise
and resources to create sustainable solutions at scale on a range of
challenges such as energy, health, and agriculture. And today, host
countries themselves are driving policy changes to compete for American
investments. Moreover, America's global economic leadership also
embodies our country's values--promoting economic freedom, prosperity,
and entrepreneurship that can mitigate the drivers of violent extremism
in the world today. In today's global economy, we have a significant
opportunity to strengthen the State Department, USAID, and our
development agencies and the capacity to partner with the private
sector to address global challenges and to expand opportunity.
We are committed to working with you in your role as Secretary of
State to share our perspectives on the importance of U.S. international
affairs programs to boost our exports abroad and our jobs here at home,
and we urge your support for a strong International Affairs Budget for
fiscal year 2018.
Respectfully,
Chris Policinski
President and CEO
Land O'Lakes
Andrew Tisch
Co-Chairman
Loews Corporation
David MacLennan
Chairman and CEO
Cargill
Sarah Thorn
Senior Director, Global Government Affairs
Walmart
Caroline Roan
Vice President, Corporate Responsibility
Pfizer, Inc.
President
Pfizer Foundation
Kate Rumbaugh
Vice President, Government Relations
The Coca-Cola Company
John Murphy
Senior Vice President for International Policy
U.S. Chamber of Commerce
Jim Collins
Executive Vice President
DuPont
Brad Figel
Vice President Public Affairs North America
Mars, Inc.
Connie Justice
President
Planson International
Paul Neureiter
Executive Director for International Government Affairs
AMGEN
Kathryn Reilly
Global Director Public Affairs
Aon
Tara Hogan Charles
Associate Director, Global Government Relations
Procter & Gamble
H. C. Shin
Executive Vice President, International Operations
3M
Michael Boyle
CEO
Boyle Energy Services & Technology
Bill Lane
Chair Emeritus
U.S. Global Leadership Coalition
Jeff Rowe
President of Global Seeds and North America
Syngenta
Philip de Leon
Director, Public Affairs & International Business
AGCO Corporation
Hugh Welsh
President
DSM Nutrition
Peter Tichansky
President
Business Council for International Understanding
Doug Galen
CEO
RippleWorks
David Wilhelm
Partner & Chief Strategy Officer
Hecate Energy
Pamela Venzke
Global Government Affairs & Policy
General Electric
Florizelle Liser
President & CEO
Corporate Council on Africa
Kathryn D. Karol
Vice President, Global Government & Corporate Affairs
Caterpillar Inc.
Dan Gaynor
Global Communications
Nike
Kevin Kolevar
Vice President, Global Government Affairs
The Dow Chemical Company
Laura Lane
President, Global Public Affairs
UPS
Melissa Froehlich-Flood
Vice President, Government Affairs
Marriott
Gary M. Cohen
Executive Vice President and President
Global Health and Development BD (Becton, Dickinson and Company)
Lisa Malloy
Senior Director, Global Policy Group
Intel Corporation
Kris Charles
Senior Vice President, Global Corporate Affairs
Kellogg
Ambassador Richard Holwill
Vice President, Public Policy
Amway
Jeffrey N. Simmons
President
Elanco Animal Health
Tom Halverson
CEO
CoBank
Ken Fletcher
CAO
Pike Enterprises
Peter M. Robinson
President & CEO
United States Council for International Business
Karl Jensen
Senior Vice President, National Governments
CH2M
Ward Brehm
Founder, Chairman
The Brehm Group
Chris Keuleman
Vice President, Global Government Relations
International Paper
Frederick S. Humphies, Jr.
Corporate Vice President, U.S. Government Affairs
Microsoft Corporation
Dave Adkisson
President & CEO
Kentucky Chamber of Commerce
Joseph Albert
Owner
Eli H. Albert Agency
Diane Alleva Caceres
Principal
Market Access International, Inc.
Luis Arguello
President & CEO
DemeTECH
Jeremy Arthur
President & CEO
Chamber of Commerce Association of Alabama
Connie Bacon
Commissioner
Port of Tacoma
Doug Badger
Executive Director
Pacific Northwest International Trade Association
Travis Barnes
President & Founder
Hotel Tango Artisan Distillery
Gene Barr
President & CEO
Pennsylvania Chamber of Business and Industry
Kurt R. Bauer
President & CEO
Wisconsin Manufacturers & Commerce
Lane Beattie
President & CEO
Salt Lake Chamber
Jon Bennett
Vice-President of Business Development
Catalyze Dallas
Thomas Bentley
Owner & Chairman of the Board
Bentley World Packaging
John Bernloehr
President
Consolidated Metal Products, Inc.
Carl Blackstone
President & CEO
Greater Columbia Chamber of Commerce
Silvia Bonilla
Director, Small Business Development Center
Illinois Hispanic Chamber of Commerce
Antonio Boyd
President
Think Tank Consulting Group, LLC
Tony Braida
Vice President
Bankers Trust Global Banking
Becky Brooks
President & Executive Director
Ruidoso Valley Chamber of Commerce
Kelly Brough
President & CEO
Denver Metro Chamber of Commerce
Cindy Brown
President
Chippewa Valley Bean
John Bruntz
President & CEO
The Boulder Company
Anne Burkett
Executive Director
North Alabama International Trade Association
Bob Burleson
President
Florida Transportation Builders Association
Jay Byers
President & CEO
Greater Des Moines Partnership
Steve Cain
President
Triangle North Carolina British American Business Council
William Canary
President & CEO
Business Council of Alabama
Ben Cannatti
Executive Director
Main Street Jobs Coalition
John Casper
President & CEO
Oshkosh Chamber of Commerce
Kip Cheroutes
President
Japan-U.S. Network, Inc.
Lalit Chordia
President & Founder
Thar Tech
Gil Cisneros
Chairman & CEO
Chamber of the Americas
Jay Clemens
President & CEO
Associated Oregon Industries
Jonathan Coffin
Vice President
VOX Global
Harvey Cohen
President
KZB, Inc.
Todd Connor
CEO
Bunker Labs
Caralynn Nowinski Collens
CEO
UI LABS
Alfonso Cornejo
President
Hispanic Chamber Cincinnati USA
Bill Cronin
President & CEO
Pasco Economic Development Council, Inc.
Joe Crookham
President
Musco Lighting
Maryann Crush
Manager
South Boston Transit Systems, LLC
Dan Culhane
President & CEO
Ames Chamber of Commerce
Yuri Cunza
President & CEO
Nashville Area Hispanic Chamber of Commerce
Eric Dallimore
Owner
Leon Gallery
Sarah Davasher-Wisdom
COO
Greater Louisville, Inc.
Daniel Davis
President & CEO
Jacksonville Chamber of Commerce
Richard Dayoub
President & CEO
Greater El Paso Chamber of Commerce
Ryan Deckert
President
Oregon Business Association
Connor Deering
President
Cemen Tech, Inc.
Dustin DeVries
Co-Founder, Technology Consultant
Caffeine Interactive Technologies
Brian Dicken
Vice President of Advocacy & Public Policy
Toledo Regional Chamber of Commerce
Billie Dragoo
Founder & CEO
RepuCare
Steve Dust
President & CEO
Greater Cedar Valley Alliance and Chamber
Barry DuVal
CEO
Virginia Chamber of Commerce
Lauri Elliott
Chairman & Executive Director
Afribiz Group, Inc.
Jason Espinoza
President
New Mexico Association of Commerce and Industry
Joe E. Evans
Owner
Evtex Companies
Keith Evans
President
Key Financial Insurance Agency, Inc.
Teresa Faidley
Senior Vice President
Schaumburg Bank & Trust Company N.A.
Terry Fankhauser
Executive Vice President
Colorado Cattlemen's Association
Ronald J. Finlayson
CEO
E-Systems Corporation
Beverly Flaten
Vice President of International & Domestic Marketing
JM Grain
Henry Florsheim
President & CEO
Wichita Falls Chamber of Commerce
Michael Ford
Chairman
Mid-Atlantic District Export Council
Nathan Frampton
President
Fanimation
Stephanie Freeman
President & CEO
Dunwoody Perimeter Chamber
Jenny Fulton
Founder
Miss Jenny's Pickles
David Gessel
Executive Vice President
Utah Hospital Association
Matt Glazer
Executive Director
Austin Young Chamber of Commerce
Howard Glicken
Founder, Chairman & CEO
The Americas Group
Neel Gonuguntla
President
US India Chamber Of Commerce DFW
Dean Gorder
Executive Director
North Dakota Trade Office
Terry Grant
President, Utah Market
KeyBank
Trey Grayson
President & CEO
Northern Kentucky Chamber of Commerce
Keith Guller
CEO
Essex Industries
Dan Haley
President & CEO
Colorado Oil & Gas Association
David Hart
Executive Vice President
Florida Chamber of Commerce
Chris Henney
President
Ohio Agribusiness Association
Aaron Hermsen
Director of Business Development
China Iowa Group
Dave Hofferbert
President
Bond Technologies, Inc.
Gregory Hopkins
Partner & President
Solitude Wealth Management
Kevin Hougen
President & CEO
Aurora Chamber of Commerce
Galen Hull
President
Hull International
Thomas Hulseman
Managing Director
Metro Chicago Exports
Mark Ingrao
President & CEO
Greater Reston Chamber of Commerce
Bob Jameson
President & CEO
Fort Worth Convention & Visitors Bureau
Andrea Jett Fletcher
Executive Director
French-American Chamber of Commerce
John Kalaras
CEO
Quality Training Institute
Jeffrey B. Kendall
President
JBK Integrated Solutions, LLC
Robert Kill
President & CEO
Enterprise Minnesota
Joseph Kirk
Executive Director
Mon Valley Progress Council
Wally Kocemba
Chairman & CFO
Calhoun Companies
Katie Kruger
CEO
Denver Metro Commercial Association of REALTORS
Matt Krupp
Co-Owner
Desantis Krupp, LLC
Kitty Kurth
President
Kurth Lampe
Emily Lane
Vice President of Sales
Calendar Islands Maine Lobster
Craig Lang
President
The Prairie Strategy Group
Lloyd Le Page
President & CEO
Heartland Global, Inc.
Kirk Leeds
CEO
Iowa Soybean Association
Donna Lindquist
President
Soleil Global Communications
Lou Ann Lineham
President
Linehan Associates, LLC
Doug Loon
President
Minnesota Chamber of Commerce
Kevin Lutz
President
Armstrong Printery, Inc.
Kevon Makell
Founder & CEO
Seww Energy
Dr. Toby Malichi
Founder, Global Chief Executive, and Ambassador of Trade
Malichi Group Worldwide
Ron Marston
President & CEO
HCCA International
Frances Martinez
Founder & CEO
North Shore Latino Business Association, Inc.
Nick Mastronardi
Founder & CEO
POLCO
Jason Mathis
Executive Director
Downtown Alliance
Robert Mayes
CEO
Keel Point
Eddie McBride
President & CEO
Lubbock Chamber of Commerce
Sandi McDonough
President & CEO
Portland Business Alliance
Candace McGraw
CEO
Cincinnati/Northern Kentucky International Airport
Larry McQueary
COO
Indy Fuel
Daniel McVety
President
Japan China Carolina
J. Patrick Michaels
Founder, Chairman & CEO
CEA Group
David Milton
Chief Supply Chain Officer
Payless ShoeSource
Mortada Mohamed
Executive Director
Texas International Business Council
Aneezal Mohamed
General Counsel, Compliance Officer & Secretary
Commercial Vehicle Group
Beau Morrow
Owner
Left Hand Design
Wilfred Muskens
President & CEO
Stevens & Lee
Ron Ness
President
North Dakota Petroleum Council
Saul Newton
Executive Director
Wisconsin Veterans Chamber of Commerce
Laura Ortega
Executive Director, International Business Council
Illinois Chamber of Commerce
Ersal Ozdemir
President & CEO
Keystone Corporation
Jerry Pacheco
President
Border Industrial Association
Jim Page
President & CEO
Chamber of Commerce of West Alabama
Richard Paullin
Executive Director
The International Trade Association of Greater Chicago
Raymond Pilcher
President
Raven Ridge Resources
Heather Potters
Chief Business Development Officer
PharmaJet, Inc.
Ramiro Prudencio
President & CEO
Burson-Marsteller Latin America
Robert Quick
President & CEO
Commerce Lexington
Laurie Radke
President
Green Bay Area Chamber of Commerce
Rona Rahlf
President & CEO
Utah Valley Chamber of Commerce
Brooks Raiford
President & CEO
North Carolina Technology Association (NCTA)
Michael Ralston
President
Iowa Association of Business and Industry
Bede Ramcharan
President & CEO
Indatatech
Olga Ramundo
President
Express Travel
Josh Rawitch
Senior Vice President, Communications
Arizona Diamondbacks
Joe Reagan
President & CEO
St. Louis Regional Chamber
Jeff Reigle
President & CEO
Regal Ware, Inc.
Gene Reineke
CEO
Hawthorne Strategy Group
John Reinhart
CEO & Executive Director
Port of Virginia
Colin Renk
Executive Director
America China Society of Indiana
Sandra Renner
CEO
FasTrack Global Expansion Solutions, Inc.
Jim Roche
President
Business & Industry Association of New Hampshire
Bob Rohrlack
President & CEO
Greater Tampa Chamber of Commerce
Robert Rotondo
President
Rotondo Enterprises, Inc.
Jack Roy
Owner
Jax Enterprises
David Rudd
Partner
Ballard Spahr, LLP
Rebecca Ryan
Founder
Next Generation Consulting
Mel Sanderson
Vice President of International Affairs
Freeport McMoRan, Inc.
Lydia Sarson
Executive Director
German American Chamber of Commerce of Philadelphia
Joe Savarise
Executive Director
Ohio Hotel & Lodging Association
Chris Saxman
Executive Director
Virginia FREE
David Schaffert
CEO
Olympia Thurston County Chamber of Commerce
Dean Schieve
President
Victus Motion and DMD Consulting
Michael Schmitt
Executive Director
America-Israel Chamber of Commerce Chicago
Bret Scholtes
President & CEO
Omega Protein Corporation
Ralph Schulz
President
Nashville Area Chamber of Commerce
Mike Shanley
Founder & CEO
Konektid International
Stephanie Simpson
Vice President
Texas Association of Manufacturers
Bill Sisson
President & CEO
Mobile Chamber of Commerce
Nathan Slonaker
President
Columbus International Affairs Opportunity
Jim Spadaccini
CEO & Creative Director
Ideum
Bruce Steinberg
President
Relyco
Michael Strange
President
Bassett Ice Cream
Carol Stymiest
President
Canadian Business Association of North Carolina
Greg Summerhays
President & CEO
Sandy Area Chamber of Commerce
David Taylor
President
Pennsylvania Manufacturers Association
Christian Thwaites
Chief Strategist
Brouwer & Janachowski
Jon Troen
President & CEO
Mittera Group
Brett Vassey
President & CEO
Virginia Manufacturers Association
Liane Ventura
Senior Vice President
Greater Miami Chamber of Commerce
Chad Vorthmann
Executive Vice President
Colorado Farm Bureau
Chris Wallace
President
Texas Association of Business
Jeff Wasden
President
Colorado Business Roundtable
Joyce Waugh
President & CEO
Roanoke Chamber of Commerce
Cherod Webber
President & CEO
Innovative Global Supply,LLC
Ed Webb
President & CEO
World Trade Center Kentucky
Deborah Wilkinson
President
Wilkinson Global Connections
Sheryl Wohlford
Owner
Automation-Plus
Richard Yang
President
Carolinas Chinese Chamber of Commerce
Steven Zylstra
President & CEO
Arizona Technology Council
A 29 percent reduction in the President's budget is way
beyond what I think the market will bear and it will
effectively neuter soft power in many areas of the world at a
time when a little money spent wisely can bring about real
change. It is 1 percent of the Federal budget, foreign
assistance. The total package is 1 percent. What Senator
Lankford is telling us that some money, relatively a small
amount compared to what we spend overall, can actually affect
change in a positive way: less illegal immigration, more
reliable partner, less drugs.
Thank you all. The subcommittee Members can submit
questions for the record until Friday, the 19th, by 2:00 p.m.
and our next hearing is June 13 on the fiscal year 2018 budget
requests for the 150 account with Secretary Tillerson.
SUBCOMMITTEE RECESS
The subcommittee is adjourned. Thank you all.
[Whereupon, at 3:54 p.m., Tuesday, May 23, the subcommittee
was recessed, to reconvene subject to the call of the Chair.]